At the start of this year, do I feel confident? Yes, absolutely, because we’ve put in the place the things that we need to ensure our continuing growth and more importantly that of our customers. That includes investment in our product range, service offer and infrastructure.
That doesn’t mean that we don’t see challenges on the horizon. In the face of downgraded UK economic growth forecasts and the potential fallout from Brexit it would be naive not to think that there are some slightly tougher times ahead but that’s why we’ve restructured and invested in our operation.
Equally it’s sometimes also important to take a reality check. Yes, we’re facing a number of unknowns – but then we always are.
Emplas was set up my father Kevin Johnson, in 1979. At the end of our first year in business things weren’t exactly an ‘economic picnic’, as the UK was hit by widespread industrial unrest and inflation.
40-years on we may face our own set of challenges and have seen many more in between. The point is challenge has always been there and the industry has always come through the other side. What has been key to that process and what has driven our own growth and that of our customers, has been continuing innovation and investment.
Closer to home, and regardless of the wider economic climate, we see 2018 as a possible watershed year. We’ve seen significant product and service innovation in fabrication and market consolidation. Given forecasts for the industry itself, we would expect the ‘horse-trading’ to continue into the coming year.
It will also be interesting to see if those companies who went through that process in 2017, can successfully integrate their offers this year. The other question mark surrounds the ability of smaller fabricators to keep pace with product development and if they can’t, if we will see further consolidation.
Emplas for its part remains a family-owned privately run business but one fortunate enough to have the scale to have sustained investment – which we see as being key this year and through to 2020. We are not answerable to external investors who can often add levels of unwarranted bureaucracy. Having our future solely in our own hands, gives us a high degree of stability but also a clear long-term strategy and with that the confidence to invest.
Shifting market trends
As a starting point, we have a very strong core product offer in Optima from Profile 22. We added the Optima Flush system to that range last year. According to Palmer, demand for flush casements grew by 88% in 2016 alone, making the launch of our own flush casement, a timely addition.
FACTBOX: Optima at a glance
- X4 options: Flush Casement; Optima Chamfered; Optima Sculptured; Flush Tilt & Turn
- Six chamber outer frame and five chamber sash 70mm system
- Choice of 24mm and 28mm double, and 36mm, 40mm and 44mm triple-glazed beading options
- U-values as low as 0.8W/m2K on triple-glazed units/WER A++
- Deeper drainage channels and a new 13mm stack hinge which increases overlap cover to 10mm compared to an industry standard of 6-8mm, improving weather tightness
- Eurogroove location of hardware and local thickening of walls, making the system fully compliant with PAS24:2012
- Suited French door, patio door and residential front door frames
- 12 stock colours including 4 as standard plus a choice of 8 premium stock and 28 FoilExpress/specials colours.
What also stands out is the growth seen in colours and the contribution that that is making to margin. Taking the market in its entirety, Palmer suggests that in 2016 there was a 1.2% increase in window volumes to 6.82m frames but installed values increased by 5.5% to £2.38bn.
The long-term trend cited by Palmer is even more interesting with demand for foils including both woodgrains and solid colours – up 45% since 2013.
This again made the revision of our colour offer last year timely. In expanding our ex-stock colour range foiled Cream, Anthracite Grey, Anthracite Grey on White, Black Brown, and Black Brown on White are now available as ex-stock standard colours in lead times of 10 days.
We have always seen product development as being rationalisation and refinement of offer as much as product innovation.
We have brought on new systems for example, Optima and Ultraroof solid roofing system but we have also shortened lead times and lowered costs on composite doors, so that 65% of all doors we supply are now available on lead times of 5 days. And we see this flexibility in our service offer as key future growth.
Investment is key
At a time when many other fabricators have cut back on investment, we have also continued to invest in our infrastructure. This included a more than £3.5m on our new factory extension and machinery.
Adding around a third again to our manufacturing facility, the new development houses new lines, loading bays and offices, including our second Schirmer machining and cutting centre. This was delivered as part of a £1.4m spend on machinery in the last year.
This has been underpinned by a corresponding investment in our IT infrastructure and systems, increasing visibility of our service offer to our customer from the initial point of order right up to delivery.
More importantly, we’re also investing in our people. We have an active apprenticeship programme which allows us to recruit the right people and train them the right way so that they not only perform their roles to the highest standards, but share our culture and commitment to customer service.
We see this as of absolute importance given the continuing skills shortage nationally.
Strength and stability in 2018
Now in our 40th year in business, this investment combined with our product offer gives us an exceptional foundation for 2018 and beyond.
It’s important to recognise that there are opportunities on the horizon as well as challenges.
We’re approaching a year since the Government published its White Paper, ‘Fixing Our Broken Housing Market’ [February 2017]. It may remain ‘broken’ but the Chancellor Philip Hammond took the first tentative steps towards ‘fixing’ it in the Autumn budget.
This included a commitment to build 300,000 new homes a year, in part funded by a £44bn investment fund. The role the government has highlighted for smaller housebuilders in its solution, increasing the accessibility of the new build sector to smaller contractors, making new build a source of new business in the coming year.
The scrapping of Stamp Duty for first-time buyers on purchases of up to £300,000, if not necessarily having the desired effect of increasing accessibility to the housing market has at the very least bolstered and increased confidence in it.
Initiatives to build more affordable and council housing are also welcome indicating a shift in direction away from austerity towards investment and the growth potential that this brings.
We don’t see any quick fixes in 2018. It’s about grinding out a result. What we have and what those installers who we partner with have as our customers, is access to a very strong product offer but also the service and sense of purpose that underpins it.
We have a long-term strategy, we have a high degree of flexibility, stability, innovation and ambition within our business and we are looking to growth. The key to unlocking our own potential is unlocking that of our customers and we look forward to working with them as partners in the coming 12-months and beyond.