IF you can't beat them, join them - that is the approach being taken by one of Blackburn's oldest companies in the face of low-cost imports from the Far East.
Cherry Tree Industrial Laundry Solutions has signed up with China's largest manufacturer of washing machines and the strategy has given the company a new lease of life.
And after selling the Chinese machines in the UK for the past two years, the company has now been granted the exclusive European distribution rights for the Sea-Lion range.
Managing director Paul Carroll arrived at the company in 1999 as part of a team that had bought a run-down business which had been making losses for five years.
After making industrial washing machines for more than a century, manufacturing had already been halted and the company was surviving on service contracts for units it had built in its heyday.
"The company had hit difficult times and it was pretty much a declining enterprise," recalled Paul. "We could see the potential to rebuild the business and re-establish it in the marketplace."
Returning to mainstream manufacturing was never an option. Down to just 15 employees from a workforce that had once peaked at more than a hundred, Cherry Tree simply did not have the critical mass to make its own range of laundry machinery.
The first step on the road to recovery was to enter the re-manufacture market. "The re-manufacture process returns a used machine to as close to new as possible," Paul explained. "Machines are completely disassembled, cleaned, inspected and worn parts replaced, state-of-the-art controls fitted and fully tested.
"Typically, re-manufactured machines are 60 per cent of the cost of a new machine which understandably make them popular in busy laundries. Over the past 18 months, we have brought in sales of £500,000 for re-manufactured machines from the prison service alone."
Re-manufacturing returned the company to profitability, but the company needed to develop additional revenue streams and Paul set his sights on an international partner.
A search on the internet found Sea-Lion, China's largest industrial laundry manufacturer, which employs more than 800 people north of Shanghai and makes 10,000 units a year.
"I sent them an e-mail and, one telephone call later, I was on my way to China for the first time," he said. 'The fact I went out to see them was something they liked. Their sights were set on China and Russia and they hadn't really thought about Europe."
Cherry Tree was initially given the distribution rights for the UK and has now made 30 installations of Sea-Lion equipment. On the back of this success, the company now has the European rights to Sea-Lion and will launch a marketing drive at the Texcare exhibition in Frankfurt in June.
"We are extremely proud that Sea-Lion has chosen our company to develop their European operations," said Paul. "They wanted an English company to represent them in Europe because of the language."
Service staff from Cherry Tree have already gone out to China for detailed product support and maintenance training. All the technical documentation has been translated into English and a large stock of spares is in place at its Gorse Street headquarters.
Paul is convinced the Chinese link has provided the company with a lifeline in what he believes is an interesting business model. "With the labour costs enjoyed by Chinese companies, you cannot compete on price," he said.
"Chinese products were once derided as cheap, but not any more. The build quality of the equipment from Sea-Lion is superb and they are committed to research and development in a big way.
"We are now becoming more of a service company and we are well aware that only by providing fantastic service can you achieve growth."
While China has been good for Cherry Tree, however, its cuisine has not done Paul any favours. Not a great fan of Chinese food, Paul's hosts noticed that he was eating a lot of boiled eggs.
"It's like a scene from that banking advert on TV where an English businessman is fed increasingly large portions of eels because he doesn't understand local customs," he said.
"At every meal, I am faced with six or eight eggs at a time which does nothing for the digestion!"
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