Vidrala is to invest in new furnaces at Encirc
Spanish glass manufacturer Vidrala bought Encirc for EUR 408 million in 2015. Encirc is based at two sites: Derrylin, which employs 440 staff and Cheshire, which employs 800 staff and houses the largest integrated bonded warehouse in Europe.
The Encirc brand was created in 2014 following the appointment of a share receiver to the Quinn group of businesses in 2011. Within the re-brand, Encirc Managing Director Adrian Curry and his team of directors established the Encirc 360 sustainability model – whereby the company produces 2.7 billion bottles per year between Derrylin and Cheshire; fills bottles with up to 200 million litres of wine, beer or soft drink; and takes care of warehousing and logistics.
The 360 model is “the only one of its kind in the world” and it makes Encirc more sustainable, which is of great importance when attracting customers.
Encirc made a pre-tax profit of GBP 33 million last year; a 17% increase from 2015. In order to sustain that performance, it “has to invest heavily to stay at the forefront in terms of technology, quality and service.”
Vidrala has agreed to invest GBP 50 million over the next four years in upgrading the plant and rebuilding the furnaces to accept natural gas which will be piped to Derrylin through the Gas to the West initiative.
“When Vidrala bought us they were very clear they wanted to keep the Encirc business as it was; same branding, same management team etc. Over the two-and-a-half years we have learned a lot from each other and during that time we’ve become very strong,” said Curry, adding: “Vidrala have a lot of investments across the group so we have to demonstrate that we are the best return on capital.”
Encirc was part of the initial Gas to the West discussions with the then Enterprise Minister Arlene Foster and the gas providers. The GBP 250 million project, with a contribution of up to GBP 32 million from the Northern Ireland Executive, will see the construction of approximately 200km of pipeline linking Coalisland, Cookstown, Derrylin, Dungannon, Enniskillen, Magherafelt, Omagh and Strabane to the existing gas network.
“Bringing gas in will help environmentally, it will help with our emissions and it also takes three large road tankers [of oil] off the road per day. But it means we will produce less glass because oil is more efficient at melting glass,” said Mr. Curry. “The complication is that we have to design our furnaces differently. We’ve worked very closely with Arlene Foster and her team a number of years ago and more recently with the gas providers to get to a point where everyone is certain this is going to happen because it does influence heavily on the decisions we make,” he added.
The first furnace rebuild will take place in 2019 and the second in 2021.
Outlining the Encirc 360 sustainability model in more detail, Mr Curry said: “We make bottles in Derrylin that are transported to the plant in Cheshire for filling. We ship wine, beer and soft drinks in bulk from all over the world for filling in Cheshire so we are not shipping glass from all over the world and we can maximise the weight on the container. As it comes in we fill it, we store 260,000 pallets on site and distribute directly to the retailers.
Customers include Baileys, Guinness, Jameson, Bushmills, Britvic, Heineken, C&C, McGuigan wines and Gallo wines (formerly known as Ernest and Julio Gallo).