MGN Exports: A lasting exporting legacy

Houghton International is an electro mechanical engineering company which started life overseas in 1984 and still trades overseas today. It’s a remarkable heritage and one that is fiercely protected – and being built upon – by Michael Mitten, the company’s chief executive.

Michael’s parents set up the business when they were living and working in West Africa. At the time, Ron Mitten (Michael’s father) was running a repair shop that he’d set up as a joint venture with Blue Circle Cement as they couldn’t get any decent quality of repair out there. So they decided to set up their own dedicated facility and this went on to become the biggest of its kind in West Africa.

Michael takes up the story: “My parents had the foresight to have invested in a repair shop back here in the North East and in 1988 they set up the coil manufacturing division which the key differentiator for the business today. There are hundreds of re-wiring companies the UK but only a very few have the necessary technological capability. And in terms of capability we are the biggest and best independent company”.

Today, Houghton International works on emergency service requirement. Much of this is scheduled contracted service and repair of equipment, predominantly for the rail industry. If a customer has a critical piece of equipment or asset that has broken they call on Houghton International to fix it in the shortest possible timescale.  The company manufactures replacement parts in Newcastle and also supplies a bespoke emergency manufacturing service.

“You tend to get longer-term contracts with the rail industry,” Michael explains. “We are hoping to work with Hitachi Rail up the road as they introduce new vehicles. I can tell you that all the rail vehicles we service and repair are the best performing ones in the UK and this is our best possible selling point.

The company also develops new technology – for example, it has developed a new Tidal Generator which has a new type of coil arrangement within it that we have developed and patented it too. This will, Michael hopes, become the first commercially viable technology of its type in the world.

Innovation really drives the business and Houghton International has positioned itself as a partner and a solutions provider, working with customers on R&D projects. There is an engineering R&D team but the company also draws on the knowledge and skills from across the business whenever it’s appropriate, another differentiator from competitors. “We are normally up against OEMs and large international companies so having that flexibility to work with customers and the service we offer them really makes a difference.”

Most of Houghton International’s work is provided for UK customers but it also works in over 30 countries around the world. It tends to work through other repair companies which operate locally but that don’t have the technology to fix certain things, so Houghton International supports them in doing so.

About 18 per cent of the business is manufacturing – and of that, 80 per cent is exported. We manufacture high-voltage coils for use in our own repair shop in Newcastle and then exports these to other repair shops around the world.

Michael Mitten is hoping that Brexit won’t affect them too much. “We don’t have a huge presence in Europe but it depends on what sort of deals we do from countries outside the EU. We see real growth potential for our exporting markets and growing with our partner organisations around the world. We want to retain all our manufacturing here in the UK, so for the time being we have no plans to open facilities overseas.”

Houghton International works with customers globally to improve the performance of electrical locational assets – pumps, generators etc – and uses its many years of experience and skills across the business to exceed customer expectation.

“We work very hard to educate our customers as we want to try to influence them on making the decision to use us. If someone got a problem that we can solve – wherever they are in the world – we want them to know about us and know that we can add value – and to support them in the most cost and time-efficient way possible.”

Staff development and engagement are key priorities for Michael and his senior management team. Skills are developed at all levels but there is a significant focus on bringing in – and developing – apprentices.

“My dad started out as a miner but managed to get an apprenticeship and throughout his life he was always passionate about giving people opportunities. We started employing apprentices in 1988 and they remain a huge part of the business today. Stu Whitfield, one of those original apprentices is still with us 30 years later, something we’re very proud of.

“Most of our competitors struggle against us because they haven’t really invested in their people and the retention of skills. If you look at the demographic of our competitors’ workforces nobody has employees under the age of 40 but we do – in fact, we have people here in the 20s who have ten years’ experience already! They are experts at what they do and they have the whole of their careers ahead of them.”

Houghton International had over 70 people attend its Apprenticeship Open Day, and had 60 applicants for just six jobs. “Mechanical engineering is not a discipline that people generally think of in terms of apprenticeships but as soon as they see the training that’s offered and the benefits that it brings, the investment in training and development. We’re offering a lifetime opportunity. This creates a huge competitive advantage for us. The skills we offer are valued around the world and of course some people leave to pursue other opportunities but we also have people who return to us after a couple of years.”

Houghton International is about half way towards its target of achieving £20m turnover by 2020. The intention is to maintain – or even increase – its current 25 per cent year-on-year growth. “Everyone here has bought into this idea and the over-arching strategy has been focused on this since it was formulated.”

In order to maintain this level of growth, Michael believes they will need a workforce of around 250 – almost double the current 130. To get there, Houghton International has invested hugely in the employer brand in order to retain its good people. “We introduced a new benefits package which was borne out of our employee survey and through consultation with our Works Council. And this really emphasises the point that everyone in the business is important to us and that this is a really good place to work. And as the business grows we want everyone to share in it and be rewarded for it.”

Michael has focused on much of his attention on the strategy for the business and looking at each of the sectors that the company operates in and this has really propelled the growth. “We are a relatively small player in a market that’s worth billions, so if we’re good at what we do it stands to reason that we will grow. And we’re not doing that acquisitively; we’re doing it organically – and at a rate of 25 per cent year-on-year. We’ve taken on 50 people in the last two years and it seems we have new people starting every week.

“It’s not just finding the right people you have to develop them too, so they meet your standards and do they understand – and able to fit in with – the values that we have and which are fundamental to the business. But we’ve also invested in equipment.”

2018 has seen the introduction of a new pumps business for which people with the necessary expertise and hands-on capability for this new venture have been recruited to match the electro-mechanical core skills Houghton International already possesses. “Most of the workforce is multi-skilled and can do a variety of things, and that knowledge is shared throughout the business. All our values are shared throughout the business, starting right at the top. We make a point of making these values visible to everyone.”

Ron Mitten’s legacy of hard work and making shrewd business decisions continues today and claearly marks Houghton International as a company that really is going places.

The Manufacturing Growth Network (MGN) is a quarterly publication sponsored by NRG, EY, Square One Law, Lloyds Bank and EEF and published by Insider Media.  MGN is FREE for North East manufacturing businesses to join, for further information on how your business can get involved contact Julie Mordue, client relationship manager at NRG.

*Article originally published by Insider Media.