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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.
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