Bad Debt Kickstarts Business Growth

EMB Ltd, the organisation that delivers the Business Link service on behalf of East Midlands Development Agency (emda) looks at how turning a bad debt into a business opportunity kick-started a major expansion programme and international sales drive for one Northamptonshire company - Crane Plastics.

The company makes plastic components for the food industry. Its balance sheet was hit in 2007 when a customer went into liquidation, owing Crane Plastics more than £8,000.  But partners Craig Burdon and Hugh Sterling recognised the huge potential of the customer's product, Testick, a small plastic and metal device which food manufacturers can use to test metal sensors on production lines.

Crane Plastics acquired the Testick business and moved staff from the failed business into their Northampton premises. A sales manager was brought in to help the product reach its potential. Craig Burdon said: "I set up Crane Plastics in 1996 and Hugh joined me the next year. We have grown steadily over the years and have a good reputation for our core business of plastic fabrication, taking plastic sheet and cutting, bending and bonding it to make a range of plastic products, mainly for the food industry.

"When we started, everything was done by hand and over the years we have invested in machinery so that everything is fully automated on that side of the business."

Last year Crane Plastics moved into a new factory in Sywell, Northampton, to give them room to grow. Craig sought the advice from Business Link, who introduced the company to the complementary services of The Manufacturing Advisory Service (MAS), which was available to help advise the company on shopfloor layout and equipment and support available to help them expand.

 

Expansion into new markets

"The Testick business is giving us opportunities to expand into new markets.  It's a brilliant business but we need to make production of Testicks as efficient as our other processes to make sure the product reaches its full potential. With the help of a funding initiative identified by Business Link, we have bought a diamond polishing machine, which fully automates the production of Testicks and removes the bottleneck we had when polishing had to be done by hand."

Business Link has also put Craig in touch with UKTI, the government export support service, and Train to Gain, the skills broking service, which has advised on how the company can ensure it has the technical and management skills to support its growth.

Crane Plastics now has 12 employees. It has distributors in 11 countries and is building up its distribution network overseas.

"As well as the grant funding we secured with the help of Business Link, we really found it useful to be put in touch with all the other support networks which Business Link has access to. Whatever question we asked, Business Link knew someone who could help," Craig said.

Craig's advice for fledgling businesses? "When I started out I signed a 12-year lease on a 3,500 square feet factory. I thought I would never outgrow that space and I got the lease cheaply because I signed up for 12 years. Three or four years into the lease, the factory wasn't big enough. With the wisdom of hindsight, I wouldn't have signed that lease!"