Family venture sets up HQ in tax haven

Apr 17 2008 by Graeme King, The Journal

ONE of the North East’s largest family businesses is moving its head office offshore to Gibraltar as its growth accelerates.

Miller UK, of Cramlington in Northumberland, is changing its structure entirely to take account of its global growth and benefit from a tax-efficient new home close to the founding family members’ second homes in Spain.

The worldwide business, which makes excavator buckets and other equipment, is to be known as Miller International and expected to achieve sales of about £49m this year – a near 20% increase on last year’s £40.7m.

And chairman Keith Miller expects the restructured business to deliver sales of £60m in 2009 and £75m in 2010. The company is also pursuing at least two acquisitions in that period.

Miller International employs 280 people in two factories at Cramlington and 650 in a factory run by a joint venture in China which handles volume manufacturing. Miller also has offices in Japan, China and the US.

The company, founded in 1978, is owned by siblings Keith, Gary and Jacqui Miller, but all three are aiming to take a step back from the day to day running of the business.

Keith Miller, a board member of the Entrepreneurs Forum, moved aside from his role as managing director two years ago to become chairman, as Miller UK hired John Lines as MD – the first “non Miller” to run the business.

Now Gary and Jacqui are also to step back from their day to day responsibilities as heads of engineering and sales and marketing respectively, with new managers hired to handle their workloads. A new head of engineering, Andy Assinder, has already joined.

While the siblings will sit on the board of Miller International in Gibraltar, the daily operations of the worldwide business will be handled by a new global management group with members including Mr Lines and financial director Chris Parkin. This will direct operations in the UK, US, Japanese and Chinese divisions of the business, as well as in any acquisitions the company makes.

Keith Miller said: “All the strategic and investment decisions, and global management decisions, will be made in Gibraltar, and all the operational decisions will be made by the global management group who run the day to day business here. I now have time to think things through. Where are the strengths and weaknesses? Which new market could we attack and really do business in?

“The business is now run as well, if not better, than when I was running it. We have taken cost out of the business, which gives us working capital to fund future growth. During the period to 2010 we will look at one or two acquisitions. We are talking to two companies at the moment who have great products and great brands.”

Mr Miller admitted the company had “felt the pinch” of the slowdown in the US economy, as about half the business’s exports (60% of the total business) go to North America, but he was confident the group would still perform to expectations.

Miller International has recently had to contend with a warranty problem with nine excavator buckets supplied for export, where the buckets have required repairs after a change in specification requested by the customer.

However, Miller UK has undertaken to maintain and service the buckets as necessary, pending agreement on the cost of the warranty.