Business

Sales rise at glass-maker Encirc - but cost burdens crack its bottom line

The Encirc headquarters plant at Derrylin
The Encirc headquarters plant at Derrylin The Encirc headquarters plant at Derrylin

FERMANAGH glass manufacturer Encirc had a 7 jump in sales last year, its latest published accounts show.

THE former Quinn Glass business, whose ultimate parent is the Vidrala company in Italy, saw revenues rise from £335.7 million to £360.2 million in the 2021 calendar year.

But on the back of a significantly larger tax bill and a number of other cost burdens, its bottom line profit fell back from £46.4m to £39.5m, according to the accounts filed at Companies House.

It comes after its managing director Adrian Curry predicted last October that the firm’s energy costs could rocket by £60 million a year as a result of rising costs - and that grim warning came ahead of the outbreak of the Ukraine war and before the last two quarters of spiralling inflation.

At that time he said Encirc had seen "huge increases" to its natural gas and electricity costs, forcing it to pass on the increases to brand owners, retail outlets and consumers.

And he warned: "The problem we have is that there seems to be no cap to it and it's continuing to rise on an almost weekly basis.

"Generally we will have contracts for 12 months at a time, so we're having to look at what contracts are offering . . . how we can pass these price increases on and how can we can protect our business in that regard.

"Our businesses is not at risk, per se, but our profitability is being hit hard."

Asked back then about how much the company's energy bills had gone up by, he said: "We would normally spend about £40 million a year in energy but today we're seeing increases that mean we could be spending up to £100 million on a like-for-like basis."

The payroll at Encirc increased slightly in 2021 from 1,338 to 1,356, and its wages bill rose from £65.3m to £67.7m.

The directors' total salaries fell to £648,000 from £716,000, and the highest paid of them had his package cut back from £392,000 to £348,000.

The accounts show that dividends paid last year more than tripled from £14.2m to £56.6m.

Encirc, which makes more than three billion glass bottles and containers a year for British, Irish and European food and drinks manufacturers including the likes of Diageo and Britvic, was bought in 2015 by Spanish giant Vidrala to enhance its positioning in the European glass-container market.

During the last trading year, the company created a world-first sustainable glass bottle at its Derrylin plant, made from 100 per cent recycled glass, using only the energy from burning ultra-low-carbon biofuels, in what its managing director described as “a truly momentous occasion for glass, setting a new global standard.”

As well as its main site in Fermanagh, Encirc has manufacturing facilities in Cheshire and at Corsico in Italy.