Onwards and Upwards

Onwards and Upwards

Always on the move as he built his business into global leadership, entrepreneur Keith Miller is now even more like a bird on the wing. Brian Nicholls finds out why.

TRYING to chat with entrepreneur extraordinaire Keith Miller almost threatens suffocation beneath flight timetables. Only a quarter or so of the year gone, yet Keith, king of the groundbreaking bucket, has already notched up 25 mostly long-haul flights.

 

We finally catch up in Cramlington - somewhere between trips to India, Spain and the USA - and even then conversation in his compact office is disrupted by calls from India and Spain. That leaves just the USA to come, we guess.

 

Wasn’t Keith, as the 30th anniversary of the Miller Group he founded approaches, expected to step back from day-to-day hassle? Did he not hand over some responsibility in 2006 to John Lines who, as the newly appointed managing director, became the first non-Miller entrusted with a lead role in running the family firm Keith has taken to global leadership in manufacturing? Well of course. But being non-executive group chairman now does not mean Keith’s 6ft 4in frame will recline for days on end on a sofa at the Spanish apartment where he occasionally allows himself to unwind.

 

He admits the new role created a quandary. “I found myself wondering; what does group chairman mean? After years of starting at seven o’clock every morning and working till seven, eight, or ten o’clock at night, and having God knows how many meetings and travelling and doing all sorts of things – enjoying it all – when you hand over the reins you cannot take them back. “An entrepreneur is not necessarily the best person to run a business day to day, indefinitely. When you employ senior professional people you have to let them get on with the job, and everyone is different in how they manage.”

 

The quandary was resolved almost immediately by the need to go at the enlarged focus on strategy. As Keith explains: “I soon found myself working as hard as before on wholly new activities vital to the greater growth of the company as we envisage it.” He and John sat down and agreed a division of responsibilities in this critical and highly competitive worldwide business at the sharp end of excavating – the making and selling of market-leading buckets and grabber quick couplers for earthmovers. “The new arrangement was a learning curve for both of us and has proved an excellent move. We have some ambitious plans,” Keith says. Hence his clocking up of air miles.

 

“The management decided after much discussion to focus on planning and managing for the next 10 years. How to make our products even better, more cost effective, increasing throughput in the factories and investing in improving our suppliers? You need time to do all this.”

 

Mind, Keith, brother Gary and sister Jacqueline have done pretty well already. It all began when Keith, at 21, was told bluntly at the company where he then worked that he was second rate as a welder and unfit for purpose as a manager. “I had a Sweeney-type Ford Granada, the in-thing at the time. I sold my precious car for £895, which gave me the capital to buy a second-hand Ford Escort Estate and my own welding set,” he says.

 

He drove his mobile welding and repair service around the quarries, mines and opencast sites of the North East. Business rolled in from the National Coal Board, plant hire firms, coking plant owners and the consortium behind the Kielder reservoir and dam then being built. Keith Miller was in business on his own account - so successfully that Gary joined the following year. In 1981, the Millers exhibited for the first time – at Birmingham NEC.

 

They persuaded Jacqueline, then 17, to sales pitch from their stand. That was Jacqueline hooked into the business too. She has led sales and marketing since, though Dad initially had to drive her to sites around the country for orders because she had yet to pass her driving test. Soon the firm was turning out buckets for major UK suppliers of most earthmoving machinery.

 

Today, it not only makes buckets, couplers and other attachments, but also provides a ‘custom built’ service of specialised and one-off products. Sir Digby Jones, when director-general of the CBI, called it “one of the North East’s biggest success stories.” It could hardly be otherwise with a client list that includes Komatsu, Volvo, Hitachi, JCB, CAT, Caterpillar, Case and New Holland – and when it can claim to hold more than half the market share in the USA alone.

 

Keith’s workshop on wheels gave way to an allotment site at Springwell, Gateshead; monthly rental £5. As work mushroomed, bringing diversification into refurbishment of equipment for manufacturers, the company moved regularly around Blaydon and Newcastle in hunger for space.

 

The big breakthrough, leading to global number one in grabber quick couplers – the device connecting buckets to machines more efficiently - came with the licensing, further development and patenting of an idea spotted at a construction show in New Zealand in 1987.

 

Today, Miller Group has two factories at Cramlington, a headquarters in Gibraltar, factories in China and North America, offices in Japan and the USA and dealers worldwide. It employs around 1,000 people – about 320 in the UK, another 100 or so dotted around the world, and the balance in China with the firm’s joint venture and supplier.

 

It was an early British firm into China, Keith first visiting in 1995. “When I came back I wrote a report. I said China was an interesting country, but not for us. I said that if we were in the puncture repair outfit business we would have a great opportunity. I saw China being of no great interest to us during our business lifetime. How wrong I was!”

 

Eighteen months later, when China was being heavily promoted as a place of opportunity, a friend persuaded him to look again. By then, he had difficulty finding anyone in Britain who could make castings to the price, quality and delivery dates he required. For another 18 months he found China’s business atmosphere hot and cold – “a roller coaster of emotions. While there you got lots of promises. But as soon as you turned your back things would fall apart.”

 

He got nowhere with big state corporations. Progress came when he went into “the real China” – to a town three hours north of Beijing on the edge of the Gobi Desert. There, he found a privately owned business whose owner had the necessary synergy. “I warned them that without a Western toilet in their factory they had no chance of doing business with us, or anyone else from the West.”

 

After a discomfiting experience he had felt better for that! But the company proved it could respond and move fast. Three months later Keith returned and saw not only a brand new Western toilet block and shower facility, but a whole new office block. Their joint venture is now prospering and, far from spiriting jobs away, it has actually helped to create more work in the North East of England. Through finding a suitable Chinese manufacturer Miller was able to switch from steel fabrication to make products faster that are also lighter and stronger, and also costing less. Key control and decision-making remains in Europe.

 

Strategic decisions are made in Gibraltar, manufacturing ones in the North East, where 25 staff research and develop. Without the Chinese factor, requiring an investment of about £2.5m, a factory four times bigger would have been necessary and probably unviable here.

 

As it is, the North East workforce has doubled since Miller moved into China, an additional factory at Cramlington looks likely and the firm previously reliant on organic growth alone is considering two acquisitions.

 

With the Millers in more of a strategic role - non-executive directors but still owning the company - the search is on for senior sales people, and for a senior engineer to take over Gary and Jacqueline’s daily workload. It looks a happy ship to join, many staff having been there all 27 years since recruitment first got under way.

 

“My role now is to search for new markets, new growth potential, calculating how business will look like in five years’ time. Where are the opportunities, where are the threats?” says Keith. The opportunities appear to lie in India, Russia, Eastern Europe and South America, but also in established markets like Japan.

 

Each market requires a different strategy, a different plan. Miller prices may sometimes be up to 15% higher than rivals’. But, says Keith: “We are the most cost-effective, considering the accompanying service, support and back-up.

 

Our product is reliable, parts and services are available. With our product on your machinery, your capital investment is secure.” With a current output of about 23,000 couplers a year, sales are running according to plan at about £52m, and group profits this year could be about £6-£8m, despite the economic slowdown in the USA. And with year-on-year growth since day one averaging 23%, it looks as if Miller Group continues to grapple every bit as well with its strategies as with its buckets and couplers.