Changing Gears

Jim McColl knows a thing or too about shifting up.

To many within the wind energy markets he’s still a relative unknown. Although in truth, the role that he plays within the sector has grown rapidly – albeit not out there in the field but in the boardroom and behind closed doors.

In part, that’s been helped by a number of strategic acquisitions that he’s made within the specialist gearbox engineering and manufacturing space, under the umbrella of the Clyde Blowers brand.

That umbrella business, which was formed in 1924, initially as a locomotive boiler-cleaning specialist, has evolved quite considerably since. Indeed, the past twenty years have been particularly busy, following a buying spree that started with Jim taking a 30% stake in what was then an under invested, loss-making firm.

However, in less than a decade that financial position was quickly reset, with the firm now acting as a business incubator and hub for a portfolio of specialist manufacturing and engineering firms.

And so it was that in September 2008, Jim bought David Brown Gear Systems for a reported £368m. Then in November 2011, he acquired the 900-person strong Finnish gearbox manufacturer, Moventas, for €100m, after it filed for bankruptcy.

That means that in just a few years he’s developed an enviable product set, market share and international footprint, that’s led to a string of lucrative contracts with many of the leading turbine manufacturers and developers.

It also meant that he’s developed an attractive long-term revenue stream, with major steps already having been made to secure and build new relationships in key emerging markets such as China, India and South America.

It’s a strategy that both Moventas and David Brown have benefitted from considerably of late, enabling both firms to win high profile work with the likes of Vestas, Alstom, E.ON and RWE.

However, it’s one of David Brown’s most recent contract wins that that’s sparked the real interest.

For, in February of last year, the specialist firm won a long-term supply collaboration contract with Samsung Heavy Industries, to design and develop a gearbox for its much-anticipated 7MW machine. That’s the very same prototype unit that arrived in Narec late last month, to undergo preliminary stress tests.

It remains a significant deal. And it’s in part the formation of that key client relationship that’s sparked the latest Clyde Bowers portfolio reshuffle and shift.

For, in winning the work for Samsung, and in continuing to build out the wind energy client base within both specialist brands, McColl has been able to establish and launch a new UK based company that’s focused exclusively on servicing the needs of the sector.

That’s good news for future industry innovation, that’s good news for the UK supply chain and that’s good news for the wider market. Particularly since it marks a bright spot in tough market and could spell the start of a renewed period of growth.

Some may argue that the sale of one business unit to another within a wider umbrella group is less about corporate growth and more a case of reshuffling the pack.

And to some extent that may well ring true – with financial incentives and the ability to streamline costs remaining key.

However, as McColl has demonstrated throughout his tenure at Clyde Bowers, the ability to build businesses and brands is as much about understanding the opportunity as it is about timing. And for Clyde Blowers, it’s time to change gear.