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Farsons unveils completed €24.5m distribution, logistics centres

Louis Farrugia: "Farsons has always been aware that it operates in a packaging-driven industry."

Louis Farrugia: "Farsons has always been aware that it operates in a packaging-driven industry."

Simonds Farsons Cisk plc will on Wednesday officially inaugurate a new, €13.04 million (Lm5.6 million) soft drinks packaging hall and a €11.41 million (Lm4.9 million) distribution centre, the two completed phases of a €32.6 million (Lm14 million) capital project unveiled in March 2005.

Both developments were completed on time and within budget. Work on a new brewhouse, the third and final phase, starts next year and should be completed by the first quarter of 2011.

The ambitious project, described by Farsons Group chief executive officer Louis Farrugia as the organisation's third most important milestone after it was established in 1928 and the brewery opened in the 1950s, was constructed on 20 tumoli of company-owned land, all acquired over the last 20-odd years.

It is also the fruit of the foresight of an organisation, which although today prides itself on being a wholly Maltese-owned public limited company, is still run with the wisdom, shrewdness and pride of a large family concern.

The diversified group now enjoys an annual turnover of close to Lm30 million, around 60 per cent of which is generated from sales of locally manufactured beer, soft drinks, water and fruit juices. Other earnings are derived from subsidiary companies' retail of imported wines, spirits, beer and food. The group has 850 full-time employees on its payroll.

"The land was acquired in the early 1980s, except for a small parcel which was only acquired a few weeks before we announced the project two-and-a-half-years ago," Mr Farrugia told The Sunday Times. "That parcel cost as much as all the previously acquired land put together.

"We have always been aware that we are in a packaging-driven industry and that PET and cans would help increase the market for beverages. The liberalisation of the market to allow such packages happened because the EU deemed the local regulation making renewable glass compulsory as anti-competitive. The industry requested a four-year transition period and we then began to design the right investment for what we thought a fully liberalised market would develop into. It was not an easy task."

Mr Farrugia explained that a Maltese project team, comprising Farsons management officials and headed by chief operating officer Paul Micallef was tasked with spearheading the research that would help devise the project. The team included senior general managers Ray Sciberras, and Albert Calleja; all three have over 55 years' experience between them and all trained under Farsons' first foreign principals. The team was assisted by Maltese consultants. Over five years, there were visits to trade fairs and similar set-ups overseas, intense market research, meetings with suppliers and project management.

"Board approval was granted in 2004 and the project began in 2005," Mr Farrugia pointed out. "Farsons has a track record of a good technical workforce and this, I believe, is one of the reasons for our long-term success. An intensive training programme was also drawn up as the projects involve the latest technology and software."

The soft drinks packaging centre produces carbonated soft drinks, beer, beer mixers, and still and carbonated water. Operating on a 24-hour basis, it has the capacity for 18,000 50cl bottles an hour.

This involves a unique and meticulous operation - switching from producing soft drinks to beer on the same production line is a painstaking task that is required to meet the highest standards. The soft drinks line includes equipment to blow bottles from a test tube-sized container to a regular PET bottle, a rinser and filler, a mixer carbonator, three palletising machines and a conveyor to the adjacent logistics centre.

The logistics centre, boasting seven levels of high bay racking with a capacity to store over 11,000 pallets, has been designed to store beverages in controlled temperatures. This operation is governed by a computerised warehouse management system to ensure a constant, efficient flow of products from the plant and to the market. Sophisticated forklifters are mechanically guided into the aisles - 12 in all - to stack or remove pallets several metres high. Thanks to insulation, controlled cooling, insignificant noise levels, and restricted movement, the products should arrive at retailers in the best possible condition.

Farsons' five distribution depots around Malta have now been closed.

Around 1,000 square metres of seven-metre high storage has been allocated to Wands' fine wines and spirits, which are stored at optimal temperatures.

The upper floors house brand new, open plan office space for management personnel, executives, brand managers and sales teams. Designed to enhance work practice, the floor plan allows for improved communication between staff, and meeting facilities.

"The underlying principles of this project were to increase quality, productivity and efficiency and cut costs, while meeting the challenges of a liberalised market," Mr Farrugia remarked.

"The advantage of operating in a small scenario such as ours is that we produce in the market we operate in. We do not have to add freight costs to our final product. In this way, we are also able to compete with the larger facilities in Italy."

Now there are ambitious plans for Farsons' main building on Notabile Road, Mrieħel. Built by the late Lewis Farrugia, an architect by profession, the listed building is a hallmark of Malta's industrial architecture. But Mr Farrugia believes that it could have a whole new future ahead of it.

"We are in an ideal location to offer prime, well-designed office space for sectors like financial services," he said. "In two to three months' time, we will launch a feasibility study into the possibilities of redeveloping it to meet the demands of modern business space. That will take about two years."

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