Alpha Media Solutions (AMS) has parted ways with Z-Card to produce a rival credit card-sized folded marketing product under the brand name Alpha Cards.
AMS managing director Ian Whitfield said that he had been in discussions with Z-Card throughout 2012 about either acquiring the marketing company, for which AMS had exclusive UK and European manufacturing rights from 2005, or breaking away from its core business when the contract ran out at the end of the year.
The companies decided not to renew the contract for 2013, and so Z-Card will buy back its binding lines - used for production at AMS as part of the latest five-year agreement signed in early 2008 - in the next couple of weeks. It is understood that Z-Card has moved production to Poland.
The patent on Z-Card manufacturing expired shortly before the end of AMS’ contract with the firm.
AMS' application to register the Alpha Cards trademark is currently pending.
Whitfield said that he would have preferred to takeover Z-Card, but added that becoming a direct supplier to the market to reduce costs was his main purpose.
Two new binding lines, sourced from a number of different suppliers for a six-figure sum, have been installed over the New Year to begin production of the Alpha Cards, which Whitfield anticipates will reach over 2m a week.
Whitfield said: "Z-Card has done a great job at building the market but there might be an Achilles heel revealed as marketing spends are put under more and more pressure.
"It is now no longer a question of whether it will work, but whether it fits the budget and how it compares to the basic product.
"I like to think that we have worked with the market for so long that no-one will question the quality of the service and products.
"I anticipate that our success will come from driving volumes at competitive prices."
He said that by having all aspects of the Alpha Cards under one roof – from production to distribution and customer service – the AMS service will be "seamless".
In September, Andy Milner joined the company as marketing director as it prepared for a more proactive sales and marketing boost for the new compact cards, according to Whitfield.
Whitfield said that he was encouraging the AMS sales team to target new areas for the company, which is had a turnover of £5.9m in the year to 31 March 2011. He added that Europe would be the biggest challenge, but, seeing as Z-Card production made up two-thirds of the firm’s business, he is confident that the company can grow through the Alpha Card launch.