Fire-hit firm Myson fans flames of recovery

Nov 18 2009 by Karen Dent, The Journal

A HEATING company which suffered £245,000 of fire damage at the start of the year says it is recovering from problems that plunged it into the red last year.

Rettig (UK) – which makes radiators under the Myson brand at its Team Valley headquarters – made a £2.9m pre-tax loss in 2008, compared to a profit of £3.1m the previous year.

The Finnish-owned business was hit with the double whammy of soaring steel prices last year, coupled with the effects of the recession, and decided to cut its costs. It employs 250 people in Gateshead, where there were two compulsory redundancies in 2008.

Rettig moved towel rail production from Bolton to Turkey and closed its distribution centre in the West Midlands. The restructuring cost the business £2.65m and, before that extraordinary cost, it made a £277,000 operating loss despite increasing turnover from £70.9m to £80.8m, according to just-published 2008 accounts.

A fire in January this year put the Team Valley factory’s painting facilities out of action for almost two months, but Rettig worked with local suppliers and other businesses within its group which had spare painting capacity.

And although predicting a tough 2009 at the end of last year, the company now says the year has panned out better than expected.

A spokesman said: “2009 has seen a good recovery from difficult trading conditions in 2008, which saw significant increases in many of our commodity prices, including a 73% rise in the cost of steel.

“While there has been a continued market decline, particularly in new build housing, we have so far this year achieved an above expectation order book resulting from significant deals to supply product to a number of our key customers.”

The firm said the fire could potentially have caused major problems. But the spokesman added: “Our ability to work with other local companies to utilise capacity created in their businesses by the effects of the economic downturn helped us deal with something which could have been catastrophic. We must also acknowledge that our people have been fantastic in what we have achieved this year.”

The business, benefited from a softening in raw materials prices and the weakness of the pound, which helped it to remain competitive against overseas rivals.