How this company went from sheet metal to robotics (via advertising)

The Tharsus Group has a long history of diversification in the face of crisis and opportunity.

by Stephen Jones
Last Updated: 28 Aug 2018

The Tharsus Group was founded as Tharsis Welding & Sheet Metal Company in 1964 by three metal workers who had won some money on the football pools. (The name was changed to Tharsus after a misspelling during the printing of the company’s marketing material.)

For the next 30 years, Tharsus operated as a 'proper backstreet metal basher' until current CEO Brian Palmer became involved alongside his business partner Owen Sayer in the late 1990s. 'There was a numerical read out on a milling machine and accounts were done on a comptometer. There wasn't really any technology,' says Palmer.

The Tharsus Group in brief

Founded: 1964

HQ: Blyth, Northumberland

Employees: 260

Turnover: £23 million (2017)

They decided it was time for a change of direction. The company was renamed Tharsus Engineering Limited and money was invested in CNC (computer numerical control) machines.

This new approach to technology was paying off, but then the crash happened. Tharsus had built a strong business producing a number of prefabricated metal products for the likes of Ericsson, Marconi and BT - when these were ‘affected’ it had a knock on effect and Tharsus felt the crunch hard. It posted an operating loss and the total brand value dropped to below £1 million.

In reaction Palmer bought out Sayer in 2003 and set about consolidating the company’s remaining client base.

Slowly, he was able to rebuild. One of the major projects included the roll out of BT's cable broadband system. Tharsus developed the main distribution frame for the provider's nationwide telephone exchanges. As a result a second company, Tharsus Direct Limited was setup to design cable management systems at the heart of BT's ‘21st Century Network’ expansion.

Going underground

The next major diversification occurred in 2007.

'A lot of pivot points aren't really intentional' says Palmer, explaining how the company originally wanted to break into the defence industry and had been in discussions with a firm that was looking to sell its defence fabrication arm to concentrate on its growing outdoor advertising business.

'While we were talking to them they got into trouble so we ended up buying everything out of receivership,' says Palmer. 'So we set up an outdoor advertising company alongside the metalworking business.'

The group now expanded to three companies. Tharsus Engineering Limited remained a metal basher, Tharsus Direct specialised in telecoms manufacturing, while the new arm, Tharsus Vision, primarily focused on outdoor advertising and went on to produce all of the illuminated advertising boxes on the London Underground.

The latter was a relatively capital intensive business. Once the box was installed the company relied on weekly advertising rental as a means of income. By 2009 the rise of internet advertising and the credit crunch hit the market  and the company started to wind down its advertising operations. To make matters worse, the drop in capital expenditure put a stopper in its telecoms operations.

So in 2010, the Group was forced to diversify again.

Robots or machines?

Following the decline of the advertising market, Palmer set about a new strategy for Tharsus Vision. Up until then the company had manufactured and designed its own products, but in the search for efficiency, the decision was taken to make products on behalf of clients.

As more contracts came in, the company started to becoming increasingly technology-focussed. Over the years, what started with simple logic controls, mechanical relays and custom circuit boards has developed into robotics and smart machines.The company notably worked to develop, design and manufacture the online retail giant Ocado’s smart robot delivery system in 2016.

‘Robot is a useful description because it conjures up a lot of imagination, but there isn't really a clear definition,' says Palmer explaining how Tharsus Vision’s product range gradually became more sophisticated over time. ‘There’s not much distance between a robot and a complex electrical mechanical machine.’

While there’s been a great deal of technical change within the business, Palmer says one of the biggest innovations has been a change in the way the company relates to customers.

Instead of signing individual contracts of varying size, Tharsus signs two-way, long-term sector exclusivity agreements with new clients. Tharsus will be the client’s sole industrial partner, and in return does not work with any sector competitors. The thinking behind the move was to reduce complexity.

While there is a risk that this strategy could limit the business, Palmer insists that the company goes to great lengths to ensure that the partnership is the right fit and says that the model works because it means that both parties have ‘alignment around the success of the product’.

What does the future hold?

At the end of 2010, Tharsus Vision had 18 employees. Eight years later and shorted to just Tharsus, it has over 160 and turned over £15 million in 2016.

Sheet metal fabrication is still at the heart of what the group does. In 2013 Tharsus Engineering was renamed Universal Wolf - the Blyth-based business now employs nearly 100 people and turns over £8 million annually.

Palmer admits that finding attracting the right skills to match the rate of change has been problematic, with the company's location in the North East providing an additional challenge.

'Recruitment has to become a core skill of the business'. This has meant the group has had to take a proactive approach. It regularly works with local schools, has hired an in-house recruiter and is also working hard to improve the employment proposition of its brand.

The company currently exports to 14 countries but the next ‘pivot’ involves making the brand even more internationally focused.

'We feel like it's taken quite a while to distill what it is that makes us successful and I think we've distilled that now. We've got quite a unique product development - based on specifying the need for the product first - we've got a really clear way of contracting with customers and we're doing a lot of work developing a really bespoke product management system now,’ he says.

‘We believe if you put all of those processes together it gives us a real competitive advantage.’

Image Credits: The Tharsus Group


Find this article useful?

Get more great articles like this in your inbox every lunchtime

The best leadership books you’ve probably never read

From a distilled MBA to the future of humanity, six instant classics to sustain your...

Should it become illegal to contact staff after hours?

MT Asks: Should the UK bring in a ‘right to rest’ law?

Workaholic? You might suffer from an overactive 'threat brain'

Psychologist Nelisha Wickremasinghe explains how to calm your brain and your team's at the same...

Can you still say 'guys' at work?

Opinion: Keep calling women "guys", but first promote, praise, and pay us like them too....

Major companies back initiative to get 25 female CEOs in FTSE 100

25x25 campaign aims to boost female representation at the most senior levels of business.

3 things to do when an employee resigns

“The truth is, if invested in properly, resignations can be extremely positive.”