Redco is a plastics business that has been operating for over three decades from its base in Norwich.
Starting as a small, regional business supplying to local industry, the company is now operating nationally, with a sub-contract machine shop.
Over the years, Lombard and NatWest have worked hand-in-hand with Redco to help finance new machinery, from forklift trucks to a biomass boiler that provides heating for the company’s newly installed workshops.
Redco is just the kind of business that typifies successful, innovative manufacturers who are keen to move with the times and are open to new ideas.
But all too often, small and medium-sized manufacturers are pressed for time and resources, so it’s crucial that they can access support from organisations with the expertise to keep them up to speed with industry developments.
Looking to the future
The recent EEF Executive Survey of manufacturers’ expectations for the year ahead revealed that 50% are planning to increase investment in technology and innovation. While that’s a great start, it means that half of manufacturers are without plans to forge ahead over the next 12 months.
If we want manufacturers to expand to selling services alongside products and have the time to create digital supply chains, there needs to be a greater awareness of how these areas of growth can boost the top line.
Understandably, companies like Redco need support to grow. That means they have partners that understand the broader sector and have a grip on their particular expertise.
A major concern among companies similar to Redco is countering the risk of buying new assets, which is why asset finance can be such a boon to small and medium-sized manufacturers. It allows businesses to be sustainable and move forward by improving cash flow, reducing residual risk and avoiding the inevitable depreciation of machinery. At the same time, manufacturers can save cash resources that may be needed elsewhere.
There are a number of ways companies can finance assets. Lease purchasing, finance leasing and operating leases are some of the options, although there isn’t just one avenue to growth: all options should be available, whether it’s a loan or renting new machinery.
Sometimes moving forwards is about making savings. Government incentives for renewable energy are particularly suitable for the manufacturing sector, offering long-term savings on lighting and heating, for instance. And vehicles and machinery are often claimable as capital allowances.
Manufacturers need to know they can trust their advisers and that the people they speak to are supportive of their sector. Organisations like EEF provide valuable insight, and its such as the recent National Manufacturing Conference and its upcoming Manufacturing Connect events help bring together experts and industry leaders to find support and learn from each other.