The cash injection comes alongside on-going investment in the firm's 120 employees, as the family-owned firm readies itself to enter new markets and reinforces its presence in its existing specialisms.
Manchester-based Duo UK manufactures bespoke polythene packaging for the retail, e-tail and industrial markets, counting national brands such as JD Sports, JD Williams and ASOS among its clients, as well as well-known Manchester operations such as the Trafford Centre and Keep Britain Tidy.
The bulk of Duo's investment has been made in a £750,000 co-extrusion (co-ex) machine which aims to position Duo at the forefront of polythene manufacturing technology and increase the firm's film manufacturing capacity by 40%.
Duo managing director David Brimelow said: ?"Co-extrusion has better efficiency and higher output than our current machines, so we can produce better quality polythene more quickly. This allows us to offer a better product to current customers and enter new markets such as the courier sector. Production costs and the environmental impact are also cut thanks to a substantial reduction in energy consumption, increased amounts of recycled content and lower levels of raw materials and waste."
Italian finance
Finance for the deal was raised via the Italian markets which offered surprisingly competitive terms as part of the Italian government's support of their own manufacturing sector, as Duo UK's finance director Paul Teasdale said: "Investing in the co-ex machine was essential for the next stage of Duo's growth so being able to access foreign capital markets at competitive rates helped speed up the investment process compared to UK alternatives.
"The exact funding method is known as forfaiting, which lends funds to exporters against receivables, backed by an insurance policy covering the risk of failure of the buyer.
"This spreads the risk for all parties involved and offers a number of advantages – the Italian manufacturer is certain of payment, our UK borrowing capacity is unaffected and, at the time, the outlook for the sterling to euro exchange rate made this a particularly attractive option.? Even with the recent changes to the sterling euro exchange rate, this has proved to be a great alternative to traditional asset financing."
Elsewhere, speaking to Packaging News at the firm's twenty-fifth anniversary event, Teasdale said the next twenty-five years will see the firm invest more in its business and team. Speaking about UK manufacturing in general, he said that UK manufacturing will grow. "It has got to be not just through government subsidies but through the education system. You've got to get young people seeing that there is a viable career in manufacturing, where they are going to get professional qualifications, going to get training and work in a nice environment than traditional dowdy perceptions of manufacturing plants. At the moment too many young kids just want to be celebrities."
Flexographic printing press
In addition to the co-extruder, Duo has invested £225,000 in a 6-colour flexographic printing press which offers faster double-sided printing and additional funds in Manufacturing Production Scheduling (MRP) and Enterprise Resource Planning (ERP) software.
Brimelow explained: "This trio of strategic investments gives us a great platform to build on our first quarter of a century in business – they open the door to new markets, allows us to offer new or better products to existing customers and enables us to better integrate our main Manchester operations with our second manufacturing site in Nottingham.
"In 25 years we've grown our turnover to £25m and I'm incredibly proud of what the team has achieved. We are a family business with five Brimelows working for Duo and that ethos is reflected in how we look after our employees, who in turn take great care of our customers and ultimately drive our business.
"We are proud of the fact we have employees who have chosen to stay and grow with us from the very beginning.? In addition, one of our apprentices has recently been named Apprentice of the Year and we're offering financial support to another team member to gain degree level qualifications.
"Investing in people, like investing in equipment is, not only the right thing to do – it makes good business sense. This approach, along with the significant investment in the co-ex machine and the ingenious method of funding Paul spearheaded, speaks volumes about our positive, pro-active attitude to strengthening and growing our business whatever the economic climate and despite government 'support' for manufacturing."
