Neuhaus Neotec and Devex succeed as team players, offering complete roasting and instant coffee plant solutions to growing markets across Asia.
The success of Neuhaus Neotec has always come from the combination of different capabilities to offer an unparalleled product or service in the coffee market.
When Neuhaus, a German regional manufacturer of products for handling raw materials in the agricultural sector, and Neotec, a licensee of an American roasting machine manufacturer, merged in 1987, it allowed them to offer a turnkey solution for the entire coffee processing plant. Incorporation into the Kahl Group in 1991 increased the scope of what Neuhaus Neotec could accomplish and a breakthrough in the development of its in-house rotational flex batch (RFB) technology soon followed. Lars Henkel, Head of Marketing and Area Sales Director for Neuhaus Neotec, says these events served as turning points for the company, increasing its capacity and ability to open itself to the booming international coffee market.
“We were already successful in the United States and, being based in Germany, were quite strong in Europe. So, like many companies do now, we saw Asia as a new market for growth,” Henkel says. “Its coffee markets were not as developed back then, but Neuhaus Neotec knew the need for technology would increase as these traditionally tea drinking countries shifted to instant coffee consumption.”
Asia has been a core coffee market to Neuhaus Neotec since the early 1990s, first delivering industrial grinders to Japan and South Korea. Henkel says this success in Asia is in large part due to the work of Gustav Lührs, the now retired Managing Director of Neuhaus Neotec, and former sales team member – now Director of the Coffee Division – Ralf Torenz.
“Lührs and Torenz pushed the business, starting in Korea, quite successfully. They spent quite a lot of time in Southeast Asia, building relationships with customers and establishing agents in the country,” Henkel says. “Once you have a few big successes, ‘lighthouse cases’, they show the benefits of your systems and technology and the business begins to accelerate naturally from there.”
From the turn of the millennium, Henkel says Neuhaus Neotec’s Asian business developed faster and faster, and customer confidence in the technology was rewarded with large orders for high-performance RFB roasters. As globally active coffee companies increasingly entered Asian markets, they brought with them preferences for technology they use at home. Henkel says with RFB technology already widely established in Europe and America, the companies normalised its use in Asia, making local industries more familiar with the technology.
“Significantly more possibilities in flavour profile design, production reliability, high availability, lower cleaning expenses, and lower shrinkage loss compared to traditional roasting processes, were and still are the decisive factors for the increasing interest in RFB technology with high convective energy input,” Henkel says. “Due to the roasting physics of RFB, the significantly more homogeneous roasting result is achieved for all kinds of green coffee qualities used in instant coffee production.”
Henkel says the reduced shrinkage loss used to be the primary selling point of Neuhaus Neotec’s technology in Asian markets, more than offsetting the initial investment. Now, coffee companies are more open to the economic and environmental advantages of RFB’s reduced energy usage. All of these factors have helped Neuhaus Neotec spread throughout Asia, developing an especially firm foothold in the Vietnamese coffee roasting industry.
“While persuasion was still needed when the first RFB was sold in Vietnam, today, almost the entire national large-scale coffee industry relies on RFB technology,” Henkel says.
“The Vietnamese coffee production sector has changed massively in recent years. While in the past the focus was on building up green coffee production for export, today the industry is trying to create value by producing instant coffee domestically and exporting the finished product to the Russian and Asian regions. And the trend is clearly towards continuously growing quality demands of the coffee product.”
Even the larger Vietnamese green coffee traders have joined established coffee producers in the production of spray-dried and freeze-dried coffee. Henkel says there is no end in sight to the increasing production capacity of instant coffee in Vietnam, even if the coronavirus pandemic briefly delayed some expansion plans. Much like Neuhaus and Neotec combined their resources in the 1980s to offer a service greater than the sum of their parts, Neuhaus Neotec now owes much of its growth in Asia to collaboration with sister company Devex. A provider of system solutions for the extraction and production of instant products, Devex was founded in 2015, but its team members can look back on several decades of experience in the field of soluble coffee solutions. Henkel says Devex has quickly made a name for itself in the market with its special extraction and freeze-drying technology.
“The unique partnership of Neuhaus Neotec and Devex within the Kahl Group offers its customers joint turnkey plant solutions from a single source, from green coffee intake to the finished coffee granulate,” Henkel says. “This cooperation under one company roof, which is unique in plant engineering for the coffee industry, has resulted in several orders for complete factories in recent years. Currently, another complete factory with RFB roasting technology and Devex extraction technology is being built in Vietnam with great charisma for the entire regional industry.”
As the second largest green coffee producer in the world, Vietnam is as an important market for Neuhaus Neotec and Devex, however, it is not the only market where they are finding success. Business is also developing in the other Southeast Asian countries, as well as in the ‘Middle Kingdom’.
“As in so many countries around the world, one of China’s highest-quality national coffee refiners is relying on RFB technology to give its coffee the appreciation it demands,” Henkel says.
He adds, while small to medium-sized roasters still dominate in China, Western global companies are increasingly developing expansion plans in the country to meet the growing demand for coffee. For example, in the coming months an established global coffee chain with growing presence in China will begin building “one of the most modern and energy-efficient production facilities for best roast and ground coffee qualities” near Shanghai.
“Neuhaus Neotec will supply almost the complete plant technology including the RFB roasting technology with many innovative features that both further minimise the already standard good energy consumption values and radically reduce the carbon footprint,” Henkel says. “Similar to the entry into the Vietnamese business with large roasters, Neuhaus Neotec expects the new plant to have a strong impact on the Chinese market.”
Despite the special challenges COVID-19 has posed in recent months, Neuhaus Neotec has also successfully managed to commission another large-scale roasting plant in southern India, and thanks to technological advances, it was able to offer remote commissioning to circumvent closed borders. Despite great competitive pressure, Henkel says Neuhaus Neotec again convinced the customer with RFB’s high energy efficiency and the lower shrinkage loss than traditional systems.
“Each coffee roasting plant is an individual business that will have different needs to each other. For us, it’s important each customer receives a customised plant with the right range of equipment. Yet, cost reduction and environment impact are important aspects to all businesses,” Henkel says.
“These arguments are decisive success factors and competitive advantages for the coffee producer in a market characterised by price pressure.”
Neuhaus Neotec is also committed to environmentally conscious equipment, such as regenerative thermal oxidation, Low NOx catalytic converter technology or the heat pre-treatment of coffee beans.
“Neuhaus Neotec is proud to deliver and advance the latest technologies low in energy consumption. As an innovation driver in the field of energy recovery and exhaust gas treatment,” Henkel says.
Considering the rapidly increasing population of already populous countries like China, India, and Indonesia, and the accompanying rise in coffee consumption, Henkel sees no end in sight to the investment boom in coffee plants across Asia.
“Neuhaus Neotec has succeeded in continuously expanding its position in the Asian market over the past 20 years and has built up a good reputation through efficient technology and qualified local supports,” Henkel says.
“Together with Devex, both companies are looking forward to a positive business development and the expansion of the partnership cooperation with their customers.”
This article appeared in the July/August 2021 edition of Global Coffee Report, read more HERE.