W Howard was planning to upgrade the production facilities at its Manchester factory last year when a more enticing proposition arose – the opportunity to buy Balcas Kildare.
“The Manchester site was becoming quite stretched and we were running at full capacity. We were going to upgrade our production facilities and potentially install some new ones, then this acquisition potential came up and we thought that was a better bet,” said W Howard Group chief executive Jonathan Grant.
The Irish business had surplus capacity and so the signing of the deal increased W Howard’s capacity, and production flexibility.
W Howard already has a factory in Manchester; Polyco, the veneering and foil-wrapping business in Newtown, Wales, which was bought in 2009; and a dedicated collection and distribution depot in Thurrock, Essex.
The Manchester facility has four lines and there are three in Kildare. Bringing them under the same umbrella will improve the efficiency of both businesses.
“Having two manufacturing sites gives us greater flexibility. It gives us the ability to swap things around and create better efficiencies,” said Mr Grant.
“The Kildare business has a very loyal following and will continue to service its own customers, but it will supplement any supply that Manchester or London needs. We had been buying product from Balcas to supplement supply so now we own the business we can use the surplus capacity to ensure we have additional products.” The Irish business also provided a new market and broadened the company’s product ranges.
“We didn’t do much in Ireland previously so this opens up the Irish market for us,” said Mr Grant.
It also adds the KOTA product range to W Howard’s offering. While W Howard produces primed, foil-wrapped and veneered MDF mouldings, the KOTA range is pre-finished with a white polymer which is impact resistant. Balcas launched the range in 2012.
The acquisition was also timely, given the pound’s weak performance since the EU referendum in June last year.
“The decision to buy was around the time of the EU referendum so it was another good reason to push ahead and buy the business. It gives us a foot in both camps,” said Mr Grant. “It wasn’t the primary factor but now it’s certainly an important factor.
“It’s helped us with the euro and enabled us to have that flexibility without having to worry about the exchange rate.”
Purchasing the new business wasn’t just about product diversification either; it was also about security of supply for W Howard’s customers.
“We wanted to have a second manufacturing site, especially with the problems we had with supply after the explosion at Kronospan last year,” said Mr Howard. “Our customers were very patient but we want to make sure the likelihood of that happening again is minimised.”
The Irish business, now known as W Howard Kildare, sources its MDF from the Medite plant in Clonmel.
The two enterprises – W Howard UK and W Howard Kildare – will be operated as separate businesses but will be “very much linked from a trading perspective”, said Mr Grant.
“We have great communications lines between the two businesses and the staff in Ireland have been very welcoming, as we have to them, and it’s a real pleasure to be able to work together,” he said.
Part of that working together will be a sharing of best practice.
Just five months after being handed the keys to the Kildare site, W Howard is now planning to upgrade the business.
“We want to make sure the production facilities in Ireland are as modern as possible.
It’s not had a lot spent on it in the past five to six years, apart from the KOTA line so we’ll be upgrading things like the fork lift trucks,” said Mr Grant.
There are also plans to improve manufacturing efficiencies by using processes that are already in place in Manchester.
“There are further options to do more shift work in Ireland so that will also increase capacity,” said Mr Grant.
W Howard will also put a lot of energy into the KOTA brand and products, which will continue to be produced on the specialist equipment at Kildare.
“KOTA is a fantastic product that’s been undersold so we want to launch it properly,” said Mr Grant.
“We also want to add some new KOTA products to the selection – different thicknesses, different paint finishes and profiles.”
Adding the Kildare business, and before that Polyco, has helped to diversify W Howard’s business and this, said Mr Grant, ultimately benefited customers.
“We want to give our customers the edge in the market.
“The more flexible we are, the more products we have to offer and the more service locations we have gives our customers the confidence to be able to sell more, which gives them the edge,” said Mr Grant.
