THE unpredictable nature of the currency markets has been a concern at Halewood International, as its overseas operations account for 13% of its turnover.
The Huyton-based drinks firm, which has a portfolio including Lambrini, Red Square vodka and Tsingtao beer, generates £30m a year from its significant presence and manufacturing operations in South Africa and Romania as well as a joint venture in China.
It also exports more than 500,000 cases of a wide variety of products to more than 40 countries.
The company recently announced it made operating profits of £7.6m on a turnover of £227m in the year to June 2008 – a period marked by major changes in the exchange rates.
The company said: “The group’s South African subsidiary has continued its strong growth driven by increased volumes. This has resulted in operating profits increasing by £900,000 for the subsidiary during the period.”
Halewood said it seeks to minimise the risk of exposure to changes in the currency markets.
It added: “The group sells and operates in mulitple markets around the globe and it is exposed to movements in key currencies, in particular the euro, dollar and South African rand.
“This risk is managed at a group level with forward contracts taken out to manage the risk.”
There have been big changes in the company’s key currencies against sterling. From September 2007 to April 2008, sterling gained 13% against the rand and slumped 15% against the euro.
While in the same period sterling only slipped slightly – 1.5% – against the dollar, it later fell 17% in the three months to November 2008. The currency fluctuations have continued throughout the early months of 2009.
Halewood has also been working in China since 2001, when it established a joint venture with the Beijing Shunxing Wine Company, which enabled it to start producing Red Square for the Chinese market.
Since then it has launched other products into the market as well as expanding its geography to include other countries including Malaysia and Thailand.
It also became the UK distributor last year for Beijing-brewed Tsingtao beer – one of the world’s ten largest beer brands.
This coincided with a major fillip for the brand with the success of the Olympic Games in Beijing leading to an upsurge in demand for Tsingtao.
