Global Food & Beverage manufacturers look to smart finance to meet pandemic investment challenge

Siemens Financial Services (SFS) has released a new whitepaper entitled Rising to the New Challenge: The role of Smart Financing in helping the Global Food & Beverage Sector navigate the economic ‘new normal’. This is the second in a series of insight papers on the automation, retrofit and digital transformation investment challenges faced by manufacturers.

The pandemic crisis and its economic aftermath make the importance of investing in agile technologies even more critical. Historic evidence shows that companies that continued to invest in previous crises emerged ahead of their competitors.  Such investments typically enable manufacturers to achieve levels of operating flexibility that can cope with uncertain and volatile markets – a flexibility that is becoming an increasingly important competitive advantage as patterns of supply and demand, as well as working and labour practices, are likely to fundamentally change as the crisis recedes and businesses and consumers embrace ‘the new normal’.

The size of the investment challenge is, however, considerable. SFS has developed a model which conservatively estimates the size of the investment challenge faced by the Global Food and Beverage manufacturing industry as it seeks to implement smart factory technology during the five-year period 2020-2024.

The Investment Challenge for Digital Transformation in the Food & Beverage Industry 2020-2024

Country

Investment Challenge - billions of USD

Brazil

8.8

China

343.1

France

7.7

Germany

9.2

India

8.0

Italy

8.3

Japan

20.1

Poland

3.8

Russia

5.3

Scandinavia

4.8

Spain

9.7

Turkey

4.8

United Kingdom

4.4

United States

36.8

Rest of the world

91.9

Global Total

566.7

 

Expert commentators are advising companies to diversify their financing sources, nurture existing lines of relationship credit, and harness alternative financing sources, such as Smart Financing, in order to preserve existing lines of credit.  New financing models to enable technology and equipment investment are often aligned to business outcomes, to integrate financing closely with the expected rate of return-on-investment delivered through the benefits of retrofitting existing installations and/or adopting new agile, digitalized technologies.

“The flexibility offered by upgrading existing platforms through retrofitting automation, or digitalization can be a significant competitive differentiator during this crisis,” says Brian Foster, Head of Industry Finance, Siemens Financial Services. “The ability to adapt swiftly and intelligently to rapidly changing markets remains an urgent need for businesses of all sizes. Smart finance enables sustainable investment based on clearly identified desired business outcomes for F&B manufacturers, facilitating access to the right technology and services with expert support from a specialist financier.”

 

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