After 167-years of making speciality paper and technical fibres, James Cropper plc cannot afford to sit still in a rapidly changing global industry. Yet even with this weight of responsibility for the family business on his shoulders, chairman Mark Cropper has found time to indulge his other passion - hydroelectric power. Will Stirling interviews.
In Mark Cropper’s modest Portobello Road office there is a map of the Lake District peppered with coloured shapes. Each one marks a hydro-electric power plant in differing stages of development. “Our mission was to lead the renaissance of hydropower in this region. We’re doing that,” says Mr Cropper, chairman of James Cropper plc and managing director of Ellergreen Hydro.
A four-year spell funding energy start-ups at corporate financiers Turquoise Associates fuelled his interest in hydropower. “I became obsessed with it. Compared to other sources of alternative energy, which need millions of pounds and might never work, hydro is extremely efficient and has been around forever. There is a huge amount of unexploited potential in the UK – not least of all in my home, the Lake District.”
Ellergreen Hydro has five projects installed and 20 in the pipeline, while other third party projects dot the county. The company has partnered with local engineering company Gilkes to install turbines, where Gilkes also implements much larger scale projects in Scotland and abroad. They are nearly all grid-connected and power communities of two up to 550 households. Despite looming drought in parts of England this summer, it’s a thriving miniindustry and Mr Cropper has great ambitions for growth.
Sideline would be an inaccurate description of such a concern. But Mark Cropper’s ‘day job’ is chairman to the family firm, James Cropper plc.
Cropper the plc
Founded in 1845 when 22-year old Liverpudlian James Cropper came to The Lakes, today the company is a world-leader in making speciality paper, paper conversion and increasingly, the manufacture of technical fibres.
The Cropper family was in the thick of the Industrial Revolution, and by the 1840s had sold up much of its business and become philanthropists. Grandson of the family patriarch of this era, young James had no specified career but lots of cash. He fell in love with his first cousin, followed her to Kendall and bought a mill. In fact, Mark adds, the start point to Cropper plc can be traced back to 1753 when a local paper mill was developed, the first time such independence was allowed by the draconian paper barons.
Over 167-years, through wars and recessions, and over many generations of Croppers, Willinks (extended family), white and blue collar employees’ families, the company is today a hidden gem of British manufacturing. With an annual turnover of £86.8 million in 2011 and 55% owned by “family and friends”, it is a prime example of the UK’s own Mittelstand of large family-owned manufacturers which fight hard to operate in global markets and which support whole communities.
When an eminent historian was commissioned to write the company history but failed to deliver, Mark Cropper stepped in to the breach. The result, ‘The Leaves We Write On’, painstakingly puts the genesis of the company and papermaking into its historical context. “There was a huge crisis in the British papermaking industry after James bought the mill,” says Mr Cropper. “As it became more mechanised, the availability of raw materials – mainly linen and cotton rags – couldn’t keep up with demand. From the mid-1870s to early 1900s, the processes to make paper from wood fibre had been developed but this period was very tough.”
The ‘rag crisis’ was serious and The Times newspaper even offered a reward for a solution. “We solved it because we were very entrepreneurial; using material like hessian sacks,” Cropper says. “We weren’t able to make a fine, white paper so we added dye to it, which is how we got into coloured paper. Like all good company developments you respond to your environment.”
This specialisation was the first of two key developments in the Cropper company story. Changes in the raw commodity drove the next change.
Paper needs wood pulp, a cyclical commodity. “The main reason we have survived is that the board recognised in the late ‘80s that papermaking alone was too volatile and we needed to diversify,” Cropper says. While all the pulp comes from sustainable sources, “there is a new paradigm in buying practices now” he says. “The Chinese strategically purchase large quantities, manipulating the market.”
Biography: Mark Cropper
- 1996 – University of Edinburgh, MA in English Literature
- 2001-04 – Joins Johnson Matthey and researches the fuel cell industry.
- 2003-04 – Writes and publishes Cropper plc’s history, ‘The Leaves We Write On’.
- 2004-08 – Joins corporate financiers Turquoise Associates. Raises capital for new energy start-ups and establishes Turquoise Capital.
- 2006 – Joins the board of James Cropper plc
- 2010 – Becomes chairman, James Cropper plc
Son of Sir James Cropper KCRVO, Lord Lieutenant of Cumbria, who he succeeded as chairman of James Cropper plc in 2010.
Mark is managing director of Ellergreen Hydro, a hydro-electric project developer and a director of Ellergreen, Ellergreen Tidal and Logan Gill Hydro. He is an industry champion for the “Make it in Great Britain” campaign. Mark splits his time between the paper mills in Burneside and his London office. He is married and has two children.
Until the 1950s, British papermaking had been isolated. This fragmented, old school industry got a nasty shock when Britain joined the European Free Trade Area and was introduced to the Nordic block’s modern processes. “Suddenly it was exposed to huge Scandinavian plants, where trees went in at one end and paper came out the other,” Cropper says. “It was disastrous, a huge block was wiped out.” From the mid-1960s to 1970s many mills closed. The 1990s were not as bad but the last decade has seen many more closures. “This is why in the last year I’ve found myself doing more and more government lobbying.”
Essential changes followed: the business modernised then diversified. “Between £40m-£50m was spent, mainly through the 1980s, on renewing the whole business – mills, capital equipment, new treatment processes. Since then we have an average capex spend of £3 million a year.” The company strategy, Cropper says, has always been to reinvest heavily in the business. It is publically listed on the AIM market, but “the majority shareholding is family, which clearly helps a lot when reinvesting.”
Two new businesses were established, and both have been essential to keep Cropper plc in the global paper chain. James Cropper Converting applies a vast range of finishes to the raw coloured paper – sticking, embossing, impregnating, surface finishing. Paper samples in his office feel like silk, another like rubber. Cropper is a world leader in picture mount board. “Most of it is chemically inert to museum quality,” says Mark. It also makes the highest quality digital grade paper, and fire retardant board was developed after the Kings Cross rail disaster. “We try to do it all – but an identifiable trend across the business is that we push the boundaries of what paper can do.”
The second new business, Technical Fibres, was born out of the scientific leanings of two board directors. “They snuck off into the laboratory one night and experimented with carbon fibre,” Cropper says. The key achievement was to make the material bond. “The results that returned from analysis were amazing. This stuff absorbs electromagnetic interference, radar – it has many properties.” The next big step was in the late-1980s, when the company invented a machine to make these products at scale.
“This is a much lower volume, higher margin business than paper. There are very interesting applications for surface finishing in aerospace, automotive, fire protection – any industry that uses composites.”
Cropper the man
At 37, Mark Cropper is young to chair a large company. Was the job an inevitable birth right? “I was fortunate. My father never put pressure on me to join the business. Not all family businesses are so liberal,” he says.
After dabbling in journalism, he joined chemicals company Johnson Matthey, a supplier to Cropper plc, which was investigating fuel cell technology. He formed a small research team to investigate the fuel cell industry’s trajectory. “We rapidly became global experts, travelling the world and talking to the main players. Within a year we were asked to speak at conferences – within a few months of that we chaired the conferences. It was great!”
After three years, he contacted a corporate finance company for some career advice. “The MD said “Could you win us some business [in fuel cell technology]?” Thereafter I made it my job to meet the CEO not the junior scientist at these firms. I won them some good business and joined the company, then set up an arm called Turquoise Capital. I couldn’t have done anything I’ve done since then without that grounding, particularly when you are raising money for energy start-ups and writing business plans.”
In spite, or perhaps because of the family company inheritance, Mark Cropper is a realist and a shrewd businessman. “This whole story is very nice. We employ 550 people, we have world class products and world class customers. But the truth is we have a huge task ahead of us. There are big opportunities too, but we have to become much more profitable – it’s a fact, not a choice. If you analyse our inflation-adjusted performance over the last 20-years, as I have, we’ve kept our head above water but we’re treading a tightrope, like a lot of manufacturers I’m sure.” The plan, he says, is to develop each business division but be open-minded about what part is profitable as the market changes. “Someone might say we have a 200-tonne order. So what? Like any manufacturer we must think in terms of margin, not volume.”
The power of brand, and championing industry
By the 2000s, Cropper plc had many virtues and a strong name. But, to compete globally, Mark knew it needed a bigger commercial push. “The leanness of our operations had received devoted management attention for decades. But we haven’t been very commercial. The paper business only recruited a marketing manager two years ago.” Today each division has a dedicated marketing manager.
Joining luxury brand association Walpole opened his eyes to brand leverage opportunities. “As a member of Walpole, global brands ask you; ‘if you were a big brand, what would be your story?’ Actually, it would be bloody great! We’re a seriously old school British manufacturer, still here after many tough years. The biggest employer in our region, with generations of the same families in every part of business, making something this is really interesting and special as well.”
Mark Cropper has become an Industry Champion within the ‘Make it in Great Britain’ campaign run by BIS. Already an old hand at linking business to the community and young people, the appointment reflects his passion for sustaining his own company in the UK, and for wider manufacturing. “I want to get more involved in the [manufacturing] agenda. Companies like ours have a duty of care to safeguard manufacturing for the future, which it can if we adjust to the world. There are huge opportunities and no reason to miss them.”