Naturally there has been an increasing level of co-operation between us, he added. "We have integrated the computer operations of both companies and we have been sharing IT services now for some time.

We have worked closely with XM developing coherent commercial policies and improving understanding of the strengths of both operations".

Callus said Plastimo's overall business in the UK has now grown to a point where the physical limitations of both operations is restricting efficiency.

"Our aim is to deliver an altogether higher level of service to our trade customers, " he told us. "In order to achieve this, we have decided to move Plastimo and XM Yachting to a brand new purpose-built facility in Hedge End just outside Southampton on the M27."

The move will be completed during September of this year.

Staff at the Newick, East Sussex offices of XM Yachting have been offered relocation terms or redundancy. "We've offered assistance to relocate the XM staff and a number have accepted, " said Callus, "but we're waiting to hear from the others."

The existing sales forces will remain as separate entities with Mark Acaster running XM, Ross Wilkinson running Plastimo and Martin Bridger in between handling OEM sales.

"We'll retain our Scotland operation, " said Callus, "which will also report to both sides."

Magnus Andersson, XM's managing director, is going back to Sweden, said Callus.

"This move represents a major new investment by the Plastimo Group into the UK market, " said Tony Le Saffre, president of the Plastimo Group.

"Our absolute focus is to grow our market share, improve service levels to our customers and to consolidate our position as Europe's largest manufacturer of marine chandlery and now the dominant player in the UK."