A telecoms fibre solutions business tucked away in a tranquil corner of the Scottish Borders is opening a major manufacturing plant in Fletcher, North Carolina, as it makes inroads into the lucrative US market.
Emtelle is a Scottish success story which has remained relatively below the radar, with its boss saying he would welcome a visit from the government to show them how Scottish ‘blown-fibre’ technology and its patented clip-on connections are changing the game for the roll-out of fibre networks.
He would also like to discuss with ministers the need for better business infrastructure in the Borders.
Tony Rodgers, a Chartered accountant who qualified with BDO, has been with Emtelle for eight years now. Before this, he was financial director of Dumfries-based specialist military manufacturer Penman Engineering in Dumfries, which he owned for 10 years before selling to the management team.
He is from Saltcoats in Ayrshire, where he still lives.
“I admit we’ve hidden our light under a bushel, but we have an amazing story to tell with our operations here in the Borders - and our expertise - so I would invite the government to come and see what we are doing here,” he said.
Emtelle, now reaching 40 years in business, was originally spun-out from Mainetti, the largest coat-hanger business in the world, serving the fashion and retail industry from Jedburgh.
Now employing several hundred people, the business has two major manufacturing plants in Scotland.
In Hawick coloured fibre optics - up to 24 strands per core and up to 5km long - are ‘extruded’ and assembled for multicore communications, while in Jedburgh, at Mainetti’s former factory, PVC telecoms and energy-grid piping - which protects sensitive fibre and electrical cabling - is turned out by the mile.
The company increased turnover by 30.7% from £126.2m to £164.9m in 2020, with profits more than doubling £21m from £43.1m.
However, Rodgers explained that his energy bill is around £800,000 a month, as gas prices have risen, while the cost of PVC also doubled between January and December 2021, and haulage charges have increased too.
Rodgers explained his own involvement: “When I sold my last company, I came across the Danish shareholders of Emtelle who owned 25% at the time.
“I was taken on as chief financial officer, then after a few years, our Indian owners the Chandaria family, decided to buy out the Danish shareholders and they appointed me as the CEO.
“At this point, we had the Scottish and Danish operations, plus I had just completed the acquisition of the German business,” he said.
“When I arrived it was clear what we had to do was scale things to better serve the massive potential market - we have talented people in operations and R&D, and we have patented technology invented in Scotland - but we needed to unleash them and that capability.”
In Hawick, the production lines - with their colour fibres reminiscent of the woollen threads once spun throughout Borders mills - are highly sophisticated.
Each line, running at 170 metres per minute, allows the curing of the polyethylene through the ovens, the bundling of several fibre optic strands, and the application of a coating of resin making a fine sheath, all done in a continuous automated operation.
Brian Marsh, the Emtelle factory manager in Hawick, said: “I’ve been here 23 and a half years – I started when I was 16, building drums and then I was a machine operator, before becoming the production manager.
“There's a real buzz about the prospect here – and this means more jobs in the Borders.”
Marsh explains that Emtelle’s products can be blown by a pocket of air along micro-ducts of up to 2km, preventing the need to dig up roads.
Each group of fibre is coated with a yellow ‘slip agent’, which allows the fibres to glide along the micro-ducts.
Along the back fence of the factory, a 100m testing track has been laid out to train telecoms people how to ‘blow’ the fibre optics down the ducts.
Rodgers grew the German business, before moving to acquire Dubai-based Afripipes in December 2021, which gives the company access to the oil-based raw materials for its PVC pipes and polyethylene ducting.
“Now we’re opening in Fletcher, where we'll have 300,000 sq ft of space, our new machines have arrived and are being set up, with teams from Scotland going out to help set things up – the pent-up demand is amazing, with orders for as much as we can produce,” he said.
To further drive US growth, Emtelle has appointed Tommy Conner as managing director there, to lead its new North American operation. An experienced executive, with more than 30 years’ experience in industrial distribution, engineering and manufacturing, he takes up his post after five years at Mainetti, where he was director of operations.
During that time he was responsible for the company’s reuse and recycling operation sites across the US, managing a reorganisation that saw it consolidate its operations in a brand new factory – within which Emtelle is setting up its fibre production.
Meanwhile, Clay Harris and Lee Santoro are joining Emtelle as business development managers. Harris will be responsible for the Midwest, while Santoro will look after Eastern region.
To meet demand in the UK, a third manufacturing facility has been opened in Wrexham.
“Covid was a catalyst for the roll-out of fibre to businesses because more people were working from home, for Teams or Zoom video, you need a robust and reliable high broadband connection, which massively accelerated our growth in fibre connectivity and bandwidth,” said Rodgers.
“It will be 10 years before the whole of the UK reaches its full fibre connectivity, then 15 years before Germany and central Europe is done.
“And in the US, they haven’t even started, America has thousands and thousands of miles to go and this is where the opportunity is for Emtelle.
“Most of our customers are not Scottish, the market is international telecoms companies,” he added.
Emtelle’s chief operating officer Paul MacLaurin, who started in May this year, has 15 years of international manufacturing experience and has been tasked with harmonising production at the company's various new sites.
“In my experience, I have never worked in a company that is growing and investing so heavily.
“Our prospects in the United States are amazing when you look at the size of the market, so our challenge is to service this as quickly as possible – and manufacturing for us in that market is a game-changer for us.”
Emtelle UK remains a private company based at Haughhead, Hawick.
It is a subsidiary of Emtelle Holdings, incorporated in the Netherlands, while the ultimate parent company is Mapua Investment Holding, incorporated in Luxembourg.
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