One of the UK’s biggest brick makers says its new factory – the biggest in Europe – should be up and running by the end of the year.
Forterra said the site at Desford in Leicestershire will increase productivity for the business by 22 per cent from 2025.
It is replacing its existing factory in Desford with a vast new shed housing two massive kilns, more than doubling production there.
Almost £100 million is being spent on the state-of-the-art plant, which will be capable of firing up to 180 million bricks a year.
The business said it will offer “market-leading” efficiency and help address UK housebuilding’s continued reliance on imported bricks.
The outdated existing Desford factory has suffered recent operational problems, it said, including a kiln related breakdown in the first half of last year.
Forterra said the new factory was expected to be completed within its original £95 million budget, and the business intends to put a further £200 million into its UK operations over the coming decade.
In its financial results for 2021, Forterra, which is headquartered in Northampton, said revenues were more than £370 million last year, up from around £292 million in 2019.
Pre-tax profits were £50.7 million, compared to £17.4 million the year before.
The latest figures were not far behind the UK’s biggest brick maker Ibstock, which a day earlier announced 2021 sales of £409 million and pre-tax profits of £65 million.
Forterra said trading last year was slightly ahead of expectations, with brick sales on a par with pre-pandemic levels in 2019.
It said costs did go up in the second half of the year, but market conditions remained strong due to continued demand for new homes and constrained UK manufacturing capacity driving brick imports to record levels.
It said: “Order books remain strong, supported by robust customer sentiment and an ongoing housing shortage.”
Chief executive Stephen Harrison said: “Our markets continued to recover from the effects of the pandemic, with our brick sales volumes similar to 2019 and further growth only limited by production capacity and available inventory.
“We continued our programme of organic investment, with the construction of our new Desford brick factory remaining on track for commissioning at the end of this year, our Wilnecote refurbishment proceeding to plan; and new investments in Accrington and solar power generation announced today.
“We remain disciplined in our capital allocation and have maintained our progressive dividend policy whilst commencing a share buy-back programme and retaining balance sheet flexibility for bolt-on acquisitions.
“Our order book remains strong and, although inflationary pressures continue, we remain confident of recovering these through selling price increases.
“We remain watchful as to the impacts of increasing macro uncertainty and supply chain pressures as well as increases in interest rates. Approximately 70 per cent of the group's 2022 energy requirements have been secured.
“With market conditions remaining highly supportive, and Desford now expected to deliver a 22 per cent effective increase in brick production and increased incremental EBITDA of £25 million from 2025, we are confident that the Group will achieve further progress in the coming year and beyond.”
