Too many businesses blaming Brexit for bad investment decisions, says AESSEAL boss

Chris Rea, founder and managing director of mechanical seal manufacturer AESSEAL, said he ‘honestly couldn’t care less’ if Britain was in or out of the European Union but added that politicians just need to make a decision to end the deadlock.

“I think I think too many people are saying ‘Brexit is the reason we are doing x’, and it’s silly,” he told The Yorkshire Post.

“The car industry, for example. The European Union signed a free trade deal with Japan so therefore, it makes more sense for car manufacturers to go back to Japan.

“Some other people in the car industry failed to invest in hybrid technology or electric cars, which is what people want to buy. There’s too much dependence on diesel. So they’re using Brexit as an excuse for their investment decisions.

“People use the facts that support the views they have and ignore the facts that don’t support their views.”

He added: “I honestly, personally, couldn’t care less one way or the other, bring it on. Whatever the rules are, we’ll go play the game but uncertainty is never ever good.”

However, Mr Rea, inset, insisted the uncertainty surrounding Brexit was having ‘no effect whatsoever’ on his business.

“It would be good for business in general if we have some certainty but it’s not impacting us,” he said.

“Our primary markets are not Europe. America, the Middle East, the Far East are potentially bigger markets for us in the future,” he added.

The Rotherham-based business, which designs and makes mechanical seals and support systems for a wide range of global industries including oil and gas, food, water, mining and pharmaceuticals, has just posted two record months of sales. In March, it reached sales of £16.4m and in April the figure was slightly higher at £16.45m, due to a ‘big increase in demand’.

The previous record of £16.29m was in May 2018.

The latest sales figures come as the company reveals its 2018 annual accounts, which show a 6.3 per cent increase in sales to £181.3m and 15.9 per cent rise in pre-tax profit to £27.7m.

“It was a strong year despite heavy investment,” Mr Rea said.

“We generated organic sales growth all over the world and substantially grew our profitability.”

The company, which celebrates its 40th anniversary this year, operates in 230 worldwide locations, with 1,850 staff and annual sales of £175m.

AESSEAL is in the middle of a huge investment programme to digitise the company, a process which started in 2013 with the acquisition of a condition based monitoring (CBM) business.

CBM uses sensors to help firms spot early warning signs of impending issues.

Last year, AESSEAL invested about £11m in new technology. This year it intends to invest over £20m.

Most of the investment is in technology but Mr Rea said part of this year’s increase would go towards picking up the pieces of its recent £5m IT upgrade, which he described as a ‘semi-disaster’ after it led to a slowdown of some of its processes.

In a bid to maintain its customer service, the firm has recruited more people to speed things up.

Mr Rea said AESSEAL was close to having fully-automated design which will turn jobs that could take up to 20 man-hours into tasks of a few minutes. “We want to be able to do that for everything but we’re on the cusp of at least 10 per cent of what we do being completely automatic.”

However, he insisted that jobs were not at risk from the digitisation process. “We will have human beings working on the really sophisticated high end stuff and the stuff that’s boring will get done better by computers,” he said.

Looking ahead, Mr Rea said AESSEAL had a ‘strategic policy to acquire’ another CBM business. “We’re making efforts to acquire for the first time in five or six years. Our primary market for consideration is America.”