Rather than simply wait to welcome a new boss at the pharmaceuticals site he oversaw in Cramlington, Robert Hardy and his management team decided to take it on and build a business themselves. John Hill finds out more about the subsequent success of Aesica, and its plans for growth.

FOR a long time, Robert Hardy’s job was to perform a big role at a big pharmaceutical company, while studiously hacking at it to make it smaller.

It wasn’t unusual practice in the industry at the time, but that didn’t make it any less depressing.

However, there came a time when he realised he could build a business instead of cropping it.

It was around 2002, and his employer BASF had decided to offload the last chunk of the Boots Pharmaceuticals division it had acquired in 1995.

Hardy received a phone call from the company’s base in Germany to say BASF was putting up the metaphorical For Sale signs at the chemicals business, having sold all other parts of the division to Abbott Laboratories in 2001.

He says: “I got a call saying it was going through the process of selling the Cramlington site. Potential buyers were being shown around the site, and one guy sidled up to me and said his company wouldn’t be interested in buying the business unless I was there.

“That got me thinking that if I was so important to this business, why should I be working for him? By this time, I’d got tired of closing places. I wanted to build something instead.”

It took two years, but the ensuing management buyout spawned Aesica, a company named after a Roman fort near Haltwhistle in Northumberland.

It now employs 1,300 people worldwide, is one of the world’s largest developers and manufacturers of pharmaceuticals and is among the country’s fastest-growing private- equity-owned companies.

At the start of the month, it completed the acquisition of manufacturing sites in Germany and Italy from biopharma firm UCB, doubling the size of a company which already has sites in Cramlington, Nottingham and Queenborough as well as business development teams in New York, San Diego and Shanghai. It aims to reach turnover of £300m by 2013.

At its heart is a man who decided to leap off the diving board when other management professionals might have climbed back down the steps.

He says: “It’s an industry where you’re encouraged to do things to the letter because people’s lives are at risk. So what generally happens if you pull aside a person who’s intensely risk-averse, bright and reasonably well-paid, and ask them to do something risky.

“Early on, I went on the basis that I would be decisive. I always figured that a non-ideal decision was better than no decision at all. The one thing that helped me in the industry was that I was never the best chemist. I knew just enough to be slightly dangerous.

“I wouldn’t have been very successful as a PhD chemist in a lab, so I went into management instead.”

West Cumberland-born Hardy was always interested in chemistry, and moved to Nottingham at 18 to study for a degree and PhD in the subject. He joined the ranks of the Boots Group in 1983.

“It had a big pharmaceutical division at the time,” he says. “I worked as a lab chemist at first on things like ibruprofen, which went into Nurofen. I did a lot of jobs at Boots, such as audits in the former Yugoslavia and India, and also spent five months in South Texas.”

Boots Group sold its pharmaceutical division to BASF in 1995 after choosing to focus on retail, and the new German owners subsequently decided to move the centre of their business from Nottingham to Cramlington.

Hardy says: “What was soul-destroying was that it was my role to shrink it. I spent quite a lot of time knocking things down, making people redundant and chasing costs, rather than growing the top line. What really excited me about Aesica was to go the other way.

“We wanted to build a pharmaceutical business in the North East, but none of us had any idea how to do it.

“My first port of call was to pick up the phone to Graham Adams at Northumberland County Council, and he introduced us to PricewaterhouseCoopers, which said it would be happy to be our advisers and introduce us to people who could back us. I said I didn’t have any money, and it said we’d sort that out later. We were then put in touch with Eversheds, which gave it a go as well.

“BASF is a very conservative organisation which didn’t like management buy-outs and didn’t like its management team stepping outside the bounds of acceptable behaviour.

“It took about two years to persuade the company we were the right party. BASF had to get its head around the fact that we weren’t buying the business because we knew something about it that BASF didn’t.” After securing funding from Lloyds TSB’s private equity group LDC to complete the deal, the company set out on its own.

Hardy says: “The thing about doing a management buyout is you’re never quite sure how it’s going to affect you until you do it.

“I always worried before we acquired the Cramlington site whether I’d ever sleep again. We’ve had a lot of ups and downs but I’ve never lost a night’s sleep, although others in the management team did.

“When someone gives you the keys to a facility for the first time, you’ve suddenly got 200 people relying on you, whereas before there was a cushion.

“As the years go on, you worry you’re going to become the same as the organisations you left. I used to have a fax machine in my office so I knew when the orders came in. We framed the order form for our first product, but now I couldn’t tell you who was ordering on a weekly basis. When you were smaller, decisions were made in a corridor, but you can’t do that now.

“Someone once told me a family company works like the spokes of a wheel, with all the decisions coming to you at the centre. You can get away from that by hiring good-quality people below you.

“If I look around my executive team and the way we work now it doesn’t look a lot different from the executive team we had at Boots. In fact, the quality of people is probably higher.”