CMS invests again to support growth
Friday, November 20, 2020
Central Mailing Services (CMS) has beefed up its capacity with further significant kit investments and a planned factory extension as it prepares for a continued uptick in business, while it simultaneously heightens its search for potential M&A targets.
The centrepiece of the latest investment is a £400,000 spend with CMC on a second highly specified CMC One paper wrapping line and field upgrades to its existing machine and a CMC 250 enclosing line.
“It’s been a year since we installed our first paper wrapper and it’s a business that has grown nicely for us,” said CMS managing director Mitesh Chouhan.
“We knew we were never going to be the market leader in that one process, with ten machines, that was never the plan, the CMS model is being involved in every aspect of mailing, transactional, DM, poly, enveloping hand fulfilment.”
He added that the new machine was required because some potential clients insist on a second machine for contingencies and there had been times when it had been forced to decline paper wrapping jobs as it was running at full capacity, despite adding an extra shift earlier this year.
“And we never like to say no to clients,” said Chouhan.
Now the firm is in the process of adding a third shift to run 24 hours and the new machine will be installed in March 2021.
The new CMC One will be configured largely as per the initial machine, albeit with a CMC Robot 2000 automated delivery system from the get go and a third tank for peelable glue for wallet style mailings.
The 20,000cph machine will also differ by running a Domino K600i 220mm-wide UV inkjet system for full A4 coverage.
“At the moment if a client wants to run silk or gloss coated paper wrap then we need to run solvent cartridges and they cost a fortune, but the K600i will print onto any substrate,” said Chouhan.
As part of the circa £250,000 additional investment with Domino, it will retrofit the same Domino system planned for the new machine on its existing CMC One. It will subsequently transfer the original 2019 machine’s current Inc.jet twin two-inch heads system to one of its CMC 250 envelope enclosers.
Chouhan said one of the things the firm didn’t fully appreciate when it first entered the paperwrap market was the makeready times involved, which he said effectively ruled out runs of less than 10,000.
“We’ve been fortunate in that the runs we’ve been doing have been big, half a million plus, but when you’re running cartridges versus UV ink, it’s a lot more expensive, up to ten times – hence the investment in the Domino UV kit,” he said.
This latest order comes hot on the heels of its circa £500,000 summer shopping spree that included an additional high-spec poly line, a Sitma W1050, a second CMC 250 envelope encloser and a CMC Robot 2000 for its first CMC One, both of which were installed this week, and a second refurbished Kern 3500 enclosing line.
Last week it also took delivery of a Norpack P9 poly line with stacker from Bakergoodchild, which recently acquired Send DM. It’s also added a seventh envelope encloser in August, a Buhrs BB300 from ESP Colour.
As part of the Domino spend, it’s also in the process of upgrading the inkjet system on the recently installed Sitma W1050 from RMS so that it’s Mailmark enabled.
The total investment is around £650,000.
While much of the recent spends have been focused on increasing automation so the operation can run as lean as possible, which enabled the business to slim headcount to around 65 from a peak of 100 while simultaneously increasing capacity, in recent weeks it has started to recruit.
“We’ve increased headcount by around 10, we’ve taken on client services and machine operators and we're still recruiting for operators and finance staff,” said Chouhan.
The business has also benefitted from an increase in requests for handwork, and, as a result, is planning to put a mezzanine floor in its 4,300sqm factory to add 465sqm of floorspace and increase its handworking capacity.
“During Covid we’ve been doing a lot of hand fulfilment work and that’s really been growing, and for that you need people and people need space,” said Chouhan.
The firm has recently completed significant hand fulfilment projects for the likes of BBC Children in Need and Uber. It hopes the mezzanine will be installed in late December or January.
Chouhan said that across the board business is “rammed” and despite the various challenges he was confident the bounceback would continue at the Birmingham-based operation.
“Pre-Covid a good month for us was £1m in sales, we’re going over that at the moment and at a time when one of our biggest sectors, theatres, still hasn’t returned.”
He added that the M&A hunt for small mailing houses up to £2m in sales, which can be readily rolled into the CMS business, continued.