Swot Analysis (As written in the Know It All Newsletter January 2011)
I popped in to see an old friend (and fellow member of the Sheet Plant
Association) the other day, and was stunned at the progress that his business
has made. With a couple of decades' experience in the ink manufacturing
industry, Hi-Tech Products Ltd is a service orientated business, offering
water-based flexographic inks to customers throughout the UK. Having set
up in 2004, the Midlands-based business has grown phenomenally (50-60% per
annum over the last three years), which is not surprising when you note
that the business is owned by Wade Brealey (who has levels of intensity
and drive that Antipodeans seem to have in spades).
They offer a range of water based inks to flexographic printers
throughout the UK - including integrated box plants and sheet plants.
The inks range from high quality inks (Hi-Tech) for standard printing,
to high-end gloss inks (Pro-Tech) for coated substrates. In addition the
good folk at Hi-Tech supply various products like standard flexo inks,
gloss inks, barrier coatings, cleaners and ink dispensers.
However, what is really special about these guys is their technical
support and restless desire to keep on innovating. For example they have
recently introduced a service called Mini-Blend
(www.mini-blend.co.uk).
They'll install it free of charge, which in turn allows their clients to
make their own inks on site - just paying for the ingredients as and when
required. Customers can also log on to the website and check prices, as
well as tracking orders. The most recent client has seen their deliveries
drop from ten a month to just one. They have also seen the amount of ink
they buy drop - as they're only making exactly what they need.
Strengths:
- Very good quality
- Excellent service (same day / next day)
- Technical development (for machines, substrates, general advice)
- Offer training and advice
- Competitive
- Small and therefore fleet of foot (although growing strongly)
- Decades of experience
- Independent and hence have flexibility of sourcing
- The owner runs the business
- Central location leaves Hi-Tech well-placed for national deliveries
- Have just moved to a new 8,000 sq. ft. building (from 2,600 sq. ft. previously)
- Next day delivery
- Now supply 75 sheet plants
- Good spread of risk - the
Weaknesses:
- Perception of Hi-Tech as a small player / one man band (although this has been somewhat addressed with recent recruitment)
- At a cost disadvantage with integrateds - and hence competing with their cost base
- Only one site (although this keeps overall costs down)
Opportunities:
- Local geographic region: Birmingham; Leicester; Derby; Nottingham; Leamington Spa
- Offer a 'free' or low cost ink machine for large users
- Shelf ready increases market size
- Film inks, envelopes, tissues, paper bags
- Take on more new business to compliment the 40% of new capacity arises from moving to the new factory
- Introduce bag in box to replace plastic buckets - reduced carbon footprint and support corrugated
- Expand the Mini-Blend offer
- Gain ISO 9000:2001 accreditation (which they're working on)
Threats:
- Rising fuel costs
- The threat of a major client going bump
- High and rising cost of white top liners is making decorative packs dearer - and hence is limiting growth potential
- Further raw material price rises (e.g. pigment like titanium dioxide has risen by 50% in the last three months
