Allied’s spirits are high thanks to demand

DEMAND for premium spirit brands in fast-growing emerging markets helped Yorkshire manufacturer Allied Glass to toast record sales last year, according to company accounts to be published this week.

The Leeds-based business, which employs 700 people, supplies customers including Diageo, the world’s biggest drinks company, and The Edrington Group, one of the largest companies in the Scotch whisky industry.

Its turnover increased 14 per cent to £97.5m in the year ending December 3, 2011.

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The group’s operating profit before goodwill amortisation rose 21 per cent to £12.9m.

“It’s been a good year of continued growth. The business has improved in all areas,” said Alan Henderson, who led a management buyout of the group two years ago.

Diageo, the Johnnie Walker whisky and Smirnoff vodka maker, last week announced an increase in sales and profit driven by emerging markets.

The UK-based company, which is the largest producer of Scotch whisky, plans to invest more than £1bn in the drink over the next five years to meet growing demand from emerging markets.

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The investment will benefit Allied Glass, which spent £3m last year to support the growth of the Johnnie Walker and Buchanan’s brands.

Mr Henderson told the Yorkshire Post: “The Scotch whisky market sees positivity in Asia and South America. They are aligning themselves so they can cash in on those opportunities.

“All of our accounts that service the rest of the world are seeing positive growth again. The accounts which are UK or Europe based are fairly static and flat. Time will tell as to whether that changes.

“There are still a lot of businesses doing well in the eurozone and don’t see imminent collapse but desire to invest is held back because of the negativity they read.

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“There are businesses out there expanding their brands and expanding their portfolios.”

Allied Glass has gained a foothold in the French market and is working with customers including luxury group LVMH and its Belvedere Vodka brand.

“There’s growth for us in French markets,” said Mr Henderson, who has invested in French speakers among his staff.

He added: “As we have moved the business into France I want to be able to communicate effectively with our customers rather than expecting people to speak English.”

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Around 88 per cent of group sales come from the UK business, although many products are ultimately bound for export markets. The group’s growing export sales are predominantly to Europe.

Last year, the group won new business through its glass decoration department, which opened at the Cross Green Industrial Estate in Leeds following a £750,000 investment.

Mr Henderson said: “We are able to offer customers a one-stop shop for that kind of service now, rather than them going to another supplier once the glass has been manufactured.

“We hope to double the size of that department in 2013.”

The department created 32 new jobs last year.

Allied Glass invested in workforce during the year, taking on new university graduates and apprentices. It has taken on five graduates in the last two years.

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Mr Henderson said: “We try to teach them how to identify problems. The key thing for me is problem solving and how to handle difficult issues.”

He expects a minor increase in headcount during 2012.

The group is also investing in its plant. It plans to rebuild one of its furnaces next January and will be expanding output at its two manufacturing sites in Leeds.

The investment will help ensure that the group can meet the demand from customers like Diageo, which posted an 8 per cent rise in reported net sales in the year to June.

A growing taste for spirits in Africa plus demand for Scotch in Latin America and Asia, particularly deluxe brands in South East Asia and China, boosted Diageo’s sales.

@bernardginns

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