Industrial site redevelopments: brownfield projects

Redeveloping an industrial site: General contractor’s premise

Building a turnkey greenfield factory is a fairly complex task that requires hands-on experience and technical know-how. Good organisation is certainly the best asset to guarantee the success of a project like this. However redeveloping and/or optimizing an old industrial property, an activity generally called brownfield project, is a completely different enterprise.

In this article we will try to explain the crucial activities which revolve around simple and complex industrial site redevelopments. We will also consider the importance and concrete convenience of redevelopment projects compared with new -builds.

This kind of project requires key skills and competences in the construction and installation sectors as well as the ability to draft a precise preliminary assessment of industrial processes. Therefore the level of difficulty rises, competencies must be consolidated and technical knowledge has to be integrated into all steps of the procedure.

Industrial site redevelopments: current context

When we think of new industrial projects, what usually comes to mind are huge mega-factories which showcase innovative state-of-the-art technology and architecture. This happens because our minds are focused on the future and on the idea of newness.

Anyone who is familiar with industry, and especially with the manufacturing sector, knows that there is a prevalence of abandoned industrial sites, which are certainly real-estate assets. Moreover, in today’s era of 4.0, many industries still work in old factories which may be efficient in many ways, but are not very attractive from an architectural viewpoint.

Considering all the manufacturing plants built in the 1950s and 60s, it is easy to understand that what makes an industry competitive is unrelated to aesthetics, but rather depends on productive efficiency and above all on logistics.

Modern successful production enterprises have transformed their plants over time to make them more suitable and efficient.

Key activities for industrial redevelopment

Assessment of client’s needs within his/her production context

Each client has his/her own specific needs according to the type of industrial activities they do on a daily basis. There are no general standards for requirements so it is hard to compare one redevelopment project with another.

This is a determining factor for general contractors who have to work with project managers with experience and expertise in the industrial construction and utility systems sector.

This first phase to establish the client’s requirements usually takes a few months, and our flexibility and helpfulness towards our client form the foundations for the whole project.

In this evaluation phase, the general contractor and his engineers establish a proactive, confident relationship with the client’s technicians.

Project managers must be able to convey their knowledge and give advice during meetings on qualitative, timing and financial convenience matters.

Brownfield projects are founded on a careful assessment of the client’s requirements and an implicit assessment of the production context.

Environmental impact study and authorization procedure in compliance with legislation

Running parallel to the phase of establishing a client’s requirements is a technical and engineering study based on the assessment of environmental impact.

This is a very important step as modifying, replacing or redeveloping an existing structure will always have more or less serious impact on the environment.

Any activity that requires reclamation, cleaning up or redevelopment will entail a cost for the client.

It is therefore important to consider the environmental impact study before drawing up a budget, both from a technical and an economic point of view.

It is also crucial for the project to comply with current development planning and authorisation legislation and regulations, and this needs to be checked in the preliminary phase.

The many stakeholders include the municipality, which grants appropriate approval authorisations, organizations like the local health authority ASL, the WWF, trade and industry bodies, utilities companies (electricity, water, natural gas and/or propane) to increase and /or interrupt existing supplies, and specific consortia or territorial entities.

Interconnected projects

It is almost impossible to create a complete project for all phases of redevelopment nailing each single technical aspect perfectly.

Nowadays technology has evolved in leaps and bounds compared to a few decades ago. Surveys are conducted using satellite tools, drones are used to take aerial photos, design and calculus software and programmes are more and more sophisticated and use interlinked language that connects the various stages of the project in BIM (building information modelling); but this is not enough.

Projects like this entail the risk of potential unexpected setbacks and contingencies.

The core of each project is the interconnection among its various stages. Technical adaptation calculations are superimposed on the existing infrastructures, and complement the definition of the production site’s general and production-specific systems.

This basically means that the general contractor has to be able to simultaneously plan civil and structural infrastructures as well as electrical and mechanical systems (m.e.p. systems),which are a crucial part of the correct functioning of the production site under redevelopment.

While the general contractor plans, builds and redevelops, the client carries on working in the factory, business as usual, as production cannot be stopped or transferred at such short notice.

A series of operational procedures strive to eliminate potential interferences with the production, and above all they aim to raise the safety standards in the workplace and on the building site.

This aspect is certainly decisive when drawing up a general brownfield redevelopment project.

Budget for planned activities and definition of work plan

When a plan is drafted, budgeting occurs either simultaneously with, or immediately following, the initial phase.

This is a rather complicated step as all the analysed factors must be taken into consideration:

• initial data and client’s requirements;
• preliminary and final finished project;
• environmental impact study;
• study of authorization procedure for single projects;
• well-defined contingency, and
• definition of staff and management personnel involved in the project.

The budget will include not only economic factors, but also the planned execution time of the whole project. An industrial redevelopment needs a defined delivery time.

Usually the reason behind choosing to redevelop an existing building is the quicker work plan compared to a new-build. However sometimes the opposite happens, and the work takes longer than anticipated. A very detailed work plan will definitely help clients to pinpoint their investments carefully.

Evaluation and comparison of brownfield/greenfield development costs

There are lots of evaluation parameters, and also in this case good technical and managerial knowledge is crucial to make the best decisions.

We can summarize the main parameters in four points:

1- Cost

The first parameter is economic. We take the total amount of the post-project budget and create a ratio with the total surface (m²) of the area that needs to be worked on. Then we compare the per-unit value with the per-unit cost in the ratio per square metre of the new-build or another new project with similar characteristics. If the per-unit value of the brownfield project is greater than the per-unit cost of a similar greenfield project, then an industrial site redevelopment is not worth it, and it would be advisable to invest in a new-build on the same site.

2- Timing

The second factor is timing, so for the same cost of investment, brownfield vs. greenfield, factories tend to optimize their investments over time, so a client will usually chose the quicker route.

3- Cost/Benefit

The third parameter is the cost/benefit analysis, which is carried out before deciding whether to opt for redeveloping an existing site or go for a new-build. Keeping this in mind, various key factors need to be considered such as logistics, staff recruitment, and general costs regimes etc. More precisely, in industry cost/benefit analyses are always done at the moment of programming any general investment aimed at energy efficiency. Therefore if benefits from energy savings, brought about by installing better-performing new high technologies, facilitate retrieving future investments with a pay-back time of less than 4/5 months, then it is definitely worth making sure the industrial site development becomes as efficient as possible.

4- Context

The last parameter we believe is important to consider is the geographic position and the logistics of the development site compared to that of a potential new site for a new-build.

Many industrial areas, despite being obsolete, have previously been served by main infrastructure and utilities systems, and they are usually built in proximity of main communication routes, state roads, duel carriageways and motorways, so they are strategically placed as far as logistics are concerned.

Contrary to new industrial areas, old ones do not enjoy as many benefits.

To conclude, the context parameter is less an indicator and more a prevailing factor which determines the feasibility of both types of projects.

Client’s staff training and refresher activities in line with the upgraded technology plant engineering

Once the industrial site redevelopment has been completed, the client’s maintenance staff will undergo radical changes in their job management. Replacing old infrastructures and utilities systems generates a new operative model of reference.

In this situation the general contractor is under the obligation to inform the client of this aspect, as well as giving his/her technicians assistance and management training.

The various training activities are included in the estimate, and are part of corporate Capex (capital expenditure) and therefore are included in the general redevelopment project costs.

This activity may continue after the inspections have been carried out and may be part of an after-sale contract, for example in the form of assistance and guarantee of the completed works. In any case we believe training activities should be an important chapter in any brownfield project.

Inveco Group’s experience

In recent years Inveco has completed various projects both in Italy and abroad.

Each project was customized to meet our clients’ requirements, and all systems comply with current planning regulations.

Completed industrial site redevelopment projects

– CLN Group, Serbia, Kostolac municipality. Excavation and special foundations construction for new coil stretching lines inside an existing factory.

– Plados Telma, Serbia, Nova Pazova municipality. Large scale general and production-specific systems installation, creation of new internal partitions REI 120, new external technical premises, restructuring administrative offices.

– Fixa Shoes, Serbia, Ruma municipality. Redevelopment of an old 1960s building. Restoration of all façades, door and window frames and industrial roof, ex novo industrial floor, administrative offices, external yards and logistic loading and unloading area, and general and production-specific systems.

 

– Dayco Europe, Italy, Ivrea (Turin) municipality. Over the course of a few years we restructured the former Olivetti industrial park in San Bernardo d’Ivrea, carrying out construction and logistic requalification and making various production departments more energy efficient with the application of new technologies like photovoltaic systems, LED lighting systems and boiler optimization. We also disposed of significant quantities of various categories of cement-asbestos.

 

– Lombardini Motori, Italy, Reggio Emilia. We cleaned up 24,000m² of cement-asbestos industrial roofing with a sandwich encapsulation system. Cement-asbestos was also limited to the industrial department’s water tower.

 

– Dytech Fluid & Technologies, Italy, Airasca (Turin). We cleaned up 16,000m² of cement-asbestos industrial roofing with a sandwich encapsulation system and we installed 80 smoke out domes to combine with air exchange, interfaced with a new centralized fire detection system inside the industrial plant.

 

– Cooper Standard, Italy, Ciriè (Turin). Generalized multilevel industrial site redevelopment of 110,000m², consisting of construction and infrastructure redevelopment, energy-consumption optimization of all technological systems, and cleaning up of lots of surfaces and areas contaminated with cement-asbestos.