A £1.9million investment in new machinery and improved grid connection will result in massive annual savings for Princes Gate Spring Water ensuring its long term sustainable future.

The Narberth based business is investing in a new bottle blowing plant which will cut down the number of lorry deliveries a year from 1,000 to just 50; while a new three-phase grid connection will reduce power costs by half.

The investment is being supported by £167,000 from the Welsh Government's Economic Growth Fund providing capital funding to help businesses in Wales invest and expand.

On a visit to the company, Business Minister Edwina Hart said she was pleased to hear that support from the fund would enable Princes Gate to take advantage of increased demand while ensuring the business remained sustainable.

"The current economic climate makes it very challenging for businesses of all sizes to remain competitive, retain jobs and invest for their future. I am delighted to hear that the fund is making a real difference to companies as they are vital for our economic revival."

Princes Gate previously bought in bottles which resulted in up to 1,000 lorry deliveries a year and this figure was set to increase substantially this year to meet increasing demand.

The company services all the major UK supermarkets and supplied 53 million bottles of organic spring water last year, with sales this year set to reach the 80 million mark.

The bottle blowing plant, which is currently being commissioned, makes bottles on site by blowing small preformed plastic tubes into bottles of various sizes.

Princes Gate currently relies on three generators to power machinery, but the cost of red diesel has increased substantially and the investment in three-phase grid connection will immediately halve these running costs.

Operations director Endaf Edwards said the investment was vital to remain competitive.

"In line with many other businesses, rising fuel costs and increase in raw materials meant overheads have increased hugely, cutting into profits

"This is a substantial investment and a bold move by the directors. To be effective, both projects need to come on line together and are vital for the sustainable long term future of the business.

"Support from the Economic Growth Fund is essential to secure the grid connection and has been extremely helpful."

The spring water company employs 20 people full-time and its sister company, Cool Water, supplying bottle water coolers, employs 25 full-time staff.

Production runs have already been extended, and the company expects to recruit at least another four people.

Princes Gate Spring Water was established from a farm diversification project on an organic farm in Pembrokeshire. In 2010 - its 20th anniversary - the company, with support from the Welsh Government, invested in specialist equipment to service new contracts.