Cash needed to grow.

Byline: JEZ DAVISON

A LOSS-MAKING biscuit manufacturer in Middlesbrough has secured orders of up to pounds 12m as it looks to expand from Teesside.

But The Baked Snacks Company (BSC) said it needed funding of around pounds 600,000 to meet its working capital requirements and financial commitments to former owner Zetar, the AIM-listed confectionery firm.

In April, serial entrepreneur Mobeen Mehdi bought BSC from Zetar for an initial pounds 817,000, with an additional pounds 2.2m to be paid in instalments.

He plans to expand the business after winning work from contract manufacturing and private label customers - he is in discussions with a UK supermarket - and growing BSC's range of own-branded products.

He expects to grow staff numbers at the Middlesbrough factory by 50% from 100 to 150.

Mr Mehdi said the funding injection was vital to secure the future of the business and meet its financial commitments to Zetar.

Under Zetar's ownership, BSC made an adjusted operating loss of pounds 0.8m in the six months to October 31, 2008, despite generating sales of pounds 1.5m.

The entrepreneur said: "I need the extra funding but I believe I will get it.

"I'm a trier. The potential is there, our product range and business model is right."

He urged banks to start lending to businesses with good growth potential after having funding requests turned down by mainstream banks.

"The banks are saying: 'we'll give you money when you've turned around the business'. Why am I not being helped now by the Government and the banks?" Mr Mehdi established Britannia Biscuits Co (UK) in Middlesbrough seven years ago.

But a number of setbacks, including funding issues and teething problems with equipment, forced the company into administration in 2003.

The site was sold to a newly formed venture involving Mr Mehdi - Britannia Biscuits International - which grew sales on the back of rising demand for healthy snack products.

In 2007 Britannia was bought by Zetar-owned BSC in a multi-million pound deal but, BSC struggled as the recession began to bite. Mr Mehdi re-took control of the company in a reverse buy-out four months ago.

BSC, which also makes organic bagged snacks, exports to Australia, Belgium, Germany, France and Ireland and produces around 600 bags a minute for customers including Marks and Spencer and Aldi.

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LOOKING TO THE FUTURE: Entrepreneur Mobeen Mehdi has helped to secure more huge orders for his Baked Snacks Company, which he now wants to see grow Picture by IAN McINTYRE