Let's all shout three cheers for the creative industries!

The surface engineering industry occupies a unique position in manufacturing. It exists on the borderline between the certainties of mechanical and chemical engineering and the more nebulous field of product design. It is a hybrid profession, populated by skilled machine operators and those strange creative people, dreaming up ever new product designs and finishes that serve the needs for both product visibility and durability.

The Creative Industries in the UK represent 7.3% of GDP, generate over £60 billion for the economy and employ more than 2 million people. It is a sector in which Great Britain excels, outperforming the USA, Germany and Japan.

It also compares favourably with Financial Services (8.9%) and Manufacturing (11.5%). And in contrast to these two sectors, it hasn’t had to receive a massive bailout and the government doesn’t need to set up Enterprise Zones or award grants to encourage it to flourish.

The UK leads the world in advertising, digital marketing, fashion, computer games, product design and many other activities that loosely fall under the creative umbrella. We export our services and our talent around the world, with the emerging countries doing their best to keep up.

There has been a lot of debate recently about the need for our universities to produce more scientists and engineers, and there is no doubt that we are behind the game in those areas. However, this is not to downgrade the importance of our Art & Design Colleges. Creativity is an elusive concept that is hard to define. Students need to appreciate the finer points of high art in order to hone their skills, even if they are to be used for commercial design.

If you doubt the importance of our Art & Design Colleges, then take a look at China. They are in the process of building no fewer than 1250 of them over the next 5 years. They are conscious of the fact that they cannot persist with a low-value, low-tech economy. Future prosperity will depend as much on the generation of ideas as it will on technological innovation.

In many ways, it is the search for the X Factor without the odious Simon Cowell, and staged for all the right reasons. The Creative Industries do not exist simply in a bubble; they infiltrate and enhance all kinds of industries, providing marketing services, web design, product design, phone apps and many other innovations.

In UK manufacturing, our talented product designers are giving us the cutting edge in all kinds of ways. The iphone and ipad were both designed by a British product designer who had served his time in Art College. Other examples include the Dyson vacuum cleaner, distinctive as much for its quirky appearance as it is for its bagless operation, the Mini and the angle poise lamp.

In the surface finishing industry, talented British designers are colluding with engineers and chemists to make the UK a world leader in this particular field. This applies to special organic colour finishes, decorative finishes and the use of polymers and ceramics for unusual and durable finishes in cars, white goods and thousands of everyday products. In many cases, goods that are manufactured in low-cost countries are shipped here to complete the kind of innovative and high quality finishes that we are famous for.

The Creative Industries are one of the UK’s great success stories. For every Terence Conran or Damien Hirst, there are thousands of excellent and practical designers working in unsung fashion throughout British industry, and we ignore their importance at our peril.

We all have responsibility to produce growth

Following the Queen’s Speech outlining the government’s legislative programme for the new parliament, there has been a great deal of criticism from opposition parties, media commentators and general chatter from the users of Twitter and then like about the need ‘to create more growth.’

While few people would argue that more growth is desirable in these difficult times, what does ‘growth’ really mean and how do you ‘create’ it anyway?

The traditional Keynesian measures consisting of the government stimulating growth by pouring money into large public sector infrastructure projects seem to be out of the question at present. The Olympics has given a massive boost to East London and the feel-good factor should be with us all summer, but this is the exception. In any case, the finance was put in place during the good times, before the banking crisis caused the world economy to fall off a cliff.

In the UK, our economy is operating against a backdrop of public sector cuts, high street closures, tentative bank lending, rising energy prices, rising unemployment and falling living standards. Not exactly the ideal environment for growth creation.

On top of all that, the falling value of the euro may be good news for those of us that are going on holiday to Europe in the next few months, but not such good news for companies that depend on exports to the European market. Meanwhile, the crisis in the Eurozone goes from bad to worse. In this perfect storm, where is the growth?

Well, for starters, maybe growth is the wrong word to be using. Growth implies that the consumer suddenly becomes more confident about future prospects, job security, rising property values, personal credit-worthiness and a whole host of other factors that result in an increase of consumer spending.

The other main implication is that the spending must somehow be fuelled by borrowing, and that it will be on goods, services and properties that are currently in negative growth. In other words, the direct opposite of the current downturn. But isn’t this the thing that got us into trouble in the first place?

If you substitute the word growth with success, you arrive at an entirely different agenda. Success involves successful companies producing new products and services that people want to buy, and will find a way of doing so despite the economic climate.

You are probably thinking, ‘what has all this pontificating got to do with our industry?’ Well I will try to explain. A good example, as outlined in my previous blog, is the growth of paint and powder processes, which are currently out-performing electroplating and demonstrating growth that is lacking in much of industry at the moment.

New technology, whether it be in motor vehicles, aerospace, defence, computing or construction materials, is demanding even more interesting, durable and sustainable kinds of product finishing. Where traditional electroplating processes have been found wanting, new organic coating processes are supplying the need.

This, in turn, is resulting in successful products from successful companies, which are finding new markets in developing countries such as the Middle East and South

East Asia, where recession is not an issue. So we create exports, which create jobs, which create confidence, which creates growth.

There is no easy way out of this scenario. The greatest hope, both for our industry and for the country as a whole, is that we constantly find new solutions to new problems and continue to work hard at what we do best. This may not make growth certain, but certainly more likely.

The Finishing Touch. How paint and powder is re-shaping our world.

My intention in this article is to discuss the market position and potential growth of paint and powder coating processes, coming at it from the perspective of an equipment reseller that is observing the changes in the industry on a day to day basis.

Riley Surface World is in many ways at the sharp end of the surface finishing and coating industry. Because of our role in buying and selling process plant and equipment, we are subject to the changes and dynamics much more than most companies.

When my father started this business in the mid-1960s, the metal finishing industry was dominated by traditional electro-plating or ‘wet finishing’ sub-contract companies and processes, serving the buoyant manufacturing and engineering industries of that time.

For instance, motor vehicles still had a large amount of visible chrome plated components. These processes were administered by people with very specialised skills that had been handed down over generations. They formed a closed shop that practised the dark arts of electroplating, with far fewer restrictions on the use of harmful chemicals and hazardous working practices than there are today.

At that time, the paint and powder coating processes were in their infancy, very much viewed as the poor relation to more superior electro-deposited immersion coating procedures. Britain’s great manufacturers, such as aeroplanes, cars, construction materials and heavy engineering were still firmly wedded to processes such as zinc plating for volume production finishing.

So what are the factors that are driving the paint and powder coating revolution, and how can our industry benefit from them?

Quality and choice

The first major issue must be quality. Paint and powder chemical companies have made huge strides in improving their formulations. Today’s organic finishes provide greater thickness, consistency, hardness, tensile strength, flexibility and corrosion protection properties. Safety is also a major factor, with paint and powder coatings being resistant to such hazards as hydrogen embrittlement.

In addition, it is possible to select from an almost unlimited choice of colours, textures and effects to suit a massive range of product finishes, from small picture frames to large window frames. These finishes can be applied to a far greater variety of substrate materials, such a lightweight polymers. Just compare today’s mobile phones with a 1960s domestic telephone!

As well as being more predictable and reliable, these organically produced compounds are less harmful to the individuals that work with them and are considerably kinder to the environment, with modern process equipment able to recycle up to 98% of coating residues.

More streamlined

When it comes to efficiency and economy, paint and powder processes are superior to electro-plating in almost every respect. For a start there are fewer stages involved in the process. Typically, there are cleaning and pre-treatment stages, followed by spraying, immersion coating or e-coating. This is usually rounded off with heat treatment stages for stoving, curing, hardening and other requirements.

This compares with plating plants that can invariably have numerous stages for the cleaning and rinsing processes alone, with some plants having as many as fifty 1000 litre tanks, an awful lot of chemicals to be stored, used and disposed. A powder plant usually occupies a smaller actual footprint, with an equal reduction in carbon footprint, as considerably less energy is consumed. Processes such as passivation are not required; there is no need for rectifiers and regulators and much less in terms of effluent treatment, a major factor for electroplating operations.

Skills shortage

Then there are the skills required to operate paint and powder plants in comparison to wet finishing. Electro-plating engineers have been among the most sought-after and highly paid operatives in manufacturing. In contrast, those employed in the paint and powder industry can be trained relatively quickly and are required to know much less about chemical formulations and the intricacies of coating processes.

These skills and knowledge have largely been bypassed by the chemical producers, who present manufacturers with a ready-made formula that is tried and tested. It all adds up to fewer numbers of less skilled people being required. Product testing becomes a formality rather than a barrier to finished production and the finishing properties follow global standards that can be easily understood across international boundaries.

In this instance, there is an analogy with the newspaper printing industrial revolution of the 1980s and 90s. Before the onset of new technology, newspaper production was dependant on numerous trades such as typesetting, compositing and other traditional crafts. Pages were produced in hot metal, with print unions frequently holding publishers to ransom with their high wage demands. All of this has now been replaced by a computerised system that transmits data directly from a PC to the plate-making process, with no stages in between.

Global flexibility

These improvements in product quality, productivity, energy efficiency, toxicity and sustainability are the reasons why manufacturers have become so much more flexible and dynamic in their production strategies throughout the world. Modern paint and powder coating plants cost a great deal less to install and operate and deliver a rapid return on investment. They also have a modular construction that makes them easy to relocate to other parts of the world.

This is why we are seeing so much change throughout the finishing industry. Electro-plating plants are being broken up or mothballed, with their place being taken by modern paint and powder facilities, often in other more competitive manufacturing countries such as China and South-East Asia. In many cases, it is cheaper to dispose of a plant in one country and build a brand new one elsewhere.

In this way, global corporations, such as those working in computers or consumer electronics, can afford to regularly evaluate their production cycles, change course and move finishing plants around the world with much less disruption than in the days of electroplating dominance.

At Riley Surface World, we are seeing the consequences of this trend on a daily basis. As an example, we took the decision to withdraw from the trading of DC rectifiers and transforming regulators recently because the demand had completely evaporated. Redundant electroplating plants are generally going straight to auction or are being decommissioned with very little prospect of renewal.

Upwardly mobile

At the same time, powder lines, pre-treatment lines, conveyor systems, tunnel ovens and other associated items are being installed, operated, mothballed, uninstalled and relocated at a rapid rate. At the same time, the annual consumption of paint and powder-related chemicals is growing at an exponential rate, as the following table illustrates.

Historical and Forecast Sales of Powder Coatings (2004, 2009 and 2014 forecast)

	2004	2009	2014 fc
Volume (million L)	1659	2452	3219
Value (million $)	3851	5440	7215
Average price ($/L)	2.32	2.22	2.24
Compound Annual Growth (%)
Volume		8.1	5.6
Value		7.2	5.8
Average price		-0.9	0.2

Source: International Paint & Printing Ink Council

There is no end in sight to this upwardly mobile sector of the finishing industry. If anything, the growth is expected to accelerate during the current decade, with strong growth in the consumption of organic coatings in the years ahead.

Of course, there will always be a place for electroplating in a diverse finishing industry. The process is still used for very fine coatings and the huge range of electroplating plants around the world will not disappear overnight. However, environmental regulations and the power of the green lobby will only get stronger, putting increasing pressure on those still wishing to maintain their plating capabilities.

Challenges for UK

So where does all of this activity leave the UK, and how can our indigenous industries and government prepare for the challenges to come? Firstly, we need to consider our core industrial base; aerospace, automotive and precision engineering are what we do best. We are no longer renowned for volume component production, the nuts and bolts economy has long gone east.

Our role is to develop the cutting edge properties of paint and powder coating and to be a world centre of excellence for those processes. We have the ability to create added value and to be a benchmark for other countries to follow.

We can also benefit from the huge amount of equipment recycling that is taking place. As used plants become available from the restructuring of large, global corporations, this presents opportunities for smaller, start-up companies to gain a low cost entry into the product finishing market, doing specialist coatings for niche manufacturing.

We are already seeing a growth of new, home-grown paint and powder finishing sub-contractors emerging to fill the void left by the traditional electro-plating companies. This will help to provide the infrastructure for the return of more high technology manufacturing to this country in the near future.

Usetec, Cologne - thriving despite the Eurozone crisis

I have just returned from the USETEC exhibition in Cologne, Germany, where Riley Surface World exhibited as part of a UK Pavilion of industrial machinery dealers and publishers. There were evident signs of the Eurozone crisis, with both exhibitor and visitor numbers down on previous years. However, this did not stop the mercenary hoteliers of Cologne from doubling their tariffs during the show week.

USETEC exhibition
Cologne, Germany

This is not to say that the event was unsuccessful. USETEC attracts a global audience, with visitors from nearly 100 countries, so there was sufficient diversity to find opportunities for business. Another reason to be happy is that the priority for our company has recently switched from selling to buying, the reasons for which I will explain.

The traditional role of the sales person in the surface finishing industry, along with most other forms of manufacturing, has evolved alongside the growth of digital marketing. The old concept of the commercial traveller, with company car and expense account has become rather outdated as our ways of communication become more sophisticated.

Companies that wish to expand their market share now invest a great deal more in online marketing than they do in direct sales. The power of Google in particular means that there are always plenty of buyers in the market, and those buyers will now find you, rather than you looking for them. The secret is to express clearly the products and services they are seeking in a way which the search engines understand.

The quality of company websites, the functions they provide and the usefulness of downloadable material means that prospective customers are brought much closer to the buying decision than was the case with traditional marketing practices. This means that subsequent telephone conversations and meetings with buyers are less to do with sales and much more to do with technical issues. And once the customer becomes involved in the ‘nitty-gritty’ of the project, he or she is well on the way to making a purchasing decision.

At Riley Surface World, we have invested heavily in the structure and content of our website, so that prospective customers will always find what they are looking for, providing we have it in stock. This brings me back to our new emphasis on buying.

Our experience of marketing used surface finishing machinery internationally is that there are plenty of buyers around the world, but not enough sellers and insufficient machinery. This problem is not confined to the surface finishing sector, as dealers in all forms of industrial machinery are reporting the same problem. This is why events such as USETEC are vitally important.

There is a misconception about trade shows, reinforced by the old John Cleese sales video. It is that they are dominated by men in suits standing in booths and waiting for buyers to come along. The reality of USETEC is that it is a dynamic networking forum, where we can identify buying opportunities from other international dealers, create factory clearance events and match up buyers with sellers. This process sometimes involves complete process lines being moved across to the other side of the world.

Even in the digital age, it is still necessary to set aside time for trade shows, trade association events and conferences. This is where it is possible to meet with your counterparts from other countries, discuss industry issues, identify opportunities and do deals. And here’s the good news: the government actually gives you some money for making the effort!

The USETEC show enabled us to buy some significant items of plant and machinery from other dealers that would otherwise be difficult to acquire. We were also able to get our message across to the wider European market that we are buyers first and sellers second. These efforts by us and our colleagues from other metalworking sectors told the world that the UK is serious about developing its manufacturing.

The trade show season

The summer is nearly over, days are getting shorter and the pace of work is quickening as we head towards another year’s end. After an enjoyable summer break touring in the USA, I am now focussing on the autumn/winter period ahead, both for Riley Surface World and the finishing industry in general.

Autumn is always an exciting time in our industry. New projects start to take priority and deadlines get shorter as the proximity of Christmas looms on the horizon. It is also a time when some of our leading trade exhibitions are taking place, with the opportunity to see new innovations and make new contacts.

The trade show season kicks off in Stuttgart, Germany with Parts2Clean in October. The European solvent directives have had a huge impact on product cleaning technology and practices. Manufacturers and finishers are now heavily regulated on the chemicals they can use and the ways that they are applied. This has brought about new innovations in cleaning technology, many of which will be on display in Stuttgart. I am certainly looking forward to seeing what’s new this year.

In November, we in the UK have our own Surface World exhibition in Birmingham. This show has been rejuvenated in the last 4 – 6 years, thanks to a terrific marketing effort by the Surface World team. An event that almost died a few years ago now attracts many more exhibitors and visitors. It has also found a new dimension by incorporating Correx, the corrosion control exhibition and conference.

The fortunes of the Surface World show have coincided with an upturn in the UK finishing industry, largely due to a long-awaited increase in manufacturing output. For the first time since the early 1980s, manufacturing’s share of our domestic output has risen to 12%, on a par with the USA and France. Germany still leads on 21%, but even there the figure has declined from its post war peak of 35%.

Germany, of course, is still the powerhouse of European manufacturing, and does a great deal more to promote itself around the world than the UK has done in recent years. A good example in our industry is its presence at SF China, the third and by far the largest finishing industry trade show in Shanghai later in November.

This year, German companies are combining under the banner of their own trade association to host a national pavilion at SF China. The companies represented will cover sectors such as electroplating, organic coatings, cleaning, blasting, peening and vibratory finishing. Germany is serious about doing business with China, something that our own trade associations and government agencies should take note.

Designing things and finishing them are the two great strengths of British manufacturing and engineering. We have not always been so good at the bits in between, but working practices imported from countries such as Germany and Japan have made us a lot better.

Recognising our longstanding skills in the automotive sector, UK Trade and Investment is making strenuous efforts at this year’s Frankfurt Motor Show to attract inward investment from parts makers such as Bosch to our newly established Enterprise Zones. Car production in the UK is set to increase to 2.5m units per annum by 2015, taking it back to its 1970s heyday. The creation of automotive centres of excellence on a macro level must surely benefit the finishing industry in the longer term.

So with the trade show season underway and with the London Olympics to follow next year, now is the time for all of us in the finishing industry to go out and sell everything that the UK has to offer.

If you are looking for new or used process equipment and machinery, head over to www.rileysurfaceworld.co.uk.  We have over a 1000 machines in stock. Make sure you use the search box at the top of the page, which is powered by Google search technology, to find the machine you are looking for.

Trade convention in Budapest, Hungary

I have just returned from a visit to Budapest, Hungary, taking part in a trade convention that included many aspects of industrial plant and machinery. It was a revelation to see such a modern, dynamic city in a country that has suffered from so much conflict and oppression over the past century.

Unfortunately, the weather we experienced was similar to that of the UK throughout June and July; rain of monsoon proportions. However, staying indoors enabled us to focus on business and understand the common ground that we had with our Hungarian hosts.

During all the upheavals in Eastern European countries following the 1989 revolution, the issues in Hungary had a much lower profile than, for example, East Germany, Ukraine and Romania. This is because changes were introduced to its political and economic structures as early as the 1970s, making the transition to democracy and capitalism much smoother than elsewhere.

Hungary experienced market liberalisation in the early 1990s as part of the migration process from a socialist to a market economy. It was hit particularly hard by the global financial crisis in 2008/9, but is now recovering strongly, with an industrial production growth rate of 11%, one of the highest in the world outside China and India.

It has been a member of the EU since 2004, but not part of the Eurozone. Because it was able to devalue its own currency and set its own interest rates, recovery has come much more quickly – Greece, Ireland and Portugal take note!

A legacy of the Soviet era is that Hungary has a strong specialisation in machinery production, both industrial and agricultural. Its scarcity of natural resources and traditional reliance on farming resulted in State-sponsored programmes to build production machinery for other Eastern Bloc countries. This background has given it a head start in that particular sector, together with a skill-set that is easily adapted to other large-scale manufacturing.

The 21^st century, the main areas of Hungarian industry are, as well as machinery, steel production, energy, mechanical engineering, chemicals, food and drink and, last but by no means least, automobile production.

Hungary, with its strategic Central European location and industrial competence, now boasts car plants from four major brands: Mercedes Benz, Audi, Opel and Suzuki, as well as a whole host of sub-contract companies.

There are parallels with our own economy here. Since the 1980s, both the UK and Hungary have disposed of inefficient state-run industries in favour of home-grown enterprise and foreign investment by global companies.

In the UK, we have BMW Mini, Nissan, Toyota, Honda and Tata (controlling Jaguar and Land Rover), as well as SAIC, the Chinese owners of Rover. Both countries now produce a greater volume of vehicles than at any time in their histories. Furthermore, both have manufacturing growth rates that are outperforming their European neighbours.

This volume of manufacturing activity creates work for thousands of sub-contractors. Both the UK and Hungary have a large reservoir of skills and knowledge, particularly in the finishing sector, that make a major contribution to the efficient operations of their foreign-owned automotive companies.

We can feel a great affinity with the Hungarians and learn a great deal from them. It is enlightening to know that a country once best known for Paprika, Bulls Blood wine and the Danube has now become a powerhouse of Central European industry and a shining example to us all.

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If you are looking for new or used process equipment and machinery, head over towww.rileysurfaceworld.co.uk.  We have over a 1000 machines in stock. Make sure you use the search box at the top of the page, which is powered by Google search technology, to find the machine you are looking for.

A week in Mexico

I have just spent an enjoyable week in Mexico at the annual conference of the MDNA (The Machine Dealers National Association of the USA). It was a useful week in several respects. I was able to expand my social circle within the US machinery industry, acquire many new business contacts and practice my ever-improving Spanish! My overall objective was to find a strategy to exploit the American market from both a buying and selling point of view.

Historically, our countries have always been strongly intertwined. Ever since the descendants of the Pilgrim Fathers voted to speak English rather than German we have been friends, notwithstanding the small matter of the Civil War. Certainly for the entirety of the 20^th century the USA was our major ally and prime trading partner.

The growth of the EU and our increasing inclination to face East rather than West has seen that bond begin to unravel. But cultural and emotional links are still strong – look how many Americans and Canadians enthusiastically lined the routes at the Royal Wedding!

When contemplating doing business in the USA, there is a temptation to be bamboozled by the sheer size and scale of the market. We think that because they like us, talk a version of the same language, watch the same movies, eat the same kinds of food, then the business culture will be the same as well. And yet subtle but important differences need to be taken into account.

Firstly, you must take heed of American self-sufficiency and insularity. It used to be the case that their manufacturers produced primarily for home consumption. Their great industries, such as automotive, aerospace, computers, food & drink, produced goods for the people, employed the people, provided their healthcare, education and pensions, with little or no outside help.

All of this has changed. The great manufacturing powerhouse that was America is in deep crisis. It all started with the emergence of Germany and Japan after World War Two and has now taken on a new dimension with the growth of China, Brazil and India. Many American citizens have become heavily dependent on the State and the US economy is heavily dependent on imports, not a healthy scenario.

So where are the opportunities for our own industry? Well, for starters, many of our UK finishing sector OEM companies have been American owned or represent American manufacturers. Just think Wheelabrator, Westinghouse, Donaldson Torit and Harper Canning.

The USA relies on its UK subsidiaries and many other independent partners as its gateway to the lucrative European market. In the UK we are on Europe’s doorstep as a prominent if semi-detached member of the EU. We are governed by the same rules and regulations, we have reluctantly embraced metrification. Sometimes we can even talk some of their languages, and they can certainly talk ours!

From our company’s point of view, the great opportunity is in buying redundant US finishing machinery from OEM manufacturers with European links in order to repatriate them for sale in the European market. Due to the downturn in their manufacturing, they currently have a great deal of equipment that is surplus to requirements. On this side of the pond, we are growing again, even if it is from a smaller base, and the European market is ready and waiting. All we need is reliable partners to assist with inspection, purchasing and logistics.

Every other UK company has a different pitch to make. We have a solid and trustworthy base in engineering, innovation and specialist skills, particularly in the finishing sector. We can coat, paint, polish, clean and apply our finishing skills to many American products and prepare them for the European market.

The opportunities are there, we just need to exploit our already strong relationship to help to bring them to fruition.