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Food Industry Sees Increase in Capital Budgets; Safety to Blame

Posted on July 1, 2010

Good news for the food industry! Business is booming. Food Processing magazine recently conducted a survey of 32 public companies in their Top 100 list and uncovered 13.6 million dollars budgeted for capital expenditures. Overall, capital spending is up almost 20% in the industry, compared to last year’s decline of 8.7%.

The reason? Well, some companies, like PepsiCo have completed mergers, which make them a larger company than they were last year–$60 billion larger. But safety has also played a critical role. As FP mentions, noone wants to be the next Peanut Corp. of America, and extra meausures have been put in place to improve sanitation and cleanability. (Hello food processing vacuums!)

Along the lines of safety, but not mentioned in the article, is combustible dust. Imperial Sugar made combustible dust a very critical issue in the food industry and got every plant manager listening and wondering if their flour, whey powder, dried milk, cinnamon, peanut dust, etc., etc. was “combustible.” Not surprisingly, Imperial Sugar’s capital expenditures budget is way low this year (compared to previous years), since they’ve had to put their money towards rebuilding the Port Wentworth facility. So, noone wants to be next Imperial Sugar either, and are budgeting money to invest in the proper equipment like explosion proof vacuum cleaners, venting systems, etc.

Read the entire report here…

2010 Capital Spending Outlook: Pent-Up Demand Causes an Explosion in Projects
Dave Fusaro, Editor in Chief; After last year’s drop in capital expenditures, budgets for the Food Processing Top 100 survey group are up 19 percent for 2010.