Building materials manufacturer Forterra is to close its general precast facility at Swadlincote, Derbyshire, but will spend £27m on upgrading its Wilnecote brick factory allow for the production of more high-end brick products.
Having conducted a review of its Bison pre-cast business, Forterra has concluded that better returns are to be had from focusing on added value products over the more commoditised, margin-pressured grey concrete market.
The investment in the Wilnecote factory will increase capacity by 20% or 6m bricks a year, although it will require a nine-month closure next year, in order to install the new kiln, dryers and handling equipment.
Forterra saw an increase in first half profits to £27m, following a £23m loss over the same period in 2020. Revenues from bricks and blocks are now slightly ahead of 2019 levels helping to restore revenue to £180m.
Stephen Harrison chief executive officer, said: “The current strong trading conditions appear set to continue in the second half of the year with our customer base signalling that they expect current levels of demand to continue.
“However, we remain watchful that ongoing economic uncertainty surrounding the longer-term impacts of the pandemic, coupled with the shorter-term effects of the present shortages of labour, materials and transport across the wider sector could potentially impact demand for our products.”