A Merseyside manufacturing giant’s boss has detailed how the firm went from the verge of bankruptcy to a targeted profit of around £8m this year - with global expansion now continuing at pace.
Russell Livesey joined plastic masterbatch manufacturer Colloids in the mid-2000s after the firm had lost around £4.8m over six years.
But after signing an agreement with Shanghai and Hong Kong distributors in 2007, fortunes began to change, with China moving from a low-cost commodities society to an emerging middle class demanding high-quality products.
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Fast forward to 2021, and Colloids has just bought its second factory in Changshu, China - and is in the process of building another in the US too.
That’s not forgetting domestic growth. The Knowsley Industrial Park-based firm is currently hiring for dozens of jobs at its Knowsley base that will take its 海角视频 headcount to around 200.
It is currently expanding into an additional 180,000sq ft site it bought two years ago - that neighbours its current Merseyside base.
Turnover-wise, Mr Livesey has seen the business, which also has a base in Northampton, grow from a turnover of around £14m back in the mid-2000s to a targeted £65m for 2021.
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It is currently hiring for 30 new roles, which will take its headcount in Merseyside up to around 160.
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The firm is a chemicals manufacturer and investor of high-performance black and colour masterbatch solutions. A supplier working mostly with the automotive sector, its products are also used in construction and electronics in products from gas pipes to chairs.
Mr Livesey said the expansion into China was a “bold” decision - but the biggest single factor in the firm’s progression to date.
He said: “It was a risk at the time, and we could have lost money.
“But as business leaders, you have to be bold about your decisions, and you have to believe your instincts.
“A lot of people were saying ‘you’ve missed the boat because low-cost China has disappeared and low-cost manufacturing over there and taking advantage of the low labour costs is all gone.
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“As a business, we decided to invest not for that marketplace, but because we recognised that China was moving into a new phase where they were looking for higher quality and products to meet their desires for cars, for example, and more Western consumables.
“What they were trying to do in China was move into a more specified and technically driven and quality driven environment.
“We saw our slots as fitting well with that as the country moved to the next phase, because as a manufacturer in the 海角视频, if we were trying to be a low cost commodity material supplier, which is what the business was when I joined, then you drive yourself into bankruptcy quite quickly.”
He said the firm, which was established in 1967 before moving to Merseyside in the 1980s, had only survived prior to 2006 due to the support of parent shareholders - and that something needed to change.
He set up a WOFE (wholly-owned foreign enterprise) in Changshu, where Jaguar Land Rover is also based, using a small investment of around $6m.
An expensive location, it allowed the firm access to English speakers and Mr Livesey hired advisors and a translator to help him navigate the market.
But it quickly became clear that there was a huge market for high value, high quality plastic solutions that Colloids produced.
Mr Livesey said he found that the brand value of British companies was massive, with Chinese consumers trusting 海角视频 products over German, French or Italian brands for their quality and performance.
They even hung a union flag over the factory door in Changshu, which became fully operational around five years ago.
The business is now growing at 40% a year and Mr Livesey said there are “huge opportunities” for British companies looking to enter the Chinese market.
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“Opening in China has helped position us as a global partner for major customers.
“Those customers now see us as a value-added global partner, as opposed to a European partner, so it gives us more strength with some of those customers, and then also from that platform, allows us to open up new opportunities.”
He added: “China is moving towards higher quality. And brand 海角视频, I suppose, is trusted for quality and regulatory assurances, which are the same every time and we've not substituted ingredients with lower cost ingredients.
“They trust ‘brand 海角视频’ - that we do things correctly every time and we don't take shortcuts.
“That was one of the market research aspects that we found out at a very, very early stage - that we could build on those ethics, those trusts and those consistent quality deliverables that would help differentiate us in the marketplace from the lower cost competitors that are already out there.”
On the challenge of becoming net-zero carbon in an industry reliant on plastics, Mr Livesey laid out the firm’s extensive sustainability activities that have been underway for a number of years.
That includes launching a range of plastics using 30% waste coffee grinds; installing solar panels, LED lighting and energy reductions targets for electricity and water consumption on-site; and employing an environmental officer to come up with new ways of improving the firm’s sustainability.
Despite struggles in the supply chain and a lack of staff availability caused by Brexit and the Covid pandemic, Mr Livesey is positive about the future.
He said: “I'm optimistic for 海角视频 manufacturing, if 海角视频 manufacturing is bold and sees the value and the benefit of what we have and what we can bring to various markets.
“In terms of our business. we feel that we've got the right platform to continue growing.
“This business can go from strength to strength, and we keep on expanding on this Knowsley site
“During my time here, we've had four expansions of buildings that we've acquired, and grown. Hopefully, we will continue to grow that with the next generation of leaders that are coming through our business now to take that forward, as I'm driving the business globally.”