UK: J and J Siddons - the founder's estate. (2 of 2)

UK: J and J Siddons - the founder's estate. (2 of 2) - Siddons Industrial Estate is certainly no showpiece science park of lawns and tinted glass. Many of the buildings are more or less as they were in 1880, but now under a coating of grime and with a br

Last Updated: 31 Aug 2010

Siddons Industrial Estate is certainly no showpiece science park of lawns and tinted glass. Many of the buildings are more or less as they were in 1880, but now under a coating of grime and with a broken pane here and there. Yet out of a total of 25 units - varying in size between a few hundred and 8,000 sq ft - only two or three are at present vacant. Some tenants have moved on to better things, a few have failed, others appear to be permanent residents. In the main these represent traditional West Midlands industries: aluminium recovery, light engineering, tube stockholding, and so on. Some may stay because they have expensive plant, or because rents are fairly low: rents in the South-east would be at least twice as much.

Over the years a few sheds have been demolished and replaced by others more suitable for letting. The same policy of make-do-and-mend is apparent in the foundry. The coke-fired cupola furnaces, dating from the 1960s, have been restored bit by bit. "They are not worth replacing," says Siddons candidly. Where possible the firm prefers to buy its equipment second hand, which not only saves money but helps to keep it in credit at the bank. Caution and frugality are - or were - the names of the game.

What has evidently not been skimped is product quality, for the long list of customers includes some of the proudest names in British engineering. The volume of production was seldom great, however. The company stayed in the batch production market. Although willing to accept government hand-outs, it chose not to automate. And it stood well to one side while others strove for big car industry contracts. The ferrous foundries grant scheme encouraged people to borrow, argues Siddons, which was the downfall of some foundries in the 1980s. But it was not prudent management of the foundry that saved J and J Siddons from the full horrors of the 1980s so much as the cushion of the factory estate.

Later, when demand recovered, the good times were just as extreme. For several years revenues had stagnated at or a little above £1 million. "Then all of a sudden things started to go," recalls company secretary Ian Parker, who is a distant cousin of Andrew Siddons. In the period to the end of June 1988 - when Siddons succeeded his father - turnover leapt to just under £2 million, and passed that mark the next year. Profits more than quadrupled to £365,000 before tax. An interim comparison showed Siddons to be the UK's second most profitable foundry in 1988. Return on capital employed was well over 45%. The figures are, as always, distorted by the inclusion of rental income, and by the fact that so many of Siddons' elderly assets have long been written off. Yet the firm's capacity to make money, given the right conditions, is clear enough.

The younger generation (Siddons and Parker are the same age) seized the opportunity of the upturn to carry out some genuine modernisation costing real money - although grant-aided of course. Grey iron castings, such as the firm has always made, are in terminal decline. The up-and-coming material is a ductile iron known as SG - spheroidal graphite. But SG iron cannot be produced in a cupola. It calls for electric melting, and that meant a wholly new facility.

Separately incorporated as Siddons Alloy Castings, the new foundry went into production two years ago, in a shed that became available beside what was once the canal and is now a dried-out strip of waste land. It cost £180,000 and has yet to make a profit. In the meantime it stands as a signpost. "By starting the subsidiary," says Andrew Siddons, "we've shown customers that we're serious."

The same message comes across in other forms. Two years ago Siddons called in consultants "because we were ducking the issue of business development". One of the options, which the board rejected, was to close the foundry down. An alternative, which it acted upon, was to recruit a finance director and a sales manager, to put in some modern systems and start cleaning the place up. Siddons talks, aptly, of breaking the mould. "We're old fashioned and fuddy-duddy," he declares - yet a little less so now. His father worked all hours, selling during the week and doing the books at weekends. But his father managed without a production control system (which has just gone in) or management accounts (which are on the way). Today "the team's the thing".

"This is still a family business," observes Siddons. "I have a commitment to the family and the shareholders." To meet that obligation he has to ensure that the firm remains "a long-term player", which in turn means a commitment to growth: nothing fancy, mind, or risky - family traditions die hard. But first there is the recession to get through, and then the cost of the Environmental Protection Act. "We're mindful of that," says finance director Terry Fox, 18 months into the job. "We're generating sufficient cash to prepare for it. The estate is a very, very solid foundation."

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