Alamo Group Europe proves leadership as British manufacturing endures challenges
It has long been felt that one of the sectors most affected by Brexit uncertainty in the UK has been manufacturing. The industry relies heavily on physical imports and exports, many of which follow complex supply chains that see different parts crossing borders and the English Channel multiple times.
This has been coupled with a relatively weak demand for British goods, which has seen new order demand in British factories fall for six consecutive months. According to the IHS Markit purchasing managers’ index, the two months before the previous Brexit deadline of October 31st saw an easing of this contraction in demand, although Director Rob Dobson has suggested that once stockpiling was taken into account, the longer term trend of falling investment and job losses was ‘darker than even these disappointing headlines suggest’.
The British manufacturing industry, however, is no stranger to difficult times. Dr Geoffrey Davies OBE, CEO of Alamo Group Europe Ltd (AGE Ltd) recalls the formation of their agriculture based manufacturing organisation, writing in his best practice article about the era of their incorporation in 1991. He speaks of ‘a time when Britain was witnessing what seemed to be an irreversible decline in its manufacturing base’, stating that this is ‘barely levelling out today’. However, AGE Ltd came in ‘as a new boy on the block’ and despite the potentially challenging environment, grew into a company with three thousand employees and £686 million in sales in 2017.
Davies puts their success down to quality, citing ‘manufacturing excellent and innovative machinery’ as keeping them ahead of the game and writing that ‘it never felt like a gamble’. A significant part of the organisation’s growth has been through acquisition, which has helped to provide ‘increased distribution exposure’ and ‘economies of scale that enable us to keep our factories busy’. Perhaps the most remarkable element of the organisation’s success is Davies’ admission that ‘companies making similar products sometimes compete fiercely with sister companies’. He believes that ‘through this, we drive competitive innovation and offer customers the widest choice of specifications and features’.
It may be that, in challenging times in the UK market, business practices are refined and made more efficient and effective, allowing other companies to flourish in adverse situations as AGE Ltd have continued to do.