In the bag - Smith Anderson clinch £35m McDonald's contract

Fife business Smith Anderson has secured a £35m deal to supply McDonald's with its paper bags.

Wednesday, 31st May 2017, 7:21 pm
Updated Sunday, 4th June 2017, 9:40 pm
McDonald's  bags - new contract won by Smith Anderson
McDonald's bags - new contract won by Smith Anderson

The Kirkcaldy-based company confirmed the deal today.

Smith Anderson produces up to 10 million paper bags every year from its Kingdom base, with almost half of them going to McDonald’s.

This new deal will run for three years and is the result of prolonged negotiations which started in 2016.

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Michael Longstaffe, CEO, Smith Anderson

Michael Longstaffe, CEO at Smith Anderson, was delighted with the outcome.

He said: “This agreement was a great deal more complex than in previous years and McDonald’s are ever more demanding of their top flight supply chain.

‘’We are thrilled to have secured this contract, most especially the European expansion and the benefits these deliver to shareholders and all of our 205 hardworking staff into 2020.”

A key component of the deal will see Smith Anderson supply Poland and all of the surrounding central eastern European countries with paper bags.

Michael Longstaffe, CEO, Smith Anderson

And McDonald’s will also back the company’s new joint venture with a multi-billion euro packaging supplier, with sites all over the world.

The new venture will be based in southern Poland and will see new Polish staff trained specifically in Kirkcaldy, to then operate one of two planned machines based in eastern Europe.

The company says this will form a very small part of its total output, as the UK site has over 45 machines - a larger volume of export product will be made on specialist machines in Kirkcaldy and exported in bulk trailers to destination markets in and around Poland.

This new volume will be worth an additional £2m revenue to the Fife firm annually.

It stressed that working internationally would help to secure jobs in Kirkcaldy.

Mr Longstaffe added: “The future looks ever brighter for Smith Anderson, who in partnership with Barclays, have brought forward on a number of positive foreign exchange positions, to secure hard fought margin within recently won international contracts as far forward as 2019.

‘’ We are not looking for ‘quick wins’, but longer term secure and sustainable growth, from which we will all benefit.”

Supported by a number of training initiatives part funded by Scottish Enterprise and Fife Council’s Economic Development team, the Company will make in excess of 2 billion paper bags in Kirkcaldy during 2017 and are clearly looking to spread their wings ever further, always in the quest for profitable growth.