Riding on the crest of a wave

THE white water canoeist hurtles through the start gate, adrenaline pumping as he paddles down the rapids.

It is well known among the men and women who compete in this demanding sport that by Gate 7 the racer’s heart is pumping at its peak; his lungs expand as he searches for breath; his arms ache as he seeks the strength to keep powering on.

It is at this point that the going starts to get really tough and only the true heroes of the water emerge to survive the rest of the race.

It’s the perfect metaphor for a company that is run by a former world championship level white water canoeist, and shares the name of Gate 7.

Though it may be treading water for the moment, having reached manufacturing’s own version of the Gate 7 low point, the award-winning Gateshead company is likely to emerge fitter and leaner than ever as it powers on through its future course.

It produces decals for off-road industrial vehicles such as cranes, diggers and tractors, dealing direct with the likes of JCB, Caterpillar, Bobcat and Komatsu as a key player in their manufacture of original equipment. When you learn that a single vehicle might have up to 200 stickers, from branding to safety information to operating instructions which Gate 7 can produce in 34 different languages, it starts to become clear how the market is worth $20m to the Team Valley-based business.

But when you also hear that the factories of some of its European clients have been closed since Christmas and production schedules are coming through with zero in the order column, it is clear that it’s an industry hit hard by the recession.

Showing true entrepreneurial zeal, managing director Keith Wickham is stoical, buoyed about how the historical success of the business will see it ride the slump.

“At the moment we are severely hit by the construction industry downturn; it’s another challenge.

There’s never been anything as bad as this, these are the worst trading times I’ve known, but for the past ten years, we have had a very successful time.”

When the market does return, Mr Wickham believes it will look very different to that which has gone before.

“There will be much greater emphasis on quality standards, on compliance and on tighter delivery times so we are using this quiet time to re-structure, re-train our people and change the way we operate so we are ready.

“When the market comes back we will be in for a very, very successful run, so we are just looking forward to that and capitalising on the new opportunities it brings.”

Gate 7 was borne out of Silverscreen, Mr Wickham’s former print business that he ran for 30 years.

Taking the experience he had built up, he founded Gate 7 in 2000 by taking over a specialist part of the Silverscreen business where he could see expansion possibilities.

It certainly wasn’t the easy option, however.

“We supply to a technology-driven industry that’s red hot on compliance issues, so we are a specialist and unique in the way we manage and approach our market,”

explains Mr Wickham.

Indeed, it is Gate 7’s targeting of a specific market that has meant the company has had such a successful run over the last decade.

From a standing start, it now employs 36 people in Gateshead and 24 in Pennsylvania, in the US.

Exports account for 95 per cent of production, mainly to customers in Europe, the US and South America, thanks in no small part to export director Paul Crilley, who has excelled at sales on the international market.

Having had a successful distribution business in the US, it was decided early last year to open a manufacturing plant there.

John Reay, a key player in Gate 7 in the UK, moved to the US to run the operation.

The American division primarily serves the east coast of the country in a market that has been less affected by the recession with customers that include National Crane, Volvo and Manitowoc, a major crane manufacturer.

The eventual development of a second overseas base, this time in Europe, is likely and Mr Wickham is looking at different locations. It could come through acquisition, strategic merger or a cold start.

Gate 7’s success in finding foreign business led to it being bestowed with a Queen’s Award for International Trade in 2005.

“At the time, we were the only Tyneside company to be recognised in that way and it was good to know that small businesses are not forgotten,”

says Mr Wickham.

The accolade was followed with the Export Business of the Year title in the 2006 North-East Chamber of Commerce Awards, and the award for Exporter of the Year in the North-East Business Awards a year later.

Mr Wickham believes exporting should be encouraged as much as possible. On his shopping list to Chancellor Alistair Darling for this spring’s Budget were tax concessions, such as ending corporation tax on foreign deals and stopping the windfall benefit to the banks through the cost of converting currency.

Gate 7 deals in euros and US dollars through its concentration on the two most competitive zones; the pay off is that it deals with bluechip customers with reliable payment records within these regions.

But again, concentrating on the export market has not been easy.

Mr Wickham said: “If you are exporting, you’ve got to be prepared to plough your own furrow. It’s the brave option.

“Banks aren’t attracted to foreign business, they’re reluctant to give security over foreign debt, so you have got be financially well organised.”

This can be a deterrent to British exporters, though not to Gate 7 which has always been a cash business and has sound financial management thanks to financial director Quentin Caisley.

One of the company’s tactics has been to spend in euros, which means it sources supplies in Europe and Ireland.

“Is that really what the Government wants?” asks Mr Wickham.

“Should we not be buying from British suppliers and reinvesting in our own country?

“The best thing a local manufacturer can do is employ local labour, source from local suppliers sell goods abroad and bring that foreign money home. Instead, we are being pushed towards trading in foreign currencies.”

Gate 7 has been supported well in the past by UK Trade and Investment and has drawn on Business Link facilitites for training.

Through the Society of Motor Manufacturers and Traders, Mr Wickham and members of the team have been on “life-changing” trips to Japan to witness the country’s legendary Lean manufacturing practices and communication methods, some of which have been introduced by Gate 7.

Mr Wickham’s daughter Kate, who has a degree in business studies and was recently named Young Exporter of the Year, is one of those to have visited Japan and is implementing new business development techniques back at home.

Meanwhile, her brother, Oliver, has launched Gate 7 Signs having spotted a niche in the North-East commercial property market and sporting arena for advertising and branding hoardings.

Mr Wickham is understandbly proud. “He has done very well and has continued to be very successful during the downturn. He’s been innovative and entrepreneurial,” he said.

Gate 7 Signs may be developed separately in the future and may relocate out of Gate 7 HQ to encourage further growth nationwide.

Succession planning is not an issue for Mr Wickham. He’s only 60 and is not considering retirement any time soon. And in any case, he says, the business needs every bit of experience it can get at the moment.

“But I do feel comforted to have Oliver and Kate and our dynamic young management team on board,” he admits.

The company recently welcomed Norman Stables as general manager at Team Valley, a major coup because he came from Caterpillar with experience and management skills from the customer side.

Gate 7 has also recruited two engineering graduates from North- East universities.

And Mr Wickham is putting his money where his mouth is when he says the business is gearing up for the future.

It has developed two internal computer programmes, which will be key to its performance when the upturn comes. Its Total Management Concept interprets complex customer requirements into a production schedule and breaks down foreign languages into numbers.

The second piece of software is a decal warranty system to exceed the expectations of customers with strict demands and standards.

Both developments are likely to become key tools as Gate 7 positions itself ready at the start when the market takes off once again.

When it does, you can be sure Gate 7 will be riding the crest of a wave.

■ Keith Wickham is a member of the Entrepreneurs’ Forum. For more information, call 0870-850-2233 or visit entrepreneursforum.net