Scaling Up When Demand Outstrips Supply

Plant Design 
Scaling Up When Demand Outstrips Supply
For our small and mid-tier food manufacturers, increasing production volumes is often not a priority until demand starts outstripping supply and one of the big challenges can be achieving the right balance between scaling up the process and scaling up the facility. What are the options and where is the capital best spent?

Depending on your current situation you’ll likely be asking questions such as, do we expand or relocate? If we relocate, do we lease or buy? If we buy, do we buy an existing site or buy land and build a new factory?
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The more defined your growth target is, the easier it will be to work through the options of how to scale in control over a given timeframe for the lowest possible cost. For many small to mid-tier manufacturers, scaling up over a few years may be a safer and more favourable option than immediately raising debt finance or relinquishing equity to get there quicker. The perceived risk for lenders is far greater if the “supply contract is waiting for sign-off”, and to compound the problem your customer wants to ensure that you have the capability to supply. 

Author:  Peter Taitoko, Director RMR Process

Read the full article at Food & Drink Business October 2018 > Scaling up – Food & Drink Business >>