South East: Manufacturers set to please Bank of England, reports MAS

The recent Bank of England’s call for improving productivity appears already to have been answered by small and medium manufacturers in London and the South East as they continue to grow and adapt to a general softening in the marketplace. The latest Manufacturing Advisory Service (MAS) Barometer revealed that over half of the companies in the South East (53%) felt that they had raised their productivity in the past six months with three quarters (75%) admitting further efficiency gains were necessary in order to remain competitive.

Steven Barr, head of MAS, commented: “Our Barometer shows that manufacturers are already raising productivity and this should please the Bank of England following recent recommendations. This is welcome news at a time when there are mixed messages around economic activity, with the UK holding up relatively well against a less-than-positive outlook from our eurozone trading partners.”

Sam Duong, CEO of Kent-based Ming Foods, agreed: “Since we launched in 2005 our business has experienced high growth and we now successfully export across Europe. We fuse traditional techniques with leading-edge technology to manufacture and package high-quality Chinese pastry products. The demand for our products has allowed us to upscale from a 4,000 sq ft to a 32,000 sq ft premises, with the intention of increasing company growth, diversifying product range and ultimately inspiring and nurturing a family of businesses.”

Cautious optimism is the overarching sentiment among the 291 respondents within London and the South East. Many manufacturers are prepared to spend to make this happen, as 62% who responded said that they were already planning to invest in new technology, machinery or premises.

Oxfordshire-based injection moulders Data Plastics has enjoyed a record breaking year. Managing director Carl Reeve explained: “The growth this year has been remarkable, especially in the medical sector, consumer products and our work with start-up businesses.  It has enabled us to invest heavily in new plant and machinery to enhance our service levels.  We place a huge emphasis on training and staff development which has helped us negate the skills shortage in the area.”

Likewise, Hampshire-based Ahmarra Group’s managing director Tim Doran said: “During our 20 years of business, we have continuously invested in new technologies and product development and when combined with the finest craftsmanship, we have been able to guarantee the very best standards in door manufacturing. We are proud to fly the flag for UK manufacturing and expect our business to continue to grow by 10% a year through new product ranges and innovations.  We currently employ 55 staff at our manufacturing plant.”

For the sixth successive quarterly report, more than half of the South East manufacturers (57%) recorded an increase in sales, with 79% expecting to grow between now and March 2015. Furthermore, 57% of firms are currently planning to increase their workforce, highlighting the determination to build capacity across the supply chain.

Buckinghamshire-based Case Design manufactures custom-designed flight cases to protect high-value goods and service clients around the world with exports representing 30% of the business. Director Rob Macdermott said: “We continue to broaden the range of markets we supply to grow in a controlled and profitable way.  We have seen our business picking up again and our production has increased 30% this year helped by the Winter Olympics in Russia, the World Cup in Brazil and the Commonwealth Games in Glasgow.”

Barr continued: “Our small and medium firms have recognised the importance of continually improving productivity. This could include anything from introducing new processes and eliminating waste, to upskilling staff and investing in technology and state-of-the-art machinery. Management teams are continually looking to get more out of the business, a feature that will become increasingly important with the market showing some signs of softening.”

Barnet based Luminite Electronics has been established for over 30 years and specialise in PIR detectors for the security and home automation markets.  MD Graham Creek said: “Luminite designs and manufactures all its products in North London and we know that this offers our customers unique responsive deliveries and manufacturer-level technical support.  As with most small and medium manufacturers, innovation is the key to growth and our continued investment in advancing technology gives us a strong competitive advantage in the domestic and global security markets.”

Sussex security firm, The Fuzion4Group has likewise recently invested heavily in its infrastructure including new premises, new service and product development, marketing, additional staff, training and equipment.  Andre Keen, managing director, said: “This investment is the first step in our five-year growth strategy which will hopefully see the group turnover double, providing opportunities for existing staff and further employment in our area.”

The MAS Barometer is the largest survey of its kind, sharing the views of over 859 small and medium manufacturers across England, employing over 20,000 people. This quarter’s survey focused on their approach to productivity and asked how each sector is tackling the issue, with chemical, food, automotive and pharmaceutical showing the biggest gains.

Barr continued: “Our manufacturing advisers are continually working businesses to help them understand market forces and plan steps to make them more competitive, especially against international rivals. This is playing a role in building capacity within supply chains, so there is little surprise that automotive and aerospace – both buoyed by significant investment and work returning to the UK – feature strongly.

“Interestingly, businesses supplying both the offshore wind and nuclear sectors also expect a sharp rise in productivity and MAS will be helping to facilitate this through our involvement in specialist services, such as GROW:OffshoreWind and the enhanced Fit for Nuclear programme.”

John D Hotchkiss (JDH) based in Kent is a business that has diversified into subsea cabling and has benefited from GROW:OffshoreWind’s Flexible Enabling Fund.  It currently employs 25 people Tom Sisley, company director, explained: “GROW continues to support us with market insight and knowledge which allows us to respond to changes in a fast-moving industry. Our results this year are a testament to the soundness of the investment and this will continue for the foreseeable future. We anticipate a 15% increase in turnover and have employed four additional staff expecting to increase this by a further 10 in the next four years.”