21 Jul 2014 Bernard Matthews’ Green Enery Initiatives Attract £73m in Capital Investment
In August 2013, Rutland Partners completed a significant investment in Bernard Matthews alongside family shareholders to fund and support a turnaround in the UK business and support a turnaround in the UK business and establish a stable platform for future growth.
Bernard Matthews is the UK’s market leading producer of turkey products. With its head office in Norwich, the company has over 2,000 employees across East Anglia and Lincolnshire, operating from fifty farms and four production facilities. In addition to producing well known branded products such as Golden Drummers and Turkey Dinosaurs, synonymous with its iconic founder, the business operates a private label business, which includes a large proportion of Christmas turkey products (including whole turkeys and crowns) supplied to major UK retailers. The UK business operates a vertically integrated business model owning the entire supply chain from ‘farm to fork’. This ensures that all turkey products are sourced solely from Bernard Matthews farms, which guarantees that high standards and UK provenance are maintained.
The investment plan, backed by Rutland, was multi-faceted. It involved a wide range of operational improvements, which included, inter alia, investment in the existing infrastructure and a number of cost-out initiatives. A further key tenet in the plan was the implementation of a number of pre-identified Green Energy initiatives. Over time this will materially improve profitability in the business by reducing the company’s energy requirements, whilst simultaneously helping to protect the environment.
The Green initiatives were principally developed in response to increased focus on sustainability (as highlighted by Sainsbury’s 20×20 Sustainability Plan), spiralling energy costs and the need to balance economic needs with environmental concerns. Bernard Matthews has historically been a heavy consumer of electricity, gas and water, spending almost £15m on these utilities alone during 2013. Planned Green Energy initiatives are to be implemented to reduce Bernard Matthews’ reliance on fossil fuels through the use of renewable resources and the re-use of natural resources. This will build-in long term sustainability with Bernard Matthews expecting to be self-sufficient by 2016 for green electricity and carbon neutral by 2020.
Given its sizeable land bank and fully integrated business model, which provides potential feedstock into a number of Green Energy processes, Bernard Matthews is well placed to undertake such projects. Projects implemented, or in the process of being implemented, have already attracted a total of £73m of capital investment and include:
- Largest biomass boiler installation in the UK – a £24.5m investment providing the UK business with 179 boilers across 21 sites. The boilers use wood chip as a fuel instead of liquid petroleum gas and will save the UK business c.£1m per annum.
- Anaerobic Digestion (‘AD’) Plant – a c.£4m investment in an AD plant has been made to generate power from factory wastes. The plant produces electricity cheaper than it would be bought from the grid and reduces the cost of disposing waste. Furthermore, income is also generated by charging 3rd parties to dispose waste via the AD plant. The AD plant has been oeprating since September 2013.
- Large scale wind farms – nine 125m wind turbines, each generating 2.3mW of electricity, generating £160k in income pa.
- Solar – two large scale solar projects at Weston and Holton across 28 and 55 acres of land respectively. This is funded by a third party investment of £16m.
Eight months into the plan, the business has made considerable progress in implementing an ever growing list of potential Green Energy projects. It is envisaged that implementation of these Green Energy initiatives will give the business profit uplift of £3-5m, whilst also helping to protect the environment by reducing their use of fossil fuels, lessening their consumption of water and decreasing waste production.
In addition, to the Green Energy initiatives, Bernard Matthews supports the UK economy by:
- Adding value to UK agriculture by supporting local farmers and buying local wheat;
- Rearing healthy British turkeys by managing Bernard Matthews farms across East Anglia and Lincolnshire;
- Employing over 2,000 employees and supporting a range of local and national businesses;
- Feeding the nation well by providing turkey; a healthy, nutritious and tasty food.