United Kingdom media packaging molder Coral Products plc is raising £3 million ($4.86 million) to expand its injection molding capacity for products including compact disc jewel boxes.
The 6-year-old firm of Haydock, England, expects to invest £1.5 million ($2.43 million) this year to install three new 350-ton Netstal presses. The expansion will boost its current output of 50 million boxes per year to 80 million.
To raise funds for the expansion, Coral is placing 5.11 million new common shares with institutional and other investors this month. The move comes on the heels of the firm's initial £2.4 million ($3.88 million) capital outlay to launch jewel box production last year. It acquired four 350-ton Netstal injection machines, taking delivery of the first two in May, a third in August and the last in December, said Jonathan Ferster, corporate development director.
Coral wants to double its current market share in the sector both in Britain and continental Europe with the new presses, which will be installed this summer. It now claims a 7 percent share of the European audio CD packaging market, Ferster said.
The firm said it will use the rest of the £3 million ($4.86 million) to automate existing production facilities. Coral began by injection molding videocassette cases and moved on to housewares.
Ferster said the firm plans to add more molding equipment by September for products other than jewel boxes. It has annual capacity for about 60 million videocassettes. Housewares make up about 10 percent of sales.
``We're going to continue growing in both media packaging and housewares molding,'' he said.
Coral operates 10 other injection presses at its Haydock plant, including Mannesmann Demag and Cincinnati Milacron machines, with 300-600 tons of clamping force.
Sales, which have increased on average 54 percent in the past three years, hit £8.82 million ($14.3 million) for the most recent fiscal year, while pre-tax profit rose 30 percent to £1.56 million ($2.52 million).
Coral attributes that growth to a competitive pricing strategy, cost-efficient production and a highly targeted marketing campaign aimed at volume buyers.
The molder exports more than a third of its output to Scandinavia and continental Europe.