Breaking the cycle

Going from small to big should come as second nature to Brompton Bicycle. The Brentford-based manufacturer has built a thriving £14m business on producing compact packages of metal and rubber that transform into full-sized bikes. Now the company is set to extend its engineering ethos into the business market, reveals managing director Will Butler-Adams. "I think there's an opportunity for a huge business, one that could be bigger than the global bike manufacturers like Giant and Specialized," he says. "Those manufacturers have managed to create a multi-billion pound market based on bikes for recreational use." Brompton's bike appeal stretches further afield, explains Butler-Adams. "There's been a real renaissance in people using bikes as a mode of transport. We're selling to people who need a bike to get into work and want to keep fit at the same time. The opportunities are massive." A burgeoning customer base from Tunbridge Wells to Tokyo attests to that. Brompton bikes have become as commonplace as plastic coffee cups in the hands of rush-hour commuters. The bike's popularity has fuelled 15% year on year growth at Brompton since 2004. The success bought Nick Clegg and Vince Cable to visit Brompton's site in January, acclaiming the firm as an example of the future direction for UK manufacturing. Yet despite the plaudits, Brompton faces a herculean task to achieve its ambition of going from SME to global player. The UK is home to fewer large manufacturers than Germany and the US, according to EEF research, with domestically-owned giants the rarest breed. Many bright flames suffocate beneath lending difficulties, red tape and hostile taxes. However, Brompton can buck the trend, says Butler-Adams. "We're interested in making a good folding bike, but as it happens we've also created a powerful brand," he says. The Brompton allure is particularly strong internationally. Over 70% of business is export based with models carrying a cache as 'the London bike'. Much of the Brompton's popularity has been achieved through word of mouth, says Butler-Adams, and there is plenty of scope to develop markets in the EU, Japan and China. International growth can be achieved even if there is a recovery in the strength of the pound, he predicts: "People are not buying us because we're the cheapest. It's about the strength of the product and the fact we do it better than anyone else." Hurdles to expansion are far more likely to come internally, he believes. "There's a speed at which you can grow. We can't throw hundreds of thousands of pounds in and transform into a Toyota overnight. We've got to grow incrementally." Brompton plans to fund target growth of 5-15% per year independently, according to Butler-Adams. The company is unwilling to sacrifice its cooperative business structure in a bid to speed up expansion plans, he stresses. "We don't want to give control to the bank or venture capitalists. While we keep control, we have fun." Going it alone will be rife with challenges, he reflects. One major difficulty will be the increasing rarity of companies like Brompton across other sectors in UK manufacturing. "We used to get our raw materials in the UK. If we were sourcing aluminium we'd only want a small volume and we were able to piggy back on to another manufacturer's order. Now that other company no longer manufactures in the UK." Brompton has had to turn instead to Taiwan, Russia and the US to source raw materials. The trend could be a fatal flaw in the supposed UK manufacturing renaissance, warns Butler-Adams. It's a point the Brompton boss took up with the business secretary Vince Cable during his site visit. "I was trying to explain to Mr Cable that there's a guy around the corner who supplies injection mould parts. You would look at those parts and think there's nothing advanced about that. But there's huge intellectual property in the machines that make that product." And the risk of vanishing intellect isn't a problem confined to production techniques, stresses Butler-Adams. The Brompton boss is unequivocal on why the UK lags behind in producing domestic manufacturing giants. "I believe we don't have the best minds coming into engineering. Somebody I look to as an outstanding business leader is Sir John Rose of Rolls-Royce. He is a great mind but never trained as an engineer." The industry is only attracting a very narrow pool of talent, he says. The students with more of an entrepreneurial flair are simply not being switched on to engineering. "We could do so much better if we got those bright minds to see engineering as a career," he says. The turnaround must begin with a major shake-up of our schools, he says. "The education system serves a ridiculous league table system and that's wrong. Schools are not delivering to employers or pupils. Half of teachers don't have a clue what a modern manufacturer does." When youngsters are given a true flavour of the factory floor they're often inspired – and Butler-Adams takes his bikes on tour to local schools to try and pique interest. "It's a shame I turn up on my bike because they probably think manufacturing is not very well paid," he jokes. A government-backed scheme to get students to tour factories could be a starting point for stirring youngsters' aspirations, reflects Butler-Adams. But he cautions against early claims of success. "We'll only know in five or ten years whether it's worked," he says. "Whether you think the initiative is right or wrong, at least they are trying." But Westminster must show long-term commitment to truly harness sustained growth in UK industry, he stresses. "We're not like the service industry where you stimulate things for a year and then clear off. You see in the news that the government is taking the credit for a rise in manufacturing GDP. But that's down to what companies did five years ago." That's why Brompton has a relentless focus on product development and testing: "Companies can get overexcited about their brand and forget about developing their products. It a bit like the emperor's new clothes," he explains. Brompton is currently carrying out rigorous tests on a new electric-powered bike and trialling it with user groups, reveals Butler-Adams. "It sounds anal but detail matters. The closer you want to get to perfection the harder it is. We can all play tennis, but we aren't all good enough to get to Wimbledon." With a renowned brand, innovative engineering and unquenchable ambition, Brompton has all the aces to play on the bigger stage. "In five years' time we should have doubled or trebled turnover," says Butler-Adams."And against a turnover of £50 million, we'll be in a position to take on the global players." Career in brief Name:Will Butler-Adams Experience:Butler-Adams graduated with a first in mechanical engineering from Newcastle University. He joined Brompton in 2002 instead of completing a business MBA in France. Butler-Adams also previously ran a chemical plant for ICI in Middlesborough. "I didn't like the idea at first, but ended up completely loving it: great people, a massive plant and millions of machines." Manufacturing mantra: "Innovate, have fun and if the shit hits the fan then take it on the chin." What's a Brompton? Step on to any rush-hour train and you'll see commuters clasping a package that looks like a cross between a tuba and a bicycle – but once through the ticket barrier, the case rapidly reforms as a fully-fledged bike. Brompton's bikes offer excellent ride quality and contain 1,200 components – nearly three times as many as a standard mountain bike. "You look at it and think it's not going to work," says MD Will Butler-Adams. "When the first person raves about it, you think they're insane, but by the time you hear it from the sixth person you realise they might have a point." The folding bike concept was not invented by Brompton, but the West London firm has brought the fold-up bike to the masses. Founder Andrew Ritchie, now Brompton's technical director, developed the prototype in his bedroom overlooking the Brompton oratory and named his design in its honour. Ritchie met with a dim commercial view of his invention. A rejection letter from Raleigh Bicycles still hangs in the corridors of Brompton HQ. Only the support of an audio equipment manufacturing entrepreneur helped secure bank backing for the Brompton bike in 1986. Funding was supplemented by private investors and Ritchie began work on the Brompton mark II. Brompton is still owned by independent shareholders. Butler-Adams joined the firm in 2002 after a chance meeting with Ritchie. He recalls his disbelief at his first visit: "I thought 'wow, it's making a profit and it's so inefficient'. I had nothing to lose and thought let's go for it." Since then, turnover has soared from £2m to £14m and staff numbers from 26 to 115. The 22,000 sq ft factory has embarked on a continuous improvement programme, including lean, kanban and Six Sigma. Butler-Adams says it still resembles a throwback to the 1980s, "but when I arrived it was more like the 1950s". Brompton's guiding principles have not changed and include a meticulous approach to product development: "We measure our frame parts to +/- 0.1mm using a CMM machine. Most good double A frames would have a tolerance of circa +/- 2.0mm." The bikes can be manufactured to order in several million permutations and are distributed via dealers: "If something goes wrong with your bike and you rely on that bike to get to work then you need to be able to get hold of someone local to sort the problem out." The company recruits up to five apprentices each year under an informal apprenticeship scheme. All workers undergo intensive training and engineers engrave their initials on every bike frame as a seal of quality.