Operations: Competitiveness Through Cost Savings and Efficiency
Shankar Rao, Senior Vice President, Manufacturing & Technical Services
Olam’s end-to-end soluble coffee capability now includes 2 soluble coffee manufacturing plants, strategically located in Vietnam and Spain.
Just 2 years after our decision to enter the segment, we set up a greenfield 4,000 MT per annum plant in Vietnam. Successful production and increased demand led to the expansion of our capacity to 12,000 MT per annum. Now, the plant produces an extensive array of soluble coffee including spray dried, agglomerated, freeze dried and frozen extract forms, which are packed in bulk format.
Our other plant in Spain, which we acquired in end-2012, has a capacity of 10,000 MT per annum. Besides producing soluble coffee in spray dried, agglomerated and freeze dried forms, it has the added capability to pack both in bulk and in retail private label formats like jars, pouches, sachets and stick packs at a world class packaging facility.
Track record in project management
As in other high asset intensity processing businesses, strong project management capability is key. Our commitment to the soluble coffee production business included a significant amount of fixed capital to build the Vietnam plant during phase 1 in 2008-09; phase 2 in 2011-12 as well as continual quality improvement and cost savings initiatives across the development cycle. Similarly in Spain, we have undertaken several medium size capex projects to address quality, environmental, health and safety (QEHS) infrastructure bottlenecks and cost savings.
Having the right physical assets is only one aspect of successful industrial processing. We also paid close attention to developing “soft” assets by assembling and training a world-class in-house project management team. Their collective experience and track record in project management continue to enable us to deliver on all phases of our projects on-time and within budget.
Focus on ongoing operations
The processing of soluble coffee requires rigorous attention to minute production details to optimise quality. It consists of 5 steps:
- roasting of green beans;
- extraction of roast and ground coffee;
- aroma recovery;
- evaporation of weak extract; and
- drying of concentrated extract to produce spray dried or freeze dried coffee.
Agglomerated coffee is produced by steam wetting and drying the spray dried coffee. Frozen coffee extract is produced by freezing the concentrated extract.