Fusion proves to be nimble in tough conditions

The Chesterfield company saw group turnover increase by 31 per cent to £116m. Pre-tax profit shot up 71 per cent to £6m.

The group manufactures and distributes jointing parts for gas, water and electricity infrastructure and sells to utility firms and contractors in more than 35 countries.

“As with all manufacturers and businesses these continue to be troubled times with many infrastructure projects on hold or still going through the planning stages,” said the directors’ report, which highlights the volatile trading conditions.

“In these difficult times, teams need to be nimble and to constantly review their performance.

“Within a 12-month period we have experienced significantly changing situations from inflation to deflation in key raw materials, constantly fluctuating energy and fuel prices, constant swings in performance from record months to very flat months and to dealing with major swings in the currency exchange markets.

“Forecasting has become extremely difficult but the need to do so has never been so great.”

Kevin Raine, the 51-year-old managing director, told the Yorkshire Post that the year ending March 2012 was a successful one for the group.

But he added: “At times I feel like we are running very fast to stand still. That’s the same as all companies.”

Fusion’s UK distribution business continued to grow despite the flat construction and housing market.

The group also consolidated its position as a leading supplier of domestic and commercial gas meters in the UK.

Fusion managed to grow its international business and retain its margins despite the strengthening pound. Two thirds of all its manufacturing output goes to international markets.

Last year, the group opened new offices in Sweden and Kazakhstan, bringing the total of overseas offices to 15.

Mr Raine said: “Some of the markets in Italy, Portugal and Spain have been stressful, but other markets like Russia, China, Australia and Kazakhstan are doing well.

“The overall trend for international business has been improving. In a recession, we have benefited by having a lot of rods in the fire. If Europe is down, Asia is booming. If Asia is down, South America is booming.”

The group’s products are in constant demand, added Mr Raine. He said: “Every country either needs gas or water or both. There is still potential for us to grow significantly.”

Fusion is headquartered in Chesterfield and has a manufacturing plant in the town employing 400 people. It also has two factories in China, in Zhongshan, near Hong Kong, and Kunshan, near Shanghai.

The Chinese factories supply customers in Southeast Asia and Australia. Fusion opened in China 10 years ago, although Mr Raine commented that “the job is never over” and to be successful in China takes a lot of commitment. Fusion has a small factory in Egypt, which exports to Qatar, Iraq and Jordan. Mr Raine said the Cairo operation “is doing reasonably well, which is probably very good in those conditions” referring to the recent political upheaval in Egypt.

The group has invested in a retraining programme in its manufacturing business and is seeing improved staff retention and morale.

Mr Raine said: “Despite the growth, it has still been a recession. One of the things we have been brave enough to do is ring-fencing new developments.

“We have got two exciting new products launching this year.

“The aim is to roll them out so we can get financial benefit from them.

“We want to retain our market share. Customer retention must be our differentiator.”

On the international front, Fusion plans to expand into South America and develop its Australian business.

Mr Raine said medium-sized UK manufacturers receive limited state support in comparison to some of their overseas rivals.

“We do it almost alone,” he told the Yorkshire Post.

Secret story of success

FOUNDED more than 40 years ago, Fusion Group is one of this region’s best-kept secrets.

The manufacturing success story began in Sheffield when Eric Bridgstock founded the business.

Mr Bridgstock is the company chairman and majority shareholder, with 60 per cent of the £116m turnover business. The directors holds the other 40 per cent.

Former gas fitter Kevin Raine joined the company 24 years ago as a sales rep in Bishop Auckland. He became MD eight years ago.