A Droitwich plastics manufacturer is set to hit £10million annual turnover after expanding its premises and investing in new machinery, thanks to a £1.2m support package from Lloyds Bank Commercial Banking.
Chess Plastics is expanding its current site at Berry Hill after buying a 16,000 sq ft property with 1.5 acres of land, in addition to investing in new machinery using an asset finance facility. This support comes from Lloyds Bank’s commitment to lend up to £2.5bn to West Midlands businesses in 2019.
The new property will expand the firm’s existing facility by as much as 50 per cent with the new site handling storage and distribution. The expansion will boost efficiency by eliminating any wait time for raw materials and will save the business £100,000 a year in storage rental costs.
The new machinery is a 1,000 tonne Borche BU1000 plastic injection moulding machine capable of producing plastic components up to 5 kg in weight, worth £235,000, with state-of-the-art software to allow optimised processing. This replacement machine is expected to use 40 per cent less electricity, thus reducing costs, and will help reduce the company’s carbon footprint by around 128 tonnes of CO2 per year.
Using an asset finance facility means the company is able to purchase the new machinery without impacting its day-to-day cash flow. As a result, Chess Plastics will increase production by six per cent this year, which will boost its turnover by eight per cent from £9.7m to £10.5m over the next 12 months.
Chess Plastics, established in 1968, is a second-generation family business that makes plastic parts for the automotive, brewing and construction sectors, including Jaguar Land Rover, Thermos and Scania.
Gareth Olden, shareholder and director at Chess Plastics, said: “When my parents founded Chess Plastics in the 1960s, it was a small family operation with just one or two machines. We have made significant investments over the last five years in the new plant, building renovations, training staff and implementing and updating our IT systems. We’re now a 24 hour a day, five day a week operation with 17 moulding machines and 75 members of staff.
“The team at Lloyds Bank has been by our side since we purchased our current property six years ago. In recent years we’ve grown our turnover by at least six per cent year on year. Taking on additional space gives us the room to grow and achieve our plans for the future. Working with Lloyds has been instrumental in our recent expansion. The team ensured that everything ran smoothly, and we have complete confidence in Lloyds to deliver to their word - we always feel as though our business is in safe hands.”
David Chance, relationship director at Lloyds Bank Commercial Banking, said: “As part of our commitment to helping Britain prosper, we work closely with family-run firms like Chess Plastics as they look to modernise and expand.
“This year is likely to be a milestone year for Chess Plastics and will see the firm hit £10million annual turnover for the first time. We look forward to continuing our work with the business, as it expands with future generations.”
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