Profit is in the can, says measuring specialist Scalar

SCALAR Technologies, the West Lothian optical measuring specialist, is set to break into profit in the coming financial year after developing technology that could save the food packaging industry millions of pounds a year.

The group, which has received about 750,000 in private funding since it was founded seven years ago, will formally launch its measuring gauge next month at a key US trade show.

It uses sophisticated optoelectronics technology to precisely measure the thickness of the lacquer used on the inside of food and drink cans.

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As these protective coatings are mostly oil-derived materials, manufacturers have been hit by a sharp rise in production costs.

Existing equipment used to determine the thickness and consistency of the lacquer is said to be incapable of measuring the thin coatings now being developed.

Scalar has signed a major distribution agreement with US-based Nordson, which makes the equipment that can-makers use to apply the lacquer. Ian Bain, founder and chief technical officer of Livingston-based Scalar, said he hoped the deal would generate up to 1 million in revenues in the first full year.

"There is a huge potential market for our technology," he said. "We think it's a good marriage with Nordson, who have about 90 per cent of that market.

"They have the sales, marketing and support network already in place - something that's way too big for a small Scottish company like us to address directly.

"We are now at the stage where the lacquer that protects the can from the contents is almost as expensive as the metal.

"The next big push is to reduce the amount of lacquer, but if you've no way of measuring that accurately you've got no real control. That's where our technology comes in."

Scalar's financial backers include the Scottish Co-Investment Fund and Archangel, the investment syndicate. The firm currently has five staff.

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Bain said the strategy had "changed a little bit" since the company was founded and had become "more application-specific".

He added: "We decided to focus on just a few key industries where we think our technology has a lead.

"We are now eyeing complementary applications within the canning sector and are also looking at other industries."

The measuring gauge has been brought to the market with support from Dumbarton-based Wideblue, the design and production development company spun out of imaging giant Polaroid. It helped take Scalar's prototype and engineer it into a marketable product, building all of the early production units.

Bain said he expected Scalar to report a profit in the 2007-8 financial period.