A driving perform
Alexander Dennis is now a bus builder going somewhere fast on a global scale. Its CEO explains how he created the route map to Colin Cardwell
OLD Hong Kong hands will remember the number 1 Kowloon Motor Bus that 20 years ago lurched down the garish madness of Nathan Road to the Star Ferry terminal. A sweating driver, cursing in Cantonese, feverishly worked a huge steering wheel from side to side as the engine smoked and roared and the rest of us desperately sought a window seat in the stifling, nonair conditioned humidity.
Fast forward to 2013 and the bus that cruises down the same stretch of neon blaze is a sleek, elegantly quiet and (literally) cool Dennis Enviro 500, built by a company based in Falkirk that has been one of Scotland’s most significant recent examples of business turnaround and global growth. Last November it clocked up orders for more than 600 buses in Hong Kong alone.
Colin Robertson, chief executive of Alexander Dennis Ltd, has presided over a period of exponential growth that has raised turnover by 35% to almost £500 million during 2012 and is targeting a further hike in 2013 – 50% of it coming from exports as the company continues to expand internationally.
Robertson’s year started with some impressive additions to the company’s order book. In January, Alexander Dennis Ltd (ADL) announced it had won some £50 million of orders from transport giant Stagecoach, bringing further work to its 900-strong workforce in Falkirk; then just a month later it revealed an order worth nearly £40m from Aberdeen-based FirstGroup, meaning that it will supply almost 50% of the group’s total new vehicle requirement this year.
ADL has been one of Scotland’s major phoenix company stories. Rescued from administration in 2004 by a consortium that comprised Brian Souter and Ann Gloag, the co-founders of Stagecoach, Sir Angus Grossart’s merchant bank Noble Grossart and entrepreneur David Murray, Robertson was tasked with getting the company firmly back on the road in 2007. Since then, he has gone the extra mile.
So how has Robertson transformed an ailing companyintooneturningover £500m and employing 2500 people at facilities in the UK, Australia, New Zealand, Asia and North America? He laughs self-deprecatingly. “Just call me lucky.”
There is clearly more to it than that, though. “Well, we have been quite lucky because public transport continues to be a growing sector,” he continues.
“If you’re in the Western world, the demand for it is being driven by the rising price of fuel, road congestion and scarcity of parking, while there is a huge growth in the emerging world because of urbanisation.”
But there is still a difference between establishing ADL as a successful British bus builder and the huge growth it has undergone. “I believe that if you don’t grow you die and if you don’t consolidate you will be consolidated,” says Robertson.
“If you are focused on growth, not just blind growth, then to attract customers you need an attractive product proposition and if you’re going to retain customers you need an attractive service proposition – and the company didn’t have those before.
Robertson set the target of becoming a half billion pound company by 2015, which meant trebling in size. “As a private company we don’t have a cavalier approach – we’re not in telecoms, we’re not in sexy commodities and we’re not playing fast and loose with people’s money so that sounded like a reasonable aspiration and even through the worst of recession we have continued to do all right. We had the half million in our sights three years early in 2012 as opposed to 2015.”
Much of that growth derived from the UK, where ADL grew its market share from 30% to 50%. “That came from really focusing on reliability and customer service and the rest of the growth came from i nt e r na t i o nal i s a t i o n, d e ve l o p i ng evolutionary products for new markets that we were very clear that we wanted to go after”
There were, he says, some commonsense guidelines. “Right hand drive makes sense for us, former British colonies make sense and English-speaking countries make sense. In North America, diesel was a dollar a gallon six years ago; now it’s more than four, so the landscape has absolutely changed in that area.”
Something ADL did inherit from its previous incarnation, which was initially an amalgamation of three companies which can trace its roots back to the 19th