New winery to open in Snetterton
Around 60 jobs are to be created as part of a �4.75m investment in a new wine packing factory in Snetterton which will open in December.
Broadland Wineries chief executive Mark Lansley – who has overseen the return to profit of the Cawston-based wine bottling firm which went into administration in 2006 – has set up a joint venture with Asda subsidiary International Produce Ltd called Vinpack Ltd, which will exclusively pack wines for Asda on a new site close to its existing warehouse in Breckland .
Vinpack has a three year supply agreement to bottle Asda wines and Mr Lansley is a 100pc shareholder of the new company, but Asda will hold one golden share.
Mr Lansley and Asda are splitting the investment 50-50.
Asda approached Mr Lansley in January 2010 to see if Broadland Wineries could increase contract packing work by 40m litres.
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There was no capacity at the Cawston site, but at the firm's storage warehouse at Richard Johnson Warehousing Ltd in Snetterton there was a building suitable for a small to medium sized operation.
Mr Lansley said: 'I took Asda down there and said that Broadland would like to start up production there.
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'We set up a separate company and new winery closer to the motorway network and Felixstowe port to handle this demand, in the most cost-effective way possible,' he said.
Mr Lansley said that the rail track at Snetterton would also allow tankers to be brought in by train which would be cost-effective and would also help the firm's carbon footprint.
Its existing 8m litre bottling contract with Asda, which is currently done at Cawston will also be moved to Snetterton as part of the expansion.
And he said that by moving all of the Asda bottling contract to Snetterton under the Vinpack brand, Broadland Wineries will be able to produce more of its own brands at the Cawston site which he added was ideal for development into a higher margin niche, branded drinks business.
'We are enjoying success with our new brands Three Mills, Belgars and Scrumpy Dog and we need more capacity for new brands coming through our product development pipeline, like Compass Point,' he said. 'So when Asda approached us to take on 40m litres more low-margin contract packing work it made no sense for Broadland Wineries to do that.
He said with the Asda bottling moving to Snetterton, it was important to the keep the ship 'nice and steady' at Cawston and as a quid pro quo Asda has helped the company develop its products and sell a number of brands.
But he said that there were challenges for the business.
Since he took over in 2006, Mr Lansley has increased the firm's sales from �8m to �20m and in 2010 the firm recorded a pre-tax profit of �915,000.
But 2011 end of year profits plunged to �70,516 when a recall of bottles from a supermarket cost the firm �500,000 after a problem following the upgrade of a rinser filler capper machine.
Mr Lansley said: 'In bringing in that new technology and taking the company forward it was that project that led to the recall. We restored confidence and recognised the fault. But it cost us a lot of money.'
'This year we are having a better year. We have a full order book,' he added.
The new factory is set to open on December 5 and will employ between 50 to 60 staff by the end of 2012. Twenty-five of those jobs – which include bottling operatives and engineers - will be recruited by the end of November.