Buyers flock to online auctions of processing equipment

By Ahmed ElAmin

- Last updated on GMT

Related tags: Food, Food processing, Food industry

From gleaming stainless steel valves to industrial scale kettles,
the guts of Winn-Dixie's failed food business are displayed on the
Internet as equipment from two of the company's plants are put up
for auction.

The growth of online auctions of used factory machinery provide opportunities for managers worldwide to pick up brand name parts and equipment they may need to start new lines or to upgrade theirplants.

The increased availability of second hand food machinery also helps smaller companies get into the market quickly without having to make a big spend on new equipment -- providing processors withthe ability to make adjustments to their production lines faster. Trends in the food industry have also been relatively unpredictable in recent years, leading more and more companies to rely on theused equipment market to keep apace with constant changes.

The Branford Group and Rabin Worldwide will conduct the online auction next week. It features nine complete processing and packaging lines from two of Winn-Dixie's food processing plants. The plantin Jacksonville, Florida produced spices, tea, coffee and instant mixes. The plant in Fitzgerald, Georgia made peanut butter, mayonnaise, syrups, ketchup and jellies.

The equipment auction is being done by order of the US bankruptcy court. Winn-Dixie filed for bankruptcy reorganization in February this year.

James Gardner, Branford's senior vice president, said online auctions of used food processing equipment are becoming more and more popular among buyers and sellers. He estimates the Winn-Dixie auction could pull in over $3 million.

"Without question it's a growing business,"​ Gardner told FoodProductionDaily-USA.com in an interview. "It has been a very active year."

The auction will be conducted on the 7 and 8 December, live over the Internet, with buyers entering their bids from their desktop computers over secure connections.

Since most of the equipment is made by well known brand names and is usually made of durable stainless steel, buyers are keen to put in a bid or two. In the Winn-Dixie sales the equipment includessuch manufacturers as Krones, Tetra Pak and Alfa Laval among others.

Previously, auctions were seen as a last resort for sellers, Gardner said. With the growth of the Internet, auctions have become more attractive by bringing in more buyers worldwide. In otherwords, auctions are becoming more mainstream.

"People are becoming more comfortable with the online buying process,"​ Gardner said. "Before they did not set aside budgets for this kind of buying. Now, with all thenotice we have given them they are planning ahead."

This year Branford and Rabin have conducted about 30 auctions of food processing equipment located at 20 US plants. In previous years sellers have included Hershey's and PepsiCo.

Among the upcoming auctions by Rabin, which specializes in food processing equipment, will be the sale of a Plukon-Friki turkey processing plant in Amsterdam, the Netherlands on 1 December.

Rabin is also auctioning bakery mixers, ovens and packaging machinery from the closed plant of an unnamed cookie baking company in Des Plaines, Illinois on 13 December. On 18 January Hershey's isputting a complete chewing gum factory on the block in Puerto Rico.

Sales of processing lines and used food equipment in general attract a lot of small and medium-sized buyers looking to expand their business and make savings at the same time. Lately more companiesat the top end of the spectrum, the Fortune 500 ones, are also entering the market as buyers, he said.

Many companies are finding it useful as a means of widening the market throughout the world and as a means of getting the best price,"​ Gardner said. "Buyers are coming foreverywhere in the US, Asia and Europe."

Information on the auctions is available at ww.thebrandfordgroup.com and www.rabin.com.

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