Avocet Steel strip ltd was established in 1996, it was a product of the industrial turmoil of the late 1980s as the demand for steel and metals contracted in line with the offshoring of manufactured products. As customers closed or contracted steel and metals suppliers fought for market share. Prices fell, margins were squeezed, costs were cut and those metals suppliers who were to survive did so by cutting staff. Often replacing the experienced people with inexperienced but cheaper options. Many metals suppliers were unable to compete and closed. The writer was one of those experienced personnel, aged in his mid forties and left high and dry with a stark choice. Accept a complete career change or seize the opportunity to learn the lessons from the mistakes of the past and go it alone. We chose the second option.
Avocet Steel strip, later to become Avocet Precision Metals was designed as a low cost trading company. Working as sole agents for a number of producers within the EU guaranteed both quality and continuity of supply. By selling direct and not carrying stock customers could expect very competitive pricing. The absence of the overheads of warehousing, stock and a workforce removed the necessity for high margins, the ease of trade within the EU, single market particularly with problem free cheap groupage carriage made all this possible. A unique, efficient de-risked low cost business model thrived and grew steadily in an ultra competitive market and is as valid today as it was back then. The only difference is that todays Avocet Precision Metals is not just EU focused but imports and exports globally.
By 2016, Avocet Precision Metals was still a small lean business, office based with 5 people but opportunities with new customers were occurring that required a transition.
“We should look towards manufacturing.” Those immortal words echo down the last 6 years. At the time we really did not understand the size and difficulty of the task that we were to undertake. It’s easy to call it a journey but its more of an odyssey with unforeseeable challenges, traps and ambushes always jut around the corner.
Desmond Tutu said that the way to eat an elephant is in small bites and with hindsight that’s what we have done.
2016 – 2020 was the easy part. At this stage the project progressed from a crazy idea to a concept with some elemental structure. We identified the product that we proposed to produce, we studied the competition and the current market and then the projected market. We compiled some costings and derived some projections for sales, turnover and profit. So far so good. By the end of 2019 we had he bones of a plan except we didn’t plan for Covid. We were not alone in that! Ironically, Covid perhaps did us a favour because it prevented us from actually doing physical things and forced us to concentrate on planning and strategy and getting our narrative straight. This was to become vital when seeking investment.
2020 meant running the existing business, Avocet Precision Metals remotely, ensuring that our customers got what they needed and at the same time getting our investment offering in Shape. Here we were lucky, a family connection lead us to ‘ The Change’, a Belfast based company that specializes in preparing start ups for investment and scale up. In 2020 the first valuable lesson was learned – that transitioning from trader to manufacturer or from start up to viable business is not for amateurs. It was vital that we had this professional help because those who we may wish to invest expect huge quantities of information and data presented in a professionally compiled format.
2020 saw us make the first contacts with the investment community; the venture capital companies and angel investment groups. This was all done remotely through “Teams” and “Zoom”. It was not encouraging, the sector is highly tuned to risk and is even risk averse and the statistics do not help with only 1 in 1000 companies progressing from start up concept to functioning business. We were confident in our offering in that we were to be operating in the world’s fastest growing market for electrification in Li ion battery manufacture. Nevertheless, there were repeated refusals and the company was usually criticised as being “too early”, that is not far enough along the transition to actual manufacturing to be an investment attraction. In addition the potential costs in terms of equity surrender were disturbing. In June 2020, our key customer invited us to join a grant consortium with Innovate UK and we were successful in our bid. This gave us both confidence and a financial resource. It was decided that we should continue and use all our own financial resources, the cash reserves accumulated over years of successful trading in Avocet Precision metals plus the new grant and continue the journey.
In spring 2021 a suitable factory unit was identified. A new unit that required fitting out but would house both Avocet Precision Metals and the new company ABM. It was clear by then that the biggest gap in our knowledge needed to be filled. As a commercial team we knew nothing about engineering or the complexity of setting up a manufacturing operation. The first new hire needed to be an Operations Director who knew how to do this and could help to build an engineering and technical team.
Once again ‘The Change’ played a vital part in a very successful recruitment. By the Summer of 2021, the team was 7 people with an addition to the sales team and the Ops director all crammed into the small commercial offices.
In November 2021 both companies moved into the new factory unit. The recruitment of the Ops director gave confidence to a new potential investor and an equity deal was agreed.
By Christmas 2021 the order was placed for the first high speed machine scheduled to arrive in Spring 2022.
The new year of 2022 was greeted with great optimism. Key personnel in Operations, Engineering and R&D joined the company in January 2022 but first that team had the job of building and equipping the laboratory and workshop in preparation for the arrival of the first HS machine. Two further new team members in R&D and Quality joined the company in spring and Summer 2022 taking the total to 14.
A bid for a scale up grant again from Innovate UK was successful giving ABM the resources to accelerate the scale up plans. The first HS machine finally arrived in August over 3 months late but the engineering team performed an incredible feat of achieving the completion of FAT approval within 10 days.
3 more Engineers are planned to join the company in Spring 2023 to implement the scaleup.
2023 promises to be an exciting year with early stage manufacturing commencing in October 2022 with customer trials followed by manufacturing to orders.
Both companies achieved ISO quality certification in September 2022 preparing the way to supply into the market.
More production machinery has been ordered for arrival in early 2023 (assuming no delays) and the entire production process will then be in-house.
So much has been achieved in the last 12 months but this is just the beginning. We have learned an enormous amount but we have much to learn and much more to achieve. Transitioning from trader to manufacturer is like marriage ; not to be undertaken lightly nor without some trepidation. It requires patience and determination and a fair amount of luck. Above all it requires the humility to know when you don’t have the answer and the wisdom to know who to ask.