A team led by md David Sillars has bought the Gateshead firm – which makes cereal bars, cookies and biscuits – for £1 and paid down debts in the region of £750,000; it also plans to invest the same amount again in new product development and machinery.
The management buyout from private equity owner Duke Street will safeguard around 160 jobs, and is partly supported by private equity backers Cri Seren Investments and the Food and Investment Group, based in London and Aberdeen respectively.
Sillars told FoodManufacture.co.uk that Northumbrian was aiming to boost turnover by 10% to over £12m in 2011, following a difficult last couple of years during which the firm recorded pre-tax losses of several hundred thousand pounds.
More responsive to customer needs
Asked about past problems and why he felt confident that the firm now had a brighter future Sillars said: “It’s about realising that we’re not a Burton's Foods, and being more responsive to what customers need.
“We’re looking to focus more on what the business can do, not focus on battling it out with the big boys.
“We have to be more flexible in our culture. Take the gluten-free area. It’s a £30m market that none of the big boys would even bother getting out of bed for, but it’s a potentially big deal for a firm like ourselves.”
Improve our capability
Sillars was unable to reveal too much about the investment in new machinery, simply saying that it will “improve our capability; we supply all the major retailers”, where the firm recently signed deals with the likes of Marks & Spencer and the Co-Operative Group.
Asked about potential new recruits given new business, Sillars said: “We’re looking to be a wee bit more efficient with staff we have, and though we will look to take on more at some point within our four-year plan, we certainly have no plans to do so this year.”
One element of Northumbrian’s strategy is a launch programme begun late last year, involving own-label and licensed products such as Jammie Dodger and Maryland cereal bars, Thorntons cookies and the relaunch of its Geobar Traidcraft cereal bars. Sellars describes the latter sector (for such Fairtrade products) as a “consistent rather than growing market, which has its devotees”.