Speculation is rife about further consolidation in the PVC-U window systems market after this year’s news about Schüco, Deceuninck-Status, HW and now PFL. Perhaps it’s because some industry folk have more time on their hands these days. Plastmo Limited has been the subject of speculation and rumours, some of them believeable.

A few prospective buyers looked at Plastmo’s accounts before the management buyout in 2003, noting that the Northampton extrusions business was exposed in the difficult-to-get right new build market and servicing large loans. In addition, in having one big trade customer Plastmo might be putting many of its eggs into one basket. ‘Standing on a bar of soap’, is how one industry commentator put it. Rumours have circulated in recent months.

Plastmo’s answer was an invitation to the Abbott Group, which is a dedicated manufacturer of PVC-U windows for newbuild, and a wholly owned subsidiary of Plastmo. The systems company owns its customer because of Abbott’s past financial difficulties – but the Abbott of today is visibly a super-efficient operation.

On target for profit

Plastmo’s losses in recent years mainly stem from Abbott, it is claimed:

‘If you look at our 2003 results Abbott made a £1.7 million loss’, says Henrik Jensen, Managing Director and main shareholder of Plastmo.

‘In 2004 we turned that round to a very small loss. We are continuing that trend and on target to make a profit this year. That will also mean the Group as a whole will be profit-making.’ He expects a turnover of £40 million.

What does it take to make a profit in the newbuild market?

‘You need to get it right first time and get it signed off first time’, says Henrik Jensen.

Abbott, based at Golden Cross near Hailsham, East Sussex, has a number of systems in place to ensure this happens. Colour-coded labels signify which day’s output is being worked on – staff can easily tell whether they are ahead or behind with work. Bar-coding ensures all production is tested for quality, given traceability, and that orders do not leave the factory unless they are complete and correct. An interesting factory invention was a conveyor that held the window upright but allowed both sides of the frame to be worked on in turn.

A new composite door is now available to Abbott’s customer base. Plastmo’s Charisma vertical slider is too high-spec for much of the newbuild market, so a version with fewer features is Abbott’s choice. A neat insert on one sash ensures equal sightlines.

But how is the relationship with Plastmo A/S, the parent company up until the MBO and still a stakeholder in the business. Could they pull the plug?

‘They are not going to lose patience because they know how tough the market is.’ says Henrik Jensen. ‘These people take a longer view than bankers and venture capitalists. Plastmo is a highly geared business, but not unreasonably high.’

Customer base

The final question mark over Plastmo, that it is known for one major customer, the Style Group. Plastmo’s answer is that it has over 100 fabricators, including such big names as Quantum Windows, Vale Windows, and Rainseal Windows.

So where do this leave us? Time will tell, but Plastmo’s foundations seem to be firmer than the rumoured.

Source

Glass Age