Wrexham-based paper cup producer Benders Paper Cups has secured a funding package of £5.3m.
The company secured the funding after switching its banking facilities to become a new customer of Lloyds Bank Commercial Banking.
The deal transfers Benders Paper Cups’ day-to-day transactional banking to Lloyds Bank, and provides an uplift in facilities including overdraft and foreign exchange to support the business’s global expansion and enable it to trade effectively with international partners.
Lloyds Bank’s Commercial Finance division provided asset finance funding worth £1.5m to support the businesses plans to enhance its manufacturing capabilities.
The deal follows a period of significant growth thanks to improved economic conditions and a market shift away from plastic cups due to the enhanced branding and environmental properties of printed paper cups. This recent success will be capitalised upon by the purchase of three Hoerauf cup making machines, enabling the business to meet demand from the likes of high street coffee chains.
Moving towards lean manufacturing processes in recent years has also boosted revenues, and this efficiency drive will be further supported by the finance package.
The business was founded over 100 years ago and is Europe’s only dedicated paper cup manufacturer. Its client list features household names such as Greggs, Douwe Egberts and Nescafe.
The deal follows the sale of Benders Paper Cups to a European consortium comprising Nupik, Flo and Dopla in 2012, which has invested heavily in paper cup technology, and offered a route to develop exporting throughout Europe. In 2013, the first full year of trading under new ownership, Benders Paper Cups reported full year turnover of £23.9m. The forecast for the current financial year is turnover of £25.1m.
As part of Lloyds Bank’s commitment to support UK manufacturing, the bank has pledged to lend £4bn to both SMEs and mid-market businesses in the sector by 2017.
Mark De Meza, finance director of Benders Paper Cups, said: “Our sole concentration on paper cups means we can invest time and expertise into creating innovative and effective solutions. As a result of a number of high profile client wins and new product launches, such as our Garda Embossed Insulated Cup, demand is currently outstripping our capacity. The funding from Lloyds Bank will change all that, and take us into our next stage of growth.”
Ashley Suter, relationship director at Lloyds Bank’s Commercial Banking team, said: “LBG is committed to supporting businesses like Benders Paper Cups, a locally-based company manufacturing the highest quality products in its sector. Our knowledge and experience in lean manufacturing, plus the funding facilities we’re able to provide, will underpin Benders Paper Cups’ future success.”