Commonwealth Capital invests in S$70m integrated food facility

HOMEGROWN food-and-beverage names such as PastaMania, Swissbake and The Soup Spoon now have access to a state-of-the-art facility that integrates food logistics, production and services under one roof.

The S$70 million, 300,000 square-feet facility in Buroh Lane in Jurong was officially opened on Wednesday.

Singapore-based Commonwealth Capital, an investment holding company with an extensive F&B portfolio, either owns or has a stake in the aforementioned and other F&B names, which run 151 cafes and restaurants in 12 countries (and counting).

By tapping the shared amenities and enjoying economies of scale, the brands under the Commonwealth Capital umbrella will get a leg up in expanding overseas. Managing director Andrew Kwan said internationalisation was in fact "the main push" behind its investment in the facility.

Deputy Prime Minister Tharman Shanmugaratnam, the guest of honour at the official opening, said this collaboration between players big and small was an "important way forward" for the industry.

It enables smaller players to retain their diversity and their own distinctive offerings, while "gaining the efficiency that comes through scale or collaboration", he said.

The cutting-edge technologies for the facility offer solutions that smaller players may not have access to on their own.

For example, on the warehousing and logistics front, Commonwealth Capital has kitted the facility with an automated storage-and-retrieval system in a minus 28 deg C environment.

It houses some 5,600 pallets in 14,000 sq ft of floor space; a conventional warehouse usually needs 60,000 sq ft.

The system does not need manpower and can be deployed round the clock.

The new facility also boasts innovations in the food-manufacturing process. These include the High Pressure Processing (HPP) line, a first in Singapore, which extends the shelf life of food by three to eight times through cold pasteurising.

Another is the proprietary MicroThermik processing, through which food is cooked and stored for up to 12 months.

Such developments propel Commonwealth Capital's expansion aspirations in the region and beyond.

Mr Kwan disclosed that "very little" of the company's revenues come from exports at the moment; he aims to push it up to 50 per cent in the next two years.

"With this capability to produce food that can hold for a long time, we can now go to regional markets. We have started exporting quite a bit."

The key markets that are a top priority are South-east Asia and the Asia-Pacific.

As the manufacturing site is certified halal, the company is also looking at the Middle East market.

The new facility gives the company capabilities and bandwidth to service not just its own in-house brands, but other customers as well.

Mr Kwan said that in-house brands now take up slightly more than half the production capacity. With the focus on internationalisation, he expects this ratio to change soon.

"If we are just looking at the Singapore market, a facility like this will not be very utilised or be able to capture its full potential."

This increase in capacity is a contrast from before, when Commonwealth Capital operated from three to four different sites across Singapore.

"In the past, it took a long time for our raw materials to be brought to our production facility. It wasn't very efficient. But with all the capabilities brought together under one roof, the whole process is seamless from end to end."

This article was first published on Jan 12, 2017.
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