UK: Lye Cross eyes growth, expands capacity

By Katy Askew | 10 December 2013

Alvis Brothers Ltd, which trades as Lyle Cross Farms, is expanding its processing capacity in a bid to grow the business in the UK and overseas.

The company said it has increased production by 1,000 tonnes a year to 4,500 tonnes. The investment includes upgrades to its milking facility, added a new packing line and expanded its ability to pack 20-40g mini cheese portions. The expanded facility will enable the group to double packing capacity from 80,000 units to 160,000 a day, Lyle Cross Farms said.

Lyle Cross produces organic cheddar and UK territorial cheeses, together with conventional west country farmhouse Cheddar and territorial farmhouse cheeses under the Lye Cross Farm Brands. In the UK, the group supplies Asda, Sainsbury's, Aldi and Ocado.

Around 25% of its GBP25m (US$41m) annual turnover came from overseas markets last year and the group sells UK cheeses into South Korea, the US, Dubai, South Africa, Saudi Arabia and a number of European countries.

Commenting on the investment, MD Peter  Alvis  said the group planned to grow sales in the UK and overseas, including the possibility of opening new markets.

"The investments we have made will have tangible benefits to the business and will enable us to sell more produce both at home and overseas. Our aim to grow both turnover and profitability over the next 18 months, and of course opening up new international markets will be key to that," he said.

The investment in upgrading production facilities was supported by a loan from HSBC.

Show the press release

LYE CROSS FARM SECURES HSBC FUNDING TO SUPPORT EXPANSION
Alvis  Brothers Ltd, the South West cheesemaker that sells its Cheddar into 30 countries  globally,  is increasing production by nearly a third on the back of strong domestic and global demand. HSBC has provided a seven figure finance package to support the growth, which includes expansion of both its milking and packing facilities.

The  company, which trades as Lye Cross Farm, plans to increase production by  1,000  tonnes to 4,500 tonnes a year. It has invested in upgrading its milking parlour facility so that it has the capacity to milk 600 cattle, up from 400 previously and will enable the company to upscale this to 900 when required.

In  addition, the company has upgraded its packing facility, adding a new packing line and increasing its ability to pack 20g to 40g ‘mini' cheese portions - a strong growth market. The expanded facility will enable Alvis Brothers to double packing capacity from 80,000 units to 160,000 a day.

The  company secured the finance with HSBC's Devon and Somerset Commercial team in a deal led by Senior Agriculture Manager Debbie Bunclark. The finance package includes sufficient working capital to finance the duration of the production process.

The  Alvis family has made Cheddar at Lye Cross Farm for three generations. The company produces a  full range of organic Cheddar and UK territorial cheeses, together with Conventional  West  Country Farmhouse Cheddar and Territorial Farmhouse cheeses under the Lye Cross Farm Brands. Its mature cheddar cheese enjoys Protected Designation of Origin status.

Turnover at the company hit £25 million last year, with 25% of sales going to overseas markets, including Korea, the USA, Dubai, South Africa, Saudi Arabia  and a number of European countries. In the UK, the company sells through its own farm shop and through major supermarkets, including Sainsburys, Aldi, Asda and Ocado.

Managing  Director  Peter  Alvis  said: "This finance package from HSBC has enabled  the business to invest to reach the next stage in its development. The  investments  we  have made will have tangible benefits to the business and  will enable us to sell more produce both at home and overseas. Our aim to  grow  both  turnover  and profitability over the next 18 months, and of course opening up new international markets will be key to that."

He  added:  "Producing  cheese  takes  time,  you invest in milk at today's prices  to sell your produce a year down the line, so you need a supportive bank and the right financial structure to support the business."

Phil Sargeant, Area Commercial Director for Devon and Somerset Area, added: "Alvis  Brothers  is  a fantastic business that promotes the South West all over  the world. It has a very capable and experienced management team with a  clear strategy for growth. We are delighted to have been able to support the  company's  latest  expansion plans and are very excited in our role as strategic business partner."

Original source: HSBC

Sectors: Dairy

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