Conder flies again

Conder is a story of a company that rose and fell, rose once more only to fall again, and is now fighting back yet again to reclaim a place at the top table of British constructional steelwork.
Formed in 1947, the Conder Group expanded to become the biggest name in the industry, employing more than 3,000 people at the height of the 1980s boom, and its trademark yellow frames were an instantly recognisable brand on building sites nationwide.
But, in the expansionist atmosphere of the Thatcher era, a series of ill-advised acquisitions combined with poor management decisions brought Conder to its knees. Receivers were called in, and though few expected anything to survive, the group's solid Staffordshire-based structures business was bought by Nottingham businessman Nat Puri, and Conder Structures emerged as an independent entity.
For a while, things went well. But in 2000, the company posted a loss of £500,000, followed by a bigger £1.3m loss a year later, on a turnover of only £16m. Once again, it seemed Conder was about to disappear from the construction map.
At this point, Gordon Ridley, formerly technical director, took over as managing director. Having been with the company in its various forms for more than three decades, Ridley had the job of saving it. Two and a half years later, he's done much more than that. In 2004, Conder Structures will make a profit for the first time since the millennium, its turnover is up more than a quarter since Ridley took over, and staff numbers are rising.
n What was your main priority when you were appointed managing director?
Cash was probably our biggest worry. Fortunately, our bank, Barclays, has been very supportive, to the tune of £2m when I first took over. But I had to downsize our existing business plan, which meant 35 redundancies (out of 180), and look at ways to relieve the pressure on cash.

n How did you improve the
cash situation?
High stock levels were a big problem. When I took over, we were carrying about 2,000t of stock. So we introduced a
just-in-time (JIT) system and started buying the steel as we needed it from stock holder Austin Trumann, instead of buying in bulk from Corus.
It's more expensive, but it means what we order hardly sits in stock for any time before it is out the door. That has reduced our stock to about 300t, and saved us at least £500,000.
The workshop was another concern of mine. It was making a loss every month, so I introduced a bonus scheme to increase productivity. Every fabrication drawing is now assessed in terms of how much time it should take, and a bonus paid according to when it is finished. That has lifted productivity 15%. It's turned the workshop into a profit centre and given us extra capacity without bringing in extra people.
I also sold 1.5ha of surplus land to a developer, which brought in £1m.

n What else did the new business plan entail?
The main thrust of the new business plan was customer focus. Conder had a reputation for being very adversarial - confirmed by a customer survey we did - and we had to convince them this would change. I brought in a new sales director, Les Whitehouse, to drive this strategy and gradually the customers started coming back.

n Did you start targeting different market sectors?
Yes. One of the main failings of the business was that it hadn't recognised changes in the market place. Single-storey buildings were becoming less popular and multi-storey buildings were going in the other direction. So our new sales team focused on that market, particularly student accommodation and apartments. It has risen from 10% to 50% of our turnover.

n What other sectors are you strong in?
Warehouses and distribution centres are a great strength of ours because of our traditional expertise in the portal-frame system.
Large-span frames are ideal for warehouses and they're quick to erect. It's still a booming market - we've just taken two, £2m orders - and because so many distribution centres are in central England, we're ideally placed because of where we're based.
We've also developed a few niche markets. Projects with restricted access - where you have to be good at getting the delivery and erecting schedule spot on - have been ideal for us because of the JIT system we work to.
Car parks are another sector we're strong in. Steel-framed car parks are becoming more popular because they're lighter, use fewer materials and can
be demountable.
Then there's town centres. We have a big design department and we can go in after an architect has done the outline plans and do the gridding - laying out where the buildings are to go. Our sales team is very strong in this area - we've done Scunthorpe recently, we're doing Workington now - and I want us to stay in there because there's less competition for us.

n How have you been affected by steel prices rising?
Corus disrupted all steel businesses by imposing its
£30/t hike with just a few days notice at the start of last year. We were on fixed-price contracts so we were very hard hit. We're now talking to Corus with the British Constructional Steelwork Association (BCSA) about spreading out the rises to every six months so we can build it in.
Looking longer term, I think it has done the industry some good because it has lifted steel out of being a low-priced commodity. Now, rather than everyone thinking steel is so much per tonne, it's become something where you can add value, and we're starting to see a rise in margins.
However, Corus needs to stem this perception that it can keep hiking the price and the industry will adjust accordingly, because the danger is people will start thinking concrete is a cheaper option.

n One cloud over the business recently was the court case [Conder was fined £100,000 in January 2004 after the death of a 16-year-old boy on one of its sites]. How has that affected you?
It happened before I was in charge, but it did send a shock through the whole business, and I talked to the mother of the boy several times.
If our subcontractor had followed our instructions, it would not have happened. But the charge was lack of supervision and our supervisor was 400m away, so we didn't contest it.
I was glad that the judge said in his summing up that we weren't a "cavalier company in our approach to health and safety".
But I still don't like it being on our record.
We have since developed, with the BCSA, a code of safety for erecting steel in windy conditions - there was previously nothing.
It will establish maximum levels in which steel can be erected, with a cut off of 25mph wind speeds.
n Looking to the future, what's the business plan for Conder?
I hope we'll report a £22m turnover in 2004. We reported £15m in 2002 and £18m in 2003 and the aim is to reach £26m in 2005, and £30m in 2006. By then, we'll be in the top 10 of steelwork contractors.
More importantly, we've returned to profit.
The first six months of 2004 returned an operating profit of £83,000 on a turnover of just over £10m, and the whole year is forecast to be £350,000 on a turnover of £22m.
Ideally though I'd like to be doing a margin of between 4% and 5%.
We're also investing in our facilities, putting £500,000 into workshop equipment this year, plus recruiting another 20 employees, taking our total workshop staff numbers
to 110. o