A team not afraid to take risks
Zyron is looking for a challenge and is trying to break into the ductile iron pipes and fittings market. Ashley Martin travelled to Germany to talk to the company's boss about his plans.Some people are not cut out for the uncertainty of business. Others thrive on the challenge - Michael Combrinck, managing director of Zyron Trading, is one of those. Zyron identified an opportunity in the UK ductile iron pipes and fittings market and seized it.
Combrinck felt the market lacked competition, with Saint-Gobain dominating the field. Over the last three years, Zyron has set about developing an alternative source that could match Saint-Gobain in terms of quality, reliability and reputation. Zyron recently announced it has been awarded a contract by Yorkshire Water for the supply of fittings. Combrinck and his five-strong team are not afraid of taking risks. They have previously achieved success in the above-ground drainage market, where the company launched against one main supplier. Partners in pipes
Zyron is a small company based in a remote location in mid-Wales and one may wonder how it hopes to compete. "We are looking forward to the challenge," says Combrinck when asked about the task, but in reality Zyron is not working alone.
The company travelled to America, India and China in search of products, eventually identifying two independent sources in Germany - pipe manufacturer Buderus and fittings manufacturer Duker.
With the German market dramatically reduced and continental European demand fluctuating, both companies were seeking business further afield and Zyron was well-placed to launch them into the UK. Breaking into the UK has been a gradual process.
Persuading customers to move away from traditional suppliers chain was always going to be difficult. Saint-Gobain has been servicing the industry for many years. It has a plant in the UK, stock on the ground and its products meet requirements. "I applaud Yorkshire Water for actually doing it first," says Combrinck, "but we have secured one contract with a water company so there is no reason why we can't do it with others".
Getting this far has required a lot of patience, but Zyron intends to strengthen its position in the market and believes it is well-equipped to do so. "Patience costs money" says Combrinck, but Zyron can afford time building its reputation, largely because of its low overheads. The company now senses a change in the sector, marked by the contract from Yorkshire Water.
"We are not afraid of competition," Combrinck comments, "we know we can compete on quality and service but only on a level playing field". Philosophical Yorkshire Water split its contract between Zyron and Electrosteel, the latter providing ductile iron pipes.
Combrinck is philosophical: "Yes, there are other people banging on the door but competition is what the market needs." The Yorkshire Water contract will be serviced from Germany direct to the contractors' stock yards. A typical lead time is three to four days. Combrinck predicts Zyron will eventually service contracts the same way as Saint-Gobain. It will soon carry a substantial amount of stock at its headquarters in order to reduce the impact of a logistical hurdle, the English Channel. Development of the stock yard, warehousing facility and office space is all part of Zyron's growth plan.
Many of the UK water companies approached Buderus and Duker directly, failing to understand why a company the size of Zyron could become such an important agent. "None of them stopped to think what Zyron brings to the table," says Combrinck. The answer is probably best summarised by Manfred Hoffman, sales manager export, with Buderus: "We have a very lean management and very lean sales team." Six people handle export to over 30 countries worldwide.
Without a sales partner in each country, trade would not be possible. Hoffman is confident: "We know Zyron is doing a good job. I have no doubt we will reach our targets." For Buderus and Duker this is the traditional way of working, a strategy that has been successful in other countries over the past eight to ten years. "We have a lot of experience," Hoffman adds, "we can fulfil the requirements of each client". Both German manufacturers have direct contact with end users to enhance product development and Buderus particularly has already demonstrated its commitment to the UK. The company had to ensure its epoxy coatings were included on the Secretary of States' list of approved products under Regulation 25. It took 18 months to develop the plant, gain approval and get the first pipe off the production line.
The company claims to have the largest range of fittings in Europe and to have patented more restraint joint systems than any other company in the world. Ironically, Duker has sold licences to Saint-Gobain. The firm is currently working on new restraint systems, is developing linings and outside enamel coatings. As we approach the end of AMP3, the UK water sector is expected to enter a period of greater spending, fuelling an upturn in the market. Zyron does not expect to dominate, but the opportunities are there