Backing the future
It’s a failure to invest that will cause you serious problems, not market pressures, argues Cornwall Group’s chairman, Mark Mitchell.
Current market conditions are creating a real headache for business owners, who are seeing costs increase as demand starts to stagnate, Cornwall Group’s chair, Mark Mitchell, believes.
“We are feeling all the pain of a recession, even if it isn’t labelled a recession,” Mark says. “I am very concerned and anxious about 2023, especially the start of Q2 where we have five specific concerns: the energy price cap mechanism unravelling; minimum wage pressures; a 20% increase in industrial business rates; rising interest rates; and corporation tax going back to 25%.
“Just one of those on its own would be a challenge, but together they could cause considerable distress for some companies.”
Cornwall Group was formed in 2019 when Cornwall Glass was split into three business units: retail-focused Cornwall Glass & Glazing, Cornwall Manufacturing and merchanting business Mackenzie Glass. Since then, the group successfully weathered the pandemic and grew as increased demand followed.
“We have come out of two very successful, strong, trading years which has given us much-needed reserves,” Mark says. “Every penny that we made in profit over the last three years has gone back into the business.”
This, Mark says, is vital for not only business survival, but also for prosperity.
“In recent years, the Cornwall Group has streamlined its shareholding structure, which has made us quite nimble,” he says. “We don’t have too many paymasters. We don’t have to answer to private investors. And we don’t have a load of shareholders who are expecting a dividend. Every penny of profit has gone back into the business and will continue to do so for the foreseeable future.”
Despite the pressures outlined by Mark, this approach to investment and growth is key to building and maintaining its customer base.
“Where some of our competitors may struggle, we are looking to grow, both organically and through acquisition. So, it’s important that we make a profit, because that profit will go back into the business through plant and machinery, through our colleagues, through training initiatives, and through investment in IT.”
Cornwall Group’s St Austell site has got a £4m investment programme lined up for the next three years, with a specific focus on upgrading the existing machinery. Top of that list is a £1.5m Bystronic sealed unit line, which was ordered at the start of 2023, and is due to be delivered by the end of Q3 this year to replace an existing line.
“I remember very fondly buying our first piece of equipment – a Bystronic sealed unit line – 20 years ago for £500,000,” Mark says. “And it’s a credit to our operators and our engineers that we’ve maintained that equipment, and similar equipment of a similar age.
“But it is vital that St Austell and the other larger sites that are reliant on automation, plants and machinery are updated on a regular basis.
“It is essential that we continue to invest in new technology, new robotic sealed unit lines, and furnaces that are more environmentally friendly. We have to plan ahead because the order you place may not be commissioned for 12 months – so you cannot afford to leave it until the last minute.
“By continuing to plough our profits back into the business, we can continue to give our customers good quality products backed by good service. That means looking beyond the current gloomy forecast, and always with an eye on the five-year horizon.”