Niche work

Posted on 18 Aug 2008 by The Manufacturer

ATB Morley is achieving growth, despite operating in a challenging market. Robert Pols hears the story from MD Ian Lomax

Much of the world’s manufactured product seems to be travelling (often on the traditionally slow boat) from China. But ATB Morley is bucking the trend.

The company is part of the Project Motor Division of the Austrian motor group ATB – a group which also includes ATB Laurence Scott in Norwich and Brook Crompton in Huddersfield and Blackheath – with ATB itself a division of the Vienna listed ATEC Industries.

Established in 1897, electric motor manufacturer ATB Morley operates from three locations: the original site in Leeds; a Bradford facility that was purchased to accommodate expanding production; and the former David McClure factory in Stockport, which was acquired and incorporated into the business last year. The company designs and manufactures low and high voltage electric motors, specialising in heavy-duty and flameproof models for – in particular – the global underground coalmining market. In fact, about 75 per cent of production is for coalmining, while the remainder is for oil, gas, MoD and general industrial applications. In addition, the company has a particularly strong retrofit capability, for its long experience of bespoke manufacturing has given it the expertise and flexibility to design totally interchangeable replacements for old and obsolete motors.

While there is a firm focus on design and innovation, to talk of new product development would be to miss the point. “Everything is a new product,” explained MD Ian Lomax. “We design and manufacture the products that we’re going to sell, and we have all the capabilities and design tools necessary for that. We’ve now developed motors of up to 1800 kW, and we’ve done a fair amount of R&D work on higher voltages over the last year. But our R&D isn’t carried out in a vacuum. What we make, we sell, because it is made to order.”

However, he continued, the company serves a changing market: “The biggest issues facing us at the moment are availability and costs of raw materials, and increased competition from domestic suppliers in our main market: China. Since China’s manufacturing industry is becoming stronger, it’s now only the top end of high-tech equipment that’s going into the country from the UK and the rest of the world.”

Nevertheless, ATB Morley’s motors find their way there in very healthy numbers. Of the three quarters of total production that becomes part of mining equipment, some 80 per cent goes overseas, and nearly half of that is destined for China.

As for the prospect of a declining coalmining industry, the company has formed an appropriate response. “The global demand for coal is not about to decline – there are many hundreds of years of known coal reserves. While the industry has experienced significant growth, this will eventually saturate. So, to support our own growth, we need an adjustment to our product portfolio,” Lomax argued. “We’re working to grow the percentage of our production going into other industries, and the acquisition of David McClure has given us valuable access to new markets in, for example, the marine and defence sectors. These are distinctly specialist arenas, and they fit well with our concept of serving niche markets. We’re seeking to build on our ability to make very specialised heavy-duty motors and to take our coalmining technology into other market places.”

To ensure that this response is effectively followed through, the company is investing regularly. Last year’s acquisition of the Stockport operation, of course, represented a major financial commitment, but ATB Morley also routinely spends around £200,000 a year on new or replacement equipment. Recent investments have included new brazing equipment, specialist machines for coil winding and welding manipulation, and a new five-axis CNC milling machine to follow on the heels of a five-axis DMG machine bought two years ago. Next on the shopping list are a new lathe, vacuum pressure impregnation equipment and an annealing oven.

“Investment is a standard feature of our life,” said Lomax. “We may have a factory that’s over a century old, with some very old equipment, but we have our fair share of modern equipment, thanks to our policy of annual upgrading and replacement.”

Allied to a willingness to invest is a concern for efficiency. “Everything we make is made to order and – apart from some nuts and bolts – we carry practically no stock. As material comes through the door, we consume it. We have very limited room, and we really do make the most of our floor space. So there’s a sense in which we are naturally lean. In 2003 our turnover was just under £7 million, and it had risen to over £15 million by last year. So in four years we have more than doubled our turnover and we have further plans for growth. This year, though, we’re embarking on some formal training for lean manufacturing. I believe there’s still waste to be identified in processes and the movement of material, and we’re hoping to apply more science to what we’re doing.”

This new drive will support a positive vision for the future. The key aims are to continue growing the business and to expand the product portfolio. In the longer term, too, it will become necessary to find more space to accommodate the projected growth. Meanwhile, in everyday operations, a focus on continuous improvement will be sustained. Last year, for instance, the business grew by over 25 per cent – with some effort – this year it’s running steadily and without strain at the new level with modest growth. But the job of continuous improvement is, by definition, to be continuous – and continue it clearly will.

Informing ATB Morley’s vision is a strong sense of the distinctive identity the company has built for itself. “Manufacturing is still around in the UK,” said Lomax, “and we are part of it. We are a fully-fledged manufacturer: we buy raw materials and by fabrication, machining and winding, transform them into motors; we don’t buy in kits of parts. We work in niche markets, where an awareness of our strengths determines the direction we take. So we know how to be competitive and how to seize new opportunities.”