Nat Puri has an eye for a deal. Annabella Gabb looks at how he built up his manufacturing mini-conglomerate, Melton Medes.
"I don't have any ambition. The business was not built up because of ambition but on the basis of opportunity." Opportunity must have knocked at Nathu Ram Puri's door more often than most. In the past eight years, by a series of astute deals, he has built his privately owned company, Melton Medes, into a manufacturing mini-conglomerate with interests as diverse as car seat covers, cigarette and Bible papers, hot water bottles and security cabinets. Turnover for the 18 months to December 1990 was just under £170 million.
While the rest of British manufacturing has continued its seemingly inexorable decline, Puri and his team have swum against the tide, acquiring loss-making companies and wringing performance out of them. It has not always been an easy task, particularly in the past two years. Like the rest of industry, Melton Medes has had to cope with high interest rates and an unfavourable economic climate. All of its 17 operations traded profitably last year, but the bottom line was hit for the second year running by the cost of borrowings. As a private company, Melton Medes' gearing is considerable - currently 115%, but down from 160% in mid-1990.
Puri (known as Nat) speaks quietly but with determination from his Nottingham headquarters. His crumpled grey suit and slow, almost shambling step belie his entrepreneurial skills. He came to Britain from Chandigarh in northern India in 1966, arriving at the age of 27 with £600 and a degree in pure and applied mathematics. After a year-long course leading to a diploma in building services - heating, ventilation and air conditioning - he joined engineering company FG Skerritt. However, even after he left in 1975 to set up his own consultancy, he always knew that he was capable of more.
How Puri left Skerritt was perhaps a sign of greater things to come. Ordered not to go on a Middle Eastern business trip the day before he was due to leave, he offered his resignation on a matter of principle - his credibility. He went anyway and brought back lucrative business which he duly offered to Skerritt. The firm turned him down. Its loss was Puri's gain: he left and the contracts ultimately brought in £200,000.
Eight years later he founded Melton Medes and made his first acquisition - his former employer, Skerritt. But manufacturing was his goal. In the same year, 1983, he met the man who would manage the businesses that he would buy. James Philpotts, Melton Medes' chief executive, was at the time turning round the manufacturing operations of Dorada Holdings. The two met when Puri showed an interest in buying a Yorkshire machine tool maker in the Dorada stable. But, says Philpotts, "I couldn't do business with him. He wanted the company too cheaply" - a trait which he has since had frequent cause to admire.
While nothing came of that initial encounter, the two were sufficiently impressed with each other to stay in touch. Early the following year Philpotts became Puri's right-hand man and a successful managerial partnership was born. In the month that Philpotts joined, Melton Medes made its first manufacturing acquisition: a small plastics company making mouldings for the car industry with a £3 million turnover, bought from Bowater Industries.
The choice of plastics was more or less arbitrary. Says Puri: "I started with nothing - so I was not going into any particular industry. I was going into BUSINESS." That concept has underlain subsequent acquisitions.