Swallowfield opens production plant in the Czech Republic

By Guy Montague-Jones

- Last updated on GMT

Contract manufacturer Swallowfield has opened a production plant in
the Czech Republic to achieve the twin goals of high sales growth
and lower costs.

The investment is part of the UK-based company's global expansion plan which aims to take the cosmetics producer's turnover well beyond £45m (€60m). The 5,000 square metre production facility will employ 100 production staff when fully operational and is expected to bring Swallowfield substantial cost savings. "Whilst there will be an increase in freight costs associated with moving an operation overseas, the labour costs are approximately a third of those in the UK for the type of work that will be undertaken in our new operation, thereby providing a significant net saving,"​ said Ian Mackinnon, Chief Executive of Swallowfield. According to the company, the plant, which is located in Tabor and will produce colour cosmetics, fragrances and other liquid products, is one of the largest operations of its kind in Europe. "As the facility is operated by us, rather than outsourced to a strategic partner, we feel that this gives us a major competitive edge in the marketplace,"​ added Mackinnon. The company has increased its operating profit significantly over the past year and is pursing strategic initiatives in order to secure long-term profit growth. It is planning to unveil a joint venture operation in China soon that it expects will improve the quality of the products it sources from the country and provide new sales opportunities in Europe. The opening of the plant in the Czech Republic comes soon after the sale of its warehouse facility in Lowmoor, on which the company expects to make a pre-tax profit of £1.25m. The sale will help the company fund its expansion plans in the UK and overseas. Swallowfield has picked itself up since being hit by the ending of a 30-year contract with Marks & Spenser for the production of colour cosmetics in 2006 worth a reported £2m (€2.9m).

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