As they prepare for MACH 2012 BCW Engineering traces a decade of successful asset finance which has taken the business from a twinkle in the eye to a £10m turnover organisation.
They dreamed a dream
When Alec Cassie and Paul Biggs of BCW Engineering walk through the doors of MACH 2012 their thoughts will almost inevitably travel back exactly 10 years to MACH 2002. When they arrived at that exhibition the pair had little more than a basic business plan and the dream of creating a new engineering company, which under prudent management, could grow to become a major force in the UK sub-contract engineering sector.
That dream has come to be a reality. Today BCW Engineering Limited boasts a turnover in excess of £10m. The business has invested over £4m in the latest CNC technology, employs over 100 staff and has won countless awards for technology and innovation.
The roots of this fantastic UK manufacturing success story began with a chance meeting at MACH 2002. Cassie and Biggs knew they wanted to move into manufacturing but thought it would be impossible to find someone to back their plan. That was until they bumped into an old acquaintance, Steve Gee, then general manager at Close Asset Finance, who was exhibiting at the machine tools expo for the first time in 2002.
Gee had known Cassie and Biggs from their days at aerospace supplier, Hyde Group. After a short discussion around their plans for a new business, Gee agreed to back Cassie and Biggs and lent BCW £95,000 to buy their first CNC machine, a Hitachi Seiki H400. Cassie and Biggs ordered the machine at MACH 2002 within 30 minutes of the meeting with Gee.
“We’d no premises, nowhere to put it” recalls Cassie; but the company was very soon established in Unit 23 on the Smallshaw Industrial Estate in Burnley, Lancashire. “We’d decided we were going to make the business pay for itself, and the first three month’s profits paid for the deposit on the machine,” says Cassie. This first Hitachi Seiki ordered at MACH 2002 is still producing parts today, albeit it alongside one of the most up to date CNC machine shops to be found in the North of England.
Over the past 10 years, Close Asset Finance has continually helped BCW to grow, providing funding for around 20 CNC machines which equates to around £2m of investment. Gee looks back over the relationship saying: “While Alec and Paul are prudent directors, they can also spot an opportunity when they see one. They are very forward looking and always seem to be one step ahead”.
Alec Cassie explains the grounding behind BCW’s financial management: “One of the first things we did was employ an accountant – we needed to understand our cash position. This was a result of my Hyde Group training and I remember saying we would die if we didn’t do £4k per week. I took the view we might be making parts and have a healthy bottom line, but you’ve got to be in control of your cash to keep a company healthy.”
Initially, BCW focused on the automotive sector. However, it soon became clear if the company was to achieve its original vision, it required both a technologically advanced UK operation, and an offshore, low cost business.
This realisation was crucial to BCW’s next stage of development which saw a subsidiary manufacturing plant established in India within five years as well as a new high pedigree technology location in the UK to support the operation at Smallshaw. This global sourcing strategy has seen some parts – mainly for power generation – being produced by BCW’s partner in India. “It isn’t a case of selling your soul, it’s about asking how can I enhance my business?” says Cassie. “The answer is by getting a £3m contract and having £1m of it made in India to secure £2m to be made in the UK”.
“It isn’t a case of selling your soul, it’s about asking how can I enhance my business?” – Alec Cassie, BCW Engineering
Not all about the money
For over 10 years the policy at BCW has been to invest heavily in people. This has been recognised by numerous awards and also royal recognition when Prince Charles opened its second site in 2008. The policy was to employ time shared professionals; with the patience and ability to teach at all levels. These individuals were then mixed with people from all walks of life; from graduates and school leavers to people of any age that just expressed a will to work and be trained. It’s an approach which has certainly borne fruit, as a number of these individuals are now in senior management and engineering positions.
In common with many UK manufacturing SME’s however, when the downturn hit in 2008 and 2009, BCW had to cut their cloth accordingly. The business had to lay off staff to cope with strained conditions – albeit, they were all re-employed before the middle of 2010.
During the hard times though, BCW turned again to Close Asset to ensure that the business did not lose competitive ground, despite being forced to downscale. At a time when UK banks had no appetite to invest in the manufacturing sector, Close provided facilities to ensure necessary investment took place.
Shoring up investment activity has enabled BCW to accelerate out of recession. Cassie comments: “In the seven years to 2009 we had never missed a finance payment or defaulted in any way. Close were there when we needed them on day one and they were there again for us to ensure we didn’t miss on the opportunities which lay before us in 2010 and 2011.”
Looking forward, the growth potential, Cassie says, is in power generation and aerospace, though the traditional automotive work will continue to be a valuable staple. “One of the reasons we have survived” says Cassie, “is we are balanced across aerospace, automotive, power; we’ve just got our first medical order and were looking closely at nuclear”.
So, the next 10 years will take BCW into another carefully planned growth pattern. This will include building an even stronger relationship with its Indian partner L.G.Balakrishnan and, of course, a continued relationship with Close Asset Finance – though under its new nomenclature of Close Brothers, Asset Finance.
The business will be sticking to its diversification policy into all sectors of engineering, while keeping it’s ethos of training and succession planning alive. Here’s to the next 10 years and MACH 2022!