STRIX Ltd A STRIX product is used more than one billion times every day around the world by approximately 20% of the worlds population!... STRIX Limited
PRESS RELEASE 15/07/1999
LOCAL INNOVATOR SENDS TEMPERATURES SOARING

The man who saw a business opportunity in boiling water has upped the ante in the world market for thermostatic controls.

Edwin Davies pushes a piece of paper across the table. It is a faxed copy of a Chinese newspaper clipping telling the story of a man electrocuted by a faulty kettle.

"People copy our products in China," he says. "And they are not meeting safety standards. These are safety-critical products and we carry a big responsibility. We are dealing with people's lives."

Mr Davies runs STRIX, the kettle controls company that has about two-thirds of the global thermostatic controls market. Technical and design advances are protected by about 200 patents.

"Patents cost a lot of money," says Mr Davies. "It costs about £5,000 to take out a patent and probably about £1,000 a year to keep it going. And you have to do it in about 10 countries."

STRIX works hard to protect its interests. It employs the best intellectual property lawyers in the worlds, says Mr Davies, and has secured successful prosecutions in China and other markets. Such world vision has been honed in just 15 years.

STRIX was created in 1984 after Mr Davies met John Taylor, the owner of a small thermostatic controls company on the Isle of Man.

"Taylor was an inventor. The opportunity I saw was this mass market in boiling water. Everybody does it. With increasing use of electrical energy and a global population of 5bn, it was a growing area." But the combination of water and electricity is so explosive that producing safe and efficient kettle controls is complicated. Over the years, STRIX has developed three failsafe mechanisms: first, the kettle switches off when the water boils; then it switches off if there is no water in the kettle; its third, back-up, protection shuts down the whole mechanism and was developed when kettle makers introduced plastic models.

"At the time, the shiny metal kettles were all you could buy," says Mr Davies. "Plastic kettles were just coming on to the market but they needed a special safety mechanism because if something goes wrong plastic can burn."

Other innovations have helped drive sales. Demand in the late 1980s and 1990s has been for cordless models that area easier to fill and harder to pull down from kitchen surfaces. STRIX has won further sales by taking over the manufacture of thermostatic controls from some of the large kettle makers that used to make their own. It has done so by focusing on technical innovations that cut final manufacturing costs for its customers, which include all the big kettle makers such as Rowenta, Russell Hobbs, Siemens, Braun and Morphy Richards.

Its control systems have become more integrated, says Mr Davies, which means less labour is needed for final assembly.

Sales grew in the early years, from about £1m in 1984 to £5m in 1990. But kettles in the 1990s became a fashion item and sales of plastic models in all kinds of colours took off. The shiny metal models also went upmarket and became a trendy design item too. Consumers that once bought kettles virtually for life suddenly wanted to change models every two to three years. As kettle sales jumped, turnover at STRIX leapt to £30m by 1995 and to about £50m last year.

STRIX sells its controls for water boiling applications all over the world, although the UK is still its biggest single market. Exports, which now account for 70 per cent of output, are particularly strong in countries "where the Brits have taken their kettles", such as Australia, New Zealand and Canada. The company has won a string of awards, although the recent strength of the pound has squeezed prices in some markets.

The company's priority, says Mr Davies, is to hold on to hard won customers.

The Isle of Man, where STRIX employs about 500 out of its total workforce of 600, is the company's main manufacturing base. The company remains committed to its original home, but the local labour force has been too small to keep pace with growth.

In 1995, STRIX opened a factory and new corporate headquarters in Chester in the north-west of England. It has also created a global network of sales and support offices, with bases in Hong Kong, Delhi, Brussels, Moscow and Guangzhou in China. STRIX is building global sales by adapting traditional products to local tastes and by entering new markets. It aims to double sales in the next three to five years.

It was demand from continental Europe that persuaded STRIX three years ago to develop a kettle with a concealed element. "The element scales up when it is exposed and we put up with it because we are British. But they won't in other European countries."

It has also developed exotic-looking kettles for particular markets including a Turkish tea urn and an electric Samovar for sale predominantly in Iran and Russia.

The company makes cooker controls, too, which account for 10 per cent of sales. And in 1996, STRIX developed a thermostatic control mechanism for underfloor heating systems, which the company claims is widely accepted as the industry standard for performance and reliability.

STRIX will continue to grow, says Mr Davies, by applying its technology to other applications such as cordless irons, which are popular in Japan, deep fryers and water distillery systems - all of which is likely to keep the company's technical and design teams busy into the foreseeable future.

Return to News Index Sheila Jones, Financial Times Thursday July 15 1999
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