Case Study

Ever Ready Tools and Plastics

Background

Every Ready is an established tool making company with a 48 year trading history. It started life in 1950 as Manor Engineering, and moved to Romford in 1952. The company became a wholly owned subsidiary of a multi-national corporation, McKecknie, in 1980. For sixteen years Every Ready served the needs of the larger group prioritising provision of tooling for other companies within the group and for preferred customers of the group. This has meant that there was no marketing of Every Ready in its own right.

Ever Ready make injection mould tools that are used in the manufacture of plastic products. It is very difficult to stand anywhere, look around, and not be able to count dozens of items made of moulded plastic.

Every Ready provide:

• the designs for the tools which will be required from the drawings of the component which the customer wishes to manufacture,
• manufacture the tools as per the design,
• assistance to the customer with setting up and using the new tools, and after-care, trouble shooting, modification and replacement as required.

Ever Ready specialise in very high quality of tooling for manufacturers who are interested in durability and longevity. Some of the tools that Ever Ready have supplied have been in use for very long periods of time, for instance, Rawlplug have used Ever Ready tools for 25 years and literally billions of pressings - a phenomenal length for a production component. They are one of the few suppliers who can work to this exacting standard.

Changes in the global strategy of the larger group left Ever Ready with a less significant role and the central management decided that they no longer required their own facility but could rely upon out-sourcing. The owners decided to withdraw completely and thus redundancy notices were issued to all the Ever Ready employees in Autumn 1996.

The process

The employees sought advice about their potential redundancy and through this came the idea of taking over the business. A small group of 2 or 3 employees took the lead.

The key players were two or three of the employees, with support and advice from:

• Co-operative Assistance Network, Colchester
• Tower Hamlets Co-operative Development Agency
• Sam Slade, Leggatt Bell Chartered Accountants.

The advisers gave the employees the confidence they needed to decide to take over the business and practical support was given on:

• writing a business plan
• writing financial projections
• gaining support from their current customers and suppliers
• obtaining funding
• negotiating with the landlords
• negotiating with the owners
• and overall confidence building.

The idea came from the employees in discussion with the Co-operative Assistance Network.

Raising of the finance

The conversion was financed by:

• employees redundancy income
• deferred payment to the owners, McKecknie
• income from sales negotiated prior to taking over the business

After the conversion

The business is now relatively strong and it is owned in full by the workers. However, having no financial backing, other than a £20,000 overdraft facility, means there is a constant battle to keep the cashflow positive. Now, in Spring 1998, there appears to be a minor recession looming in the engineering sector and this is a major anxiety to the business.