Teesside-based Chemoxy, independent contract and speciality chemical manufacturer, has received a £10m growth capital investment from the Business Growth Fund (BGF).
At the same time, The Royal Bank of Scotland via its Complex Transaction Execution team in Leeds will be providing £10m new working capital facilities taking the total funding package to £20m.
The business will use the new funding package to make further investments in capital and plant over the next four years in order to increase capacity, expand its product and service range and drive growth. Chemoxy’s management team has an ambition to grow revenue to in excess of £100m by 2020.
Chemoxy operates from two sites in Teesside and provides specialised manufacturing services to a wide range of large blue chip companies in the chemical and oil & gas industry. In addition, it has developed its own portfolio of low-toxicity solvents, including its Coasol range, used in environmentally friendly paints, industrial coatings and cleaning products.
The business has experienced rapid growth since it was acquired from Dow Chemicals in 2011 in an MBO led by chief executive Ian Stark and chief operating officer Martyn Bainbridge, increasing turnover from £34m to around £50m today. To date, the team has invested more than £10m in new plant and acquired new land at their Billingham site in preparation for future growth.
More than 130 people including chemical engineers and apprentices are employed, of which 32% are graduates and PHDs. Its international presence continues to grow with around 60% of the chemicals produced or processed at the two sites shipped to overseas markets.
BGF, an investor in growing companies, has backed 26 British manufacturing businesses in the past three years, including VTL Group in Huddersfield. Last month, VTL received further funding to commence an eight year project to supply engine components to Jaguar Land Rover. Two of Chemoxy’s neighbouring businesses on Teesside, waste management firm J&B Recycling and fifth-generation house builders, Cussins, have also secured BGF funding.
Ian Stark, chief executive, Chemoxy commented: “This funding package supports our long-term ambitions for Chemoxy, with growth capital empowering us to expand the business without relinquishing control over the management or direction of the firm. At the same time, we are looking forward to drawing on new ideas and expertise.”
Barry Jackson, BGF, commented: “Chemoxy is a well invested business with significant potential for growth in a number of different areas. We are delighted to now be a partner in the company and assist the Chemoxy team in achieving the next stage of growth. Teesside and the North East continue to demonstrate strong demand for growth capital with Chemoxy being our third investment in the last 12 months in the region.”
Andy Killingback, director, RBS Complex Transaction Execution, North, commented: “Chemoxy is a high regarded customer of RBS and having supported Management with the 2011 MBO, we are delighted to provide this funding package, alongside the investment from BGF, which will enable the business to further consolidate its position as the UK’s leading contract chemical manufacturer.’’
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