New R&D centre to open at Leamington Spa business

CeraCon UK

A specialised engineering business in Warwickshire which is under new ownership has opened a new research and development centre and is set to change its name.

Managing Director Robert Jones led the management buy-out of Leamington-based CeraCon UK, which safeguarded the future of the 20 staff at the foam sealing company.

After a nine-month process, the deal was completed with help from the Coventry and Warwickshire Local Enterprise Partnership (CWLEP) Growth Hub.

Contrary to the recent problems being experienced by its German parent company, CeraCon UK has consistently grown year-on-year in its seven-year history, applying its services and technology to new markets. Even with the challenges over the last 12 months, the company will grow by 20 per cent.

Robert explained: “We offer a unique service in the UK. There is no other business doing what we do, with the expertise in the field of sealing parts.

“Using 6-axis robots and specialist equipment, we create and automatically apply liquid foam seals directly to our customers’ parts. Our customer base and target market is vast; basically anything you need to keep watertight! Our customers range from electronics to automotive, lighting to construction. There are significant commercial and technical benefits in our process, compared to manually fitting seals and gaskets.

“From our modest start in 2013, we now have approaching 100 UK customers with in excess of 500 different applications. Our turnover is in excess of £1.6 million and we’re running two-shifts.

“Covid-19 hit our German partners hard. However, after our initial April 2020 closure in the first lockdown, we returned in May and were straight back to two shifts. Since then, I have been very fortunate to work with the Growth Hub, as well as various legal and business advisors, to reach the MBO conclusion. Our German parent company’s options were to close and consolidate, or sell to an unknown party, in order to keep their business afloat. This option worked for everyone.

“We applied for a £400,000 Coronavirus Business Interruption Loan Scheme (CBILS) through Lloyds Bank, which helped to fund 80 per cent of the deal. Then with the support of Lloyds Bank commercial financing, we were able to make up the difference.

“The experience of Jim Clark from the Growth Hub, who has been there and done it, was invaluable. Being as this was my first experience of this type of activity, the one thing I learnt more than anything is you need people around who you trust and have the skills that you lack.

“At the beginning of 2020, we expanded into a second facility, which will become our Technical and Visitor Centre. We are specifically targeting applications within the Battery Electric Vehicle market with our new R&D facility.

“The facility was supported by grant funding from the Coventry and Warwickshire Innovation Programme (£4,455) and from the Coventry and Warwickshire Green Business Programme (£20,000) which are part funded by the European Regional Development Fund (ERDF) and delivered by Coventry City Council and delivery partners; Coventry University Enterprises and Warwickshire County Council.

“This helped us to invest in and install the largest of our foam seal production cells. It will allow our technology to be used on the sealing of automotive electric battery enclosures, which tend to be the size of the car floor.

“With our continued expansion, we will start to diversify and develop our own brand. By the end of June this year we will be changing our name to Robafoam, Robotically Applied Foam Seal Specialists.

Jim Clark, account manager at the CWLEP Growth Hub, said the business organisation was set-up to provide advice and information for companies, however large or small, and in all sectors throughout Coventry and Warwickshire.

He said: “It has been a pleasure to help Robert with the management buy-out which can be daunting at any time, but particularly in the middle of a pandemic.”

“I was happy to act as a mentor throughout the process and offer advice, as well as being a sounding board since it can be tough when you are the head of a business.”

“I have no doubt that CeraCon UK – or Robafoam as it will be known from the summer – will continue to diversify into different markets because they have a winning combination of technology and expertise.”

Jagdish Soor, of Warwickshire County Council, added: “We were introduced to CeraCon by the CWLEP Growth Hub and engaged at a time when the business was negotiating its MBO. Warwickshire County Council through its specialist A2F program was able to assist and advise Robert as to how the company could be valued with the structuring of a deal that would be beneficial for the longer-term outcomes.

“It’s pleasing to see that there has been a positive outcome and that the business will continue to thrive in Warwickshire by the assistance provided through the various business support programmes in the region which has resulted in the safeguarding of vital jobs in the Advanced Manufacturing Sector.”

Brian Stevens, Delivery Manager for the C&W Green Business Programme at CUE, said: “We were delighted to support CeraCon to invest in new technology to enable them to be able to support the development and manufacture of electric vehicles, and contribute to the growth of the green economy in the region.”