Dealing in global flexibility

High flyer Jeremy Beeton has moved from construction to mechanical engineering Anthony Gould asked him about his plans

Jeremy Beeton, civil engineer and deputy chairman of Kvaerner Cleveland Bridge, created a stir recently when he abandoned a 17-year-long career in construction to move to engineering and industrial services outfit Haden MacLellan Holdings.

To many who had him cast as chairman-in-waiting at Kvaerner – following his promotion to deputy chairman earlier this year – his move to executive director at HMH on 1 June was a bolt from the blue. Especially considering that Beeton’s career to date has had `nothing to do with process engineering, industrial services, manufacturing fasteners or specialist engineering’ – HMH’s sphere of business.

`You get to a point where everything starts coming round again,’ explains the softly spoken star who was made managing director of Cleveland Bridge in 1991.

The call from Haden had not been his first brush with the company however. `I first heard of Haden when I walked into Kvaerner Bridge in 1991. Ironically my first notebook says: “Problem contract, high bay warehouse, Sheffield, for Haden MacLellan”.’

The attraction of Haden has also led to the appointment of Roger Leverton, former chief executive of Pilkington, who is to replace Harold Cottam as chairman.

Haden MacLellan, based in Egham, Surrey, is not only about as far away from Durham – where Beeton lives with his wife in a converted flour mill – as he could get, but also from the world of bridges.

However building bridges will still feature in Beeton’s new role, although only metaphorically. His main task is to oversee and guide the group’s 23 businesses and four divisions – including those in Australia, China and India – and to build links between them under the Haden brand.

It is clearly ridiculous, he says, that Haden companies based in the UK do not have regular contact with each other.

A keen proponent of decentralisation, Beeton has seen the damaging effects of too much centralisation in practice – at Cleveland Bridge’s parent Trafalgar House prior to its takeover by Kvaerner. The company tried to retain as much decision making as possible at the centre, he says.

`The idea at Haden is to have a small no-task orientated head office which simply determines overall strategy, encourages the managers of the separate companies, gives support, injects new ideas, provides resources and gets the businesses to talk to each other.

`One of the biggest challenges is finding a way of maintaining corporate control over this lot,’ he says. `It is very hard to have strong supervision over an operating division that is 8,000 miles away.’

Beeton’s first job is to see the managers of all the businesses – whether in the US, China, India or Australia – and he is clocking up air miles at a fantastic rate. `Reconnaissance,’ he says, `is never wasted.’

He hopes to have a solid video conferencing network in place by the end of this year – which should help reduce the amount of time he presently spends curled up in a sleeping bag on aeroplanes.

Beeton believes everyone in the company should be enlisted in the quest to keep costs down and remain competitive. `A proactive costdown process has been implemented across the company. This goes as far as the secretary making a decision about first or second class post for any mail,’ he says.

The company’s interims last week showed pre-tax profits were up 6.3% to £6.7m on turnover down from £278.4m to £226.2m. The fasteners division was by far the most profitable, with operating profits of £4.2m out of £7.3m for the whole group in the six months to 30 June.

The industrial fasteners division benefited from the acquistion of B Elliot in July for £9.25m, and the earlier takeover of specialist fastener manufacturer, Centrepiece Engineering. The company is looking for further acquisitions in this area.

Haden’s five remaining specialist engineering companies are to be sold off sooner rather than later, according to the compny’s managing director Richard Taylor.

The results in process engineering, however, were disappointing – turnover dropped to £101.4m from £149.4m and profits from £1.4m to £1m. However, Beeton sees the process engineering division as key to expanding the industrial services side. `Our businesses should feed off each other,’ he says.

`We recently completed a contract to build a paint shop at Land Rover’s Solihull plant. We didn’t miss the opportunity of telling them we had another division which could actually service and clean the paint shop for them,’ he quips.

Beeton sees massive potential growth in the industrial services division – especially in the automotive sector – where Haden is a minnow compared to the likes of big fish Serco and Johnson Controls.

`Facilities management offers huge untapped potential, with the big automotive players keen to develop relationships with a small number of contractors who will follow them around the globe.’

It was this ability, claims Beeton, which saw his company win a recent contract with BMW to build its new plant, for the 3-series, in South Africa. `Although Haden Drysen in Germany won the contract, the plant was designed by one of our UK-based companies and will be installed by our company – and this was probably key – that is based in South Africa.’

Although he admits that it is still too early for him to have really got to grips with the company, Beeton says one of the main lessons he has learnt over the years is the need to be imaginative and flexible in winning contracts, `taking a leaf out of the construction industry’.

Beeton cites a potential client which wants to build a paint shop but does not have the finances. `It asked if we could engineer the money as well as the designing, building and servicing of the paint shop. In this case we may offer a financial package as part of the deal.’