A caravan manufactirer is gearing up for growth, after a radical shift in both its culture and processes. Deputy Business Editor Dan Jenkins reports on how the Explorer Group changed from struggling cottage industry to modern market leader.

UNDER various names and owners, making caravans has been an industry in Consett for more than 40 years.

And with a workforce of 450, the Explorer Group remains one of the town's biggest private employers.

But, after four decades of steady expansion, the wheels very nearly came off in 2002, when a number of problems led to a financial crisis.

Steve Ford was appointed managing director in June that year and succeeded in not only averting disaster, but putting the group back on the road to success.

"The company was on the edge," he said.

"There is no doubt it was in serious jeopardy.

"We had to get from producing 70 caravans a week to 100, almost overnight, just to manage the cash flow."

By introducing modern manufacturing methods and revising the sales strategy for its three main brands - Buccaneer, Compass and Elddis - he has improved productivity and profits.

"Traditionally, the market has tended to undulate, leading to a cycle of redundancies every two years, which is very negative," he said.

"It has been strong the last couple of years, but we have restricted our output quite deliberately.

"I have tried to stabilise the business, train the workforce and improve production, rather than chase the market.

"Instead of boom and bust, we now have incremental growth."

Mr Ford joined the company as production director at the height of the crisis in June 2001, and had an immediate impact.

The Hartlepool-born engineer updated the manufacturing methods, with measures such as building all models from a common platform.

He also did away with bulk component assembly and introduced a modular production line.

He said: "Furniture doors used to take three days. Now they are done in less than an hour."

Since 2001, the number of complete units produced per employee has risen from 11.5 a year to 14, which takes the plant almost to its annual capacity of 6,500 units.

But Mr Ford is only half way through an efficiency drive he expects to be completed by 2008.

"We have been saying no to dealers for the past two years, which is a nice position to be in," he said.

"Our priority is improving the product, as opposed to increasing the volume. We aim to be producing 8,000 units a year in three years time."

The company has about a 20 per cent share of the market and total sales have risen from £40.7m in 2001 to £57.2m last year, with a healthy pre-tax profit.

Its Avantgarde motor home, launched in 2001, is now the biggest-selling model in the UK, helping Explorer more than double sales of motor homes in only three years.

Before Mr Ford's appointment as MD, annual sales of its 51 caravan models and 18 types of motor home were a guessing game.

Managers estimated how many units they thought would sell and built accordingly. But this strategy could leave the plant with unwanted and costly stock.

"Having stock left at the end of the season was a huge problem, because of its high value," said Mr Ford.

"We now agree orders or allocations with the retailer network, so we are much closer now to our customers than we ever were."

The company began as Elddis in 1964. It was formed by Consett transport magnate Siddle Cook, who made miniature caravans as a hobby.

The business grew steadily, riding out the demise of north Durham's steel and mining industries.

The first serious difficulties began in 2000. Managers initiated cost-cutting measures, including merging two County Durham operations on to a £4m site in Delves Lane, with the loss of 130 jobs.

"The merging of the two was clearly a difficult one, both physically and culturally," said Mr Ford.

The crisis deepened when spring and summer sales were hit hard by the onset of foot and mouth disease, and Explorer posted losses of nearly £1.5m for 2001.

"We were right in the middle of it all," he said.

"The restrictions on vehicle movements meant the whole retail network was affected. It made a difficult situation worse."

That November, the cash-starved company sold its Coachman brand to a management buyout team.

However, the situation continued to worsen in 2002. One of its largest customers went into receivership, leaving Explorer with a £700,000 liability.

The company pinned its hopes on the launch of a new range of motor homes that spring, but their arrival was delayed by five months because of problems with a chassis supplier.

In May 2002, the company that supplied its soft furnishings went into receivership.

That led to one credit insurance provider cancelling Explorer's credit.

"That is a situation that a lot of companies would not recover from," said Mr Ford. "We were really in the clart."

He took over as managing director the following month, and the turnaround began in earnest.

Evidence of a reversal of fortunes could already be found behind the scenes, with productivity and sales growing steadily.

The year ending August 2002 saw the company post losses of £375,000 on a turnover of £43.8m.

Only a year later, sales reached £49.9m and the company was back in the black, with a profit of £3.1m.

Explorer's modernisation drive, supported by the North-East Productivity Alliance, will see it invest heavily in the site, ploughing several million pounds a year into plant machinery.

It has also recruited engineering graduates from Newcastle University to look at design issues, such as standardising components and using better composite materials.

Marketing innovations include the launch of 3D virtual reality product tours - an industry first - provided through the company website.

The company recently took on four apprentices - its first in ten years.

Existing employees are also being pushed through the biggest training programme the company has run.

"There is so much potential in the business," said Mr Ford.

"The experiences of the last few years meant the management team has learned the hard way.

"In the face of adversity, you can become stronger."

At a glance: The fight for survival

1964: The Elddis brand established in Delves Lane, when Siddle Cook began making touring caravans, naming the firm by reversing his Christian name.

1981: Siddle's son Ray sets up Compass Caravans in Langley Park, near Durham.

1986: Elddis launches first motor homes.

1993: Death of Siddle Cook

1994: Constantine acquires Elddis' holding company, Carisfield Ltd.

1997: Carisfield buys Compass and Coachman brands.

1998: Carisfield changes name to Explorer Group and buys Beverley-based Buccaneer group.

2001: Posts losses of £1.4m after range of problems, exacerbated by the foot and mouth crisis restricting sales.

2002: Steve Ford appointed managing director.

2003: Explorer back in profit.