Tuesday 25th Oct 2016 - Logistics Manager

MK shed offers growth for Barr Britvic following merger

AG Barr’s new shed at Milton Keynes will play a key role in the supply chain plans of the new group that will be formed by the merger with Britvic – Barr Britvic Soft Drinks.

Irn-Bru maker AG Barr signed a build-to-suit deal with Gazeley for construction of the 265,000 sq ft warehouse and production plant in August.

Britvic has one of the most famous automated warehouses in the country at Magna Park near Lutterworth, which is managed by Wincanton.

The two companies said the merger offered the opportunity to optimise the combined operational footprint, increasing manufacturing capacity utilisation and thereby enabling better leverage of fixed production costs.

“It is expected that the combined group will be able to benefit from a reconfiguration of the supply chain.

“In particular, it is likely that the new facility that AG Barr is in the process of constructing in Milton Keynes will provide additional capacity which will offer greater flexibility for the combined group.”

There are also expected to be savings on procurement costs coming from greater scale in direct procurement of key overlapping raw materials, as well as in indirect procurement such as media, trade marketing and third party external production.

The boards of the two companies believe that Barr Britvic will be able to achieve annual cost savings of £35m. It is expected that realisation of these synergies will result in one-off exceptional costs of approximately £40 million.

Britvic brands include R Whites and Robinsons. It also makes Pepsi under licence. AG Barr is responsible for Tizer and Rubicon as well as Irn Bru.

The merged company will have annual sales of £1.5bn. Britvic shareholders will hold some 63 per cent of the new company and AG Barr shareholders will hold some 37 per cent.