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Growing upturn in occupancy rates buoys British cold store operators.

Growing Upturn in Occupancy Rates Buoys British Cold Store Operators

Public refrigerated warehouse operators in the UK have seen better times, to be sure. While contract processing facilities are reportedly doing alright, some others cannot generally say the same. But things are starting to look up. While the first six months of 1990 were disappointing both in terms of occupancy and rates received, by August rates were advancing and the vacant space average was down to about 20%. Many of those engaged in vegetable packing suggested they would be 100% full by October.

"The BSE scare (Bovine Spongiform Encephalitis, commonly referred to as mad cow disease) has helped improve occupancy as beef intervention stocks rose," said James Bittles, secretary general of the London-based Cold Storage and Distribution Federation. "With it came higher rates, which should continue for the near-term. However, stores in Scotland are still not at the level one would like."

The growth of composite depots serving retail multiples has boosted capacity to the detriment of traditional public cold stores. While major operators have won contracts to run the facilities, the overall bottom line impact leaves something to be desired as the problem of excess capacity in a number of established facilities remains. However, rationalization is now taking place which will reduce the oversupply of space.

But there are those who are benefitting nicely from the trend toward centralized storage of finished frozen food products for national and pan-European shipment. In addition to the warehouse-distributors who are cashing in, those supplying equipment to operators are also gaining from major investments being made to upgrade materials handling capability and gear up for greater throughput and faster turns.

One such company is Barpro Storage Systems, the Bromsgrove-based producer of electrically-powered high density Storax mobile racking systems. Its design allows cube utilization of up to 85% as well as immediate access to all unit load storage locations.

Ken Jones, managing director, advised that a lot of refurbishing and retrofit work is being done now rather than new construction. Customers cramped for space have discovered the high picking advantages of mobiles, he said.

Jones, nothing that 60% of Barpro's present business is in exports, reported that inroads have been made in the USA through Europe-headquartered cold storage multinationals such as Christian Salvesen and CEGF. In another promising market, this August a set of rails was laid in an East Germany facility. And in Norway an order has been received to install what is being called the most sophisticated mobile storage system in the world.

The retrofit trend in the UK was echoed by David S. Lewis, commercial manager of Hemec Manufacturing Ltd. The company's Prescot, Merseyside-based plant turns out insulated modular panels while its Liverpool factory specializes in cold storage doors. "A lot of our urethane panels are going into refurbishments now as older cold stores are being brought up to date," Lewis told Quick Frozen Foods International.

New Installations

As for new installations, within the last year orders were filled to supply nine huge distribution centers for customers such as J. Sainsbury, Tesco, McDonald's and Trust-house Forte. The client list further underscores increased activity in the private sector at the expense of public warehouses.

But the reader should not get the wrong impression about the public refrigerated warehousing industry. There are plenty of smart operators who are smiling.

"Business is not bad at all," declared Ian Lister, managing director of West Kent Cold Storage in Dunton Green. "We turned in our best figures ever for the financial year ending in April. So it's hardly doom and gloom for everybody."

His facility boasts 3.5 million cubic feet of storage space -- of which 85% is devoted exclusively to frozen foods -- on a 17-acre tract well situated in relation to London and the channel tunnel that will soon link the UK directly to continental Europe. Fifteen engine rooms, 700 electric motors and 100 compressors power the plant.

With more than 40 separate chambers, West Kent can be described better as a frozen food trading estate than as a cold store. Among its 24 tenants are independent packers such as JD&D Limited, which recently invested 1.3 million [pounds] to equip an EEC-approved pork processing plant on the premises. Pullman Foods, a major catering distributor handling more than 1,500 items, runs 34 trucks daily out of its four chambers. And most of the name brand manufacturers are represented such as Ross-Young's and Country Choice.

Interestingly, most of the tenants have opted for two-pallet rather than five-pallet high stores. It's preferred especially by those engaged in fast-turn distribution as picking is easier to carry out.

Clearly, West Kent's versatility and size are unmatched in the southeast of England. To what does Lister attribute his facility's nearly full-up occupancy rate during times when others are less prosperous: "We offer the three most important requirements of distribution," he responded, "location, location, location."
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Title Annotation:public refrigerated warehouse operators
Publication:Quick Frozen Foods International
Date:Oct 1, 1990
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