Accrol announces construction of paper mill in the UK
The tissue converter shared plans for its new plant as it unveiled the results of its strategic review
Accrol Group Holdings, the UK’s leading independent tissue convertor based in Blackburn, has announced that it will proceed with the construction of a sustainable paper mill, following a strategic review conducted with the help of the professional services network Deloitte Touche Tohmatsu Ltd, putting the company’s development plans into practice.
Facility construction costs are not expected to exceed £10m and the investment will reduce volatility in input costs for the tissue converting business.
The forecast is that the plant will start operating in mid-2025. In addition to building a paper mill, among the medium-term ambitions of the company is to continue focusing on its core business of converting tissue – toilet paper and kitchen towel – capable of reaching £250m of revenue, of which 10% to 20% will be made up of higher margin licensed third-party brands.
Accrol also intends to expand its facial tissue and wet wipes business, which is expected to grow three to five times the brand’s current numbers, develop a licensed business model and increase direct-to-consumer sales.
“Over the last four years, Accrol has been transformed as an organization to one that currently supplies c.21.5 per cent of the UK market’s tissue volumes and has considerable further capacity. Our state-of-the-art businesses are in an incredibly strong position to benefit in a private label market, which is growing rapidly and significantly,” reports Dan Wright, CEO of Accrol.
“Our customer base is strong and varied and the ability to pass-on cost increases swiftly has been evidenced in the group’s half year results, also announced today. We look forward with increased confidence, having clearly identified where we can grow the business”, adds the executive.
The company claimed its private label market amounts to a 45% share and also praised “continued operational excellence” as over £20m has already been invested in installing tissue converting machinery and automation across all main locations of the group.
RESULTS
Along with the facility announcement, the company also released its results for the semester until October 31, 2022.
During the period, the company’s revenues increased by 64.3% over the same period of the previous year, from £73.7m to £121.1m. Pre-tax losses also decreased from £3.5m to £900,000.
Adjusted earnings before interest, tax, depreciation and amortization increased from £5m to £7.1m, around 42%.
In light of these figures, Accrol believes it is on track for annual revenue growth and adjusted Ebitda above expectations – rising from £9.1m to £15.5m – for the fiscal year ending 30 April of this year, which would represent an increase of 70%.
