Castalum

Origins

The company commenced business in Welshpool in 2000 as part of a large American group – SPX Contech. It traded successfully until 2008 when its American principal became badly affected by the recession. In October 2008, the parent informed the company that it would be filing for Chapter 11 early in the New Year and that “if anyone wants to buy their individual businesses we will listen to offers”. An MBO offer was accepted in November 2009 but given the economic circumstances at the time, it became difficult to raise funding. However, through perseverance and keeping the business profitable throughout the most parlous manufacturing months the world has ever experienced, two very sensible people decided that the company was worth backing and the business was bought in June 2009. Contech UK was liquidated and became Castalum. In starting this new business, the management team did the opposite to what would have been expected of a new enterprise in the middle of a recession. They did not look to manage through a difficult time and conserve funds - before the end of their second year, they had spent £12 million on capital and subjected themselves to the challenge of making it work efficiently and pay back.

Success Factor

The business has grown because it operates difficult processes to produce difficult parts. The level of control apparent in what the company does cannot be maintained on any equipment without state of the art controls and it has the youngest diecasting equipment base in the industry. A primary factor that has allowed the company to expand efficiently has been the ability of its people to grow with the business. Castalum runs an active apprenticeship scheme – has employed 17 apprentices to date and will recruit another 2 this year and is always looking to recruit internally for new positions. Almost exclusively, the firm’s business services contracts of at least 5 years and all of its capacity is now sold out until 2018 and has major contracts still in the background that would require new equipment.

The Future

The business will grow by about 50% over the next three years and it will purchase a further 2 diecasting cells by 2015, increasing its overall output capacity by 25%. Castalum is operated on a “Good to Great” strategy that calls for £10 million of new business to be found by the end of 2015. Technical skills remain a constant challenge and the company will continue to fill its requirements on this by recruitment of apprentices. Each of these will follow a 5-year course consecutive to which their knowledge will be focused on the company’s processes and programmes.