Sam Metcalf
Editor of Midlands Business Insider
In Focus: On the make
Sam Metcalf wonders which manufacturers will be tempted by LDC's new investment drive.
Insider’s new annual awards event – Made in the Midlands – has seen me immerse myself in the sometimes bafflingly introverted world of manufacturing for the last couple of months.
I’ll say now that it's been a pleasure to deal with companies in this sector, but there remains a strand of companies who really do need to shout about themselves a little more. PR and marketing is way down some firms' list of priorities – if it's even on the list at all.
This is a shame, because after going through the entries for Made in the Midlands, it's plain to see that there are some incredibly innovative companies in the region. Some might not be faring as well as they'd have liked over the last couple of years, but manufacturing companies in the Midlands have one thing in common: they're not afraid to strike out and take risks. If only they'd tell us about it a bit more…
What they also have in common, of course, is that they all need more capital. Good news, then, that last week private equity firm LDC committed itself to investing £200m in engineering and manufacturing firms in the Midlands. The project will be led by the firm’s West Midlands investment directors, but LDC says there are no geographical boundaries when they come to invest.
On the face of it, this sounds like excellent news for manufacturing in the Midlands. However, after speaking to industry experts about the nature of firms in this sector, I do wonder how many will, take the money, change their entire culture and allow an outsider into their company.
Manufacturing firms – even if not in name – are often run like family enterprises. They have long-serving, highly-skilled staff. LDC is dangling a carrot in front of these firms and it’ll be interesting to see what interest there is.
Certainly, LDC's money will seem attractive, and there’s no love lost between the banks and engineering firms at the moment – just ask Graham Mulholland who owns epm: technology about how he struggled for weeks just to get some cash to buy a new van for his company.
One potentially decisive factor behind LDC’s investment drive is that it will also be supported by LDC's Asian operation, which is based in Hong Kong. This international dimension, says LDC, will allow companies to extend cross-border relationships with manufacturing and supply chain businesses located in high-growth Asian economies.
With the government seemingly obsessed with the UK exporting its way out of recession, the temptation to get in on some overseas action might be just too much to bear for some Midlands manufacturers, and, cleverly, LDC has pinpointed manufacturing as one of the few export success stories of the last few years.
How LDC spends its cash is always fascinating to watch, and this new initiative will be even more so. Who, if anyone will woo LDC? It's going to be an interesting three years.
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About Sam
Sam Metcalf is assistant editor of Midlands Business Insider, and has worked at the magazine for the last five years. Based in Nottingham he writes on commercial property, corporate finance, law, and international trade.
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