Year-End Reflection: Building Biomanufacturing

Lessons Learned (so far….)

This is the time of year when many of us reflect on the wins and losses of the current (soon to be past) year and what we’ll do differently next year. So let’s kick off with highlights and discuss a few of our lessons learned. 

Highlights: Our Richmond, Indiana precision fermentation facility is progressing well, we are roughly halfway through the project, still on schedule for the end of 2024 and on budget for $115MM. We’ve expanded our team, including our first Indiana-based employees, made significant progress on offtake agreements, secured a total of $75 million between venture funding, equipment finance and a USDA Loan Guarantee.

As we look backwards, we have a lot to be proud of, and grateful for.

So, has everything gone perfectly? Not completely. Any undertaking of the size and complexity of a commercial precision fermentation facility will face a litany of challenges.

We’re proud of our strong engineering and management team whose clear focus, can-do spirit and innovative approach to problem solving has been able to knock them down as they come up.

Here are a few lessons learned we thought might be worth sharing:

Covid impacts are waning, but not over – our project budget and schedule were set at the beginning of 2023, when stainless steel and concrete were near record highs and committed delivery times were hard to secure.  As the year has played out, most Covid and supply chain impacts have been mitigated. Major engineered equipment has maintained or improved schedule, with concrete and steel pricing recovering.

We are not fully back to pre-Covid delivery times and material costs, but definitely much closer than at the beginning of the year.  That said, there are still challenges. Fabrication lead times remain very long, with fermenters requiring 60-70 week lead times. As long as you plan for this, it can be mitigated.

Speed has upsides and downsides – there are many positive impacts of moving a project forward at speed. While it reduces administrative costs and brings the facility into commercial production sooner, there are certainly downsides that need to be managed. In our case, the primary downside seen to date has been the negative impact of change orders on some of the early engineered equipment. Those changes, while modest in size and undesirable, are the ultimate repercussion of speed to market and still worth it, in our opinion. 

Know your vendors and keep close contact – for any large industrial project, engineered equipment is the tail that wags the dog on the overall project; there is no substitute for selecting vendors with whom you have a history and keeping close contact throughout the project. In reality, nobody wins a dispute between buyer and vendor (you could have a prevailing party, but they seldom come out feeling like a winner). Identifying issues early and working with vendors to mitigate them will end up with the best result.

Cast a wide net – As the equipment and contracting markets return to pre-Covid levels, we are seeing a wide range of responses to bids. This means opportunity – so issuing a Request for Quote (RFQ) to a robust number of bidders is necessary to get favorable pricing.  While this seems like Captain Obvious, there are timing and cost impacts of casting a wide net and there are times it is not required. Honestly, we’re still striving for the sweet spot.

Winter is coming – both figuratively and literally.  One factor that needs to be mitigated when building in climates similar to the upper Midwest is the impact of winter on construction.  Concrete is more difficult and expensive to install, and productivity is lower for many trades during cold, wet and windy conditions. Strategically planning the construction approach (such as a groundbreaking in June) to work around these impacts provides significant project benefits.

As we wind down the year, the Liberation Labs’ team wants to express our gratitude to all of our vendors and partners that have been key to moving the Richmond facility forward.  We look forward to 2024 when we will complete the construction, staff the facility and move into commercial operation. 

Stay tuned and Cheers for a Happy and Healthy New Year!