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If you asked people in the street to suggest a world-beating British engineering company, the chances are the same few names would crop up time and again. Dyson would likely be there, along with JCB, Rolls-Royce and BAE Systems.
But what about Edwards, the West Sussex maker of vacuum pumps and gas abatement systems? It would be far less likely to get named, despite being phenomenally successful. The company employs around 3,000 people and has built up a profitable export business to 30 countries, counting international giants Samsung and Intel among its major customers. And yet Edwards goes about its business without fuss or flattery. It’s the quiet man of British engineering.
That sort of reputation doesn’t unduly bother Matthew Taylor, Edwards’ recently appointed chief executive, who joined the company earlier this year following senior management roles within Land Rover and JCB. “The company is well known in the markets it serves and that to me is the most important thing,” he says. “It has a tremendous track-record and continues to be a market leader in most of the sectors it competes in. But at the same time it still has a huge amount of potential to get bigger and better.”
Edwards has a history that dates back more than 90 years. In recent times it has operated primarily from a factory at Shoreham, making dry pumps for semiconductor manufacturers and at a site in Burgess Hill producing turbo-molecular pumps and scroll dry pumps for the scientific sector, while its research and development facilities are located at nearby Crawley. It also has a smaller gas abatement manufacturing plant in Clevedon near Bristol.
The business has recently been through a significant amount of restructuring as its major customers in the semiconductor and LED lighting industries have shifted their manufacturing facilities to low-cost countries in central Europe and Asia. Edwards has been forced to follow suit, and this will result in the closure of the plants in Burgess Hill and Shoreham by the end of 2011, while certain elements of the supply chain will also move away.
Taylor says the migration of manufacturing is an unfortunate necessity, as the markets it serves are no longer based in this country. But he insists that Edwards will continue to depend on the skills of its British-based engineers for all research and development activities. “We will manufacture in Korea because that makes a huge amount of sense in terms of proximity to the customer base,” says Taylor. “However, the core technology bit – the long term development and engineering – will continue to sit here in Sussex and Clevedon because that’s where our skill-sets are. That’s not going to change – it’s not talent that’s replicable elsewhere.”
As leases come up on several facilities over the next two to three years, Edwards has plans to build a technical research and development centre in its Sussex heartland that could see it recruit additional engineers. Taylor does not know where exactly the centre will be or how much it will cost but he remains committed to building it. “It makes eminent sense to bring everyone together where we can – that’s something that we will be doing,” says Taylor. “We will be increasing what we spend on research and development as a whole. And the vast majority of that spend depends on engineers.”
So far this year, Edwards has enjoyed buoyant trading conditions, with an exceptionally strong first quarter setting the tone for the spring and summer. Taylor says that the order book continues to look strong, with the construction of huge semiconductor plants in the Far East driving demand for its vacuum pumps. “I think we will be close to a record year,” says Taylor. “There’s a huge amount of additional fabrication capacity being put in place around the world that will come on stream in the next 18 months. Demand from China, India and Brazil is going to drive the business forward significantly.”
That does not mean there will not be further restructuring at Edwards. While the major phase of plant closures and transfer of production will be completed by the end of 2011, Taylor says he will continue to drive costs out of the business to ensure it remains competitive. He says that savings can be made in logistics and that the business can be further streamlined.
The business split is fairly well-balanced. The provision of vacuum pumps and abatement systems to the silicon semiconductor industry represents a third of turnover, while general vacuum for equipment such as scientific instruments, along with the service side of the business, also accounts for a third. Flat panel display, solid-state LED lighting and solar panels accounts for the remainder of turnover. But Taylor is conscious that the semiconductor industry can be cyclical and says he wants to ensure that the business is shaped to cope with any downturn.