UK Allied Glass, based in Leeds, a manufacturer of glass containers for the premium spirits industry, is reportedly investing heavily in new machinery and staff as its new management team prepares to conquer new markets in Europe and worldwide.
The company underwent a secondary management buyout (MBO) a year ago in a deal valuing the manufacturer at GBP 75 million.
Allied Glass is reportedly investing heavily in new machinery and staff as its new management team prepares to conquer new markets in Europe and worldwide.
The UK company, based in Leeds, northern England, underwent a secondary management buyout (MBO) a year ago in a deal valuing the manufacturer at GBP 75 million.
Allied manufactures glass containers for the premium spirits industry and has, among its customers, Diageo, Chivas and William Grant & Sons.
Company managing director Alan Henderson, who led the buyout, sees diversification into Europe as “a key part of the growth” of the business, which is backed by the private equity arm of Barclays Bank.
In a recent interview, Henderson said that Allied wants to win new work in France, Italy, Spain and Poland: “We are targeting key brands that we want to be associated with and know we can do a good job for.”
Allied has invested GBP 600,000 to create a new plant, and has also hired 30 people to staff this new facility, which is decorating bottles for Johnnie Walker. The company hopes the new facility will open up the Cognac market.
Further investments of GBP 2 million regard new machinery, which will allow it to cater for growing demand in emerging markets for whisky, and which is scheduled to come on stream in January 2012.
Total capital expenditure of Allied for 2011 will be about GBP 3.5 million, and the company also expects to spend around GBP 150,000 on staff training.
The company has also recruited a French salesman, while the sales director is spending more time in Europe, currently dominated by three main players, Verallia, Owens-Illinois and Arda.
Since the MBO, company turnover has increased 9% to GBP 85.5 million, and the workforce has expanded by 30 to 660. This year, growth is expected to be about 10%.
“We are very busy,” said James Hart, the new finance director. “The biggest pressures are cost pressures rather than customer pressures. Energy is a big cost. It’s a big part of our business.”
Energy costs have more than doubled on the open market since 2009, and, alongside rising energy costs, the company also faces a challenge common to many manufacturers – a shortage of skills in the labour market.
“Engineers are still very thin on the ground. Finding a shopfloor person with the right skills is very difficult,” said Henderson.
The company has found success by taking on apprentices and equipping them with glassmaking skills, as well as sponsoring a new recruit through an engineering degree course.
Henderson said the negative image of British manufacturing over the last couple of decades has made it harder to encourage young people into the sector.
“British manufacturing does have good careers to offer,” he stressed. “It does have good prospects.”
According to Henderson, Allied Glass is “a good, solid UK manufacturer, growing in output and growing in UK jobs”.
He went on to add: “We are directly exporting now, which is what the UK economy needs.
“As we grow, do we acquire? Do we move into Europe itself? Do we expand sites?
“The whole view of the business is about growth and becoming bigger and stronger.”
“Those manufacturers that have survived the recession did so for a reason,” he said. “They are here because they are good,” he said.