Recapturing our past glory in manufacturing
Konrad Goess-Saurau believes that engineering experience is the key to a lucrative manufacturing business. As Executive Chairman, the entrepreneur is taking British Ceramic Tile on its own success story by looking to the UK’s industrial past. Gary Price reports
‘A nation of shopkeepers’ is the disparaging remark supposedly used by Napoleon to describe the UK as unfit for war against France during the 1800s. His assertion ultimately proved wrong as Britain’s manufacturing capacity was far greater than that of France, providing the tax base necessary to conduct a prolonged war of attrition. However, Konrad Goess-Saurau, Executive Chairman of British Ceramic Tile, based in Newton Abbot, UK, argues that the UK workforce has now traded in its industrial roots, opting instead to pursue glamorous roles in the city, at a detriment to the birthplace of industrialisation.
‘Very few people study science or engineering in the UK, instead opting into English literature or performing arts’, explains Goess-Saurau. ‘In Austria or Germany, you strive to become production director at a large ceramics factory or have a role in engineering research in the motor industry, but here you become an accountant or lawyer.
It is a completely different culture.’
Goess-Saurau became interested in the manufacturing trade at an early age. His parents had investments in a number of industries when he was growing up in Austria, including a stake in a concrete company owned by Bamburi Portland Cement in Nairobi, Kenya. He went to work there in 1978, after graduating from the Graz University of Technology with a PhD in industrial engineering, to learn how a manufacturing company operates.
‘Experience is the only thing that matters and my education has helped me to better understand how to run a business in industry,’ he explains. ‘When it comes to building a factory, talking to suppliers, or negotiating with people, you need to know exactly what you are doing.’
He has built his professional career around this philosophy, and has used his knowledge to spot lucrative investment opportunities in the USA, South Africa and the UK.
While working in Kenya during the 1980s, I met a guy who asked me to invest in the emerging cellular telecommunications market’, he says. ‘He told me that it was possible to link laptop computers with cellular data and fax it through the air. I invested and we began developing the technology before selling the business to Motorola for a healthy return. My engineering background helped me to understand his idea and how it would work when others thought it couldn't be done.’
In it for the long-haul
As an entrepreneur, Goess-Saurau enjoys building businesses more than running them, but says that to be a true industrialist people must sacrifice the short-term pay-off for long-term success.
‘The mentality of many investors in the UK is to buy today, sell in the autumn and get a bonus. Some of the people hailed as the great businessmen and women of this nation actually destroyed the industries by stripping away their assets, stopping research and cutting cost. In Germany you still have companies like Bayer AG in Leverkusen that are pillars of society, research and education.’
Goess-Saurau believes it was under-investment which caused the decline of the British tile-making industry in the 1970s, when Italy and Spain took a large share of the market after investing in new kilns. ‘All the technological investments in industry seemed to bypass the UK after the Second World War’, he says. ‘Britain was still operating with tunnel kilns when Italy had roller kilns, which were more fuel efficient and suited to fast production cycles and rapid flow processes. Old industry just never made the quantum leap.’
The result is that imports now account for 80% of the UK market. Nevertheless, he says British Ceramic Tile, which was formed after Goess-Saurau bought the assets of 130-year old Candy Tiles in 1998, can now take on overseas manufacturers after a major investment in modern production facilities.
‘What attracted me to ceramics is that the industry is not consolidated. In the paper and cement industry everything is owned and sold by three or four mega multinationals. It is a closed shop. But because there is such a local element with ceramics manufacturing, it is completely different and the best raw materials are on our doorstep.’
Goess-Saurau’s desire to invest in ‘old economy’ investments has put the company in a good position at a time when foreign tile exporters are facing financial difficulties. ‘We have cut our production costs by 40% by becoming more efficient through investment, and now the pound has lost 30% against the euro and the dollar, making us more competitive’, he explains.
By selling through retailers including Laura Ashley and Homebase, the company has taken a six per cent share of the UK wall tiles market and aims to lift this to 30% by the end of 2010. ‘We’ve come on-stream with extra capacity at the right time because imports are now more expensive and harder to come by, but our main asset is our clays.’
British Ceramic Tile’s factory is situated in the midst of the white clay reserves that played a key role in the success of the UK’s potteries in their Victorian heyday.
‘These clays are the envy of the world’, he says. ‘Spanish and Italian industry was founded on local red body clays in places like Valencia, but nobody wants this anymore because they are harder to glaze than white body tiles.’
As a mark of its success, the company recently won the UK Tile Association’s Wall Tile of the Year award for the third year running and earned ISO 14001 accreditation in December 2008 for energy efficiency.
It has not all been plain sailing since Goess-Saurau took over the company. ‘I underestimated some of the difficulty with ceramics because there is always a bit of black art with it’, he explains. ‘It is not a totally defined process because with every raw material there is a different trick. You have to learn how to grind it, how moist it should be, how to press and fire it.’
However, Goess-Saurau says the biggest challenge was finding the right people with the precise skills to run the factory. ‘The old Candy factory was in a different century in terms of technology. We now have a highly automated modern factory and have spent £30m to double our output so the future looks good. But to get a team of 300 people who are loyal, know their trade, and are self-motivated is difficult and takes time. ‘It would be easier if more people studied useful subjects such as science and engineering and entered the work arena with practical skills. There is nothing creative about being an estate agent!’.
Further information: BCT
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