Expansion plans to increase capacity have been triggered at Teesside chemical firm Chemoxy after it landed a £20m funding package.
The business, which makes solvents for products ranging from petrochemicals to fragrances, has secured a £10m growth capital investment from the Business Growth Fund.
Meanwhile, the Royal Bank of Scotland (RBS) through its Complex Transaction Execution team in Leeds, is providing £10m new working capital facilities, taking the total funding package to £20m.
Middlesbrough-based Chemoxy is now poised to invest in capital and plant, building upon rapid growth experienced since the firm underwent an MBO.
The firm, which employs 130 people, is one of the UK’s leading contract chemical manufacturers operating from two sites in Teesside, providing specialised manufacturing services to a wide range of large blue chip companies in the chemical and oil and gas industry.
It has also developed its own portfolio of low-toxicity solvents, including the Coasol range, which are used in environmentally friendly paints, industrial coatings and cleaning products, and exports account for 60% of sales.
The business was acquired from Dow Chemicals in 2011 in a management buyout led by chief executive Ian Stark and chief operating officer Martyn Bainbridge, and has since increased turnover from £34m to around £50m.
Since then, the team has invested more than £10m in new plant and acquired new land at its Billingham site in preparation for future growth.
The £20m funding package will be used to make further investments in capital and plant over the next four years in order to increase capacity, expand its product and service range and drive growth, with the management team targeting revenue in excess of £100m by 2020.
Ian Stark, chief executive, said “This funding package supports our long-term ambitions for Chemoxy, with growth capital empowering us to expand the business without relinquishing control over the management or direction of the firm.
“At the same time, we are looking forward to drawing on new ideas and expertise.”
Barry Jackson, of the Business Growth Fund, said: “Chemoxy is a well invested business with significant potential for growth in a number of different areas.
“We are delighted to now be a partner in the company and assist the Chemoxy team in achieving the next stage of growth. Teesside and the North East continue to demonstrate strong demand for growth capital with Chemoxy being our third investment in the last 12 months in the region.”
Andy Killingback, director of RBS Complex Transaction Execution, North, added: “Chemoxy is a high regarded customer of RBS and having supported management with the 2011 MBO, we are delighted to provide this funding package, alongside the investment from BGF, which will enable the business to further consolidate its position as the UK’s leading contract chemical manufacturer.”
Chemoxy is the fourth business within the North East to receive backing from BGF, an independent company established to help growing businesses with a turnover between £5m and £100m, which has supported 26 British manufacturing businesses in the past three years.
In December we told how Alnwick-based Cussins received £10m growth capital from BGF and a £7m debt facility from Lloyds to support the acquisition of land and the development of up to 300 new houses per year over the next four years, generating 500 jobs.
Meanwhile, Hartlepool-headquartered J&B Recycling, a waste management firm, received £7.5m growth capital from BGF to develop an additional recycling facility in Middlesbrough for treating commercial waste, and Durham pub company Wear Inns received £8m.