Tony Langley started out in 1975 supplying fire safety equipment to the coal mining industry. He was not long out of school and resurrected the failed business of his grandfather. After 15 years successfully supplying the UK coal industry, his client base was about to disappear. Faced with the need to diversify, in the early 1990s Langley bought a couple of engineering companies, Jenkins of Retford and Newell Dunford, both based in the East Midlands of England, and merged them to create JND. This business supplies the power generation industry, process industries and the oil and gas sector with such products as pressure vessels, pig traps and rotary dryers and cookers. There is also a service company to commission or refurbish mechanical and electrical installations. Other subsidiaries of what is now Langley Holdings include grout producer Reader, house builder Langley Homes, Allens Light Rail which supplies track and rolling stock for tunnel builders and other construction sites, and Magco Tollemache, which manufactures crushers, shredders, screens, feeders and conveyors. Another subsidiary, JND Miken has designed a plant to convert agricultural fibrous waste into a wood panel substitute called Mikenboard.
Collectively, these and other businesses acquired and developed during the 1990s gave Langley an annual turnover in the region of £15m to £20m ($22m to $30m). Now Tony Langley, aged 46, has taken his boldest step yet, buying most of the materials handling business of Rolls-Royce (a $30m turnover business) and the crawler crane manufacturer RB (£5m turnover). Coincidentally, both acquisitions were made in the same week towards the end of December. The purchases, for an undisclosed price, were funded partly out of the company’s own coffers and mainly through “perfectly comfortable” debt.
The latest acquisitions have been organised into a new division of Langley Holdings called The Clarke Chapman Group. The largest of Langley’s four divisions, it comprises:
• Cowans Sheldon – rail cranes
• Stothert & Pitt – dockside and offshore cranes
• Wellman Booth – overhead cranes
• Clarke Chapman Services – repair and refurbishment
• Clarke Chapman Facilities Management – providing operators and crane services to dockyards
• Clarke Chapman Manufacturing – the assembly facility and machine shop at Gateshead
• RB Cranes – crawler cranes.
Moving into materials handling further diversifies Langley’s business, the health of which was a little too closely aligned to the price of oil. At the same time, he says, they fit with the principal business of manufacturing engineering capital equipment.
Tony Langley says that what he looks for in his acquisitions are “good brand names with a good reputation for quality products”. With his latest purchases he has certainly got himself some names that resonate with industrial heritage, but they are hardly setting the industry on fire with their output today.
The business bought from Rolls-Royce is “very healthy”, Langley retorts. Rolls-Royce sold not because they were under-performing operations but because it wanted to get back to its core business of making aero engines. Before the sale it spent heavily on reorganising the business into an attractive package, Langley says.
Stothert & Pitt may not make many cranes these days – about six a year – but those that it does make are often specialised, high integrity cranes. For example, it has built cranes for the Faslane nuclear submarine base in Scotland, and it made 80% of installed cranes in the North Sea, Langley says. Wellman Booth’s recent installations are handling, at different UK locations, nuclear waste and nuclear warheads.
If Clarke Chapman is in good shape, as Langley asserts, he cannot deny that RB (now written without a hyphen since the sale) was a failed business, bought out of administration. Why did he buy it? Was it just for the parts business? He admits that he would not have been interested had the Clarke Chapman deal not already been in negotiation. His machine shop manager lives in Lincoln, home to RB, and told the boss about a local crane company that had gone under. Langley went to visit, only vaguely curious it seems.
“When I went to RB, my initial thought was that it would be aged mechanical machines with limited value. I was pleasantly surprised that the product had been so developed. I thought that it was a superb product range. They had obviously invested a huge amount in the new hydraulic range.” He spoke to customers like Weldex owner Dougie McGilvray. “I was told by principal customers that it was a good product with wide market acceptance,” he says. But beyond securing a few testimonials he appears to have done no analysis of the state of the market or the strength of the competition.
The previous owners had split the assets so there was no factory included in the sale. This meant that manufacturing in Lincoln “was not an option,” he says. By happy chance, Langley Holdings has had excess capacity at one of its three East Midlands workshops for several years, not very far from Lincoln.
RB components and booms will now be fabricated in Retford and/or nearby Misterton, he says, and assembled and tested at the Clarke Chapman plant in Gateshead in the North East. The refurbishment and the spares and service businesses will also be based in Retford, as will the engineering department.
In 1974 RB made six cranes a week and had 3,000 employees. When it went into administration it employed about 60 people and had made half a dozen cranes in the preceding year. Most of its turnover was in the aftermarket business by this stage. The cost of developing the new range, the collapse of the Asian market and the flood of grey imports conspired against it.
Langley insists that his ambitions for all the new operations lie beyond niche markets or just supplying spare parts. About RB he says: “We have not bought the thing to sit back on the aftermarket revenues. We are in it for the long haul. We are not here to make a fast buck. It’s my job to build a future for them and expand the business.” There is reason to be optimistic about the future of the former Rolls-Royce companies as there is continuity. The same people, on the whole, are operating out of the same locations, and there is about £22m ($33m) of orders in hand. Also, there is an overlap in the client base of the Clarke Chapman companies and some other companies in Langley Holdings. Designing and supplying an overhead crane to a factory, or a dockside crane to a port, is not a vastly different business from designing and supplying a kiln or crushing equipment.
Mobile crawler cranes, though, are a very different type of business and it is hard to see Langley being able to resurrect RB.
How will he do it? “It needs to be promoted,” he replies. There are no orders in hand and Langley plans to build only to order. He will not exhibit cranes at trade fairs. “We don’t exhibit as a policy,” he says. “I think it is a complete waste of time and money.” Langley, it seems, will be attempting to sell the crawler cranes from catalogues, which is not an easy task.
Added to this, the factory where the cranes had been built has now closed. None of the fabricators were retained by the new owner, and those with knowledge of the market and the customer base have departed. It will be a steep learning curve and possibly not even be worth the climb.
