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

Riley Surface World assists Irish sheet metal company with its expansion into paint and powder coating

McAree Engineering is one of Ireland’s leading outsource sheet metal fabrication companies based near the picturesque village of Ballinode in North Monaghan.

Founded in 1946, the company has built a solid reputation for quality service backed up by state of the art production facilities. Services include laser cutting, folding, punching and fabrication and the company has achieved ISO 9001 quality accreditation.

McAree Engineering has recently introduced spray painting and powder coating to its production processes. This is in order to expand the business into production of finished or part-finished components as well as sheet metal production.

Having achieved ICOR accreditation for paint finishing, the company decided to invest in a state-of-the-art shot blasting, spray painting and spray baking facility from Riley Surface World. The equipment selected had all been declared surplus to requirements by a UK- based utility vehicle manufacturer.

After taking advice from the Riley Surface World technical support team, McAree purchased a 7 x 7 x 4 metre Hodge Clemco shot blast room with large, fixed shot blast machine, media recovery system, Nederman reverse pulse dust collection and all modern safety devices built-in. The system will be used for priming and pre-finishing of the metals prior to painting or powder coating.

For paint application and curing, the company selected a purpose built, Spraybake 4 x 7 x 5 metres spray/bake room with thermostatically controlled gas heating, fan-assisted air handling, floor-mounted extraction system and ample fluorescent lighting for a high quality paint finish combined with minimum wastage and maximum operator safety.

Finally, McAree acquired a large paint storage and mixing room with all necessary ventilation, product security and fire prevention facilities built-in.

The equipment is to be commissioned in McAree’s new purpose-designed paint and powder coating building alongside their existing factory in Ballinode. Once fully operational, the new facility will provide extra services to existing sheet metal customers, as well as attracting new sub-contract projects from Ireland, the UK and the rest of Europe.

According to project manager, Vincent McAree, the company enjoyed excellent value for money by purchasing such high quality, pre-owned equipment from Riley Surface World. He was also impressed by the first-class customer service shown by the Riley support team in enabling the purchase and transfer of the items from the UK to Ireland and is confident that the investment made will pay dividends in potential new business to be won in the near future.

For further information, visit: www.mcaree-eng.com

Riley Surface World to exhibit at Surface Technology, Hannover Fair, 2015

I am pleased to announce that in April 2015, Riley Surface World will be exhibiting at the Surface Technology 2015 trade show, part of the massive Hannover Fair in Germany.

Surface Technology is the leading European exhibition in our industry, and one of the top five surface finishing trade shows in the world. My colleagues and I have visited the event several times in the last few years, but only now do we feel confident enough to participate.

There are a number of reasons why I feel that it is a good time for our company, and indeed other British companies, to be throwing our hats into the ring at this major exhibition.

The first one concerns the globalisation of manufacturing and the effect this has had on our particular products, services and processes. As well as being the primary show in Europe, Surface Technology also hosts visitors from China, India, South East Asia and the Middle East. In other words, the fastest growing economies that are brimming over with opportunities for companies like ours.

Secondly, the dynamic nature of our industry dictates that we need to be looking further afield to promote ourselves. All across the world, companies in the aerospace, automotive, general engineering and consumer goods industries are undergoing continual restructuring, both for internal company and external market reasons.

It is this constant change that throws up opportunities almost on a daily basis. This means that the lifespan of a typical surface finishing plant or individual item of machinery is, on average, considerably less than in the previous century. This in turn releases on to the global market facilities that are in excellent working condition and ideal for relocation elsewhere.

We recently had the task of relocating a large rack electroplating line from a costume jewellery manufacturer in Ireland to a musical instrument maker in Nova Scotia, Canada. Conversely, a complete pre-treatment and powder coating plant was recently acquired, with our help, by an Irish sheet metal company from a UK utility vehicle manufacturer, so the volatility works both ways!

We are currently engaged in a number of plant disposals for multi-national organisations in Sweden, with interest coming from all parts of Europe as well as further afield. In the case of modern manufacturing, globalisation recognises no national borders or artificial barriers when it comes to doing business.

So by setting out our stall at Surface Technology 2015, our message to manufacturers and sub-contractors, wherever they may be is to partner with us. We can place their surplus machinery on the best platform that there is, and in front of a relevant, educated and fully international audience.

As a counterpoint to this argument, some may say that the downturn in the Eurozone economy would suggest a period of stagnation for manufacturers and resellers of surface finishing plant and equipment.

However, in our experience, it is precisely these fluctuations in the economic cycle that present new opportunities. Investment in new equipment can be replaced by a preference for pre-owned or reconditioned, with obvious cost advantages. The booming remanufacturing sector has a constant need for this kind of machinery and many companies wish to enhance their green credentials by acquiring and operating recycled and refurbished equipment.

Whichever way you spin the dice, an event like Surface Technology is not to be missed. It takes place at the Hannover Fair, Germany from April 13 – 17, 2015. We will certainly be there, how about you?

Barry Riley. An obituary.

I would like to use the opportunity in this month’s blog to pay tribute to my father, Barry Riley, who passed away in August.

He had been involved in the UK surface finishing sector for six decades and was a well-known figure in the industry. He was also a much-loved father and grandfather and will be greatly missed by all our extended family.

Our company’s origins go back as far as the 1940s, when Barry’s father founded a general industrial machinery merchants known as Lambert Smith & Co. This company was to forge a profitable association with a large, Birmingham-based copper/nickel/chrome electro-plating supplier to the automotive industry. He bought their redundant plant and machinery and resold it to jobbing shops around the city. This allowed the Riley family business to develop its important speciality serving the coating and finishing sectors.

In 1966, Barry himself picked up the baton by starting Barry Riley & Sons. The company began life by renting a small unit from British Rail under the archways near Snow Hill station in central Birmingham, later re-locating to the famous Taylor & Challon industrial complex on Constitution Hill close to W.Canning and Birmingham’s world-famous jewellery quarter in Hockley.

During the great nickel shortage of the late 1960s, the enterprising Barry Riley developed a lucrative service buying excess nickel stock from the Pianoforte surface finishing company and delivering it by flatbed Ford Transit to the many small independent electro-plating companies that were around at that time. This provided the working capital for the company to become a stockist of used plating and finishing machinery, which it began to trade all over the UK.

Riley Industries, which became the company’s trading subsidiary, enjoyed successful growth throughout the 1970s and 80s, eventually re-locating to Perry Barr, near Aston Villa football stadium and the 60s monstrosity of ‘Spaghetti Junction’, the hub of the UK motorway network. I joined the company after attending engineering college in the early 1980s, taking over as managing director in the mid-1990s.

Barry subsequently became chairman of the company and was fully involved in a strategic role up until his death. He was instrumental in moving the business to our new location in Aldridge on the outskirts of Birmingham in 2006, seeing the potential in a new factory that offered greater floor space, easier vehicle access and improved proximity to the M6 toll motorway.

He could be a hard taskmaster, who was not afraid to challenge business decisions and actions that were not to his liking. Although he did not belong to the tech-savvy generation, he was the first person in the early 2000s to identify the need for a fully interactive and internationally focussed website as the best way forward for the company, a decision that has been vindicated many times over.

It is my belief that, due to the solid foundations laid by my father, we are now seeing the development of Riley Surface World into a global force in the surface finishing industry, with a wide marketing reach and a hard-working and dedicated support team.

I know that he was very proud of the progress we had made, and optimistic about the future prospects for the UK finishing sector. He could see that, after a difficult few years, conditions were starting to approach what they were over 40 years ago, when Birmingham was the world centre metal finishing. The best tribute that we can make to him is to carry on doing what we do best, not just for the benefit of Riley Surface World, but for the UK industry as a whole.

How Social Media can help your company become a global player

This month’s column tackles the almost impenetrable subject of social media and what relevance it has to our business. In that, I don’t just mean Riley Surface World, but what I would define as the whole, global product finishing family.

First of all, I must confess to being a dinosaur in this respect. Whilst I understand our own website and what it does and can find my way around an iPad, I have seldom, if ever, looked at Twitter, Facebook, Linked-in or any of the other leading social media platforms. Indeed, until recently, I had never booked flights online and still prefer to use a travel agent.

However, thanks to having a proactive marketing company and some staff under the age of 35, we have somehow managed to accumulate around 500 followers on Twitter and I personally have a regular presence on Blogger where, if you’re desperate for bedtime reading, you can take in the full archive of these articles!

My observation is that, in the industrial sector, big companies are much better at this sort of thing than small ones. This is because they treat social media seriously and recognise its potential, unlike most of us who see it as a rather frivolous, mainly recreational pursuit. (In consumer products, the reverse may be the case, as many small companies are building their business models entirely using social media.)

Our Twitter feed regularly includes entries from the big brand names in the industry, posting their latest products, promotions, videos, case studies, exhibitions and much more. To be devoting such resources to this fledgling media must be bearing some fruit. But how can it be measurable?

I think the simple answer is that it can’t. To go back to the old adage: ‘Half of my advertising budget is wasted; the problem is I don’t know which half.’ In the case of Twitter, I don’t believe I can quantify a single transaction that has resulted from this activity. But we persist for a number of reasons.

Firstly, there is the question of reputation. Twitter provides almost unfettered freedom of expression and allows individuals and companies to set their own agenda. Such a facility is priceless in this monogamous culture that we all inhabit. So, we must take advantage of such freedom. We may not necessarily achieve the reputation that we aspire to, but if not we only have ourselves to blame.

Secondly, we must be prepared for the future. The great economist, J K Galbraith once said: ‘I find most things difficult to predict, especially the future.’ None of us knows just what the future holds for our industry. Already we see change accelerating due to advances in chemistry, technology, legislation and the volatility of world markets. The only certainty is that change is constant and getting faster.

So, how much better it is to keep abreast of change by being part of the rolling dialogue. Vehicles such as Twitter give us an insight into what the latest trends are, who the movers and shakers are, what important events are taking place and how it will all impact on our businesses and our lives.

At Riley’s, our hungry beast is partially fed by the demise of defunct companies that didn’t see the next big thing coming over the horizon. Maybe if they’d been better at Twitter they would have survived and prospered, we will never know.

All of this is being played out on a global scale. Recently, we enabled the sale and shipment of a large electroplating plant from Ireland to Canada. Just this week, our client posted an interview with CBC Canada radio about the project on Twitter, turning it into an international news story.

And just in case you are not following us yet, we are @RILEYSURFACEW.