Severs' heaven

Birmingham's Bull Ring Shopping Centre, London's Excel International Exhibition Centre and Manchester's Commonwealth Stadium are three of the projects where structural steel was supplied by Severfield-Rowen. The company prides itself on being a market leader in its sector, but its founder and managing director, John Severs, is the first to admit it started from humble beginnings.

"I was 23 years old when I founded the company with three other partners. It started off with £2,500 and a Nissan hut," he recalls. "It's like that old song 'Ten green bottles'. I'm the only one left now."

Twenty five years down the line, Severfield-Rowen is now a public company with fixed assets worth approximately £30m, a workforce of around 1,000 people and a turnover of £59m in 2001.

Severs is based at Severfield-Reeve Structures whose site is on a former World War II airfield at Dalton near Thirsk in North Yorkshire.

The company has come a long way from John's Nissan hut. It now boasts the largest single production facility for the fabrication of structural steelwork in the UK.

According to Severs, one of the reasons why the group has been so successful is the way it has tailored its service to suit customers' needs.

"As you go forward, you have got to keep designing the company to service your clients," explains Severs.

The fact that the group's main clients include major contractors such as Amec, Balfour Beatty, Bechtel, Bovis Lend Lease, Carillion, Kier, Laing O'Rourke and Sir Robert McAlpine, proves that Severs has a canny instinct for mixing with the right people.

"We always use our own people to take care of the erection of the steel on site and we got to know the site agents. It has been quite simple - we have grown up with our clients," he says.

Maintaining a close relationship with major contractors has enabled the group to predict the industry sectors in which clients' interests were heading.

"One of the reasons why we bought Rowen was to access the airport business," explains Severs.

The group's most recent acquisition is Watson Steel, a specialist company in bridges, tubular frame structures, plate work and pipework which Severfield-Rowen bought for £2.6m in November 2001.

Established in 1933 and with a turnover of around £29m for the year ended December 2001, Watson Steel is expected to play a significant role in Severfield-Rowen's forthcoming work at Heathrow's Terminal 5 where the group is BAA's structural steelwork partner.

So confident is the group in Watson Steel and the company's potential in strengthening its strategic role in the industry, it has committed itself to a £4m upgrade of Watson's Bolton-based facilities.

"Having Watson Steel as part of the group will help spread our operations beyond the commercial and retail sectors," says Severs.

Although the group's order book for 2003 looks strong, Severs is still keeping a careful eye on the economy and as a cautious Yorkshire man, he is unhappy with the signals being sent out by the government.

"Germany, France and Belgium have been in recession for the past two to three years," he cautions. "The big thing that worries me is government spending and the threat that PFIs may slow down. There are a lot of contractors who have pinned their hats on to them."

Even though Severfield-Rowen is financially strong - particularly in that the group is not geared and has no borrowing - Severs predicts that the industry's immediate future could be uncertain.

So when he is asked if the group has any plans to make new acquisitions, Severs' answer is a prompt and succinct, "No", before adding, "We will stay as we are for the next two to three years."

Although Severfield-Rowen is no stranger to international projects, an example of which is Chek Lap Kok Airport in Hong Kong, Severs says there are no plans to bid for too many projects outside the UK. "We do a little bit abroad, but you try to keep yourself to yourself and keep what you know to yourself."

Focusing on what you know best and looking after your major clients also includes investing in new products.

"We set up a R&D department last year," says Severs. The department helped in the development of the group's fire beam which is now proving to be popular with clients.

"We have spent £200,000 in research and testing over the last two years, just on the fire beam. Research has told us that in the case of a fire it will last two hours and two minutes before the beams will buckle. That is how exact we can get."



High investment

With the group's high level of investment in R&D, Severs does not hesitate to throw down the gauntlet to competing industries. It is a challenge that is well timed as other steel construction bosses recently offered to pay for fire tests on concrete structures at BRE's Cardington research centre.

"We plough more money into research than any other sector," he comments. "There is even a question mark over concrete and fire. The problem is that the concrete guys will not do a full-blown fire test. We know exactly how a steel beam behaves in a fire because we have done all the tests. If the concrete guys want to join in the research, I haven't got a problem with that."

A walk around Severfield-Reeve Structures' production facilities on its 16ha site leaves visitors in no doubt as to why the company can safely say it is the largest single production facility for the fabrication of structural steelwork in the UK. It is massive.

"We completely dwarf the others," says Severs looking justifiably smug. "Even when the Americans come over, it's nice to show them around. They are so used to saying: 'We are the biggest and we are the best', they go quiet when they see the outfit we run here."

With a daily production output of 200t to 300t a day, it is a far cry from when Severs started the company with his three colleagues and each welder produced 1t a week. With modern machinery, each man produces 8t a week.

"We recently spent £5m on a new plate line production unit," recalls Severs, who adds that the company makes a conscious effort to buy British.

"Ninety per cent of the steel we buy is from the UK and the rest is primarily from Italy, France and Germany."

So while the order book for the next 12 months looks promising ("The capacity of this plant is nearly full for the next year," says Severs) nothing should be left to chance.

Huge volumes of materials, tight deadlines and involvement in fast-track projects means it is not a sector for the faint-hearted.

"I love this industry. There is not another one like it. You're cock-a-hoop if you win a contract or down in the dumps if you've lost one," comments Severs.

However, he adds a note of caution for anyone thinking of throwing their hat into the ring.

"Starting in this business now is not the same as 25 years ago. There are many issues to consider - health and safety, insurance, industrial relations - which need a professional approach that people have to seriously think about." n