Inside Piedras Negras. What s new and innovative at Grupo Modelo s 10mhl mega-brewery THE INTERNATIONAL BREWING INDUSTRY MAGAZINE
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1 THE INTERNATIONAL BREWING INDUSTRY MAGAZINE VOLUME 139 NUMBER 6 NOVEMBER/DECEMBER 2010 Inside Piedras Negras What s new and innovative at Grupo Modelo s 10mhl mega-brewery Wither German consolidation? Veltins pursues exports Brau Beviale 2010 previewed
2 COVER STORY STATE-OF-THE-ART Brewing is underway at Grupo Modelo s new 10mhl brewery near Piedras Negras, Coahuila, in northern Mexico, in a plant that boasts all state-of-the-art technology and then some. Editor Larry Nelson visited the brewery for an inside look, as well as for a big picture view on Modelo s environmental and technical objectives What are the defining forces for necessitating additional production capacity, be it for beer, cars or vacuum cleaners? It s a collision of considerations, surely: growth projections, accurately based on historic trends, weighed against the total existing combined capacity and the working condition of said capacity. For Grupo Modelo, the fortunes of the first half of the first decade of the new millennium had been kind to the brewer. Over those five years the compound annual growth rate for Modelo s beer brands in the domestic market was 3.1% and in export markets 10.9%. Against this was an existing production network of seven breweries that would be operating by the end of the decade at one of the, if not the, highest utilization rates amongst global brewers. (By 2009 Modelo would be brewing at 89% capacity, compared to estimates of 79% for Mexican rival Femsa and 73% for SABMiller.) So thus it was virtually inevitable that in September 2006 chief operating officer Daniel del Rio appeared before Modelo s Board of Directors with a proposal for a greenfield mega-brewery. The site selected for the brewery was in the northern Mexican state of Coahuila. A 334 hectare site was purchased, located approximately 15 kilometres south from Piedras Negras, a city on the banks of the Rio Grande. Given its proximity to the US border, from the outset Piedras Negras the operating company is Compañia Cervecera de Coahuila was intended to serve the growing thirst of Americans for Corona Extra, Corona Light and Modelo Especial. These are all heavyweight performers amongst import brands: Corona Extra has been the number one imported beer in the US for the past 13 years, currently claiming 28% market share amongst imported brands. Modelo Especial ranks third, and boasts double-digit growth for more than 18 years. Corona Light, fifth ranked amongst US imports, was the only light beer import to grow sales during the 2009 downturn. Beyond proximity to market, there is also access to a national highway and a mainline rail service. Electric power lines run past the property, although Grupo Modelo finds it more efficient to operate its own power plants in breweries with capacities in excess of five million hectolitres. A branch of a natural gas duct is within 17 kilometres and Piedras Negras will be converted to gas-fired power. Finally, perhaps most importantly, there is an under-exploited aquifer with good quality water. There s another asset that s offered by the local community a well-educated workforce with sufficient numbers of graduates in the technical professions required by the brewery. About 90% of the workforce at Compañia Cervecera de Coahuila are new, local hires with the top management drafted in from other Modelo breweries. The land purchased for the brewery is virtually flat, with a slope of no more than five meters from one extreme to the other. Combined with low seismic activity in the region and good soil, construction costs were saved because the foundations did not need to be excessively deep. All federal permits needed to start construction, including the environment impact study, were obtained by June 2007, allowing construction of the brewery to begin. According to del Rio, the work was undertaken at a record-breaking pace: the first brew took place on 28th March of this year Total capital expenditure is estimated at US $600 million. Bedding in the technology Of course Grupo Modelo is no stranger to the operation of mega-breweries, those with capacities of greater than 10 million hectolitres. Zacatecas is Grupo Modelo vice president and COO Daniel del Rio: 20% of CCC s energy needs will be met by renewable resources at 20 million hectolitres, Tuxtepec 16mhl, and Mexico City is 11.1mhl. So there was a wealth of in-house experience, making it easier to breathe life into Piedras Negras, right? You must credit director of engineering Alejandro Correa with a dry sense of humour. Yes, he replies, In this factory we put all the experience. All the mistakes: we call it experience. Del Rio notes that one of the biggest challenges in commissioning the brewery was the integration of the selected technologies. In each stage of the process, we have tried to use the most advanced technology available, as long as it was congruent with our quality criteria and production philosophy, he explains. Consequently technical and information systems play a preponderant role which is why one of the major challenges in commissioning was to get the different systems to interact with each other. 16 Advantage Publishing Ltd Brewers Guardian, November/December 2010
3 On top of the world: making CCC a reality are (from left) Grupo Modelo director of beer production Mario Reynoso, Grupo Modelo director of beer and malting processes Arturo Cadena, Compañia Cervecera de Coahuila General Manager Abel Loza, Grupo Modelo director of engineering Alejandro Correa, and Compañia Cervecera de Coahuila quality manager Ricardo Cuevas What s taken shape at Piedras Negras not only takes advantage of what s best in Modelo s experience, but breaks new ground as well. There s an increased level of automation on the packaging lines and in the warehouse; there s the energy and water efficient Ziemann brewhouse; and there are challenging environmental initiatives being implemented. According to del Rio, Compañia Cervecera de Coahuila will treat its wastewater with an anaerobic-aerobic process that will enable biogas to be compressed and sent to the boilers. We expect that the contribution of these fuels will be between 5% and 7% of the total plant requirements, he said. In common with a programme already in place at Zacatecas, it is anticipated that CCC will have the ability to burn spent grains as fuel. Factoring in all programmes, del Rio says We expect that the percentage of use of renewable sources of energy at the CCC brewery will reach levels of approximately 20% of the total required. Environmental leadership Across the production network, on average the ratio of water used to beer produced is 3.4:1, allowing Grupo Modelo to claim world leadership. This admirable performance is possible in part because of a five-part approach by the brewer to water management: Efficiency in water consumption Reuse of water Wastewater treatment and recycling Preserving and restoring aquifer use Promoting awareness of efficient use of water outside the organisation It s the reuse of water where Modelo seems especially diligent. Del Rio describes a system of recovery and treatment of water used in processes where that process does not significantly alter its quality. He notes, Were it not for this reuse, we would be forced to extract 43% more than our current volume. In regards to energy requirements, a Grupo Modelo s strategic objective is the gradual and progressive substitution of fossil fuels for renewable energy. Del Rio submits that Grupo Modelo has registered 200% growth in its use of renewable energies over the past three years. Further at the end of 2009 fully 10.52% of the thermal energy used by breweries was from a renewable source. Which renewable energy sources are being tapped? Generation of biogas from waste water has been mentioned in the context of Piedras Negras. Its use has been expanded in recent years across Modelo breweries, with it on average accounting for six per cent of brewery energy requirements. At Zacatecas, since 2008 spent grain has been burned as a renewable energy source. The spent grain needs to be dried first, with it 89% humidity coming out of the wort filter. A bonus is that the by-product contains almost no sulphur, 0.34%, compared to the 4% average weight in fuel oil. Del Rio adds, It is important to point out that emissions originated by the combustion of spent grain do not increase the potential for global warming of the earth s surface, since carbon emitted has its origin in the photosynthesis process that takes place during growth of the barley. Modelo is looking at wind power, using it in breweries that are not currently co-generating their own electricity. Starting in 2012, these smaller breweries, as well as the group s malthouses and bottle and cap plants, will be supplied
4 COVER STORY Stained glass summation: the story of Piedras Negras is there for all to see in vivid colour in the brewery s visitor centre wind energy. We estimate that this clean energy will account for up to 80% of these plants energy requirements, says del Rio. And will reduce CO 2 emissions by more than 60,000 tons. The drive to improve environmental performance extends to logistics. Here attention is paid to keeping both Grupo Modelo s and those of its external suppliers as up-to-date as possible with vehicles that do not exceed five years of service. Del Rio explains, Compared to the average Mexican truck fleet with approximately 20 years of service, we are very well able to achieve the lowest diesel consumption ratios in the country. What s next, technically? Del Rio is asked what new technologies he sees emerging onto the market that might well be attractive to Grupo Modelo. There s quite a detailed reply offered, with some elements familiar to those in the industry; others not so much. Crossflow filtration systems, with an eye to eliminating use of kieselguhr, are of interest. Del Rio adds that Grupo Modelo is working on new developments to achieve beer filtration and stabilisation in a single step. For its mid-sized breweries Modelo is investigating Dispax crushers. Del Rio explains that when the crushers are combined with new generation mash filters, have achieved a high level of automation and quite acceptable extraction efficiency values without affecting the quality of the wort. As with the Ziemann brewhouse at Piedras Negras, Modelo has an interest in vacuum evaporation as a way to reduce energy consumption. There s also interest in zero-waste brewing, with the use of spent grains for fuel at Zacatecas a step in that direction. However, brewing with unmalted barley with the use of enzymes that s proposed as an environmentally friendly alternative isn t of interest. Del Rio comments, we consider it to be a very interesting development that some enzyme producers have achieved, but that does not look appealing for our products or market at the moment. Regarding packaging line innovations, at plants where most of the production is dedicated to reusable bottles, del Rio says Grupo Modelo is testing a technology to recover the caustic soda used to wash the bottles through a microfiltration process. The bigger picture Beyond environmental initiatives and assessing the value and applicability of the latest technical innovations, del Rio has a number of other concerns on his plate. For example, the current volatile markets for raw materials are being monitored closely. And then there s that new guy on the block, who s potentially going to make the competitive environment more challenging at home and abroad. Del Rio says, Although at Modelo we are used to competing with the top global brewing groups in over 160 countries, the arrival of Heineken certainly implies a new challenge. For now, though, Modelo is the clear market leader versus Femsa, both at home and in exports. Modelo points to market reports that have it holding 58% of the domestic market for beer and fully 83% of the export market, or 63% overall if the domestic and export markets are combined. According to their own figures, today Grupo Modelo checks in at number seven in a ranking of global beer groups. In 47 of its 160 markets Corona Extra is the number one imported beer. In common with their international peers, Modelo is considering its packaging needs. Bottles have come in for review and are being standardised, both for domestic and international markets, in order to reduce change over times. At the same time Modelo is also training its staff, improving their software application skills, to work with more SKUs with not necessarily incurring more down times, therefore maximising throughput on production lines. This may have gone largely unnoticed beyond Mexico but on 25th October of this year Grupo Modelo celebrated its 85th anniversary. An upand-running, state-of-the-art brewery is certainly icing on the cake. The final question is what happens next in terms of expanding Compañia Cervecera de Coahuila. In the planning stages it was envisioned that one day this could become the world s largest brewery with 30mhl capacity. With the ongoing economic recession that possibility seems to be off the table. But a doubling of capacity to 20mhl one day remains a distinct possibility. Daniel del Rio explains, In terms of expanding the brewery capacity by another 10 million hectolitres, we don t at this time have a defined schedule but we can say that it will be possible to add this capacity on without any major impact on the current operation of the brewery. The design from the very beginning considered that the expansion could be done in modules and practically as a mirror image of the current operation, without interrupting production. 18 Advantage Publishing Ltd Brewers Guardian, November/December 2010
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6 COVER STORY INSIDE COMPAÑIA CERVECERA DE COAHUILA Raw material supplies Compañia Cervecera de Coahuila s water supply is more secure than the brewery s semi-arid surroundings suggest. The water is sent via pipeline to the brewery from artesian wells some 60 kilometres distant. There s no pumping, only gravity is required. Reverse osmosis is used to strip out the minerals. On-site there s water storage for a day s production; there s also storage available in the pipeline itself. Malting barley, corn starch and maize are brought in by rail. Modelo operates its own malthouses, three in Mexico and one in Idaho. These facilities supply 75% of Grupo Modelo s malt requirements; the remainder is purchased from maltsters in the US and Canada. Grupo Modelo has its own power plant at Piedras Negras, in order to optimise the use of steam and energy generation. There are two turbines, one is condensation (10 MW); the other is a 6 MW back pressure turbine. The brewhouse There are two production lines in the glistening Ziemann brewhouse, each capable of five million hectolitres annually. The first brew was in March 2010; production from the second line is expected this November. The brewhouse boasts the latest environmental refinements, namely energy recovery and vacuum evaporation. The brew length is 1,050 hectolitres, in high gravity. Piedras Negras is notable for the world s largest lauter tun, fully 15.2 metres in diameter. For the first time Grupo Modelo is utilising pre-mash tuns, two for each line, to decrease the mashing cycle time. As a result each line is capable of 12 brews per day. There s but one control room, with six staff commanding everything from raw material intake through to the bright beer tanks. Process control is run on a PCS7 system from Siemens, said to be the world s largest such system. Fermentation & maturation There is one yeast strain in use at Compañia Cervecera de Coahuila, with it changed every two months. There is a Filtrox beer recovery system installed that allows recovery equivalent to two per cent of production. Grupo Modelo uses an automated unitank system, with 70 tanks in the farm. There are 12 tanks with a 1,050hl capacity for one brew, for fermentation and propagation. And there are 16 x 5,100hl and 42 x 12,000hl tanks for fermentation and propagation. Transfer of beer in the cellars is done via a complex automated double-sit valve system, which helps reduce waste. There are three Filtrox-supplied filtration lines, each with a capacity of 1,200 hl/hour, using candle filters and kieselguhr. Finally there are 27 bright beer tanks, each with 5,100hl capacities. 20 Advantage Publishing Ltd Brewers Guardian, November/December 2010
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8 COVER STORY INSIDE COMPAÑIA CERVECERA DE COAHUILA The packaging halls There are three bottling lines and one canning line in operation. The bottling lines operate at 2,400 bottles per minute; interestingly each line has three fillers operating at 800bpm. Modelo believes the capital cost is more than offset by fewer bottle rejections and lower maintenance costs. With only three brands in production there are few SKUs departing Piedras Negras. Corona Extra and Corona Light are produced in six-, 12- and 18-packs, and loose pack 24s, all 12 ounce bottles. Theses two brands are also canned, 12-packs of 24 ounce cans. Modelo Especial is only canned, in 6-, 12- and 18-packs of 12 ounce cans, and 12-packs of 24 oz. Sidel has supplied all the bottling and canning lines. The robots hard at work preparing to palletise product is unique amongst Modelo breweries. There are 54 robots Sidel-supplies installed at Piedras Negras; a total greater than all the other seven Modelo breweries combined. Automated warehousing Another first at Piedras Negras for Modelo s production network is the use of fully automated vehicles to move palletised product from the end of the packaging lines into and through storage. The Laser Guided Vehicle system, supplied by Elettric80, is controlled remotely. The warehouse is massive storage is on 11 levels, with positions available, all fully automated. Product is shipped from Piedras Negras by truck and by rail, a minimum of 16 rail cars per shipment. The brewery operates its own railroad, in effect, with 12.2 kilometres of new track laid on the site. The brewery has its own engine; staff can switch cars on-site. Looking to the future The vantage point for this image is from top of the malt tower. The view is north towards Piedras Negras and the United States border, less than 20 kilometres distant. As is evident, land for expansion isn t a concern and, as strange as it may sound, the existing 10mhl brewery is modular; the second can simply be built alongside without interrupting production. To the left of the brewery there s an already constructed large building that s being used for storage, with a rail link. Modelo envisions that one day this will be occupied by a glass manufacturer supplying the brewery, again cutting production costs. In the early days of this project it was envisioned that it might one day be the world s largest, reaching 30mhl. Modelo says that 20mhl is possible, but not yet scheduled. Even if US demand increased to where a further 10mhl of capacity is needed, Modelo is not considering producing 30mhl at one facility. 22 Advantage Publishing Ltd Brewers Guardian, November/December 2010
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