Lift-Off for Sheet Metal

Shotton Group

Shotton Group is a company that refuses to sit – like so many – and moan about the economy and the problems of doing business in 2012. The family owners of the company saw the signs some years ago, according to General Manager Adrian Maloney, and have been structuring it to best get through the tough times. “Now is the time we realise we have to push harder because the economy is getting tight and we must exploit new opportunities or we won’t survive. That’s the state of the market – we have to be proactive, seek out new opportunities and maximise the use of the skills we have here.”

The Shotton Group is an Australian business, family owned with over 35 years of service to industry, founded by Roy Shotton and now with son Lloyd as Managing Director. The group currently comprise three divisions – P&R Sheetmetal, Shotton Lifts Australia and ParMED – and employs a workforce of more than 80 people including sheet metal workers, welders, quality teams, design engineers, planners and sales teams.

P&R Sheetmetal, the founding company, provides specialised sheet metal services to general manufacturing, new cleantech industries, biomedical, shopfitting, transport, mining and aviation. The ParMED division is a unique business supplying equipment and consumables to the mortuary, forensics, laboratories, hospitals, universities and emergency services, in which sectors materials handling and OH&S issues have lately become a major concern. Shotton Lifts manufactures, installs and services Residential and Commercial lifts.

Adrian joined the business two years ago at a time when, he explains, the existing management had a vision but needed a way to achieve it, to take it to the next level. Adrian credits the family with forecasting correctly some five years ago that the traditional manufacturing industry in Australia was an endangered species. In areas such as packaging, machinery and biomedical, in which the company was deeply engaged, customers were starting to look offshore and wages at home were simply not competitive. Fortunately the family had the opportunity to diversify into other business sectors and concentrated on what is now ParMED and the Shotton Lifts division – “they are our own products, but they generate work for our factory.” All the businesses are grouped together at Dandenong South in Victoria.

“A lot of volume-related sheet metal work can be sourced from China and Taiwan,” Adrian explains, “because we can’t compete on price.” The differences are rather dramatic – 25 per cent of the price in some cases, with the difference largely attributed to labour costs.

However, there is one sector – custom sheet metal – where Shotton is able to retain both its customers and its competitive edge. This is the sector of small runs that are very job-specific and require a high level of skill. As an example, Adrian cites the stainless steel surrounds on the entrance to a lift – it is usually highly individualised to a particular installation and needs to be shaped. “It’s very detailed work and the finish needs to be of a very high quality and durability – it’s almost like managing glass and requires a lot of care.”

P&R Sheetmetal is active in the biomedical industry, making chassis for medical equipment with intricate bending and shaping that requires a skilled tradesman, and customers “have not been able to find that quality of work offshore. Because of the low volumes, plastics are not cost-viable, leaving the industry little alternative.”

There is also the mortuary business – a niche market, Adrian concedes. In one recent project ParMED won a $1.3 million contract with a leading forensic institute to provide custom benching, racking, storage and special trolleys (it’s an unpublicised testimony to the growing national and international obesity epidemic that ParMED is being asked to design and supply equipment that can handle bodies weighing up to a staggering 450kg, up from ‘only’ 120kg just a few short years ago). “We have design engineers and drafts people, as well as technical experts who can discuss requirements with customers and come up with solutions that fit any specific requirement. We can design that sort of speciality product and then translate it into manufacturing with our specially trained sheet metal workers.”

There is not a great deal of repeat work in a mortuary, but medical establishments, as Adrian puts it, are “all talk. They go to the same venues and meetings and if you get a reputation, it can get around quite quickly. It took us two years to build that reputation; officially the ParMED division only began three to four years ago,” when the company bought out part of the business of a customer to whom it had been supplying parts. This echoes Shotton’s approach throughout its 35 years, says Adrian – talk to the customer direct, find out precisely what he wants and needs, then supply something that matches what he wants.

What Shotton wants now – and is actively pursuing – is to spread out, to replace more of the production-type work that is disappearing with “work that brings business back through our factories.” Early successes include work for bus maker Volgren and a contract for another major international transport provider, both under the P&R Sheetmetal brand. Likewise, ParMED is actively looking for new avenues in the medical field that would complement the sheet metal business with its expertise in managing projects involving medical facilities and clean-room installations, which, as Adrian points out, are substantial, typically in the $300-500,000 range.

A recent customer was Gold Coast University hospital where ParMED re-equipped the mortuary. The company is also exporting to the US via a company involved in biomedical work. “We provide all the sheet metal for that as an FDA-approved manufacturer – they have been unable to find anyone in the US that can offer the capabilities we have.”

In terms of recent growth, P&R had a customer whose business was going down and the firm took on much of the workforce and turned it into Shotton Lifts, which has now developed its own range of lifts. These are not high-rise lifts; typically they are up to four level installations for apartments, high-quality houses and prestige homes (for example with a car park in a basement). Shotton can carry out the complete project, designing it, manufacturing and then installing and commissioning it (as well as being able to maintain the installation for years afterwards). “We have also recently been quoting for installations in aged care homes, which is another expanding market,” Adrian explains.

A speciality for the residential market, bearing in mind the government’s drive to enable people to remain in their own homes longer rather than entering nursing homes, is Shotton’s self-supporting tower, which can be bolted to the side of the house and does not require a lift-well. In essence, this involves knocking a hole in the wall at the bottom and another at the top and joining the two via an exterior lift (although of course it’s a little more complex in reality and requires great care in assessing the building’s structural integrity). The lift can be enclosed, or it can be glass. Typically, the cost will start at around the $40,000 mark – plus the building costs – but especially in the current economic climate this may well be a more attractive option for an elderly person or family than selling a home and moving into care. These lifts have a wide range of other applications too – Shotton has just completed an installation for a factory which wanted access between floors to and from a new mezzanine level.

“I expect there is something available overseas that will be similar, but to my knowledge we are the only Australian manufacturer of this type of product based in Victoria,” says Adrian. The self-supporting tower is – as it were – poised to take off, with Shotton now gearing up to market it more forcefully.

Having the sheet metal expertise in-house is a major plus even for conventional lift installations, Adrian says, because every job is unique and alterations always need to be made. Those companies that source their sheet work overseas first have long lead times and then, when the result arrives, there is a problem should any alterations be required. “In the three months their materials would be on the water, we could have the job finished.”

A challenging business environment has led to a growing realisation within the company of its strengths, one of which, says Adrian, is that “we have some really clever design engineers on our staff who are helping us to open up new opportunities all the time. We are now looking at balustrading, which we had not previously thought about – especially custom work with special renderings. Our people are proper design engineers who do the full range of structural and testing work and it gives us a real edge over our competitors.” The company’s bankers and accountants tell him Shotton is getting it right – and the fact that the company is expanding the business in these tough times would seem to suggest they are right too.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 19, 2018, 5:15 AM AEDT