Houghton march on

Jan 7 2008 by Graeme King, The Journal

FAST growing engineering company Houghton International is predicting 25% growth every year for the next five years – despite doom and gloom from other parts of the economy.

Boss Michael Mitten is bullish about the company’s prospects after a successful 2007 which saw the company make great strides in the rail and offshore market places.

Now in 2008 Mr Mitten is moving towards securing a second factory base for Walker-based Houghton, as well as winning more work for his growing team of staff. Numbers have risen from 39 to 50 in the last year and are heading for 60 this year.

The company managed sales of £2.5m in 2007, similar to 2006’s total but generating more profit than before, and now Mr Mitten is aiming for at least £3m this year.

He said: “I’ve read that some companies are concerned about the prospects for 2008, but I’m sitting here, thinking this is the most optimistic I’ve ever been.

“This year, we are cruising towards £3m but we’re actually confident of doing better than that. And we expect to grow 25% every year for the next five years, taking us to £3.75m in 2009, around £4.6m in 2010, £6m by 2011, and then on from there.

“We aim to have a new factory in 2009, which will require substantial investment. We have 14,000sq ft here in Walker, and have been looking for another unit for a while now. Something to take us to the next level.”

Mr Mitten, who took over the managing director’s chair of family-run Houghton two years ago at just 27, said the business had benefited from ‘thinking differently’ in an industry where many companies have operated in the same way for years.

He said: “We’ve done a lot of things differently. We have a great blend of youth and experience in the team here and we have always invested in training apprentices.

“People want to know that if their machine breaks down, they can ring us, and know they will get a capable and competent response.”

Mr Mitten said when Houghton realised it was starting to grow at a good rate, managers sat down to examine what structure they would need to get good staff to join the business.

“We knew people wanted more money, better conditions, better working hours, so we came up with a new shift pattern for the service side of the business, so the guys work three days then have three days off. Then one week per month, they get the whole week off.

“It works fantastically well and we have attracted the best talent in the industry.”

In the last two years, Houghton International has succeeded in securing a substantial amount of work from the rail industry – when it was previously considered a very tough market to attack.

The company now works for clients including Unipart Rail, which has contracts with several major UK train franchise operators, and Tyne & Wear Metro operator Nexus. Rail work now contributes around £1m of Houghton’s annual sales.

Mr Mitten said: “Nobody else in this industry has ever broken into the rail market as it has been dominated by big companies like Bombardier and Alstom.

“Everybody else has got complacent but we have priced differently, and offered different commercial contracts. Everybody said we would fail, but we are now taking work from them.

“Where we’ve been successful is in going out and finding who the customers really are, and what they want.”