Sefydliad Materion Cymreig Institute of Welsh Affairs

uroaring dragons Entrepreneurial Tales from Wales Rhys David acknowledgements This series of profiles of Welsh companies has been made possible by a generous grant from the Jane Hodge Foundation, for which we are most grateful. We also wish to thank the directors of the companies interviewed for giving us their time and their valuable insights into running a business in modern Wales.

About our Authors The Institute of Welsh Affairs • Rhys David was a senior journalist with The Institute of Welsh Affairs is an the Financial Times until 2002. He has independent think tank, research agency subsequently carried out a series of and publisher, focusing on issues of editorial, research, marketing and other constitutional, economic, cultural and assignments for the Institute of Welsh social importance within Wales. Affairs. • Glyn Mon Hughes is a senior lecturer Established in 1987, It has more than in journalism at Liverpool John Moores 1,400 individual and corporate members University and is also a freelance who receive copies of the Institute’s journalist and musician. He writes for a journals, regular newsletters, and range of business and musical invitations to attend the institute’s magazines and newspapers. conferences, seminars and other events • Lynne Walsh is a freelance journalist at locations throughout Wales. and was editor of the Welsh Development Agency’s journal, Busnes. For details of how to join please call 029 2066 6606 or e-mail [email protected] introduction We are often told Welsh people are not But while Government reports and academic research still point to some reluctance on the part of Welsh people to start their own enterprises, the voice of entrepreneurial, and a variety of explanations – those who are running important Welsh businesses is rarely heard. Nor, perhaps, some of them by now rather hackneyed – is sufficient recognition given that throughout the length and breadth of Wales there are businesses, some going back a hundred years or more, and some of is usually offered, ranging from the much more recent origin, which are as fast-moving, innovative and enterprising as former dominance of big self-sufficient sectors their rivals in other parts of Britain.

such as mining or steel to the preference of This publication sets out to present insights into just such businesses as these: Welsh- many parents for their children to find based companies operating in a variety of fields and making a success of it. It aims to tell their stories of the strategies they are adopting to survive in an increasingly careers in the professions such as teaching, competitive environment, the difficulties they have faced, the way they have overcome the law or medicine. them and the assistance they have been able to call on. The companies we have selected vary considerably in size, the biggest, Newport engineering and construction company, Rowecord, employing more than 1,000 and the smallest two, food manufacturer, Patchwork and pharmaceuticals company, Maelor, just a handful. Some are very international in their business orientation, manufacturing on three Continents and selling worldwide in the case of Biotrace, the microbiological test company, or supplying life-saving equipment to the famine-affected areas of Africa, as does Rowecord subsidiary, Braithwaite. They are also drawn from a variety of sectors within manufacturing and services, some dealing with a small number of key clients and others dealing with thousands of different customers each day. Their headquarters are to be found across Wales from Bangor in Gwynedd to rural Powys and Cardiff, and they include companies which in one case – North Wales builder,Watkin Jones – go back more than 200 years and nine generations, to another in the same business sector, Cardiff-based, Opco, founded since the turn of the new millennium. Some of the businesses we look at are resolutely family-owned and already have in place a new generation of family members already in key roles and ready to take over. Others such as Wynnstay, the Powys agricultural supplies group, have ventured on to the London markets, securing funding from City institutions for their forward investment plans, and accepting the challenges posed by exposure to the financial markets. Some have charismatic leaders, individuals who have taken a risk, convinced, like all good entrepreneurs, that they have the expertise or the idea to make a difference.

Roaring Dragons – Institute of Welsh Affairs Others are run by teams where complementary skills have been brought together to Though they have had to take risks to succeed, most of the companies interviewed ensure the right overall management, financial, human resources and other skills can have been prudent with their finances, relying heavily on internally generated resources create the combination needed for success. or borrowings from their banks to fund their development and expansion. The banks Yet, though they vary widely, the companies do have much in common. Firstly, themselves emerge from their stories with mixed reviews, in some cases being regarded there is widespread recognition that, if time and trouble is not taken to ensure the as very helpful and in others downright unhelpful. One company reported being given business grows and develops, it will not help to shape the future of the sector in which only weeks by one of the big four banks to eliminate its overdraft without any previous it operates but will, at best, be part of another company’s plans. Secondly, all the warning. The bank lost that business, and the company concerned has subsequently businesses covered have invested in people, processes and plant to ensure they stay gone on to become a leader in its field. Others wryly note that the banks are only there ahead. This has been the secret behind the success of one of the most private – in all to help when your business is strong. senses of the word – companies covered in the publication, Ifor Williams Trailers. From Perhaps surprisingly, public sector support agencies appear to play a much less its base in Corwen its products are now seen daily up and down the roads of Britain, on significant role in the success of the businesses we talked to than might have been farms, in factories, at shows and exhibitions and elsewhere. assumed. Some of the businesses operating in the retail and leisure field felt financial Thirdly, nearly all of the businesses, including those without the opportunity for an assistance was geared to manufacturing and excluded them, while some of the medium- international profile, have realized the importance of trading outside Welsh borders, sized businesses argued that they fell between two stools. A lot of the funding and even if only into neighbouring England, where a much greater population and market other assistance programmes, it was felt, were directed at very small companies, lies close at hand. Thus, Watkin Jones is building in English cities and includes major including start-ups, ruling the medium-sized companies out. Bigger companies, it was companies such as Tesco among its clients, while Leekes has defied the pressures facing argued, were able to deploy much greater muscle in ensuring their interests were looked department store owners generally to open up in Wiltshire. after. Perhaps in confirmation, some of the most appreciative comments on the efforts Interestingly, all the companies covered have used relatively straightforward methods of the Welsh Development Agency and Wales Tourist Board’s support efforts – of finance to keep their businesses running and have generally stayed clear of the more particularly mentoring – came from one of the smallest companies, Patchwork. sophisticated forms of borrowing and funding that are available, such as venture capital. There were complaints, too, that support was too often linked to job creation when The equity demands of these institutions, in return for nothing more than modest possibly the business could only be strengthened by investing in new equipment or investments, are seen by several of the directors we talked to as often far too rapacious. processes and reducing employment. A greater focus on helping already successful Two of the companies, Wynnstay and Maelor, are listed on the Alternative businesses to grow was called for by one industrialist as the only way to ensure Wales’s Investment Market (Aim) and a third Biotrace has a full stock market listing, (though it small and medium-sized businesses became larger and were retained in Wales under is currently subject to a takeover proposal). The advantages these companies see from Welsh ownership. listing is firstly access to a wider funding pool and the challenge of responding to the All of this is not to say many of the companies surveyed were not taking more rigorous requirements which come with a stock exchange quotation. In particular, advantage of a number of financial and other packages on offer from Government. as Wynnstay point out, a listing means you are playing in the premier league and have Insurance brokers, Thomas, Carroll in Caerphilly has, for example, used Welsh Assembly to act accordingly. This means very high standards of corporate governance, which, Government financial assistance to invest in new information technology, and while it can be onerous, can also mean the business gets to be better managed with Rowecord in Newport received a grant to help with the £2.5m refurbishment of its benefits for customers, staff, and shareholders. main works. In general, red tape was not felt to be too much of an obstacle and several Companies that have listed are quick to point out, however, that there are companies mention the support the Welsh Development Agency has been able to offer drawbacks, too, and in particular the City of London’s notorious short-termism. Directors in releasing land or dealing with other property issues. can and do sometimes feel that decisions they wish to take in the long term interests of The access to ministers that has come about as a result of devolution was also the business have to be swept aside because of the need to maintain onward share price welcome to many of the companies. Government ministers, including the First Minister, growth. Businesses can sometimes feel they are being driven by the need to ensure the have been very willing, companies report, to visit plants to see for themselves some of institutions can continue to receive ever-improving dividends. As such, it can sometimes the problems facing business and have been prepared to take up issues and seek to be simpler to accept an offer from a much bigger company – as has happened in recent resolve them. This accessibility to decision-makers is regarded as one of the main years with several quoted Welsh companies – to escape the City treadmill. bonuses from the creation of the National Assembly for Wales.

Institute of Welsh Affairs – Roaring Dragons More worryingly, only a few of the companies reviewed were working closely with university departments or local colleges to improve their products, even though there are now few businesses - and certainly none that aspire to be part of the knowledge economy where Wales is supposed to be heading - that could not usefully rely on some input from academic departments. One of the main problems that businesses wish to see Ministers move higher up the agenda is skills shortages, which in a number of cases represent a potential constraint on growth. Even in populous south Wales Rowecord has found difficulty securing young people willing and able to train as draughtsmen, despite the high levels of job satisfaction the career offers, and the company has had to turn abroad. Watkin, Jones in Bangor has similarly had recruitment problems, despite being located in an area where many remain out of work. In Denbighshire, the problem is a largely full employment market. Shortages exist at all levels, including managerial posts, with most companies perhaps understandably, looking within and beyond Wales to fill the most senior positions. More serious, however, is the difficulty of finding in Wales individuals to fill posts in areas such as marketing which are now vital to the ongoing success of businesses. This is coupled, too, some companies report, with a reluctance on the part of some suitable candidates across a variety of posts to move to Wales for one reason or another. Most of the companies reviewed are, however, seeking to overcome shortages with positive programmes of training, as in the case of Merthyr Tydfil printer, Stephens & George, or innovative programmes designed to motivate and retain staff as Cardiff builder, Opco, and Patchwork are doing. Communications within Wales are another issue. Companies in mid and north Wales argue that the difficulty of reaching markets and of connecting with Cardiff necessitate further investment in the roads network. These are issues which can and will, one hopes, be addressed. The message that comes through from our publication is that entrepreneurialism is alive and well, much of it residing in companies with their origins in Wales and with a dedication to continuing to operate successfully within the Welsh economy. To that extent they are the inheritors of a well-founded and long-standing tradition of entrepreneurialism – exemplified by David Davies of Llandinam and other Welsh coal owners, by the Reardon-Smiths and other Cardiff ship-owners, and by the many refugee owners of small businesses in Treforest and elsewhere – that has always existed in Wales.

Rhys David October 2006

Roaring Dragons – Institute of Welsh Affairs contents Rowecord sculptures in steelwork ...... 1

Biotrace rapid results ...... 5

Ifor Williams Trailers trailer blazing...... 8

Leekes driving range...... 11

Stephens and George abiding impressions ...... 15

Wynnstay seeding success ...... 18

Watkin Jones new foundations...... 22

Opco city transformers...... 26

Thomas, Carroll accented insurance...... 28

Maelor core care strategy...... 31

Patchwork kitchen classics ...... 34

Unsung Heroes – Institute of Welsh Affairs

RHYS DAVID 1

Profile Company Rowecord Sector Engineering sculptors in Location Newport steelwork Monuments to the engineering If they are ever in need of inspiration, the draughtsmen and craftsmen who skills of this Newport-based design and create the complex company can be seen all over structural steelwork produced by Newport company, Rowecord, need Britain from new sports only look around. The company’s stadia and bridges to works lie conveniently next to the River Usk alongside one of the prestige office blocks on engineering wonders of Wales, the the banks of the Thames. Newport Transporter Bridge.

It is also helping to From under this imposing structure, one of bring water to some only two in Britain where a travelling platform is used to convey vehicles and of the poorest and passengers across water (the other one is driest regions on in Middlesbrough), some of Wales’s best- known steel constructions start their life in the planet. Rowecord’s drawing office Swansea’s Liberty Stadium, home of the Ospreys rugby side and Swansea City football, is made of 2,600 tonnes of steel members fabricated by Rowecord, as is the Millennium Plaza that adjoins the Welsh Rugby Union’s Cardiff headquarters. Also in Swansea, Rowecord was responsible for the £2m Port Tawe Sail Bridge, the iconic new 140m long cable-stayed foot and cycle bridge, complete with 43m high steel mast, that has become the centrepiece of the SA1

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development, linking two parts of the the Middle East, including Iraq and the had made it impossible for him to fulfil company that is an agent for large city previously separated by the river. Antarctic, as well as in hospitals, offices an ambition to become an architect. valves used mainly in the steel and Nearer home the company, which and factories in Britain. After his five year apprenticeship he petrochemical industry. employs more than 1,000 people, has This impressive range of activity is served his National Service in the Royal Unifloc’s recent contracts include been responsible for Newport’s new perhaps not surprising given the Engineers. Here he obtained a equipment for screening and conveying £4.9m River Usk foot and cycle bridge, as constituent companies that have gone to commission and served this period at the iron ore at Corus, Port Talbot, limestone “The well as other Welsh projects, including create the Rowecord Group, now an ‘School of Military Engineering – handling and stockpiling at Brunner Theatr Mwlgan in Cardigan, flats on the integrated company capable of offering a Chatham’ where new skills were acquired Mond’s Winnington works in Cheshire and investment former Monico cinema site in Cardiff, and range of in-house expertise for delivering in bridge building and heavy engineering. gritstone crushing for Hanson Aggregates in new manufacturing a range of factory, office and other big projects. From Swansea he moved to the at Craig-yr-Hesg in Glamorgan. facilities makes dramatic developments, such as the huge Concast Midlands to work for Braithwaites, which improvements to our facility at Corus’s Port Talbot steelworks. COMMON THREAD then had a significant business building MULTIFUNCTION COMPANY The range of projects – each of them A common thread links all these power stations before returning to Wales The growth from a handful of production capacity and giant sculptures in steelwork – goes much businesses with the founder of Rowecord, to join Rees & Kirby, one of the principal employees offering structural steel ensures we continue to further than Wales. Rowecord steelwork 73 year old Ben Hoppé whose Quaker contractors building the new Llanwern services to a multifunction company, produce material of the has been used recently in aircraft hangars great grandfather left the Baltic in the steelworks in the early 1960s. Rowecord capable of handling a project from highest quality. Most in Farnborough in Hampshire, in an middle of 19th century for Swansea to was formed in 1968 and has gone on to drawing board through to handover to award-winning steel and glass footbridge avoid his sons being conscripted in the acquire a number of businesses which client, reflects the cautious go-it-alone importantly it helps us to in Coventry, in Football League side Prussian war. A talented sportsman, who include Braithwaite Engineers, a approach of Ben Hoppé, whose family, protect jobs” Ben Hoppe structural company with over 100 years including two sons working in the experience world wide, Unifloc, a business, own and control Rowecord. process engineering company with 70 Expansion, including acquisitions, has years experience, Andrew Scott in Port been financed from internal resources Talbot – one of Wales’s longest without recourse to borrowings, enabling established construction companies, the company, according to Ben Hoppé formed 137 years ago – and Total (who freely describes himself as, in the Access, a scaffolding company with near best sense of the word, careful) to remain to 200 employees mainly working in the firmly in control of its own destiny. The South Wales area. Industrial Planners & company’s most recent large investment Constructors is another smaller has been a £2.5m refurbishment of its Newport works, backed by £300,000 Welsh Assembly Government selective Milton Keynes Dons’ stadium and in the was once offered a trial by Leeds United regional assistance funding. refurbishment for property group, and went on to gain an FA coaching “We have completely reconfigured our Chelsfield, of a former BT tower block in a certificate as well as playing cricket for manufacturing facilities, creating prestige site alongside the Financial Times Monmouthshire, Ben Hoppé left school conveyance systems which can fast track and the Globe Theatre near Southwark early to work for steel construction heavy steel members and pre-fabrications Bridge in London. Steel water tanks from company, Dawnays, in Swansea, where from one process to another. We have also Rowecord Group subsidiary, Braithwaite, Michael Heseltine’s father Rupert was put in new shot blasting and spraying are to be found even further afield in managing director. The early death of his facilities, two curing and heating units various parts of Africa, Eastern Europe, and father and the need to earn an income pipe-cutting and steel-cutting machines.

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The investment makes dramatic construction groups as specialist supplier improvements to our production capacity of steelwork or other services. and ensures we continue to produce The rise in the price of steel over material of the highest quality. Most recent years, largely under the influence importantly, the investment helps us to of strong demand from China, has been protect jobs,” Ben Hoppé states. an embarrassment to the company, The company, which is now the which found itself having to work to fourth largest structural steel group in quotations offered at a time when much Britain as well as Wales’s biggest, expects lower prices for its main raw material to see continued growth in the use of were prevailing. However, these contracts steel as a building material at the expense have now largely been unwound, of re-inforced concrete and other rival according to Ben Hoppé and, in a market processes. The market according to Ben that he describes as currently being Hoppé has moved in favour of structural buoyant, contracts now much better steel, which now takes a share of more reflect the higher steel prices of recent than 70 per cent of all buildings more times. Demand has been strong in Wales than five stories high and becomes as elsewhere, with the redevelopment of virtually essential on taller structures. The Swansea’s dock area and of Newport city main advantage of steel is the speed with centre expecting to continue which a building’s framework can be put contributing to order books as both together once the elements have been cities seek to replicate Cardiff’s revival manufactured in the factory. and growth. The Braithwaite water plant business BRIDGE BUILDING is also expected to continue to develop In competing for work Rowecord strongly. The company makes the believes it enjoys an advantage by being sections for modular tanks, which are able to bring together different parts of then assembled on site wherever water the building process as a result of its needs to be stored in large quantities. ownership of contractors, Andrew Scott This can range from hospitals, hotels, and materials handling company, Unifloc. factories and office blocks in developed It is also relying on the expertise it has and developing countries to village now acquired in bridge building and in communities in the poorest countries. stadium development (where, admittedly Braithwaite tanks are to be found in operating on a much smaller scale, it has many famine and drought-affected avoided the financial and other problems regions across Asia and Africa. One recent encountered by firstly Laing in building the client is the Bank of Tanzania, which has Millennium Stadium and now Multiplex in recently taken delivery of 48 glass- building the new Wembley) to win further reinforced plastic water tanks for a new work in sophisticated areas such as these. extension in the capital, Dar-es-Salaam, The company also acts as a sub-contractor with another smaller contract being won itself, however, working alongside big for the same client in Zanzibar. 4

The company also recently started a outsource some of its drawing, Ben Hoppé joint venture with Hyundai Heavy believes, if the difficulties continue. Industries, part of the huge South Korean It is not, as Ben Hoppé points out, that chaebol, which is constructing onshore local companies do not make efforts to find facilities and offshore pipelines for Shell’s workers in and around Newport itself. A Nigerian subsidiary on Bonny Island. group of about a dozen Newport companies Braithwaite is supplying and installing has set up its own recruitment and training three steel water storage tanks for agency, which acts as a clearing-house for drinking water and 30 metre high apprentice and other vacancies in engineering supporting water towers. The company and allied trades. Nor does a commitment to has also won contracts to help improve training prove inexpensive. “It costs us about water supplies in Afghanistan. £70,000 and it takes four years to train a A significant problem for the draughtsman, for example, including a first company and one that puzzles Ben Hoppé year spent in full-time education and a day is the difficulty of recruiting skilled release per week at the local tech.” workers, and in particular draughtsmen. As These problems have been drawn to a former draughtsman himself Ben Hoppé the Assembly Government’s attention and regards the work as one of consuming Ben Hoppé is hopeful they will move up interest, offering the opportunity to take the agenda and receive attention, so that a project through from pencil and paper companies such as his can continue to onwards, tracking it through the works, compete effectively in UK and world seeing it being erected and completed on markets. In the meantime, as Ben Hoppé site. Sadly, despite trying hard, the himself contemplates a further easing company finds it very difficult to secure down of his own responsibilities and his draughtsmen or shop floor workers sons take over greater responsibilities for locally, or to find recruits to train, running the business with senior colleagues, preferably from the age of 16 onwards. the next few years will see the focus move According to Ben Hoppé bright young to consolidation of the business as it students at the age of 16 are persuaded absorbs the impact and take advantage of to remain at school to take ‘A’ levels. It is its investment in new facilities. in the interest of schools as this attracts financial incentive funding.

WELDERS Rowecord Group The company, like so many others in Neptune Works Wales and elsewhere in Britain, has had to Usk Way Newport look further afield. It has recruited welders NP20 2SS from Poland as well as Filipino T 01633 250511 draughtsmen, sometimes running into F 01633 253219 local criticism for doing so. The company www.rowecordgroup.com may, however, find itself having to

Institute of Welsh Affairs – Roaring Dragons RHYS DAVID 5 rapid results The Bridgend manufacturer of products to test for contamination is relied on by manufacturers of consumer and industrial products around the world to provide assurance their facilities are clean. An acquisitive company started less than 20 years ago, it now operates internationally in Europe, Asia and North America.

Profile Perrier incident is now largely forgotten manufacturer of industrial microbiology but the green bottle’s market dominance products in the world, serving customers Company Biotrace has gone, too, and other brands that were in the food, pharmaceutical, water and Sector Industrial Microbiology able to take advantage of its misfortunes defence industries and employing more Location Bridgend are now equally prominent in the fiercely than 300 people worldwide, including competitive bottled water market. 100 in Bridgend. Its competitors are When a leading international mainly big international businesses, confectionery company had to remove PEACE OF MIND usually the subsidiaries of broadly-based several million bars of chocolate from stores because of a possible link to Providing manufacturers in the food chemical industry giants. salmonella in 2006, the immediate and other markets with the peace of This Welsh-based business has its cost was put at £20m. Yet, the wider mind they need that their products are origins like so much else in Wales in that damage in such cases can be much being produced in clean environments is great Welsh natural resource – water. greater, potentially wiping out several a job that Bridgend-based Biotrace Laleston-born Ian Johnson, its chief decades or even longer of trust built International has been successfully executive and co-founder, worked for up with consumers that have come to carrying out for the past nearly 20 years, Welsh Water testing for contamination in regard the brand as embodying very growing over that period to become one marine environments, sewage treatment high standards of reliability. of the leading world companies in this works and water supply networks. A specialist field. An acquisitive company Cardiff University graduate, he left in the In some cases recovery can be either very with a strong record of growth, Biotrace 1980s after completing an external slow or less than complete. Until the now operates internationally in Europe, masters degree to work with one of his 1980s a Perrier was as much a synonym Asia and North America and in 2005 had former lecturers in a small commercial for sparkling bottled water as Hoover was revenues of £29.3m and pre-tax profits venture, Clear Ltd. for a vacuum cleaner. A contamination of £3.5m. After five years getting to grips with scare resulting in a large-scale product Acquired in October 2006 by IUS the commercial world, Ian Johnson recall undermined that powerful multinational 3M in a £52m dealt, decided that rather than follow the new positioning of the Nestle brand. The Biotrace has become the sixth largest direction Clear had decided on, he would

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seek instead to use the particular Australia, with the company’s leading authorities, the Welsh Development technical research he had been engaged proprietary brands, Ascotec, Cogent, Agency and the Welsh Assembly on in Cardiff. Biotrace was born, (with the International BioProducts and Tecra Government has been good, according to help of business partner, Colin Griffiths accounting for 83 per cent of sales. Ian Johnson. “The Assembly has brought who retired in 1996) in the Cardiff The business model, Ian Johnson points greater access to officials and to Business Technology Centre in out, is much like that of the shaving ministers, and we have been well Senghenydd Road, close to the university market. In the same way as industry leaders supported by both Andrew Davies, in Cathays Park. In 1989 with help from Gillette or Wilkinson Sword sell an initial [Economy Minister] and Rhodri Morgan the Welsh Development Agency and the product – the razor which the customer [First Minister].” In particular, the ability former Mid Glamorgan county council must regularly re-equip with new blades – of the business to work closely with the business moved to the then new and derive most of their revenue and profit Government and Government ministers Bridgend Science Park. from the latter, so Biotrace sells testing in Wales has made it possible to achieve Four years after the first products equipment that generates regular repeat much higher visibility in the markets in emerged from the Bridgend factory in orders for its consumables. Currently some which it operates. The company has also 1990, destined for customers such as 90 per cent of revenue comes from received help with its research through Nestle and Grace Dearborn, the US recurring consumables. research grants, a helpful if not huge detection equipment and consumables, chemicals company, and after several Customers, who are supplied through contribution, according to Ian Johnson. and customers include the Ministry of rounds of investment by venture capital a network of 70 distributors from Defence in Britain and a number of GREATER FOCUS firms, the company floated on the foreign government and defence manufacturing plants in the US and London Stock Exchange raising £10m. Australia as well as Bridgend, are There are, nevertheless, changes he “The rules organizations. Within a few years, and despite its The recent award of a essentially buying rapid results: the would like to see in the way Government governing relatively small size, its success was £1.2m.contract to supply nuclear, ability to find out within seconds support in Wales is delivered, in particular assistance need to be recognized with best technology award in biological and chemical field whether or not surfaces are clean a greater focus on helping successful interpreted more widely… as the plc Awards organized by the Financial laboratories and associated for the manufacture of food, businesses to grow further. This, Ian Times and accountants, including dairy products, cosmetics, Johnson says, is vital if larger firms are to in other countries, and equipment to Nato’s Maintenance PricewaterhouseCoopers. This recognized and Supply Agency will boost this and pharmaceuticals. If not, they be established and retained in Wales. support given for the its record in delivering innovative year’s revenues. Business is split can immediately put cleaning Although the new Knowledge Bank for purchase of technology as products and strong returns to its mainly almost equally in revenue terms processes into effect. A variety of Business is a step towards achieving this, well as its development” institutional investors. between the Americas and Europe, the technologies is offered under different the mechanisms it can use are seen as Ian Johnson Middle East and Africa, both of which had brand names, depending on whether the outdated. “K4B4 is in danger of being a DEFENCE SECTOR sales in 2005 of more than £13m, the tests are being made for hygiene new wrapper on old products,” he argues. The main markets serviced by still relatively unexploited Asian market monitoring; pathogen, toxin, allergen and The rules governing assistance also need Biotrace are food and environmental, bringing in a further £2.5m. vitamin tests; or air sampling. Some to be interpreted more widely by accounting for just over two thirds of Biotrace supplies its 10,000 customers make up simpler compounds officials, as in other countries, and revenue, pharmaceutical, personal care customers in these markets with two from materials supplied by Biotrace but support needs to be given for the and cosmetics, representing a further broad types of product – consumables three quarters of the products supplied purchase of technology as well as its quarter of business, and defence, a small for testing for contamination and the are pre-prepared, with value added at the development. Such help would be much but expanding sector accounting for the equipment for carrying out the tests. manufacturing stage. more helpful, the company believes, than, rest. Products developed for the defence Apart from Bridgend, manufacturing is Support for the company from key for example, changes in the tax structure sector include biological weapon carried out in Runcorn, Indiana and institutions in Wales, such as local for companies in Wales.

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Product development to date has been Stock exchange listing has also brought Although the decisions will now be plant and creating a further biotechnology largely managed in-house with support the company face to face with the City of taken in conjunction with the new owners, presence in the area with an emerging from academic departments at Cardiff London’s notorious short termism and made Ian Johnson believes the company has the involvement in in vitro fertilization (IVF). University and University Wales institute, it necessary to devote considerable time to potential to grow faster than the overall 5- Growth is expected to come not just Cardiff (UWIC). Biotrace has commissioned shareholder presentations. “It is difficult to 6 per cent annual increase in the market from the existing product range but also work from post-graduate students in balance out long term project plans with the itself – currently estimated at $3bn a year from new acquisitions, including Microsafe, departments at both universities and also need to demonstrate high levels of by value – and has set a $100m turnover as an Italian-based maker of industrial has a regular intake of graduates. Professor performance to fund manager shareholders the company’s next milestone. Part of this microbiology and life science products and Chris Griffiths at UWIC is retained as a who have typically a three month view of growth is expected to come from services for the food, pharmaceutical and consultant on science matters. An their fund’s value. Sometimes we want to do expansion into broader industrial diagnostic defence sectors. Biotrace has also made a impressive total of 10 per cent of turnover things that will cost in the short term but will testing, such as anti-biotic residues, an area number of moves designed to increase is spent on research and development. give long term benefit. You have to make of increasing interest to dairy product and market penetration, including the purchase Commercial skills are harder to find sure you inform shareholders and bring them other food manufacturers. The company’s of the remaining share it did not own in than scientific skills in south Wales, the along with you.” big competitors, Ian Johnson points out, Target Diagnostics, its Italian distributor, company reports, with sales and Quoted companies can also be tend to be part of much bigger chemical and a deal with the big US corporation, marketing expertise in particularly short vulnerable to stock market sentiment industry conglomerates that have huge Pall. Under a five year agreement the supply. As a result, services in these fields about particular sectors, regardless of the catalogues offering a wide range of company will market Biotrace’s Ascotec generally have to be commissioned from individual company’s own performance. products the customer has to find for airborne bacteria detection systems. outside Wales. There also remain “You can have a lot of value wiped off himself. Biotrace has tried to tackle niches This deal, and others that will follow, problems in persuading individuals from your share price, simply because within the marketplace for higher will, according to Ian Johnson, give outside Wales to relocate here. sentiment has moved against the sector technology repeat products. Biotrace high credibility, something its as a whole for one reason or another,” successful record of nearly 20 years REGULATORY BURDEN says Ian Johnson, himself the owner of a CORE PRODUCTS making products vital to the success of a Compliance with stock exchange 7 per cent stake in the business. Other “Manufacturers are looking for much range of industries has already delivered. regulations has been another burden. significant shareholders prior to the faster results technologies to solve “Regulations increase year on year and we acquisition by 3M were Liontrust, Herald problems more quickly, partly because have had to meet the same reporting Investment Trust, Morley Fund Government regulations are demanding standards as much bigger companies with Management and Armor Capital. much swifter action to find and tackle critical mass that are able to afford teams Ian Johnson remains convinced, problems,” he says. of people to carry out these tasks,” says Ian however, that the public market has been To focus more closely on the core Johnson. Among the recent new burdens the right place for companies like Biotrace product areas that it has identified, earlier are the need to adopt international simply because it provides the best access this year the company sold its loss-making accounting standards when reporting to funds the company needed from time to life sciences division, Russkin Technology to company results, and the growing demands time to finance expansion or acquisitions. its management for £1.05m. This Biotrace International of corporate governance, and health and Thus, although he acknowledges there were subsidiary was operating in the medical The Science Park safety. Compliance in all its forms has been many private equity companies offering field, developing systems for enhancing the Bridgend Mid Glamorgan taking a significant portion of the time of finance to support stock exchange exits, a study of cell interaction, and as such was CF31 3NA the two key executives on whose plate this move to go private, as have some other seen to be moving in a different direction T 01656 641400 falls – Ian Johnson himself and his finance companies, including Welsh washroom from its parent. Biotrace retained a 10 per F 01656 768835 director, former AB Electronics finance services company, PHS, was never an cent stake and the company is staying in www.biotrace.co.uk controller, Peter Morgan. option for Biotrace. Bridgend, moving into the former Sony

Roaring Dragons – Institute of Welsh Affairs 8 GLYN MON HUGHES

Profile Company Ifor Williams Trailers Sector Equipment trailer blazing Location Corwen After almost half a It’s one of those names that almost any motorist will have seen … many century in business the times. For those drivers who spend North Wales company’s their time reading marques, makes and registration plates – a frequent trailers now reach a pastime among travellers on Britain’s wide range of users overcrowded roads – Ifor Williams Trailers will, quite possibly, be nearly across world markets. as familiar as Ford, Rover or Nissan. As competition from But, ask where this successful designer manufacturers in lower and manufacturer of trailers is based, or cost countries how many people the company employs, and, more than likely, there increases, however, the will be a hesitant response. This is a UK family-owned business market leader in its field that remains coy about its success and reluctant to is determined to stay publicise its success. ahead through good Yet, Ifor Williams Trailers can tell a great story. The firm, based at Cynwyd, design and product near Corwen, employs nearly 600 people, innovation. making it one of North Wales’s biggest

Institute of Welsh Affairs – Roaring Dragons 9 employers. It is well on the way to making The strongest links are with the farmers and others needing to transport portfolio of products, with customers throughout Europe – including Iceland – its half-millionth trailer. It can, when the equine leisure market, with around 150 animals to meet new animal welfare and already able to select from a range of and as far a field as Israel, Australia and pressure is on, produce more than 1,000 horseboxes a week rolling off the transport laws that come into force in wheels, couplings, sides and so on. When New Zealand. Some distributors have trailers a week, though the average figure is production line at the relatively recently 2007. These are aimed at minimising the the opportunity arises, however, the self-managed sub-distributors and the around 700 units. Around 30,000 opened facility at Deeside. While those leakage of liquid waste on to roads and company can offer trailers outside its development of this comprehensive customers a year choose Ifor Williams horseboxes may be the most easily other surfaces, reducing the health risks usual standard product range, specially network has mirrored the successful products, which are distributed worldwide recognised products in the company to humans and other animals from designed and built to tight customer expansion and development of the to a customer base that ranges from catalogue, the rest of the range includes animal droppings. requirements and demanding company itself. farmers to show-jumpers, from builders to livestock, general purpose, tipping, plant, For the building industry the specifications. A military contract was Competition, however, remains fierce plumbers, from holiday-makers to furniture flatbed and box van trailers, as well as company supplies flatbeds and tippers recently completed for almost 1,500 and, to meet this, effort has been put removers. Their success is based on a that can carry plant up to a total gross trailers.” We delivered all the trailers to a over the past decade into producing determination to stay at the forefront of weight of 3500kg. very precise specification and schedule to more trailers more efficiently. “We’ve the design of new and innovative products. “That’s something like a mini-digger a very satisfied client,” reports Andrew concentrated hard on strengthening our plus trailer which could easily be towed by Reece-Jones. management team, right through finance, HALF CENTURY design, development, sales – the whole The company is limbering up to a Land Rover Discovery, or similar vehicle,” structure of the company. No one celebrate its first half century in business, notes Andrew Reece-Jones. “This sector is MARKET LEADER employee is pigeon-holed but is a milestone it will pass in 2008 and, simply huge for us and we deal with some Ifor Williams has perhaps surprisingly encouraged to achieve his or her full perhaps most notably of all, the business of the biggest construction companies, become market leader without extensive potential in whatever field they wish to has been built up without relying on down to the small, one-person operations. marketing or advertising. Its main selling progress in. Employee contributions, in the financial support from the public purse, As a result, we have a range of different tool is its network of established way of ideas for improving the way they work or for increasing efficiency on the shop floor, are very much encouraged. pick-up canopies. With all the possible “The result,” suggests Andrew Reece- variations on the trailer theme, more Jones, “is very real progress, which has all than 1,000 variants are available. hinged on the success of the product, the The firm also supplies other parts of efficiency of our production systems, and the leisure industry, producing a range of of course, the workforce.” box vans such as caravans and trailers The company uses the latest that can transport anything from disco CAD/CAM – computer-aided design and acquiring its reputation instead through equipment to potted plants and antiques manufacturing – facilities and customer determination and sheer hard work. to supplies for small retail outlets. Car opinions and research are taken fully into “Ifor Williams started the business in trailers and livestock transporters are account when new products are being 1958, mainly constructing trailers for other products. “It might be something to developed. A large proportion of the parts local farmers,” says Andrew Reece-Jones, transport a racing car to a circuit, and if it used, including axles, chassis and most the company’s design engineering all goes wrong, we produce trailers used body parts, is produced to the company’s manager, “and it has snowballed from by vehicle recovery companies, not to own designs and specifications. Other there. This is now a multi-million pound, mention the trailers used by car delivery types of trailers all suitable for specific distributors, which the company claims is parts are purchased from approved family-owned operation delivering people,” says Andrew Reece-Jones. niches within the overall market.” not matched by any other similar manufacturers that have met the products all over the UK, Europe and the A recent innovation is a trailer with Bespoke treatment of standard manufacturer. Those distributors are stringent demands of the company, which rest of the world.” an internal sump to make it easier for products does not form part of the located across the UK as well as operates to ISO9002 quality standards.

Roaring Dragons – Institute of Welsh Affairs 10

lower cost of production in many parts of people in all areas of the business, but finding financial and in terms of advice and Europe is making it much harder for us in people of the right standard can sometimes support, while the very big players are certain markets,” Andrew Reece-Jones be challenging, particularly personnel in the often able to twist the arm of observes. “We’re now beginning to see those engineering and management areas.” government to help them in their lower-cost operators expanding their sales Individuals who can pass the business quest, the company argues. into the UK. We’re used to that overseas. It’s company’s aptitude tests are able to “There is a danger we fall into the trap something rather new at home.” secure attractive rates of pay, which the of being either too big or too small to win “We face stiff competition from Eastern company claims are above average for support,” says Andrew Reece-Jones. To European competitors in this field, too.We North Wales and the North West. In the date, the company has not received recognise that and we’re not the only UK process, a significant contribution is financial support other than funds Raw materials come from as far a field as company currently under pressure as made to the local north Wales economy. generated through the business itself. The China, Thailand and Malaysia but quality companies cut costs by sourcing components “We are seeing people travelling from company’s directors see the fact that control remains key. “Everything we do has from China and India.We know that our much further afield, attracted by our growth has been generated internally as a to relate back to the highest quality components are copied and are sourced from excellent salaries,” says Andrew Reece- strength. “As for external funding, it’s down products, which will enhance our reputation. manufacturers well outside Europe.” Jones. “In the past many of our employees more to not qualifying for assistance rather With that in mind, we have a much defined lived in the immediate area but as we have than a reluctance to accept it,” he adds. focus on the quality of manufacturing which RELEVANT SKILLS grown we have become much less reliant is reflected in the rigorous controls we have The company is responding with the on the immediate area and are now CONSISTENT PATTERN in place to safeguard our purchasing,” the development of new products and is attracting employees from as far away as A consistent pattern of profits has “We are company says. seeking to enter new markets. “We are Conwy, Flintshire and Cheshire.” allowed the company to grow to its finding that High levels of investment have been developing our spare parts business and The complexity of doing business present size and visibility at events, in the lower cost of production maintained to ensure product quality (with the imminent arrival of a new spares across international borders and against factories and farmyards and on the remains high. An on-site galvanising plant catalogue) hope to see an increase in this manufacturers who sometimes appear to in many parts of Europe is highways. Indeed, there can be few places gives the company total control over the sector of the business. This may lead to enjoy unfair advantages can be a further in the world where an Ifor Williams trailer making it much harder for us quality and efficiency of chassis other additional items, associated with problem. The lack of uniform trading rules is not serving a useful purpose. The in certain markets. production at Deeside and further trailers becoming available through the across Europe is seen a particular diligent trailer spotter may already have These lower cost operators investment at both Deeside and Cynwyd network,” Andrew Reece-Jones says. obstacle by the company, with some added Japan, the Falkland Islands and the will bring improvements in manufacturing Future growth, however, assumes that nations requiring vehicle-type approval United Arab Emirates to his or her list. are expanding their sales into methods, materials handling systems, relevant skills will be available locally. “In the before sales are permitted. “France is a the UK as well” products and customer services. Heavy engineering world, it is not easy and we set good example,” says Andrew Reece-Jones. Andrew Reece-Jones investment has also taken place in ourselves a difficult task.We need people “It requires type approval [before a manufacturing technology, including who live nearby or are prepared to relocate. product can be licensed for road usage] automated material stocking systems and They need the right aptitudes and and French competitors are immediately at extensive use of computer numerical qualifications and the ability to understand an advantage since they know and Ifor Williams Trailers control equipment (CNC), including lasers, engineering. There are plenty of engineers appreciate the regulatory expectations of Cynwyd Corwen plasmas, punches and presses. out there but the right ones tailored to our the area. If a French company wishes to do Denbighshire LL21 0LB Competition now comes from an ever- requirements are hard to find.We certainly business in the UK, no similar restrictions T 01490 412626 wider range of countries, “Some of our advertise locally and nationally for engineers exist so it is far from a level playing field.” F 01490 412770 competitors cannot compete with the and will offer all necessary training,” There are dilemmas, too, associated E [email protected] quality of the product and the efficiency of according to Andrew Reece-Jones. “The with being a medium-sized company. www.iwt.co.uk our production but we are finding that the company employs the highest calibre of Small start-ups can rely on support both

Institute of Welsh Affairs – Roaring Dragons LYNNE WALSH 11

Profile Company Leekes Sector Retail and Leisure Location Pontyclun driving range If Gerald Leeke had enjoyed being an With its sites out of town, the Pontyclun-based retailer has escaped the accountant, Wales would not have gained a multi-million business pressures that have led over recent yeas to the demise of several of currently providing around 1,500 jobs. Wales’s best-known department stores. It has also successfully added Instead, by moving swiftly into the then small family firm, J.H.Leeke, after hotel, golf, and other leisure businesses to its portfolio of activities. gaining his qualifications, he has helped to transform a small retail business much like any other of its era into one of Wales’s biggest retail and leisure operations with a turnover in excess of £90m.

From the day he joined what was then a builders’ merchants in Tonypandy to the present day as the owner of three department stores, a hotel and golf complex, and Hensol Castle, a 17th century mansion close to St. Fagans to the west of Cardiff, Leeke and his fellow- directors have kept the business on a forward momentum. The Leeke “dynasty”, including several members working within the business, is now one of the richest in Wales, according to the Sunday Times Rich List, with a family fortune running to around £70m. The original business, which is now owned by family trusts, was a traditional builders’ merchant, set up in 1897 by Gerald Leeke’s grandfather, James Henry Leeke, from the front room of his terraced house in Clydach Vale. Gerald Leeke takes up the story. “My father went into the business in about 1930. I was

Roaring Dragons – Institute of Welsh Affairs 12

training to be a chartered accountant and The next break came with the the Valleys nearby to pick up the goods its position close to the M4 motorway did not want to follow him but the day I development of out-of-town shopping as they wanted,” says Gerald Leeke. The and the large numbers of people qualified, I resigned from my job” better road communications and, in company took over the former Sovereign travelling from West Wales to Swansea to Accountancy, he explains, bored him. “I particular, motorways made it possible pencil factory in Pontyclun. This was shop. The formula was applied again in didn’t enjoy it. You could see from for people to drive to shopping facilities before UK chains such as B&Q had the company’s first foray across the people’s accounts where they were going where they could park easily to pick up arrived on the scene. border to Melksham. The Wiltshire town wrong. They made the same kind of bulky goods. Leekes saw an opportunity The store was opened in 1977, is only eight miles from the M4 and in a mistakes over and over.” in locations catering for customers who followed by another in Cross Hands in position to attract customers who might So, in 1966, he joined the family firm, at would otherwise have to travel to the 1984. But, instead of simply selling building otherwise have to drive to bigger centres, the time employing only six people.When a nearest big town but who might prefer to supplies to cater for the do-it-yourself such as Swindon or Bristol. The railway goods yard in the Rhondda town, shop more locally if a suitable retail market, the stores also stocked furniture, catchment area also includes a large Trealaw, came up for sale, the Leekes bought outlet was available that offered the kitchens and bathrooms. “Basically, men number of wealthy potential customers. it to build a home improvements centre. range and quality of goods they wanted. came for the DIY, the women for the There are now plans for a fourth “Builders were not very happy at first, because furniture,” Gerald Leeke says. Later, the store in Worcester. “I see us drawing we were selling direct to the customers instead OUT OF TOWN range was extended further, to include customers from Gloucester, Cheltenham, of through them.” The new business gained a “We knew the motorway was coming carpets, home accessories and sportswear. Malvern and other nearby towns and foothold, however, and was in a good through, at Llantrisant, and that people Like Pontyclun, Cross Hands in villages as well as from the south of position to expand again a decade later. would welcome the chance to drive from Carmarthenshire was chosen because of Birmingham,” says Gerald Leeke. The 13 company’s head office in Mwyndy “The members had been very supportive either in-house or, where necessary, The latest big project has been Business Park, Llantrisant, where it has its and I promised them that when we built through our own legal and accountancy the purchase, believed to be for a centralised warehousing and distribution the hotel, their tee-off times would not advisers, and so the services on offer from total of £5m, of the Hensol Castle facility, is well located to service these be affected. The hotel guests, of course, the Welsh Development Agency and other estate. Previously a long stay hospital outlets. Turnover from the company’s wanted to play at weekends. To honour government bodies have not generally owned by the NHS and subsequently stores portfolio now exceeds £60m a the promise, I had to build a second been relevant.” used for conferences, the ‘castle’ is year. course.” The firm’s steady growth and its actually a 17th century Grade 1 listed Parallel with the growth of the retail ability to fund a growing range of projects building. Within two or three years, it side of the business has been a move CUP FINALS in its chosen fields have, however, attracted will be a luxury spa hotel, into another area driven by the social The Vale Hotel and Country Club the interest of potential purchasers and the incorporating holiday apartments and and economic changes of the past few venue is now well known as the location financial community. “I am constantly being residential accommodation. “It will decades, the growing interest in leisure chosen by national rugby and football bombarded by offers either to purchase the cost about £60m to renovate the pursuits and fitness In 1994, the teams as well as Premiership clubs when company or to help with its funding, but we castle, turn it into a destination spa, company took over a local golf club at they are preparing for big matches at the have always declined them and funded the build 20-odd bedroom suites, as well Hensol, in the Vale of Glamorgan. “I live Millennium Stadium. Among the teams expansion either by retained profits or as libraries, restaurants, pools, on the corner, nearby, and someone that have made the hotel their regular through bank loans. Bank loans are, of apartments and a holiday ownership knocked on the door and asked if I base for cup finals over the last few years course, the cheaper form of funding, and village,” says Gerald Leeke. wanted to buy the club. The business plan while Wembley has been out of our very strong balance sheet has helped us commission are Manchester United. to obtain competitive interest rates from LISTED BUILDING A keen amateur sportsman himself, HSBC.They have been very helpful for over The project is now moving forward Gerald Leeke also put up sponsorship to 40 years.” despite some early complications. bring the world’s top squash event, the Outside consultants have been used to Leekes bought the estate in 2003, and British Open, to Wales in the mid 1990s. advise on particular projects, including the entered a period of difficult planning Squash professional, Adrian Davies, development of leisure facilities. “We negotiations. The 60 apartments have became involved and is now the resort’s brought in KPMG as consultants, and their been included at the insistence of the director of sales. More recently the market research told us to create a leisure local authority, which required a leisure club activities of the hotel have club in a town centre. They also said that it housing element in the plan. Work will been further extensively developed. should have a membership of around 700- also include an ecological strategy for With the company’s activities 800. “We could see, however, that there was the landscaped grounds, lake and did not make sense, as the place had concentrated in the retail and leisure a boom in the sector, though I knew nothing serpentine pond, and will involve liaison almost gone bust.” field, the company has not been able to about developing a leisure club. I could see with Cadw, the Welsh Assembly Importantly, however, the club draw on the support available to that many people who lived in the Rhondda Government’s guardian of Wales’ already had outline planning permission manufacturers investing in Wales and has and Llantrisant worked in Cardiff. I knew historical environment. for a hotel. “Running a golf club on its financed its growth largely through they’d prefer to come to somewhere that Gerald Leeke is confident the project own does not work. They are very costly to internal resources and bank borrowings. was halfway home, or halfway into work, can be managed successfully. “We built maintain, so you need other activities. “The attitude of the authorities in general and be in this lovely area.” two golf courses, and I didn’t know Moreover, it takes about £2.5 to £3 million is that retailers, as opposed to The club, the facilities of which were anything about how to do that when we to build a golf course so you have to have manufacturers, should stand on their own developed with the help of consultants started. We learned as we went along, and other income within the business,” says two feet and so any financial assistance from top London spa, The Sanctuary, now because we had gained such a lot of Gerald Leeke. The hotel was built and a tends to be out of the question. We have has more than 5,000 members and a experience from building the first, the second course was duly added in 2003. plenty of business acumen and experience turnover between £10m and £15m a year. second was easier.”

Roaring Dragons – Institute of Welsh Affairs 14

The Wales Tourist Board, which was bathrooms, and we have staff that know improve our purchasing power and reduce The philosophy now remains much not involved with the previous hotel, the stock. If customers are buying a three- head office costs, and we will have to as it always has since Gerald Leeke leisure and golf club projects, has piece suite, they are probably going to improve staff training, customer service arrived forty years back. “The business has contributed around £200,000 towards redecorate the room as well. We employ and our product offers.” Gerald Leeks is been consistently profitable for nearly 100 the £3m plus cost of the new National interior designers who can help when confident, however, the group’s formula years, and over the last 10 years or so, the Golf Course of Wales. “I believe that our people are apprehensive about colour, for can go on being developed and will senior management has been support for Ryder Cup Wales and our example. If a customer is choosing a new continue to work. “The general public strengthened by experienced individuals assistance in manning Wales Tourist Board fitted kitchen, staff will show them tiles. always prefer something a little different both from the family and outside enabling stands in Europe and the US helped to Every department has staff who are and the more sophisticated shoppers are “The general us to modernise and improve. We have to secure their assistance.” specialists.” A total of more than probably fed up with every town centre or keep adjusting and improving!” public prefers The company has built its success in £500,000 a year is spent annually within shopping mall containing the same something different. the highly competitive retailing field at a the group on training to ensure these national retailers.” More sophisticated shoppers time when many department stores have skills are available. “Luckily, we already have sufficient been struggling. In Wales Swansea’s “Retail gets more and more purchasing power to obtain competitive are fed up with every town David Evans, part of the House of Fraser buying prices from manufacturers and we sophisticated. Our new information group, B.J.Jones in Lampeter, Dan Evans in were ahead of most retailers in visiting and centre or shopping mall technology system, for example, cost more Barry and David Morgan in Cardiff, all sourcing products from the Far East.We have containing the same national than £1m, and that required more training businesses with a history stretching back built up a very good relationship with retailers” Gerald Leeke for everyone.” The investment in IT means to the nineteenth century, have closed. In manufacturers in China, Malaysia, Thailand customers can be tracked through a these cases changing retail patterns, and Vietnam, and with the quality of comprehensive database. This makes it including the growth of out-of-town products continually improving and with possible to target customers with shopping malls and the spread of the excellent prices and ranges, importing has incentives to revisit the store if there has internet have been blamed. In the case of become an important part of the business. If been a gap since previous purchases. the independents the difficulty of it costs £100 to make a product in Italy, it will “The attraction of department stores in competing against the bulk-buying power cost around £70 in Eastern Europe – and £50 the past has been the ease of finding of the big chains has also been cited. in China. Those differences are remarkable.” Leekes’ strategy of serving areas ‘everything being under one roof’. The previously lacking access to department modern shopping mall achieves that SUCCESSION PLANNING store retailing from out of town sites through its collection of separate retailers. In many family-owned businesses close to motorways has clearly worked The only way we can counter this is to succession planning can be a problem, but Gerald Leeke believes attention to have individual departments that are able particularly if an upcoming generation detail and, in particular, choice and range to compete as specialist shops with has decided to move into other fields. In of goods has also been important. sufficient expertise, wide ranges of the case of Leekes, however, younger merchandise and friendly, well-trained family members have already taken over Leekes SKILLS TRAINING staff. a number of senior positions after Mwyndy Business Park “Some department stores decide they Continued success will depend on acquiring expertise outside the business. Pontyclun Rhondda Cynon Taff are going to open up a new ‘department’, being able to continue to match the price Emma Leeke has had 12 years experience CF72 8PN but it might not have the range people and quality of goods available in the big as a buyer with Marks & Spencer, and T 01443 667600 would expect with perhaps only a few out-of-town shopping centres and on the Joanna has had buying experience with F 01443 667615 models on offer. We make sure we have a internet. “To succeed in the future we will Next. Steve Leeke is in the hotels division www.leekes.co.uk good range, of, say, kitchens or have to keep expanding in order to and Chris works on the company’s IT

Institute of Welsh Affairs – Roaring Dragons RHYS DAVID 15 abiding impressionsimpressions

Wales’sWales’s biggestbiggest printer, based high above Merthyr TydfilTydfil has survived the ups and downs of the printing industry for nearly 100 years. To do so it has had to ininvestvest heaheavilyvily in plant and training and to prproveove its flexibility in a quickly changing and rruthlesslyuthlessly competitive marketplace.

Unsung Heroes – Institute of Welsh Affairs 16

Profile Turnover, including a small amount Caerphilly works, where it produced a The company has moved to its new leading to times of extreme busy-ness of inter-group trading, is now in excess of range of consumer magazine titles, and premises and re-equipped completely at a followed by other more slack periods, the Company Stephens & George £20m, having first reached £1m as retrenched back to its English plants. Welsh total cost of £12m. One of the latest pieces company has agreed the introduction of Sector Printing recently as 1984. The customer base is company, Colourprint UK has recently of kit, a new binding plant costing £2.2m, annualised hours with staff. Location Merthyr Tydfil spread throughout the UK and Ireland announced the concentration of its print enables the company to carry out binding Under this system wages remain and is serviced by a ten strong sales production in Milford Haven with Cardiff for other larger printers who send unbound constant but employees can be called Andrew Jones is a man with a highly force. handling finishing work and its sales and magazines to Merthyr for this purpose. The upon to put in extra time when the attuned survival instinct, something Stephens & George has survived to estimating operation. demand arises because in many companies workload is busier and to take more time that is really needed in one of Britain’s approach its 100th anniversary in an Stephens & George itself had a full-out printing capacity, called into use off when this is not the case. A most competitive industrial sectors. industry that closely mirrors the near death experience in 1991 when its ahead of big printing seasons such as the management information software country’s economic cycles. When the then bankers unexpectedly demanded months leading up to Christmas, can package from the automotive industry As managing director of Stephens & economy goes into reverse, companies the repayment of its £750,000 substantially outstrip binding. Rather than has also been introduced through IT George in Merthyr Tydfil, he now presides feel the pinch and cut back on their overdraft in seven days. The company, install more binding capacity themselves supplier, Wasp IT of Nantgarw, 20 miles to over a family-owned business that has advertising. The pain is felt directly by Andrew Jones observes, was forced to the large printers would prefer to contract the south on the A470 and this is also grown to become Wales’s biggest printer magazines, which immediately cut their out these requirements. sack employees and sell assets, helping to make operations more (though still only around 128th in the pagination, or in some cases cease including company cars, and had to efficient. overall UK list out of 15,000). With 235 publication, with knock-on effects for the BINDING CAPACITY persuade its customers to bring forward The company has received support employees it is also one of the biggest printing trade. Other printing payment of their bills by 30 days. The ongoing investment programme, employers in the heads of the Valleys from the Assembly Government and requirements also fall back during any The company survived (and which is being supported by Regional town. other public agencies in Wales but has not economic downturn. subsequently changed its bank) and has Selective Assistance grants from the Founded in 1912 in Aberdare, the always found the processes easy. Andrew In the past couple of decades the used the lessons it learnt to put itself on a Welsh Assembly Government, has made business made the move over the hills to Jones is not convinced either that the print industry has suffered two severe sounder footing to continue to win a big difference to profitability, Andrew Merthyr in 1969 where it now occupies a most appropriate support measures are in downturns. In 1991 after the first Gulf contracts in trading conditions that remain Jones reports. One of the quirks of the modern factory on top of a hill, looking place. The grant application procedures, War, business evaporated, creating large highly demanding and seem likely to stay printing industry, however, is that with back towards Dowlais, the iron town including preparation of plans that would swathes of overcapacity across the that way. Under the leadership of Andrew most of the items produced being highly cradle of the industrial revolution in satisfy civil servants, is described as sector, which only recovered in the late Jones, who took over from his father time-sensitive, equipment has to be Wales. From this location some of onerous, a problem the company solved 1990s as internet fever took hold and Gareth, the company has recognised that doubled up to ensure jobs can be Britain’s biggest business-to-business eventually by using consultants, Deloitte, advertising took off again. The bursting of survival and investment go hand in hand. switched in the event of a breakdown. A magazine titles fan their way out to the dotcom bubble in 2001 brought magazine producer whose monthly run to advise. Grants totalling £3.6m have subscribers all over the United Kingdom. another savage industry downturn. fails to reach subscribers on time is been awarded to the company, payable as Stephens & George itself is responsible Conditions at present, according to unlikely to be forgiving. spending occurs on new machinery, for putting 11m packages into the postal Andrew Jones, are still “severe”, with Stephens & George has also worked facilities and of course new employment. system every year. most printers reluctant to ask clients for hard to introduce management The grants regime needs, however, to increases to match extra costs simply for efficiencies in a bid to improve profit be improved, Andrew Jones believes, if CUSTOMER BASE fear contracts will be put out to tender margins, currently running at around 4 companies like his are to prosper. “We Two thirds of turnover comes from and lost to rivals desperate to acquire per cent and below the sort of profit need to be given more favourable tax magazines, which the company started business at any price. levels most public limited companies treatment for investing in high cost capital producing in 1979, with a further 25 per In Wales as elsewhere there have would find acceptable. To cope with the equipment. It is ridiculous, too, that cent coming from commission work – been casualties. St. Ives, one of the two variable workload that all printers face, corporation tax has to be paid on the grants one-off items for clients – and the remaining big public limited companies with pre-Christmas publications, holiday we receive.” A lower overall corporation tax remainder from contract binding. left in UK printing, upped sticks from its brochures and other seasonal work all rate would also help, he believes.

Institute of Welsh Affairs – Roaring Dragons 17

The company, Andrew Jones points with operating from Merthyr Tydfil. Senior Other challenges facing the company out, has to compete in a national UK management positions are difficult to fill, include the growth of the internet, which market and pay the same wages as other with some employees travelling from as could over the longer-term result in a businesses in more prosperous parts of far afield as Newport and Swansea. Two decline in demand for the printed page, the country, yet because property values highly skilled printers commute weekly (though newsagents’ magazine shelves are lower borrowing costs can be higher. from Birmingham. Other skilled labour suggest this is hardly happening yet). This problem arises because in London and services also often have to be Andrew Jones, however, believes the two and the South East security is provided brought in from outside the area. media – internet and print – will by the value of the buildings businesses To meet its demand for skilled machine continue to have complementary roles occupy. By contrast the economics of the operators, the company has turned its back for a long time to come yet. area mean that Stephens & George’s on a British Printing Industry Federation factory, purchased on a 15 year (BPIF) two-year traineeship scheme and ACQUISITIONS mortgage, is worth less than it cost to gone back to apprenticeships. The scheme Output from the Merthyr plant runs put up. was introduced, Andrew Jones, points out, at 15,000-25,000 pages a month because the five-year apprenticeship, later depending on the time of year and the BANK LOANS reduced to three years, was considered too limitations of the site mean further After its falling-out with its previous long. The unintended consequence of the expansion there is probably ruled out. The more unsympathetic bankers, Stephens & new scheme was that individuals who had company has, however, set a target of George now has a good relationship with completed two years were expecting to go reaching a turnover of £30m which could Bank of Scotland (which took the on to the rate for fully trained printers when lead to a further 100 jobs being created. company’s account over on acquiring the their training was in fact still incomplete. Growth could come, Andrew Jones Bank of Wales). Most of the company’s The company now recruits apprentices to believes, through acquisitions, leading to financing requirements have been met meet demand and currently has about 10 in a further much needed rationalisation of through normal bank loans and finance training. the sector in Wales, but the opportunity agreements, and from private sources, The company also takes in adult would have to be the right one. and this pattern is likely to remain. trainees and provides them with a Printing is an industry in which Venture capital companies have made slightly different training reflecting the Wales could do well, he believes, but approaches from time to time with offers fact that they will usually have worked clearly it needs strong nerves if any to finance expansion in return for equity. somewhere else and will already have individual company’s impressions are Their demands are seen by the company acquired transferable skills and positive going to be abiding. as rapacious, with sizeable chunks of the work attitudes. Andrew Jones sees “The grants company’s equity being demanded in difficulties arising, however, with new age regime needs return for little more money than would discrimination legislation. The company be needed to buy one new machine. would like to keep workers on beyond 65 Stephens & George to improve if companies are Similarly, the company is not convinced but is faced with a Catch-22 situation. Goat Mill Road it would raise enough money from a float Not to give these employees the death- to prosper. We need to be Dowlais Merthyr Tydfil on one of the London markets to justify in-service benefits available to other given more favourable tax CF48 3TD treatment for investing in taking the decisive step of effectively employees would, he fears, amount to handing over control of the business. discrimination. For employees over 65, T 01685 387777 high cost capital equipment” Though the company has a loyal however, the insurance companies insist F 01685 352042 Andrew Jones workforce, there are problems associated on exorbitant charges. www.stephensandgeorge.co.uk

Roaring Dragons – Institute of Welsh Affairs 18 RHYS DAVID

Profile well beyond the borders of the old county of Montgomeryshire. Moreover, its Company Wynnstay determination to try to be a leader in that Sector Agricultural Supplies process has helped it to avoid being a Location Llansantffraid-ym-Mechain footnote in history itself and instead

It is a village with one of the longest Welsh names, which few even of Wales’s inhabitants could confidently place on the map, but it is home to one of the country’s most successful Welsh League football sides of recent years – The New Saints (TNS) – and to one of Wales’s biggest domestically-owned companies and among the biggest private sector employers in rural Wales.

Llansantffraid-ym-Mechain is not much more than a dot on the map in the rolling Powys countryside on the road from England’s most Welsh town, Oswestry, to Dolgellau but it is here that the mighty Wynnstay Group, now a diversified agricultural supplies manufacturer and distributor, and retail outlet operator, has its headquarters and main animal feed plant. With its origins as one of the agricultural co-operatives set up all over Britain by farmers more than a remain a major employer and contributor century ago to to the Powys and wider Wales economy, seeding success ensure they were seeding success employing more than 400 individuals not at the mercy of directly and a further 80 in joint ventures. The Powys-based quoted company has been a major force in the sometimes As Bernard Harris, the managing consolidation of the agragriculturalicultural supplies sector ooverver recent years, unscrupulous commercial feed merchants, director explains, some of the most crucial Wynnstay has grown through a series of steps were taken in the early 1990s. This acquiring companies in Wales and in England. It has also staked out a mergers and acquisitions to become one was a time when mutuality – ownership position in retailing throughthrough its own chain of outlets serving farmers and of the main forces in the consolidation of by the membership of organisations – was the sector, with operations well beyond beginning to come under pressure, with other countryside dwellers.ellers. supplying farmers with their needs, and building societies, anxious to raise funds

Institute of Welsh Affairs – Roaring Dragons 19 for expansion into other banking activities, With some difficulty the farmer 420,000 tonnes of compound and leading the charge towards public limited shareholders were persuaded that a blended feeds a year. Wynnstay is company status. change to public limited company status providing 160,000 tonnes a year of Wynnstay, which had amalgamated was the way forward and this step was materials to farmers in its supply area with a neighbouring co-operative, Vale of taken in 1992. The illiquidity of the from its Llansantffraid plant, having closed down a Pye-Bibby factory in Shrewsbury, and Investment Market (Aim). In 2004 Welsh Feed another move was made, this time to Producers supplies Aim itself, raising a total of £1.5m to its area with fund Wynnstay’s growing activities. 90,000 tonnes Farmers, mainly in the areas of the co- from its operatives that have merged to form Carmarthen mill. Wynnstay, including Eifionydd in 1994, still “This was an important strategic move own around 75 per cent of the business but for Wynnstay in that it helped us to reduce the remaining quarter share of the company the oversupply of animal feed that is now in the hands of other investors, continues to affect the industry, to assist in including City of London institutions. economic fleet management and to enable the company to manage the supply of feed JOINT VENTURES in a more efficient manner,” Bernard Harris The business now focuses on two says. Being a listed main activities – agricultural supply and The process has continued more company rural retailing – but has also used a string recently, with the £2.5m acquisition of involves a lot of time- of joint ventures to extend its reach into Glasson Group, based at Glasson dock other ancillary areas. In 2005 in a highly near Lancaster, which blends fertilisers consuming activity but complicated deal that had to be and manufactures pet and other speciality involvement with the City of engineered out of the failure of another products. The company had sales of London is stimulating. We business, W & J Pye, Wynnstay joined £36.3m in the latest financial year and is have chosen to play in the with Carrs, Billington to acquire trade involved in the importation, shipping and carried out under the Bibby Agriculture trading of 346,000 tonnes of animal feed Premier League” Clwyd Farmers in 1989, was itself feeling the shares – sales could only be made when name in Wales and the Borders. materials as well as the blending and Bernard Harris constraints of co-operative status and not matched buyers and sellers could be The new business, which is 50 per distribution of 55,000 tonnes of fertiliser receiving a particularly sympathetic hearing found – represented a serious drag on the cent, owned by Carrs Billington, 25 per products. It is also a manufacturer of pet from its banks. “The bank took the view that if share price, which after a few years had cent by Wynnstay and 25 per cent by and speciality products. For Wynnstay the the company needed to be refinanced, as was risen to only around £1.60 from the Welsh Feed Producers, itself a joint 50-50 purchase complements the activities of then the case in order to finance its future original £1 price, representing what was venture between Wynnstay and its arable and feeds division supplying growth, the farmer shareholders should do felt to be a serious under-valuation of a Carmarthen-based CCF, has already feedstuffs, seeds, and fertilisers to farming so.” In practice, it was, of course, very basically strong business. As a result a consolidated production facilities to customers but just as importantly also difficult to ask farmers struggling to find the further move was made in 1995 to join achieve economies of scale in widens Wynnstay’s geographical reach, funds to invest in their own businesses to Ofex, then the third tier exchange behind distribution. The new grouping bringing it new customers in the north of stump up cash for Wynnstay. the Stock Exchange and the Alternative manufactures and distributes some England and southern Scotland.

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Aim listing has opened up expansion The selection of this sector has been plants and shrubs to garden centres and capacity by a further 25 per cent, and Joint ventures represent the other way possibilities such as this for Wynnstay but deliberate because it represents a niche D-I-Y sheds. Importantly for Wynnstay, further emphasis is being placed in in which the business has been extended, has drawbacks as well, Bernard Harris that is not already heavily colonised and the purchase of Foxmoor has also given Foxmoor’s growth plans on architectural again not always to the plaudits from the admits. One of these is the difficulty because it enables the company to deepen it experience and exposure on digital plants such as ornamental grasses and investment community, which regards analysts sometimes have in understanding further its links with its predominantly television shopping channels, one of the ferns. them as peripheral. Bernard Harris is the strategic choices the business is making agricultural customer base. A recent outlets the plant grower uses to sell its Pet supplies offer another possible convinced, however, of their value. Joint and the prejudices they can bring to bear acquisition, Quins Farm Supplies of products. This expertise could be retail avenue that Wynnstay is exploring. ventures, he points out, are a means of against certain types of business structure – Newtown, a supplier of animal health care developed to sell other products offered Currently, the sector is dominated by generating new streams of income but can in this case one with more than one main and nutrition products as well as general by Wynnstay through its retail outlets. Pets at Home, leaving even the big also offer smaller partners an exit route activity, a sign the City is inclined to hardware items and a range of country The company has also linked with supermarkets such as Tesco trailing, a where no obvious succession is in place. In interpret as muddle, however clear-sighted sporting goods, including shotguns, has Channel 4’s City Gardener, Matt James, position Wynnstay feels needs to be addition to its share in Welsh Feed the thinking behind it. The City, too, Bernard brought a previous competitor into the in a special promotion to launch its challenged. The group is currently looking Producers, Wynnstay has a stake in Youngs Harris argues, is obsessed with sales growth group and previous trade in its two stores Matt James Collection of plants. This has at making acquisitions in this field and Animal Feeds, a Staffordshire based and is inclined to interpret lower turnover has been relocated at Wynnstay’s sites in focused on a range of architectural, aims ultimately to establish a standalone company which distributes equine, pet even if accompanied by higher profits as a Welshpool and Newtown, where the drought-resistant plants, a growing pet business and possibly also standalone and wild bird food, mainly to pet shops step backwards. group last year opened a flagship new sector of the market. A new site has also angling stores. The group already has a and equine sales outlets from distribution Wynnstay itself sees business benefits store on the outskirts of the town. been acquired in Devon to increase specialist equine outlet in Warwickshire. units in Merseyside and Cheshire and has from being a strong survivor in its traditional a turnover of about £6m a year. A new business, agricultural supplies, even though GARDEN CENTRES plant to pack wild bird seed has recently the market has declined in recent years as a Other retail sectors have been been commissioned for sales in Wynnstay result of the pressures on farming and to examined, Bernard Harris explains, stores and to the existing customer base some extent the switch to organic farming, including garden centres, but the margins of pet stores and garden centres. A fuel where fewer inputs are required. The total achievable in this extremely competitive supply subsidiary, Wynnstay Fuels, is 40 fertiliser market in the UK (where it has a sector were too narrow, Wynnstay per cent owned by the group delivering five per cent share) has, for example, fallen directors decided. “Many traditional agricultural, commercial and domestic fuel from 7.2m tonnes to 3.8m tonnes in the last garden centres make very little money and oils in Wynnstay branded tankers. 10 years, though this is mainly as a result of are having to change their business model better environmental controls.Wynnstay to become visitor destinations, offering HOUSEBUILDING takes the view that to be one of a small everything from food to Christmas Perhaps surprisingly, Wynnstay also number of suppliers in a consolidated sector decorations, confectionery, greeting cards finds itself a house builder in mid and will enable good returns to be made, and is and gifts,” Bernard Harris says. They are north Wales through a joint venture, therefore a sound strategy. also beginning to experience renewed Wyro Developments, with local building The City by contrast is somewhat competition from do-it-yourself stores firm, S.J.Roberts Construction. Initially more enthusiastic about Wynnstay’s which are responding to the shrinkage in developed to make use of surplus group expanding retail business where it now their basic market by extending into sites, including a number of old railway has a total of 25 stores in mid and north garden centre territory. sidings from which seed and other Wales and the English Midlands, Wynnstay has chosen instead to agricultural supplies used to be providing a range of products for both invest in a supplier to garden centres, distributed, it has now its own land bank, farmers and the wider rural community, acquiring the Devon-based business, currently estimated as sufficient for the including hardware, equine and pet Foxmoor, which has four sites in the West next three years. The business is never products, and country clothing. Country growing and supplying pot likely to challenge the main house

Institute of Welsh Affairs – Roaring Dragons 21 builders but, according to Bernard Harris, costs will have to be accommodated from Llansantffraid and Carmarthen where the much as 700,000 tonnes of wheat a year has been growing quickly. towards the end of 2006. company has its other feed operations can from UK farms for its existing plant in The units are all timber frame and In announcing the company’s half year take three hours by car. Indeed, poor Manchester, switching from imported sites within Powys incorporate a 30 per results, however, the chairman, John Davies, communications, according to Bernard maize. It has already formed a partnership cent social housing element that is forecast some recovery in the company’s core Harris, has to be seen as a contributing with Tesco, the supermarket operator, and transferred to housing associations for agricultural activity in the second half. factor behind the failure of some Greenegy the biofuels market leader in the disposal to first time buyers or others Livestock prices were improving helped by the businesses to take root and succeed despite UK, to develop biofuel blends for sale needing lower cost accommodation. Units lifting of the ban on the export of both inducements in and around Newtown. through petrol retailing outlets. This on a recent mainly three and four livestock and meat products and this would While the City can seem to lack development could have a very significant bedroom property development at feed back to the supply industry, he forecast. understanding, the Aim quotation has been of impact on the agricultural supply market Abermule are priced from £90,000 to Increased concern over food miles and the benefit.The company secures tax benefits for as farmers gear up to meet demand, £300,000. Wynnstay’s involvement in this long supply chain for imported food products shareholders but perhaps most importantly the Wynnstay believes. sector enables it to extract value from its that could be grown locally could also be listing is a stimulus to better governance and Some changing of the guard is about surplus sites and to offer its 20,000 divisions, arable £36m (which includes beneficial to the UK agricultural industry, corporate social responsibility. “Being a listed to take place and this could influence the account holder customers a mechanism advisory services, crop sales and seed leaving the company optimistic that as a company involves a lot of time-consuming activity direction the company takes as well. for gaining value from their own processing at a plant in Shrewsbury,); major force in the consolidation of the but involvement with the City of London is Bernard Harris, who joined the company redundant buildings. The two partners also feeds £35m: and stores £28m, all agricultural supplies sector it could continue stimulating.We have chosen to play in the Premier in 1980, is due to retire in the next year bring complementary strengths according contributing roughly similar proportions. to find growth within its core supply business. League so that is fine,says Bernard Harris.” or so together with other colleagues who to Bernard Harris, Wynnstay can offer land The £1 shares issued when the company In developing the company to its joined at much the same time. However, and finance while S.J.Roberts Construction went public are now worth nearly £10, present size directors have relied heavily CONSOLIDATION STRATEGY Bernard Harris, suggests, there is a good can offer building expertise. valuing the business as a whole at more on internal resources, borrowing usually The dilemma for the company now is team ‘on the bench’ waiting to take over. than £26m. Staff receive an allocation of only to meet seasonal demands. The whether to continue to regard serving its With farmer shareholders – a BRANDED PRODUCTS shares shortly after joining the company Welsh Development Agency (now part of farmer customers – currently more than relatively conservative group – still a The group is also backing moves by and can acquire more through a Save as the Welsh Assembly Government) has two thirds of its turnover – as its main substantial majority, it seems unlikely Welsh farmers to move downstream you Earn (SAYE) share option scheme been generally helpful, Bernard Harris priority or whether to chase a higher there will be a lurch in a completely new closer to the consumer through the and some have made significant capital believes, particularly in making land share price with a strategy that would tilt direction or sudden abandonment or sale development of branded products and is gains as a result. available for purchase, but not a generous the balance more heavily towards of any substantial existing activity. In a a partner in a new meat marketing This year so far has proved difficult provider of funds for expansion. “When retailing. At present the company says it changing agricultural and rural venture, Celtic Pride, in which another partly as a result of the introduction of there is a capital project needing to be will continue to look for acquisitions in environment, however, Wynnstay will, it strong Welsh business, Castell Howell, the EU Single Farm Payments (SFP), which funded the WDA would generally ask how order to continue its strategy of acting as seems, continue to evolve as it has done Carmarthen based wholesale food although handled much better in Wales many jobs it would create. Usually, such a consolidator within agricultural supply, consistently over the past 90 years. supplier, is also a stakeholder. than in England, has still affected farmers’ projects result in a stronger business but alongside continuing to develop its retail Developments of this sort will be cash flows, with effects that are likely to fewer jobs,” he suggests. The Assembly operations and joint venture activities. vital, Bernard Harris explains, if Welsh take some time to settle down. A further Government, however, has, he believes, There is also the prospect of a huge Wynnstay Group farmers are to fight off competition from impact will also come from the reduction been a force for good in rural areas of new market opening up through biofuels, a Eagle House the increasingly high quality producers in in sheep numbers and hence sales, which Wales, showing understanding of the development that could herald a Llansantffraid Brazil and Argentina. will result from SFP. Energy price rises culture and needs of rural communities. renaissance for farmers of rape and wheat, Powys SY22 6AQ In its last full financial year the have affected manufacturing operations Further investment in communications the main products likely to be used. Cargill, T 01691 828512 company had modest (though still and consequent higher fertiliser prices in mid-Wales, is however, urgently needed, the huge US agrifood combine, is investing F 01691 828690 record) pre-tax profits £2.87m on have had a knock-on effect on sales. the company believes, for businesses in the heavily in new plants in Britain and Europe www.wynnstay.co.uk turnover of £101m, with the three main Further large scheduled rises in energy area to prosper. The 112 miles between to crush seeds and could be buying as

Roaring Dragons – Institute of Welsh Affairs 22 GLYN MON HUGHES new foundations The bold decision by one of Wales’s oldest companies to restructure itself, shedding some of its less profitable activities, has paid off. The family-owned construction business now finds itself well-established in a number of fast- growing niches and is winning orders from big clients outside Wales, including some of the biggest names in retailing and leisure.

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Profile Mark Watkin Jones, who took over in 2001 from his father, Glyn, now heads Company Watkin Jones the company, which employs 237 people. Sector Construction They are based at their Bangor Location Bangor headquarters with other offices on St Asaph Business Park alongside the A55, and over the border in Manchester – a move described as a natural progression into a neighbouring big business centre. Yet, while the growth of the company in the last decade or has been Perhaps it is in part the legacy of slate rapid, it has not been without its – the material that once roofed challenges. “We didn’t really plan to grow burgeoning industrial towns and cities the way we did,” says Mark Watkin Jones, in Britain and beyond – but north Wales winner of the 2005 North Wales Business has a strong stake in the construction Person of the Year award. “As a result, we industry. David McLean is a big player in ended the financial year in 2002 having the regeneration of cities, and Redrow, turned over £127m but a profit of only a its north-east Wales rival, is one of the little over £3m. That’s a lot of hard work UK’s biggest house builders. for not much reward. We felt, at the time, that the business was out of control.” A less familiar name is Watkin Jones but it is still a multi-million pound CASH FLOW family-owned operation that can trace its The directors took the bold decision roots back more than two centuries to restructure the 210-year-old business spanning nine generations, making it completely. easily one of the oldest companies with a “Over the next 12 months we halved one point it was the business that was 2006. This annual league table, ranking record of continuous trading in Wales. our sales to £62m. That, naturally, had a controlling what we were doing not us the UK’s 100 private companies with the The first family member, Huw Jones, marked effect on our cash flow. Of course, controlling the business. That has now fastest growing profits over a three-year set himself up in business in 1791 as a our creditors had to be paid but we been reversed. I’m happy with that since, period, positioned Watkin Jones at carpenter, passing on his woodworking virtually stopped our business in order to as a private business, why should I kill number 51. Between 2002 and 2004, skills to his cabinet-maker son and facilitate what we had set out to achieve. myself running round the country and profits rose 74 per cent a year from an grandson. The first Watkin Jones, born in We also received considerable support getting no reward for doing just that?” annualised £1.1m to £5.8m. In addition, 1842, also a skilled woodworker, from our bankers who obviously saw the asks Mark Watkin Jones. as profits have risen, risk has been branched into building, an area in which wisdom of our plans. These had shown us Recognition of the company’s reduced, leaving the company to the family has been involved ever since. that if we did less, we would make more achievements has quickly followed. concentrate on those areas that give it Indeed, the company has been family-run profit. Watkin Jones was the only Welsh- the greatest returns. since it was set up more than two That is exactly what has happened. headquartered company to be included The company has been formed into centuries ago with the lineage traceable Profits have grown substantially over the in the Sunday Times three main divisions: homes, construction from those days to the present, with a last four years and last year the company PricewaterhouseCoopers Profit Track 100 and student accommodation. The list of new generation waiting in the wings. turned over £60m for a profit of £6m. “At national league table published in April clients includes many household names:

Roaring Dragons – Institute of Welsh Affairs 24

Tesco, Aldi, Lidl in the retail sector; Housing development for the Jones is also recognised as a prime Nuclear Electric, the Welsh Development company has by contrast been an under- developer of apartments nationwide, Agency, as well as local authorities in the performer. Here, market conditions with a number of significant commercial and manufacturing sector; dominate, and in any slowdown the developments centred on Nottingham Allied Domecq, Forte, Greenalls and contractor has to be capable of adapting and Manchester, as well as in other Whitbread in leisure; and the National quickly. Watkin Jones decided it was not quality locations, such as Llandudno. Health Service and a wide range of prepared to sell at a discount, buy up A separate move by the company into private developers. more land, build more houses and hope the sales-investment market at a time when “Construction was, perhaps, the most the market would improve so instead it the long-winded housing boom could have obvious division for us to create,” took a hard look at what it was doing in been teetering on the brink of bust could in according to Mark Watkin Jones. “We this area. retrospect be seen as brave, yet this sub- operate largely in North Wales, branching division of the homes sector has justified out over the border into Cheshire, though CITY APARTMENTS the risk by remaining buoyant. The company “It has to be for some clients we operate nationwide. The result has been the development owns sizeable acreages in prime locations We have been involved in Tesco’s new good to work of a now well-established brand of up- such as south Manchester, Cheshire and the ventures at Ruthin and Porthmadog as well market two- and three-bedroom homes North Wales coast and, according to Jones, with big clients as we get to as in Hereford and Burscough Bridge in for sale in North Wales and the border ‘is always on the lookout for new know them and understand Lancashire.” regions of North West England. Watkin development opportunities’. their business needs. We can WINNING THE CONFIDENCE work through their problems, Winning the confidence of a major “Some say we’re heading for a find solutions and minimise corporation, such as Tesco, so that repeat property crash,” says Mark Watkin Jones. any risk to our own business” business follows is clearly of vital “From our perspective, the market is buoyant and, while it would be foolish to Mark Watkin Jones importance. “It has been good to work closely with big clients as we get to know try to predict one year ahead, never mind them and understand their business needs. ten years, at present I would say we are on That means we can work through their a high.” problems, find solutions and minimise any “There is still a lot of money in the risk to our own business,” says Mark economy,” he added. “With interest rates Watkin Jones. “The most recent store built so low, people will see a much better for Tesco was trading just 11 weeks after return on their investment as prices we put the first steel up.” continue to rise. But this sector is closely The student accommodation linked to our student accommodation division operates UK-wide, too, and is ventures. People are prepared to buy six- currently producing 1,500 bed-spaces bedroom flats in student developments annually. The operation is development- and thus spread their risk. To have six led with the North Wales company people paying the rent is much less risky securing the land, working up the than relying on one.” planning application, constructing the A fourth division of the company is property and then selling on the entire being developed, which will handle big package. contracts in excess of £20m. Rather than

Institute of Welsh Affairs – Roaring Dragons 25

expand other divisions to the point that Mark Watkin Jones is adopting a they have worked hard, moved into other The company also seeks to develop The company can look back at a the company could lose control, the plan wait-and-see approach on the absorption parts of the company and created new roles non-construction skills in other business pedigree spanning more than is to manage projects and tender out of the WDA into the Welsh Assembly for themselves. We are firm believers in the employees, but it believes some of the two centuries. Handwritten ledgers from contracts so other companies carry out Government. “The WDA’s advice has, in concept of loyalty. Give something to organisations set up to help companies the end of the 19th century are still held work on behalf of Watkin Jones, a now the past, been invaluable and they’ve someone and there will be a pay-off if we locally are too attuned to the needs of which testify to a ‘a bag of cement was familiar model within the construction always been supportive of business. Their ask for something back in the future.” start-up firms or very small businesses on sold to Mrs Jones’. Judging from the sector. knowledge base has helped us hugely but Despite positive employment policies, the one hand, or companies where the judicious planning that goes into Watkin Restructuring has been carried out it seems we are going into a time of recruitment poses a problem for the workforce can be counted in thousands Jones’s present day dealings, the with the strong support of primary uncertainty. Merging all these institutions company, remoteness from the bigger on the other. Medium-sized enterprises, company’s ledger equivalents seem to banker, Bank of Scotland, which Mark may seem to be a good idea but the WDA population centres being one of the main Mark Watkin Jones argues, are puzzlingly have every chance of being available for Watkin Jones praises for taking the have worked well and I feel it should have factors “Based in Bangor, we can mostly only left out of the equation. inspection in the 23rd century as well. time to work with them and fully been allowed to continue doing this good attract people from east of here,” explains understand the business and what it work. We’ve not had a great deal to do Mark Watkin Jones. The company has PROFESSIONAL SERVICES was trying to achieve. The company with other institutions but we’ll watch to responded by working closely with Coleg Although the company has in-house remains resolutely in private hands and see how things develop.” Menai in Llangefni, offering six scholarships a wide range of relevant skills across there are no plans to take it public, each year so that 16 year olds can begin most of the business sectors it requires, though this could change at some ENHANCING SKILLS studying for a BTEC or HND in building. This certain professional services – legal and point in the future. Public sector help has also been used is intended to create a supply of employees accountancy in particular – have to be for skills training, a vital issue for for the company as well as helping to raise acquired from further afield and, and construction companies throughout Wales. the profile of the construction industry as a usually outside Wales, too. “We tend to “We have been closely involved with ELWa possible career path. To date,Watkin Jones seek professional services in centres like [also part of the has not had to rely on a Manchester, Liverpool or Cardiff,” said Welsh Assembly supply of workers from Mark Watkin Jones. Government since Eastern Europe but the “There are very few professionals in May 1] and we work company says it North Wales who have the expertise or hard at enhancing remains possible it will experience to be able to cope with the size the skills of our have to do so, if it of projects with which we deal. Getting to workforce, as staff continues to prove hard cities in North West England is not so bad for retention is very to combat what us, if we need to but transport links between important to us.We appears to be a dearth north and south Wales remain diabolical. want to help people of local workers. The company is one of many in better themselves “It’s all part of north Wales that argue that it is easier to educating young get London than to Cardiff. “Fortunately, Watkin Jones people to understand we have broadband connections at our Llandygai Industrial Estate Strong links have also been formed and move into other that it is possible to have a well-paid and office sites and everyone, from office Bangor Gwynedd with the public sector, including the areas.We have secure future in building. The education junior to managing director and chairman, LL57 4YH Welsh Development Agency [part of the helped to train system is very supportive but we need to has a laptop or desktop computer. We T 01248 362516 Welsh Assembly Government since May people who have do even more to attract high-quality encourage the use of the latest IT, whether F 01248 352860 1 2006], for which Watkin Jones has perhaps started people into the industry and we are doing for planning or design or office www.watkinjones.com worked on a number of projects. work in accounts, all we can to encourage that. management.”

Roaring Dragons – Institute of Welsh Affairs 26 LYNNE WALSH & RHYS DAVID

Profile With many of Cardiff’s oldest building companies, such as W.E. Turner, now part of Company Opco wider groups based outside Wales, Opco, Sector Construction Services with a direct workforce of more than 100, is city transformers Location Cardiff city transformers a welcome addition to the list of companies based in the city, and a clear demonstration For a company formed only in 2001, that the entrepreneurial skills to start Opco, the Cardiff based construction successful businesses are firmly present. group, has quickly become involved in Only three years into its existence years the projects literally spanning the whole company was named as the 2004 top history of building in Wales. performer in the Fast Growth 50 award sponsored by the Western Mail and All those who have passed Cardiff Castle in Deloitte, the business services firm. Turnover the course of 2006 will have seen the has grown to more than £40m (up from company’s logo on the site of the new £3m £27.8m in 2004-5) and the current order two storey underground interpretation book stands at more than £100m. centre Opco is building for the castle’s owners, Cardiff City Council. This sensitive LEISURE DEVELOPMENTS scheme has already revealed not just post- South Wales remains the core area of mediaeval, Mediaeval and Roman finds, as activity for Opco with projects currently might be expected, but evidence of pre- ongoing at Salubrious Place in Swansea, (a Roman activity on the site as well, making £11m contract spread over 18 months), it one of Wales’s oldest settlements. an £8m leisure development, including an eight screen Vue cinema in Cwmbran, and CARDIFF SKYLINE the £9m St. Catherine’s Corner scheme in A few miles south in Cardiff Bay the Pontypridd. Business is now also being company is working on a number of projects won outside Wales, often as a result of that in this case are helping to transform the successful collaboration with big clients skyline. Opco has worked on several phases on schemes in Wales. Opco is currently of the £85m Century Wharf development by converting a former postal sorting office Westbury (now Charles Church) and, not far in Exeter into another Vue cinema and away from this scheme, is engaged on the has won work with Charles Church in architecturally bold Watermark Bristol on its Muller House scheme. development, 46,000 sq. ft. of residential Opco’s origins go back to the decision In only a few years a construction business set up to utilise some of the accommodation rising ten floors and by its two founders to set up their own latest management and information technology approaches has quickly overlooking the bay. Other big projects in business bringing modern principles of the area include work on George Wimpey’s management and the latest information established itself as a force in the regeneration of south Wales. Its Isis development, which is helping to technology approaches to a business sector success has also been good news for other Welsh businesses joining transform one of the city’s oldest industrial full of financial and other hazards. areas, and conversion of the former Granary Construction, as well as having to cope with its supply chain. Store in Lloyd George Avenue. all the other problems faced by business,

Institute of Welsh Affairs – Unsung Heroes 27 also has the added complication of having to integrating an aggressive acquisition strategy services, Reussir for brickwork, GE Carpentry with structured career development, In addition, continued improvements are factor in the possibility of delays as a result and for reshaping the business structure and Services and Denver Construction Services, an exposing them to all the departments being made to our bespoke software of bad weather, the possibility of geological process. He joined Opco in December 2003. architectural aluminium and specialist drilling within the business. The consultancy, Lloyd defects management and activity or other unforeseen site problems, material In the construction industry generally contractor. Its kitchen supplier is Paula Rosa. Masters Consulting, is retained by the monitoring,” say James Coombs and Nigel deficiencies, supplier breakdowns and labour in Britain, individual companies The business has grown to its present company to help improve core people skills, Coulter, joint operations directors. recruitment shortages, all of which can badly concentrate on providing the services they size from an initial £200,000 investment and puts on coaching workshops designed The company is expecting to benefit from hit cash flow and cause banks and other think they can best offer, working in by the founders and has relied on to help staff raise their skill levels and continuing regeneration activity in Cardiff, and financial backers to become nervous. partnership with other specialists, and this LloydsTSB as its main financial partner. deliver greater value in their everyday work. from its spread into other parts of south Wales, Nick Kelly, the chairman and managing is the approach Opco also follows. It works Public sector financial support has not In a bid to ensure staff want to notably Swansea and Newport. It also plans to director, had been managing director of UK with a series of major partners including been utilized by the business itself, though continue to work and make a career with continue to extend its business portfolio, building group, Balfour Beatty, in south house builders, Charles Church, and some of the schemes Opco works on the company, Opco assigns a coach to moving more deeply into commercial buildings. Wales and knew the marketplace well. Ballantyne Homes, Powell Dobson, the receive some backing from public funding. newcomers who has been trained to look Around south Wales it has been responsible for Originally he set out to buy a business that Cardiff based architecture, urban design With work taking place on a number of after the new recruits’ requirements and building a large portal framed extension to Celsa was staffed by competent individuals who planning supervision and landscape design sites and largely in the hands of partners, answer their queries. The company also Manufacturing (UK)’s rod mill at the Castle understood the construction process and provider, and RVW Consulting, a privately runs its own apprenticeship scheme, Works in Cardiff, and for improvements to who wanted to utilize the best technology owned engineering design consultancy. which is now producing trained French food group, Danone’s Evian bottling available for the benefit of the project. individuals able to run their own projects. plant in Abercrave, as well as a £10m project to Failing to find a business that matched his SUPPLY CHAIN build new offices, laboratories, clean rooms and criteria, he decided to set up his own. On site Opco works with another PRODUCTIVITY TOOL warehouse facilities at DePuy CMW (a He was joined by fellow director, Peter range of partners, trying wherever possible The company has also developed its subsidiary of Johnson & Johnson) in Blackpool. Jones, who had worked as commercial to use Welsh companies. “We are own productivity tool, Opcode. “Opcode is Passengers departing and arriving at manager on some of the world’s largest continuing to try to build an in-Wales supply a statement of the processes that underpin Cardiff airport have also benefited this construction projects in some of the world’s chain. We always want to contract to Welsh the running of our business. It ensures that summer from the completion of a £4.1m most exotic locations including Hong Kong, business where we can,” says Stuart Epps. we understand how the overall scope of the expansion and redevelopment carried out by Barbados and Botswana. He had come back These partners include Whitehead for project and those of our commercial Opco. This included a new executive lounge to Britain in 1999 and, after sampling major mechanical and electrical engineering partners interact with our clients’ business and new walkways to serve new stands. projects in London, decided to return to his interests. By deepening our understanding Just what the inhabitants associated native south Wales, again with the objective of the overall project we are better equipped with those early traces of human activity Opco’s headquarters staff are responsible for of forming a company that could offer to predict project outcomes, increase uncovered by Opco under the walls of managing the processes and ensuring clients clients a world-class construction service. He productivity and deliver tangible financial Cardiff Castle would have made of that is get the results – and the buildings – they was able to bring to the new business benefits for our clients,” says Peter Kelly. anyone’s guess. expertise picked up in his previous posts in expected. Much of the company’s effort, Opco has also invested heavily in setting up and running businesses. therefore, has to be devoted to ensuring it technology. All sites now have access to As the business has grown, it has attracted invests in the skills of its managers. its central servers and the company is Opco other experienced individuals, including Stuart “We create an environment where our putting in place an intranet based 54 East Moors Road Epps, the finance director, an accountant who employees can expect to meet fresh, exciting administration system with Opcode at its Cardiff spent four years as financial controller for M&C opportunities and experience the satisfaction core. “We are actively working on the CF24 5YX Saatchi, the UK’s seventh largest advertising of a job well done,”Peter Kelly observes. This deployment of a business procurement and T 029 2046 4255 agency before moving to south Wales in has meant developments such as the payment system, the installation of an in- F 08702 676 726 January 2001 as finance director for National company’s role rotation programme, where house estimating functionality and the roll www.opco-construction.co.uk Britannia group, where he was responsible for graduates and undergraduates are provided out of our site entry management system.

Roaring Dragons – Institute of Welsh Affairs 28 RHYS DAVID accented insurance

Wales’s biggest independent commercial Profile Its deals with the footballing and turnover of more than £20m and cricketing authorities are among a turnover excluding premium of £3.8m, Company Opco insurance company has been at the forefront of number of shrewd moves the Caerphilly- through organic growth and acquisitions Sector Insurance Broking based insurance broker has made over both of other local brokers and the consolidation taking place within the sector, Location Caerphilly recent years from its offices overlooking experienced individuals, many of them adopting information technology solutions and To anyone interested in local league Britain’s second biggest castle. In the either displaced or disillusioned by the developing pioneering staff training methods to football or cricket in south Wales the process it has managed to emerge as an take-overs that have occurred. A recent name Thomas, Carroll will be very important force in the consolidation of new arrival from broker Opus, now part of ensure it can continue to supply a local and familiar. In local weekly or evening the insurance broking sector in the area, Willis Faber, the big US group, is Brynmor personal service. This has established a strong papers the two names are likely to acquiring companies itself rather than Williams, who, as well as bringing appear on the sports pages most being swallowed up by bigger rivals. contacts with some of Wales’s larger platform on which to grow alongside the nights, not as a pair of opening Indeed, in only six years the company businesses, adds a rugby connection to company’s Welsh clients. batsmen or strikers but as important has doubled in size to employ more than the company as a former Cardiff, Wales sponsors of amateur sport. 80 people and achieve a premium and British Lions scrum half.

Institute of Welsh Affairs – Roaring Dragons 29

The company claims to be the largest The main focus is on small and elimination of duplication and reduced expanding into other parts of the south independent commercial insurance medium-sized clients with whom a costs in working with insurers will make Wales market through organic growth brokers in Wales, and incorporates some longstanding and loyal relationship can it possible to offer more advantageous across the region and best-fit acquisitions 12 other small brokerages acquired over be built. “Everything we do is quality pricing for insurance products. of businesses and/or people. Moves the past 10 years. Its strength lies in the based. Our market niche is combating the outside Wales are not being considered services it offers to small and medium- call centre mentality that permeates so STAFF DEVELOPMENT at present. “Our market sized enterprises with insurance premium much of business these days. Customers IT has also been very important for Alongside the broking business, spending of up to but usually well below prefer to be treated as people and not the company’s active staff development Thomas, Carroll has developed a private is combating £500,000 a year. Through its recruitment policy numbers,” says Rhys Thomas, programmes. The Campus package clients division specialising in handling the call centre mentality that of Brynmor Williams and others, however, managing director of Thomas, Carroll developed by industry giant, Axa, the the household and motor insurance permeates much of business it has a strategy to develop much further (Brokers) French company that now owns several requirements of directors, other key these days. Customers prefer in the higher corporate sector, hitherto Crucial to this has been the of Britain’s leading insurers, is on all individuals and their families. “We the safe domain of national and investment in IT, which has enabled the desks, and staff members are encouraged recognise the unique needs of clients to be treated as people and international brokers. company to link up with the internet- to take relevant modules. These offer whose assets and, indeed, lifestyles mean not policy numbers” based middleware operated by six big training in skills such as negotiation and that the insurance protection they require Rhys Thomas COMPUTER SYSTEMS insurance companies – Allianz, Axa, can count towards insurance industry cannot be provided by off the shelf polices Investment in information Groupama, Norwich Union, Royal & Sun examinations. They also provide evidence or the one size fits all direct approach,“ technology has helped to drive growth. A Alliance and Zurich – in what is known as to the Financial Service Authority says Rhys Thomas. total of £300,000 has been spent on new imarket. This is effectively a portal regulators that the company is being run The company also offers risk computer systems and software with offering entry into an online shopping efficiently. management services to its clients as a grant help totalling £50,000 from the mall where Thomas, Carroll agents can Feedback on training being way of helping them to hold down Welsh Assembly Government, and this find the best deals for clients, organising undertaken and recommendations for insurance premium costs. Small and has enabled Thomas, Carroll to renewals, adjusting policies and making further learning form part of six monthly medium sized businesses, the company strengthen its links with the big insurance amendments as required. All appraisals. Staff are also encouraged to points out, run the risk of not being able companies and to develop products that correspondence will in future also go acquire industry qualifications offered by to find cover unless they can provide can be marketed through the big banks. through this route. For more complex the Chartered Institute of Insurance (CII) evidence of an active risk analysis The company was founded in Cardiff cases the system enables the insurance and are given time off to study. Senior process. in 1972 by Evan Thomas and the late broker and the provider to view staff members have also been selected A separate consultancy service provides Terry Carroll. Evan Thomas himself retired simultaneously on screen the same for appropriate management an on site assessment, including a 325 as chairman in January 2006 having information, making it much easier and development, including MBA courses, and point breakdown of essential areas from previously wound down the bulk of his quicker to resolve issues. management courses offered by the premises to vehicles, to security to own shareholding in the company with Use of the system is expected by Leadership Enterprise and Economic employment conditions and contracts. transfers to the other directors, who are Rhys Thomas to bring significant Development (LEED) unit at Cardiff From this a risk report is produced now the majority shareholders in the administrative savings, enabling the Business School. The company also providing a precise record of the data group. This ownership structure has given company to deploy its people on real recruits at least one graduate each year recorded, with charts to help set priorities the company a strong degree of hands-on customer service activities. “We and gives him or her the chance to learn and an agenda for action. “Risk continuity, enabling it to focus both on believe that with underwriting capacity to the insurance broking business from the management can mean lower premiums and maintaining a quality-led approach to allocate being scarce, insurers look to inside with assignments in various it places you in a better light with insurers business and to expand both its support those brokers that show the ability different departments. who see that you are among the cream of geographical reach and its insurance- to invest in the latest technologies,” he Growth in the immediate period companies that have a risk management related offerings. says. Customers will benefit because the ahead is expected to come from policy in place,” says Rhys Thomas.

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The commercial insurance broking The company was this year “Too many good Welsh businesses business also stands to benefit from a recognised as the 10th best small reach a plateau and seek a partner that all relationship with Royal Bank of Scotland, business to work for in the UK and the too often comes from outside of Wales.” which is providing new client introductions only Welsh company to receive a three in the Newport, Cardiff, Swansea and star rating in the Michelin style awards. RETAINING CONTROL Llandrindod Wells postcode areas. A pan- Growing the business in Wales and Wales campaign using the tag line HEALTHY EATING retaining independent control of it is the “Insurance with a Welsh accent – Yswiriant The awards reflected the company’s determined strategy of the directors who gydag acen Gymraeg” extols the virtues of provision of complimentary membership own the company. “We enjoy what we are keeping business in Wales and avoiding the of a local leisure centre and of nutritional doing and it is the continuity of our slide into the culture of overseas call centres. advice from experts. Staff are provided independent approach that enables us to Thomas, Carroll is one company that has with apples, pears, grapes oranges and attract the best people and offers our not in general found it difficult to recruit the bananas from a fruit station to encourage clients a level of certainty in a sector staff it needs to expand its operations. The healthy eating. Staff surveys suggest where there is usually precious little” says consolidation of the sector in south Wales these and other similar policies are Rhys Thomas. has resulted in a number of individuals with appreciated. Some 87 per cent said in The emphasis that has been placed in the relevant skills becoming available and one survey that they believed senior recent years on developing Welsh they have been attracted to the company by managers lived the values of the entrepreneurialism, however, should, if it its enlightened employment and career organisation and 90 per cent expressed works, provide the company with a development policies. confidence in their leadership skills. growing potential client base within its south Wales target area, and make it easier for Thomas, Carroll to remain an Location in Caerphilly – a borough which portrayed to be. “We spent time preparing acquirer rather than a potential target. If now boasts some of Wales’s most successful our case and this helped. In the end the this proves to be the case, many of the entrepreneurial companies – has been finance was granted without the extensive region’s cricketers and footballers, and advantageous. Though the company’s interviews and bureaucratic processes we had not just the company’s customers will directors had some initial doubts about feared,”says Rhys Thomas. For other finance have reason to be pleased. moving out of Cardiff, where most of the the company has used normal commercial original businesses were sited, the Caerphilly banking arrangements. A good track record location has proved accessible for staff from ensures that relationships are sound and north Cardiff, including Lisvane and Pentyrch funding has always been available. as well as from the Rhymney Valley and The company’s future growth will further afield. The M4 is less than 20 minutes depend partly on developments away since the dualling of Nantgarw hill. Rail generally within the Welsh economy, Thomas Carroll Group links to Cardiff are also good and frequent. where Rhys Thomas sees some cause for Pendragon House Raising finance for expansion, including concern, in particular the drift of Crescent Road the investment in IT, has not been a businesses out of Wales or out of Welsh Caerphilly CF83 1XX problem and the experience of obtaining control. All too often when businesses T 029 2088 7733 grant funding from the Welsh Assembly are acquired from outside Wales the F 029 2085 5230 Government was not the red tape services provided to them by other www.thomas-carroll.co.uk nightmare such transactions are often Welsh firms go with them.

Institute of Welsh Affairs – Roaring Dragons GLYN MON HUGHES & RHYS DAVID 31

Profile volume has recently been commercialised to the National Health Company Maelor Service – Maelor also works through Sector Pharmaceuticals and partnerships with other companies to core care Medical Devices Location Ruabon bring to market late stage and launch products and technologies in other areas not linked to its core critical care strategy. strategy It also owns a complex technology – proprietary micelle nanotechnology – The publicly quoted pharmaceuticals and devices company has struggled in Mix together Wales and that in layman’s terms enables insoluble pharmaceuticals and the result is not active pharmaceuticals to be made recent years but after a thoroughgoing review is hopeful a focus on certain necessarily a prescription for success. soluble. This technology entraps drug product areas where it has key technologies and on the more profitable The big, global names – Astra Zeneca, compounds inside minute particles built Pfizer, GlaxoSmithKline and the like – up from polymers, and can, potentially, world markets will bring it rewards. have limited, if any, Welsh presence, deliver effective concentrations of drugs preferring to cluster instead in south that would otherwise be insoluble. A east England or the north west of the patented technology, it works on active country, notably in Cheshire and various northern cities.

Maelor, based in a semi-rural location not far from Ruabon, south of Wrexham and not far from the border with England, is one of the exceptions. At an attractively modest Edwardian pile adjoining the railway line between Chester and Shrewsbury, the company focuses on specialist pharmaceuticals and devices, supporting patients in critical care, a category that includes drugs, breaking them down into ever- those undergoing emergency or elective smaller components in order to make surgery, and commonly cared for in them soluble. intensive care units. Maelor has made significant advances in this area, with products in LAUNCH PRODUCTS the pipeline capable of providing As well as bringing products and significant benefits in the care of cystitis devices in this area to market – its and chronic pelvic pain, wound care and Volplex gelatin brand used in operating anaesthesiology. It will not be theatres and wards to maintain blood commercialising these itself, however.

Roaring Dragons – Institute of Welsh Affairs 32

Instead, it will license this technology for Tim Wright is frank about the re-acquired and it has since been “As a result of this approach and by partners to develop. challenges he found on his arrival. The successfully re-launched. Sales of the targeting a specific sector we are seeing The business model the company has company, he explains, was trying to do product rose as a consequence by 35 per sales grow. Volplex sales in the second half adopted – focusing on areas where it has too much with too diffused a product cent in the second half of the last financial of the last financial year grew by 35 per specialist knowledge and finding partners range and too wide a scale of year, compared with the first half. cent over the first half and it now has a 14 for others – has been arrived at after a international operations. In addition, a per cent share of the UK gelatin market period of losses, leading during the stronger commercial capability was SISTER PRODUCT and continues to grow rapidly. We have course of 2005 to management changes needed for both the identification and The new focus has also been brought therefore, taken the decision that we want and a rigorous strategic review. exploitation of new opportunities. to bear on the company’s other main to build up our experience in anaesthesia “We perceived that the business was “Maelor, when it was first founded, commercialised brand, the company’s and fluid control in order to become fragmented, both in terms of therapeutic took original pharmaceutical products, catheter maintenance range. Optiflo, which market leader. And, as we do that, we and geographical focus,” said Tim Wright, improved them and developed them was launched in 1999 and is distributed would like to look at acquiring new a pharmaceutical industry professional further. The company had certainly done through distributor Bard, has grown to take products within the area of critical care. with 15 years experience working with good things in the past but there was, and 54 per cent of the UK prescription market, According to Tim Wright, market Pfizer, SmithKlineBeecham and Irish remains, room for improvement. In the and a sister product Contisol, distribution reaction to the refocused strategy has company, Elan, who was appointed chief past, Maelor had developed some useful of which has been retained by Maelor, has been positive, though the share price has “The market executive in October 2005. “There was technology, notably micelle been successfully launched in Spain, yet to reflect this fully. “The market now now regards also the need to build a stronger nanotechnology. At a later stage, Maelor Greece and other international markets. regards us as a much more focussed group became expert in wound care, yet there “We’re very actively promoting Volplex, and that has rationalised products and us as a much more focused commercial capability for both the identification and exploitation of new were large areas within the available we’re doing the same with ContiSol, the distributors to focus on high potential, group that has rationalised business opportunities.” market where improvement was needed.” international brand of the UK product profitable opportunities. That’s beginning products and distributors to Tim Wright’s appointment followed Since the new strategy was launched, OptiFlo,” says Tim Wright. to make us much more attractive to the focus on high potential, that of Geoffrey McMillan, a non- the company has entered into a licensing The decision to focus on devices as market, especially as there is a real executive director since May 2005 and agreement with another UK company, well as pharmaceuticals is deliberate. “The willingness on our part to get on and make profitable opportunities. That the current chief executive of BioFocus. Plethora Solutions Holdings, for the people most involved in critical care are a difference.” is beginning to make us much He was appointed non-executive micelle nanotechnology delivery system. anaesthetists and intensive care specialists, more attractive” chairman, in January 2006 in succession Maelor will provide Plethora with a and they are very familiar with using STRONG POTENTIAL Tim Wright to Alastair Macpherson, who led the worldwide exclusive licence to the pharmaceuticals at the same time as they Although losses – which at one time company to the Alternative Investment technology for application in Plethora’s need to use devices. Given the relatively resulted in the company actively seeking Market (AIM) in 1997. programme for he treatment of low numbers of these specialist physicians, a purchaser for the business – have not interstitial cystitis and painful bladder they are relatively straightforward for a been eliminated, the directors claim to be NEW APPOINTMENTS syndrome. Plethora will be responsible for company like Maelor to access. making good progress. Turnover in the six Geoffrey McMillan previously held product development. Maelor will receive, The critical care portfolio will now be months to end-September 2006 has senior posts with Elan and was recruited in addition to an upfront payment, further built, by identifying grown by 44 per cent to £1.33m and partly for the particular experience he has development and sales milestones complementary pharmaceuticals and operating losses are down from £429,000 in product licensing and mergers and payments, and royalties. devices as well as by extending existing to £93,000. The company’s cash position acquisitions. Other recent arrivals include a Volplex, which had been identified as product lines. The company also intends is also stable. new financial director and new commercial a key area on which Maelor wished to to go further in commercialising critical So what does the future hold for director. The advisory board has also been focus, has travelled in the opposite care brands fully itself. It is also now Maelor? “We’re seeking to establish strengthened with the appointment of a direction. Full UK rights to the product, looking for other critical care products to ourselves firmly in the UK,” said Wright, highly experienced clinician. which had been licensed out, have been distribute in the UK. “and then outsource manufacturing and

Institute of Welsh Affairs – Roaring Dragons 33 sales to the US, Canada, Germany, France, of the firm. “That’s why our website is Italy and Spain. The main thing to critical but we cannot use it for selling, remember is that 80 per cent of the because of the stringent regulations world’s pharmaceutical sales occur in surrounding drugs sales. It is very much the eight territories: the UK, those already outward-looking component of our mentioned above, and Japan.” China is operations. Without it, we cease to be also seen as having strong potential and entrepreneurial and we’d cease to be a Maelor is actively pursuing regulatory company which is out-and-about.” approval for Volplex in that market. The company was originally set up as “Our review showed that we were a virtual organisation with all involved in several territories outside these manufacturing outsourced to Germany countries, where the size of opportunity is and employment is still very small at only inadequate when weighed against the costs eight people. Finding the right individuals of ongoing regulatory support and the to fill vacancies and to expand the potential distraction of the business at this business can, Tim Wright admits, be stage of its development. These agreements difficult. “As we are not the pharmaceutical are now either being terminated or are industry per se [but a specialist operator being treated as low priority.” within it], attracting people with specialities In contrast to many companies can sometimes prove very difficult.” operating in Wales, Maelor has relied very largely on private sector finance, and in SPECIALIST SUPPORT particular its AIM flotation, to fund its Specialist support, too, has to be development. Public funds were not used to brought in from across a wide area. set the company up and support from public “Where we can, we use local people,” said bodies has been limited, the company says. Wright, “but, at present, much of our “Whilst we have certainly received support comes from outside Wales. Much some funding for which we are grateful, I of our marketing and design is undertaken am not aware of any significant amount of in house but, for us, one of the hardest support in the past from bodies such as the things is to find someone who offers the Welsh Development Agency,” notes Tim very specialised service we need. We Wright. “We had support from the local generally use London-based advertising authority for the purchase of computers agencies, simply because the expertise in and we are actively looking for assistance pharmaceutical advertising is from the Welsh Assembly Government for concentrated within the M25 corridor.” Maelor the development of new products The company is now a year into its Riversdale Information technology (IT) is a new strategy and is confident it is Cae Gwilym Road Newbridge highly significant part of the company’s delivering the hoped-for results. Making it Wrexham LL14 3JG development and selling process and it is through into break-even and ultimately T 01978 810153 something the company has embraced profit in the highly competitive F 01978 810169 since its formation, becoming reliant on pharmaceuticals market is now the www.maelor.plc.uk it in recent years to enhance the profile company’s main goal.

Roaring Dragons – Institute of Welsh Affairs 34 GLYN MON HUGHES

Profile Halen Môn sea salt collected from the Menai Straits seas around Anglesey is to Company Patchwork – be found on some of the best dinner The Traditional Food tables in restaurants and homes around kitchen classics Company the world. Sector Speciality Food Women have been at the forefront of Manufacture The Clwyd paté company started by chance 25 years ago to fill a sudden many of these ventures. Rachel Davies, Location Llangollen gap but quickly established itself as a supplier of quality products to founder of Aberystwyth’s Rachel’s Dairy, pioneered the use of organic milk for restaurants and retail outlets. It was also an early adopter of information yoghurts and a range of other dairy technology – now a vital tool in helping it to secure orders through the Wales has long had a reputation for products. Another Welsh company started the raw materials that go into making by a woman, Patchwork – The Traditional internet from all over the world. high quality foods but turning these Food Company has also won markets jewels into branded consumer around the world for its patés. Its goods products and marketing them to are on the shelves of Fortnum and Mason customers around the world has not in London, as well as Selfridges and been one of the nation’s strengths. Harrods. In Wales Howells, the Cardiff Welsh lamb is supposedly the best in department store, stocks its produce, as do the world, as is succulent beef from many specialist delicatessens in the UK. It Welsh black cattle. Seafood delicacies is also possible to pick up a Patchwork paté include Penclawdd cockles and the in international locations from Bangkok, oysters and the particularly Welsh Hong Kong, and Tokyo to the Algarve. dish, laver bread from Swansea. RURAL LOCATION Yet, partly due to the efforts of the Wales Like so many successful Welsh Tourist Board, which has tried to entrepreneurs, Margaret Carter, the firm’s encourage hotels, restaurants and other founder started Patchwork in 1982 on a businesses catering to tourists to use kitchen table in an isolated rural location: local foods, and to Gwir Flas – True Taste, a Victorian shooting lodge on a North an initiative of the Welsh Development Wales hillside near Llangollen. “My Agency, the picture over recent years has mother was recently divorced with three changed dramatically. Welsh meats have young children and needed to pay the become established as branded quality bills. “She worked at that time for a products alongside their Scottish restaurant in Llandegla and they needed counterparts, with market research some paté so she said she would make it. leading to the development of cuts She took £9 from the housekeeping money aimed at particular tastes in France and and started the business off,” says Rufus other discerning markets. Carter, Patchwork managing director. Vineyards in south and west Wales The restaurant decided not to take have won prizes, too, in international any further supplies but Margaret Carter competitions for their ranges and thought she had the makings of a great

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Carter. “They built our factory unit and we bought it from them, so in terms of sheer bricks and mortar we owe our existence to the WDA.” The agency has also provided assistance in the form of tutoring – vital in a critical manufacturing area such as food processing where serious health and hygiene issues constantly need to be addressed. “It’s not so much hand-holding but more piggy-backing. They have also helped us with market research, and advised on investment in information technology and machinery. They make networking possibilities so easy, as well. Of course all that is a major bonus for our business. If there are grants or handouts that we’ve not received, then we do not feel hard done by.We’re positive about our business and that’s our frame of mind.” The support available in Wales is not so easily found across the border in England, says Rufus Carter. “I suspect that is why so many small product and sold instead to pubs and Patchwork’s products are specialist Patés remain the mainstay of the companies like ours choose to come to restaurants in and around Llangollen. and unusual but the company does not company but they have now been joined Wales, succeed and flourish. The support With space running out at home to make make a fetish of secrecy. In the kitchen by houmus, oatcakes, pies, tarts, quiches systems are so well developed.” her kitchen table classic she took the where new products are formulated and and chocolate terrines. “Gwir Flas is decision to move to purpose-built recipes drawn up ingredients on display From that kitchen table in Faraway, BUSINESS MENTOR the most premises in Ruthin in 1987. include Penderyn Welsh whiskey, Brecon the lodge where the business started, The company has also been able to Many companies make a virtue out vodka, and organic oranges. The company’s Margaret Carter’s early efforts sowed the find locally other business support it has amazing flag-waving of longevity but Patchwork at barely 25 policy is to use only local produce or at seeds for a company that now employs needed to continue to grow, using a exercise for the whole of the years old demonstrates that least goods that are UK sourced. 45 people and is seeing remarkable marketing company in Colwyn Bay and a Welsh food industry and it entrepreneurs can start businesses and growth. “We expect a minimum ten per business mentor based about ten miles has really helped put us on prosper without any previous experience SMALL BATCHES cent growth this year,” notes Rufus Carter, away. Recruitment consultancy services or background in a similar area, providing Everything is preservative and “and that has come about without major come from Wirral but the company looks the map in Wales” the idea is right and the quality is good. additive free, cooked by hand in small external investment or borrowing.” after its own business planning. “We’re not Rufus Carter “Lots of companies that are similar to ours batches to Margaret Carter’s original The Welsh Development Agency (part out specifically to employ people locally. will say that they are the in the third recipes, with a few recent additions. of the Welsh Assembly Government since They just happen to be the best people for generation of generating recipes. We Products are created to be unusual, May 2006) has helped to support the our requirements. If they happened to be started up within the last couple of challenging to the palate and easily growth of Patchwork. “In many ways we miles away, we would still use them. But it’s decades and we are trading successfully,” marketed to those who are looking for are the business that the WDA built, both still good to know that this kind of expertise Rufus Carter explains. something different for the dinner table. literally and metaphorically,” says Rufus is available within a short drive.”

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6-2 on a Friday, with office staff working used the company in a management sight of Howells department store, a normal office hours. To avoid the dangers training film and the Manchester Patchwork stockist. According to Rufus of a ‘them and us’ management and staff Business School has filmed Patchwork as Carter the lawyer chooses instead to e- regime the company has been split into part of its research into new ways of mail requests for paté to be posted to six teams with catchy titles: ASAP, managing a growing company. him because he does not feel he has the Account on Us, Cool Stuff, In and Out, The company’s philosophy of seeking time to buy it in person. It costs him an Hot Stuff and Right Stuff. to work with its staff permeates other extra £10. Every morning each team gets areas, too. The workforce rest area – The “Internet business also helps us pick together in a 10-minute huddle where the Galley – has tea, coffee and soft drinks up on international thinking and so it helps day’s work will be planned, with some constantly available. There’s an outdoor, us hone our products to the markets we’re individuals taking on different jobs and landscaped decking area with outdoor aiming at. For years the Welsh mentality responsibilities on different days. Official tables and chairs. Workers can watch appeared to be one of secrecy, and not responsibilities – communications, safety television and make use of unlimited telling people about how good the place and quality officer, for example – rotate Internet access, as well as pinball is,” Rufus Carter says. “We love what we on a three-monthly basis, so everyone machines, other games and a selection of do and we really want to share it with the gets a share of responsibility and accepts magazines and newspapers. world.” and learns new challenges. IMPROVED ROADS Getting the products out from a The Gwir Flas – True Taste initiative is Yet, the more offerings the judges see, the location where the nearest railway is 20 credited with being particularly helpful. higher the standards in what is already an miles away and where the roads “It is the most amazing flag-waving excellent sector.” connecting the town to the motorway exercise for the whole of the Welsh food As in many other parts of Wales network are still tortuous in places is a industry and it has really helped put us on recruitment has become difficult for the challenge but Rufus Carter says they the map in Wales.” In the awards company. “There is virtually zero per cent encounter few problems. “It was a organised by Gwir Flas Patchwork has unemployment in the Vale of Clwyd,” problem at one time but improved roads been highly commended once, as well as notes Rufus Carter, “and we are seeing an mean we can get to places quickly enough winning one silver award. Rufus Carter influx of foreign workers into this part of for our products still to be in perfect has also been Gwir Flas ambassador for Wales. We welcome them. They’re hard- condition.” A daily international one year, a post that has also been held working, punctual, pleasant – indeed, collection takes goods from Ruthin to by Rachel Davies and involves touring shining examples of the kinds of people airports for shipping around the world.” Welsh food events in Wales and we’d all like to employ.” The company was an early adopter of elsewhere and generally spreading the Workers from Eastern Europe are information technology and regards its Patchwork Traditional Food Company word about the quality produce now now regularly among the faces on the information technology system as its Llys Parcwr available from Wales. Patchwork factory floor. prime marketing tool “Our website is a Lon Parcwr Industrial Estate The company has developed a highly proactive investment. It allows people to see Ruthin Denbighshire AWARD SCHEMES individual method of working, which in The weekly formal team meeting is what we do and to order products on line. LL15 1NJ More companies should, Rufus Carter some respects re-writes the management called 59:59 and must last no longer than We have a deep understanding of e- T 01824 705832 believes, involve themselves with Gwir textbooks. Production employees agree 59 minutes, 59 seconds. So innovative commerce here. We have to. It’s vital to us.” F 01824 705833 Flas and its award schemes. “Many their own working patterns, which, at are the management techniques that The company has one very good www.patchwork-pate.co.uk businesses are simply reluctant to enter. present, are 7-3 Monday to Thursday and Patchwork has installed, the BBC has client in Cardiff, a lawyer working within

Institute of Welsh Affairs – Roaring Dragons