Vernon steams ahead at Spirax Sarco
PUBLISHED: 17:19 24 September 2012 | UPDATED: 21:55 20 February 2013
World-leading industrial engineering company invests £30 million into Cheltenham
Vernon steams ahead at Spirax Sarco
World-leading industrial engineering company invests 30 million into Cheltenham.
Spirax Sarco is one of Gloucestershires biggest employers, with around 1000 people based at the companys Charlton House headquarters and its manufacturing base at The Runnings on the Kinsgditch Trading Estate, Cheltenham.
The companys white-painted headquarters, a landmark for commuters driving into Cheltenham through Charlton Kings, began life as a Regency style home of distinction in 1810, probably then in rolling meadows but now incongruously right in the middle of a residential area.Spirax Sarco is a multi-national industrial engineering company with two world-leading businesses that provide a wide range of valves, instruments, pumps, engineered packages, systems and services for commercial and industrial end-users, it has more than 51 operating companies located in 34 countries around the world.
This business likes the cost of traditional energy rising and tougher regulations put on companies to reduce their carbon footprint. But Spirax Sarco is not the bad guy, the knowledge-intensive business helps companies use steam energy, by far and away the most used heat transfer fluid for manufacturing processes, in the most energy efficient way, reducing cost and carbon footprint at the same time.For Mark Vernon, Spirax Sarcos Chief Executive Officer, energy efficiency begins at home. The most recent carbon usage bill at our Cheltenham site was over 100,000. We used to be able to offset, but since the introduction of a Government Energy Efficiency Scheme we are unable to. Quite simply, this is a tax on all UK businesses, including manufacturing and anything we can do to reduce it for us and our customers will boost everyones profitability as well as reducing carbon footprint.
Listed on the FTSE 250 index, with revenue of over 650 million and an operating profit of 134 million, the success of this company should be acknowledged by the local community for its economic contribution to the Cotswolds, as well as by its shareholders.Spirax Sarco dates back to 1888 when Sanders, Rehders & Co. (Sarco) began making steam traps in London.
In 1932 Spirax was created to manufacture Sarco steam traps in the United Kingdom under the Spirax brand name and in 1937 the company moved to Cheltenham and became a publically quoted company, Spirax Sarco, on the London Stock Exchange in 1959.Just eight per cent of the companys revenue is generated in the UK, much more from emerging countries, but product development is still based in Cheltenham, and thats the way its going to stay, according to Mark. We have invested well over 30 million here in the last three years, he says.
This includes the consolidation of manufacturing onto a 10-acre site at the Kingsditch Trading Estate where around 750 people now work. Its Charlton Kings Grade II listed headquarters, extended in the 1960s and 1970s to provide office accommodation has been refurbished more recently. All lie within exquisitely landscaped gardens which are also home to a smart staff restaurant, research and training centres. It is, to date, the most beautiful company HQ Ive visited for Cotswold Life.
Lucky employees.Mark took over as Chief Executive Officer in April 2008, having spent 25 years of his career leading international industrial engineering businesses in the US before a brief and unfortunately timed foray, in 2001, into the Capital markets. We had plenty of seed capital to use but 9/11 hit, people pulled back their exposure to equities and things were tough. At the same time I missed the rough and tumble of manufacturing so when I was headhunted for a job with Spirax Sarco to run the US subsidiary company in 2003 I accepted.
In 2007 he relocated to the UK as Chief Operating Officer and a year later was named Chief Executive Officer of the company, responsible for the overall management and strategic direction of Spirax-Sarco Engineering. Mark has guided Spirax Sarco into the 21st century, bringing a wider perspective to the company that had, for many years, recruited its senior management team largely from within. He has invigorated the company and helped it expand globally. There is everything to be said for encouraging organic growth from within, he says.
But sometimes a broader view is required and that is what I have sought to bring to Spirax Sarco.Mark spends a significant proportion of his time travelling; when this interview took place in July he was just back from the Ukraine where he met industry representatives and Spirax Sarco sales teams from Hungary and Romania. There are big growth opportunities for us in these countries, as well as in emerging South America and Asia, he says.
Spirax Sarco has around a 15% share of a very fragmented market worth a total of around 4 billion. Rather than simply growing Spirax Sarcos share of the existing market, the company is aiming to grow the market itself by diversifying into new technologies, new products and the expansion of applications.
To do that he needs skilled engineers, and along with almost every other Cotswold manufacturing company I meet, Spirax Sarco wants skilled engineering talent.There are just not enough engineers of the sort we need being trained, he said. We need more. The company has a dynamic apprenticeship programme, endorsed earlier this year by Deputy Prime Minister, Nick Clegg, on a visit to its Cheltenham site.For Mark, business is about people.
Encouraging them to make the most of their talents and experience, motivating them to achieve even more.This belief system is born of his commitment to The Church of Jesus Christ of Latter-day Saints, which has a strong congregation in Cheltenham. When hes not doing his day job, his night job is based around mentoring and leadership roles within his church.Reviewing his career Mark, now 59, reflects on his travels to over 65 countries (many dozens of times), doing business, discovering new cultures, learning how other people live and think.
You dont really know someones circumstances until you walk in their shoes, he says.But it hasnt all been rosy. When his children were younger, he spent time seeking to get a business off the ground, and it didnt all go to plan.I spent two years without a steady income, he said. It certainly focused my mind, and that of my wife too.Three of Mark and his wife Shellees four children and six grandchildren live in North America.
It is evident as he speaks of his family that as successful as much of his professional life has been, he misses them.A big consolation is one daughter who is now working in Cheltenham, having recently graduated from the University of Gloucestershire.Another regret,perhaps not quite as large, is that however much he loves England he still cant get that all-American essential: A 32oz coke with ice.