South African dairy giant, Clover S.A., has unleashed the benefits of servitisation at its Queensburgh mega-factory, by means of a R360 million investment by energy solutions company, Energy Partners (EP).
Servitisation, whereby clients pay for a service rather than the equipment itself, means that Clover will only pay a fee per unit of the refrigeration and steam it uses, enabling the dairy company to lower its operational costs by as much as R792 million over the period of the agreement.
According to Chief Executive Officer of EP, Manie de Waal, the model highlights an opportunity for commercial and industrial businesses to increase their bottom line while decreasing operational costs and risks in a very challenging economic environment.
“South Africa’s limited and unstable power supply is now a medium-term certainty. More than just electrical power, it is absolutely critical to identify opportunities across the total energy ecosystem, such as refrigeration and steam supply, whereby capital can be preserved, efficiency increased and costs reduced.”
Zero Clover capital investment
He continues, “Servitisation builds operational agility, improves profitability, minimises waste and achieves resource efficiency. We are global leaders with a servitisation model that includes 100 percent investment, design, construction and utility management across power, refrigeration and steam assets.”
With EP assuming the capital cost of the project, Clover is able to further invest in Project Sencillo, its five-year, multi-phased plan targeting the improved utilisation and efficiency of company assets and processes.
Anton Pretorius, Clover’s Group Manager: Product Technology and Technical Services explains, “This removal of upfront investment, together with the fact that we have access to a modern, automated plant that EP has committed to guaranteed uptime and efficiency in line with industry standards, has resulted in lower operational costs and ensures that Clover is at the forefront of efficient and sustainable technology.”
A win-win situation
De Waal adds that, despite the 18 months it took to construct a new ammonia cooling plant within the existing plant room, a 1,180m2 boiler house and a 1.6MW solar system, Clover experienced minimal interruptions to operations.
Critically, Clover’s servitisation agreement with EP has secured the mega-factory a reliable supply of refrigeration and steam, with cooling efficiency alone increasing by 40 percent. It will also avoid 132 million tons of CO2 emissions over the 20-year term.
Amidst substantial challenges for South Africa’s commercial and industrial sectors, the partnership is “definitely a win-win for both parties”, concludes Pretorius.