GrowthBusiness tracks down a band of pioneering UK manufacturing players with exciting global prospects.
Fantas-Tak prospects at secretive dots maker
‘We want to grow sales to £10 million, then we might look at floating in five years’ time,’ enthuses Richard Turner, co-founder and managing director of Yorkshire manufacturer Fantas-Tak, an innovative maker and seller of revolutionary glue dots.
The company is a European market leader in this space, producing 100 million dots a month and exporting to 43 countries.
Based in Shipley, Fantas-Tak was formed after identifying a gap in the market for adhesive dots at home and abroad, and its individuality lies in its expertise in the chemical make-up of adhesives and its ability to mix and make its own adhesives in a way unknown to rivals.
You’ve probably come across Fantas-Tak products already without knowing it. Superdots – produced to customer specification using a secretive process at the group’s facility in Shipley – are a unique development in the hi-tech attachment of CDs, free samples and flyers to magazines, and can be used in a variety of industries from print finishers to contract packers. A key area for future growth stems from the fact that these clever glue dots are also suitable for use within food-related industries, since they are acid free and non-toxic.
Protecting innovation
‘We are very sensitive about people coming into the factory and all our staff are covered by confidentiality agreements,’ teases Turner. ‘But basically, our dots have a better bond, look and feel than rivals’, and also produce less grease stains because our adhesives are made with very low oil content.’
Turner is equally keen to point out that the company recently set up a retail arm, enabling it to sell its wares into the stationery, grocery, education and high street retail sectors, and supermarket clients are on their way.
‘We have an October year-end, and we’ll turn over £3.2 million this year, up from £2.2 million last year. For next year, we are forecasting £4.5 million, and crucially, our margins are rising due to cost savings and the implementation of some higher pricing,’ he boasts. Prospects at Fantas-Tak, which spurned an invitation to appear on BBC2’s Dragon’s Den, look to be nothing short of fantastic.
Practice makes perfect for clean power play Voller Energy
Another venture manufacturing a unique product is Voller Energy, which ‘will be the first fuel cell player to reach profitability’, according to chief executive Stephen Voller. The company, which floated on AIM with a £9.1 million funding in February, makes portable fuel cell systems used as battery chargers and mobile generators.
‘Flotation allowed us to move our operations from a small, 1,200-square-foot office to a new 5,000-square-foot facility,’ recounts Voller. ‘Where we are now is basically a bigger version of where we were, but we’ve been here for four years and economies of scale are becoming an intriguing factor for this business. The product becomes smaller, smarter and cheaper to make each time, with the components we are using also becoming cheaper as we use more and more of them.’
UK base helps learning curve
Voller’s manufacturing experiences have helped make improvements to successive generations of its VE100 portable fuel cell system, the latest of which was recently CE certified – the CE mark is the European Community’s official safety and environmental requirement stamp.
‘A question we are always asked is, why are we manufacturing here in the UK when we could be making our systems in India or China?’ says Voller. ‘Well, the answer is that the numbers we’re making just don’t warrant an international move at the moment. The volumes just don’t justify doing it 5,000 miles away.
‘Manufacturing here and then shipping out to distribution partners allows us to get feedback and make improvements to our systems. Fuel cells are unique products affected by all sorts of environmental issues like temperature, humidity and air pressure, and you can only learn so much in the lab.’
See also: Why businesses should bring manufacturing back to the UK – Jason Leslie, managing director at UK Point of Sale Group, explains why he’s confident about the future for UK manufacturers and why in-house is often best.
Interestingly, the latest VE100 is a quiet system that weighs only 9kg and yet produces 230 volts, equivalent to the power produced by a plug in the wall. The product will do its bit for a cleaner Earth, as it produces no toxic emissions, and its only output is pure water.
For the year to June 2006, analysts are forecasting pre-tax losses of £2.3 million on sales of only £994,000, ahead of a £2.25 million deficit from a top line £2.4 million the following year. For June 2008, however, Voller might well score first profits of £600,000 on £14.5 million sales. This is most certainly a manufacturing star to watch.
Stadium’s Eastern promise
Stadium is making a name for itself as a venture with some arena-sized prospects out East. Nigel Rogers is chief executive of the electronic manufacturing services star, which produces electronic products and assemblies for original equipment manufacturers from facilities in China as well as the UK. Major customers include Hozelock, Tyco and Black & Decker.
A strategic shift five years ago has left Stadium in robust health for the future. ‘There was a real sea change in the late 1990s in the sourcing behaviour of OEMs,’ recalls Rogers. ‘They were becoming increasingly global in outlook and were starting to look at China. At the time, we were a UK provider of manufacturing services in a rapidly shrinking domestic market. So in 2000 we acquired Stadium Asia, a Dongguan-based outfit making power supply products like battery chargers and transformers.’
Way out East
Stadium led the way with this strategic manufacturing move to the East. ‘We were early pioneers in China,’ says Rogers. ‘If we weren’t the first to head to China, we were certainly one of them. The reason? We had large customers such as Black & Decker driving the pace.’ Stadium Asia has since delivered staggering growth. In 2004, Stadium Asia’s turnover sped 14 per cent higher, contributing to a 24 per cent rise in profits to £2.34 million.
Nevertheless, a UK presence remains key. ‘We still feel it is very important to be a UK manufacturer, as well as having volume capability in China, because it gives us credibility with customers.’ Rogers cites a famous quotation: ‘China is going to be the largest economy in the world in 20 years’ time, which is no surprise, because it has been for 19 out of the last 20 centuries! Other parts of Asia, and especially India, are sure to hang on to its coat tails.’
Aerobox’s long-haul appeal
Not without its problems but a potential winner over the long haul is Aerobox. ‘Our challenge now is to get the airlines focused on the whole life cost of the product,’ enthuses Ray Gibbs, finance director of the manufacturing minnow that was founded in New Mexico back in 1998. Today, the company is a volume manufacturer of unique air cargo containers, peddling its wares from a 65,000-square-foot facility in the sweltering heat of New Mexico. Made using a unique, top-secret process, its innovative baggage container is lighter, stronger, more durable and more easily repaired than aluminium containers currently in use by commercial airlines.
Though sales have yet to take off as quickly as hoped at float, this venture could prove a long-term star. ‘The key thing is that we have FAA [Federal Aviation Administration] approval to supply the box, which is not easy to get,’ says Gibbs. ‘And existing aluminium boxes, of which we think there are 400,000 in flight around the world, are easily torn and need frequent repair. Our boxes have flown about 60,000 flights and the number of repairs has been less than a hundred.’
Licence to thrill
News flow is also picking up pace. Aerobox recently announced a brace of new contracts. Having delivered 250 containers in late 2004, the company has received a follow-on order from Virgin Atlantic Airways (the first airline to trial its containers back in 2003) for an extra 250. That revelation was hot on the heels of an order from global player American Airlines, which placed an order for 500 for delivery in the second half of this year.
Admittedly, loss-making Aerobox, which raised £7.2 million from investors during 2004, won’t break even for a while yet, but the business catches the eye for several reasons. Firstly, airlines are under pressure to reduce costs in the light of a surging oil price. Furthermore, the company is not limiting itself to aviation; other markets are being examined, including transportation, where potential customers might include logistics players and freight forwarders, as well as the military and construction markets.
