But by finding ways of cutting costs, small manufacturers can invest those savings into areas like marketing. They may even be able to pass on their savings to their customers. In turn, it will be easier to make a splash in the industry and remain competitive.
So, if you run a small manufacturing company, here are five ways in which you can cut costs.
From robotics and welding inserts to artificial intelligence, there are multiple technologies and emerging technologies that can help you automate processes like inventory management, helpdesk support, data migration and aggregation, sales orders, payroll, invoicing, and time and attendance tracking, to name just a few.
By adopting software and other tech that can automate daily processes, you can quicken tasks, which will lead to greater efficiency.
Technology can also make processes much more reliable, which means fewer mistakes will happen. Again, that will increase efficiency. Ultimately, that means you can make significant savings.
You have probably heard the expression “If it isn’t broken, don’t fix it.” Well, that philosophy should not be applied to your machinery. To ensure machines don’t suddenly break, which would have a massive impact on your productivity and ability to make profits, employ periodical preventive and predictive maintenance for every machine and item of equipment.
That could involve doing things like replacing filters, lubricating parts to avoid a build-up of rust, and checking for vibration anomalies, to name just a few tasks. By performing preventive and predictive maintenance, and ensuring you have a complete list of maintenance tasks that need to be carried out that is always followed, you can avoid downtime and repair costs.
When machines do fail and need replacing, as will happen from time to time, or when you decide to get a new type of machine or piece of equipment for the machine shop floor, you can make substantial savings by purchasing used equipment where possible. And by getting an item of equipment that you didn’t previously own, such as a waterjet, you could get a great return on investment with a used waterjet, for instance.
Most types of equipment are available to buy second-hand. Just make sure they are in full working order. As long as you go with a reputable vendor, you can ensure the used equipment you purchase is just as good as new items.
Every manufacturing company needs to spend a lot of money on energy for operations to function. But there could well be ways in which you could save on energy costs. So, spend time examining every way in which energy is used by your company to identify ways of cutting costs.
For instance, you could:
Logistics and shipping costs could be inflating your costs without you realising it. For example, you could be moving items around more times than they need to be transported due to the system you have in place with fulfilment centres.
Wasting resources and time and having a high risk of damage to your products are never good. So, look at ways in which you can minimise the time and distance that you spend transporting your products. You may find it is better to provide shipping services in-house rather than outsourcing.
The trick is not to be distracted by the noise and avoid drawing all the wrong conclusions. So, I try not to scream when the market seems blithely unaware of the cataclysm of bad news threatening to overwhelm it.
More often than ever before I find myself wondering if markets have some form of dementia. Stocks suddenly rise a couple of percent when the news sounds unremittingly bad, solely on the basis that tomorrow will likely be better, or that really, really bad news will force Central Banks to give up on monetary tightening – thus making bad news into good news.
Market sentiment is up and down like a see-saw. When senior bankers, like Jamie Dimon of JP Morgan, are telling their banks' largest clients they see a greater than 20% likelihood of something worse than a hard recession – then maybe it’s time to check your hard hat is a snug fit.
For the last few months, the tone of markets has become more and more confusing. Whether the driver of uncertainty is China, Russia, inflation, war, Ukraine, energy or simple political or central banking ineptitude – the up and down of prices feels like it is making less and less sense by the day. The thing is – these are all known unknowns, things we are aware of, and have worked out how they will hurt us.
As a humble market strategist, I continue to pick the information together to discern probable outcomes. Whether it is raw data, reading through behaviours or seeing patterns in events, there is plenty of information out there – often too much. I try to interpret it and use it to discern what markets might be doing. (The key is to understand markets don’t think – they are just a voting machine.)
But the thing that really knocks-out markets are the no-see-ums – like the pandemic or the energy spike that has routed European economies.
Recently, I was looking at Risk On/Risk Off scenarios and came to the conclusion that US Treasuries will remain the core risk mitigation strategy. What could possibly undermine the mighty dollar?
Chips have become a key strategic resource. No one wants a destructive, costly war over Taiwan, or to wreck the global chip supply.
But then I also figured out the role of the humble computer chip in the global economic picture. Such a small thing could trigger a geopolitical crisis.
Perversely, the global chip business seems to be in short-term trouble. Investors are focused on declining demand for chips as post-pandemic shortages ease, and the rapidly escalating costs of new chip foundries required to make new ones threaten to overwhelm the market. Even as some of the major manufacturers have seen their stock price tumble, global demand for chips is set to double in the next decade – hence the need for greater investment.
On the other hand, semi-conductors (to give chips their proper name) are about the most important component of the global economy. Without chips… nothing works. We would go back to the horse and cart. The imperative from Washington to Beijing is to secure their access to chips.
Chips have become a critical strategic good – and that means they have become a key issue in the geopolitical Game of Thrones being played in the South China Seas.
Here are some points relating to semi-conductors to think about. Chips are ubiquitous:
Chips have become a key strategic resource. No one wants a destructive, costly war over Taiwan, or to wreck the global chip supply. The Chinese have enough on their economic plate – property fallout, the domestic loan market, youth unemployment, plus the ongoing damage of COVID restrictions to contend with. The conflict would simply exacerbate their economic weakness ahead of critical party meetings.
But… If China wanted to inflict economic self-harm by inviting Western Sanctions and lost manufacturing orders, then they could.
The Chinese don’t actually need to invade to thoroughly destabilise the West. All they would need to do is institute a blockade of Taiwan. The West would not be certain of global support against such a move. If the Chinese frame it as domestic police action, the same countries that failed to rally against Russia’s invasion of Ukraine – critically the Gulf States – may decide to withhold support and wait and see how it plays out.
A global shortage of chips will swiftly impact the West’s manufacturing capabilities, closing down the auto sector and causing chip rationing towards defence spending. It would be dangerous – a blockade would raise the likelihood of mistakes, miscalculations and raise the risk of confrontation turning a cold war hot.
Sprinkle in some more confusion – like a new Trump administration likely to unravel the Western Democratic Alliance and break NATO. Trump had his successes, but his first presidency was an unmitigated disaster in terms of America’s international standing and relationships. He offended US allies and diminished the reputation of the Bastion of Democracy as a reliable partner. Should Trump’s new MAGA republicans win the mid-terms it will further change the signals – perhaps encouraging China to take a risk on Taiwan’s chips…
By taking the time to understand these businesses and make the most of their fixed and working capital assets, Wyelands Bank can help them to trade and grow, says the Bank’s Asset Finance Managing Director Jim Higginbotham.
Why do you focus on manufacturing?
The UK manufacturing sector employs 2.6 million people, or one in 12 jobs, and is responsible for nearly half of the country’s exports.
Yet despite the importance of the sector, many medium-sized manufacturing firms are struggling to get the funding they need to grow.
New Wyelands Bank research reveals just how these firms are held back due to a lack of finance. By addressing this issue, we could help the UK’s manufacturers to trade, grow and create jobs.
What’s the issue?
Our research of UK mid-sized manufacturers, turning over £10m to £300m, shows that nine out of ten firms (89%) are held back because of a lack of finance.
These difficulties in raising finance have stopped UK mid-sized manufacturers from winning new contracts and that has stifled new job creation.
Each firm said that the difficulties in raising finance meant they had missed out on an average of £20 million in revenues and an average of 11 new contracts. These would have enabled each firm to create 10 new jobs.
Clearly, if we scale these average results up against the 23,000 mid-sized manufacturing businesses in the UK then it’s clear to see that having the right access to finance is a material issue.
Our research of UK mid-sized manufacturers, turning over £10m to £300m, shows that nine out of ten firms (89%) are held back because of a lack of finance.
What’s more, our research shows that difficulties in raising finance also prevent 70% of firms from investing in new equipment or technology.
Half (50%) have also been held back from entering new markets and 45% have been prevented from moving to a new site or premises.
When manufacturing is so critical to the UK economy, this isn’t good enough.
How does Wyelands Bank help unlock growth?
UK mid-sized manufacturers are not able to grow to their full potential without greater access to finance. But that finance has not been available as traditional banks are too often unable to help.
Helping individual businesses unlock growth along the manufacturing supply chain would help tackle the UK economy’s productivity challenges.
Mid-market firms can have a disproportionate effect on growth and job creation in the economy as a whole, but first, they need to be understood as individual businesses. It takes time and effort to understand a firm’s specific challenges and identify how to help them. This must then be underpinned by a range of flexible financial solutions to help shape the right answer.
This might mean manufacturers using asset-based lending where they raise money against the invoices they have issued, or against stock that they hold. Or these businesses might be able to raise finance against the plant and machinery they have or are looking to get.
To make it easier for firms to raise finance, financial providers should be straightforward to deal with and speak the same language as their customers.
Mid-sized firms, turning over £10-300 million, are often too small to receive bespoke support from large high-street banks and often too big for peer-to-peer lenders.
Wyelands Bank was set up to help firms address these issues. We focus on getting to know the customers we work with so we can tailor the solution to the specific need.
How can we better support mid-sized businesses?
Mid-sized firms, turning over £10-300 million, are often too small to receive bespoke support from large high-street banks and often too big for peer-to-peer lenders.
By better understanding these businesses, we can help identify how they can access finance to bring their plans to life now and in the future. In enabling greater access to finance Wyelands Bank will help the UK’s mid-sized manufacturers to trade, grow and create jobs.
With the ongoing spat between the United States and China, which seems to be only getting uglier, Katina Hristova explores the history of trade wars and the lessons that they teach us.
Trade wars date back to, well, the beginning or international trade. From British King William of Orange putting steep tariffs on French wine in 1689 to encourage the British to drink their own alcohol, through to the Boston Tea Party protest when the Sons of Liberty organisation protested the Tea Act of May 10 1773, which allowed the British East India company to sell tea from China in American colonies without paying any taxes – 17th and 18th century saw their fair share of trade related arguments on an international level.
Boston Tea Party/Credit:Wikimedia Commons
Trade wars were by no means rare in the late 19th century. One of the most infamous examples of a trade conflict that closely relates to Donald Trump’s sense of self-defeating protectionism is the Smoot-Hawley Tariff Act (formally United States Tariff Act of 1930) which raised the US already high tariffs and along with similar measures around the globe helped torpedo world trade and, as economists argue, exacerbated the Great Depression. As a response to US’ protectionism, nations across the globe began striking each other with an-eye-for-an-eye tariffs – countries in Europe put taxes on American goods, which, understandably, slowed trade between the US and Europe. As we all know, the Depression had an impact on virtually every country in the world – resulting in drastic declines in output, widespread unemployment and acute deflation. Even though most countries began to recover between 1932 and 1933, the world was hit by World War II shortly after that. In 1947, once the war was over, the World Trade Organisation (WTO) was established - in an attempt to regulate international trade, strengthen economic development and hopefully, avoid a second global trade war after the one from the 1930s.
Schoolchildren line up for free issue of soup and a slice of bread in the Depression/Credit:Flickr
Another more recent analogy from the past that could be applied to the current conflict between two of world’s leading economies, is the so-called ‘Chicken War’ of 1963. The duel between the US and the Common Market began when European countries, feeling endangered by US’ new methods of factory farming, imposed tariffs on US chicken imports. For American poultry farmers, the Common Market tariffs virtually meant that they will lose their rich export market in West Germany and other European regions. Their retaliation? Tariffs targeting European potato farmers, Volkswagen campers and French cognac. 55 years later, as the Financial Times reports, the ‘chicken tax’ on light trucks is still in place, predominantly paid by Asian manufacturers, and has resulted in enduring distortions.
President Trump may claim that ‘trade wars are good’ and that ‘winning them is easy’, but history seems to indicate otherwise. In fact, a closer look at previous examples of trade conflicts seems to suggest that there are very few winners in this kind of fight.
For now, all we can do is wait and see if Trump’s extreme protectionism and China’s responses to it will destroy the post-World War II trading system and result in a global trade war; hoping that it won’t.
Arun Roy is the Chief Financial Officer of CHERVON North America Inc. CHERVON is one of the world’s top 10 manufacturers of power tools, outdoor power equipment and related products. Although the company’s Global headquarters is in Nanjing, China, it has locations across USA, Canada, Europe, and Australia too. Here Arun talks to Finance Monthly about the company’s North American branch, his role as a CFO and the current business climate.
Can you tell us a bit more about CHERVON?
The company has always been committed to helping build a better world by building better tools. We focus on hand-held portable power tools, stationary bench tools, laser and electronic equipment and outdoor power equipment. With world-class R&D, testing and manufacturing capabilities; collaborating sales & marketing groups; industrial design professionals and service teams throughout the world, we are able to provide satisfying solutions that meet or surpass our customers’ expectations. Over more than 20 years, CHERVON has earned its reputation for continuous innovation and dedicated pursuit of professionalism. Today, CHERVON-built products are sold by more than 30,000 stores in 65 countries. We pride ourselves on being a TOP 10 player in the global power tool industry.
Tell us a bit about your career path prior to becoming the CFO of CHERVON North America?
I started as a Management Trainee with the German Automotive Parts Manufacturer Robert Bosch in India, 26 years ago. Over the years, I worked in different functional areas, such as Corporate Finance, Internal Audit, Human Resources, Supply Chain and Manufacturing operations in India, China, Europe and USA. My last role was Chief Operating Officer for the SKIL/SKILSAW Brands. My journey at Bosch was an interesting one, as it broadened my perspective and taught me to be a better “people person” through the various teams I led in different parts of the world.
What goals did you arrive with as a CFO of CHERVON North America?
As I joined CHERVON NA through an acquisition, it was important for me to ensure that the acquired brands stabilized themselves within the CHERVON Network and be a key strategic player in redefining the overall organization to support the desired growth, as well as developing the new roles that we were taking on. It was also important for us to invest in people and processes to help us come to terms with the growing needs of our North American Business.
What is your opinion of the current Business climate?
The business climate is currently cautiously optimistic but at the same time, as a Company, we need to ensure we leverage our market position through continuous and cost effective innovation. The sweeping policy changes in the USA are impactful but need to be studied further to determine the interim impact. Currency and Commodities are back on the radar and will impact procurement strategies, especially for companies with supply chains overseas.
In your opinion, what might the future of financial directors look like in the upcoming years?
The world of Finance and the pace at which business decisions are taken are changing rapidly. Finance Directors are seen as strategic partners of the business and play an important role in the overall strategy of the company. The role also requires a proactive approach versus a reactive one to ensure that risk is mitigated before the fact. They need to think of their feet and it is all about speed.
Mid-size companies are becoming global players and forces to reckon with. The expectations of the CFO role are also changing to align with this trend. We need to be strategic and ensure we partner with the CEO to drive a common vision. It is not all about cutting cost, but about being rational and real, while keeping the long-term vision and objectives of the organization in mind.
Sustained economic growth and the fall in the Sterling exchange rate have put record pressure on British businesses to increase the amount of money tied up in working capital, leaving them at risk if growth were to weaken in the months ahead, according to the latest report from Lloyds Bank Commercial Banking.
Firms across Britain now have around £535bn tied up in excess working capital – up seven per cent from £498bn since the last report was released in May – meaning that firms could struggle to free up cash either to grow or to weather turbulent financial conditions.
The sustained growth seen in the past 12 months – particularly in manufacturing and in the services sector – has increased the amount of cash tied up in the day-to-day running of businesses, with the impacts from the fall in Sterling, forward purchasing of inventory and a rise in input costs, being fully realised.
At the same time, one in four businesses said their customers had taken longer to pay during the past 12 months, increasing the value of firms’ outstanding invoices. This comes as businesses are continuing to rapidly build up inventory, leading to more cash being locked up in stock, which is then unable to be used for growth.
With as many as one in three firms saying they are concerned by economic uncertainty or a fall in sales during the next 12 months, these factors could spell trouble for British businesses if economic conditions declined.
Adrian Walker, managing director, head of Global Transaction Banking at Lloyds Bank, said: “Increasing pressure for British businesses to hold more working capital has to date largely been driven by economic growth fuelled by the fall in Sterling. But, if there were any economic obstacles on the horizon this could be a double-edged sword.
“By locking up cash in this way, it stops investment in other more productive areas of the business, whether that be investing in new people, creating new products or targeting new markets.
“With as many as one in three businesses telling us that their greatest concerns for the next 12 months are economic uncertainty or a fall in sales, this reliance on future growth prospects is concerning.”
The findings come from Lloyds Bank’s second Working Capital Index, a six-monthly report that uses Lloyds Bank Regional Purchasing Managers’ Index (PMI) data to calculate the pressure British businesses are under to either increase or decrease working capital.
Working capital is the amount of money that a company ties up in the day-to-day costs of doing business. Growing businesses tend to use more working capital, while pressure falls when firms realise they are facing challenges.
The current Index reading of 108.0 is an increase of almost four points, from 104.1 at the end of 2016, and is just below the highest point seen since the research started in 2000.
The Index highlights that with the UK’s domestic outlook looking weaker, businesses are increasingly going to need to rely on exports for future growth.
While the current relative weakness of Sterling makes conditions for international trade benign, the practicalities of exporting mean that it often places even greater stress on working capital through shipping times and slower payments.
Mr Walker added: “Whether businesses expect to grow through exporting, or they anticipate challenges due to weakening domestic demand, UK firms could benefit from the operational efficiency and cash flow boost that comes from working capital improvements.
“In the past, previous highs in this Index have coincided with improving financial conditions. The fact that the Index is currently climbing while financial conditions remain relatively low means businesses are taking on more and more risk.
“Our experience is that businesses that undertake a programme of working capital improvements can typically release around three to five per cent of turnover in additional cash, allowing them much more freedom to invest in growth, trade internationally, expand their product set or to give themselves a buffer to see them through more troubling times.
“But doing so successfully isn’t easy. It requires change across a number of business functions, and so the time to undertake that work should be done ahead of embarking on further growth, a new exports programme, or before any possible future storm hits.”
Manufacturing under pressure
The manufacturing sector has been a source of hope and opportunity for the British economy in recent months as the fall in Sterling made British manufactured goods more competitive overseas.
But the sector’s growth, together with rising import costs and pre-purchasing of materials in expectation of inflation, has pushed the sector’s working capital index to 126.1, which could be hampering growth amongst manufacturing businesses.
This compares with readings of just 105.0 and 104.8 in the services and construction sectors respectively.
The pressure to increase working capital grew in every region apart from the East of England, where the Index fell from 112.0 to 107.8. Although, the East of England still saw high pressure on businesses to hold more working capital.
Scotland, where a reading of 99.5 indicated pressure to reduce working capital six months ago, saw the biggest increase, with the Index reading rising more than five points to 105.2.
Wales remained the region with the highest pressure to increase working capital with the Index climbing from 113.7 in April to 114.3 now.
(Source: Working Capital)
The first Game Changer that Finance Monthly talked to this month is a CEO with a proven track record in FMCG businesses, former FTSE 100 Director and an international working experience. Stewart Hainsworth has been the Chief Executive Officer of the largest independent drinks company in the UK by volume, which manufactures and sells in 88 countries across the globe – Halewood Wines and Spirits, for nearly two years. In his interview with us, Stewart tells us more about the company that is famous for its Lambrini and Crabbie’s Ginger Beer brands and his vision for its future.
Could you tell Finance Monthly more about Halewood Wines and Spirits and its ethics?
Halewood Wines & Spirits is the UK’s largest independent alcoholic and non-alcoholic drinks manufacturer and distributor. The company’s goal is to create a unique portfolio of craft products with strong local provenance in the beer, wine and spirit categories whilst providing the trade and consumer a point of difference from mainstream brands.
Halewood is expanding and now employs over 1,000 people worldwide, more than 50% based in the North West including 325 employees at its Liverpool Gin Distillery Headquarters, a thirty-acre facility based in Huyton, Liverpool, capable of producing 20m cases. Halewood’s executive team also benefit from the company’s London office in Mayfair.
The business remains family-owned since its creation by local entrepreneur, John Halewood in 1978 and has retained an active role in community-related activity, sponsoring local and national sporting events and raising stars in boxing and motor racing.
Halewood is a medium-sized company and modest compared to its large international competitors but it continues to “fly the flag” for the UK drinks industry internationally, with operations in Romania, South Africa and China. The company exports in over 90 markets worldwide, including significant volumes in North America and Australia.
Halewood provides full manufacturing capability from distilling, bottling and distribution of craft brands at different price points including Liverpool Gin and Vodka, Whitley Neill Gin, Willow Mineral Water, Hyperion wine, Hawkshead Windermere Pale, Crabbie’s Alcoholic Ginger Beer, Lambrini and Red Square Vodka. Liverpool Gin Distillery works in conjunction with H&A Prestige (a Halewood subsidiary based in Chorley) that is a specialist bottling operation providing the industry a range of innovative bottling and packaging designs for both its alcoholic and non-alcoholic brands.
The UK domestic business accounts for 45% of profitability with a growing presence in the supermarkets, small shops and Horeca (Hotels, Restaurants and Catering). The company is focused on growing core brand exports, whilst driving sales for its Agency brands: Tequila Rose, Carlsberg, Lheraud and Tsingtao through its international operations.
Halewood demonstrates a genuine commitment to communities in its brand activities. 2016 was the third year of Crabbie’s sponsorship of the Grand National, and signifies Halewood’s continued association with Aintree, dating back to the 1990s. As well as providing an unrivalled platform to promote and sample Crabbie’s Alcoholic Ginger Beer, the sponsorship has allowed Halewood to support the prime event of the Liverpool sporting calendar.
Crabbie’s is supporting rugby at all levels of the game throughout the UK – from sponsorship of Scottish and Welsh Rugby Union, St Helen’s Rugby League, through to supporting local players and clubs at grassroots level. The company also supports local community activities including Liverpool Football Club Foundation, Glacial Art – a company taking part in the World Ice Art Championships in Alaska – and sponsorship of Declan Jones, a racing driver from Merseyside.
What have been Halewood’s major achievements in 2016?
2016 was a challenging and busy year of re-focusing and acquisitions and it’s paid off. Halewood reported strong financial results for 2016. The business returned to growth with a profit after tax of £1.7m compared to a loss of £9.5m in 2015.
The positive results follow a restructuring of the business, focus on core brands and rationalisation of non-performing brands in conjunction with a rapid inorganic growth strategy to improve the product portfolio. The introduction of a new highly-experienced spirits focused senior team helped develop the strategy to put premium craft products at the helm, alongside substantial investment in distilling, manufacturing, brand marketing and distribution.
The results of the new strategy are paying off. In 2016 the business launched a significant number of new brands, including Marylebone Gin and the J.J. Whitley range of gins and vodkas, which are inspired by the British countryside.
Development of new products also includes the expansion of the premium Whitley Neill range, with a Blood Orange Vodka “a quintessential Sicilian flavour”, Quince Gin, “the first in the UK” and Rhubarb and Ginger gin to build on gin’s huge popularity with consumers.
The success of these products has resulted in further investment in the Huyton facility, where the whole range of Whitley Neill will be produced and bottled in the near future.
Demonstrating continual improvement, existing brands including Red Square, Belgravia, Admiral Benbow and Jules Clairon have been revised too.
A number of Halewood brands won industry awards, including at The Grocer Drinks Awards, where Crabbie’s won the ginger beer of the year category alongside the Hot Brands award achieved in the USA. West Cork Distillery was voted best craft distillery in New York with its West Cork brand and Rum Sixty Six won a Gold award at the Spirits Business awards.
Could you tell us about any successful deals that Halewood has been involved in?
Halewood Wines & Spirits has made several major acquisitions in the recent past, including the purchase of a major stake in West Cork Distillers, to jointly develop and distribute its innovative Irish whiskey portfolio throughout domestic and international markets.
Halewood has purchased joint ownership of The Pogues Irish Whiskey, a joint venture with the iconic Celtic punk band and the business has also acquired Rum Sixty Six, a premium Bajan rum.
Most recently, Halewood made a significant investment in Hawkshead Brewery in the Lake District, as the business moves into the craft beer category for the first time and further strengthens its presence in the North West.
Another significant recent acquisition for Halewood is the super-premium organic craft spirit, Liverpool Gin. Liverpool Gin has been transformational for the business culture and direction in the business strategy. It has encouraged the whole workforce to engage with the brand and be proud of what they create.
Liverpool Gin has stayed true to its roots as an organic gin that is distilled and bottled in Liverpool driving significant investment in the Merseyside site, with new stills and specialised spirit bottling lines.
To capitalise on increasing consumer interest in “drinking less, but higher quality products”, Halewood has expanded the Liverpool Gin brand by launching the Liverpool Collection – a craft spirits range which includes Liverpool Gin Valencian Orange, Liverpool Rose Gin and Liverpool Vodka, as well as special editions of Liverpool Gin Distillers Cut, a 16-year-old Trinidadian rum and a 12-year-old whisky.
The launch of the Liverpool Collection has allowed Halewood to form a partnership with one of Liverpool’s most iconic names – Liverpool FC. The partnership with Liverpool FC creates a platform for Halewood to expand its presence and brand awareness within international markets, in association with one of the largest brands in world football.
Halewood’s latest strategic investment is in The City of London Distillery, the only gin distillery in London’s Square Mile. The deal will enable the micro-distillery to further capitalise on the gin renaissance by gaining new routes to market, as well as reinforcing Halewood’s firm focus on premium craft spirits.
The acquisitions have strengthened Halewood’s product portfolio in priority categories of craft beer, Irish whiskey, gin and vodka.
Looking into the rest of 2017 and beyond, what does the future hold for the company?
Halewood Wines & Spirits will remain focused on driving sales of core brands on a global basis, whilst further investing in craft products in new and existing facilities. The company wants to move closer to the consumer and develop new channels and routes to market. Engaging with the customer is important in the evolution of the company to identify new trends.
The company will continue to invest in liquid development, particularly through its Liverpool Gin Distillery, Hawkshead Brewery, Aber Falls Distillery and pending plans for a new John Crabbie’s Distillery in Scotland.
Halewood's export drive will be championed by notable brands including Whitley Neill Gin, The Pogues Irish Whiskey and Liverpool Vodka, with consumer marketing support through key export markets.
The Liverpool Collection is a key aspect of this activity, both in terms of increasing listings of the Liverpool Collection brands within the UK On Trade, but also seeking out opportunities to promote the city’s brand wherever possible.
Halewood will be weaving the brand story of Liverpool into its marketing campaigns – the launch of Liverpool Rum within the collection provides Halewood with a platform to tell the story of Liverpool, the docks and the city’s history with rum.
The partnership with Liverpool FC has only just commenced, so we are looking forward to deepening this relationship. Halewood’s sponsorship of the Liverpool FC Foundation will undoubtedly generate further opportunities for community engagement.
Halewood will continue to support local businesses and initiatives – as the headline sponsor of the British Style Collective, which takes place in Liverpool, and supporting the Liverpool Summer of Love event in its 50th anniversary this year.
Halewood also plans to be putting greater emphasis on the strong provenance of its North West based brands, such as Willow Water and Hawkshead Brewery, in order to strengthen their appeal and drive further growth.
The Aber Falls Distillery will start to come to fruition, and Halewood has plans to launch a visitor centre, tours and distilling classes to engage consumers.
Halewood expects to see consumer interest and growth in premium spirits to continue throughout 2017, so hopefully our spirit brands to remain relevant and popular.
Consumers have developed a keen interest in craft distilling, and Halewood will also be exploring opportunities to allow smaller businesses to access the market through our portfolio offering.
Last but not least, Halewood expects rum and Irish whiskey to grow in popularity this year, and the business is well-placed to take advantage of these trends, through the expansion of the Rum Sixty-Six range and further Irish whiskey distribution in collaboration with West Cork Distillers.
Halewood Wines & Spirits
The Liverpool GinDistillery, Wilson Road, HuytonBusiness
Liverpool, L36 6AD, UK
0151 480 8800
Peter Sprigg, CEO of Helge Nyberg AB in Sweden, explains the challenges of offering a unique logistics business, developing and manufacturing trolleys and towing and picking trucks for a global market.
Could you please give a brief overall description of Helge Nyberg AB and the work you do?
Helge Nyberg AB is a company that develops, manufactures and markets trolleys and towing and picking trucks for a worldwide market. Some companies make trucks while others sell trolleys, but Helge Nyberg AB is the only specialist company that takes care of the whole picture: people, trolleys, trucks, and the Ergobjörn truck and trolley, considered as a unique solution in the market. Today, we are a global company with customers in more than 60 countries.
We offer our standard trolley range via large catalogue companies throughout Europe, and our solution partner for many years, Toyota Material Handling, is the world's largest company within material handling, and part of the company that founded the Lean Principles. Our solutions are part of their range. The company’s head office, where development and manufacturing takes place is located in Sweden and we have a separate sales office in Germany. Our sales consultants in both Sweden and Germany help both our partners and end customers to find the best and smartest solutions for in-house material handling. As specialists, we want to offer constantly increasing efficiency, better ergonomics and positive economic results for our customers.
Could you please give us an insight into your role as the CEO of your company?
My role as CEO is to manage Helge Nyberg so that it remains a company with an aim to constantly exceed our customers’ expectations, in all our activities.
As a business leader, how do you ensure that your visions are executed across all sectors of your company?
I make sure that I keep a strong focus on our vision and the position within the market we have taken, which is as ‘the in-house material handling specialist’. My role is to ensure that we always act as a specialist across our entire range of services and activities. However, the outcome and the result of our activities should lead to our customers perceiving us as specialists, and with this in mind, to feel satisfied with us as a partner. This position includes all our actions, from development to production, marketing and sales, as well as the behaviour and attitude of the people in our organization. With this in mind, we like to grow our business as a specialist with the view to making the daily business better and more efficient for our customers.
What have you done as the company’s CEO since you started in 2009?
As a new CEO in the company, I took the opportunity to make a six-month analysis of our market. I used the strategy ‘Listen, Find and Act’. This meant that I spent a lot of time interviewing people in the organization, as well as our partners and customers, since I wanted to find new future sustainable strategies for growth. We ‘found’ and we did ‘act’! One of the first things I did was to make big changes in our methods of communication and thinking. From inside out, to outside and in, we started to look at the company with the view from our customers’ eyes. We created a position to take at the market – we made segmentations of our market – we started to communicate the benefit for our customers when they used our products in different logistics flow in each segment, instead of product specifications. We started to make new Lean principle-driven product development, determined by the new segments in which our products should be used. At the same time, we started up a strong development program with the view of making new product solutions. The result of this program we hoped would help our customers to be more effective with our trucks and trolleys solutions, and ultimately, the result has been that 50% of our turnover today comes from new innovative product solutions launched during the last five years.
What has your experience brought to the company?
My background as CEO comes from sales and marketing and I brought this knowledge into Helge Nyberg to understand our customers’ needs and demands; to create strategies, products and solution that meet and exceed those needs. We need to help our customers with their daily business and make them more efficient with our products solutions, and that needs to be something we keep in our minds at all times. Make our customer´s working life easier. If we are able to keep this directive at the forefront, then both our customers and we will be successful.
How does your firm ensure that they are at the forefront of any emerging developments?
We have built a strong customer focus and strong R&D into our different market segment! We also constantly analyse the market segments we are working within, with the view to finding better product solutions, which makes our customers more efficient. With this in mind, we visit many of our customers and regularly undertake studies in the working flow. From those visits, we can find new areas for improvement and we make new product solutions.
How do you ensure that all of your products and services meet the high standards you set for yourselves?
We have shaped a culture within the company that we have created for ourselves, where we keep in mind the position we have taken as the in-house material handling specialist. We have also implemented Lean principles within the company.
Does working in your region throw up any specific challenges or opportunities?
Helge Nyberg Ab is a growing international company, with customers in more than 60 countries today. The industries of today are constantly changing and we have found some trends in the market and today we are working very hard to make new product solutions in response to those trends. One trend is the growing e-commerce business and the second is the changes of how the traditional industry makes their material flow in the production. The forklift free production makes new opportunities for new kind of product solution.
What makes your company unique? What distinguishes your firm from its competitors?
We have unique solutions for order picking and the e-commerce business. We also have a strong knowledge about our customers’ demands in the different segments in which we act. In our segments; industrial and manufacturing, e-commerce and order picking, healthcare and hospital, automotive and vehicle, and service and support, we fully understand the demands and challenges. We have built up an organization that is able to provide standard products, as well as tailor-made customer solutions.
What does the future hold for your firm?
We, as a company, adapt to constant changes and new technology. In this way, we keep focus on both the products, production, R&D and our communication. It keeps us curious about the development and finding solutions to help our customers achieve a more effective everyday life.
Turning our attention towards manufacturing, Finance Monthly reached out to Ray Torres – the President & CEO of Checkers Safety Group, a manufacturing business headquartered in Broomfield, Colorado, dedicated to protecting people, assets and environment by providing revolutionary product designs and visionary safety solutions.
How would you currently describe the US’ manufacturing landscape, and what about in the safety product segment?
The prognosis looks encouraging, we are seeing more products being “on-shored” and a focus on quality and reliability. Manufacturers that consistently perform are being rewarded with additional business opportunities from key customers. The importance of safety in the work environment is being elevated, which bodes well for safety product manufacturers.
What would you say clients look for as a priority in the products they look for, and how does Checkers safety meet those needs?
Our products are safety-oriented so they must perform their intended purpose at all times, without exception, meeting a high level of quality and durability. We are the only manufacturer of our specific niche products that has its products third-party tested and certified to perform as designed. After that, the next priority is availability, because when our customers need the products, they must have them now!
As a thought leader, how does Checkers intend to improve on those standards, and change the status-quo of this manufacturing segment?
We are always working on the next generation product, improving the performance while making them more user-friendly. For example, we have made our products lighter weight, while maintaining the strength and durability, so the workers can more easily manage the products – to avoid injuries and strains - while simultaneously improving their work environment and decreasing the environmental footprint on the manufacturing side. We use recycled materials, when we can, accounting for approximately 30% of our product sales.
How has the vision of the company changed over the years, adapting according to the markets and needs of clients?
We intentionally decided to expand our product offerings, by acquiring other manufacturing companies to offer a broader suite of products. Our focus is primarily to manufacture “ground-based” safety solutions, i.e., products that are typically on the ground and provide some element of safety for either people, assets (such as heavy duty vehicles and aircraft) and the environment. We have expanded our safety offerings to protect people, with our mats for professional use (Notrax®) and the environment, with our products for ground and Turf protection (TuffTrak® and Terraplas®). Our other two power brands, Monster® and Linebacker® provide safety solutions for assets and people, through our traffic safety, vehicle safety and cable management products.
As a thought leader and CEO of the firm, how do you believe you have had an impact on safety product manufacturing, and its market, in the US?
We are viewed as the category leader in our product niches, usually setting the standard with the next generation products. Our competitors often try to emulate our products, without the requisite testing, product knowledge and manufacturing expertise, which only reaffirms our position in the market place.
What precedents would you say you and the company have set in the industry, and how do you intend to raise the benchmark further?
We have the lightest weight products in wheel chocks, cable management systems and heavy duty mats that still provide the highest level of performance and durability. We continue to push the envelope with new technology, by incorporating LED and photoluminescence into new products. Our NoTrax® products are constantly evolving, to ensure the maximum comfort against fatigue and avoidance of slips and falls, while meeting the ever-changing needs of our customers.
Are there any regulations you would see changed to better the benefits of your products/services?
We believe the move away from barricade lights in construction zones is a mistake. While reflective tape and barrels might be suitable when weather conditions are fine, they do not perform as well during poor weather conditions and create unsafe conditions for the workers and drivers. The cost of one accident, both from a personal and financial perspective, does not justify the “cost savings” to move away from barricade lights. In addition, we believe all electrical cables and wires should be protected in work areas where people are present, which is not currently the case, and the protection should be standardized, i.e., covering the cables with duct tape or draping a carpet over them is not enough and is extremely unsafe for everyone.
Outside of business formalities, how does Checkers support communities and society through partnerships and non-profit projects?
We are passionate about being a responsible community leader and ensuring growth opportunities for our employees. We believe our social responsibility encompasses both the local and global community and model our social responsibility by partnering with non-profit organizations. In Colorado, we partner with A Precious Child, a non-profit that provides basic essential needs for disenfranchised and abused children or children living in poverty. Globally, we partner with Institute Univers, a K-13 school in Haiti, where we send mission teams for a week at a time to work on specific projects for the school, as well as provide clean water systems for the community around the school. These partnerships help the non-profits but simultaneously provide tremendous growth opportunities for our employees. Checkers provides the funding for these projects and allows its employees to volunteer without having to use PTO and vacation time.
To hear more about the ins and outs of being a game changer and a leader outside of the corporate finance world, Finance Monthly reached to James Stewart – a highly skilled Engineer, who is passionate about the gun manufacturing industry. “I formed Longthorne, a new English gunmakers in 2010 with my Co-Director and wife just before we launched our first gun at The CLA Game Fair at Ragley Hall. Prior to this date, Longthorne had operated as a subsidiary of our precision engineering company which I had formed in 1998 on our return from Australia, where we had also operated a precision engineering company since 1989. I direct operations on a day-to day-basis and also have ultimate control of the design of the guns we produce and the manufacturing processes.”
What goals did you arrive with when founding Longthorne? Six years after launching your first model, do you feel that you have achieved them?
My initial goal was to produce a top quality shotgun for a reasonable cost which would enable the shooting public access to a wholly-made English gun. In recent years, a common practice within the industry has been to import parts and then assemble the shotguns in the UK; or to rebrand imported models. What I was aiming at was to incorporate innovation and modern manufacturing techniques, whilst retaining the best English aesthetics with the right weight balance.
Six years on, I believe that we have achieved our primary goals - we manufacture everything in-house and have a policy of continual improvement. If we find something which can be improved and innovated further, we set about doing it. We are always looking for improvements to form, functionality, and design. Manufacturing is sometimes more difficult than you want it to be if you want to retain the aesthetic qualities. Prismatic shapes are a lot easier to manufacture than organic shapes which generally look nicer; in essence - it is a lot easier to make something geometrically shaped. Continual investment into ‘cutting edge’ technology and machinery is expensive but enables us to do this.
Tell us more about your innovation?
Conventionally-made barrels are fabricated from two tubes soldered together, in doing so, the heat process softens and distorts the base metal resulting in barrels which are never going to be 100% straight or accurate. They also have weak points at the joints which can corrode and can lead to the barrels disassembling, if not made properly. Although we initially experimented making fabricated barrels, the method we now use involves machining both barrels from one single piece of high specification steel, resulting in stronger, lighter more accurate barrels which won’t fall apart. Additionally, they have significantly less felt recoil and muzzle flip than conventionally made barrels and they can also be proofed for steel. We believe that this is the future of barrel making. Longthorne currently has patents granted in the UK and USA, with others in process. We actually have one of our clients to thank for this – Patent Attorney Peter Finnie of Gill Jennings Avery, who is now a personal friend and an owner of 2 Longthorne guns.
What further goals are you currently working towards with the company and do you have a particular vision for the future of its products?
At the moment we manufacture ‘true side lock’ guns, while we are also working towards increasing our range of products and designs. Our long-term goal is to improve our process capability and streamline the manufacture of the guns, to reduce delivery times and make production controllable, so we can become truly competitive in the international market.
Working with modern technology has its problems - machines have their limitations and don’t always perform the way we expect them to perform. We’re currently looking at ways to eliminate that as much as we can.
What challenges would you say you and Longthorne have encountered: and encounter on a regular basis?
We experienced initial resistance and scepticism from all walks of life, including the trade. I believe that people were scared of change and still are to a certain degree and were reluctant to accept the fact that we, as engineers, could appear from nowhere with a shotgun and with barrels manufactured from one piece of steel that actually work. Once our guns started getting out there, this diminished to a large degree. This is one of the reasons why we manufacture everything in-house - quality and stock of parts is totally controllable and we don’t have to rely on third parties to make any of our parts, it is a much safer position to be in. Traditionally, the gun trade relies on sub-contractors which is great until they get busy, retire, shut down or for whatever reason they don’t want to make parts for you.
By the nature of the product we make, it is technically challenging to produce consistent components. Working with, for example wood, can be very difficult to work with because of the patternation. Wood does its own thing to a certain degree - the more figured the wood is, the longer it takes to get the required finish and the more it is inclined to ‘move’. Although we can limit this, every piece of wood is different and reacts differently. Metal also comes with its own problems and sometimes doesn’t react the way you expect it to.
The range of side lock guns we make at the moment would be comparable to F1 racing cars - to make them lighter, faster, stronger, and more stable becomes exponentially more challenging. We have patents granted relating to our barrel technology, which involves extremely difficult manufacturing processes, which have to be carefully monitored to maintain consistent quality.
Machines can be extremely challenging and we have faced many challenges in this regard throughout our journey.
The relocation of our factory from Lancashire in the North West to Northampton in the Midlands in October 2015 was a huge challenge. Moving 14 machines, the heaviest of which was 25 tonnes, on 16 articulated Lorries was no easy feat. It began with having to dismantle part of the original location to remove the machines as some of the walls had been built around them. Sensitive machines don’t like being moved and most objected strongly to their new home.
It was also challenging to recruit a whole new team when we relocated. Taking even a small back step and delegating is a scary thing but if the company is to flourish in its own right this needs to be done and we have to Increase the workforce with the right people and trust their judgement. Not only do they have to have the right skills, they also have to integrate well with the other staff members. It is important to us that each and every staff member fits in with the family ethos of the company and works as a part of the team to maintain the equilibrium. Sometimes the best person for the job is not the most technically qualified. We are very happy with our employees at the moment.
How are these challenges set to change, in conjunction with the advent of technologies and the potential future needs of clients?
We are currently working closely with a machine tool supplier, whose machine tools may not necessarily be the best in class. However they are cost-effective and the level of support and assistance has the potential to outshine its competitors and compensate. Reliability and support are the most important aspects of any manufacturing facility. To remain at the forefront of what we are doing, we have to continually invest in new technology as it becomes available, which automatically means that we also need to invest in our staff.
What would you say are the company’s top three priorities towards its clients? How have your sales evolved over the years?
I think when we first started selling our guns, our clients embraced the fact that we were making an English gun in England and were curious about our new barrel technology. We owe those first few sales to a handful of forward-thinking clients who willing to give us a go. Now that we are more established in the marketplace and the innovation is proven, many of our sales are on recommendation.
Our key priorities have always been quality/innovation, delivery and affordability.
What motivates you most about your role?
Wanting to succeed and having the ability to make the decisions to make this happen motivate me the most. From a small boy, I had always been obsessed with finding out how things work and fixing them. I knew even then that I wanted to be an Engineer and was very lucky to be recognised by my high-school engineering tutor who mentored me for several years and eventually became Godfather to my daughter. It is ironic that I applied for a gunsmithing apprenticeship for a company in Liverpool on leaving school. However, at that time they were not recruiting and subsequently closed, and I became an apprentice toolmaker instead. I enjoy having the knowledge which enables me to make changes to our designs and processes.
Our clients motivate me, especially those who trusted us from the start and embraced our technology, having placed their orders when we were located in little more than an old barn. They have watched us grow and pioneered our guns and I am certain that without them, our progress would not have been possible. It feels very rewarding to be able to show them around the new factory today, when we have significantly grown and improved our facilities.
How would you evaluate your role and its impact over the last year or so?
The company has grown over the past 12 months since our move to Northampton, so my role is forever evolving. It has become less hands-on and more managerial. There is still a way to go but as our staff numbers grow, I can delegate more of my responsibility and can spend more developing the business.
What’s your golden nugget of advice for other shotgun makers?
Although tradition has a part to play, if you don’t move forward and encompass some technology -you effectively move backwards.
What lies on the horizon for the company in 2017, and what changes do you expect in the coming year?
We have an exciting new design due to be launched in 2017 with very intricate engraving and lots of metalwork. We also have outside x side due, as well as a boxlock model.
We will continue to invest and grow the business. We plan to particularly focus on export sales.
Turning our attention towards Manufacturing, Finance Monthly spoke to Ray Torres - President and CEO at Checkers Industrial Safety Products, who sheds some light on the company’s work, the challenges that it typically faces and the achievements that he is most proud of.
Can you tell FM a little about the services you provide and the kind of clients you deal with?
Checkers Safety Group designs, manufactures and sells, primarily through Distribution, safety products focused on protecting People, Assets and Environment.
Our customers are typically distributors who service industrial and commercial end-users in various markets, including oil & gas, mining, manufacturing, construction, infrastructure projects, utilities, energy, aviation, military, food service, janitorial and sanitation.
How do you tailor your services to the needs of each individual client?
One of our core competencies is “We Listen” - we listen to the market, our customers and the end-users to better understand the particular safety issues that need to be addressed and then design products to solve those issues and needs. We are the experts and thought leader in our niche safety products categories and our customers look to us to provide innovative and revolutionary products solutions.
Are there at times particular challenges involved in delivering services? Do you have any examples?
There are always challenges in every business, but our challenges are typically associated with new product introductions, which we put through extensive independent third-party testing. This often means a longer lead time to market but ensures our products meet the performance standards required by our customers and the industry. In addition, oftentimes we have competitors attempt to copy our products, without the requisite quality and performance standards, so we spend a fair amount of time defending our intellectual property and differentiating our products from copycats who try to grab market share, trying to piggyback on our product quality innovation, with price and inferior products.
How would you describe the evolution of the US health & safety manufacturing industry over the last decade?
Safety is clearly becoming more important across the board in every industry and we are seeing more governing bodies and regulatory agencies issuing safety standards and performing health and safety audits. Everyone is more conscious of health and safety and are demanding a safe work environment. Risk assessment and mitigation is more prevalent and companies are now better understanding the cost of an unsafe work environment.
How significantly would you say this has affected US legislation, businesses, and risk prevention within particular industries such as construction and transport?
This has pushed safety to the forefront and businesses are trying to get ahead of the issue, by preventing accidents and installing safety procedures and products to protect workers, assets and the environment, which is an integral part of our mission.
Given the quality of products you provide, how would you say this compares to safety groups from elsewhere around the globe?
Our products are sold globally into more than 70 countries and are considered the market leader in our niche product categories. We tend to have a leading market position in the markets we serve and our products tend to be the best value, combining quality, durability, reliability and price to be extremely competitive.
In providing safety products or services, what are the key compliance considerations you have to make?
First, we have to understand the conditions under which the products will be used to design the product properly to meet the harshest conditions. For example, many of our products are used in extremely cold and extremely hot environments, with temperatures ranging from as low as -40 degrees to as high as 140 degrees, so our products have to be sufficiently robust to meet the extreme differences. Second, we have to ensure our products meet regulatory requirements, not just from a performance perspective but also with the raw materials we use. Third, our products need to be durable enough to last multiple years or multiple usage and still perform under the harshest condition.
Are there any complexities involved in the regulations of safety equipment you develop?
There is no one overall governing body that applies to all of our products; some are under the auspices of OSHA, while others are governed by MHSA, for example. Therefore, we need to understand the various regulations and design products that might have to comply with multiple agencies and regulations.
In terms of market competition, where does the company stand globally and what are its goals moving forward?
We are viewed as market leaders and we typically enjoy a leading position in our product categories and end-markets. Our goal is to be the thought leader and expert in our product categories and end-markets. We focus on offering differentiated products, with some level of intellectual property. We want to continue to expand our safety product offerings, adding logical adjacent new product categories to complement our existing product categories.
Is there anything else you would like to add?
We are active in the acquisition front, looking to acquire companies that have a similar mindset of offering top quality, niche products, with a leading brand and market position. Our passion is around protecting people, assets and the environment and are interested in adding products that fit that criteria. We focus on family owned businesses, where the owners are looking to transition the business and want a safe haven and friendly acquirer to maintain the legacy they have created. We have a proven history of helping businesses grow when they become part of the Checkers family.
“We tend to have a leading market position in the markets we serve and our products tend to be the best value, combining quality, durability, reliability and price to be extremely competitive.”
In 1987 Checkers Safety Group began with a simple vision: to be a dynamic and growing organization dedicated to saving lives and protecting assets by delivering innovative safety products. That vision still drives Checkers today. With the company’s product offerings of House and Cable Protection Systems, Wheel Chocks, Warning Whips and more, Checkers has created a unique solution for each or their customers’ unique problems.
Checkers Safety Group is headquartered in Broomfield, Colorado, U.S.A. with another manufacturing and support facility located in Mesa, Arizona. Each of the company’s products is produced in the United States. Serving a diverse number of customers and markets worldwide for over 25 years has provided Checkers with the knowledge and insight to ensure every one of their customers’ needs is satisfied. Through the company’s continued growth and innovation, Checkers is poised and positioned to continue to serve as a leading global provider of industrial safety products.