Health and beauty wholesaler DCS Europe has branched out into manufacturing after struggling to find a supplier to produce its Enliven brand.
DCS has opened a £1m factory in Wolverhampton employing 24 people to produce the 70-product range, as well as own label health and beauty products.
Chief executive Denys Shortt said the company had been looking for a new supplier to produce Enliven because it wanted to expand the range - but couldn't find anyone suitable.
"There were only 15 decent-sized manufacturers left in the UK who made health and beauty," he said. "Six were losing money and the others were under pressure from the major multiples over margins and reluctant to take on Enliven. Often Tesco and Asda promote big brands at two for £1.49. Selling big brand toiletries at 74p is killing the industry. With all my options exhausted I started thinking: why not start your own factory?"
Shortt said there had not been a sound financial argument for moving production overseas. "We like to buck the trend. As UK suppliers are closing down or production is moving abroad we are seeing less choice and increased prices. So what better time to open a new factory?"
Enliven, which is a 99p range featuring products for men and women across the full range of toiletries, was now a £6m brand at retail, he claimed.
Half of volumes were sold in the UK, in both supermarkets and convenience stores, and the rest in 50 different countries around the world.
DCS was not looking to become a large manufacturer, he insisted, with the new factory forecast to turn over £1.5m in its first year.
However, he also claimed to have received several inquiries from companies interested in having their products made in the plant.
"There is no shortage of companies wanting quality products in small runs that are made in the UK," he said.
The toiletries and healthcare market grew 3.9% to £6bn last year [TNS Worldpanel].