Labfacility & The Northern Powerhouse
Labfacility turns up heat on international growth after securing backing from Finance For Enterprise and the Northern Powerhouse Investment Fund
The UK’s leading manufacturer of temperature sensors is set to expand its operations in South Yorkshire after securing a six figure lending package from NPIF – BEF & FFE Microfinance, which is managed by Business Enterprise Fund (BEF) and Finance for Enterprise (FFE) and part of the Northern Powerhouse Investment Fund.
The funds provided by Finance for Enterprise will be used to help Dinnington-based Labfacility acquire the adjacent 6,000 sq ft premises to its existing manufacturing and stores facility as it targets future growth within the export sector. The property has been secured on a 10 year lease and will increase the size of the company’s site to 18,000 sq. ft.
Responsible for producing a range of more than 5,000 temperature instruments, sensors, and couplings, Labfacility manufactures more than a million products each year which are sold in 120 countries across the globe and used in the engineering, pharmaceutical, aerospace, oil & gas and food production industries.
In recent years the company became mindful of the potential uncertainties caused by delays in Brexit. Working closely with growth accelerator manager Jim Scott, the company began exploring international growth options in markets which would be largely unaffected by the current political uncertainties and began exploring non-EU markets. Export orders now account for over 25% of the company’s sales, resulting in regular orders being placed by businesses based in the US, China and Australia.
However, in order to meet demand, Labfacility knew it needed additional working space. When a neighbouring unit became available the company turned to Finance For Enterprise for help, recognising that a quick deal was needed in order to help it achieve its future growth plans.
The six figure loan has enabled Labfacility to not only secure the new property, but invest in upgrading the building as well as purchasing new equipment, enabling it to boost production, as well as creating additional new roles including a planned six apprenticeships within the business as the company sets its sights on future growth.
Labfacility was launched in 1971 by Norman Riddett, from his family home and has now grown to employ some 80 people across sites in Dinnington and West Sussex.
Under the leadership of Norman’s son, Martin, Labfacility pioneered its temperature sensor manufacturing operations in Dinnington in 1991 after acquiring a local competitor. Since that time, the number of staff employed in South Yorkshire has risen from just three employees to over 40 with further recruitment anticipated.
Martin Riddett, Managing Director, Labfacility said:
“The growth and success we have achieved in recent years is very much the legacy of our work with Jim Scott, who helped us to understand the possibilities and opportunities available within the export market. Sadly, Jim passed away before our latest phase of growth had been fully realised. The success we are achieving today is a testament to his hard work and dedication.
“We have worked with Finance For Enterprise for a number of years and during this time, the financial support they have provided has enabled us to innovate, expand and invest within our company for the long term. In recent years, there has been a lot of uncertainty in the export market, but the success we’re achieving is bucking the trend and some much-needed good news for Britain’s manufacturing sector.
”The support we have received will enable us to not only invest in developing and expanding our South Yorkshire site; we are also looking to create new skilled jobs within the local economy through our apprenticeship programme which will help to equip the engineers of tomorrow with the vital skills needed to succeed in the workplace.”
Alan Scott, Senior Investment Manager, Finance For Enterprise said:
“Businesses often find their growth plans stifled because they are unable to access lending from traditional high street lenders. Entering the export market can be lucrative but it isn’t without risk.
“At a time when the manufacturing sector has been particularly hard-hit as a result of the uncertainties surrounding Brexit and possible future trade deals with the EU, Labfacility was quick to seize the opportunities offered by entering into new export markets, but crucially targeted areas outside Europe, ensuring that the impact of Brexit could be mitigated. We have worked with Labfacility for a number of years and the approach they have pioneered has resulted in the company achieving significant growth in overseas markets, enabling the company to invest in new premises and jobs within South Yorkshire.
Mark Wilcockson, Senior Manager, British Business Bank, said:
“Since its launch in 2017, NPIF’s impact on businesses has been wide-ranging, providing funding to launch new products, employ new staff, enter new markets and acquire new facilities. We are pleased that NPIF is continuing to unlock the North’s growth potential by supporting small growing businesses with vital investment.”
The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.
Notes to editors
1. Alan Scott is not related to Jim Scott.
2. Now aged 92, Norman Riddett continues to hold the position of company chairman
About Finance For Enterprise
Finance For Enterprise is a registered lender under the Enterprise Finance Guarantee Scheme. It is responsible for managing a business loan fund which has been supporting new start, early stage and growing businesses for more than 30 years.
Today, the company acts as a joint fund manager with the Business Enterprise Fund for the Northern Powerhouse Investment Fund. Finance for Enterprise helps businesses across South Yorkshire, the North Midlands, Lincolnshire and in Hull and The Humber to achieve their growth ambitions. Financial support is tailored to meet the unique needs of each entrepreneur and business owner, helping them to improve liquidity, support growth or purchase assets. Loans worth up to £250,000 are available and can be accessed by businesses in all sectors.
Finance for Enterprise also acts as a delivery partner across the Sheffield City Region for Start Up Loans, a Government backed initiative aimed at supporting individuals keen to explore self-employment and business creation. Tailored support is available to pre-start and newly formed businesses up to 24 months old.
Business Enterprise Fund is authorised and regulated by the Financial Conduct Authority (FRN: 726237). Finance for Enterprise is authorised and regulated by the Financial Conduct Authority (FRN 718612). Information Commissioner Office Registered (FRN: Z153621X)
About the Northern Powerhouse Investment Fund
· The Northern Powerhouse Investment Fund will invest in Microfinance, Business Loans and Equity Finance sub-funds which will offer financing ranging from £25,000 to £2m, specifically to help small and medium sized businesses secure the funding they need for growth and development.
· The Northern Powerhouse Investment Fund is operated by British Business Financial Services Limited, wholly owned by British Business Bank, the UK’s national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity.
· The Northern Powerhouse Investment Fund is supported by the European Regional Development Fund, the European Investment Bank, the Department for Business, Energy and Industrial Strategy and British Business Finance Limited, a British Business Bank group company.
· NPIF covers the following LEP areas: Tees Valley Combined Authority, Greater Manchester, Cheshire and Warrington, Cumbria, Liverpool City Region, Lancashire, Humber, Leeds City Region, Sheffield City Region, York, North Yorkshire and East Riding.
· The project is receiving up to £140,359,192 of funding from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The Department for Communities and Local Government is the Managing Authority for European Regional Development Fund. Established by the European Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations. For more information visit https://www.gov.uk/european-growth-funding.
· The funds in which Northern Powerhouse Investment Fund invests are open to businesses with material operations, or planning to open material operations, in, Yorkshire and the Humber, the North West and Tees Valley.
About the British Business Bank
The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The British Business Bank programmes are supporting more than £6.6bn of finance to over 89,000 smaller businesses (as at end of March 2019).
As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses:
The Business Finance Guide (published in partnership with the ICAEW and a further 21 business and finance organisations) impartially sets out the range of finance options available to businesses at all stages – from start-ups to SMEs and growing mid-sized companies. Businesses can take the interactive journey at www.thebusinessfinanceguide.co.uk/bbb.
As the holding company of the group operating under the trading name of British Business Bank, British Business Bank plc is wholly owned by HM Government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, one of which is authorised and regulated by the FCA.
British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.