What the budget means for the surface finishing industry and other thoughts

Every year, usually in April, our accountant sends us a weighty tome explaining all of the tax changes in the Budget and the implications for businesses. This year, we’ve had two Budgets, so no doubt there will be a further accountant’s summary winging its way to us any day now.

Budgets are something that I confess I don’t normally pay a lot of attention to. This one, however, makes some significant changes that will have a major impact on small/medium enterprises such as ours.

The Living Wage increases to £9 an hour for those over 25 by 2020. This will obviously make a difference to the fixed costs of those companies like us that employ some lower paid or unskilled staff. At the same time, corporation tax is being reduced from 20% to 18% by 2020. This compares to 40% in the USA, 33% in France and Japan and 30% in Germany.

Unlike the global giants Amazon, Starbucks, Google etc., our company actually pays its full whack of corporation tax, employers’ national insurance and so on, so this reduction will be a very welcome windfall.

We can only hope that, by 2020, we are still making sufficient profits on which to pay the tax, and that the ill winds that plunged the world into recession seven years ago don’t return anytime soon.

Of course, the UK will only return to full economic health over the next five years if we can improve our productivity, which we are told lags behind countries such as the USA, Germany, China and even France.

In our own small way, our company has made a serious attempt to improve our own productivity over the past two years. You would think that buying, refurbishing and reselling plant and machinery is a fairly simple business model in comparison to the complexities of those involved, for instance, in electroplating of diverse products and components.

However, even a streamlined organisation such as ours has issues with productivity. Valuing and purchasing surface finishing equipment from all around the world has to be dealt with in an efficient and organised fashion. When it comes to processing the items through our various sales channels, we have to follow procedures that contribute to good productivity and increased profitability.

Finally, our online marketing and sales processes must be fine-tuned to meet the needs of the global marketplace, having the right good in the right place at the right time.

In the UK, it is our largely foreign-owned automotive industry that is leading the way on improved productivity. These vast organisations have benefited from the research, development and investment that come with globalisation. They have also tapped into the skills that already were present in this country, where we have been building cars, motor cycles, vans and trucks for over 100 years.

This in turn makes rigorous demands on all of the sub-contractors to the automotive sector, not least those of us involved in product finishing. So compliance with the first tier results in enhanced productivity in the second and third tiers. This then has a positive knock-on effect on our exports for the benefit of the whole economy.

I look forward to meeting you all at Surface World in September. I know for a fact that Nigel Bean and his colleagues are making strenuous efforts to make the show a success this year and they deserve all of our support. Hopefully, the forthcoming autumn season will be a productive period for everybody in our industry.

Better prospects for UK surface finishing industry in 2015

At the beginning of 2015, I believe that the new year heralds much better prospects for the surface finishing industry and the manufacturing sector as a whole than any of the past seven years, since the world went into recession in 2008.

There are two items of news that are significant for me at this time. The first one concerns the inevitable correction that’s taking place in the fortunes of some of our giant retailers. The problems at Tesco have been well-documented and they have begun 2015 by announcing 43 store closures and other major cost-cutting measures. Marks & Spencer has also announced poor trading figures, Morrison’s has said goodbye to its CEO and even Sainsbury’s has suffered a downturn.

After years of inexorable growth, we are finally witnessing a levelling out of the prospects of the great retail juggernauts that have dominated our economy for over two decades. At the same time, it has been reported that new car sales rose to more than 2.47 million in 2014 – the highest level for over ten years.

As many of these cars are manufactured in Britain, from the low cost Nissan vehicles in the North East to the luxury Bentley models in Crewe, we are producing new cars in record numbers. Indeed, it was significant that the cargo ship that ran aground off Southampton over the new year contained over 1200 cars and commercial vehicles, including Jaguars, Land Rovers, Minis and JCBs!

Is this a sign that we are finally seeing the rebalancing of our economy towards production and away from consumption? The answer is a tentative ‘yes’, but tempered by the fact that we are still running a current account deficit at 6% of GDP. We have not had a larger gap between what we earn and what we have to pay to the rest of the world since 1948, so there is still a long way to go.

Nevertheless, the UK economy as a whole grew by 2.6% in 2014 and is forecast to grow by a further 2.4% in 2015. Unemployment is set to fall below 5.5% this year and wage inflation is finally overtaking general inflation, so the outlook is encouraging.

In four months’ time there is a general election, one for which the outcome is looking more uncertain than at any election since 1974. And yet, I don’t believe that this uncertainty will necessarily harm our economic prospects. After all, Germany has been governed by broad coalitions for as long as anyone can remember and it hasn’t done them any harm.

This is because their politicians of all persuasions have always been focussed on the importance of science, engineering and manufacturing, and when the going has got tough, they have always had the ability to export their way out of trouble.

We can also draw a parallel with the USA. For most of the past six years, the Obama administration has been paralysed by deadlock in the Senate and Congress. Despite this, the economy has been ticking over perfectly well and is now outgrowing even China and India.

So, for all of us in the UK surface finishing industry, my advice is this. Look overseas as far as possible for your future business prospects. Take advantage of the government grants available through the Chambers of Commerce for capital investment, consultancy, business development and marketing.

Support our excellent UK manufacturers of process equipment and consumables. Utilise the resources of our first class trade associations, the SEA and IMF for technical support and business advice. Above all, be confident that the growth in manufacturing will inevitably feed into opportunities for product finishing services as the year progresses.

Finally, a happy new year to you all, and I look forward to doing plenty of business with you in 2015!

Riley Surface World unveils multiple surface finishing plant opportunities at Surface Technology, Hannover 2015.

RileySurface World is Europe’s leading reseller of new and used surface technology plant and machinery. The company will be exhibiting in the Surface Technology hall of the Hannover Fair in Germany, April 13 – 17, 2015, hall 3, stand E02.

The major theme of the stand will be opportunities for manufacturers or sub-contractors anywhere in the world to acquire complete, used process plants and associated machinery at greatly reduced prices in comparison to new capital equipment. Riley Surface World is able to decommission the plants, relocate them to their new sites and assist with any reconfiguration or refurbishment if 

required.

Delta Industrietechnik GmbH precious metal and copper acid plating plants

The first facility for disposal is a Delta Industrietechnik GmbH precious metalelectroplating line, formerly used by a costume jewellery manufacturer in Ireland. The plant is offered, together with a large selection of water treatment, effluent treatment and chemical storage facilities. In total, there will be over 500 lots to be sold by negotiated sale, with the remainder to be auctioned from Riley’s website during April 2015.

From Nova Scotia, Canada, Riley is handling the sale of another large DeltaIndustrietechnik GmbH electroplating line due to the closure of a musical accessories manufacturer. This copper/acid system, which can be reconfigured for other processes, comprises three sizes of tanks: 600, 1200 and 2400 litres. The 600 litre tanks are used for the non-electrolytic, dragout and rinse stations. The larger tanks are used for the electrolytic stations, with either 3 or 6 flight bars in operation at any one time. 

Robotic polishing cells, anodising and cleaning lines

Also in Ireland, Riley is handling the sale of a large quantity of Intec and Bularobotic polishing cells with ABB robots from a global manufacturer of healthcare products. These are accompanied by manual polishing and belt grinding machinery and other ancillaries.

From Birmingham, UK, there is the prospect to acquire a large selection of anodising, nickel plating and cleaning lines, together with other ancillary equipment. They are all available due to the restructuring of a global manufacturer of safety-critical components for the nuclear industry.

Unique showcase for redundant plant and machinery

In addition to these existing site clearances, Riley Surface World is inviting companies that have redundant surface finishing plant and machinery available to take advantage of the exposure that the Riley showcase at Hannover provides. It is a unique opportunity to display valuable assets before approximately 40,000 visitors from 100 countries at Europe’s largest surface technology forum.

Clients will also enjoy the benefits of a planned marketing programme for their capital equipment during the build-up to the event. This campaign will utilise Riley’s large database of surface finishing companies and professional buyers all around the world, combined with the marketing facilities of Hannover Messe to deliver a truly global reach.

Over 1000 surface finishing machines in stock and online

Finally, visitors to the show will also have access to the Riley Surface World stock of over 1000 items of new and used machinery, covering all surface treatment and coating categories. This includes polishing and linishing, ovens and furnaces, process cooling, cleaning and degreasing, shot blasting and peening, dust and fume extraction and much more. There will be a 10% discount off all advertised prices for items purchased during the exhibition.

For further information, visit www.rileysurfaceworld.co.uk