Round table: East Midlands manufacturers call for a coherent voice

If the East Midlands is to thrive, post-Brexit, against competition from both the south-east and the Northern Powerhouse, then it must have a credible industrial strategy – that was the message from our round table panel which gathered in the Leicester offices of KPMG last week.

Does the East Midlands have a credible industrial strategy and are manufacturers being consulted?

Ian Borley: The East Midlands still needs companies who make stuff, quite simply. We should have a reputation for leading the way in manufacturing. The sector has many opportunities, but also many challenges – for example, the proposed industrial strategy seems to fly at 30,000 feet, when it really needs to be more granular.

(L-R) Ian Borley, Steve Digva, Megan Ronayne

There is a danger, to my mind, that the Midlands Engine project is becoming Birmingham-centric. We need to address this, and local politicians and the LEPs need to get their act together so that the East Midlands speaks with one voice and we can start to bring the big ticket investments to the region that we all want to see.

Nick Harrison: Does the East Midlands have a credible industrial strategy? In short: no. Businesses in the sector don’t have any detail and don’t seem to know which path the strategy will take. The biggest challenge at the moment is how the government implements that strategy and how it is cascaded down to businesses in the manufacturing sector to inform them. There are a number of forums open to manufacturers, but to navigate them all is difficult.

(L-R) Jonathan Lowe, Adam Cooper, Nick Harrison Darren Joint and Sam Kirk

Darren Joint: The East Midlands doesn’t have a coherent voice. We have to ask: who knows where the East Midlands actually is?

Steve Digva: We need to start making things again in this country – we’ve stopped. That’s down to a number of reasons, but the main one is that we’re profit-driven and it simply costs too much to make products in the UK, in our experience. We can’t find a manufacturer who will make our products, and we’re now paying 25% more to overseas companies than we were before the Brexit vote.

Paul Bennell: We’re in quite a unique position, I suppose. We’ve choose to be in the Midlands because of its central location, which is essential, and we source as much of our ingredients as possible from the UK. One problem we do have is staff; we employ 7,000 people in Leicester, and the city is at pretty much full employment. We have to ask whether this means we wil have to look at automation.

Sam Kirk: We see very little competitive edge in manufacturing overseas?

Borley: Could you onshore?

Digva: I’d be more than happy to invest in our own manufacturing technology, but the fact is the banks aren’t lending to companies like mine.

Kirk: It’s still cheaper to manufacture overseas, for us – mainly due to the price of steel.

Adam Cooper: We need a coherent strategy. UK companies cannot compete with Chinese manufacturers, and so what we need is some serious investment in manufacturing tech in the UK and to make that our USP.

King: One of the problems with onshoring is that we’ve lost so many skilled manufacturing workers in the UK.

Megan Ronayne: We have to be careful – we can’t compete on price in the UK at the moment, but what we can do is concentrate on costing and ensuring that what we do make is a high-value product. We can do this by playing to our strengths in distribution, supply chain and customer relationships.

Paul Bennell

Darren Joint: We’re driven by customisation and diversity and so we need a vast range of products – sometimes quickly. That’s why we manufacture in the UK.

Borley: What would make life easier to do business in the East Midlands?

Joint: We’re looking for potential clients for our tech application. At the moment, our customers are still very conservative when it comes to stock levels. What we need to learn is it’s not just about the lowest unit cost, but about infinite cost.

Jonathan Lowe: I talk to a lot of manufacturing SMEs and, slowly, the tide is turning away from it being all about price. You could be sourcing products from Taiwan or China – but what if they go wrong. I’m definitely seeing a shift towards onshoring. It’s a slow process, but I believe it’s happening.

Ronayne: Manufacturers need to engender long-term partnerships – and respond to what the customer needs. Lots of OEMs and manufacturers want to champion this space.

Is the Midlands Engine project relevant for manufacturers?

Bennell: The East Midlands doesn’t have its own identity, but location is definitely something it wins on.

Lowe: The East Midlands has always had an indentity crisis. I think it’s about finding the centre ground with a Midlands voice so that we stay an important part of the world for investors. We don’t have an Andy Burnham or a Steve Rotherham, unfortunately. I think I’d have to ask: What is the East Midlands Engine? I’m not sure I know the answer to that.

Cooper: I’m aware of the Midlands Engine, but we’ve certainly not been consulted on its direction.

Joint: Again, I’m aware of it, but don’t know enough about it. For me, the EEF is the place to go for manufacturers to work together. I think sectors working together makes more sense than any geographical initiative.

Ronayne: The EEF, CBI, IoD, FSB and Chambers of Commerce all meet with the government once a month. We definitely have more weight and influence when we work together.

Harrison: Do manufacturers work enough with universities?

Ronayne: We work very closely with universities, but there remains a huge gap – the “Valley of Death” as its known – and it’s an important job to try and close that.

If you could give the government one message, what would it be?

Joint: Get on with the Industrial Strategy. Do something that makes a manifest difference to manufacturers.

Digva: For me it’s about the cost of labour. The Minimum Wage doesn’t require any skill set and businesses can’t support the constant rise in its levels.

Cooper: At the moment we have a vanilla approach to the whole region. I’d like to see a better understanding of the different sectors in the East Midlands.

Kirk: We must have an investments in skills. The skills shortage is acute in manufacturing, and we must tailor courses so that young people are attracted into the industry – especially after Brexit.

The full panel for the event was:
Paul Bennell, Samworth Brothers Supply Chain
Sam Kirk, J-Flex
Darren Joint, Viking Signs
Megan Ronayne, EEF
Adam Cooper, Pattonair
Jonathan Lowe, Maven Capital Partners
Steve Digva, Road Angel
Ian Borley, KPMG
Nick Harrison, KPMG

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