SuperFyba was used extensively at the development of the Olympic Park in London.
The £1.5 million investment in the new plant will be funded from William Sinclair's existing facilities. The new plant will increase the amount of SuperFyba the company produces by over 200 per cent, lifting production to around 150,000m3 per annum.
Production of SuperFyba at the new site is due to start in November 2012. Sinclair said the increased availability of this peat alternative will bring "significant reductions in non-peat raw material costs and at the same time enhance the consistency of our already high quality peat reduced and peat free products".
Garden and amenity green waste generated in nearby urban areas will be supplied to the site by local authorities and other organisations.
William Sinclair has boiught a £4.75 million production site near Ellesmere Port in Cheshire.
The new 'Super Site' includes 16ha of freehold land with approximately 40,000sqm of industrial buildings.
In addition, Sinclair has established the availability of a further five ha of adjoining freehold land and four ha of leasehold land bringing the total potential for the site to 25ha.
The purchase also includes existing plant and equipment including an internal pallet storage system. Planning permissions are already available throughout the site.
The freehold land and buildings are being acquired from Morley Estates for a cash consideration of £4.25 million with a further £0.5 million for the plant and equipment. The consideration will be settled in cash on completion which is expected within the next six weeks.
Funding for the acquisition will be provided by a bridging loan of £5 million from Lloyds Banking Group. The loan may be repaid from the sale of surplus properties owned by the company. Any balance still outstanding after 18 months will be converted into a term loan over a further 42 months.
Chief executive Bernard Burns said:
"William Sinclair has evaluated over 50 sites in its search for suitable premises to support the Company?s growth strategy. We are delighted with the efficiencies inherent in this new site which will provide a platform for growth for the medium term.
"We estimate that Ellesmere Port will reduce the distance travelled by our vehicles by more than 1,000,000 miles each year and lead to significant improvements in service levels enjoyed by our customers in an industry where speed of delivery is critical. When fully operational in 2016 this facility will set a benchmark in service that our competitors will be unable to match. The facility will also significantly reduce the cost base of our business.
"This property purchase is a significant strategic development for William Sinclair and provides the company with the right facilities to capitalise on the expanding horticulture industry and consolidate its market leadership."
Sinclair added: "The investment in the new production facility will move William Sinclair a further step towards reducing the Company’s exposure to a poor peat harvest due to inclement weather. Haulage costs will also be reduced as raw material transport miles are minimised."
William Sinclair’s specialist soils subsidiary, Freeland Horticulture, which developed the SuperFyba technology, will operate the new production facility.
The feedstock for the process, called "oversize", is widely available but is difficult to use. It frequently becomes a disposal liability for waste recycling companies. Freeland Horticulture’s technology removes salts, glass, plastics, metals and stones that normally contaminate the composted material, and then fiberizes the cellulosic component to create SuperFyba.
"The opening of a second site to manufacture SuperFyba is in line with both the company’s growth strategy and the company’s drive to create greater efficiencies. The Board fully expects the new site to bring financial benefits to the Company in the near term.
"Consumers are demanding higher quality peat free products and William Sinclair continues to lead the industry in quality and innovation. SuperFyba is a premium and sustainable material that reliably supports plant growth, thereby providing the reassurance the horticulture industry and retailers are seeking.
"With the continued market growth of peat free products, opportunities to open further SuperFyba manufacturing sites are being reviewed."