roundtable: manufacturing & engineering 43


“If I was to call the Europe economy flat, I would be over-pitching it.”


European legislation was also not helping his business with transport fleets. Ironically, Euro 6 pollutant emission standards (introduced January 2014) were now creating demand for old trucks. New Euro 6 compliant trucks are too costly. European markets were “traumatised by legislation” said Meechan. Fortunately, there was brighter news in his other international markets such as Brazil, USA, Russia, Australia and the Far East.


medical, robotics, creative media, and film sectors.


“Such sectors are going to grow, but we realise that other sectors, perhaps on the supply and services side of things, need support too. So, part of our agenda is regeneration and creation of sectors, to assist the requirements of manufacturers going forward.”


Garratt said he understood why the modern focus was on high-tech, digital and creative industries but his company was in the traditional sector of furniture manufacturing. “It’s a tough, competitive industry and this sort of manufacturing doesn’t get the same level of support from government. It’s the same in most developed economies, because at an international level it is incredibly difficult to compete within our sector with craftmanship- led processes and products that require a lot of people-time.”


Concerns on the growth horizon?


Nick Garratt


Julian Knight was less optimistic. His specialist company TSL is among a small UK group of independent infrastructure providers operating internationally, creating and implementing multi-million-pound television systems projects, but now facing a radical challenge. “We are becoming a casualty of ‘plug-and-play’ technology. So much kit can now be purchased directly by end-users, then plugged in and it works.”


While integration of television systems is still an industry requirement, the role of specialist companies is becoming more focused on the workflow itself rather than the physical devices and infrastructure required to produce and distribute content. With almost everything now being performed in the cloud, suddenly we are being faced with completely restructuring our companies focusing on building our expertise with regards to IP infrastructure, cloud and consultancy services that will enable our customers to meet commercial and operational goals with a different tool set.


Local Enterprise Partnership (LEP) CEO Richard Harrington reported a ‘bitter-sweet’ scenario in his Buckinghamshire Thames Valley area, which has only 7.5% of manufacturing businesses, 34th out of 39 compared with other UK LEPs.


Normally, Buckinghamshire tops the UK leagues for productivity, entrepreneurial start-ups, robust businesses, he said, “ …and we draw from that, this is a great place to do business.


“We may be low in the LEP manufacturing rankings, but we think we have a fantastic opportunity here for manufacturers to invest into.”


LEP strategy was to focus its resources on proven areas of manufacturing and high-performance engineering – for example in automotive,


THE BUSINESS MAGAZINE – THAMES VALLEY – SEPTEMBER 2014


Mentioning the MHA Report indicating that 92% of UK manufacturers predict growth, David Murray asked the Roundtable what factors might prevent expansion.


“Europe and interest rate rises”, came the quick response from Patrick King. With the EU being such a big market for the UK, rumblings about the flat European economy and recent events further afield in the Ukraine were obvious concerns.


Also, fears of interest rate rises already had some people “putting their hands in their pockets” and waiting to see what happens.


NatWest banker Jones pointed out that every business would have different concerns, but he didn’t feel that an interest rate rise was such a great threat to the commercial SME market. “Interest rates are low, but as a bank we have a duty to each customer to ensure that we build in a buffer, so if rates rise the client can still afford it. Rate rise fears might be one factor in a proprietor’s decision-making, but if he thinks growth is right, then he will go for it.”


Needham suggested manufacturers and engineering companies seeking growth should investigate growth in other sectors – renewable energy, for example – and how they might link to them beneficially, and perhaps join their supply chains. “Think differently about other sectors and their supply chains – see them as areas with huge depths of opportunity.”


Jones felt key threats to growth confidence among Thames Valley SMEs might be lack of local skilled staffing, increasing levels of ‘red-tape’, and internationally the strength of sterling for exporters.


Are funding issues still holding back manufacturers?


Needham felt growth funding was now more widely available, through government grants


Patrick King


Garratt revealed that Ercol was aiming for a new niche market of worldwide customers by “. . . pushing the boundaries of furniture design and manufacturing to develop products that our competitors overseas can’t make. Our aim with our UK manufactured ranges is to make them so good that they sell in 90 countries instead of just one.”


He agreed with Murray that ‘UK-made’ carried a global consumer desirability status, as demonstrated by JLR (Jaguar-Land Rover), and UK companies should capitalise on that advantage when growing their businesses.


and financing schemes and locally through the MAS and LEP support. He mentioned the Technology Strategy Board’s Advanced Manufacturing Supply Chain Initiative and the national Tooling Funding Scheme offered by NatWest. Support organisations will continue to work together to make it easier for manufacturers to access funding, particularly high growth and niche companies.


Jones felt that some companies were dissuaded from applying for additional grants and finance, such as from the Government’s £3.2 billion Regional Growth Fund, because they were already making good profits. “They just don’t feel it’s aimed at them too.


“I think there are a lot of urban myths out there – negative ones. A lot of people have a short experience of support organisations and then just don’t go back. Today there are actually lots of opportunities and help available. You guys (MAS, BBF) are great. You point clients in the right direction and take away a lot of the pain.”


The opportunities and challenges of going global


Interestingly, within the latest Sunday Times International Track 200 listing of British companies with fastest growing overseas sales, 82 were manufacturers, of whom 70 make their products in the UK.


Continued overleaf ... www.businessmag.co.uk


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