Interview – Martin Hurworth: Brexit has given us the competitive edge

In the absence of hard facts, rumours and hearsay often end up being the only option. That’s certainly true in manufacturing right now as we get ever closer to the Article 50 deadline, with leaked lists of ‘priority’ manufacturing sectors during negotiations and suggestions of sweetheart deals for carmakers doing the rounds.

The Government’s industrial strategy set out its ambitions for post-Brexit manufacturing, but so much is still unknown about what the final deal with Brussels will look like; trade terms, export tariffs and more. Much of it is still just ‘Brexit Perplexit’, as the BBC’s Chris Morris called it this month in his series Brexit: A Guide for the Perplexed.

As the industry sits and waits for more answers, Martin Hurworth is taking matters into his own hands. Harvey Water Softeners, the manufacturing firm he runs in Woking, Surrey, is in the middle of a transformation and he doesn’t have time to hang around.

His expertise is automation. He learned his trade over two decades as an engineer in the car making heartland of the Midlands, where lean manufacturing and negligible failure rates were the norm. Brought in as technical director for Harveys in 2013, he quickly rose through the ranks of the family-run firm to become its first external managing director in 2016.

When Hurworth arrived the firm was at a crossroads. Nearing its 40th birthday and expanding fast, it was experiencing the growing pains that all high-growth businesses come across – how to continue growing sustainably, meet immediate demand and plan for the future all at once.

Turnover had grown by 50% in three years, new roles were being created as soon as the last ones were filled and all the while, water softeners were being ordered by customers in ever increasing numbers.

“I could tell on my first day that this was going to be a fantastic place to work – the people here and the atmosphere around the place just had this special quality that you really don’t find very often. But as a business we needed to modernise, and to do that we needed to go back to the founding principles of lean manufacturing and management.

“the pursuit of lean is about creating process stability”

“At its heart, the pursuit of lean is about creating process stability. The stability of a more efficient production line, the stability of smarter working or the stability of a whole business through more profitable practises. That’s the goal we’ve been working towards ever since.”

Hurworth’s experience may be all focused on how to affect the many little things that can be controlled inside a business, however recent events outside the factory haven’t exact lent themselves to this ambition. But far from causing concerns, the new political reality is creating favourable business conditions for Harveys and in recent months business has been booming.

Sales for its last financial year were up 10% on the year before, to £22.6m, while its workforce grew by 20% over the same period. Sales for 2017 so far are well up on 2016, thanks to what Hurworth calls a ‘Brexit boost’ combined with a surge in the spending power of the so-called Grey Pound.

“Brexit was really interesting for us”

“Brexit was really interesting for us. As soon as the vote happened we entered a period of record sales. All businesses want predictable market conditions, of course, and Brexit and Trump have muddied the waters somewhat, but what we’re seeing day-to-day is different to the gloomy predictions that were being offered by the pundits last summer. We’re especially competitive now because we manufacturer here and export to Europe, unlike our competitors.”

“Our growth comes from our customer demographic, who’ve tended to be less affected by the Brexit decision. Pensioners, who make up a large part of our customer base, tend to have more disposable income than any other group now.”

As for the future, the hunt is on for a new factory three times the size of its existing site, while turnover growth is forecast to continue at the same pace for foreseeable future.

The company is investing significantly in its R&D department – more than £1m each year – developing areas such as 3D printing, injection moulding and robotics in order to make the most of the Government’s industry strategy and its focus on improving productivity once it comes into force for real.

In the meantime Hurworth is gearing up for next month’s Budget, while planning for the apprenticeship levy which comes into force this spring. It’s a topic on which Hurworth doesn’t mince his words.

“The STEM shortage has become ridiculous, so as a business we back the levy. We’ve got used to doing what we have to do to get around it – improving our culture to attract the best people, training and recruiting talent from within or widening our recruitment areas – but the current situation can’t be allowed to continue. If legislation is the only way to fix it then so be it.

“As for next month, we’re looking for a business-friendly Budget. We want the Government to support the continued growth we’re seeing in the manufacturing sector. We need to continue with R&D tax credits and investment in STEM to make sure we’ve got the right people coming through, because it’s people who will be driving our growth in the future.”