Barclays ‘packages’ up deal for leading paper bag supplier
One of the UK’s largest food packaging companies, Smith Anderson Group, has agreed a new financial package with Barclays, including day-to-day banking, invoice discounting and a facility to help manage longer-term foreign exchange (FX) exposures.
The deal follows Smith Anderson Group’s recent £35 million European contract win with the world’s largest fast food chain McDonald’s, which will see the company expand its operations to supply select markets in Central Eastern Europe. The agreement was secured in part by the company’s increased competitiveness due to the weaker pound.
Smith Anderson Group is a family-owned business that has been in operation since 1859 and now has over 200 employees. It produces up to 60 million paper bags per week at its custom built facility in Kirkcaldy, Fife, suppling big brand names such as McDonald’s, Harrods, Starbucks, Waitrose and Boots.
With European trading now on the cards for the business well into 2020, Smith Anderson Group approached Barclays to discuss longer-term FX management.
Michael Longstaffe, Chief Executive at Smith Anderson Group, commented: “Securing the extended European contract with McDonald’s was a great achievement for the business. With this, however, came a degree of uncertainty, especially around the Pound to Euro value, so we felt it was essential to lock-in a foreign exchange rate to provide us a level of assurance and guaranteed margin.
“Barclays’ offering was second to none and they recognised our ambitions for long term sustainable growth. The entire process has been made simple by the team and as a result we’ve now moved over our day-to-day banking and invoice discounting facilities as well.
“I firmly believe that our partnership with Barclays and our new agreement with McDonald’s will consolidate the company’s position in the marketplace, helping us to achieving our vision to be Europe’s leading provider of paper packaging solutions.”
Paul Smith, Corporate Development Director for Barclays in Scotland, said: “Companies are operating in a challenging and uncertain market at the moment but Smith Anderson has taken advantage of the opportunities the current climate offers for growing international trade.
“Managing foreign exchange exposures has always been a complex task for businesses of all types but we have a range of FX services and expertise that help reduce the risk of volatility. We’re keen to help even more companies like Smith Anderson realise their global ambitions and successfully navigate the changing economic landscape.”