Talking Point: Manufacturing success
It’s a commonly held belief that "everything’s built in China now" and that the UK really cannot compete. But I believe we have given up on manufacturing too soon. Is it that it’s because we keep on repeating to ourselves "manufacturing is dead in the UK" that it has become the received wisdom?
I consider that this is indeed the case. True, manufacturing output may have fallen significantly in the recession, just as it did in the recessions of the 1980s and the 1990s, but in both cases, there was a sharp rise in output following those recessions. So, why shouldn’t we see renewed growth in the UK in months to come?
My case in point is the engineering firm Carlton Laser Services in Leicester. Myself and RSM Tenon tax director Keith Richards assisted on the MBO by operations director Mohan Jassi who bought the business recently from majority shareholder Dennis Kent for a six-figure sum.
Mr Jassi, a minority shareholder for 11 years, owned 20 per cent of the shares and completed a buyout of the remaining 80 per cent from Mr Kent who had been at the company since 1983 and owned it since 1990. In the past 20 years, the firm's turnover has quadrupled to £4.5m and has seen its workforce increase from 20 to 71.
It was always the intention of both parties that this deal would happen and so for us at RSM Tenon, it was a smooth transaction. It took just eight weeks to complete the deal with ourselves and the assistance of law firm Harvey Ingram.
Carlton Laser is a firm which has experienced growth in the last three years while others were struggling in the recession. Mr Jassi has taken over a buoyant time for the business, with high growth predicted this year.
The company’s success is due to its responding quickly to what was happening in the economy. The company had 15 per cent sales growth last year and expects ten to 15 per cent growth this year. It has recruited 11 people in the last nine months and is looking to recruit more.
Where Carlton Laser has succeeded is in its product. The company makes metal electrical cabinets for food manufacturing equipment, as well as components for specialist vehicles and the medical sector. It has avoided being affected by the downturn by focusing on niche or traditionally steady industries.
Carlton Laser is clearly a Midlands success story and testament to the hard work and belief of its directors. But I also see a company which is resourceful and well organised and which has adapted well in the recession in order to remain competitive and buoyant.
So, for me, this was not just a smooth MBO, but a chance to advise a business success story as it prepares for its next chapter. The success of Carlton Laser to me says something else too – that manufacturing in the UK is certainly not dead and buried.
Carlton Laser is now looking forward to further rapid expansion. It is lucky enough to be able to choose its customers and is constantly innovating and developing new ideas. While working with the company, I experienced a real sense of excitement about what they were doing.
Mike Ball, director at RSM Tenon’s Leicester office
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