For three decades, Brian Hughes’ company has shifted its focus and output to reflect changing industries and demand. What hasn’t changed is its commitment to innovation, diversification and hiring the right people.
Brian Hughes’ journey as managing director of Composite Materials Engineering (CME) has spanned three decades. With a continued focus on diversifying as much as possible, since day one the business has “tried not to be in one business or one market all the time,” he says.
This has seen CME dabble effectively in materials, confectionery, and products for the building and transport industries.
But until recent years, its main source of activity has been the automotive industry, which, by the mid 1990s, made up 70 percent of CME’s business.
The downturn and pending closure of car manufacturing in Australia has seen CME reduce this output to 20 percent, now focusing 80 percent of its efforts in other avenues.
“We’ve really had to build the business and create some new markets and new products,” says Hughes, “change our people, our marketing, our technology to transition away from automotive into these other sectors.”
This transition has required some creative thinking and searching far and wide for new opportunities.
One staffer was sent on an overseas trip to find competitor companies of the larger confectionery manufacturers, in order to develop an international business. The outcome was that CME now exports up to 30 percent of its production to Europe in the form of confectionery.
A lot of its work is made up manufacturing for the transport sector, making things like train seats. “We’re thinking that’s going to be a nice market for us as the infrastructure projects grow in Australia,” says Hughes.
Materials and building products make up the remainder. An existing painting facility was used to paint glass on a large scale for such things as kitchen splashbacks as well as bathroom and laundry surfaces. This led the business to start providing glass to the building industry. The lengthy lead times for ordering, producing, cutting-to-size and delivering glass to order – around 32 days – presented CME with an opportunity to hit the market with a replacement.
The result was a product called Akril.
A substitute for glass, Akril is an environmentally friendly, lightweight and cost-effective polymer. It’s half the weight and more cost-effective than glass, and the fact that it’s readily available, and can be cut and modified on-site, means it’s an efficient and speedy solution for contractors on building jobs, kitchen, laundry and bathroom installations.
It has now been used for major infrastructure projects and in airports around Australia. It’s also been used at Heathrow Airport in the UK, where it is now exported.
The innovative product was a result of Hughes looking at materials technology and asking: ‘How can we develop a product to compete with glass that gives you as many benefits as glass, and probably adds a few extra?’
“We focus on innovation,” he says. “We focus on doing things that other technologies can’t do.”
With infrastructure products, confectionery, Akril and roof tiles – which it has manufactured since the nineties and now manufactures for CSR – it’s clear that the diversification away from reliance on the auto industry is going well for CME.
So what is it that’s allowed CME to continue to innovate, and excel in new avenues over the years?
Hughes puts it down to culture, and hiring the right people. “Every company’s got its own culture, and we’re specific with the people that we employ,” he says.
For the new industries that he enters, he sources specific expertise in new staff to lead the way. “You’ve got to invest in your people,” he says. “You have to make sure that you get the right people, particularly as you transition from one industry to another.”
CME is proud to call itself a family business, too. Some of the key hires Hughes has made along the way “have only just started to retire after 20, 25, 30 years with us,” he says. “Now we’ve got the process of replacing them with the people who are ready for the next level.”
Knowing his business thoroughly, inside and out, was the only way to be sure he was hiring the best people. But building this level of understanding wasn’t easy for a man with a background in banking and finance, not manufacturing.
In the early days he had to restructure the business and develop an understanding of manufacturing, technology and costing. Banking is a “different space” and, coming from that industry, he was more equipped for dealing with numbers and reviewing companies, than materials and product manufacturing.
“Learning the whole process of the company I own took a bit,” he recalls. “I actually got on a plane and travelled for two years, looking for opportunities and teaching myself what other companies were doing, and how I needed to change to compete with those companies on a global scale.
“Then I went on to employ the best possible people that I could afford. That was a bit of a restriction, because small companies sometimes can’t compete with the big boys.
“So, we look for the best people in terms of their technical ability, but also cultural fit within our business.”
Success in his arena requires a focus on the product, people and system. “They’re the three things you’ve got to keep a very close eye on,” he says. “It’s also important to put yourself in the customer’s shoes when making decisions, and ask yourself, ‘Would I accept that as a customer if it was given to me?’”
This is easier said than done, he concedes. “It’s easy to talk about.”
So does he have any life lessons he can pass on to others in business that he’s learned along the way?
“No more than anyone else,” he says, adding, “You’ve got to stay focused, you’ve got to believe, you’ve got to make sure that you’ve really got a clear vision of what you’re trying to do.
“If you follow those strategies, treat people the way you want to be treated, look for good customers and love your business, you’ll be all right.”
Building a good relationship with your bank is helpful, too. “You need to treat your bank as your partner, not as your enemy,” says Hughes. CME chose Bank of Melbourne out of a shortlist of four banks “primarily because its culture fitted more with ours”.
An open-minded approach to decision-making and problem-solving has also helped CME along the way. “We actually look for how to solve problems,” he says, “not just what the problem is.
“We look for the solution and we develop the solution in line with technology and the issue that’s got to be addressed.”
The company does its best to forecast where the market’s going, “and then develop and move into that space of giving the market what they want,” explains Hughes.