TWO Scottish aerosol manufacturers plan to combine to form the largest independent UK business in the sector.
Sanmex International, which has its factory in Rutherglen, and Irvine-based Barony Universal believe the tie-up will allow them to pursue larger international contracts and compete better in global markets.
The businesses already fill around 100 million units annually with products including anti-perspirant, hairspray and household cleaning agents.
The combined entity will employ close to 230 and have a turnover in the region of £40 million.
Both companies are expected to retain their own brand identity for the foreseeable future.
Sanmex is a third-generation family business owned and run by Steven Groden.
Barony was founded by Stewart Shaw but has been wholly owned by Russian born Alexei Sagal's Arnest Group since 2013.
Mr Groden is to run both businesses and he said: “We identified in the market there are opportunities within our industry for the companies to come together. Rather than competing it is better to be on the same side.”
Asked if the shareholding of the new venture would be on a 50/50 basis Mr Groden said: “I don’t have that information as such.”
When asked if there would be a majority shareholder under the new structure Mr Groden said: “It is not explainable in simple terms. It is a true merger in the sense of it.
“The economics of the merger [are] not being disclosed. I am looking forward to running both business and developing both businesses.”
Pressed on whether he was a shareholder in the new structure Mr Groden said: “We have not finalised all the details of all that.
“We are only in day one of announcing we are merging. We don’t have all the details set in stone yet. It is difficult for me to comment on the details when the details aren’t finalised.”
But when asked if he planned to retain a shareholding he said: “That would be a good intention yes.”
According to Mr Groden both companies have great scope to grow and offer complementary products to their respective customer bases.
He pointed out Sanmex is in talks about a retail contract in Australia while Barony has opportunities in Korea and China.
He said: “The UK is the largest manufacturer of aerosols per capita in the world, and the sector is highly dependent on speed to market and the ability to respond swiftly to changes in both demand and technology.”
Eliot Swan, finance director of Barony Universal said: “The global aerosol market is highly competitive and heavily reliant on constant innovation, particularly the ability to rapidly bring new products to market.
“It makes perfect sense for the two firms to combine expertise and operations, strengthening our capabilities and providing us with a platform to grow and win bigger contracts within the global market.
“We are stronger as partners than as competitors and our many blue chip customers have welcomed the news that we will be working together with immediate effect.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here