Manufacturing stars
Article Date: Sep 19 2005
Stadium’s Eastern promise
Stadium is making a name for itself as a venture with some arena-sized prospects out East. Nigel Rogers is chief executive of the electronic manufacturing services star, which produces electronic products and assemblies for original equipment manufacturers from facilities in China as well as the UK. Major customers include Hozelock, Tyco and Black & Decker.
A strategic shift five years ago has left Stadium in robust health for the future. ‘There was a real sea change in the late 1990s in the sourcing behaviour of OEMs,’ recalls Rogers. ‘They were becoming increasingly global in outlook and were starting to look at China. At the time, we were a UK provider of manufacturing services in a rapidly shrinking domestic market. So in 2000 we acquired Stadium Asia, a Dongguan-based outfit making power supply products like battery chargers and transformers.’
Way out East
Stadium led the way with this strategic manufacturing move to the East. ‘We were early pioneers in China,’ says Rogers. ‘If we weren’t the first to head to China, we were certainly one of them. The reason? We had large customers such as Black & Decker driving the pace.’ Stadium Asia has since delivered staggering growth. In 2004, Stadium Asia’s turnover sped 14 per cent higher, contributing to a 24 per cent rise in profits to £2.34 million.
Nevertheless, a UK presence remains key. ‘We still feel it is very important to be a UK manufacturer, as well as having volume capability in China, because it gives us credibility with customers.’ Rogers cites a famous quotation: ‘China is going to be the largest economy in the world in 20 years’ time, which is no surprise, because it has been for 19 out of the last 20 centuries! Other parts of Asia, and especially India, are sure to hang on to its coat tails.’
Aerobox’s long-haul appeal
Not without its problems but a potential winner over the long haul is Aerobox. ‘Our challenge now is to get the airlines focused on the whole life cost of the product,’ enthuses Ray Gibbs, finance director of the manufacturing minnow that was founded in New Mexico back in 1998. Today, the company is a volume manufacturer of unique air cargo containers, peddling its wares from a 65,000-square-foot facility in the sweltering heat of New Mexico. Made using a unique, top-secret process, its innovative baggage container is lighter, stronger, more durable and more easily repaired than aluminium containers currently in use by commercial airlines.
Though sales have yet to take off as quickly as hoped at float, this venture could prove a long-term star. ‘The key thing is that we have FAA [Federal Aviation Administration] approval to supply the box, which is not easy to get,’ says Gibbs. ‘And existing aluminium boxes, of which we think there are 400,000 in flight around the world, are easily torn and need frequent repair. Our boxes have flown about 60,000 flights and the number of repairs has been less than a hundred.’
Licence to thrill
News flow is also picking up pace. Aerobox recently announced a brace of new contracts. Having delivered 250 containers in late 2004, the company has received a follow-on order from Virgin Atlantic Airways (the first airline to trial its containers back in 2003) for an extra 250. That revelation was hot on the heels of an order from global player American Airlines, which placed an order for 500 for delivery in the second half of this year.
Admittedly, loss-making Aerobox, which raised £7.2 million from investors during 2004, won’t break even for a while yet, but the business catches the eye for several reasons. Firstly, airlines are under pressure to reduce costs in the light of a surging oil price. Furthermore, the company is not limiting itself to aviation; other markets are being examined, including transportation, where potential customers might include logistics players and freight forwarders, as well as the military and construction markets.
