Diversification strategy pays off for Fairburn

In January 2019, Craig Carr the managing director of Fairburn Heating Solutions could have been forgiven for ordering a crate of champagne to celebrate the achievement of a three-year growth plan with a doubling of turnover in that period.

However, Craig recognised that just as he encourages Fairburn clients to adopt his proactive approach to process heating maintenance, he needed to apply the same principles to his own business.  Rather than “resting on their laurels”, Fairburn needed to identify the future threats and opportunities and build a plan for the next three years.

Honda of the UK Manufacturing

In conjunction with a business development strategy consultant, Ian Harris; Craig reviewed the commercial performance and realised that the automotive industry accounted for over 50% of turnover in 2018.

This did not surprise Ian who had seen similar situations in other high-growth companies.  “Businesses that experience strong growth often find it is driven by a specific area of their customer base.  Client satisfaction quickly builds a good reputation, which spreads through networking, social media and key contacts changing employers.  Prospective new clients often like to hire companies with experience in their industry and the growing business can quickly find the customer mix has been skewed disproportionately towards a single industry” commented Ian.

So, after a very brief period of celebrating their success, by the end of January Craig and his team began planning the next three years with a firm commitment to reducing the dependence on the automotive industry through developing new business in other sectors.  By the end of the first quarter of 2019, Honda (a long-term client of Fairburn) had announced the planned closure of their Swindon manufacturing plant, which further strengthened Craig’s determination to grow business in different client industries.

Within a few months Craig had recruited Niki Ashdown as sales manager and together with Ian and his marketing agency, Aardvark Marketing they created a new business strategy to win new clients outside the automotive sector.  Feedback from existing Fairburn clients in other industries revealed that they had broadly the same reasons for choosing to work with Craig and his team as the automotive clients.  Proactive maintenance, delivering reduced unplanned breakdowns, extended life of critical assets and better lifetime return on investment from manufacturing equipment is equally relevant in all well-run manufacturing companies.

Craig decided that if he could emulate the growth Fairburn had enjoyed in the automotive sector with another one or two carefully selected industries, the diversification objective could be achieved more efficiently than chasing every opportunity that came along.

Food manufacturing was chosen as the first target, as Craig explains “we already had some experience in the food sector, and it seemed to have different dynamics to automotive.  If times are hard people might choose not to buy a new car, but everybody has to eat.

Although the Covid pandemic made acquisition of new clients quite challenging, Craig and his team persevered through 2020 and by the time the Honda plant actually closed in mid 2021, Fairburn had made a number of key breakthroughs into the food industry, working with leading companies in savoury snack manufacturing, salmon smoking and vegetable processing in addition to projects in other sectors.

Reflecting on the company performance in 2021, Craig said “The decision to diversify has really paid off.  The turbulence of the last three years would have been hard for us to survive, but we had a good 2021, and our automotive turnover is now less than 20% of our total income.”  When asked to name the critical success factors, Craig is typically modest, “We just realised that a gas burner doesn’t know or care whether it’s working in a car plant or a crisp fryer.  Our design, installation and maintenance services are equally relevant to every process heating system in any industry; we just needed to choose which ones to target and get our message out there.

So, have the champagne corks been popped at last?  “We’re proud of what we have achieved together and have celebrated as a team” says Craig, “and now we can build on these broader foundations and drive Fairburn Heating Solutions forward into the next exciting phase of the company development.”  Let’s drink to that!