BC brewing equipment icon Newlands is back in business…sort of

by Dave Smith

  

March 7, 2019

König Brewing Systems becomes BC’s newest brewhouse fabricator

The website is still up, but the lights have been off for some time at Abbotsford’s Newlands Systems Inc. 

Newlands, founded in 1990, was the pride of the BC Lower Mainland in terms of brewing equipment manufacturers. It rose with the wave of craft brewing, eventually achieving international recognition and billing itself as “the premiere North American brewing equipment manufacturer.” However the firm was acquired by Prince Edward Island’s DME Brewing Solutions in 2016.

Newlands continued to work as part of the BC craft community after that, sponsoring the Innovator Of The Year category at the 2017 BC Beer Awards and brewing a ‘collab’ at client Moody Ales as recently as last summer. However, it seems that DME overleveraged itself, and in November the operation was put into receivership with $18 million owed to Royal Bank of Canada. The Toronto Star reported that the cause was “a downturn in business, combined with low-priced competition, particularly from China”.

This was a devastating development for many craft breweries whose orders were in process. At that time, Ontario beer writer Ben Johnson reported that “some breweries have hundreds of thousands and in some cases over a million dollars invested in future brewing equipment from DME that they are now unlikely to ever see and who are no facing the very real prospect of bankruptcy”. Until this week, the outcome for those creditors was in doubt. “The best case scenario is if someone buys it ‘en bloc’ and runs it as an ongoing concern,” said Alex Ilchenko, head of  insolvency practice at Mississauga-based law firm Pallett Valo, to the Star.

Image: NSI

Eric Portelance, a co-founder of Toronto’s Halo Brewery told Good Beer Hunting that “Buying from NSI is the opposite of [uncertainty]. The reason you’re paying $1 million or more for a brewhouse is because they have a reputation and a name built in Canada for over 20 years. It was a high-end manufacturer as there is in North America.”

The Star also reported that Newlands founder Brad McQuhae had been involved in a legal dispute over the price DME paid for the 2016 acquisition.

However an announcement was made yesterday that DME has been acquired by Dutch firm CIMC Enric Tank & Process B.V. (CETP), a subsidiary of CIMC ENRIC Holdings. Now any remaining work owned to DME’s (and NSI’s) clientele will be up to DME Process Systems, the new name for the Canadian branch.

Canadian Beer News reports that the purchase did not include the NSI plant in Abbotsford, which proceeded through receivership. Its equipment inventory was auctioned off in late February.

NSI’s Abbotsford work-in-progress equipment & other inventory auctioned off. Photo: Infinity Asset Solutions

The good news, if there is any, is that the time DME spent in receivership was just over three months, as opposed to a lot longer. Also, they have indicated that they the newly restored firm is back in full operation including the NSI brand, and “they will work with previously installed DME and NSI breweries for any parts, service or expansion needs.” Hopefully this includes any BC breweries who had outstanding paid orders at DME, or recent and ongoing NSI equipment service requirements.