Supplier Spotlight: Herida Healthcare Group prepares for next stage of growth
A Group gearing up for growth
With continuous year-on-year growth, a sleek new production facility, new products to bring to the market and new faces in the senior management team with experience of scaling businesses, it would be no understatement to say that Herida Healthcare has been busy over the past three and a half years. Attending the launch of its new factory in Leeds, THIIS discovered what the ambitious Yorkshire organisation has in store for the industry.
For many businesses, the first few years are often “make or break”, with many new companies struggling to overcome those initial hurdles of winning over customers, scaling production, as well as that all-important issue of managing working capital. For many, the challenge can prove too much, with some estimates predicting 60 percent of new businesses fail within their three years, and 20 percent close their doors within just 12 months.
One success story in the industry that has managed to avoid becoming another statistic however is Herida Healthcare, the West Yorkshire-based manufacturer of pressure care and moving & handling products.
Launched by entrepreneurs Neil Smith and John Kay, the company only started trading in 2016 but in a short space of time has managed to diversify its product offering, grow its manufacturing capabilities and establish a loyal customer base.
Its foam and dynamic mattresses, along with its slings and moving and handling range, are sold to community equipment stores, NHS trusts and long-term care homes through an exclusive dealer network across the UK, alongside a burgeoning export business.
Never one to rest on its laurels, however, the ambitious company is gearing up to take scale-up, with its sights set on becoming one of the leading suppliers in the hypercompetitive pressure care and moving & handling sectors.
In the last six months, the Leeds manufacturer has been busy laying strong foundations on which to build upon, including a change in management structure and the opening of a new manufacturing facility.
New home
Having steadily seen a rise in orders over the past three years, Herida Healthcare took the difficult and costly decision to move its factory to a new 30,000 sq ft unit, twice the size of its former home.
Over the space of weeks, the company moved its entire production line five miles to a new space in Leeds, employing an extra six employees – bringing the headcount to 42 – to ensure it could keep up with rising demand.
During a tour of the site with Herida’s meticulous Operations Director John Kay, he explained how the move had been carefully planned to minimise disruption, moving over key pieces of equipment, such as its industrial Computer Numerically Controlled (CNC) precision foam cutting machine, in such a way as to reduce downtime.
In addition to overcoming the obvious manufacturing challenges that a large-scale manufacturing relocation throws up, Herida also managed to successfully retain its workforce, something the senior management team were particularly mindful of.
The need to train and retain
Getting the opportunity to learn about the various processes involved in the creation of its pressure care mattresses and slings, it was surprising to see just the large degree of human skill involved in the production.
From the precise cutting of fabrics & foams to the intricate stitching required for slings, the level of individual expertise and training required to create many of its products reinforced just how important the individual members of the Herida workforce are to the company’s growth.
With some areas of production being reliant on skilled individuals however, it does raise the question of bottlenecks. Aware of this, Herida Healthcare has invested in training its staff across multiple areas of the manufacturing process, ensuring a degree of flexibility and capacity to keep production running smoothly.
“Our multi-trained workforce is vital to our manufacturing success,” pointed out Neil Smith, Chairman of Herida Healthcare.
“One of the risks for any manufacturing company like ours, which relies on the skills of people, is being able to maintain that skills base, particularly nowadays where textiles is not so readily taught in school and those that do come through in that area are predominately focused on the fashion side of the textiles market.
“By training our staff to work across multiple areas of the business, it means we have that extra buffer, whilst also developing, upskilling and empowering our employees.”
Keen to keep hold of its valued team, the management team made sure all staff were involved in the relocation from the start, bringing them along on the journey.
“When we first found the building, we brought the staff up so they could see it before we refurbished and refitted it. When they saw it completed, they were really excited and loved the new space,” explained Ops Director John Kay.
“That was vital. From their point of view, moving the facility would mean their lives would change, particularly as some of the team walked to the previous facility and others took the bus.”
Making the transition to the new site as smooth as possible, John explained that the company mapped out bus routes for various members of staff who were unsure about how to get to the new site, as well as providing a pool car for staff to use.
“We really do have a great team and we have invested in training our staff so they are highly skilled and really enthusiastic, so we have tried to do all we can to ensure we retained our staff,” he added.
A testament to investment
Over the course of the tour, wandering through the spacious and modern production space, the investment made into its manufacturing capabilities to ensure it can match its aspirations was apparent.
Cutting, fabrication, sewing, screen printing, welding, assembling, barcoding, testing and packaging all of its products in-house, the substantial amounts spent on capital expenditure were absolutely necessary as it looks to the future, explained Neil, enabling Herida to be highly responsive, closely control quality, and determine its own destiny.
“It’s no secret now that we probably invested almost a quarter of a million pounds working capital to start the business, however we’ll track a million-pound EBITDA this year, but the key is continuously investing in that structure,” asserted Neil.
“Where people make the mistake is not understanding that a business is a living, breathing entity and you have to keep feeding it to get it to thrive and grow.”
A helping hand
As the phrase goes, “no man is an island,” and the same can be said for a business, particularly in the beginning when capital is often the dominating factor between success and failure.
With establishing a manufacturing business requiring significant funding to pay for expensive machinery, Herida turned to a number of public sector organisations keen to help the fledgeling business find success.
“Hundreds of thousands of capital expenditure investment in machinery can’t be done unless you find investment so the grants and support we received at the early stages from organisations including Local Enterprise Partnership, Ad:Venture, Digital Enterprise and the Manufacturing Growth Programme were critical,” reflected Neil.
“The grants have helped us buy equipment and become more efficient in the manufacturing process which is often the difference between a business thriving or not surviving at all.”
Sarah Carling, Programme Manager for Ad:Venture, a business support programme for new businesses in North and West Yorkshire, commented: “Herida Healthcare is a fantastic success story that shows that the public and private sectors really can work hand in hand to bring prosperity and jobs, and boost the local economy.”
New products
With a facility double the size, Herida has now set its sights on filling it with more products. Having entered the market with its pressure care mattresses in 2016 before expanding into the moving and handling sector with its slings range in 2018, the company is continuing to expand its portfolio.
One of the most exciting additions to its portfolio is its new mobile hoist range.
Speaking with John Bentley, Managing Director of Herida Healthcare, he commented: “We believe that having the combination of the UK manufactured slings, in combination with our high-quality hoists, we’ll be able to achieve a synergistic effect between the two together, enabling us to accelerate sales in our moving and handling range.”
A competitive area of the moving and handling market with well-established models in the market, the mobile hoist arena is one that Neil Smith is well versed in.
Discussing how Herida Healthcare will make its mark on the sector, Neil emphasised that Herida’s new mobile hoist’s versatility, lifting capabilities and manoeuvrability will enable it to carve out its place in the market.
“The mobile hoist is a generic market but if we are delivering everything that market needs – reliability, longevity, competitiveness and meeting all clinical needs – then we should be able to enjoy the same success we have found in the other areas we operate in,” stated Neil.
“Even though we are in a mature sector, I still believe there is value to be added and that’s not about providing the cheapest product but rather focusing on product lifecycle, speed of delivery and aftersales support.
“As a manufacturer, we have that speed of response which is vital as when people need these products, they usually need them immediately.”
Alongside complementing its sling offering, the mobile hoist range also opens up a residual stream for Herida’s dealers, pointed out Neil.
“It also creates a service business for our customers,” he said.
“Dealers can go in to care settings and make a point of being trained by Herida in order to promote the maintenance proposition.”
Confirming that the new hoist will be available from January, there are also hints of more products joining Herida’s growing roster, including stand aids and shower chairs.
New faces
Coinciding with the relocation and exciting new hoist range, the company has also welcomed two highly experienced and talented members to the senior management team.
Former Managing Director and now Chairman Neil Smith has passed over the reins to John Bentley, who joins Herida Healthcare having held senior positions in high-profile corporate healthcare organisations, particularly in the wound care sector.
In addition, David Emmerson, formerly of Johnson & Johnson, has joined Herida as the organisation’s Head of Operations as the company prepares to ramp up its output.
“My role will be to help the company reach the next stage in its development through organic growth while Neil focuses on growing the business through the strategic acquisition activity, or attracting further investment partners in order to enhance our growth and product portfolio” explained John Bentley.
“I’ve been in the medical devices industry for the majority of my career. Firstly, with Smith & Nephew for almost 10 years, rising through the ranks in sales before joining Molnlycke Healthcare, a substantial company that was involved in a number of product acquisitions, handling some very big brands.
“When I joined Molnlycke in the UK, we were turning over £16 million and when I left in 2011, we were turning over £150 million. A lot of it was a result of organic development, particularly on the wound care side, and then acquisition integration on surgical products.”
No stranger to playing an integral role in a manufacturer that is ready to pursue growth through both organic growth acquisitions, John has also spent time on the distribution side of the coin as well.
“I’ve worked for two large manufacturers in my career, and most recently, a distribution business called UDG Healthcare, a FTSE250 largely involved pharmaceutical services and also in medical devices, which is the business I managed,” continued John.
“As a consequence of that, there was a lot of dealings with manufacturers as a distributor and I think part of my challenge is reversing that out and appointing distributors as a manufacturer.”
New markets
With its new facility, new products and new faces, the foundations have been set for Herida to pursue further growth, with a considerable focus on increasing its exporting activity.
“As it stands, our international distribution business is over 23 percent of our turnover and mostly based in Australasia,” noted John.
“When we look to Europe, which is on our doorstep, we have had a very light touch, only really dealing with Poland, the Czech Republic, Malta and a few others. There is tremendous opportunity to grow our revenue and distribution there.”
To that end, the Leeds manufacturer attended German trade show Medica in November in search of new export opportunities and raising its profile amongst an international audience of distributors.
According to John, what the company found was an appetite for its British-made ranges on the continent.
“Off the back of Medica, we have already started to receive orders from France and have identified key target markets where our products would be a good fit,” he commented.
“In particular, the Nordic and the Benelux regions, as well as Germany, where there is a demand for high-quality products.”
Continuing to invest, John confirmed that Herida will take on a dedicated export manager to resource this growing side of the business, whilst also emphasising the opportunities that are open to the manufacturer closer to home.
“In relation to the UK, we are planning to ramp up our commercial capabilities by investing in our sales resource, including bringing on board two new people,” maintained John.
“That will expand our sales team to four, giving us national coverage in England, with the exception of the South West. The drive will be getting out there, spreading the word and doing more business with more customers.
“We are dealing with some extremely large community equipment stores currently but out of the approximately 120+ community loan stores in the country, we are dealing with arguably 10 percent of those in some shape or form, so there is a big opportunity there.”
With attractive routes for further growth open both domestically and globally to Herida, an experienced MD at the helm, an energetic chairman pursuing growth and a precise operations’ team ensuring seamless production, the future for Herida looks bright.
“Herida Healthcare really is at a crossing pointing now and we have substantially invested to ensure we can take that next step,” finished John.
“We are a profitable organisation and I think we are well placed for the future. Now the focus is on sustainable growth with our trade partners, offering a wider portfolio to the market and making our mark in the industry.”
www.heridahealthcare.co.uk
