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The Times’ Amy Wilson sat down with Mark Venables, Managing Director of Alloy Wire, to talk about the firm’s export strategy.
Alloy Wire International set up its first overseas base in India in 1979 and the same sales agent is still working for the company 40 years later. Such long-standing relationships with representatives on the ground have become the cornerstone of its export strategy.
AWI makes specialist wire for customers in industries including aerospace, nuclear, chemicals and medical equipment, for use in harsh conditions such as high temperatures or corrosive environments. Exports account for 61 per cent of revenues, with sales representatives in 46 countries and orders from 70 countries. Europe is AWI’s biggest market, accounting for 40 per cent of sales, followed by the US at 16 per cent. However, Asia is increasingly important, with agents recently appointed in Indonesia, the Philippines, Vietnam and Singapore.
Mark Venables, who has been Managing Director of AWI for 11 years, credits the company’s boots-on-the-ground approach, plus having local versions of its website, for the big increase in exports in recent years.
“Visits to our website have quadrupled since we starting hosting our site locally… and having agents in the country who can meet customers there has really helped to build up trust,” he said.
The second reason for AWI’s success abroad is the fact it is a niche manufacturer, making small volumes of specialist products at two manufacturing sites in Brierley Hill, in the West Midlands, and Batley, in West Yorkshire. Until the early 1990s it made high volumes of the wire used in appliances such as heaters and toasters, but Bill Graham, then Managing Director and now Chairman, travelled for several months each year in Asia meeting customers and saw the growing competition from lower-cost countries to produce these less-specialised products in bulk.
Graham made the decision to start offering “exotic” alloys, which are more expensive and produced in smaller amounts but are of higher quality. He also realised that AWI had to be able to deliver them quickly. To achieve this, it stocks 220 tonnes of raw material at any one time so that it can deliver within two weeks to all of its markets. Starting from scratch on each order would otherwise mean customers waiting three to nine months for delivery.
Although the company does not try to compete on price with wire manufacturers in lower cost countries, any cost saving benefits to customers are now being eroded by increases in shipping prices and lengthier waiting times.
“In some markets which are closer to China, when the customer’s decision is price-dependent then they are going to buy from China,” Venables said. “But a lot of companies are struggling to get products from the Far East with the cost of shipping so high and people are talking about buying from European or UK companies instead.”
AWI has been bought out by its management team twice since it was founded in 1946 — first in 1991 under Graham, and then by Venables and his team in 2013 when sales were £6 million. The company has since nearly doubled in size, with sales of £11 million in the year to the end of March 2020. Most of its 30 staff own a stake in the company and take part in a profit-sharing scheme that allots an equal sum to everyone, from the Managing Director to entry-level employees.
Screens around its two manufacturing sites show in real time what orders have come in and how many have been fulfilled, and transparency keeps motivation levels high, Venables said.
It has been a rollercoaster 18 months for AWI, as it has been for many businesses. It kept its factories open throughout the pandemic, supplying wire for a spring used inside ventilators for Covid-19 patients, among its other orders, and was able to retain all its staff despite a 24 per cent fall in revenue. Sales have recovered strongly since January, Venables said, and the company has had the busiest August since he joined in 2010.
International expansion plans have not slowed down, and Venables aims to surpass the firm’s best year for exports by recruiting five more sales agents abroad over the next 18 months. Meeting customers in person remains difficult, with many factories still not open to visitors, but AWI has four trade shows lined up for 2022 — two in Germany, one in Houston, Texas, and the fourth the Farnborough International Airshow in the UK.
The link to the Times article on Alloy Wire International can be found here – https://www.thetimes.co.uk/article/local-touch-keeps-wire-specialist-going-strong-lvdscwf7g – words courtesy of Amy Wilson.