Passing the Torch
SPI Development’s new building the has enabled the company to bring together people working on similar aspects of the company’s business within discrete areas, while facilitating communications and increasing comfort. | Photo: SPI Development
Danielle Roxborough takes the helm from Henry Tuck as SPI Developments enjoys a period of steady growth.
By George Gay
Talk to a lot of people, especially those not working within the tobacco industry, and they will tell you the industry is in decline. They will tell you that smoking rates are falling in many markets and plummeting in some others. And there is truth in this, though it raises a question about how, for instance, the U.K.-based fluids control company, SPI Developments, which is heavily involved in the industry, has been expanding and is expecting to continue to expand. But SPI’s managing director, Danielle Roxborough, has a rather neat explanation for this apparent enigma. The tobacco industry had not declined, she told me in April; it had been shaken up, and, consequently, a lot of new opportunities had been exposed to the light.
I was speaking on the telephone with Roxborough and Henry Tuck during a management transition period when she was still business development manager and managing director designate and he was preparing to stand down as MD on May 31.
In his own way, Tuck endorsed Roxborough’s view of what had happened, saying that since joining BAT and starting what was to become a 40-year career in engineering, mostly in the tobacco industry, he had seen the consolidation of the industry’s manufacturing base but an expansion of its products. What had been an industry concentrated on producing traditional tobacco cigarettes that were largely unchanged over decades was now also producing a range of new generation products that were being frequently updated and replaced. The life spans of these new products were short, Tuck noted, and every new iteration came with potential opportunities for SPI.
While SPI has always had a good foothold in flavor application equipment, this year has seen a major increase in orders.
Vote of Confidence
That SPI, which is part of the Tembo group of companies, has confidence in the future was underlined about six months ago when it moved within its hometown of Rotherham, Yorkshire, into a new building that Roxborough described as being “expansion proof.” The new facility has allowed the coming together of SPI and its subsidiary A1, which is responsible for machining components for SPI’s equipment. The two companies used to operate from premises on opposite sides of the road on which they were sited but are now housed together in a single unit that provides more space for all aspects of the company’s operations.
To give an idea of the size of the new premises and what the move means, Roxborough explained that whereas previously, space limitations had meant that engineers had struggled to build even a single RWM, the company’s biggest machine that applies menthol to the tissue side of foil bobbins, earlier this year, they had built three simultaneously. In addition, the new space had allowed what Tuck described as significant investments to be made in new turning and milling machinery, which space limitations would not have allowed previously. All in all, what these developments added up to was an increase in productivity and a reduction in lead times.
The move has also allowed the bringing together of people working on similar aspects of the company’s business within discrete areas but also an improvement in communications between those areas, a general increase in comfort and a consequent boost in morale. And, of course, there are the intangibles. Tuck said that the building had given the company a bigger, more professional feel while Roxborough reflected on how the new building’s glass frontage provided much natural light, saying, “it is amazing what it can do for your day.”
Cross-Fertilizations
As well as operating out of a new facility under a new MD, SPI has a relatively new designation as a fluid control company, something that stems from its status as the fluids expert within the Tembo group, from the business cross-fertilizations provided through cooperating with other members of the group and from the need to keep abreast of the expanded requirements and horizons thrown up by the arrival on the market of modified cigarettes and new generation tobacco and nicotine products. Roxborough said that whereas most of SPI’s equipment was concerned with the application of adhesives and flavors to cigarettes, filters and heat-not-burn (HnB) products, the company now found itself involved in projects and R&D efforts involving different fluids, either within or without the tobacco industry.
An example of the way in which the cross-fertilization of ideas can be exploited occurred some time ago when it was realized that a spiral-wound and glued paper tube being developed for an HnB project had basically produced a prototype paper drinking straw at a time when the EU was looking to ban single-use plastic drinking straws. And a bigger project has seen SPI involved with a sister Tembo company in detergent dosing systems for detergent pod manufacturing machines.
Drivers of Demand
But the focus is nevertheless on the tobacco industry, where a major driver of demand has been the need in some markets to replace cellulose acetate filters because of regulatory requirements and/or environmental concerns. Whereas the technology governing the production of cellulose filters has been largely standardized for some time, that for the current major alternative, crimped-paper filters, is still evolving, so SPI finds itself working with customers on different methods of applying various fluids to paper filters to help reproduce the taste generated through cellulose filters, to which smokers have become accustomed. In the future, such projects will likely widen to take in materials other than paper.
Another driver is being provided by HnB products and the fact that increasing numbers of companies are producing their own versions. Tuck said that while traditional cigarettes were fairly standard and so the technology used to manufacture them was standard, in the case of HnB products, companies were being innovative and including different materials. Product lifetimes could be as short as three years or four years, after which it was a matter of working with the customer on the next iteration as part of an ongoing process. This manner of working represented a fundamental change from that which had guided the traditional tobacco product industry.
But while the need to work in new ways with new materials is driving additional demand, the fundamentals of SPI’s business keep going. Roxborough said that while SPI had always had a good foothold in flavor application equipment, this year had seen a major increase in orders. And there had been solid demand, too, for upgrades of glue application systems.
Manageable Growth
Roxborough, who studied communications but who has filled commercial roles since graduating from university, has spent her 22-year career working with engineering companies, almost entirely those serving the tobacco industry. She has been with SPI for more than nine years and admits to being passionate about the company—a passion that tips over into confidence about the future. Joining the Tembo group had been hugely positive for the company, providing it with the opportunity to grow at a manageable pace, she said. And looking to the future, SPI and A1 had a great team of about 30 U.K.-based employees, including designers and engineers who could react quickly to new challenges emerging in the field of fluid control. At the same time, it could call on the resources of other Tembo group companies around the world.
Although Tuck has now left the business after 18 years, Roxborough is not short of experienced support. Paul Leverick, who Tuck described as a “fantastic engineer” and who is the founder and chairman of SPI, is still in place, ready to mentor the younger engineers and the management team. It was Leverick and Tuck, the shareholders of SPI, who realized that the long-term future of SPI lay with ITM, later to become the Tembo group, and who sold it when that opportunity arose in 2018.
Taking Hurdles in Stride
They also helped steer the company through Brexit and the Covid pandemic. Tuck was reluctant to spend much time talking about Brexit, but it was clear from what he did say that he was not a fan. Brexit, he said, had cost SPI time and administrative effort, but the company had nevertheless taken these hurdles in its stride and would continue to do so—because EU legislative changes would be ongoing and would continue to have an impact on any company such as SPI that exported to the EU.
In respect of the pandemic, the decision was taken early on that it was not viable for everybody to go home, so the company kept going while taking measures to keep its people safe, including by allowing those who were able to do so to work from home. In the end, the pandemic had little impact on the business, apart from the adjustments that had to be made to introduce the remote installation of equipment.
With the sale of SPI to the Tembo group, the Covid pandemic, Brexit and the move to the new building, the past six years have been busy, but then so were the previous 12 years. When Tuck joined SPI as MD in 2006, the company had only four other employees, and it offered only PVA glue systems and a simple flavor application system. Now it has 30 employees, a much-expanded equipment offering and is part of a multinational group.
Looking back, Tuck described working in the tobacco industry as being very interesting. As an engineer, he had found it “technically amazing” while the opportunity to travel the world had been mind-expanding. He would remember the industry as comprising a group of people who were open and welcoming.
Finally, Tuck said that one of his more recent goals had been to move the company into a new building, and now that had happened. “I’m very happy with the management team; they are doing very well, and we have a good order book, so now is a good time to go,” he said.
Leading the Livery
Although the accompanying story implies that Henry Tuck, until May 31 the managing director of SPI Developments, has left the tobacco industry, this is not strictly true. From June 5, he was due to have been elected and installed for one year as the master of the U.K.’s Worshipful Company of Tobacco Pipe Makers and Tobacco Blenders, of which he has been a member for about 10 years.
Tuck, who used to have a long commute between his home and SPI’s premises, said that, since the Covid pandemic had struck, he had spent increasing amounts of time working from home, relying on the company’s management team for SPI’s day-to-day running. Basically, he added, he had been working himself out of a job and that, though he was shy of normal retirement age, it had made sense to leave in time to take on his new role, which would comprise a full-on year, chairing and running the livery company, and attending internal and external events in the city of London.
The livery company has its foundations in the craft of clay pipe making, a craft that it is trying to keep going. There are two or three people left in the U.K. who make clay pipes for a small market comprising mainly those working in period films and dramas and those running reenactment societies. The company has a benevolent fund that helps various charities that fit its criteria, and within which is a welfare fund for former tobacco workers in the U.K. who have fallen on hard times.
The company, which has close to 200 members, is one of 111 such companies in London that together donate about £75 million ($93.91 million) a year to charitable causes. Education, too, is a big part of the livery movement, and some companies have maintained traditional functions, such as supporting apprenticeships.
It is worth noting that Tuck was introduced to the livery company by the person who preceded him as master, Elise Rasmussen, the founder and chief director of the GTNF (Global Tobacco and Nicotine Forum) Trust and vice president of sales and marketing at the U.S. Tobacco Manufacturers’ Association, which owns Tobacco Reporter. Tuck said that Rasmussen had been a great success in the role and that it would be hard to fill her shoes. She was known by everybody in the city and the livery movement. “Once met, never forgotten,” he said. —G.G.
