Member Article

Scandinavian bathroom manufacturers land £300k funding to create North East jobs

Newcastle’s Aaroft Limited has secured £300k investment to expand its presence in the UK market and create 20 North East jobs, having found success in the Scandinavian construction industry.

The firm is the UK’s only producer of lightweight concrete pre-fabricated bathrooms, which have long been widely utilised in the Scandinavian construction industry for projects ranging from hotels, student accommodation and nursing homes through to apartment buildings and social housing. Led by experienced industry professional Niels Sandahl, the Newcastle-based firm is aiming to popularise this cost-effective method of bespoke, technology-driven construction in UK markets, where the various cost and efficiency benefits its offers to both clients and contractors are not currently widely understood.

Building on the ‘coals to Newcastle’ principle, Aartoft will also be looking to target specific commercial opportunities back in Scandinavia with the products it manufactures in the North East. Aartoft’s expansion plans are now being backed by the investment from the Finance For Business North East Growth Fund,which is administered by regional fund management firm NEL Fund Managers. Support for the project is also being provided by Santander Bank and UK Export Finance, with advice on the investment supplied toAartoft by Michael Smith and Barry Gill of the corporate finance team at Newcastle accountants Tait Walker. Niels Sandahl, who settled in the North East three years ago, says: “While this method of construction is widespread across Scandinavia, it hasn’t so far been widely adopted in the UK, a situation which we believe now we have the product, expertise and resources to address. “We are able to plan, manufacture and deliver custom-built, pre-engineered bathrooms to a uniformly high quality that meet both individual customers’ specific needs, and all the relevant statutory industry requirements. “The quality control that our manufacturing systems allow, the cost-effectiveness and efficiency of this sort of modular construction and our experience in successfully delivering these projects combine to make a very attractive package for clients and constructions firms, and we have every confidence that demand for our products will be strong. “The last three years of working in the North East have shown me what a fantastic location it is for manufacturing - we’ve been able to build a highly-skilled workforce that has now been trained to manufacture this very specialised product, and we expect to see it grow as our developments plans are put into action. “We were very keen to find locally-based investment capital to support what we wanted to do, and working closely with Tait Walker, we had long discussions with NEL about how their backing could help us realise our commercial objectives, discussions which reached a pleasingly positive conclusion.” David Thomas, investment executive at NEL Fund Managers, added: “Aartoft has identified a niche market within the UK construction sector in which it has the capacity to quickly establish a very strong presence, and their development plans represented an exciting investment opportunity for us that ties in wholly with the Growth Fund’s purpose of sustaining and creating regional employment.” Tait Walker’s Michael Smith said: “Helping NEL, Santander and UK Export Finance understand Aartoft’s business was a crucial part of this exercise – we have worked with Niels for a number of years now so we knew how important this element of the deal was to his business. “The timing of the individual deal components coming together was crucial in this particular situation; each of the individual parties were dependent on the other so we worked closely with NEL, Santander and UK Export Finance throughout to ensure everything came together in a timely manner.” Simon Dunn, Trade Finance director at Santander Corporate & Commercial, added: “We are delighted to be able to help local business owners achieve their international ambitions, and proud to have been able to support Aartoft with theirs. I know that with their extensive experience in the manufacturing sector, their hands-on approach and passion for their business, they will make a great success of this new venture.”

Jonathan Leonard, Export Finance advisor at UK Export Finance, said: “UK Export Finance was a vital cog in ensuring Aartoft was able to secure the funding it needed and I believe it can now capitalise on further opportunities that exist in the market place. We are always keen to support small businesses and in this case we were able to provide Santander with a guarantee, allowing them make a bonding facility available to Aartoft.”

Aimed at regional businesses which are at a development and growth stage, the Growth Fund forms part of the wider Finance for Business North East Fund.

Managed by North East Finance, it will see £125m of investment capital injected into the region by the European Investment Bank and the European Regional Development Fund 2007-13 over a five year period.

NEL is looking to make around 130 investments over the five-year life span of the Growth Fund, and is actively looking to speak to ambitious north east companies with robust business plans.

This was posted in Bdaily's Members' News section by Tom Keighley .