Polystyrene foam manufacturer Moulded Foams has secured £2.5m from The Royal Bank of Scotland and the government-backed Enterprise Finance Guarantee scheme (EFG) to fund growth plans.

The Tonypandy-based company, which also has sites in Scunthorpe and Cumbernauld, has secured the financial package through its bank, NatWest, and sister firm Lombard, both of which are owned by RBS.

Moulded Foams managing director John Thornberry told Packaging News that the firm's previous funding arrangements were "very conservative"

and that it had needed a new funding package to realise growth plans and put "liquidity back into the business".

"We are looking at [growth] opportunities by organic growth or acquisition," he said. He added that the firm had two prospects to buy plant machinery in the next six months targeted at the food and building products sector.

Moulded Foams designs and manufactures expanded polystyrene and expanded polypropylene foams and moulds, supplying a variety of sectors, including packaging, construction, pharmaceutical and automotive.

Thornberry was cautiously optimistic that business was picking up

In terms of packaging, he said that while food and medical goods packaging has been good, white and brown goods packaging has proven tough.

Moulded Foams became one of the largest independent foam-moulding firms in the UK when it bought Linpac Moulded Foams in April 2007 and changed its name from DCB Mouldings.

The government's EFG scheme was set up to help small to medium-sized businesses (SMEs) through the recession, with the government guaranteeing 75% of the loan.

It has drawn criticism from some quarters, with some small businesses arguing that it is too difficult to access finance from banks, which are nervous about lending money to firms facing credit pressure. In September, a survey by consultancy Clifton Asset Management, found that 28% of the 1,000 SMEs it interviewed said they had not even heard of the scheme.

Thornberry said that Moulded Foams had been able to demonstrate the robustness of its business and its ability to repay money to cement the funding, following a spending hiatus over 2009-particularly in the construction and automotive sectors. However, he added. "We are holdong our breath for three or four months longer."