Berwick maltster still confident for growth

Posted by The Journal on Nov 9, 09 09:46 AM in News

Malting firm Simpsons says it is on track to exceed last year's record sales of £120m but says economic headwinds will slow growth in 2010.

Falling pub beer sales and brewery closures are expected to deter progress next year but the Berwick firm says it is anticipating growth after that and well into the next decade.

The family business, which was founded by James Parker Simpson in 1862, is the second largest maltster in the UK supplying over a quarter of the brewing and distilling industry with high quality malting barley.

In 2008 it recorded sales of around £120m which was well up on 2007's £80m with much of this being accounted for by the spike in barley prices.

Tim McCreath, group managing director, said: "We are trading well and having just completed a major investment programme the business is in good shape. We have in place some long-term strategic contracts with some of the main brewers and distillers and as they grow we will grow with them."

Mr McCreath went on to say that historically the brewing, distilling and malting industries are the last into recession and the last out.

"With brewery closures looming in Leeds, with Tetley and the Berkshire Brewery in Reading, a lot of capacity is being taken out of the market and this will have a knock-on effect on businesses like ours. We expect 2010 to be tough but anticipate renewed growth after that."

The company, whose chairman Simon Simpson OBE is the great-grandson of the founder, recently increased its production capabilities from 140,000 tonnes a year to 220,000 tonnes.

Last year's £27m investment in new facilities has been completed and the company says it is now operating at near full capacity.

As well as its Berwick headquarters and maltings it also has a malting facility in Norfolk which employs 32 of its 200 staff.

The company also operates a merchant division which helps secure its barley supply chain. Mr McCreath went on to say Simpsons places great emphasis on working closely with its suppliers and customers.

The high volatility in the price of barley last year affected the company's margins with its gross profit margin declining from 13.2% in 2007 to 12.4% in 2008.

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