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Jim McColl – Chief Executive, Clyde Blowers
INTERVIEW
Jim McColl – Chief Executive, Clyde Blowers J
im McColl is clearly very excited about his latest purchase. The proud new owner of Weir Pumps finds it hard to contain his enthusiasm or his ambition for his new business. “We are going to be the biggest pump maker,” he asserts and then adds in clarification “That’s in the world, not just in Europe”. So who is this man aiming to blow the wind of change through the pump industry and how does he intend to do it? In the first of a new Pump Industry Analyst series of interviews with senior industry executives, Mark Purvis visited McColl at Clyde’s East Kilbride headquarters in Scotland to find out.
Pumping apprentice to company doctor Jim McColl is recognised as one of the foremost entrepreneurs in Scotland and is now being heralded as the saviour of Scotland’s pump industry. His story starts with a path familiar to many in the pump industry. He left school at the age of 16, taking an engineering apprenticeship at Weir Pumps in Glasgow. After six years combining his apprenticeship with part-time engineering studies, he took a BSc degree in Technology and Business Studies at Strathclyde University. With that under his belt he returned to Weir Pumps in a management position but continued to study part-time, this time for an MBA. He then moved on from Weir to a senior management position at Diamond Power Speciality Ltd, a company supplying engineering equipment to the power industry worldwide, still keeping up his part-time studies, adding a Masters Degree in International Accounting and Finance. From there, he moved into consultancy helping to turn around failing businesses, firstly with Coopers & Lybrand then as an independent “company doctor”. This mix of a solid engineering grounding, academic study of international finance and business administration, and practical management experience came to fruition in 1992 when he acquired a stake in Clyde Blowers plc, a small Scottish engineering company listed on the London Stock Exchange, and set about completely transforming the business. The story of that transformation deserves an article in itself (www.clydeblowers.co.uk/clyde_blowers_story.html) but the key points are worth mentioning here.
The Clyde Blowers Story In 1992, Clyde Blowers had a turnover of around £4 million and was the smallest 12
Pump Industry Analyst
and weakest of eight companies competing worldwide in the power station boiler soot blower market. Today, it is the largest company in the sector – having acquired six of its seven competitors – is worth some £500 million and has more than 55% of the world market. The whole blower sector has also been transformed and grown as a consequence of the consolidation. In the past, the company supplied blowers that cleaned the boilers. It was an equipment manufacturer. Today, the company provides rather more. Amongst the engineers of seven once-competing companies there is a remarkable tacit knowledge base. Combining that knowledge with a recognition that the power industry’s demands on its boilers were changing – cleaner and more efficient generation was becoming essential – Clyde Blowers was able to develop solutions that increased the efficiency of the boilers and reduced their emissions. Providing those solutions occasionally required the acquisition of suppliers of new technology: sensors, CFD software and filtration equipment are just some examples. This expansion of areas of competence creates a virtuous circle, opening the doors to further new markets requiring different solutions, as well as delivering the solutions the customer needed. The expansion from the Clyde Blowers platform has led to a number of new companies being established. One has been sold and another is now listed on the London Stock Exchange’s AIM market but the Group is keen to apply its successful business model to new markets, and the next target is pumps.
The saviour of Weir Pumps McColl admits that there was an emotional element in his interest in buying Weir Pumps, both on a personal level as
Jim McColl
a former employee and as an engineer proud of Scotland’s industrial heritage. But he is also quick to stress the real value he sees in the business. He recognises that the engineering emphasis of Weir’s business brings with it a wealth of the type of tacit knowledge that was instrumental in transforming Clyde Blowers. He also believes that the way most pump manufacturers are managed limits their opportunities. The Clyde Blowers group operates with a very small central management team that acts as the hub of the organisation. Group companies operate with a high degree of autonomy but when strategic input and management expertise is required, Jim and his team are there to provide it. He is confident that this ability to set clear strategies and, most importantly, make decisions rapidly will differentiate his business from most of the other major pump manufacturers. He also believes that the way the major pump manufacturers have evolved has introduced intrinsic weaknesses in their business models. This stems from being a manufacturer first – with consequent emphasis on the sound principles of manufacturing efficiency – rather than being truly market facing. As an example, he cites the case of a range of pumps for power generation that Weir stopped making because they weren’t, in themselves, profitable. The problem with this was that the customers still wanted the products and were much happier to deal with a supplier who could meet all their requirements. McColl is determined that his new business will be properly market facing, focussed on giving customers exactly what they want and solving their problems. He recognises that is going to take a change in culture within Weir Pumps, and a major investment in the sales & marketing organisation, but he has the Clyde Blowers model
August 2007
INTERVIEW/IN BRIEF to work from, complete with its well-established global networks.
Going forward The first priority markets will be power generation, and upstream oil and gas, which are currently buoyant and provide a good match with Clyde’s existing markets and Weir’s engineering expertise. In fact, inquiries for power station pumps are already coming through the Clyde Blowers links. But with his eyes set on an ambitious growth path, Jim McColl has also identified areas such as downstream oil and gas, desalination, water and waste treatment and even general industrial pumps as key markets for the coming five years. He places great emphasis on the company’s need to become truly global – to operate within its target markets whether those are in the UK, the USA, Russia, China or Brazil – and cites the example of Clyde Blowers’ 42 companies in 21 countries in support of this view. Further acquisitions will be an essential part of the drive for growth, combined with that truly global approach to the target markets. A US acquisition is at the top of the shopping list as a national rep network is essential for serving the US power industry effectively. The obvious synergies between Weir and Sulzer won’t go away and McColl admits that the Swiss company’s pump business could be a target at some stage. In order to expand the company’s manufacturing capability, McColl anticipates two ventures in China: one for engineered pumps and one for configured pumps. The other priority is to find a new home in the Glasgow region for Weir’s manufacturing operations. The historic Cathcart plant was sold by the Weir Group to a property developer Cala Homes who will start building houses and apartments there from the middle of 2009. A possible site for a new plant has been identified at Cambuslang but McColl is still looking at other options. The new plant will be home to the engineered pumps facility, plus all the testing and research & development that goes alongside that business. However, McColl is keen to add a configured pump option to enable standard pumps to be
August 2007
offered cost-effectively. The manufacturing for these will be done in low-cost regions of the world, but with local assembly. The Clyde Blowers business model is about more than aggregation of competitors, although the opportunities to improve margins by consolidating the supplier market will help fuel the growth of the company going forward. The other major avenue for growth has come from reacting to specific problems and creating a new business opportunity out of the resulting solution. McColl is keen to do the same in the field of pumping, and so perhaps we can look forward to a very different type of pump company in the future. Again looking at Clyde Blowers might give us a clue as to what we should expect. Acquisitions there have included air filtration companies, software companies specialising in process optimisation and CFD, and sensor suppliers – all chosen to help resolve specific customer process bottlenecks. Will we see McColl adding seals, motors, electronic controls and valves to his existing capabilities in pumps?
What’s in a name? Much of the value McColl sees in Weir Pumps comes down to the company’s worldwide reputation for engineering excellence (aligned with a wealth of tacit pumping knowledge) so does he foresee a problem in having the Weir name existent in two different pump companies? He explains that Clyde has the right to brand itself as “Clyde Pumps incorporating Weir Pumps Glasgow” for four years. After that they have to drop the Weir name. He believes that they can establish the link between the Clyde name and Weir’s heritage in that period. “And, anyway, we may have bought the whole of the Weir Group by then” he adds, with only a hint of smile. This is a man to watch. For further information visit www.clydepumps.com and www.clydeblowers.co.uk
About the author Mark Purvis is a freelance publishing and marketing consultant. For 17 years he was editor, then publisher, of World Pumps magazine.
In Brief • SIHI Pumps has officially opened a new assembly facility in Nanhui, China. The new 4500 m² facility integrates the engineering and construction of complex vacuum and compressor systems as well as material logistics and quality assurance of locally precision-machined parts for assembly into LEM & LEL series vacuum pumps. www.sterlingsihi.com • Celebrating the 10th anniversary of Flowserve Corp’s incorporation and listing on the New York Stock Exchange (NYSE), company president and CEO Lewis Kling and other company representatives visited the NYSE on 20 July 2007 and rang the closing bell to end the trading session. www.flowserve.com • The BPMA’s Pump Industry Awards 2007 will be held in Coventry, UK on 16 October 2007. www.pumpindustryawards.com • Following its acquisition by Grundfos Pumps, UK shower pump manufacturer Watermill has recently had a change of image. All Watermill heating pumps are now red, in keeping with other Grundfos products and are co branded so they are easily identifiable as being a part of the Grundfos portfolio. www.grundfos.com • PlayPumps International’s “100 Pumps in 100 Days” campaign raised more than US$1.5 million to donate 111 PlayPump water systems to communities in sub-Saharan Africa. The “100 Pumps in 100 Days” challenge was launched as part of World Water Day on 22 March 2007. The PlayPump consists of a child’s merry-go-round attached to a water pump and storage tank that delivers clean water from deep under ground via a simple tap. These systems provide clean drinking water and educational messages to schools and communities in Africa. www.playpumps.org
Pump Industry Analyst
13
Jim McColl – Chief Executive, Clyde Blowers J
im McColl is clearly very excited about his latest purchase. The proud new owner of Weir Pumps finds it hard to contain his enthusiasm or his ambition for his new business. “We are going to be the biggest pump maker,” he asserts and then adds in clarification “That’s in the world, not just in Europe”. So who is this man aiming to blow the wind of change through the pump industry and how does he intend to do it? In the first of a new Pump Industry Analyst series of interviews with senior industry executives, Mark Purvis visited McColl at Clyde’s East Kilbride headquarters in Scotland to find out.
Pumping apprentice to company doctor Jim McColl is recognised as one of the foremost entrepreneurs in Scotland and is now being heralded as the saviour of Scotland’s pump industry. His story starts with a path familiar to many in the pump industry. He left school at the age of 16, taking an engineering apprenticeship at Weir Pumps in Glasgow. After six years combining his apprenticeship with part-time engineering studies, he took a BSc degree in Technology and Business Studies at Strathclyde University. With that under his belt he returned to Weir Pumps in a management position but continued to study part-time, this time for an MBA. He then moved on from Weir to a senior management position at Diamond Power Speciality Ltd, a company supplying engineering equipment to the power industry worldwide, still keeping up his part-time studies, adding a Masters Degree in International Accounting and Finance. From there, he moved into consultancy helping to turn around failing businesses, firstly with Coopers & Lybrand then as an independent “company doctor”. This mix of a solid engineering grounding, academic study of international finance and business administration, and practical management experience came to fruition in 1992 when he acquired a stake in Clyde Blowers plc, a small Scottish engineering company listed on the London Stock Exchange, and set about completely transforming the business. The story of that transformation deserves an article in itself (www.clydeblowers.co.uk/clyde_blowers_story.html) but the key points are worth mentioning here.
The Clyde Blowers Story In 1992, Clyde Blowers had a turnover of around £4 million and was the smallest 12
Pump Industry Analyst
and weakest of eight companies competing worldwide in the power station boiler soot blower market. Today, it is the largest company in the sector – having acquired six of its seven competitors – is worth some £500 million and has more than 55% of the world market. The whole blower sector has also been transformed and grown as a consequence of the consolidation. In the past, the company supplied blowers that cleaned the boilers. It was an equipment manufacturer. Today, the company provides rather more. Amongst the engineers of seven once-competing companies there is a remarkable tacit knowledge base. Combining that knowledge with a recognition that the power industry’s demands on its boilers were changing – cleaner and more efficient generation was becoming essential – Clyde Blowers was able to develop solutions that increased the efficiency of the boilers and reduced their emissions. Providing those solutions occasionally required the acquisition of suppliers of new technology: sensors, CFD software and filtration equipment are just some examples. This expansion of areas of competence creates a virtuous circle, opening the doors to further new markets requiring different solutions, as well as delivering the solutions the customer needed. The expansion from the Clyde Blowers platform has led to a number of new companies being established. One has been sold and another is now listed on the London Stock Exchange’s AIM market but the Group is keen to apply its successful business model to new markets, and the next target is pumps.
The saviour of Weir Pumps McColl admits that there was an emotional element in his interest in buying Weir Pumps, both on a personal level as
Jim McColl
a former employee and as an engineer proud of Scotland’s industrial heritage. But he is also quick to stress the real value he sees in the business. He recognises that the engineering emphasis of Weir’s business brings with it a wealth of the type of tacit knowledge that was instrumental in transforming Clyde Blowers. He also believes that the way most pump manufacturers are managed limits their opportunities. The Clyde Blowers group operates with a very small central management team that acts as the hub of the organisation. Group companies operate with a high degree of autonomy but when strategic input and management expertise is required, Jim and his team are there to provide it. He is confident that this ability to set clear strategies and, most importantly, make decisions rapidly will differentiate his business from most of the other major pump manufacturers. He also believes that the way the major pump manufacturers have evolved has introduced intrinsic weaknesses in their business models. This stems from being a manufacturer first – with consequent emphasis on the sound principles of manufacturing efficiency – rather than being truly market facing. As an example, he cites the case of a range of pumps for power generation that Weir stopped making because they weren’t, in themselves, profitable. The problem with this was that the customers still wanted the products and were much happier to deal with a supplier who could meet all their requirements. McColl is determined that his new business will be properly market facing, focussed on giving customers exactly what they want and solving their problems. He recognises that is going to take a change in culture within Weir Pumps, and a major investment in the sales & marketing organisation, but he has the Clyde Blowers model
August 2007
INTERVIEW/IN BRIEF to work from, complete with its well-established global networks.
Going forward The first priority markets will be power generation, and upstream oil and gas, which are currently buoyant and provide a good match with Clyde’s existing markets and Weir’s engineering expertise. In fact, inquiries for power station pumps are already coming through the Clyde Blowers links. But with his eyes set on an ambitious growth path, Jim McColl has also identified areas such as downstream oil and gas, desalination, water and waste treatment and even general industrial pumps as key markets for the coming five years. He places great emphasis on the company’s need to become truly global – to operate within its target markets whether those are in the UK, the USA, Russia, China or Brazil – and cites the example of Clyde Blowers’ 42 companies in 21 countries in support of this view. Further acquisitions will be an essential part of the drive for growth, combined with that truly global approach to the target markets. A US acquisition is at the top of the shopping list as a national rep network is essential for serving the US power industry effectively. The obvious synergies between Weir and Sulzer won’t go away and McColl admits that the Swiss company’s pump business could be a target at some stage. In order to expand the company’s manufacturing capability, McColl anticipates two ventures in China: one for engineered pumps and one for configured pumps. The other priority is to find a new home in the Glasgow region for Weir’s manufacturing operations. The historic Cathcart plant was sold by the Weir Group to a property developer Cala Homes who will start building houses and apartments there from the middle of 2009. A possible site for a new plant has been identified at Cambuslang but McColl is still looking at other options. The new plant will be home to the engineered pumps facility, plus all the testing and research & development that goes alongside that business. However, McColl is keen to add a configured pump option to enable standard pumps to be
August 2007
offered cost-effectively. The manufacturing for these will be done in low-cost regions of the world, but with local assembly. The Clyde Blowers business model is about more than aggregation of competitors, although the opportunities to improve margins by consolidating the supplier market will help fuel the growth of the company going forward. The other major avenue for growth has come from reacting to specific problems and creating a new business opportunity out of the resulting solution. McColl is keen to do the same in the field of pumping, and so perhaps we can look forward to a very different type of pump company in the future. Again looking at Clyde Blowers might give us a clue as to what we should expect. Acquisitions there have included air filtration companies, software companies specialising in process optimisation and CFD, and sensor suppliers – all chosen to help resolve specific customer process bottlenecks. Will we see McColl adding seals, motors, electronic controls and valves to his existing capabilities in pumps?
What’s in a name? Much of the value McColl sees in Weir Pumps comes down to the company’s worldwide reputation for engineering excellence (aligned with a wealth of tacit pumping knowledge) so does he foresee a problem in having the Weir name existent in two different pump companies? He explains that Clyde has the right to brand itself as “Clyde Pumps incorporating Weir Pumps Glasgow” for four years. After that they have to drop the Weir name. He believes that they can establish the link between the Clyde name and Weir’s heritage in that period. “And, anyway, we may have bought the whole of the Weir Group by then” he adds, with only a hint of smile. This is a man to watch. For further information visit www.clydepumps.com and www.clydeblowers.co.uk
About the author Mark Purvis is a freelance publishing and marketing consultant. For 17 years he was editor, then publisher, of World Pumps magazine.
In Brief • SIHI Pumps has officially opened a new assembly facility in Nanhui, China. The new 4500 m² facility integrates the engineering and construction of complex vacuum and compressor systems as well as material logistics and quality assurance of locally precision-machined parts for assembly into LEM & LEL series vacuum pumps. www.sterlingsihi.com • Celebrating the 10th anniversary of Flowserve Corp’s incorporation and listing on the New York Stock Exchange (NYSE), company president and CEO Lewis Kling and other company representatives visited the NYSE on 20 July 2007 and rang the closing bell to end the trading session. www.flowserve.com • The BPMA’s Pump Industry Awards 2007 will be held in Coventry, UK on 16 October 2007. www.pumpindustryawards.com • Following its acquisition by Grundfos Pumps, UK shower pump manufacturer Watermill has recently had a change of image. All Watermill heating pumps are now red, in keeping with other Grundfos products and are co branded so they are easily identifiable as being a part of the Grundfos portfolio. www.grundfos.com • PlayPumps International’s “100 Pumps in 100 Days” campaign raised more than US$1.5 million to donate 111 PlayPump water systems to communities in sub-Saharan Africa. The “100 Pumps in 100 Days” challenge was launched as part of World Water Day on 22 March 2007. The PlayPump consists of a child’s merry-go-round attached to a water pump and storage tank that delivers clean water from deep under ground via a simple tap. These systems provide clean drinking water and educational messages to schools and communities in Africa. www.playpumps.org
Pump Industry Analyst
13