The biggest brick factory in Europe has been fired up for the first time, with commercial production expected to get underway soon.
Forterra, one of the UK’s biggest brick makers, said the plant at Desford, in west Leicestershire, will start manufacturing in earnest when the necessary product certifications are complete.
The news comes as Forterra announced strong results for 2022 when revenues hit £450 million, up more than a fifth on 2021.
However it said inflation pushed the price of a brick up by half last year, followed by a further rise this month.
It also said it expected energy prices would continue to rise and that it had hedged 70 per cent of its energy needs for the year ahead.
Chief executive Stephen Harrison said demand had slowed in recent months as the UK housing market cooled.
Earlier this month Barratt Developments warned of a “marked slowdown” in the UK housing market over the past six months.
The FTSE 100 firm said “political and economic uncertainty” affected the market in the three months to September, which was then compounded by “rapid and significant” changes to mortgage rates into the latest quarter.
A couple of days later Taylor Wimpey said it was buying less land and planning to cut costs by £20 million in a year as it faced a slowdown in the market.
It told investors its sales were significantly below levels seen before the recent rise in mortgage rates when the former chancellor Kwasi Kwarteng’s disastrous mini budget sparked turmoil in the financial markets.
It is expected that Forterra’s new £100 million factory, capable of firing up to 180 million bricks a year, will have the potential to increase productivity for the business by 22 per cent from 2025, and help address UK housebuilding’s continued reliance on imported bricks.
In a trading statement for 2022, chief executive Stephen Harrison said: “We are pleased with our strong performance in 2022 against a backdrop of severe cost inflation.
“There is considerable uncertainty as to the outlook for the UK housing market and accordingly demand for our products in the coming year.
“We did see signs of softening demand towards the end of 2022 and we are waiting to see how our customers' spring new house selling season develops as the outcome of this is likely to be a key determinant of demand for our products during 2023.
“We remain confident that Forterra is well positioned to face this more challenging environment. The UK brick industry is ideally placed to displace imported products should demand fall, and with our new Desford factory we expect to benefit from the industry-leading efficiency this will offer.
“Alongside this, we retain a strong balance sheet with minimal debt.
“In the medium term we continue to expect to benefit from the attractive long-term UK market fundamentals of population growth, housing undersupply, a shortage of domestically-produced bricks and an increasing focus on the quality of housing stock."
