Invest in prevention, protection and a plan for a rainy day
Monday, February 8, 2016
Desmond, Eva, Frank, Gertrude and Henry. They sound like a group of friendly pensioners you might meet down the pub or in a tea room, rather than a series of devastating storms that caused the worst flooding in the north of England in decades.
The owner of Leeds family firm Duffield Printers is still raw after flood devastation prompted his decision to wind up his family business after 127 years of trading. Martyn Duffield’s 27-staff print facility was ruined on Boxing Day after Storm Eva caused the Aire River to burst its banks.
Duffield was going to rebuild his business, which he bought from a distant relative in 1985, but the risk of losing work to competitors permanently and seeing how younger, bigger, more web-savvy companies operate, changed his mind. While he has cried his eyes out over the choice, he thinks it was the best decision.
The managing director of Lancaster-based Pagefast Print & Publishing is hoping he will not have to follow suit. Almost all his kit and £9,000 worth of completed work was ruined by Storm Desmond flooding in early December.
Keith Simpson has been outsourcing work to firms including Kent Valley Colour Printers and MTP Media in Kendal, and ECM Print Finishers in Preston while he sorts out a six-figure insurance claim, delayed through the unfortunate illness of his assessor.
So far he’s had one interim payment but has no idea how long it will be before he finds out what he will get and if it will be enough for new presses and a fresh start. He will have to swallow a 10% flood excess fee – more than for other natural events – and the 4.5% he is paying to his own loss assessor.
“My customers have been fantastic. I’m worried about them getting poached and I’m in a difficult position because we’re using local printers, but most have said they will help and I’m taking that at face value. It’s like a Christmas truce. But I’m not making any money on orders.
“I’m still paying my production staff, they are doing some cleaning and collections and delivery. We’re working like busy fools and not getting anywhere, stuck waiting for the insurance.”
In the meantime, what help is there for printers hit by floods?
The government has made a series of funding announcements: nearly £200m for Eva and Desmond alone, including nearly £50m to repair roads and bridges and £50m to repair and improve flood defences.
Affected businesses are entitled to £2,500 each under the Communities and Business Recovery Scheme and up to £5,000 each for future flood mitigation works. It has also opened up The Bellwin emergency fund for authorities and found £1m for a PR campaign to help boost tourism in the North, something which could at least bring in print business.
None of it was much help to Duffield Printers.
“If you operate a compliant business, which makes prudent investments year-on-year in good business practices such as insurance, you have zero chance of government support,” Martyn Duffield says.
Duffield did, however get the full £5,000 available for future flood prevention, which will go towards works on the building where his firm operated. Once restored he plans to turn the building into serviced offices. So this could, at least, help him avoid another such cataclysmic event.
Pagefast’s Simpson secured a £10,000 grant from Cumbria County Council after “a torturous application process” but says it will go down as a sale on the books and be taken out of his eventual insurance pay-out.
“Everyone [at a local level] is well-meaning but I don’t think they realise that what they give is going in another direction.
“At a national level, I think they are a cynical, cold lot. They do things for the next sound bite, they say they are going to support you,” he says. “They give you a token, £13m for Cumbria is a drop in the ocean. Just replacing one of the roads we lost is millions.”
Tadcaster high-street print business The Ink Shop owner David Bewley uses the same phrase – “drop in the ocean”. He saw 1.2m of water swamp his main HP Designjet Z6100 printer, as well as smaller machines. It was the firm’s seventh flood in four years, with previous events down to poor surface drainage. He wants the government to look at the broader picture.
“It’s not just about building walls, you’ve got to look at the whole thing holistically,” he says.
Cambrian Printers in Aberystwth, was hit by a 46cm flood in 2012 that ruined 54 pieces of print kit, including KBA, Heidelberg and HP Indigo presses. It took just over three months to get back up and running, without any public sector grants.
That, commercial director David Lowe says, was quicker than it would have been if the firm had not had a disaster plan in place.
“When you use it once you make sure it’s up to date. Now our contact details are updated every month.
“We send our well wishes out to people. We know what it’s like when you feel like the whole world’s coming to an end.”
Burneside papermaker James Cropper also relied on its disaster planning when the swollen River Kent flooded part of its site, causing damage to warehousing, facilities and materials. The company said that successful implementation of emergency procedures minimised the overall impact.
Many business owners are concerned about insurance premiums rising in the future, although the breakdown of insurance availability seen in the consumer market does not seem to have hit businesses.
The government-backed ‘Flood Re’ re-insurance scheme, which comes into effect in April to give householders in flood-prone areas access to more affordable insurance, will not be available to businesses.
A Defra study last July found that 95% of SMEs arrange commercial insurance cover for their premises, and 97% did not experience difficulty in securing this insurance, even those in flood risk areas did not seem to have a problem.
It remains to be seen if this will change. Meanwhile business owners, particularly those with expensive equipment such as printing presses, are advised to do as much as they can to alleviate any future incident, should it occur, and to plan for how they would act if it does.
Think about the thing that will cripple you for longest
David Lowe, commercial director, Cambrian Printers
We had a month’s rain in 24 hours and the tide was in. It was a one in 100 chance of flooding, but that doesn’t mean it only happens once every hundred years.
If it happened again, we would protect the individual machines instead of trying to sandbag the whole factory. We would go one layer at a time and then bucket out any water. Think about the thing that will cripple you for longest. With us it was the saddlestitcher and mailer. Lots of companies wanted to print for us, but few wanted to stitch for us. It depends on what your business is.
Site electrical items and cables two feet off the floor. We just got a new server cabinet and we have left the bottom two feet empty. We know the equipment would be quite safe as it was above the water line. The same goes for our new HP Indigo. You can save some of the equipment. Putting the protection in place might cost you a bit more at first, but it will save you a lot more than losing a couple of months of production.
You need a good business plan. Ours helped us claim for continuing business insurance.
Our disaster plan really helped. We’re noticing that government tenders are now asking if you have one. We were asked recently: ‘When did you last simulate it?’ It doesn’t matter if you’ve got the best service, if you’ve got no idea what to do in a crisis.
We discovered our customers are really loyal and stuck by us. There were some unscrupulous printers out there who tried to approach them directly in our hour of need. It’s nice to know who you can trust in the industry and our customers are still with us three years later.
We also learned the true worth of our staff. Everyone pitched in and, in time, we hope some of our star employees will be the future managers of the business.
How was your firm a ffected by the winter floods?
Gary Walker, business development director, Snap Print Management
“We had a supplier who was affected, which caused a few problems. We’re quite fortunate that we’ve got quite a broad supplier system but we’re not naive enough to think we can’t be affected by problems like floods. We’ve got contingency plans in place across the board. Although it is sad when a print firm closes, one positive is that people like to see fresh faces in the job market. A lot of printers and print managers struggle to get good staff, especially as the market picks up.“
Adam Carnell, managing director, Bluetree Design & Print
“We’re lucky enough to have not been affected by any flooding, but I found it very sobering to see the impact on the Duffield Printers production facility, it’s very difficult if not impossible for any printer to recover from a total loss of equipment particularly given the lead times involved in replacement and impact to clients’ services. We’ve been fortunate in being able to take on a few of the Duffield team but it’s both sad and concerning to see a 127-year old business taken out like this.”
James Richardson, managing director, Wood Richardson
“I didn’t realise how much flooding would affect the finishing side of things. There are still some guys in Leeds that are still shut down. I’d like to think the industry would help each other out. You’d expect people not to take your clients, I’d like to think there’s still some honour in the print industry. Once our finishing house is up and running I’ll be back there again, even if I get a cheaper offer. We’ve got a guy down the road who’s our disaster plan but this has made us think maybe we need a more expanded disaster plan.”