AMTICO

Amtico’s Jonathan Duck – ‘Design-based manufacturing will rebalance the UK economy’

Introduction

Jonathan Duck is proud of the part that the Coventry-based company is playing in rebalancing the UK economy. As brand leaders in the ‘luxury vinyl tile’ market, the company has 20% global market share and sales of over £120m.

He says, “We came out of Courtaulds in 1995, as a management buyout, having built this whole market segment in the 60’s,70’s and 80’s. In 2012 we became part of Mannington Mills, a much larger US-based flooring company, with great long term vision and the ability to fully invest behind Amtico. As a result, we’ve recently doubled our manufacturing capacity through a £6m investment in a new production line, so now we’re Coventry’s largest company actually making things in the city, employing 300 people in the UK and 600 worldwide. This latest investment shows both our commitment to UK manufacturing and the strength and confidence we have in our product.”

The investment is enabling the company to bring back production of Amtico’s affordable flooring line, Spacia, from China to the West Midlands. Their premium range, Signature, has always been manufactured in the UK. The new calender line, launched last September, is not only increasing production but is also having a positive impact on the Amtico supply chain at a local and regional level. It has taken one year to install with a team of 20-strong engineers working round the clock.

“We have overtaken London Taxis in terms of numbers based here in Coventry working for Amtico. We also have a sales office in Solihull and a similarly sized manufacturing and sales operation in the US, but the root of all we do is in design and how this is connected to manufacturing”.

UK Production Process

Loaf-sized ‘dough balls’ of PVC appear on the conveyor belts at the start of the production process, moving onto calendars where they are rolled into fine sheets. These in turn move into the rotocure process, following which vinyl sheets are cut before being shipped around the world. This makes it all sound ridiculously straight forward. In fact the fully vertically integrated production process is wonderful to observe, finely tuned, drawing on 50 years experience, an intimate knowledge of materials, customized machinery and production lines, all ensuring that the end product is something very distinct and set apart from the competition.

The tiles are made up of five layers, a very hard-wearing PVC sandwich, generally with a photographic film of very high fidelity included. “We’re particularly good at long runs of high fidelity woods and stones, with constant shades and low levels of pattern repeat” says Jonathan Duck. “Our new calender line enables us to create unique visual effects in-house, giving us a technological edge against competitors”.

Value Production

Jonathan comments on the dangers of what he calls ‘segment retreat’. “We re-focussed the business about 10 years ago to avoid this. Up till then, we were in danger of running away from the Far East and retreating into an upmarket position, where we were then losing scale economies of production.”

To counter this Jonathan realised they needed to compete full square with the Chinese. “We worked hard to increase output per person by four fold over 10 years. We studied Chinese manufacturing, learning a lot from them, which we brought back to our factories in UK and US. On the design front we created a new line, ‘Spacia’, sitting at a price point below our Amtico Signature range. We worked hard not to cannabilise Signature with Spacia, operating along the lines of a good, better, best series of offers. For example we can customise our offer for Amtico Signature, but not for Spacia, and we cut patterns as part of Signature, but not for Spacia”.

“Taking this approach helped us to grow right through the recession. Pulling production back to the UK, or re-shoring, is now very fashionable, but it wasn’t five years ago when politicians, journalists and even banks were always suggesting that if you made things it was better to produce in the Far East and concentrate only on downstream sales and service”.

Design-based Manufacturing

“For us it has been about getting design connected to manufacturing. If we achieve cost efficiency we can look China in the eye. What is important both for Amtico and the UK, is being able to generate exports and not having to import everything. This is increasingly a design-based activity for the UK. It is very important never to allow silos, but instead to operate teams on a cross cutting basis. We enjoy very low turnover amongst our staff with tremendous loyalty. People enjoy working here and we have a pretty flat structure.

Sandy Sandhu, Process Support Technician, who has been with the company for 40 years, echoes this view, “Bringing manufacturing back to the UK can only be a good thing for the company and its employees, especially when I remember first hand all the effort put in to keep this factory open. I’m very proud to be able to say we do it all in-house here in the UK and that I’m still standing after all this time.”

Global Markets

Amtico sells to a variety of different customer groups with 80% of their sales destined for commercial markets – hospitality, residential, high street retail, even military – and with their customers varying from US submarine commanders to Number 10 Downing Street and Buckingham Palace. “We export three quarters of what we sell – 40% to the US, 30% to the EU and 5% to the emerging BRIC economies, with the remaining 25% sold here in the UK,” says Jonathan Duck.

“Manufacturing in the US helped us break into North America about 15 years ago. Developing any exports does mean flying out regularly to spend time on the ground. Every £1 sold in a typical export market, such as France, Germany or the US needs at least twice as much work as at home, with BRIC markets taking at least three to four times the work. In this country there are plenty of plaudits for retailers, but the UK needs exporting manufacturers just as much as the service economy. We can’t live by simply selling each other cappuccinos over the internet,” he quips with a broad smile, conscious that half the retailers in Oxford Street have his product on their floors, pointing out that one well known retailer’s Oxford Street Amtico floor has been down at least 25 years.

Design, Innovation and Entrepreneurship

“We’ve really got three businesses – design, manufacturing, sales and marketing. We rigorously chase down our sales opportunities. And we innovate heavily. 50% of our products are new every two years. Clearly this is a high rate of product churn, but the company needs this to stay ahead. There are a lot of competitors copying what we do. We stay ahead through product renewal, ensuring our designs are appropriate to market needs and trends, while creating a better quality product that outperforms our competition”.

“We have nearly twenty designers who have a global perspective on interiors and textile trends, interpreting these into our products to ensure we produce and sell the latest trends timed to hit the market – not too early and not too late. We have consciously brought innovation into design. We are seeing increasingly abstract trends at present and for us some of these patterns are not based on photographs. Amtico has always marketed itself not as a flooring business, but as a brand with a unique view on selling flooring product.”  There are lots of mimics for their products he says, but on the design side it is a case of making sure what they’re producing is both relevant to meet market needs and ‘designed for manufacture’.