MGN Insight – An emerging business in an emerging market
2009 was a watershed year for Tharsus. As Tharsus Vision it was a supplier to the outdoor advertising industry, with clients such as London Underground. But, almost overnight, that market disappeared – reduced advertising spends coupled with increased capital costs chiefly to blame.
So the company had a choice: should they fold or should they try to reinvent themselves? The decision was to reinvent the business – and what a great one it was.
Today, Tharsus is a leading developer and manufacturer of robotics and other electro-magnetic machines. Back in 2010 the company was turning over just over £1m; last year it turned over just over £23m and is likely to be over £30m this year.
Speaking to Insider, Brian Palmer, who has been at the helm of the business throughout these transformational years, puts the main catalyst for this amazing growth down to the highly unusual business model they have adopted.
“We call our business model Original Equipment Design and Manufacture,” he explained, “which means we collaborate on the product development with the client, we do all the certification of the product, then build the supply chain before manufacturing it.
“Our customers are the brand and IP owners – it’s their product, their name on it – which means they don’t have to find a design house, a certification body and then a manufacturer – we are responsible for the whole delivery of the product. We have developed a very integrated workflow and this is a very attractive proposition for customers.”
The other unique aspect of the Tharsus business model is that it signs exclusivity deals with its customers. “We normally sign five-year exclusivity deals and this means we never build a product that competes with another that we’ve already developed that’s out in the market.”
An example of this is online grocery retailer Ocado for whom Tharsus supplies robotics for its warehouse automation project but this doesn’t preclude the company from working with, for instance, Tesco on non-competing products.
The IP generated is very project-specific as the applications of the products are incredibly specific. Brian added: “We’re working with people who can take these applications to market. Our customers understand their markets.”
“What we also focus on is communicating clearly with our customers. Both sides need to know whether we are acting simply as a contractor or whether we are fully collaborating in the project. And being open about this from the very start of the relationship is very important.”
To date nearly all Tharsus’ customers have a UK footprint but Brian and his management team are now looking to internationalise the business. “We already export to about 14 countries at the moment but we recently commissioned a report by the London Business School to look at where our potential markets may be around the world. Ocado have recently announced deals they are doing in France and Canada for their platform to be used over there, so this will drive export sales for us. And of course our supply chain is global.
“Our vision has been the same for a number of years now, we want to be involved in application-specific projects. It’s about robotics of course, but also technology-enabled hardware. A robot is just something that can complete a task, but it doesn’t necessarily have computational capability on board.
“So we’re in a marketplace that is rapidly changing and our short-term goal is preparing ourselves for the wave of opportunities that is quickly coming towards us. Whether it’s connectivity, sensors or big data, all of these things are converging to offer us new and exciting markets.”
On Brexit, the company’s strategy is to focus on how it can benefit from the situation, rather than use Brexit as an excuse not to do anything. “As a country we need to promote and support sectors such as technology,” Brian commented.
There are just under 140 people employed by the company in Blyth and the plan is to add to this in the coming years. And Brian is very focused on how it builds the employer brand and how it can improve the recruitment process. “Attracting talented people to come to the North East is a challenge and one we take very seriously,” Brian said.
“But I’m firmly a believer in that if you work hard at recruiting people, and you have a decent offer, you can get the right people. They will joining a £30m-plus company and people will be attracted to joining a company with big growth ambitions.”
Brian has been recruiting to the senior management team too, with a new COO now in place and a new CFO joining soon. According to Brian, these are “bright, experienced people with really strong track records. And we believe we’re getting to a point now where the opportunities for the company are growing massively and we’ll look to spend quite significantly on our sales and marketing effort.”
He continued: “We’re an emerging business in an emerging market and there is a lot more to come from the business in the next few years. We are developing proper strategic cascades through the business and although things are bound to change we know where we want to get to. We’re evolving in an evolving market and we’re beginning to really hit our stride now. There are real opportunities out there for us and we’re in a great position to take advantage of them.”