Performance that bucks the trend

Last year was difficult for many in the converting industry, particularly in the UK, fuelled partly by a lack of business confidence and partly by spiralling raw material costs. Many companies did well to stay afloat and protect flimsy margins. Others did not fare so well.

One company that has weathered the storm is the London-based PSG Group, which has seen its strategy of cautious but judicious investment and the adoption of enlightened marketing techniques bear fruit, with turnover up last year and now approaching £5 million.

While similar companies have held onto their purse strings, PSG has invested in future growth.

“We are a diverse group,” says managing director Lawrence Gardezi. “Our bread and butter business is stocking, supplying and converting polyester film; providing trade conversion services and selling food packaging films, such as our own carton window patching films, Polymex, Ecomex and Enviromex in PET, PLA and OPP.

“We also have a dedicated Shims and Gaskets division that develops and produces diecut products for applications in Nomex, Kapton, rubber, PP and many other non-metallic materials.

“We are getting more involved in trade conversion work and have recently gained a contract with 3M, for instance. We are also investing in pick and place windows for cake boxes. These are made from APET in thicknesses of 220-400 micron.

“We are looking at new ways to diecut these windows which will offer our customers better handling attributes, and hopefully, in conjunction with our customers, a higher throughput.”

When you drill down into the nittygritty of a business such as PSG, one factor emerges as being of overriding importance: that of price. In difficult times recently, PSG experienced unprecedented price hikes as the major polyester film suppliers saw bigger profits coming from the television industry, for example. This forced PSG to source raw materials from suppliers in the Far East. This was a mixed blessing.

“Quality control is not their strong suit,” explains sales and operational co-ordinator Jake Stuart. “We have some extremely demanding applications where the smallest speck of dirt or dust means a whole sheet of film will be rejected. It has happened and it is almost impossible to get any redress.”

This has meant that the company’s watchword and mantra at the moment is ‘price stability’. PSG measures its group (non shims and gaskets) business in terms of weight throughput, or kilos per day. The company is currently outputting around 10 tonnes/day but could deliver 20 tonnes.

“Because there is a mini price war going on,” says Gardezi, “we have to estimate stock volumes and negotiate competitive prices so that we sell to a customer, say 100,000 sheets, which we then hold as stock. The customer can then call-off whatever they wish – for instance, 10,000 sheets. We will even package deliveries with a customer’s own labelling and deliver the consignment to our customer’s customer. PSG can plan forward with suppliers bulk orders together, fit into production schedules well in advance and work with manufacturers. This helps all involved and puts us in a position where we are able to get competitive prices, and offer this on to our customers.”

This attention to customer service ensuring, for example, that no request or problem is too small, means PSG can have someone at a customer’s premises to advise and solve problems, sometimes within 24 hours. This attention to price competitiveness extends to enquiries coming via the internet, up to 15 a day.

And this good housekeeping works in reverse. PSG could commonly stock up to 400 tonnes in the past, but now the company astutely monitors its stock levels. At the time of Converting Today’s visit there was 250 tonnes being held in stock.

“There is always room for negotiation on cold enquiries by telephone or via our website,” explains Jake Stuart. “The office will generate a quote based on very general information. If the customer balks at this our attitude is, talk to us and let’s see if we can help. We know that many customers are surprised by the good servicing levels we provide as part of our sales process.”

Investment

Perhaps the most telling development and one that marks PSG out as a serious industry player is that it is fully prepared to invest in new equipment in order to broaden its markets and generate profits.

The company has had a long association with slitter rewinder manufacturer TS Converting and has recently invested in two Elite Cameron CW800 centre winders. The machine specification is similar to a previous unit, supplied 12 months earlier, with a 1,600mm web width, 800mm rewind diameter, laser core and knife positioning, differential rewind shafts, razor and shear slitting. The latest CW800 machines are equipped with Vetaphone, two-sided corona treatment units and edge trimming to cut down on waste. These two machines join the other Elite Cameron CW800 at PSG and replace an ageing Deacro machine unable to handle thicker sheets up to 36 micron.

The introduction of the latest Elite Cameron slitters has enabled PSG to supply new grades of single and double-side treated films on very short lead times.

The slitting operation has been sited in PSG’s Class 8 cleanroom – a major plus for customers, particularly in the food industry. But PSG has plans to improve this side of the business also with the intention of upgrading to Class 7 accreditation with the addition of new air systems and ducting.

“Most of our competitors do not have cleanroom facilities,” maintains Jake Stuart, “and, while it is difficult to link directly to sales, we believe it is a facility that puts us ahead of the competition and opens up new niches, particularly in the food and medical sectors. We’ve barely scratched the surface of this diverse market.”

Although trade conversion and carton patching are the building blocks of PSG’s business, the group’s creative approach has led it to producing products as diverse as archival films, solar blankets, tambourine heads and medical visors.

Shims and gaskets

PSG’s investments do not stop at the group level, but extend to its other division, Plastic Shims and Gaskets, a section that contributes £950,000 to the group’s turnover.

Manager Mark Charles is confidently aiming for a round million for an operation that designs and produces diecut products of every shape and size. At the heart of the division is its Ident rotary I350 diecutting machine with magnetic drum.

“This machine is so versatile,” says Charles, “that we frequently get involved at the very early stages of a design requirement, often using kiss cutting techniques to avoid cross-contamination.”

Latest investments include a pick and place machine – an Atom S530CN travelling head press – that replaces beam presses that were labour intensive. This belt driven machine operates across 360 degrees to tight tolerances. Also on the shopping list and now installed are two Schneider guillotines, one 1,550mm width and the other 1,350mm. These have replaced one older Schneider guillotine and were supplied by UK agent Freidheim.

Growing intentions

Totting up PSG’s recent investments in slitting, winding and unwinding, guillotines and the pick and place machine, the figure is in excess of £500,000. Add to this the expected cost of constructing a Class 7 cleanroom at an estimated £60,000, and the total is a clear demonstration of the group’s market intentions.

According to Gardezi: “PSG already supplies film into Europe, the USA and the Far East. However, we are planning to increase this business in 2012 with the help of our website, cold calling using additional staff, reactivating customers from the database of 9,400 clients, and e-shots. Apart from the standard markets, we will be focusing on the packaging, medical, automotive and label industries, and looking at customers becoming stockists and distributors for our products.

“But our business is heavily dependent on the price of oil, hence our management strategy to counteract the effect of price rises as much as possible.”

Supplier Focus

TS Converting Equipment enjoys a very close relationship with PSG, having supplied eight machines in the last five years. “Over 50% of our orders are repeat business,” says managing director Tim Self. “We pride ourselves on machine quality, performance and above all provide an outstanding after sales service which is critical for our customers that run with short delivery times.” PSG has installed three Elite Cameron CW600 slitters, which are the backbone of its operation. The machines are versatile with quick makeready times and short web run to eliminate waste and improve slit reel quality. They can run 8-450 micron film down to very narrow slit widths. “We continue to work closely with PSG,” says Self, “often providing specialised equipment for very unusual applications to help deliver on Lawrence Gardezi’s ‘can do’ approach to business.”

PSG’s latest Elite Cameron CW800 slitter rewinders supplied by TS Converting Slitter rewinders PSG is taking on more trade conversion work, such as 3M 3M New investment: Elite Cameron CW800 centre winder from TS Converting CW800 centre winder PSG Group MD Lawrence Gardezi Lawrence Gardezi Cost control – customers can call-off consignments Cost control

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TS Converting
PSG Group