15 September 2000

TRADITIONOUTOFTHEWINDOW

TRADITIONAL management and working methods have been swept out of the door at a company operating within a notoriously traditional industry.

Tanco Engineering, a long-established manufacturer of tractor loaders, bale wrapping machines, grass slitter aerators and stock feeding equipment, is being transformed into a modern manufacturing enterprise fit to secure a more prosperous future.

Executive chairman Liam Lacey, who bought the business in 1996, and managing director Lee Choo, a Malaysian national whose involvement with the company stretches back many years, have already seen the business return to profit. Turnover has held steady at around Ir£5m for the past couple of years but this is expected to grow as new product developments and distribution arrangements are put in place.

Employees were first to see a change in approach at the company. Not just in the way that the new cellular production system gives them more responsibility – as well as potentially more job satisfaction – but also through a transparent profit-sharing scheme.

"We need good team work if the business is to do well," says Mr Choo. "It is only right that everyone who contributes should share in the companys success."

Customers will see the results of these changes in an evolving, diversified and more competitive product range, as well as engineering improvements to existing bale wrapping, grass slitters and root feeding equipment.

"Cellular production, where processes are arranged to make complete assemblies rather to perform isolated functions like drilling, cutting, welding or machining, is making Tanco a more efficient manufacturer," says Mr Choo. "It can also help with quality control issues by giving the work-force greater responsibility for the way their work is organised and monitored."

The review of Tancos manufacturing activities, however, has also brought to an end a history of making tractor loaders.

"We spent a lot of time and engineering resources on producing a vast range of mounting brackets for different tractors," explains Mr Choo. "That can not be justified when we are making around 1000 loaders a year."

Instead, Tanco will capitalise on economies of scale through a reciprocal marketing agreement with Trima of Sweden. The Swedish manufacturer, which makes some 8000 loaders a year, will supply a range of models to be sold under the Tanco name.

In return, Tanco will supply hydraulic implements for Trima loaders; and Trima subsidiaries in the UK and Germany will sell Tancos bale wrappers and other product lines.

"This arrangement gives us a range of modern and competitive tractor loaders to sell, secures a market for our loader implements, and provides new distribution opportunities for our product range as a whole," says Mr Choo. "It makes more economic sense and provides a good opportunity to expand our export sales."

Exports already make up around 60% of Tanco sales, with nearer 90% of the companys round and square bale wrappers being sold outside Ireland.

Britain remains the biggest export market within Europe, followed by Holland, Sweden and Denmark, but export sales are also won in the US, Australia, New Zealand, Chile and South Africa.

With loader production now out of the frame, Tanco will focus more on its core competence – wrapping. Outside agriculture, the company has introduced a polythene-wrapped industrial packaging system that does away with the logistics and waste of traditional pallets.

It also promises new technologies in the agricultural field, most notably in the shape of a combined baler and wrapper that will make its debut (in prototype form) at the National Ploughing Associations championships at Ballacolla.

"This machine moves on a stage from the tandem baler and wrapper in that it is a fully integrated system with wrapping performed in the bale chamber," explains Mr Choo. "That will allow users to apply plastic film to the barrel of hay or straw bales as an outside storage cover, or to wrap silage bales completely in stretch film."

With patents in many major markets now being granted and first field trials this summer producing encouraging results, Mr Choo is confident the new machine will be a symbol of Tancos future success. &#42

Production at Tanco Engineerings Bagenalstown factory has been reorganised into self-contained cells, each producing finished components or assemblies.

Tanco managing director Lee Choo says: "The agreement with Trima gives us a range of modern and competitive tractor loaders to sell, secures a market for our loader implements, and provides new distribution opportunities for our product range as a whole."

Tanco bale wrappers awaiting delivery to dealers.

TANCOENGINEERING

Factory: 6040sq m (65,000sq ft) on 2.8ha (7 acre) site.

Employees: 50.

Sales: Ir£5m.

Exports: 60% (90% bale wrappers) to EU states, Scandinavian countries, USA, Australia, New Zealand, Chile, South Africa.

Product range: Tractor loaders (made by Trima); hydraulic loader implements; round and square bale wrappers; grass slitters/aerators; root feeders; industrial packaging systems.