Established 40 years ago, MNB Precision is a Coventry-based provider of manufacturing and precision engineering services to leading companies, with a focus on the oil and gas, aerospace, power and rail sectors. A third generation family and owner-managed business, MNB Precision now operates a ‘servitization’ model where it works more closely with clients to meet their needs in innovative ways, rather than simply making product to order.
MNB Precision’s fast growth has seen the business feature on this years’ The Sunday Times Virgin Atlantic Fast Track 100 league table at number 30.
We spoke to Managing Director Luke Benton about recent challenges and the opportunities ahead.
Can you tell me about the journey your business has been on over the past 12 months?
Going back a bit further, we opened our current 36,000 square foot facility in 2015, which more than doubled our shop floor. But around that time, the big fall in the oil prices meant that orders dropped off. We were days away from closing down but we chased sales aggressively, diversified into other sectors and developed our servitization model. So we began growing rapidly again from 2016/17. By 2018 we needed more capacity, and so acquired a former contractor nearby.
By 2019/20 our turnover was just over £20m, up from £10.75m in 2018/19. Things were looking good up to the point COVID-19 kicked in. Our market has been affected and we’ll probably be at around £10m to £11m turnover this year.
To what extent has your business had to react and adapt?
We hit the COVID-19 challenge head on and started looking at what we could do to support the medical sector.
We offered the services of MNB in the ventilator challenge, received several enquiries and ended up supplying Dyson with pre-production parts – we enabled them to get their pre-production parts manufactured and into their testing facility. It gave a huge boost to the team on the shop floor. Even when we got the initial enquiries, you could feel the uplift in mood. It was like night and day.
When we started making the parts for Dyson, it was phenomenal the way people took to it and wanted to do their best because they wanted to be part of the fight against this unseen enemy. It’s sending shivers up my neck now, thinking about it. We produced close to 500 parts for Dyson, ranging from really small to decent-sized medical items. The teams had to react to working with different sizes of parts, quicker lead times and the larger batch sizes. Their dynamism was incredible to watch.
But COVID-19 has had a big impact on our sector. All our usual customers have been affected. We have enticed them to continue placing work with us by offering large discounts so we can keep the skills on the shop floor. The guys here are all highly skilled in precision machining. If we can keep cutting metal, at least we are protecting jobs. Thankfully we can take a hit because of the success we have had over the last few years and the way we have run the business – we’ve not overleveraged ourselves. We can take a hit on profit as long as we can protect our skilled workforce – because without them, there is no profit in the future!
What impact has COVID-19 had on your growth ambitions for the coming 12 months?
It’s going to slow us down this year. We are on ‘slow mo’ for these 12 months, but then it will be fast forward again. I think it will be the end of March before we will be back on our ‘re-growth’ trajectory again. But the scope for our growth is massive.
What about your people strategy? Can you find people with the skills you need when you need more resources?
We employed around 146 people in the group before COVID-19. We currently have about 105. We had to let some people go. The spirit of furlough is that it’s there to help businesses keep people if there’s a job for them to come back to. We currently have three people on furlough, who can probably come back in March.
It’s very difficult to find people with the skills we need. The skills we require on our shop floor are rare. There isn’t anybody in Coventry or the wider Midlands area with the same envelope of capability and capacity we have. You have to go to Sheffield or Aberdeen. When looking for people, we have tried to entice people down from Aberdeen, Sheffield and abroad – from the Eastern bloc, Czech Republic, Slovakia and Poland.
But when we are looking to recruit people locally, which is always best for us and for the local economy, it’s difficult because they haven’t got the experience of the type of work we do here. So we do go into training mode with new employees. But the good thing about people from Coventry is they never come up short when facing a challenge. We have a ‘can do’ attitude. When we interview people, they want to come in and learn and broaden their understanding of subcontract machining. So we look for that quality of character.
How have you fared from an operational cashflow perspective? Do you feel government measures provided enough support?
I cannot fault the Government for its furlough scheme and to a degree for the CBILS [Coronavirus Business Interruption Loan Scheme]. But the banks could have done more to assist us. We are incredibly financially sound, have a strong balance sheet and have just come off the back of a record year. We were looking for additional debt and decisions were not as quick as we wanted.
What do you see as being the main barrier to your business’ growth over the coming 12 months? And what do you see as the main opportunity?
The fallout from COVID-19 will be the main barrier. But we have a dynamic bunch of people here, which enables us to make business decisions easier because we trust our team.
And our biggest opportunity is actually adding to our team, because that multiplies the amount of opportunities I am able to take. Our people are the opportunity multiplier – the team on the shop floor all the way through to the directors.
What international expansion plans do you have?
We see the biggest scope for growth for us coming from having an international footing. We need to get closer to the ‘oil well’ – which means the Middle East. So over the next 12 to 24 months we are looking at taking the blueprint we have here in Coventry and installing it in KSA [the Kingdom of Saudi Arabia] – where currently they are heavily reliant on imports. Going forward, the KSA regime is stating it would rather pay 50% more for parts produced in the Kingdom, rather than import, so there’s a big opportunity for companies like ours to set up machine shops in the region.
What advice could you share for other business leaders?
Trust people quickly and trust them deeply – and generally people will repay you. With the growth we have had and the speed at which I have needed resource in the business, I have had to trust on face value and that trust has almost always been repaid. So trust quickly and deeply, and learn from any mistakes.
Subscribe to our mailing list to receive insights, entrepreneurial stories and invites to webinars and events.
Join the mailing list
More articles like this