Cantrell & Cochrane, bought by a management buyout 18 months ago for £578 million (€734 million), is going ahead with a £60 million investment programme ahead of a stock market flotation within 18-24 months. The investment programme will create 120 jobs directly, with a further 30 jobs through outsourcing.
The investment programme will be across all of C&C's food and drinks businesses and will increase its production of soft drinks and mineral water by 30 per cent while C&C's Tayto subsidiary will now manufacture low fat crisps rather than outsource them from a Danish manufacturer. There are five main elements to the expansion. These include:
a state-of-the-art plastic bottle manufacturing and bottling facility for Ballygowan in Newcastle West, Co Limerick;
a high-speed bottling line (36,000 bottles an hour) facility plus plastic bottle manufacturing in facilities in Dublin to accommodate increased volumes when C&C takes over the 7UP franchise next year;
a 120,000 sq ft distribution centre in Dublin;
a production plant for Tayto low fat crisps in Dublin;
an apple crushing plant and processing facilities for Bulmers Cider in Clonmel.
C&C's chief executive, Mr Tony O'Brien, said growth had been rap id in all its core businesses.
"Mineral water, soft drinks, wines are all very buoyant but we need to extend capacity and this will boost mineral water and soft drink production by about 30 per cent. This is a step change for our business." He added that the 7UP franchise from January next year was a big volume acquisition for C&C. "We've negotiated the franchise for 15 years and it's a major coup for us."
Mr O'Brien said the strength of the economy and changing demographics was driving demand for C&C's products. "The population is growing, there's immigration instead of emigration and we're probably going to see a couple hundred thousand more consumers in the next couple years. There are also more people in up-market higher-paying jobs and this has changed lifestyles. More people are eating out, more people are going on holidays, there are more weekend trips and all this is acting in our favour," he said, adding: "Our product mix means we're better placed than our peers to take advantage."
Since the management buyout backed by BC Capital, C&C has acquired the Tayto snacks group for £68 million and is now spending £60 million on capital projects. "At the time of the MBO, we didn't expect our capital investment to be as significant as this, but the huge increase in demand was not foreseen at that time," he said.
Despite recent turbulence in the markets, Mr O'Brien said C&C remained on target for a stock market flotation in Dublin and London. "Markets have had a reality check in the past week and we'll probably now see a more sensible balance between old and new economy companies. That'll make our IPO easier and more attractive to investors," Mr O'Brien said.
He expected further acquisition by C&C ahead of that flotation, but said that competition considerations would probably mean that these acquisitions would be outside Ireland.
