When its traditional construction market faltered, Barrett Steel reinvented itself for a new sector. The move worked well – until its chosen substitute, oil and gas, suffered a traumatic crash too.
But as its 150-year history suggests, Barrett Steel is made of strong stuff. After adapting once again to the realities of the oil industry, the company is looking forward to a new phase of growth.
Barrett Steel's head office is still in Bradford, on a site established by its 19th-century founder, Henry Barrett. The firm expanded steadily through acquisition and organic growth to become the UK's largest independent steel stockholder.
By the early 2000s, the group was enjoying record turnover. That came to an abrupt end with the financial crash and its impact on construction.
"Our order book went down by 40 per cent overnight," recalls Group Financial Director, Andy Warcup. "We had to make some fairly drastic changes, reducing our headcount by 30 to 40 per cent. We decided we needed to think differently."
In 2009 Barrett made a decisive advance into the oil and gas market. It invested GBP30m in three new UK businesses, specialising in steel for the wellhead and downhole casing components, while also opening a Houston operation.
These proved profitable until the global oil slump. In 2015 Barrett saw a drop in turnover and profit, further exacerbated by the dip in worldwide steel prices.
Barrett was obliged to close its Newcastle forge and a machine shop in Ayr. However, the Houston business remains poised to capitalise on recovering oil prices.
"The Houston business supports new exploration. We're still achieving strong margins from our niche offering into what continues to be a challenging market," Warcup says.
Meanwhile, Barrett's main focus has swung back to construction, where it sees solid prospects once more. At the same time it is expanding its offering to protect itself against further cyclical troughs.
The business is using its multinational clients in the UK to provide a platform for business in new territories. Warcup sees particular opportunities in South East Asia and the Middle East.
"Once you can prove your capability with a UK business, that can be replicated overseas," he says. "Thanks to our supply of components for a coach builder client, for example, we now have contracts to develop with them in Malaysia and potentially Australia."
Through a global supply agreement with oilfield service company Baker Hughes, Barrett is also seeking to establish itself in the Middle East.
"Having spent time out there, our view is that their oil and gas industry has suffered far less than America's," says Warcup. "We aim to have stock on the ground there in the early part of 2017."
Barrett has also been proactive in responding to customers' needs. Among the challenges of the group's expansion to encompass 42 different UK-based companies on 26 sites was the risk of providing a fragmented service.
"We recreated our business four years ago to reduce that complexity on the customer side," says Warcup. "Clients can now talk to one account manager about all their different needs. That enables us to offer a one-stop shop."
Staying ahead of technology helps too. In 2016 Barrett invested GBP1.7m in new saw drill lines for sites in Bradford, Ireland and Scunthorpe as part of a total GBP4.7m investment package.
This complements a longer-term GBP10m investment in tube lasers, providing a cleaner and more efficient way of manipulating steel than traditional cutting to length.
"Rather than simply supplying steel, we've aimed to do everything for the end user – so all they need to do is assemble it when it arrives on site," Warcup says.
That requires a high level of expertise among the group's 1,000 staff to solve customers' problems: "We spend a lot of money, time and effort to make sure we train people to the right level."
Indeed, Barrett has consistently invested in the business even through the toughest times. It continued to plough GBP6m into new processing facilities, IT and other developments during 2015, when the steel industry's pain was constantly in the headlines.
"We had attention from insurers at that time, questioning the strength of our balance sheet," Warcup recalls, "but with the support of HSBC, we rode that storm well."
Barrett recently secured a funding package of GBP80m to help it invest in further new technology and drive further growth. Its five-year plan foresees a turnover boost of GBP50m by 2020 to hit GBP300m.
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