Scottish malt manufacturer to double production with £5m investment

Scottish malt manufacturer to double production with £5m investment

When you’re exporting to countries on every continent apart from Antarctica, it’s inevitable there will be some awkward encounters, strange misunderstandings, and the odd thing lost in translation. That’s certainly true for PureMalt Products’ commercial director, Ross Turner, who leads the company’s export sales team and has already visited more than 15 nations this year alone.

“I’ve got plenty of awkward stories, but I’m not sure I want you to put them in a publication,” he jokes from the family-run business’ headquarters in Haddington, East Lothian. The company serves a global market and, with 65% of its revenue generated through exports, has established itself as a valued brand in many foreign climes.

Most of the exporting the business does at present is to Central and South America, with Mexico, Colombia, and Argentina taking the lion’s share of product. Australia and New Zealand are also strong export markets for the Scottish business, with the Far East and Africa starting to see more and more activity.

PureMalt produces a wide range of malt extracts, brewed from carefully selected specialty malts, which can be used in a variety of industries to create natural malt-based colour, flavour and texture.

With its maritime climate of cool summers and cold but not freezing winters, the United Kingdom is ideally placed to grow the highest quality of malting barley, giving PureMalt access to raw materials that are revered around the world.

“In recent times our major success has been the replacement of caramel products,” explains Turner. “Consumer pressure on manufacturers has forced them to ‘clean up’ their labels and replace synthetic ingredients with natural alternatives.

“This is particularly true in the brewing industry as most of the major players have made commitments to remove brewer’s caramel from their brands in pursuit of a cleaner label. That is where a lot of the success has come for us, particularly in Central and South America and South East Asia.”

PureMalt Products picked up two awards at the Scottish Export Awards in Glasgow, winning in its nominated categories of Emerging Markets Exporter of the Year and Export Team of the Year award.

The business has received support from Scotland’s Enterprise Agencies, with Turner developing his leadership and entrepreneurial skills through the highly sought-after Saltire Fellowship Programme, and the business itself collaborating with Scotland Development International (SDI) and Scottish Enterprise (SE) to help develop overseas trade.

“Scottish Enterprise has been a big help to us. I guess the two major ones that are probably worth mentioning are the Saltire Fellowship Programme, which is run by Entrepreneurial Scotland and creates programmes to identify and nurture the next generation of Scottish business leaders.

“We also collaborate with SDI on a number of issues, such as trade initiatives. Earlier this year I was at the Gulf Food conference in Dubai as part of the Scotland Food & Drink pavilion. We also have a direct line with our SDI account manager, so they can call upon specific market support for the countries they look after.”

Though it has been exporting for many years, PureMalt has started to see significant growth in its export markets over the past three or four years. In 2014, it had a single person managing sales and another managing marketing. Now, the business has four key account managers working on business development and a back-office team supporting them.

“We’ve grown our sales by around 22% in the past four years and grown our margins by about 2.2 times,” explains Turner. “We’ve seen some real commercial success in the past few years, and that was the driver for putting an application forward for the Scottish Export Awards.

“From my standpoint, I was looking for something that would provide some recognition to the efforts our team have put in and the Scottish Export Awards was quite an obvious candidate for that because I think we ticked a lot of the boxes.”

But while things are undoubtedly going well for the firm, being in the business of exporting often means being at the whims of distributors, border agents, and governments. This is especially true as the UK edges closer to leaving the European Union with little work done so far on securing trade deals to keep business moving smoothly.

“It’s going to be an interesting couple of years for us with the uncertainty around free trade agreements and movement of goods following Brexit. We’re doing a lot of contingency planning at the moment and trying to work out what our exposure is and how the different scenarios will affect us.

“I’m sure we’re all anticipating that the UK will sign trade agreements, but our concern is the pace at which they will happen. Mexico, Colombia, Peru, Ecuador – these countries might not be at the top of the agenda, but for our business they are quite important.”

Undeterred by the uncertainty, PureMalt is looking to the future with confidence, committing to a major expansion project that will see production capacity increase. This will not only allow the business to ramp up production of its already popular products to more countries, it will also allow it to explore new opportunities, such as the increasingly popular artisanal markets.

“We are now in a position in which we are selling the lion’s share of what we are able to produce with our existing infrastructure, so we are looking to invest in doubling up our production capacity, which will open up the opportunity to sell more products or new products into more of the markets we already operate in, and to some new ones.

“That investment will be around £5m, and it will see us bring in to play an entirely new production facility from start to finish. This will also allow us to enter new markets such as the craft and artisan markets within food and beverage, which is really going crazy, particularly in beers, spirits, and baked goods.

“We’re also continuing to appoint new local distributors and agents in markets that we aren’t very active in, the major one being North America, where we still haven’t managed to achieve substantial sales. And we’re also looking to expand in some of the emerging markets in Africa and South East Asia as avenues for growth as well.”

You can get support to find out more about exporting, develop an export plan or grow your current export sales by visiting the Scottish Enterprise website.

Published: 04 September 2018

Article by Chris Middleton
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