October 2016 | Co-operative and Community Finance

October 2016

October 27, 2016

Cash injection aids recovery at foundry

support Financing Workers' Co-operatives, Lending

Scotland’s only employee-owned foundry is preparing for a growth in sales after a difficult first year. A loan from Co-operative & Community Finance is easing the pressure on cash flow as the business returns to profitability.

Specialised Castings in Denny, near Falkirk, is one of just two iron foundries left in central Scotland, which was once the heart of this industry. The ironworks dates back nearly 200 years. The current company was established in 2001 following a management buyout from a larger group. Then in 2015 the retiring managing director, Steve Waring, sold the business to the workforce.
“I couldn’t be responsible for allowing the last foundry in the district to go,” he said at the time of the sale. “By selling to the employees, Specialised Castings will stay in Denny for the foreseeable future, keeping the foundry tradition alive and providing real employment for generations to come.”

The foundry produces a high quality bespoke casts in a wide range of metals for both engineering and architectural use. It has, for example, supplied the cast iron railings for Buckingham Palace. It also supplies the pipes that suck up sea water for firefighting pumps on oil rigs.

Unfortunately the transfer to employee ownership coincided with a drop in orders mainly as a result of the downturn in the oil and gas industry and the knock-on effect on manufacturing. The new employee-owners took the difficult decision to issue some redundancies. This was painful and expensive. There are now 25 employees, 19 of whom work on the shop floor. The business returned to profit earlier this year.

“Now we are snowed under with orders,” said Operations Director Ian Walker. “And finding skilled staff is becoming a problem.”

Asked what difference employee ownership had made Ian replied: “The lads have embraced it and are getting more involved. They are coming forward with suggestions for how we can improve operations on the shop floor; for example, saying that if we do it this way we’ll make an extra £5 profit on every component. Lots of small changes add up to a big difference.”

Non-executive Finance Director Catherine Maciocia said: “The loan is very welcome indeed. We have been living hand to mouth and as we return to profitability we have been relying on the goodwill of our suppliers. The loan means we can concentrate on the day job rather than juggling the cash.”

Ian Rothwell, Investment Manager at Co-operative & Community Finance, said: “It’s great that we have been able to support yet another employee-owned business in Scotland. In fact we have heard that the former owner was inspired to sell to his staff by the example of Clansman Dynamics, who we also helped a few years ago.”

Female staff at Specialised Castings — The employee-owned business is proud to have female workers on the shop floor

October 3, 2016

Future secured for Cornish housing co-op

support Financing Co-operative Housing, Lending

A timely loan from Co-operative & Community Finance has helped to secure the future of the most southerly and westerly housing co-operative in England. On 29 September 2016 Spiral Collective Housing Co-operative became the owner of the Cottage and associated land and buildings on the picturesque Pendennis Headland in Falmouth, Cornwall.

ladder Spiral Collective had occupied the Cottage for 13 years on a short-term tenancy agreement. In 2003 a group of community activists in need of housing and workspace moved into the derelict premises owned by South West Water. Following discussions with the eviction team they were allowed to stay and granted permission to restore the buildings.

The property comprises a large 6-bedroom brick house, two detached workshops and a large garden with vegetable plot and open space. It is currently home to nine single adults aged between 21 and 49 whose various occupations include flag maker, gardener, writer and seaweed harvester. They all pay rent to the co-operative.

Tim van Berkel, who moved in two years ago, said: “Over the years many people have come and gone. They tend to stay for two to four years. There is one original resident here. One resident is pregnant and that’s a very positive sign for the future.”

In 2015 following a change of personnel and policy South West Water decided to sell the property and sought to evict Spiral Collective. “We thought that was going to be the end,” said Tim. “But with the help of Co-operative & Community Finance, Radical Routes and Triodos Bank and a very generous individual we managed to negotiate and complete the purchase of the property.”

In recent years the Cottage has become established as a small community hub. It hosts live music events in the garden and the workshops and large yard have been used by several start-up businesses. Having secured the long-term future of the property, Spiral Collective intends to increase and improve its links with the local community.

Ian Rothwell, Investment Manager at Co-operative & Community Finance said: “We had to move quickly to secure the future of the Cottage and I’m very glad we did.

“Spiral is a housing co-op that uses the model rules developed by Radical Routes, and that is how they came to hear about us. I think there is a good synergy between Radical Routes and Co-operative & Community Finance. Both organisations have a total commitment to helping people take control – whether it is their living space or their work place. And both organisations insist on genuine mutuality and co-operation.”

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