A MANUFACTURING firm which launched 18 months ago is now winning business all over the world, with key growth markets including Australia and South America.
Friends and former colleagues, Paul Jones and John Wildsmith, set up Mailroom Machines (MML) in Morley, Leeds, after buying intellectual property rights to manufacture polywrapping machines.
These collate items such as magazines or leaflets and wrap them in plastic. They are targeted at fulfilment and mailing houses.
Having launched its products in August 2011, MML is now on track to turn over at least £500,000 in its second year of trading, which closes at the end of June. In its first year, the firm recorded sales of £320,000, with pre-tax profits of £22,000.
“We’ve been quite pleased at growth in the company,” Mr Jones, sales and operations director, said.
MML recently won a contract with the Ministry of Education in Azerbaijan where exam books for the education system there are to be produced as part of the deal and then wrapped on an MML machine.
MML, which sells via distributors, said it expects to receive a second order for a machine if the first is successful.
“We also have customers in Belgium, Holland, USA, Brazil, South Africa, Canada, Australia and Ireland,” said Mr Jones. “We’ve also got enquiries out in Paraguay, Peru and Turkey.”
For MML, which employs four people, the deal in Azerbaijan is significant as it is providing project management services as part of the contract, opening the door to new markets.
By the end of year, MML expects to be employing between six and ten people.
Mr Wildsmith, managing director, and Mr Jones, worked together for many years before setting up MML.
“An opportunity came along to buy the intellectual property rights to manufacture polywrapping machines,” explained Mr Jones.
Mr Wildsmith said: “We discussed it and thought we could do far worse than start a company up, buy the IP rights, look for a property and start to manufacture machines and that’s basically what we did.”
The pair bought the IP rights from administrators for Norpak Machines, a Bradford firm which ceased trading in 2007.
Mr Jones said: “We looked at the designs of the machines they’d manufactured previously and then we did some customer research and some marketing research to look at what the market was, how it had changed. We had to try and develop a machine that would fit today’s market.”
They went back to former customers of Norpak Machines and canvassed their opinions on the marketplace.
“We found there were two or three big players in the marketplace but they did very large machines which did 15,000 to 20,000 products per hour.”
The feedback they received was that there was a market for a smaller machine with quick changeover times. “We developed a machine that does 7,000 packs an hour,” said Mr Jones.
Otley-based midasmotion helped in the development of the new system and the machine was launched in August 2011.
MML also services machines and supplies parts.
Today, its customers in the UK include Camelot, QVC, York City Council and Northern Mail. But its strategy is to target emerging economies such as South America and well-performing economies such as Australia.
Mr Jones said: “What we see happening in the South American market, this is what our distributors tell us, wage inflation is taking over. Where everything used to be labour intensive, because of wage inflation they are replacing people with machines.”
Mr Wildsmith added: “And if you look at the cultures in the former Soviet Union, they are growing and getting the magazines they didn’t used to get. It’s media growth. Whereas the UK has shrunk a bit, markets like this are growing.”
Mr Jones said: “Our target for this year is growth in sales. We spent a lot of time last year putting in place distributors. We are expecting big things from South America this year.”
MML is owned by Mr Jones and Mr Wildsmith.