The deal will involve the production of 94,200 trays made from sheet moulding compound thermoset that will be used in the production of various jellied confectionery lines.
Steve Biggins, (pictured right) director of Fairgieve told ConfectioneryNews.com he believed the company had won the deal due to its “longevity and reputation in the marketplace”.
“It’s a niche market. Only a handful of companies can do what we do,” he said.
Storck, the producers of Werther’s Original toffees, is one of Germany’s largest companies and is set to put in an additional £4m order if Fairgrieve meets its initial November 2011 deadline.
The £20,000 investment was secured from the regional fund management firm NEL Fund Managers, through the Finance for Business North-East Growth Fund.
This financial support has allowed the Wearside-based company to provide the working capital and additional equipment required in order for it to complete its contract with Storck in time.
Founded in 1913, the company wasone of the first UK companies to compression mould Bakelite phenolic materials.
The company’s core business is usually heavy industrial insert moulding using engineering grade plastics which it exports to several countries across Europe as well as China.
Over the last three years Biggins said the company has eyed potential growth opportunities in Europe and has rapidly expanded the confectionery side of its business.
Fairgieve currently has an agent based in Germany and supplies trays to the UK, Austria and Germany.
He said the company provides its trays that can be used for new projects, such as the venture with Storck, or providing them as a replacement for the wooden trays previously used by confectioners with “stronger and longer lasting plastic ones”
According to the company, tray breakages are reduced by a minimum of 10 per cent compared to wooden trays.
The company currently has 15 employees and is looking to double its staff within the next 12 months.
The Finance for Business North-East fund
The UK Finance for Business North East (formally known as the JEREMIE venture capital fund - Joint European Resources for Micro to Medium Enterprises Initiative) is currently split into six separate funds, including the Growth Fund which was awarded to Fairgrieve.
The European Investment Bank, the European Regional Development Fund and One North East have all contributed towards the scheme.
Companies in any sector are compatible for the Growth Fund. Firms must be “relatively mature” and at a stage of development and growth.
To be selected the company also needs to be mostly revenue generating and looking for growth capital. The average investment of the fund per SME is anticipated to be approximately £180k.