UK electronics businesses thrive as slimmed-down specialists

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UK electronics businesses thrive as slimmed-down specialists

By Peter Marsh

Over the past 30 years the whole of UK manufacturing has become increasingly a collection of small to mid-sized companies making specialist goods in low volumes. Yet few sectors illustrate this trend more vividly than the business of producing electronics and electrical goods.

As recently as a few decades ago the sector was populated by companies that were large and well known, if somewhat unwieldy in structure and erratic in the way they were managed.

In place of the likes of GEC, Plessey and ICL that made products including white goods and telephones familiar to just about everyone, these companies’ equivalents today are businesses excelling in niche areas of electronics in fields that in many cases are barely recognisable.

The companies that are the leaders today are generally a lot smaller than the giants of the past. And as  Britain along with most other high cost nations has retreated from most consumer facing sectors of electronics, the fields where the UK remains strong are mainly involved with making products bought by businesses.

Illustrative of such goods are esoteric items of hardware used for testing products in factories or on the laboratory bench, and complex components that are never seen by the ordinary man or woman and end up embedded inside items such as machine tools or aircraft. An example of Renishaw, the world’s biggest maker of touch sensitive probes used in metal cutting machinery, whose chief executive and founder Sir David McMurtry is in the photo below.

In addition to products made by Renishaw and similar companies  – a description of which would bring a blank stare to the face of the average person – are a few specialist consumer items  where the UK can claim to having a competitive advantage.

One such product field is high-end hi-fi equipment where companies such as Linn, Bowers & Wilkins, Ruark and Naim have built up a global following for extremely sophisticated, and expensive, audio systems.

Taking in such a diverse range of products, the sector as a whole adds up to one of the UK’s biggest manufacturing businesses. According to data from the Office of National Statistics, the UK’s electronics and electrical goods industries employ more than 220,000 people – almost one in 10 of the manufacturing workforce – and account for a similar proportion of the industry’s annual output.

Fairly typical of the companies that feature in the sector is Wright Industries, a group of businesses controlled by Craig Wright, its chairman and owner. Subsidiaries of his company make items including control equipment for drilling rigs that help discover information about oil and gas deposits. The pictures at the top of this article and below show part of Wright Industries’ manufacturing operations.

Other products include radio equipment for police and military forces that has to be ultra-reliable and where the flows of data and voice traffic must be encrypted to meet security requirements.

Another set of items made by a Wright Industries subsidiary called Custom Interconnect are generating a lot of buzz – certainly among zoologists interested in the movement of bees.

These products constitute tiny sensors – weighing just 26 microgrammes – that can be carried on the backs of the insects as they fly around people’s gardens or in the countryside. The devices enable scientists to monitor bees’ behaviour to keep track of such things as breeding and feeding patterns.

Mr Wright says his company has key knowhow in set of specialist fields, which is capable of being deployed in a range of sectors. “We work for a variety of customers who increasingly rely on suppliers to provide expertise in areas such as high frequency radio communications,” he says.

While a key group of employees at the company are development engineers, Mr Wright is also keen to play up his group’s expertise in shop floor manufacturing skills.

“It’s vital for us to ensure we have the best people working in making products, ” says Mr Wright, pointing out that some of his employees have won prizes as “champion soldering specialists” in competitions judging skills in hands-on fabrication.

Another little known business that creates products used in the supply chain of mainly bigger businesses is Surface Technology International.

It has its main manufacturing centres in Hampshire and near Manchester, as well as a plant in the Philippines. The company – with projected sales in 2015 of £80m and with 900 employees, 550 of them in the UK – sell to customers in fields such as defence, energy metering and engineering control equipment. One of its UK plants is shown below.

It also has a speciality line in making goods in areas for more familiar to most people – including the control systems used in soap dispensers seen in toilets and washrooms.

“We can go to customers and offer a complete solution to the problems that they might have in sourcing component and assemblies,” says Simon Best, STI’s managing director and majority owner.

He says the fact that the company’s manufacturing operation in east Asia – which it started in 2010 – has been vital to remaining competitive.

“We saw a lot of existing and potential customers were favouring sourcing items from low cost nations so we thought we needed to add a manufacturing operation in one such country to complement our overall activity and help strengthen the business,”  says Mr Best.

Larger and better known businesses in UK electronics that make their own products and which have built up high level of brand recognition among global customers include Spectris, a big maker of instruments. Spectris’s chief executive John O’Higgins is pictured above.

Another is Halma, which produces specialist sensors and other equipment used in control systems, especially for applications involving health and safety.

Included in the cadre of the large number of businesses focusing on avionics and other areas of defence and aerospace hardware are Cobham, Meggitt and Ultra Electronics.

Many companies that can be classified as part of the electronics industry also use substantial amounts of expertise in other areas, notably mechanical engineering.

Among the examples of such businesses are Plymouth-based Spinnaker which makes banknote protection systems – for use by security companies when transporting money such as to and from banks.

Its products require some fairly straightforward metal-based components – similar to those found in ordinary safes for cash storage – designed to prevent criminals using physical force from gaining access to boxes containing notes and coins.

But equally important are electronics based systems that use sensors to spot signs of criminal behaviour such as efforts to tamper with boxes containing cash, or  channel data about the whereabouts of the boxes through wireless links.

The electronics systems used in Spinnaker’s products  also use advanced logarithms to track the movement of security guards given the job of looking after the cash. If the gait of the people close to the cash suddenly changes and can no longer be identified that can give a clue that the guard has been attacked by a criminal and bundled out of position – in which case an alarm is sounded.

Also using a similar mix of skills is NIC Instruments, based in Kent, which is among the world leaders in bomb disposal equipment. One of its products can be seen in action above.

Its products include remote controlled wheeled  “robots” that can move to a suspect package without a human being present and make it safe through destroying vital elements (such as detonation systems) using  jets of high pressure water.

Much of NIC’s expertise is based around developing and making the mechanical systems needed to ensure the company’s devices can move semi-autonomously over rough ground for up to 500 metres.

But according to Steve Wisbey, managing director, a key point to making sure the robots work effectively is specialist software needed to control electronic parts to the machines. In the 20-strong company, its team of four development engineers are particularly strong in software expertise, Mr Wisbey says.

Malvern Instruments is another business that illustrates how software – as well as other electronics based skills such as in sensor technology – plays a vital role in ensuring the success of specialist parts of the broader electronics industry. One of Malvern’s instruments is pictured below during testing.  Malvern is owned by Spectris, a large maker of industrial and analytical instruments based in the UK and which has operations around the world.

Malvern’s niche field is in making machines for measuring fine particles that can be as little as 10 nanometres in dimensions. “Demand for particle analysis is increasing in a range of industries partly to help in product development but also because of the increased need to monitor environmental effects [of particles]   due to health and safety regulations,” says Duncan Roberts, business development director.

The company bases in Britain roughly 350 of its 870 worldwide staff, and the country is home to one of its three global plants, the others being in the US and China. Out of a team of 120 development scientists and engineers, a large core of whom are in the UK, about a third work mainly in software. The company sells into a diverse range of end markets. “Our instruments can be used for analysis in fields from monoclonal antibodies to concrete,” Mr Roberts says.

While Malvern’s products are highly unlikely to be used – or even seen – by anyone other than a specialist scientist or engineer, one business making much more recognisable items is Surrey-based Vertu.

[Note -since this story was written Vertu has gone out of business. Read a good obituary by the FT’s Jonathan Margolis.]

The company is a leader in a small but valuable niche: making “luxury” mobile phones that work similarly to conventional phones but are made from exotic materials and can be hand-crafted to give a look of ultra-sophistication.

The phones – which can cost up to £15,000 – use materials such as titanium, mother-of-pearl,  carbon fibre and Japanese lacquer.  The company – which has 900 employees, half of them in the UK where it has its main manufacturing operation – generally makes each item according to order.

“We aspire to the quality of a Swiss watchmaker, blending luxury with technology and engineering,” says Martin Blades, Vertu’s head of manufacturing.

From products such as Vertu’s that are fairly simple for most people to understand, it is a far cry to most items being created by another cadre of businesses which makes novel components for packaging into new categories of electronic equipment.

In the forefront of such companies is a group with a close association with the Centre for Process Innovation, a government/industry innovation group based in Sedgefield, Durham, and which is part of the government’s Catapult network of research centres.

One area of expertise  for the Sedgefield centre lies in  providing production facilities for small companies in new areas of technology that lack the money and staff  to make products in their own plants.

Of the 250 people at the centre, a quarter work in “printable electronics” .This  concentrates on making new electronic items such as displays, processors and sensors using substrates not of conventional semiconductors but from organic materials such as plastics.

Cambridge-based Pragmatic Printing is one such business to use the CPI as a production base. Of its 30 staff, 15 work in the centre where they are creating small plastics-based components.

The components –once they are developed fully enough to go into volume production – could be sufficiently cheap  to form part of everyday objects such as clothing or food packages.

According to Scott White, chief executive, the components could store information about the way the products  they form part of has been manufactured, which would be useful in checking on quality. White is pictured below with a piece of plastic on which some of Pragmatic’s components are printed.

They would also channel messages to  stores selling the items and people buying them – with the information being obtained by special electronic readers and being used to keep track of shipments or to give consumers instructions about how to use the items during their lifetime.

“We think we should be able to make highly sophisticated products that have a great deal of processing, sensing and communications  capability but be much cheaper than conventional semiconductors made from materials such as silicon,” says Mr White.

He says the lower cost will follow from the considerably cheaper production methods used for making plastic components compared to those creating conventional silicon chips.

“Because we avoid [in plastics electronics ] the complicated manufacturing processes that involve high temperatures that are used in a silicon fabrication unit, the sort of plant we will need for our components is likely to cost less than $10m while a state of the art silicon chip plant can easily cost $10bn,” he says.

Other  small businesses being helped by the CPI on a similar basis – with the small company providing the main ideas for products  and the centre supplying production facilities and related know-how – include Polyphotonix  which is producing novel light sources.

Another such company is Sapient Sensors, working on diagnostic methods for animal diseases, and Smartkem, which is making “foldable” displays for text and graphics that could be sewn into clothing or worn on the wrist to provide an array of information – from material called up from the internet to data obtained from sensors fixed to a person’s body providing updates on health and fitness.

A version of this article appeared in the 2015/16 UK Manufacturing Review

By |November 27th, 2017|Categories: Observations, Opinion|0 Comments

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