Specialist equipment gives Cranswick hope
business and high costs for a drop in first half profits, but says
it is quietly confident of further growth after securing an
exclusive deal to import specialist meat processing equipment from
central Europe.
It has been a tough first half for meat processor and sandwich maker Cranswick; its preliminary results show net profits have dropped £1 million to £10.5 million compared with 2003, reflecting a reduction in volumes to a major sandwich retailer and high animal feed prices from November last year through to this year's harvest.
But Cranswick chairman Martin Davey said the worst was now over and that he expected a better performance in the second half of 2004. He said the company had regained the lost volumes in the sandwich business and that animal feed prices had dropped back down to normal levels following this year's harvest.
Davey was bullish about Cranswick's expansion prospects and said that "the strong cash generation of the business [turnover rose by eight per cent to £144 million] has enabled significant investment to be made in production facilities which will provide additional capacity to combat the challenges of the trading environment."
Bernard Hoggarth, chief executive of Cranswick's food division, said the company was already preparing to expand its sandwich production, which is currently running at full capacity, and that a range of new products was being planned.
Hoggarth told BakeryandSnacks.com that Cranswick had exclusivity rights on some specialist manufacturing and meat processing equipment coming into the UK from central Europe next year.
The company believes central European-style premium meats, such as speciality sausages, both loose and in sandwiches, have potential in the UK and could provide an important niche market for Cranswick.
"You have got to be at the cutting edge and you have got to be innovative to maintain your position and progress in this market. We are not a high volume, mainstream company," said Hoggarth, adding that Cranswick's focus was on the premium end of the meat and sandwich market.
Hoggarth expects the UK sandwich market to continue growing by 5 per cent per year for the next few years and Davey said the company had no plans to expand outside the UK at this stage.
There appears to be a fairly healthy market to work in. The British Sandwich Association (BSA) estimates the UK sandwich market to be worth £3.3 billion, and it says there is plenty of room for growth in the commercial sector with 80 per cent of sandwiches still made at home.
"More and more people are buying packaged sandwiches to give to their families in lunch boxes," says the BSA, which claims that UK sandwich sales are rising by 8 per cent every year.
