‘It’s going to be tight’ - Briar Chemicals boss in warning over firm’s future
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The boss of a Norfolk-based chemicals firm has hailed a new million-pound contract as proof it can secure its future as an independent firm - but admits it must adapt to life as a smaller concern to survive.
Briar Chemicals site manager Tim Green said it was 'so far, so good' since it was sold by Bayer CropScience nearly four years ago, as production begins on a new deal to supply an American firm with a product to reduce emissions in the energy industry.
But he warned the firm must constantly be searching for ways to offset falling revenue, fend off competition from Asia, and become more efficient.
Mr Green said: 'Everything we've done is about the long-term survival of the company in more challenging conditions than when we first became a contract manufacturer in 2012.
'It's so far, so good, and we've made reasonable profits for the first three years, but that is going to start coming down.
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'We have done the forecasts through to 2020, making certain assumptions, and they are that we will still be profitable, but it's going to be tight.'
Mr Green said there were no current plans to cut jobs from the 220-strong workforce, but the company was looking to reduce costs, whether by installing energy-saving measures, changing maintenance schedules or automating certain roles.
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Turnover fell from £45m in 2014 to £41m last year, with Mr Green estimating it would hit £40m in 2016. Pre-tax profits in 2014 were £12m.
The company is looking for other ways to bring in revenue, and has opened up a 25-acre site on Sweet Briar Road to become a new retail park, with DIY chain Wickes having bought the first plot.
When Bayer CropScience sold out to Munich-based investment firm Aurelius in 2012, it agreed a contract offering work on a sliding scale over five years.
But Briar Chemicals has also felt the squeeze from the downturn in the agricultural sector - historically its area of strength - as farmers have weathered tough conditions and falling food prices by cutting their own costs.Sustained low oil prices have meant demand for biofuel crops – and the herbicides needed to grow them – has also slumped.
To fill the gap, Briar has also explored new markets, including cosmetics and small-batch fine chemicals.
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