Milling, agriculture and engineering firm Carr’s has told investors it is already seeing financial benefits from a multi-million-pound investment in a new dockside mill in Kirkcaldy.
The company told shareholders at its annual general meeting in Carlisle that the £17 million capital spend was now fully operational, and was delivering the operational efficiencies it had sought.
It revealed that its food division which includes operations at Kirkcaldy, Silloth in Cumbria and Maldon in Essex was trading ahead of last year and in line with managers’ hopes.
That comes despite a much-improved summer harvest which could adversely impact on the competitive advantage Carr’s had gained during the previous year.
The dockside location of its mills had proved a significant strategic benefit following 2012’s poor crop yields, allowing both easier access to imported wheat from Continental Europe and the cheaper transport of goods after milling.
“Following the strategic investment, our new mill at Kirkcaldy is now fully operational and we are beginning to see the financial benefits linked to the improved operational efficiencies, as well as commercial benefits from having a state-of-the-art-mill in a prime location,” the company said in a pre-meeting update.
“The quality of the 2013 UK wheat harvest is significantly better than the prior year’s poor harvest.
“The portside location of our two northern mills remains important to us as we continue to ship both home-grown and Continental wheat direct to Kirkcaldy and Silloth.
“Total sales volumes across the three mills are ahead of last year and we are optimistic about future opportunities.”
The statement, which relates to the 19-week period to January 11, marks the first update from Carr’s since the full commissioning of its Kirkcaldy base.
It is the first new mill to be built in Scotland for 25 years, and was completed with the help of a £10m funding package from the Clydesdale Bank and alongside Swiss manufacturer Buhler.
Meanwhile, the group’s agriculture arm continues to consider expansion into the New Zealand and South American markets.
Investment in animal feed and nutrition products at home and in the USA is also reaping rewards.
The Carr’s engineering arm is performing “well”, with newly-expanded German subsidiary Wlischmiller winning a deal to provide remote handling gear to one of the world’s biggest nuclear equipment and installation firms.
Chief executive Tim Davies said the group was “pleased” with its start to the financial year.
“Against a challenging backdrop of a mild start to the winter in the UK, a vastly improved wheat harvest, and the continuing delays in the procurement of orders from the UK nuclear industry, trading remains in line with the board’s expectations,” he said.
“We are making good progress across each of our divisions, helped by our continued product innovation and sustained investment in our people and assets so that the business is well placed to ensure a long-term competitive advantage.
“We will continue to explore opportunities to grow the business both domestically and overseas.”