Scots prisons deal just the start for vaping pioneer

Neil McCallum is chief executive of JAC Vapour - the only UK e-cigarette company to manufacture its own products.
Neil McCallum is chief executive of JAC Vapour - the only UK e-cigarette company to manufacture its own products.
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A Leith-based designer of vaping products and e-cigarettes is looking to step up its international expansion in 2019 after securing a six-figure funding deal to catalyse its ambitions.

JAC Vapour started out in 2010, after founder Andrew Logan was intrigued after seeing someone smoking an early e-cigarette on holiday. It has grown to turnover of £3.2 million and 26 staff, and is the only UK e-cigarette company to manufacture its own products.

It recently won a contract to supply all prisons north of the border, after the Scottish Government announced a ban on smoking from this month which excluded vaping.

JAC Vapour’s chief executive Neil McCallum said the deal will provide it with valuable knowledge about the appeal of its products. It will also benefit from a £525,000 funding deal from Bibby Financial Services.

The package includes trade and invoice finance and foreign exchange funding and will help it release cash from unpaid invoices, bridging the gap between paying suppliers and receiving payment from customers, buy stock at a more competitive price and in larger quantities, and speed up the trade cycle.

Stewart Couper, business development manager at Bibby Financial Services, said the business has “ambitious yet attainable” growth targets.

JAC Vapour looks set to turn over £4.2m this year as it targets a global market worth an estimated £1.7 billion, driven by research suggesting that e-cigarettes are 95 per cent less harmful to health than tobacco.

JAC Vapour sees “huge” potential to grow in the UK, while this year saw its rollout in France and Germany, and last week it launched in the US state of Virginia, with a phased expansion stateside in the next three months.

The business has also made its debut in Romania, and in the next 12 months will be moving into Spain, Italy and Greece.

McCallum said 2019 is about expanding on the platforms JAC Vapour has created, capitalising on the knowledge it has acquired by growing into France and Germany, and developing its brand to stand out more clearly.

“We are very focused on designing products that are high quality and meet customers’ needs,” he said, also highlighting its independence from large tobacco companies. “It’s amazing what we’re trying to do and what we’re now able to do. “

The firm has in the last year alone increased its UK outlets by 200 to nearly 500. It has invested more than £250,000 this year on boosting its product line-up.

Its growth comes as vaping retailer Vaporized, also based in Edinburgh, has ploughed £2m into new manufacturing infrastructure and aims to treble the number of its stores to 300 within three years.