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Parvalux sets up Chinese factory - and expands in the UK

01 November, 2006

Parvalux sets up Chinese factory — and expands in the UK

The Bournemouth-based motor-maker Parvalux has started to manufacture some of its products in a factory it has established as a joint venture in China. It is also sourcing gearboxes from India, but according to managing director Steven Clarke, these developments have not been at the expense of the UK workforce, which is being expanded.

Clarke (above) took over the reins at Parvalux in 2004, following the death of his grandfather who had founded the company in 1947, and had run it for more than 50 years.

Steven Clarke (above) has spent the past couple of years making his mark and implementing changes that he felt were overdue. For example, when he took over, the company had hardly any computers. Now it is networked and has a CAD system. "I don`t know how we survived without it," Clarke says.

He is also changing the company`s business model. When Clarke took over, bespoke products represented just 15% of Parvalux`s business. The figure is now 40%, and he hopes to raise this to 75-80% next year.

He is also moving Parvalux away from being a lead-driven company by setting up a sales and marketing team, and is changing from supplier-based relationships to forming partnerships with customers.

"Three years ago, we had a problem with the way we were perceived in the market," Clarke concedes, but be believes that "we have turned that around" and reports that the company now has a full order book.

Some customers which had previously left the company have now returned. This trend has been helped by Parvalux offering five-year warrantees on all of its own designs of gears and motors — the longest in the industry, according to Clarke.

Parvalux now employs almost 100 people in the UK and Clarke is planning to take on six Polish workers for the shopfloor, as well as expanding his sales and marketing team.

The Chinese factory (occupying part of the building shown above) is about a third of the size of the Bournemouth operation and, at present, employs about 18 people. It is located north of Shanghai. As well as manufacturing products sold under the Parvalux name — including the company`s first motors with integrated electronics — the factory is also producing badged items for a US customer.

In the past two years, Parvalux has launched 42 new product lines, including some variations on previous models. "We have broadened our product base," says Clarke. "We are no longer just a manufacturer based on DC motors." The company`s AC business has increased by 20%.

Like other UK manufacturers, Paravalux has been hit by the shrinking UK manufacturing sector. "We are losing 5-8% of business a year through natural wastage, such as OEM customers closing or moving abroad," Clarke reports. His response is, in part, to become more of a global company, and 60-70% of Parvalux`s business now comes from abroad.

Within five years of taking control at Parvalux, Clarke aims to reach a turnover of around £10m, generating a profit of £3-3.5m. He says that in two to three years` time, the company may enter a joint venture "to take us to the next level, putting us on the Lenze scale".

Clarke, 41, has other business interests. He recently sold another company and could afford to retire now if he wanted to, but he has no plans to do so. "I love this place," he declares.

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