It began as a 19th-century business making miner’s lamps under the brand Bifold-Naylor. Today it is a world-class, high-growth business in the oil and gas industry. It is also a company that is on the threshold of transforming manufacturing.
Manchester-based Bifold makes valves and pumps. As CEO Gary Jacobson puts it, “we make shiny stainless things that put air or oil into an actuator.” Bifold’s valves are found in places where the flow of air, oil or liquid needs to be turned on and off to cause a larger valve to operate.
And it is very good at what it does.
Take the niche market of electro-hydraulic wellhead controls in which Bifold has approximately 40 per cent of the global market. It’s the world’s number one.
Overall, 95 per cent of its products are exported.
Its growth has been dramatic. Jacobson joined the company in 2002, knowing that its owner wanted to sell out and that he wanted to buy it. Which he and his team duly did, through a management buy-out.
“Private equity is the only mechanism where a good management team can buy the business off a private vendor,” observes Jacobson.
During its 12 years as a private equity-backed business, the company has grown its profits by 50 per cent every year. Today, its profits (as expressed by ebitda, or earnings before interest, tax, depreciation and amortisation) stand at around £11m. By 2017, Jacobson reckons they will be at around £33m. Despite the pace of its growth, it is a highly cash-generative company.
It is creating jobs. In 2002, Bifold employed about 35 people; today it has 260 employees.
It is investing in facilities: it has just moved into a spanking new site in Middleton, not far from the centre of Manchester.
And it is mapping out its growth plan. Enormous potential remains in its existing oil and gas sector but Jacobson can identify many other applications – “from wind turbine blades to car suspension systems to ailerons on planes to diggers, anything that needs force to lift things and move things and has hydraulic valves.”
At the heart of the growth strategy lies manufacturing innovation. As of today, Bifold can make one of its valves (and now pay attention if maths isn’t your strong point) in ten to the power of 38 permutations. It can provide a customer with a 3D model of the product, plus the relevant documentation and data sheets, and the price – in about 15 minutes. And the product, designed uniquely from that enormous number of permutations, can be delivered in 24 hours.
It is what Jacobson calls “configurable lean manufacturing” and, he adds, “I’m not sure that anyone in the world has ever done it before. If someone rings up and wants one of these parts, we can configure the design, create the 3D image, assemble and ship it out by 4pm the following day.
Right now, the capability to deliver its entire product range to this super-slick flexibility is still being developed internally. “We are not there yet but we are close,” says Jacobson.
“We are offering a tailored product in a very short lead time. It’s market changing.”
Jacobson refers to it as engineer-to-order manufacturing and sees it as the future. “There’s no reason why shoes, clothes, furniture won’t move to this approach.
“It is what the software industry has done for years. Every holiday you book with easyJet is individually configured; you select the flights and book it online. It is a tailored product that has been enabled by software.”
It has yet to come to manufacturing, he explains, because factories have to be restructured, products designed with common interfaces and configurability in mind. But it is coming, because “people are buying over the internet in a way they did not do five years ago. They are hungry to order things over the internet. They go to the internet first. This is not going to reverse. So how can we use that web-based front end to influence manufacturing?”
Jacobson believes that this convergence of the internet with manufacturing production makes this an exciting time for the makers of Britain.
“This nation is superb at trading on the web and if we apply that to our manufacturing, we are well-placed.
“If as a manufacturer you can do more of your trading through modern software tools, you enter a huge growth area. This is how you turn internet coding into real, sustainable earnings.”
Few places sum up this combination better than Manchester, he believes (although he’s not a Mancunian himself). “It’s got a huge university, a huge pool of graduates, and a real industrial base. Internationally, there’s a disproportionate number of valve businesses in the north-west of England.”
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