AIM-listed plastics company secures manufacturing agreement worth up to £6m

Coral Products, the Wythenshaw-based plastic products group, has clinched a manufacturing deal that could be worth £6m over the next three years.

The listed business announced on the stock exchange this morning that its wholly owned subsidiary, Tatra Rotalac, has signed an exclusive three-year supply agreement, with a UK distributor of BRC (British Retail Consortium) packaging containers, for the supply of ice cream and food containers.

The agreement is for an initial period of three years, and is anticipated that it will generate sales of between £1.5m-£2m per annum.

The company’s ability to produce the products under the agreement follows the £2.1m investment in new machinery and re-tooling as announced in September 2023, which is now operational.

The company said it has also completed the successful commissioning of the in-house manufacturing capability for the volume manufacturing of the ECODECK floor grids, also announced in September 2023.

The new facilities allow Coral to optimise the use of recycled materials enhancing manufacturing efficiency.

These improvements will allow it to insource £3m per annum of previously outsourced products, strengthening operational resilience and cost efficiency.

It is anticipated that the improvements will have a material positive effect on overall margin contribution and cash flow.

Coral chairman, Joe Grimmond, said: “Thanks to the efforts of Ian Hillman, our group COO and the team, we should now enjoy, after a 12-month delay, the full benefits of our investments in new machinery and re-tooling with improvements to both margin and cash flow.”