Sheffield Forgemasters International Ltd (SF) is the UK’s largest independent steel company and one of the largest private sector employers in Sheffield.
The company specialises in the production of large, bespoke, high integrity steel castings and forgings, as well as standard rolls, ingots and bar, and supplies to the defence, engineering, power generation, civil nuclear, offshore oil and gas, petrochemical and materials processing industries worldwide.
An award-winning organisation that has been in operation for over 250 years, SFIL faced difficulties due to a global economic downturn across many customer industries. They needed to facilitate a five-year programme to bring the business back into profitability.
Sheffield Forgemasters (SF) is a 670 people employee-owned business on a 64 acre site making very large forged and cast engineering parts. Most of its products are bespoke and this includes critical components for the UK and US submarine defence programmes. Due to the decline in both oil and steel prices, SF began to lose money and when a potential purchase of the business fell through in mid-2015 the company needed support so it could continue to trade.
Following a management buyout, the owners turned around a previously loss-making company to one that continually made a profit year-on year, by focusing on specialist manufacturing and technical knowledge. However, in recent years, with a rapid downturn across many markets, and increased global competition, it has been difficult to make a profit.
With 80% of products for export, and a lot of overseas competition owned by large corporations, a fierce battle continues. Significant losses were accumulating and with that came pressure on the management team. Secured lenders required substantial assurances in return for their support: the business remained viable, and confident, and as a supplier on national strategic importance, continued operation was vital. Development of , and delivery against, a turnaround plan was agreed.
The turnaround plan was developed to combat these circumstances.
A number of milestones were put in place, led by Project One providing the interim CIO, who then worked with the Board and business to stabilise and then turnaround performance.
• Reduce headcount
• Appoint a Commercial Director
• Save costs on legal fees, appointing an in-house legal counsel
• Restructure the company – once functioning as eight independent businesses, selling to each other, they have now fully integrated as one, with individuals given responsibility for departments such as sales, operations etc.
• Buying new equipment to improve performance
“I really like the Project One DNA. There’s a discipline about Project One – we’ve got a turnaround plan and it’s about making sure we don’t deviate from what we’re meant to do. They know how important it is for the company to make crucial improvements and are pushing us every single day.
“You can get stuck with a management style that you’ve had for some time, and what Project One has done is bring in a new style and new discipline, I’m sure that myself and the board of directors have learnt from that and will take it forward. The most important aspect here is that we’re doing something different because Project One have brought that style into the company. We have changed and you’ve had a big part to play in that” Graham Honeyman, CEO.