Cash injection aids recovery at foundry
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.”
