Project First Group – The Interview

r-s-m-r-s.jpgThe UK-owned Project First Group has enjoyed an unrivalled reputation as a specialist in retail refrigeration systems, engineering design, installation and support ever since Mark Stratford, former head of engineering at Tesco, founded it in 2001. Project First has grown rapidly from a three-man team at the start to an employer of over 300, for the simple reason that UK retailers like its approach to providing tailored refrigeration solutions.

A central part of this approach is Project First’s commitment to helping customers minimise their environmental impact by encouraging their use of ‘green’ technologies in refrigeration. In November the group began a new relationship with Green & Cool, the leading provider of ‘green’ refrigeration systems in the Nordic countries and Switzerland, whereby Project First has an exclusive two-year supply agreement with Green & Cool for the UK and Ireland. It’s a major development for both companies. Richard Spurgeon, Sales & Marketing Director for Project First Group, and Matthew Reeves-Smith, the Engineering Director, spoke to The Grocery Trader.

The Grocery Trader – How big is Project First now in turnover? Is Mark Stratford still Managing Director?
Richard: We currently have an annualised group turnover this year of £60 million and have 322 employees. Mark is still MD. Our turnover was £32m last year, but we’ve acquired three companies since then. GH England is a wholesaler and distributor for integral cabinets: serve-overs, fridges and chilled cabinets. Redkite Refrigeration and Air Conditioning Ltd is a Welsh-based company, as the name suggests carrying out contracting work on refrigeration and air conditioning. The third company we acquired this year, Denman Facilities Management, has now been rebranded Project First Facilities Management.

GT – When did you two join the company? Are you both involved in the agreement with Green & Cool? Will you both be involved in marketing these machines in the UK and Ireland?
Matthew: I joined in December 2004, and Richard came in April 2008. We were both involved in the Green & Cool agreement, and will be involved in developing the business from here on in.

GT – Will you be taking on more salespeople to help you do this?
Richard: We won’t be for the moment. Our business development team is responsible for taking our technologies to new customers in new areas, and we have the resources in place for developing our plans for the next 12 months.

GT – What Green & Cool refrigeration equipment will you be supplying?
Matthew: Our agreement with Green & Cool is to supply remote refrigeration plant, specifically compressor packs, to both our and our customers’ specifications as a complementary range to our existing products and services.

gamma.jpgGT – What types of store are they designed for?
Richard: The Green & Cool equipment is suitable for any size retailer. Their capacities start at 10kW for a small convenience store or cold store, and go up to 150 kW for a supermarket or hypermarket. You can use them to run a number of fixtures in the same location. The Green & Cool equipment that we supply is a range of ‘remote’ racks located in the plant room or on the roof, which drive the refrigeration in the store. The existing refrigeration system remains in place, in the store itself. Essentially we replace the compressor packs people are using with like for like units that use CO2 as the coolant.

GT – What piping do these compressors need to run?
Matthew: These compressors run on much the same piping as before, the only difference being that the new piping we put in is made of high pressure-tolerant metal, either copper or steel, in sizes that run from from half-inch to three-inch diameter. We provide new piping to a similar design as before.

GT – Where is this equipment developed and made?
Richard: Green & Cool’s equipment is made in Lulea, in Northern Sweden, with each order supplied bespoke to the customer.

GT – How different are Green & Cool’s refrigeration units from ‘standard’ ones?
Matthew: They are very different. Green & Cool’s refrigeration units use C02 instead of environmentally damaging Hydrofluorocarbons or HFCs such as R404, which standard refrigeration units use. In fact, R404’s greenhouse gas effect is a whopping 3,800 times stronger than C02, so by installing G&C’s units, customers significantly reduce their carbon footprint.

GT – What’s happening about all the other refrigeration equipment you’ve been selling up to now? Is that still available?
Richard: Yes, we are still providing all our existing equipment and services. The Green & Cool range is an offer to help people who want to reduce their carbon footprints dramatically. There are some customers who want environmentally friendly equipment: others will continue to buy refrigeration systems on price as they are used to doing.

GT – For those who haven’t heard of Green & Cool, what is its track record – when was it founded and who owns it?
Matthew: Green & Cool was founded in 2007, but has traded as two companies since 2003. The owners are Stig-Goran Lind and Michael Antonson, who both own independent refrigeration contracting businesses and joined forces to form Green & Cool as a development vehicle to provide environmentally friendly refrigeration solutions.

GT – Which retail chains in the Nordic countries and Scandinavia do they supply this equipment to?
Richard: Green & Cool supply Swedish Co-op, ICA and various other chains in Scandinavia. They have an agent in Switzerland, and have also exported equipment to the US.

GT – How much do the new Green & Cool units cost to buy and to run, compared to traditional refrigeration?
Matthew: The Green & Cool units’ capital costs are 10- 50% more than the same components in standard systems, but they save significantly on energy costs, which are typically 10% lower. They can also be used to produce hot water in conjunction with heat exchangers, which we also supply. An overall solution, including hot water generation, gives an average 20% saving on energy costs.

GT – How long does it take for a Green & Cool system to pay for itself?
Richard: We have some model stores for which we’ve back-calculated the increase in capital costs and the energy savings. On a typical model, it takes four years to balance the sums, and after that it’s savings all the way.
Matthew: The other point is, increasing energy costs will accelerate the payback.

GT – Typically, grocers’ refrigerators, chillers and freezer cabinets struggle on hot summer days. How effective are the Green & Cool units in high ambient temperatures? Do they need to be kept fully stocked to work properly?
Matthew: The Green & Cool units are designed to operate in temperatures of over 40 degrees C. As ambient temperatures rise, the energy savings drop slightly, but over a typical year will still average 10% against conventional units.
Richard: The refrigeration equipment in the store doesn’t change, just the engine behind it, so the stocking practice remains as before. We’ve made the system to suit what the retailer’s used to.

GT – What technical standards do the Green & Cool units comply with?
Matthew: All Green & Cool plant is built to the latest UK and European standards, and complies with the CE and Pressure Equipment Directive (PED) regulations. These compliances are marked on the plant.

GT – In non-technical terms, how do the Green & Cool units work on CO2?
Matthew: They operate on a conventional direct expansion single circuit model, which mirrors the basic design of today’s standard refrigeration equipment. The main difference with the Green & Cool equipment is that the plant operates on much higher pressures, up to 80 Bar compared to 30 Bar with conventional systems. This technology has been in use in retail environments in many parts of Scandinavia for the last five years, and has a 100% safety record.

GT – Are you considering changing the coolants in all the refrigeration systems you supply to C02? How easy is that to do?
Matthew: We aren’t at the moment. The Green & Cool equipment is designed for installation with new systems, or as a total replacement of the compressor plant in existing ones: it is not designed as an add-on to existing systems. Changing the system is designed to be straightforward and mirror existing types of installation. Our engineering team works closely with our clients to ensure each company’s system meets the design parameters.

GT – Is there any legislation in the EU or elsewhere saying all refrigeration has to move from HFCs to CO2 by a given date?
Matthew: In certain Nordic countries they have changed legislation to prohibit use of HFC’s in practical terms. Here there’s currently no date to switch over, but with our continued striving to be greener, the UK may well decide to change ahead of worldwide legislation.

GT – When will you start delivering the new Green & Cool units? Will you be offering them on a contract hire basis, outright sale or both?
Richard: The new units are available now, and we hope to complete the first installations in the first quarter of 2009. Generally 99.9% of refrigeration equipment is bought on an outright basis. If there’s a need for a long-term lease we would consider it, but it’s not usual industry practice.

green-and-cool.jpgGT – What are your target sales of the new Green & Cool units? Who are your target customers for them?
Richard: We’re currently looking at the target numbers. It could be 20-50 units in the first year, building after that. The target customers are anyone with a requirement for remotely driven freezer or chiller installations, from the large supermarket chains to small C-store groups. Department stores with food halls and stand-alone supermarkets are also likely to be interested.

GT – What technical support and operator training are you offering for the Green & Cool machines?
Matthew: We’re already carrying out in-house training for our own staff. Green & Cool have an office and site-based team, who are available to assist in the UK as needed.

GT – How much maintenance and servicing do the new Green & Cool machines need, compared to traditional ones? Do you provide it?
Richard: The Green & Cool units’ maintenance and servicing needs aren’t much different from traditional equipment. We provide 12 months’ inclusive maintenance as part of the sale, which we carry out.

GT – Do you have any pilot sites or demonstration machines for people to see?
Matthew: We’ve spoken to a number of clients and put proposals forward. Green & Cool have various installation sites in Sweden and also a factory there, which we are happy to take people to see. We have various Project First customers lined up for a trip to Sweden in the new year.

GT – Can people see more about these machines on line? Are there any customer case studies that people can see?
Richard: Yes to both questions. Our website www.projectfirstengineering.com has links to information about the Green & Cool agreement and links to their web site, which has a list of locations with installations and a number of case studies. Green & Cool are getting a huge amount of interest, both on and off line. They are committed at present to Scandinavia, Switzerland and the UK and Ireland as growth markets for this technology.

GT – How do people go about ordering these machines? How long will they have to wait for their machine after they’ve placed an order?
Richard: People can order them direct from us. The product is bespoke, and there is typically 10 weeks lead-time from order.

GT – The Project First Group comprises five different companies, Project First Engineering, Project First Facilities Management, Redkite, Primo Products Ltd and GH England. How do they work together to provide refrigeration solutions for clients? How does the agreement with Green & Cool change the way you operate?
Richard: We offer a complete refrigeration service, from design to disposal. We do all contract and installation work, and with Redkite in the group we also offer air conditioning. Similarly, the addition of Project First Facilities Management means we also offer after care and maintenance to the end of the unit’s lifecycle, when the customer wants to dispose of the old equipment and start again.
Richard: The new Green & Cool CO2 offer is an additional technology in our already strong portfolio, and will be supported by our existing group companies. We’ve pulled together a joint marketing plan, and we’ll be doing extensive advertising and specific marketing in 2009 to support the Green & Cool relationship.

GT – How do you help retailers who have already invested considerable sums in refrigeration systems become greener?
Richard: Yes, part of the evaluation and development process for all customers will be to produce assessments of carbon emissions, energy usage and lifecycle costs for using CO2 as a coolant, in comparison with their existing arrangements.

GT – Do you offer consultancy in this area?
Matthew: Yes, we can offer ‘pure’ consultancy if required, drawing on both our experience in the UK and that of the guys in Sweden.

GT – How is the recession affecting retailers’ spending on refrigeration?
Richard: We’re riding the storm well in terms of new contracts and case orders for Primo. The medium term vision is unclear for the sector – for the moment, retailers are taking a cautious approach, but projects are still going ahead.

pro-first-group.jpgGT – Finally, where do you see Project First Group going from here?
Richard: From a group perspective, we’ve had rapid expansion and now it’s about consolidating, getting the different parts of the business to work together effectively. We’re an aggressive company with a total offer and tailored solutions for our clients, and want to secure more business based around this. The Green & Cool relationship demonstrates that we’re an innovative company with an understanding of new technologies and the difference they can make.
Matthew: CO2 is definitely the vision for the future in terms of cooling, and the Project First/Green & Cool solution is the best independent offer on the market.

Project First Group
Tel: 01908 275300
Email: info@projectfirstgroup.com
www.projectfirstgroup.com