Metrology firm CoMech has the measure of the rail industry with plans for a new high-voltage laboratory and work with the universities of Derby and Loughborough. We talk to managing director Keith Pallet about real graft, financial control and high-voltage growth.
IT came as a shock to the management at CoMech when its website notched up its first sale.
A rumour went around the office that the company had its first online sale and there was plenty of excitement among the workforce.
Little or no effort had been made to promote the website as a retail tool as it was not the company's main line of business.
The design, manufacture, distribution and calibration of measuring equipment for the railway is a niche market so managing director Keith Pallet never expected to get thousands of hits.
However, three years after that inaugural internet sale, when it employed just nine people, the company has entered into a high-growth phase.
It now has 32 members of staff and is selling to Singapore, Germany, France, Hong Kong, South Africa and Saudi Arabia.
It is currently expanding into markets it never knew existed.
Mr Pallett said: "It was never the plan to develop a retail business via the online shop but it has taken us into areas of the market beyond what we thought would be possible."
Demand for its equipment has given the company a foundation on which to expand and develop.
Six years ago, the business was turning over £250,000 per annum. At the moment, the company is notching up sales of £1.3 million and still growing.
With the electrification of the Midland Mainline, the company has isolated an opportunity and is about to invest in a brand new laboratory.
Mr Pallett said: "We are going to build a high-voltage laboratory because tooling and personal protective equipment needs testing, evaluating and calibrating.
"Given that a couple of nine-volt batteries have enough power to kill, with 50,000 volts, we have to be very careful."
All told, it will represent an investment of some £100,000.
Mr Pallett said: "The rail industry can move quickly and you have to move with it. There is demand for a high-voltage lab and we believe that it will pay for itself before too long."
Nevertheless, the bedrock of the business is still the supply of equipment to the rail industry.
And CoMech has currently bits of kit at every rail depot in the country with some 250,000 items dotted around the nation, being used to measure and test signals and track.
The work undertaken with the equipment designed, built and supplied with CoMech technology is safety critical – without accurate and reliable testing and calibration, railways in the UK would not be able to operate.
Mr Pallett said: "At any one time, there can be as many as 150 items either on their way back to us or being sent out.
"Our own vans rack up 20,000 miles a year as well as sending out equipment via UPS.
"That's why we've got a contract with Loughborough University to develop a logistic management tool.
"We are working with Professor Ming Lim, of the University of Derby, on radio-frequency identification for our kit to tell us whereabouts it is within the depot."
Appropriately enough, the managing director started his working life driving trains for British Steel, transporting goods around steel works.
CoMech was founded after a period working in laboratories in a variety of different industries.
It all began in 1985 with a Triumph Toledo, a push bike and a belief that he had the knowledge and the contacts to make a go of it.
Though the technology being developed, manufactured and sold by the firm is highly advanced, the philosophy behind running the business is rooted in the kind of no-nonsense approach born and bred in Yorkshire.
Mr Pallett, brought up near Barnsley, said: "My grandad was a coal miner and worked down the pit. I remember him wearing knee pads and being completely black. That was hard, physical labour. That was work.
"I don't really count what we do as work. You train your brain to cope with problems, calm down and move on.
"There will always be problems in a business that you have to overcome but it is not the same and doesn't compare."
Mr Pallett's grandmother also inspired CoMech's approach to financial control.
"She had a number of tin pots for different outgoings and would know to the penny what was in each one," said Mr Pallett. "She would have made a brilliant Governor of the Bank of England."
Though the bespoke software produced in-house is more sophisticated than a series of pots, it performs exactly the same function.
Every day, the managing director can tell at a glance exactly what is coming in and going out.
For a company known for its calibration and measuring technology, it is appropriate that it applies the same precision to its money management. Mr Pallett said: "We don't know what's around the corner but we have to respond to it and we have to make money."
The firm will need to keep a close watch on its finances because of its rapid expansion which will also throw up more management issues.
Since Christmas, Wednesdays have been used for interviewing prospective employees and Tuesdays to inducting those already taken on.
Mr Pallett said: "We have always been in Derby where there is a history of both heavy industry and precision engineering.
"There was Rolls-Royce, Aitons and International Combustion and now there are people in the city from all of these different backgrounds."
The Casting Road company has expanded into the unit next door in order to house its employees and has plans to take office space elsewhere to shift its admin services.
Though storage space has been at a premium and technology is forever advancing, the company has retained rail gauges from the golden age of steam.
Mr Pallett said: "There is a lot of knowledge here and we have some real rail enthusiasts. "We were going to throw away some old rail gauges a few years ago but I was persuaded not to. They date from before British Rail, there are some with Great Western Railway stamps and a few from the 1930s.
"It was a good decision because there is a growing market for them from heritage railways who get in touch. I don't know how they find us."
The fact that it has rail heritage expertise on tap as well as a passion for the rail industry gives the business added credibility.
And credibility is an essential component in the precision measurement industry and when employees have to deal with 50,000 volts.
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