UK: PRIVATE ENTERPRISE - THE SECRETS OF SURVIVAL.

UK: PRIVATE ENTERPRISE - THE SECRETS OF SURVIVAL. - A wide variety of markets and products can be a sure protection against the elements.

by Geoffrey Foster.
Last Updated: 31 Aug 2010

A wide variety of markets and products can be a sure protection against the elements.

Be wary of the smooth talker - appearances too often deceive. The new Merc in the managing director's parking slot is an unreliable guide to financial soundness. Good housekeeping - clean floors and freedom from clutter - normally indicates a well-run business. But in the absence of other evidence do not count on it: the company could be a can of worms. The reverse also holds true. It is not necessarily a sign of irremediable inefficiency that the managing director arranges his papers in piles on the floor beside his desk.

Andy Howell gets low marks for presentation, certainly. His company, grandly styled BCB International, employs 60 people on an estate in a working class district of Cardiff. From the cramped lobby (separated by a sliding glass panel from the room where the receptionist/telephonist is hammering away at a keyboard), the visitor is led straight into a sizable warehouse. The storage racks look as if they have been knocked together out of bits of disused scaffolding. Through an opening in the wall is the factory area where a dozen or more women are occupied in packing things, or operating a few pieces of seemingly antiquated machinery. Up a flight of makeshift steps, past a quantity of discarded items (including, bizarrely, a dress shop mannequin that has been painted in several different colours), is Howell's decidedly unsmart office on the 'mezzanine floor'.

But why the carping tone? Aside from the multicoloured dummy, the description might apply to any number of privately-owned businesses in Britain. Their owners have more important things to worry about than appearances. That is entirely true. Yet the fact is that BCB International is not at all typical of small British businesses. Achievement of the BS 5750 quality standard may not be exactly a rarity these days, but it is hardly usual. Other small companies have picked up a Queen's Award for Export, although not many have won twice. But how many have carved out niche markets for themselves in which they can claim leadership right across Europe?

It is already clear that BCB International, whose business consists of producing and supplying a vast array of survival aids and equipment, is a remarkable enterprise. 'It's quite an Aladdin's cave,' says Howell, proudly showing off his property. He means to draw attention to the great variety of products and processes on 52e display. But the real point about Aladdin's cave was that it contained enormous riches. That may not exactly fit Units 7 and 8, Clydesmuir Road Industrial Estate, Tremorfa. On the other hand, the company does have an impressive capacity for generating revenues. Sales increased at an average annual rate of 36% in the half-dozen years to 1991. Then in the year ending March 1992 - in the depths of the recession - turnover slightly more than doubled in 12 months, while pre-tax profits all but trebled. Not many other UK companies engaged in manufacturing can match that.

The clue to BCB International's performance lies in that word 'international', and in the aforementioned export prizes. The company won its first Queen's Award back in 1988 with particular brilliance - hence the second Award this year. While home sales put on 10% measured by value, overseas sales came out at three-and-a-half times the previous year's record figure, and the export percentage climbed from a little over 33% to 66% of total turnover - which in 1992 topped £3.7 million.

It is more than a little ironic that Howell's company should have prospered so mightily from sales of survival kits at a time when so many other small businesses in Britain were teetering on the brink of extinction. But, of course, there were special reasons for the exports surge of 1991-92. What, in particular, gave it impetus was the Gulf War. For one thing, as Howell points out, 'Most British and European fighter aircraft are fitted with our equipment.' First aid packs are an important line. BCB International also provides knives, axes and other hand tools. It makes the flexible saws that British special forces carry in the heels of their boots. It supplies signalling equipment, camouflage cream, firelighters, shark repellent, ration packs, and many, many more of the incidental items needed by increasingly self-sufficient modern servicemen.

Far from declining in the aftermath of the war, purchases by the military continued to grow. Today, more than two years after the Iraqis were expelled from Kuwait, military sales account for approximately half the company's turnover, and much the greater part of this sum represents exports. While products are normally developed in association with - or at least with an eye to - the Ministry of Defence, the British Government is a relatively minor customer. However, NATO approval is a powerful marketing tool when it comes to dealing with foreign defence ministries, in the Middle East, for example. A year or two back BCB International was selling approximately 1,000 of its commando-type wire saws a year to the MoD. It was selling five times as many to foreign armed forces. Many times more again went to hearty outdoor civilian types - but more of that later.

Before Howell began to cultivate the military market seriously, about a dozen years ago, sales had been confined to what he calls the 'commercial marine' sector. This was where the company began. It was conceived - as is so often the case - by accident. The present managing director's father, Deryk Howell, was a successful Cardiff pharmacist. A few years after World War II, by which time he had several shops, he bought a wholesale chemist, a venerable business that had been founded in 1854 to purvey a Victorian patent medicine, Dr Brown's Cough Bottle. BCB is still trading. Nowadays it specialises in preparing first aid packs for doctors and nursing homes. Deryk Howell is also very much alive and goes in to work there every morning, although the business currently belongs to his elder son, Simon.

Years after buying BCB, Deryk Howell was approached by a friend who was in the process of designing a survival aid for seamen, an inflatable life raft. Obviously, among other pieces of equipment, the raft would need a first aid kit, and Howell agreed to put one together. This was the beginning of a wholly new business, although in the early days marine products were essentially a sideline. And so they remained until the end of the 1970s, when BCB International was separately incorporated, with second son Andrew, straight out of university, as its managing director.

Andy Howell had studied accountancy at Buckingham, but he never bothered to qualify. It may have been 55e as well. While every businessman needs command of figures, the prime job of a chief executive is to develop the business, which in this case meant developing markets and products, single-handedly at first. BCB's marine survival equipment was for a long time virtually synonymous with first aid kits - and to a great extent still is. The number of different kits has increased, they have won all the necessary official approvals, and a high percentage of them are exported. But that is mainly because the products are bought by other businesses which are themselves exporters, such as the manufacturers of life rafts. Howell has tried selling direct to shipping groups and oil production companies, but without much success.

However, first aid kits had obvious application in the military sphere, and having broken into the defence sector he set about enlarging the scope of his offerings, not only as a packer but also by manufacturing and by factoring other people's goods. Packing is still the biggest slice of the business, but Howell claims that 30% is now manufactured. Another 30% is factored. This is scheduled to decline in future, although it is unlikely to disappear altogether. Howell only recently secured world distribution rights (ex-North America) for a new US-designed and manufactured marine product that is likely to be a winner: a desalination pump that works by reverse osmosis - very suitable for lifeboats and other small craft.

The manufactured collection alone is amazingly diverse these days. The company has a light engineering workshop at Rhymney, up in the valleys, where the wire saw and hand tools are made. A second small unit at Barry, along the coast from Cardiff, makes certain rather less dirty items, including the signalling equipment. The main factory is where most of the packing is done. It also produces liquids, powders and creams (such as camouflage cream), and solids such as soap (for removing it). Two expanding brands of freeze dried foods are prepared and packed in Cardiff: light weight, high energy, just add boiling water - although it may be 'best to simmer gently', Howell suggests.

The already huge variety of manufactured goods is steadily being extended. 'We try to get out three or four new products every year,' says Howell, adding that 'we have a fairly basic, common-sense approach to product development'. Among the latest inspirations is a new type of stretcher; another is a tiny folding cooker which will enable a soldier out in the wilds to cook up a hot meal in his own billycan. Hugh Field, Howell's partner and the only other working director, happens to be a chemical engineer by training and is developing the fuel, which is an alcohol-based jelly. The manager of the Rhymney factory, who is an engineer retired from the aircraft industry, and an in-house food technologist, who doubles as quality controller at Cardiff, lend additional support over product development.

The military sector is not only BCB International's most important market. It is also (like the marine) sophisticated and demanding. Thus a lot of development tends to be concentrated in this area. But there is a third market sector which serves as a ready-made extension of the other two. Campers, walkers, climbers, yachtsmen and other devotees of the great outdoors are often eager purchasers of products that were developed primarily for the professionals. This outdoor leisure market currently accounts for about one quarter of the company's sales. It has many more buying points than the military and marine, and is therefore markedly more expensive to cultivate. On the other hand, it allows the supplier a good deal more influence over the market. Above all, it has much the biggest potential in the long term.

BCB International has been selling to camping shops and similar outlets for almost as long as to defence ministries and, inevitably, to foreign as well as domestic distributors. These days, in addition to a couple of sales executives and half-a-dozen agents in the UK, the company has its own men on the ground in France (covering western Europe), Germany (for the centre and east) and in the US. Howell believes that the reputation of British special forces in several of these markets is a powerful plus factor, although the US - maybe because of the fine ol' frontier tradition - is more difficult for outsiders to penetrate.

Howell is his own sales director and chief 'outside man', calling on major customers and making frequent trips overseas. Field, who hails from manufacturing industry, has the possibly more daunting task of controlling production, and determining what batches of which products from the company's immense range will do most to satisfy the majority of its equally long list of customers. But there are few firm lines of demarcation at the top level. A couple of months ago Field was doing business in Japan while Howell held the fort at home.

Even for a quite small business, BCB International is unquestionably light on senior management. Yet that is a better fault than excessive weight: as hands-on management is usually preferable to bureaucracy. Where the managers are also owners, and are young and energetic, the alternative does not arise. Andy Howell is a 34-year old who has taken four holidays in a dozen years. Of course, if he were to meet with an accident on one of his travels that might put the company in jeopardy. But the Welsh workaholic is slightly built, softly spoken, in every respect unflamboyant - hardly a candidate for a heart attack.

Howell finds BCB International an endless source of satisfaction. 'It's nice to be given an idea and to come up with a solution, and to see it through to development.' He takes enormous pride in the company's evident strengths, and in the recognition conferred by export awards. As he points out, its greatest strength derives from supplying those three wholly distinct market sectors with products that are very closely related in a production sense. Indeed, the combination is practically without parallel in business.

It is not that there are no other suppliers of survival aids. But either competitors do not supply all sectors, or they concentrate on a narrow range of products - such as cooking equipment. Or they regard the survival/leisure field as incidental to their main concerns. 'We are the only dedicated manufacturer - dedicated to survival accessories - in Europe,' claims Howell. 'It's not just a niche, it's quite a well-hidden niche.' It is also a niche which is not easily accessible to many other companies.

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