Accrol Group Holdings PLC Investment in new manufacturing line for Leyland
26 June 2017 - 6:06PM
RNS Non-Regulatory
TIDMACRL
Accrol Group Holdings PLC
26 June 2017
26 June 2017
Accrol Group Holdings plc (the "Company" or "Accrol")
Investment in new manufacturing line for Leyland site
Accrol Group Holdings plc, the AIM listed leading independent
tissue converter, today announces that it has invested EUR4.5
million in a new tissue converting machine for its recently opened
facility in Leyland, Lancashire.
The new machine features the latest technology and will be used
in the conversion of a variety of tissue grades, and will have a
capacity of 15,000 tonnes or c. GBP20m sales per annum.
Installation and commissioning will be towards the end of FY18.
Accrol opened its 168,000 sq. ft. manufacturing facility in
Leyland in April 2017. It has two converting lines installed and
operational, with space for a further four converting lines.
Commenting on the investment, Steve Crossley, Accrol's CEO
said:
"The new converting line will add further production capacity at
our Leyland facility and will convert a wide range of product
types, particularly at the premium end of the market.
"This investment is in line with our growth plans for the
business and will ensure that we have the capacity to service, and
benefit from, increasing demand from both Major Multiples and the
Discount sector."
For further information
please contact:
Zeus Capital Limited (Nominated
Adviser & Broker)
Dan Bate / Jonathan Sharp Tel: +44 (0) 161 831
1512
Dominic King / Mike Seabrook Tel: +44 (0) 20 3829
/ John Goold 5000
Camarco (Media enquiries)
Jennifer Renwick / Kimberley Tel: +44 (0) 203 757
Taylor 4994
Notes to Editors
Accrol manufactures toilet rolls, kitchen rolls and facial
tissues as well as other tissue products. The Company operates out
of c. 900,000 sq. ft. of manufacturing, storage and distribution
facilities across Lancashire. Accrol currently manufactures
approximately 18 million units per week and supplies some of the
UK's largest retailers, providing both Accrol branded and Private
Label products (being goods produced under a customer's own brand
or under a non-branded or less well-known brand name ("private
label")).
The Group's competitive advantage lies in its market
positioning, operational process and flexibility. Key components of
the business model are:
Production process - The Directors believe the Group obtains a
competitive advantage through its model of acquiring and converting
the large tissue reels that are Accrol's raw materials ("Parent
Reels") as opposed to manufacturing Parent Reels from pulp and
recycled fibre and subsequently converting. This requires a lower
fixed overhead and provides flexibility in Parent Reel sourcing
which allows the Group to take advantage of favourable pricing
opportunities and production technology advancements.
Technology and converting lines - Accrol has committed capital
expenditure of c.GBP18.2 million in the last three years. The Group
currently has 17 converting lines in operation providing capacity
of approximately 143,000 tonnes per annum. The Group's operating
machinery allows conversion of a wide variety of tissue grades,
adding flexibility to the Parent Reel sourcing process and allowing
manufacture of a wide range of product types.
Manufacturing private label products - The majority of Accrol's
products (75 per cent. of revenues in the year ended 30 April 2016)
are private label and whilst the Group also develops and supplies
branded products, the ability to supply customers with goods under
its own brand has allowed penetration into retailers operating in
the discount market ("Discounters") and the UK's largest retailers
("Multiples"). Accrol can launch a new private label product within
six weeks of instruction from a retailer.
Production flexibility - Accrol is able to manufacture toilet
rolls, kitchen rolls, facial tissue and certain products used
outside a consumer's home ("Away from Home" or "AFH"), providing a
"one-stop shop" solution for customers in the tissue market. The
ability to produce these goods and supply Multiples, Discounters,
local retailers and wholesalers ("Independents") and the AFH market
is a competitive advantage and the Directors do not believe any
competitors can offer the same flexibility across all of these
market channels.
Macro-economic impact on raw material prices - There is
currently a global over-supply of both pulp and Parent Reels, with
additional capacity forecast to be brought on stream through to
2019. As such, Parent Reel prices are currently relatively low and
are expected to remain so for the foreseeable future. Low Parent
Reel prices allow Accrol to manufacture at a lower cost, enhancing
margin and providing pricing flexibility to win new orders.
Overcapacity drives increased flexibility of supply and provides
Accrol with a choice of pricing and technology when sourcing Parent
Reels.
Market positioning - Having won a number of contracts with
Discounters in recent years and benefitting from the organic growth
within this market, the Directors believe Accrol is well positioned
to take advantage of the growth in the discount market and
Multiples' increased focus on private label products.
This information is provided by RNS
The company news service from the London Stock Exchange
END
NRAGIGDLUGDBGRL
(END) Dow Jones Newswires
June 26, 2017 04:06 ET (08:06 GMT)
Accrol (LSE:ACRL)
Historical Stock Chart
From Apr 2024 to May 2024
Accrol (LSE:ACRL)
Historical Stock Chart
From May 2023 to May 2024