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CEO Interview: Nick Russel, Russel Industries

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By Nick Flaherty


The acquisition of RAM Industries in Wales joins battery pack and management system maker Denchi and contract manufacturer Prima Electronic Services.

The combination is very deliberate and driven by the changes in the industry, particularly electrification and bringing manufacturing back to the UK says Nick Russel. All three companies are now part of Russel Industries with a particular business model.

“We started off with Denchi and as my thought processes evolved around what we could do with Denchi, that led to the acquisition of Prima,” said Russel. “We didn’t want to take on investors to determine the timescale to provide funds for the business and we had been looking around for other businesses for a corporate centre for the finance and share them across a group of smaller businesses.”

Russel takes the Mittelstand companies of German-speaking countries as a model. These are medium-sized family-owned engineering firms that make up the core of the German industrial base, often working together and taking a long term view around investment and training.

“When we found RAM it seemed that it was the right time to rebrand the holding company and the idea going forward is to talk about the Mittelstand focus, not about a long term exit or IPO, finding good people and businesses,” said Russel.

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While this is perhaps similar to the conglomerates of the past such as GEC or Invensys, driven by shareholder returns, there is a very different focus, says Russel.

“With the conglomerate model where it went wrong with the later stage of GEC or Invensys, people just got carried away with the cash flow, buying other businesses that didn’t fit. The three businesses we have are aligned around electrification, so there is a common them and there is overlap in technology and customer and skills and capabilities.”

“That’s the other element we want, to attract high calibre people into the individual businesses, and give them a career path across the different companies.”

He is not looking to incubate startups. “With a pure startup the problem is the cash burn so I don’t think we could do something that was a traditional startup, but there are opportunities for an add on for companies scaling up,” he said.

“RAM in a way is a bit of a startup – its only half a dozen people, and the challenge is to build that business. What RAM has done is demonstrated its technology and people are interested in it.

“Where we want to fish for new acquisitions is in this owner-managed market where people have taken a business a far as they can  and the business needs the standard business stuff, and primarily in the UK. I think it will be a long time before we would want to look outside, there’s a huge market opportunity in electrification and re-shoring.”

“With Prima we are supporting lots of customers who are doing stuff around electrification, EV chargers, control systems for heat pumps, and we are making the stuff for them. These are a mix of mature customers and scale ups that don’t want to invest in manufacturing.

“What this creates within the group is a set of skills that can be applied at Denchi for the batteries and electronics and RAM but having Prima helps refine the design for manufacturing, design for test, that gives the improvement in cost and reliability. RAM needs to have an eye for the mass production processes so Prima can help with that

“For Prima and Denchi the sales and marketing comes from the individual companies and for RAM we are in the early stages and we have pre-existing relationships with sales and marketing. We just want to work with people working with GaN and power who will come to us for the packaging and we are working with companies developing novel power converter architectures. We will be their manufacturing partner.” 

“This is a consequence of the model – it engenders a more collaborative model, they need us as much as we need them and we all prosper if we all work together. There were already lots of organisations working with RAM but were uncertain about their ability to scale up,

“The model for all three is that they have their own leaders and will develop strategies independently and my job will be at the group level to connect all the elements,” said Russel.

“Denchi builds chargers for battery projects and the challenges for defence applications are the fixed space available. By using GaN power converters you can shrink the weight and volume and that will give Denchi a competitive edge but not for the next two or three years. So we are building out a five year roadmap and thinking about the product development and the technology roadmap

For the larger batteries, for rail and energy storage, we are working with off the shelf inverters – we can definitely do the power at the smaller scale for a bespoke design but for the larger stuff we need to stick with off the shelf items.

This highlights the challenges of expanding. “We need to be really careful about what we focus on,” he said. “I need to consolidate for a while. This approach has a personal relationship, with RAM the two guys are staying on, the biggest thing was building the relationship.”

“The biggest challenge with Denchi is about engineering recruitment. [Acquiring] a project engineering company would be interesting and perhaps something that has foothold in a market such as rail or aerospace but I don’t have a particular one in mind.”

The advantages of the model are highlighted with the supply chain and maps to increased focus on environmental issues for customers.

“With Denchi and Prima you are driven to use the existing supply chain on the mechanical side we try to use UK suppliers. With RAM it will be more interesting as we will be directly involved in the specific manufacturing processes and have the ability to control the chemicals that are used and materials so there may be more opportunities. Just by building in the UK reduces carbon in transportation and stops the shifting of emissions, and there’s a real will to do more of this in the UK.”

“Some of the new technology developers who have taken VC investment, their shareholders have got some very strict rules in how the technology can be used and marketed in applications, aligned with sustainability and other areas. Really the power is with the money rather than waiting for government legislation,” he said.

Next: Expansion plans


Even though Denchi is in Scotland, Prima is just outside Cambridge and RAM is in north Wales, the model is not particularly distributed, says Russel. But it does bring advantages.

“What we want is to find people close to an existing location,” he said. “I don’t want a fully distributed workforce working from home but the hybrid model being in the office and walking the floor is important so Russel Industries will be distributed near those three locations.”

“One of the other issues is expanding facilities, a new build for Prima in St Ives, Cambridgeshire, how we expand Denchi, and there’s definitely a timeline of moving RAM into a new building. One of the nuances of CEM [contract electronic manufacturing] is the local base of customers. With Prima we have increased turnover by 50 percent since we acquired it but all the customers are within 40 miles but part of the expansion plan.”

“We have looked at perhaps three other CEMs as acquisition targets and upgrading Prima and now what I’m thinking is these CEMs are owner managed and may not be investing in new equipment but buying one of those with a new management team and new equipment.”

With a battery Gigafactory planned for Coventry there is increasing opportunity for the electrification eco-system across the West Midlands that is easily accessible from the Cambridge area for Prima and opportunities for Denchi, he says, although there are no plans to build a gigafactory quite yet. 

“We are looking at a couple of sites for Prima locally and we can be in Coventry in under an hour,” he said. “If there are more players in the cell supply chain and some based in the UK that’s an upside for us, it gives us more choice and we will use the most appropriate cells.

There is also the value of sharing a site. “We are now thinking about creating Prima Deeside alongside RAM to share facilities and skills, that’s in our minds as a geographic expansion and gives us access to a pool of new customers.”

While there are no immediate plans for a battery plant, that is a possibility for the group, he says

“There is a place for companies such as Denchi to work with companies on the cell side but it would have been the wrong thing to do to be sustainable. Longer term as we grow that is something we are likely to do more of.

“It’s something we will get more involved in in the future its making sure we have the right amount of bandwidth, It is important to support other activity in the UK, it’s about the timing and our evolution,” he says.

www.primagroup.co.uk; www.denchipower.com; ram-innovations.com

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