Expac Limited have come to a commercial decision to move factory

The question is why have we come to this decision and what are the benefits,  The following 10 headings outline the major factors in our decision process.

We trust the enclosed will help clients/suppliers and associated parties, Understand the main drivers in our decision process.

Lease and Present Agreement

Our present lease is a ten year lease with a five year option to exit that had to be communicated prior to the 7^th August 2011 – The landlord has planning permission in place for developing the site for domestic housing and is presently marketing the property and without doubt would like to achieve a sale within the next twelve months. We have taken the option to exit now so we can control our own destiny at the same time we have managed to negotiate good terms on our new site making the most out of the present business rental climate .

We are moving to –

Expac Distribution Centre

Units 1 and 2 Tomlinson Road

Leyland

Lancashire

PR25 2DY

Budget Spend and Space

Our present rental agreement is for 45,000 square feet, we have agreed a figure on the new site for 60,000 square feet.

Expac along with the new Landlord have agreed a new 15 year lease commencing in September 2011 – With an actual moving in date set as December 2011

We will be investing in over 1 million pounds
in new facilities!!

Incorporating the following –

• New 5,000 square foot office complex
• New Electrics and upgrades to the whole site
• Bespoke powder manufacturing facility segregated
• Bespoke liquid processing area
• Bespoke liquid filling hall
• Spare capacity for assembly and storage
• On Site Laboratory
• On site design Suite

 

THE PROPOSED MOVE GIVES 35% MORES SPACE WITHOUT INCREASING OVERHEADS IN THE FIRST 3 YEARSTO BE SHARED BY NEW AND POTENTIAL CLIENTS 

Exterior view of new building – Click on image to zoom in.

Interior view of new building - Click on image to zoom in.

Old offices which will be replaced by newly designed offices -
Click on image to zoom in. Floor Plans of new site – Click on each to zoom in.

Space

As mentioned in point 2 we have 20,000 square feet more space this will enable us not to have to rent space in outside storage that we do over the period of any year reducing our overhead costs again.  The extra space also enables us to offer storage to our present client base coupled with extra space to expand in to other areas of manufacture, i.e. food, beverage, contract packing etc 

WE NEED THE EXTRA SPACE TO SUPPORT OUR PRESENT BUSINESS AND TO REDUCE PAYING OUTSIDE STORAGE COSTS – and MORE IMPORTANTLY TO ATTRACT NEW BUSINESS and SUPPORT OUR VERY VALUABLE CLIENTS

Condition of New and Present Facility

Our major concern over the past few years is the state of the structure of our present site it has deteriorated badly and we have been told by our major customers the site needs upgrading, new roof etc costing in excess of 500k, obviously the present landlord will not pay this for the reason he wants to develop the site for housing and  it would not be viable to Expac to spend the money with only 5 years left on the present lease. The new factory is structurally sound and is some 30 years younger than our present facility   

Flow/BRC/GMP/Compliance/ Efficiency  

The production flow will be substantially improved

BRC accreditation is only in place due to the pending move, without the move we would lose the accreditation

Good manufacturing Practises are difficult to achieve due to space and segregation issues greatly improved with the extra space defined storage locations.

Compliance to major UK retailers will be achieved we have taken on board and designed the production facility around up-to-date recommended food hygiene regulations.

All these issues can be addressed at the new site, ALL major customers have seen the new site and agree the site will meet there standards when improved and we also gain extra gross margin from efficiency savings in the factory flow and processes.

WE HAVE NEVER BEEN ABLE TO FULLY ACHEIVE THE ABOVE ON OUR PRESENT SITE – WE WILL BE USING MAS GOVERNMENT ADVISORY SERVICE TO INDUSTRY TO HELP INTRODUCE THE ABOVE SYSTEMS

Finance payback

We are looking to spend in excess of £750,000 on the factory move  With the landlord spending a further £250,000 on the core of the building – When we run the cash flow projections against budgeted costs we are short in funding.

We are borrowing funds to ease any cash flow issues that may arise.

Many Thanks to our financial partners

NatWest Commercial Banking, FW Capital, THE North West Fund

Click here to read the latest press release from FW Capital about the Expac Move….

Click here to read the Manchester Evening News article about the Expac Move and Funding….

Expansion

We are presently predicting growth in 2011 of 25-30% and in years 2012/2013 – 10% each year, the present site would not be large enough to cope with the increased volumes putting aside all the quality standards –

Why are we growing – ??

Well we lost a lot of business 6 years ago to overseas competition and this caused Expac to shrink in size, what has changed……………  

Factory door prices, freight and quality from eastern Europe and Asia, China have started to make UK Brand owners and retailers to re look at a UK supply – The price difference is less than what it was and coupled with a need to de stock and move to just in time – It starts to make sense sourcing manufacture in the UK is now trendy and works. Our sector has shrunk by 70% over the last several years so we find our sector has a capacity issue now and we intend to capitalise on present market trends – It also helps that the government recognise the manufacturing economy as a tool to help the global financial situation and economy in general. – Right place at the right time? Had to wait several years for it to come around!

WE INTEND TO MOVE MORE IN TO THE EXPORT MARKETS AND BRAND SUPPORT/INVOLVEMENT

Green Technology

 

We have managed to secure the services of 3 university graduates from Lancaster University along with the services of CTech Innovation to explore how we can install green energy and science into the business and processes. We intend to look at the following :-

Solar heating and energy to heat the offices and blending vessels

Collecting rain water to help with water consumption

Total reduction in our present carbon footprint

The overall 3 year aim would be to become carbon neutral.  This would be the first plant of its kind in our sector in the UK. We believe long term a lot of these requirements will become law. So we will take the opportunity of the move to become a first and pioneer of these developments. The University have agreed to work closely with Expac over the next six months to mutually help us achieve our goals.

WE BELIEVE EVERY UK MANUFACTURING COMPANY NEEDS TO BECOME MORE SOCIALLY AWARE

Safe guard What we have…..Protection 

We have recognised our main aim in all the above activities is to create a platform we can grow from however it is imperative we safe guard what we have in terms of clients and staff . Without doubt if we do not move to new updated facilities we will not only lose out on new business opportunities but we will lose at least 50% of our present client base resulting in a company in serious decline .

OUR TOP THREE CLIENTS HAVE SEEN THE SITE AND APPROVED THE SITE FOR MANUFACTURE

Master Class in manufacture

If you visit our web site www.expac.co.uk you will see our approach is all about transparency – We intend going forward to update the site on a fortnightly basis with videos and pictures of how the move in progressing, this will enable all interested parties to follow the process.

OUR TOTAL AIM IS TO CREATE A MASTER CLASS MANUFACTURING FACILITY SETTING NEW STANDARDS THAT SET US APART FROM ANY COMPETITION

 

As a company we believe in being totally transparent about what we are about and what we do hence we intend on this special BLOG page to update all interested parties on a fortnightly basis as to our progress,  please join us on this journey and of course if you want to visit the new site do not hesitate to contact our business development team s.jones@expac.co.uk or d.hosegood@expac.co.uk

Office designs and Graphics, designed by Miixck Design
www.miixckdesign.co.uk