Expansion finance for malt manufacturer
With an order book boasting major blue chip clients worldwide and sales of over 180,000 tonnes of malt annually, Muntons, the British based malt and malted ingredients manufacturer is firmly focused on growth after securing an Asset Based Lending (ABL) funding package from RBS Invoice Finance (RBSIF) and Lloyds TSB Commercial Finance acting as Joint Lead Arrangers.
Innovation and expansion are at the heart of the Suffolk-based business and they are using the ABL facility to support exporting activity as well as its operations in Britain which include strengthening their purchasing power of barley.
The cost of barley has doubled in the last few years due to poor harvests and increases in demand. The ABL line is helping Muntons to meet the challenges the market brings and the volatility of the cereal market. Muntons supplies major blue chip customers across the food and drinks industry that require malt for a variety of products ranging from whisky, beer, confectionary and a variety of foods.
It says it is proud to be a true British firm in every sense – British owned, British based and using British barley. The fast growth of the business is highlighted in its turnover figures having posted a significant increase in the last five years with a turnover in 2007 of £54m rising to over £80m last year. The firm is on track to record a turnover of over £100m this year.
Alan Ridealgh, managing director at Muntons said: “The UK has experienced some unique weather over the past few years, with long periods of drought and then seemingly non-stop rain, which brings challenges not only for the farmers but also industries such as ours that rely on a ready supply of good quality cereals.
“With extreme weather comes cereal price volatility. We buy in excess of a quarter of a million tonnes of malting barley each year and when the price doubles having access to sufficient funding is an essential. The new arrangements we now have in place through RBS and Lloyds TSB Commercial Finance will provide us with the flexibility to cope with these demands and will enable us to grasp opportunities to grow our business profitably.”
Chris Hawes, director of corporate at RBSIF added: “ABL is absolutely the correct financing structure given the nature of the Muntons business operation because it provides them with great flexibility and the ability to turn the value of their company assets into much needed working capital that supports the purchase of raw materials.
“We are proud to support UK manufacturing and Muntons is a great example of how brand GB is being promoted overseas as it exports worldwide via sales offices in Singapore and Seattle. The whole team at Muntons are passionate about what they do and strive to innovate and provide solutions to their customers.”
Muntons recently became the first maltster in the world to gain the ISO50001 standard for Energy Management and was recognised as the most sustainable manufacturer in 2011 by ‘The Manufacturer’ and were placed in the top rankings in the prestigious Sunday Times Best Green Company for the last four years.
• PHOTOGRAPH SHOWS: Ian Bath of RBS Invoice Finance and Alan Ridealgh, managing director of Muntons