UK: PLASTICS, PIONEERS' PROFITABLE PICKINGS - PVC.

UK: PLASTICS, PIONEERS' PROFITABLE PICKINGS - PVC. - Innovation and technical expertise have turned PVC into a window-making winner.

by Anita Van de Vliet.
Last Updated: 31 Aug 2010

Innovation and technical expertise have turned PVC into a window-making winner.

The aggressively persuasive double-glazing salesman has become one of the stock comic characters in television sit-coms. His counterparts in real life have had plenty to laugh about themselves. They hail from an industry - the PVC-U window-frame industry, to give it its technically correct and more decorous title - which has been one of the success stories in recent UK commercial history, involving the creation of a market worth £2.5 billion in under two decades as well as making a remarkable number of people remarkably rich - four of the industry's top men feature in the Sunday Times's Britain's Richest 500.

Admittedly, this is also a business which has attracted its fair share of rogues and fly-by-night tricksters, who have used cheap materials and inferior designs, leaving their customers looking through glass only too darkly. But industry leaders are quick to point out that such skulduggery is common in immature markets, and that consumers are less easily duped now.They also point out that the activities of consumer-protection agencies and the involvement of institutions such as BSI and the British Plastics Federation have led to an increasing emphasis on standards and quality. And certainly for the serious players in the industry, success has depended on more estimable and familiar factors: a knack for grasping opportunities, clever marketing, the development of technical expertise, investment, tenacity, and constant innovation.

The story of the PVC-U industry in the UK starts in the mid-1970s. At that time, all British window-frames sold were made of either wood or aluminium; and PVC, as far as it existed at all in popular British experience, was simply the stuff of which were made washing-up bowls that cracked, or hosepipes that split. Now, both wood and aluminium have obvious advantages for window-frames, the first being cheap, readily available and, on the whole, pleasing to the eye, while aluminium (which had taken over in the UK and the US from the earlier use of steel as an alternative to wood) is strong, and can be extruded into complex shapes to create weather-tight frames. But both materials also have obvious snags: wood splits, rots and needs regular repainting, while aluminium, being cold to the touch, can result in streaming condensation in centrally heated rooms, and suffers from corrosion.

British manufacturers had therefore been looking at potential replacements for wood and metal for some time, explains James Litchfield, product director at LB Plastics, one of the UK's leading systems companies, along with Anglian Windows, the Epwin Group, Regency International, the Mottram Group and two German companies, Veka and Rehau, who have started manufacturing in the UK relatively recently. (Systems companies extrude the PVC-U profiles used by the fabricating companies to make up the window unit which is then put in place by the installer. There are now 96 such companies in the UK, the majority of them German).

In Germany and Italy, national expertise in engineering plastics had been used since the 1960s to produce PVC-U window frames, which had the advantages of thermal efficiency and low maintenance (no painting needed). 'These developments in Germany and Italy had not gone unnoticed,' says Litchfield. 'What was needed was a degree of UK manufacturing and marketing. It was a business waiting to happen.' By the mid-1970s, meanwhile, the German PVC-U extrusion companies were also eyeing the UK as a potential new market. Their domestic market was reaching saturation point and competition was driving down prices. Given their technical superiority (the PVC required for window-frames was of a much more complex composition than that used for those cracked washing-up bowls) and the advantage of a sizeable domestic market as a base, the German manufacturers could reasonably expect to sweep all before them in the UK, as they were to do in France, for example.

Thus it was that German PVC-U windows were on display at the 1975 Hanover Trade Fair. And thus it was that the following year, a young Jim Rawson, who had seen them there, set up Epwin, a tiny Devon-based company (himself and two others), and became the first to fabricate and sell PVC-U windows into the UK retail market.

Like the German manufacturers, Rawson reasoned that the same conditions which had prompted the success of PVC-U in Germany - an inclement climate, the prevalence of homeowners - applied to the UK. Because of the capital investment and technical complexities involved in extruding PVC-U of the desired quality, however, Epwin had to rely on German materials and expertise for his windows. Epwin managed to build up to a turnover of £1 million by 1981. By 1987 the Epwin Group was publicly quoted; last year's turnover was £51 million. But the going was tough in the early years: not only was PVC-U an unknown quantity in the mind of the consumer, but the German style of window also presented a snag, as the German manufacturers trying to export into the UK were to discover.

German windows are all designed according to the eminently logical 'tilt and turn' principle - tilt the top open for fresh air, turn the handle to open. They open inwards, which makes them easy to clean. It was this model, and this alone, which was on offer to the UK market. But British windows come in a gallimaufry of different styles and sizes, which may be illogical but is part of the architectural landscape. And the British fondness for displaying an assortment of knick-knacks and ornaments on their windowsills meant that an inward-opening window was not as immediately attractive to the consumer as common sense might suggest.

Market research, which plumbs the illogical reasons people have for buying and doing ostensibly logical things, might have been useful to the German companies, just as greater manufacturing expertise would have been useful for the British. In the event, it was the UK companies which filled the gap in their capabilities first. The first move was made by George Williams at Anglian Windows. This was the company Williams had founded in 1966 after leaving the RAF and finding office-work too menial, and chicken-sexing (the second phase of his civilian career) not entirely rewarding. He sold the company to BET in 1984 for £30 million, but stayed on to manage until 1990. When he finally left, it had a turnover of £150 million. (Anglian has since been the subject of a management buy-out, while Williams, with the true restlessness of the entrepreneur, has started another company, Aspen Windows.) 'We had been to Germany in 1977, to see what it was all about and to see whether we could do it ourselves,' Williams recalls. 'The only people to contact in this country were ICI, who had been given a licence for making PVC after the war, so we started with a phone call to them. We found that ICI could supply the materials but not the extrusion plant.' Williams accordingly got together with both ICI and LB Plastics - part of the Litchfield Group, the Derbyshire-based engineering organisation founded in 1930 by the grandfather of the above-mentioned James Litchfield. LB Plastics had bought its first extruder in 1948 and thus had some experience of plastics extrusion. After some hiccoughs and hitches - and again, initial reliance on German materials - the first internally glazed casement windows made for the British market by British manufacturers appeared around 1978-79.

Anglian Windows, like Epwin, encountered initial incomprehension of PVC-U. 'Initially, I couldn't get my salespeople to sell it,' says Williams. So how did he educate them? 'I didn't educate them. I ignored them,' he counters cheerfully. 'I formed another company, Climatic, with salesmen who sold only plastic; and in 12 months everyone in Anglia wanted to sell PVC.' In 1984, Anglian invested in its own extrusion plant, bidding farewell to LB Plastics. By the mid-1980s, some 80% of Anglian's turnover of around £80 million came from PVC-U.

Clearly, the consumers were learning to like the new material, persuaded by the arguments zealously propounded by those double-glazing salesmen from the likes of Anglia and Everest that PVC-U replacement windows were not only more practical but socially de rigueur.

The sales techniques of Everest and other retail companies made PVC-U synonymous with replacement windows; so as that market grew PVC was the main if not the only beneficiary; and the market boomed with the sale of council houses in the heyday of the Thatcherite era from 1983 to 1988. In those halcyon days, reminiscences one participant, the skilful 'on-the-knocker' salesman could earn over £250,000 a year with his door-to-door bravura.

But the boom also benefited the British window manufacturers who had invested in PVC-U extrusion plant, since margins are better for systems companies than for retailers. One such company was Regency International. This had been set up to sell aluminium replacement windows in 1977 by the 26-year-old Bob Mills - a former apprentice toolmaker at Joseph Lucas in Birmingham - one of the industry's so-called 'colourful characters' and, one imagines, a robust salesman as well as an engineering enthusiast. Convinced that the future lay with plastic double glazing, in 1980-81 the enterprising and pugnacious Mills used his engineering background to design a system for PVC-U extrusion, running this alongside the aluminium windows for a while before switching entirely to PVC-U in the mid-1980s. Regency now has a turnover of around £50 million (with virtually no borrowings and healthy cash reserves), 600 employees and 50 extrusion lines, which makes it one of the biggest extrusion companies in Europe, claims Mills. He explains the success of an entrepreneur like himself (although 'entrepreneur' is a word he dislikes, as it seems to cast all such achieving spirits in one mould) partly as follows: the entrepreneur doesn't work everything out to the last detail, but goes ahead and does it. His own approach so far, it seems, has been a mixture of shrewd logic and flair - and his current bet is on the new-build market, in the belief that traditional skills have been lost to the building industry and that there will be a growing demand for modulised units. With typical boldness, Mills has now invested 'up to £8 million' in a division of his company - British Standard Windows - to supply builders' merchants with such standard units, together with the huge automated warehouse required to house the product range.

Mills' approach is one among many in the industry to keep the good times rolling, for the boom for PVC-U windows ended, unsurprisingly, with the recession. But the UK market still had a growth rate of 5-10% in 1993; and different companies have found different ways of growing sales. LB Plastics, for example, has a good record in opening up new markets. When the company lost its large fabricating customer in Anglia, in 1984, it pioneered instead the local authorities market for replacement PVC-U windows. A number of local authorities had set up their own fabricating units; and long-lasting PVC-U units were a logical choice, since the authorities might have some 30,000 to 40,000 units of housing stock, each with seven or eight windows and a door, to maintain.

LB Plastics has also taken a lead in turning out a wide variety of traditional-looking window frames, which are now beginning to meet the stylistic standards of snooty architects (if not of the listed houses in which PVC-U window manufacturers can afford to live themselves). Looking to the future, James Litchfield sounds slightly less bullish about the new-build market than does Bob Mills. He agrees, however, that more architects' clients are now asking for PVC-U, just as it has been the tenants demanding PVC-U on council estates. And even if cost dictates that the builder or architect chooses wood over PVC-U, all participants in the PVC-U window business believe that every timber window installed today means a replacement (PVC-U) window in seven years' time. Some manufacturers are looking abroad for growth. LB Plastics is one such company, long established in the US but now also pioneering in the Far East, with a joint venture in Malaysia, and in Eastern Europe, with the acquisition of Wavin Profile GmbH in Herbstein, on the border of former East Germany, from the Dutch plastics giant Wavin BV.

The Mottram Group, another of the PVC-U window-frame industry leaders, also expects growth from overseas markets. In six years its sales in North America has grown to $20 million. It has ventured into the French market and is forging alliances in China and the Pacific Rim. An entrant into the PVC-U window manufacturing business through its Spectus company in the early 1980s, the group as a whole (nine companies, with interests in plastics processing at all levels and in diverse markets, as well as in property) now has sales of £80 million, and hopes to triple these within the next 10 years.

Not all of this growth will come from windows, to be sure. But the guiding principles of the Mottram Group from its early days remain. 'Research your market well, sell effectively, promote hard, emphasise quality and invest heavily,' is the company credo. This could well be taken as the motto of the industry as a whole.

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