Cereals processing technology

202 Cereals processing technology
process. This aspect is further exacerbated by the ease of locating terminals in
offices remote from the process itself.
9.9 The future of the malting industry
In Section 9.2, the current picture described was one of rather depressed trading
and low profit margins. At the end of 1998, the Maltsters Association of Great
Britain recorded that year as being the worst in the memory of those in the
industry, with European Maltsters on minimal profit margins, and instances of
malt being sold below cost to maintain a customer base. This has been the result
of, among other factors, an over-capacity in the European market, with UK
Maltsters further pressurised by the high value of sterling. Total production in
the UK continues to fall slightly, although a small increase in exports is evident.
The UK Maltster will need to rely heavily on export markets for some time.
It is difficult to foresee what events worldwide will lead to a healthier
environment, encouraging a substantial increase in malt production within the
United Kingdom, and promoting selling prices which would allow major
investment in new plant. It is unlikely that any Maltster will find it financially
attractive to develop a new greenfield site, due to the high cost of the necessary
infrastructure, including such elements as the supply of water, gas, electricity,
new roads, effluent treatment, offices, storage, etc. As a guideline, the cost of
developing a greenfield site might be in the order of £400/£500 per tonne of malt
produced per annum. This figure will vary considerably, as a multitude of
parameters can affect the final cost. Of the above figure, perhaps £250/£300 per
tonne of malt per annum might be invested in the production plant itself, the
remainder covering storage, site ancillaries, services, etc. 3
Any investment in the mid-term is therefore likely to be restricted to the
renovation or upgrading of existing plant, particularly where more efficient
production can be achieved at relatively low cost. In the past few years, there
have been efforts to increase the ‘tonnes of malt produced per employee’ in
major firms, and this attitude is likely to prevail.
With only five major Sales Maltsters in the UK at present, there is little room
for further consolidation or amalgamation.
Recently, in the UK, there have been instances of Maltings being sold, on the
basis that the new owners (Sales Maltsters) would continue to provide malt on
contract to the vendor (Brewer or Distiller). Worldwide also, brewers are
looking closely at the function of malting within their core business, with a view
to possible disposal, due to the current lack of profitability in producing malt. If
this trend were to continue, it is possible that the Sales Maltster might, in due
course, find himself producing a higher proportion of global malt requirements.
Whether this would be advantageous in terms of profitability remains to be seen.