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UKTI helps Clamason Industries to make the right decisions about Central Europe

With British manufacturing industry not as strong as it once was, the decision whether or not to diversify overseas is a burning question facing many companies in the sector. For precision metal pressings manufacturer Clamason Industries Ltd of Kingswinford, West Midlands, the UK Trade & Investment organisation facilitated essential consultancy, guidance and grant support as the company examined options for setting up in first the Czech and then the Slovak Republic.

The culmination of these efforts came at the start of 2006 when Clamason successfully opened a 1000 sq m satellite factory with a £300,000 investment at Nitra, a growing industrial town of 100,000 population on the motorway network 80km east of Bratislava.

Contrary to the common perception, the new business, instead of exporting manufacturing jobs from the UK, is actively safeguarding jobs at the Kingswinford site by winning new orders which would not be given to a stand-alone UK manufacturer or where the UK would prove too expensive for added-value assembly work. Clamason’s presence in Central Europe not only opens doors to first-tier automotive suppliers but also strengthens the company as a whole by helping it to maintain a balanced customer base, with the home entertainments and white goods plants now producing in the region.

The Managing Director and a principal shareholder of Clamason Industries, Philip Clarke, states his position clearly: “At Kingswinford we can make pressed metal components automatically as cheaply as anywhere in the world, because our processes are just not labour-intensive, and the costs of production machinery, raw materials and tooling are the same the world over – they all have to be purchased in the same global marketplace.

“Our satellite plant in Slovakia will definitely enhance our main factory at Kingswinford by facilitating overseas contracts which we would frankly not have won without a presence in central Europe. Both the economic and political centre of gravity of Europe has shifted eastwards: what was once Eastern Europe is now Central Europe. And we need to be there as a company to exploit the commercial opportunities.”

The economic argument is compelling: over 50% of Clamason’s production costs at Kingswinford consist of ferrous and non-ferrous feedstock, whilst only 9% are direct labour and 2% transport.

Parts manufactured at Kingswinford can now be shipped to Nitra in convenient flat pack form for labour-intensive second operations – such as welding, the addition of tapped holes and assembly work. Pressings can be assembled to other pressings, pressings to machined parts, and pressings to diecastings and plastic mouldings. Buffer stocks can then be maintained at Nitra for “local” customers who require logistical support in the region.

UK Trade & Investment (UKTI) introduced Clamason to just the right people in the British Embassies in Prague and then Bratislava, who in turn set up meetings respectively with the Czech and Slovak inward investment agencies CzechInvest and SARIO. Those agencies provided access to a raft of specialist advisors and consultants to investigate Clamason’s needs ranging from market and logistics intelligence to legal and recruitment resources, before proposing effective solutions to the challenges Clamason faced.

By September 2004, Clamason had made the decision to set up at Nitra, having been guided towards that choice by SARIO. In particular SARIO had a register of automotive supply companies, first, second and third tier, with a cluster evident in the Nitra area. That cluster of activity would enable Clamason to recruit production staff from a local workforce with relevant skills and to utilise a network of essential subcontract services in the vicinity, such as toolmaking, heat treatment, plating and painting.

Nitra was ideally located halfway between Clamason’s existing automotive first-tier customers Delphi in Hungary and TRW in Poland and was well placed, too, for servicing home entertainments industry majors such as Sony and Panasonic and white goods suppliers like Indesit and Whirlpool, all in the region.

Whilst SARIO was playing its part, UKTI subsidies to Clamason took the form of direct financing of the many hotel stays, flights and general expenses incurred, as well as a grant towards a detailed feasibility study into setting up in Slovakia.

Having supported Clamason to establish the facility, UKTI continues to help the company and, amongst various extremely helpful initiatives, four may be highlighted.

Firstly, UKTI subsidised Clamason’s attendance at an automotive suppliers’ exhibition in Bratislava in May 2006. As part of that exercise, UKTI invited Clamason to a reception at the British Embassy in Bratislava, where the then Ambassador Judith MacGregor and the Chargé d’Affaires Tom Carter described the economic and political background of the Slovak Republic.

Next, UKTI gave Clamason the opportunity to make a presentation at Autoforum in Wroclaw, Poland, in October 2006 which gave access to two days of intensive automotive industry networking free-of-charge.

More recently, UKTI provided a Frost & Sullivan report, produced jointly with the Society of Motor Manufacturers & Traders, on “Vehicle & Supplier Developments in Central Europe”. The latter evaluated in detail the implications and opportunities arising for the UK automotive industry and incorporated a valuable Supplier Directory on CD-ROM.

Last but not least, in July 2007 the British Embassy themselves arranged for Clamason to be included in a three-hour networking session in Bratislava with members of the House of Commons Trade & Industry Select Committee chaired by Peter Luff MP.

Richard Beams, Head of Trade and Investment representing UKTI at the British Embassy in Bratislava, summarises the benefits which his organisation has afforded to Clamason Industries over a period of almost four years, helping the company to make the right decisions about Central Europe: “When I started my posting in Slovakia at the back end of 2003, Philip Clarke of Clamason Industries was one of my first meetings.  

“Through the Overseas Market Introduction Service and Trade Exhibition support, UKTI are able to significantly assist companies such as Clamason in their journey to market and are well placed to make useful introductions and provide advice throughout. Philip has been a regular visitor to the Embassy and refreshingly always keeps us informed of his progress. Feedback is important to us: to allow us to do our job most effectively, it is essential to understand the needs of business and to identify outcomes to which we have contributed.

“Our relationship with Philip has proved important yet is by no means one-way. Whereas four years ago Philip sought and received advice from seasoned campaigners about the Slovak business climate, he now finds himself being asked the same questions he himself once posed.

“However, though Clamason is now established in Slovakia, this is not the end of its journey nor of its relationship with the Embassy.  One of the major strengths of Commercial Teams in Embassies around the world is their ability to open doors and facilitate introductions to like-minded people. This will continue, as will any other help we are able to offer Clamason towards progressing its Slovak operation.

“Clamason contributes to an industry supply chain that has done much to accelerate Slovakia’s economic growth. Ever since Volkswagen arrived in 1991, a strong automotive base has emerged, even more so with the recent arrivals of Peugeot and Hyundai Kia. This in turn has stimulated massive investment through the arrival of the automotive supply network. In many cases the Tier 1’s that locate around the vehicle manufacturers equally expect their Tier 2’s and 3’s to do the same. For companies like Clamason, this opens up new markets and provides increased turnover that can be reinvested into important areas such as R&D. 
 
“It often surprises people when they hear this, yet by 2010 Slovakia is expected to produce one million cars per year, securing its position as the world’s largest producer of cars per capita. Volkswagen alone accounted for over 20% of Slovakia’s exports last year: this year the industry export share is expected to account for 30% from a sector that receives 23% of all foreign direct investment and will employ 100,000 people within the next three years.

“Slovakia is proving to be an important market for Clamason: by being present here, the company is also picking up additional business and justifying its decision to invest. We are proud of the part we have played in this process and look forward to working in future in partnership with readers of this article.”

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