Nutraceutical manufacturer, Bee Health, has won £15m of tablet and capsule production work over the heads of competitors in low cost economies.
Bee Health convinced two global customers that it is able to offer the superior flexibility of supply and better quality than their existing Chinese suppliers and has won one £7m and one £8m contract to produce tablets and soft gel capsules.
Bee Health received funding and support from the Manufacturing Advisory Service to optimise its total cost offering and provide compelling efficiencies for its customers.
One of the customers involved is the UK high street retailer for alternative remedies, Holland and Barrett which has recently cited local sourcing as key to boosting supply chain efficiencies and helping it react quickly to market demands.
The new contracts will account for 70% of Bee Health’s turnover in 2014 according to managing director Steve Ryan.
They have also necessitated staff increases. Bee health has already taken on 60 new members of staff, taking the workforce to 130 people, and another 70 will be recruited before the end of the year.
“Although we manufacture our own brand products, pretty much all of the new contracts will be completed under license to other global customers who had been manufacturing in low cost countries,” Mr Ryan told reporters.
“These organisations have experienced gradual rises in costs, disruption in supply and unmanageable lead times. This has caused some clients to hold million pounds of stock at any one time, something that really impacts on cash flow.”
Ryan said these factors had conspired to create a more positive view of UK manufacturing and its value add propositions. Ryan also stated that Bee Health’s high tech equipment and efficiency had helped carry the day.
“A significant part of this is for the production of soft gels, where we are actually cheaper than low cost countries,” he continued. “With this in mind, a £2m investment in additional plant to cater for this area of the business is just being installed and commissioned.
Bee Health has also worked hard to ensure workflow is optimised from start to finish within its facility by implementing a new Sage ERP system with support from government funded SME support agency MAS. This project has taken three years to complete.
This system has enabled significant productivity increases according to Ryan, who is grateful to MAS for the role it has played in helping his company form a competitive total cost proposition.
“MAS has modernised the way we operate and this has made us more competitive and in a better position to win reshoring work,” he said.
“Our Advisor John Dodgson understands how industry works and the pressures we face. He’s been there and experienced the issues for himself so he knows how to react and also has a unique ability to signpost us to other forms of funding and support, such as the Regional Growth Fund.
The next challenge for Bee Health will be to manage the business pressure which sudden growth has brought with it says Ryan. With this under control, he hopes to bid to bring more production work back from overseas.