September 19, 2023
MAIN CONTRACTOR APPOINTED FOR FIRST PHASE OF £20M INVERCLYDE DISTILLERY

Main contractor appointed for first phase of £20m Inverclyde Distillery

Inverclyde’s first zero-carbon whisky distillery, Ardgowan Distillery, has appointed Inverkeithing based Muir Construction to begin the first phase of its £20 million “cathedral of whisky”.  The £7m contract is expected to last 12 months and will see the completion of the distillery’s main production elements, enabling Ardgowan to begin producing

Read More »
Desigo PXC: automation with flexible scalability in building automation

Desigo PXC: automation with flexible scalability in building automation

Siemens has introduced the latest additions to its automation stations for the Desigo™ building management systems. Desigo is designed to manage any facility, irrespective of its size or complexity, through a range of systems (Desigo CC, Desigo CC Compact and Desigo Optic) all of which can enhance occupant comfort and

Read More »
Wirral manufacturer in bid to meet critical United Nations targets

Wirral manufacturer in bid to meet critical United Nations targets

A WIRRAL manufacturer has today announced its strategy for meeting key environmental and social targets set out by the United Nations. Birkenhead valve manufacturer Heap & Partners has set out a raft of measures in a bid to meet the UN’s Sustainable Development Goals (SDGs). The SDGs, also known as

Read More »
Mace completes Marshgate building at UCL East campus

Mace completes Marshgate building at UCL East campus

Mace has completed the UCL Marshgate building, part of the first phase of UCL’s new campus at East Bank on Queen Elizabeth Olympic Park. Marshgate is UCL’s single largest building to date providing over 35,000sqm of cross-disciplinary teaching, research and learning spaces over eight floors. Designed by architects Stanton Williams

Read More »
Land & Water Unveil Groundbreaking Automated Seagrass Planter, Revolutionising Large-Scale Seagrass Planting

Land & Water Unveil Groundbreaking Automated Seagrass Planter, Revolutionising Large-Scale Seagrass Planting

Earth Change, a division of the Land & Water Group, alongside Project Seagrass and Swansea University Unveil Groundbreaking Automated Seagrass Planter, Revolutionising Large-Scale Seagrass Planting Land & Water, a leading environmental engineering company, and Project Seagrass, a renowned marine conservation organisation, are proud to announce the successful design, construction, and

Read More »
SELECT Managing Director Alan Wilson tells UK radio audience that electrical safety for consumers begins with a successful apprenticeship programme

SELECT Managing Director Alan Wilson tells UK radio audience that electrical safety for consumers begins with a successful apprenticeship programme

SELECT Managing Director Alan Wilson has told thousands of radio listeners across the UK that proper training and apprenticeships are essential to protect the safety of consumers and others in the construction industry. Speaking on the popular Building Ideas Show with Mark Millar on Fix Radio, the MD of Scotland’s largest

Read More »
Trending now: The biflation paradox

Trending now: The biflation paradox

The article was written with the help of Chris Atkins, a Chief Innovation Officer at The Gap Partnership. This special report on the hot topic of biflation examines the paradoxical state of affairs in which both inflation and deflation occur in the economy. Navigating these challenging and complex conditions requires a

Read More »
Latest Issue
Issue 323 : Dec 2024

September 19, 2023

Steels rising on new Moderna Innovation and Technology Centre (MITC) at Harwell Campus in Oxfordshire

Steels rising on new Moderna Innovation and Technology Centre (MITC) at Harwell Campus in Oxfordshire

Excellent progress being made was marked by a symbolic steel signing ceremony staged onsite attended by project VIP’s. Glencar, a leading UK construction company that was recently ranked amongst Europe’s fastest growing businesses, has today announced that a key milestone has been reached on construction of the new Moderna Innovation and Technology Centre (MITC) at Harwell Campus in Oxfordshire with steels now rapidly rising out of the ground. To highlight the key milestone a symbolic steel signing ceremony was staged onsite attended by representatives from Harwell, Moderna, Glencar and the scheme architects Scott Brownrigg. A steel beam from the building itself was signed by VIP’s from the three companies before being lifted into place where it will remain as a lasting memento and legacy to the project for many years to come. Talking about the event Glencar Chairman Pat McGillycuddy said: “It’s fantastic to be here onsite today and to see the excellent progress that the team has made with these incredible steel structures rising from the ground. We are delighted to be working alongside the teams from Harwell and Moderna and to celebrate this important milestone today.  As Darius said today these buildings and this project is a part of all of us as future vaccines to protect public health will have been directly manufactured within these fantastic facilities. Glencar is proud to have been trusted to deliver this project and we will look forward to further updates as we work towards PC in the summer of next year. Stuart Grant, CEO of Harwell Campus adds: “The steel rising event is another significant milestone and step towards the completion of the Moderna Innovation and Technology Centre. The Centre will sit at the heart of our thriving health tech cluster at Harwell and will play a key role in strengthening UK vaccine development and global pandemic resilience.” Darius Hughes, General Manager Moderna also went onto say: “We are witnessing a historical moment that affects us all. From this building we will manufacture mRNA vaccines, including for Covid-19, keeping us safe and protecting the UK population from emerging respiratory health threats. “We are very happy to see steels rising and the work that Glencar have undertaken to date.  We look forward to watching the construction progress and seeing this building rise out of the ground”. Moderna is the latest organisation to join Harwell’s thriving Health Tech cluster which has grown to over 70 life science organisations since it launched in 2016. Building, Design & Construction Magazine | The Choice of Industry Professionals 

Read More »
MAIN CONTRACTOR APPOINTED FOR FIRST PHASE OF £20M INVERCLYDE DISTILLERY

Main contractor appointed for first phase of £20m Inverclyde Distillery

Inverclyde’s first zero-carbon whisky distillery, Ardgowan Distillery, has appointed Inverkeithing based Muir Construction to begin the first phase of its £20 million “cathedral of whisky”.  The £7m contract is expected to last 12 months and will see the completion of the distillery’s main production elements, enabling Ardgowan to begin producing its own spirit from 2024.  This first build phase represents the culmination of almost 7 years’ careful planning for the distillery founders, marking a huge milestone in the ergonomic, energy efficient distillery and visitor experience, which will create up to 47 local jobs and produce up to 1m litres of premium whisky per year.  The innovative distillery design uses low environmental impact composite cladding, timber and steel materials to create a modern Nordic long hall, symbolising resurrection and rising from the ashes of the former Ardgowan Distillery in Greenock, which was bombed during the 1941 Blitz.  The ambitious plans for the new net-zero distillery include cutting-edge technologies and partnerships with new technology developers to deliver a truly carbon-neutral spirit. The distillery has partnered with Heriot-Watt University and engineers Briggs of Burton to develop technology to capture all of the CO2 in its fermentation process and transform it into green biomethane – a technique which has never been used in a Scotch whisky distillery before.  Martin McAdam, CEO, said:  “Partnering with Muir Construction for this first phase of the build is a major and very welcome step forward for us.  It  was imperative that we selected a contractor who shares the same values for sustainability. Muir’s experience constructing some of the finest Scotch Whisky distilleries open today, coupled with their hand in pioneering Scottish sustainability projects meant they were the perfect fit.” Muir Construction, part of Muir Group, are established in distillery construction, previously working with a number of major distillery companies, including William Grant & Sons, Distell and Glenmorangie. They have also worked on a number of key sustainability projects, including the Queens Quay Energy Centre in Glasgow and Celtic Renewables. Alan Muir, joint managing director at Muir Construction, said:   “We are delighted to be given the opportunity by Ardgowan Distillery to join the delivery team in what is an exceptional distillery. Not only will this be at the forefront of distilling fine whisky, but it will also be an outstanding statement in visual design, something I’m sure we will all be proud of on completion. “Our construction team is very excited to get started on the first step in what we are sure will be an excellent ongoing relationship.” Ardgowan’s multi award winning selection of sherry cask influenced malts recently celebrated a triple gold win at the 2022 Scotch Whisky Awards, their Clydebuilt whisky range is available from specialist retailers across the UK. To date, a total funding package of £24m has been secured for the project so far, with the distillery recently raising in excess of £3.6m via a convertible loan note to shareholders.  Building, Design & Construction Magazine | The Choice of Industry Professionals 

Read More »
Lidl could snap up former Wilko stores as it targets 1,100 locations

Lidl could snap up former Wilko stores as it targets 1,100 locations

Lidl has become the latest retailer to set its sights on vacant Wilko stores, as the grocer looks to open 1,100 shops by the end of 2025. Lidl boss Ryan McDonnell told Retail Week that the retailer’s property team is in very close contact with Wilko’s administrator PwC. He said that while no deals with PwC were finalised, Lidl was “certainly always interested” in properties that meet its requirements. The retailer, which current operates over 960 stores in the UK, opened 50 supermarkets in the year to 28 February 2023, more than any of its rivals. This heavy investment, combined with a commitment to lower prices, meant the retailer posted a £76m loss during the same period. Wilko fell into administration in August after a difficult post-Pandemic period saw lower footfalls and a decline in consumer spending due to the cost-of-living crisis. At the time, it employed over 12,500 members of staff. A deal was agreed recently which sees rival retailer The Range has take control of Wilko’s brand, however its stores are still set to close. This came after Pepco announced an agreement to take on the leases of up to 71 Wilko stores to convert to its Poundland brand. Rival chain B&M had also acquired over 50 stores from Wilko in a £13m deal, although did not specify which ones. Building, Design & Construction Magazine | The Choice of Industry Professionals 

Read More »
Desigo PXC: automation with flexible scalability in building automation

Desigo PXC: automation with flexible scalability in building automation

Siemens has introduced the latest additions to its automation stations for the Desigo™ building management systems. Desigo is designed to manage any facility, irrespective of its size or complexity, through a range of systems (Desigo CC, Desigo CC Compact and Desigo Optic) all of which can enhance occupant comfort and productivity as well as improve operational and energy efficiency. With the PXC4, 5 and 7 programmable automation stations a flexible solution is available for every requirement. Features include alarm signalling, time switch programs or trend logging functions. The PXC5 is the most recent and is a perfect complement to the PXC4 and PXC7 stations. It has 24 onboard I/Os with the capability to extend this using Siemens TX I/O modules to offer up to 80 points per controller. The PXC4 controller has 16 onboard I/Os, with the PXC7 utilising the TX I/O modules to offer connection of up to 400 datapoints. Ease of integration is ensured through all of the PXC controllers using the BACnet open communication protocol, with the controllers subjected to stringent hardening tests and prepared for BACnet Secure connect, the addendum to the BACnet protocol. The new licence-free Desigo Engineering Framework enables devices to be seamlessly integrated in the same framework for intuitive engineering, with easy wireless access to facilitate building automation. Alarms can be processed on site or remotely through the user’s wireless access to the controller. Security is a central feature of the design, with certificate handling and signed firmware to prevent cyberattacks from malware and viruses. Future-proofing is ensured through the possibility of easy modifications or extensions, while consistent equipment design offers standard handling, installation, maintenance and replacement which is both quick and cost-effective. An automated HVAC system is key to ensuring energy savings and reduced operations costs, also enabling effective compliance with standards. Desigo and its range of PXC controllers offers high performing automation through the integration of different protocols with no need for additional hardware or software. For further information on Siemens Building Products www.siemens.co.uk/buildingtechnologies For further information on Siemens Smart Infrastructure, please seewww.siemens.com/smart-infrastructure Building, Design & Construction Magazine | The Choice of Industry Professionals 

Read More »
Your COOP agrees deal to build a children’s nursery at Graven Hill

Your CO-OP agrees deal to build a children’s nursery at Graven Hill

Your Co-op Little Pioneers nursery and Pre-school, which has more than 45 nurseries and pre-schools in the UK, is set to deliver a new nursery at the popular Graven Hill development. Your Co-op will manage the construction of the nursery, on a 0.38 acres site close to the new Warriner Academy Trust primary school, with the build set to commence shortly. White Commercial Surveyors advised Graven Hill Village Development Company (GHVDC). Sally Bonnar, chief operating officer for the Childcare Group at The Midcounties Co-operative said: “We are investing significantly in our Little Pioneers nurseries in the coming years, and our new Bicester site is another step on that journey. “As part of a co-operative, our focus is always on doing the right thing by our children and our communities, providing a nurturing, safe and rewarding environment in which our children can develop and enjoy themselves, while also helping them to learn about the communities and world they are living in. I can’t wait to see the nursery once it’s complete” Adrian Unitt, Operations Director at Graven Hill Village Development Company (GHVDC), added: “We are delighted to welcome Little Pioneers to the site. The nursery will be built and run by Your Co-op, which is an ethical member-owned childcare business, with Ofsted reports at its UK-wide nursery sites that are consistently good or outstanding. “Providing early years and pre-school learning, with healthy meals freshly prepared on site, it will be a fantastic addition to the growing community here at Graven Hill. “Ultimately we are delivering a well-connected development with a rich character and strong sense of place that has a positive effect on both the direct and wider community. Our contribution to the local and regional economy is growing with every home built and our success story is only part way through its journey.” This is the latest in a number of community amenities to be announced at the 550-acre development. Market Square Dental recently opened its state-of-the-art five surgery practice and Wine Rack and Wine Valley Cocktail Bar opened on the 19th August. White Commercial Surveyors is providing commercial property advice on all of the commercial amenities and existing retail units which are currently under offer.  There is also a further site available for a pub restaurant at the frontage of the development. Chris White, MD at White Commercial Surveyors said: “Achieving a critical mass of residents living at the Graven Hill site has been essential in attracting sustainable commercial operators to the site. By delivering custom build and apartments, alongside self-build, there are now almost 500 homes occupied at the site and this footfall has undoubtedly attracted our second operator. “We are delighted to introduce a new nursery to the site and wish Your Co-op Little Pioneers and Preschool every success as Graven Hill continues to develop. We also continue to seek a pub/restaurant occupier for the prominent frontage site and have other retail units and office space available, for those seeking an attractive location near a railway station, and within easy reach of Bicester, Oxford and London.” Graven Hill is the UK’s largest self and custom build residential development situated close to the Bicester Village Designer Outlet in Oxfordshire. Significant amenities planned include a sports pavilion, pitches and allotments. A community centre is also set to be delivered by the local council. GHVDC is also seeking local contractors to tender for its next phase of new homes and apartments. Building, Design & Construction Magazine | The Choice of Industry Professionals 

Read More »
Wirral manufacturer in bid to meet critical United Nations targets

Wirral manufacturer in bid to meet critical United Nations targets

A WIRRAL manufacturer has today announced its strategy for meeting key environmental and social targets set out by the United Nations. Birkenhead valve manufacturer Heap & Partners has set out a raft of measures in a bid to meet the UN’s Sustainable Development Goals (SDGs). The SDGs, also known as the Global Goals, were adopted by the UN in 2015 as a universal call to action to end poverty and protect the planet. Heaps has today announced a range of measures that will see the business work towards meeting the SDGs. The firm has committed to planting 600 trees a month, and has installed areca palm plants around its Birkenhead factory to capture carbon and cotoneaster plants around its carpark to capture exhaust fumes. Heaps too is working with the University of Liverpool on a project to develop micro carbon capture technology. To work towards SDG 1 (No Poverty) Heaps is sponsoring a range of community groups including: Involve NW, Neo Community, Tam O’Shanters Urban Farm and Grosvenor Martial Arts. The firm is also signed up to the Living Wage Foundation, donates to foodbanks, and provides match funding for any staff charity fundraising. To promote good health and wellbeing (SDG 3), the firm offers weekly vegetarian meals, a cycle to work scheme, an on-site gym and roof garden, and six days’ paid volunteering time for staff. Heaps is also supporting the creation of a wildflower meadow in a local school in a bid to support local youngsters’ right to a quality education. The company is also aiming to dramatically slash its energy and water consumption via the installation of 88 solar panels, 1200 low-energy LED lights and multiple electric vehicle charging points. These will complement the company’s Smart Flower solar panel installation. Heaps is waging a war on plastic pollution too, and has achieved a 98 percent recycling rate for all materials used across the business. The business has also prioritised reducing the air miles of its activities, and is increasingly selling British-made products to its customers worldwide. David Millar, Managing Director of Heap & Partners, said “Corporate responsibility and sustainability are not just buzzwords but essential principles that can guide businesses in supporting the local community and protecting the planet no matter your industry. “While reaching carbon positivity was an incredible milestone, the work doesn’t end there. We are committed not just to achieving excellence in sustainable manufacturing but creating a sustainable future for our community. “There are many small steps and larger changes that can cumulatively make a positive impact. Moving forward, we will continue to explore innovative ways to contribute to a greener future for all.” Building, Design & Construction Magazine | The Choice of Industry Professionals 

Read More »
Mace completes Marshgate building at UCL East campus

Mace completes Marshgate building at UCL East campus

Mace has completed the UCL Marshgate building, part of the first phase of UCL’s new campus at East Bank on Queen Elizabeth Olympic Park. Marshgate is UCL’s single largest building to date providing over 35,000sqm of cross-disciplinary teaching, research and learning spaces over eight floors. Designed by architects Stanton Williams to provide new spaces for collaborative thinking, Marshgate unites activities across the arts, technology and science under one roof. Enabling students and staff to immerse themselves in innovative activities and cutting edge research. The floors are clustered into a series of ‘neighbourhoods’, each with its own double-height collaboration space to encourage cross-disciplinary knowledge share. The lower levels of the building include a network of publicly accessible spaces, with a café, exhibitions, art programmes, and activities, designed to draw the public into the heart of the building. The building creates a key interface with the wider Queen Elizabeth Olympic Park community. Its publicly accessible lower floors feature a curated programme of art and activities, including works by local artists, and landscaped outdoor settings providing a newly animated and accessible public realm. During construction Mace partnered with the UCL Plastics Waste Innovation Hub to replace all single-use plastics with fully reusable modular hoarding panels, recognised by LLDC as the new standard for all hoarding across Queen Elizabeth Olympic Park. Reflecting UCL’s overarching mission to embed sustainability through its campus and culture, durability and energy efficiency were central to the design approach. The BREEAM Excellent-rated building is powered in part by renewable electricity, with the aim to reach net zero carbon by 2035 in keeping with the district’s wider sustainable energy strategy. Terry Spraggett, MD Public Sector Construction, Mace said: “Together with UCL, the project team and our supply chain partners’ we’ve delivered an outstanding building. We are immensely proud to be part of this journey. Marshgate is exceptional in its vision – championing collaboration not just between the students and academics but including the wider public. Working closely with the community has been key for us to ensure we create long-term social value for the wider campus. I can’t wait to see Marshgate open and all the great ideas and innovations come to life.” Building, Design & Construction Magazine | The Choice of Industry Professionals

Read More »
Land & Water Unveil Groundbreaking Automated Seagrass Planter, Revolutionising Large-Scale Seagrass Planting

Land & Water Unveil Groundbreaking Automated Seagrass Planter, Revolutionising Large-Scale Seagrass Planting

Earth Change, a division of the Land & Water Group, alongside Project Seagrass and Swansea University Unveil Groundbreaking Automated Seagrass Planter, Revolutionising Large-Scale Seagrass Planting Land & Water, a leading environmental engineering company, and Project Seagrass, a renowned marine conservation organisation, are proud to announce the successful design, construction, and testing of an innovative Automated Seagrass Planter (ASP) patent pending. This groundbreaking technology promises to revolutionise the large-scale planting of seagrass, offering new hope for the restoration and preservation of these vital coastal ecosystems. “We are now convinced we can substantially scale up seagrass glade restoration using the automated planter, taking conventional planting (done with divers on an individual seedling basis) to sea-scape scale planting at 1000’s of plants per day” says James Maclean, CEO of Land & Water. Seagrass meadows play a crucial role in maintaining healthy marine environments, fostering biodiversity, and mitigating climate change by capturing carbon dioxide from the atmosphere. Globally, seagrass has the capability to capture carbon faster than tropical rainforests, accounting for 10 to 18% of total ocean carbon storage, despite covering less than 0.1% of the seafloor [source: Duarte et al., 2005b; Kennedy et al., 2010]. However, due to various human activities and natural disturbances, seagrass habitats have been rapidly declining worldwide. In the UK alone seagrass depletion since 1936 EXCEEDS 30% of the areas of previous colonisation. Recognizing the urgency to restore these critical ecosystems, Land & Water partnered with Project Seagrass and Swansea University to develop a cutting-edge solution. The Automated Seagrass Planter developed by this dynamic collaboration represents a significant breakthrough in seagrass restoration efforts, aligning the use of biodegradable seedpods/hessian sacks developed by Project Seagrass with the installation innovation from Land & Water. This innovative device streamlines and automates the process of seagrass planting, making large-scale restoration projects more efficient and achievable than ever before. Key features and benefits of the Automated Seagrass Planter include: The successful testing of the Automated Seagrass Planter has yielded promising planting results, demonstrating its effectiveness in enhancing seagrass restoration efforts. By enabling the rapid planting of seagrass at scale, this technology has the potential to rejuvenate degraded habitats, enhance coastal resilience, promote marine biodiversity, and provide substantial new habitats for carbon sequestration. Trial planting regimes will be subject to ongoing monitoring by Project Seagrass to validate the effectiveness of the new planting regime. “We are excited by the planting results, and we must now see how this method of planting works in Dale” says Richard Unsworth, Associate Professor Swansea University.                         Earth Change and Project Seagrass are committed to collaborating with governments, environmental agencies, research institutions, and coastal communities to deploy the Automated Seagrass Planter in large-scale restoration initiatives worldwide. Through these partnerships, they aim to create a positive and lasting impact on the health and sustainability of our marine ecosystems. About Land & Water Land & Water Group is an environmental engineering company specializing in waterway maintenance, dredging, and ecological restoration. With a deep commitment to sustainability, Land & Water provides innovative solutions for preserving and enhancing natural habitats and promoting environmental stewardship. About Project Seagrass Project Seagrass is a leading marine conservation organization dedicated to the conservation and restoration of seagrass ecosystems. Through community, research and action, Project Seagrass strives to raise awareness about the importance of seagrass and work towards its protection for future generations. Building, Design & Construction Magazine | The Choice of Industry Professionals 

Read More »
SELECT Managing Director Alan Wilson tells UK radio audience that electrical safety for consumers begins with a successful apprenticeship programme

SELECT Managing Director Alan Wilson tells UK radio audience that electrical safety for consumers begins with a successful apprenticeship programme

SELECT Managing Director Alan Wilson has told thousands of radio listeners across the UK that proper training and apprenticeships are essential to protect the safety of consumers and others in the construction industry. Speaking on the popular Building Ideas Show with Mark Millar on Fix Radio, the MD of Scotland’s largest construction trade association said that young people gain a thorough and rigorous grounding in quality and site safety via industry recognised apprenticeships. And he said that regulation of the electrical industry and protection of title for suitably qualified electricians was also essential to maintain and improve standards and safety in consumers’ homes. Alan told listeners: “The fact is that awareness of safety starts at the very beginning, and that means with apprentices, which is why our industry has run a successful electrical apprenticeship programme for many years. “This year, we have recruited almost 900 apprentices which is testament to the businesses in Scotland who put their faith in young people and as adults they take on. That’s where safety starts. “These people go through a proper apprenticeship. It’s not one of these short apprentice programmes which lasts six months or a year. It’s four-year programme in which the apprentices attend college and receive comprehensive health and safety training.” Alan also used his appearance on the show on Sunday 10 September to outline the importance of protection of title for electricians – a campaign which SELECT has been spearheading for many years. He said people were now talking about the electrification of society through heating, lighting, cars, computers and day-to-day devices, so it was increasingly vital that work was done by qualified electricians. Alan said: “Electricians do safety-critical work and if they get it wrong it can have potentially life-ending consequences for them or  the people they do the work for. It’s not overstating the situation to say that work carried out by unqualified people  can be fatal. “There are some 70 protected titles, from obvious ones like teachers, dentists and nurses to other trades like farriers and nightclub bouncers. So if you want to shoe a horse in the UK, you need to have qualifications and it’s a protected title, yet that doesn’t apply to electricians. “If electricians had protection of title, people would know that if someone came to their door claiming to be an electrician then they could confirm they were qualified. “We are trying to get rid of people who have no training – it’s about protecting the public and the perception of the industry.” SELECT has been campaigning for regulation for years alongside the Scottish Electrical Charitable Training Trust (SECTT) and Scottish Joint Industry Board (SJIB) and has created a Wall of Support to show the depth of support from individuals and organisations. Recent additions include Foysol Choudhury MSP, SELECT Associate Members Building Safety Group, LINIAN, Flexel and Hager andmember firms Stirling Electrical Services, RW Bell, John McNicol & Co and FT Davidson. As well as more than a third of MSPs, other bodies that have contributed a brick to the wall include the Unite the Union, Electrical Safety First, The Royal Institution of Chartered Surveyors, the Scottish Association of Landlords, the and the Energy Saving Trust.  Building, Design & Construction Magazine | The Choice of Industry Professionals 

Read More »
Trending now: The biflation paradox

Trending now: The biflation paradox

The article was written with the help of Chris Atkins, a Chief Innovation Officer at The Gap Partnership. This special report on the hot topic of biflation examines the paradoxical state of affairs in which both inflation and deflation occur in the economy. Navigating these challenging and complex conditions requires a range of highly tuned commercial skills. This article shares a four-point plan for negotiators to equip themselves with tools and strategies to face into biflation. Increasingly our clients are coming to us because they are caught in the biflation vice: pressure from governments and consumers to reverse the significant inflationary pricing we have experienced over recent years while still trying to recoup current and historical commodity price increases. So, what are we seeing and how can we most effectively address this paradox? The current situation First, there is a perception that commodity cost increases have halted. Unfortunately, that is not the case. There is undoubtedly a slowing and, in some cases, a reversal of the shocking escalation that we saw last year. But in the longer term, the trend remains upwards. It is also true, as can be seen from this shorter-term chart, that certain critical commodities continue to rise sharply. Second – and here’s the real paradox – many consumer goods companies are reporting that offtake remains strong despite inflation, so accepted price elasticity models are nullified by the ubiquity and scale of the increases we have seen. If this paradox is reality, it’s highly unlikely that reductions in consumer price will produce volume gains, and we know from using our cost increase cost decrease profit calculator that, even in ‘normal’ economic conditions it’s rare to offset price decreases by real volume-related profit benefits. This calculator helps you to quantify, in simple terms, the value of any potential price increase or the cost in margin absorption of missing your target. It makes compelling reading! In this reality, both the retailer and their suppliers are likely to lose margin, which is not good in an industry already under wage and margin pressure. You could call it a true lose-lose situation. What to do? It would be easy to ignore biflation. Consumer goods companies have become increasingly confident and adept at negotiating price increases, not just annually, but several times in a year. And these increases have been accepted by the consumer with little change in buying behavior. This year it will be different. The pressures are different, attitudes are different, and the power balance has shifted. With that in mind, here are some points to consider: ONE: Don’t become complacent. The landscape has changed, but do you know what aspects have altered and by how much? What is the real situation of your counterparty and how can you turn this from a lose-lose to a win-win? TWO: Get forensic. Sweeping statements about the scale or even the reality of cost of goods increases are being more scientifically challenged with increasingly sophisticated should-cost modelling. Don’t find yourself on the back foot of your counterparty’s analysis. It is critical to understand your cost drivers and margin enhancers. THREE: Be rigorous. Market dynamics, competitor approaches, inflation fatigue, government intervention, consumer sentiment: all of these will have an impact on the trajectory and success of your negotiations. Ignore them at your peril and carefully monitor the ebb and flow of the marketplace to identify the optimum timing. Negotiation planning should not be a function of your corporate calendar, but of optimizing results. FOUR: Unify communications. There is an increasing need for external communications teams to be involved in planning, so they are aware, aligned and prepared for any resulting trade or mainstream publicity as, increasingly, positioning is played out in the public domain. Additionally, check the messaging of your corporate communications. Annual reports paint the best picture of profitability. How will your counterparties read those messages? These considerations will be the difference between successfully navigating the turbulent waters of biflation, or getting caught in the maelstrom. Only two questions remain. How ready are you? Have you started planning yet? To find out more about how The Gap Partnership can support you with the challenges that biflation presents, please get in touch. We’d be delighted to help. 

Read More »