BICC plc

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BICC plc

Devonshire House
Mayfair Place
London W1X 5FH
United Kingdom
(071) 629-6622
Fax: (071) 409-0070

Public Company
Incorporated: 1945 as British Insulated Callender’s Cables Limited
Employees: 46,035
Sales: £3.79 billion (US$6.12 billion)
Stock Exchange: London

The 1945 merger of Great Britain’s two largest cable manufacturers, British Insulated Cables and Callender’s Cable and Construction Company, created British Insulated Callender’s Cables Limited, a company with a muscular portfolio of worldwide subsidiaries. BICC, as the company came to be called, employs people on five continents, utilizing their energies in one of the following five corporate divisions, as ranked by gross sales. Balfour Beatty designs and constructs nearly anything asked of it, from quiet suburban residences to dockyards, dams, highways, and tunnels beneath the English Channel. Metal Manufactures is one of Australia’s largest industrial conglomerates, dominating the market in communication cables, plastic piping, and copper tubing, while also playing significant roles in the construction and consumer-electronics businesses. BICC Cables manufactures and sells cables for the transmission of energy and information primarily in western Europe but elsewhere also, including Dubai, Malaysia, Pakistan, and Zimbabwe; it is the largest such company in Britain and one of the largest in the world. Performing much the same function in North America are Cablec Corporation and Phillips Cables, headquartered, respectively, in the United States and Canada, collectively referred to as BICC North America. Finally, BICC Technologies is a much smaller division working in the area of communication and control systems for industrial and commercial concerns. In 1989 the construction division accounted for more than 50% of total sales.

BICC has its origin in the late-19th-century scramble to devise the safest and most economical means to distribute electricity across the length and breadth of the United Kingdom. In 1882, when the Edison Company demonstrated the feasibility of incandescent lighting by illuminating its London offices at Holborn Viaduct, William Ormiston Callender realized that he was in the wrong business. Callender and his five sons ran a profitable construction company, importing for the purpose of road surfacing large amounts of the petroleum compound bitumen. Spurred by the recent developments in electricity, William M. Callender, one of the sons, invented a process for insulating electric wire using vulcanized bitumen, a tar-like, elastic substance that could be used as a coating for copper wire that is flexible, strong, waterproof, and nonconducting. First used in an installation at the Marquis of Salisbury’s home, vulcanized bitumen-insulated wire proved to be excellent for the transmission of low voltage and was soon adopted for a wide variety of such applications.

The Callender family built a plant in Kent, and Callender’s Cable and Construction Co. Ltd. quickly became a leader in the rapidly proliferating electrical business. Among many other innovations, the Callenders devised a method of laying cable beneath city streets, running the lines through shallow iron troughs that were then filled with more bitumen. Callender’s also began making a second type of low-voltage cable using oil-filled jute as insulation, thus acquiring expertise in both of the methods favored for the distribution of low-voltage electricity.

About the time that Callender realized the value of his bitumen supply, James B. Atherton heard a lecture in New York on the remarkable electrical properties of paper—specifically, that it was a poor conductor. Atherton was in the für business, but he too was caught up in the excitement over electricity. Arming himself with the British rights to certain U.S. patents he returned to London and founded the British Insulated Wire Company (BI) in 1890. Joining him on the board of directors was famed Italian inventor, Sebastian de Ferranti, through whose influence the company was asked to manufacture new high-voltage cables for the main London generators at Deptford. Carrying 11,000 volts, the paper-insulated cables passed every test, proving the viability of paper insulation and giving BI a strong debut in the marketplace. The company refined its manufacturing techniques, eliminating production problems while bettering the flexibility and other properties of its insulation, and by 1903 had joined forces with the Telegraph Manufacturing Company of Helsby and Anchor Cable of Leigh. The new company was British Insulated and Helsby Cables Limited. It quickly became the leading supplier of high-voltage cable in the nation.

Both BI and Callender’s were involved in virtually every important cable project in the United Kingdom since 1900, including telegraph, telephone, electrical, and petroleum networks operating below ground, in the air, and across the ocean. In 1904, for example, the two competed for and collaborated on the electrification of the London Underground, together laying about 250 miles of high-voltage wire. Along with a third company W. T. Henley’s Telegraph Works, BI and Callender’s early established themselves as the dominant power cable manufacturers in the country, vying with one another for business in all sectors of the vast electrical industry. Though the companies tended originally to pursue opposite ends of the high-low-voltage spectrum, by World War II either of them was well equipped for any type of power-distribution assignment.

During the early part of the war, British shipping suffered severe losses caused by German magnetic mines hidden in the Channel and ocean traffic lanes. P.V. Hunter of Callender’s designed a magnetized cable strong enough to push through ocean swells yet light enough to float, and Callender’s produced about 2,000 such “minesweeps” each one approximately 500 yards long and capable of detonating submerged mines at a safe distance from the sweeper ship. The entire cable industry subsequently worked on practical methods of degaussing, or demagnetizing, the British fleet, eventually manufacturing many thousands of miles of cable for installation in the hulls of seagoing vessels. The combination of sweeping and degaussing succeeded in substantially reducing the damage inflicted by magnetic mines. Later still, BI and Callender’s contributed to the construction of a gasoline pipeline across the English Channel to supply the World War II D-Day forces with fuel.

By war’s end the two companies, already the largest U.K. cable manufacturers, merged their forces to become British Insulated Callender’s Cables (BICC). The company’s formidable assets and technical expertise provided sustained growth during the decades following. BICC’s experience with cable installation led the company into the allied fields of civil engineering and large-scale construction work. Balfour Beatty, the group’s construction subsidiary, pursued a wide variety of such projects throughout the British Commonwealth. Indeed, BICC as a whole was active around the globe, establishing an especially strong Australian presence in both cables and construction and later expanding there into the retail electrical and electronics businesses. At home, the company dominated the U.K. cable market, making the most of its powerful position to win contracts on the nation’s most important electrical and civil engineering projects.

BICC carved for itself a secure place in the heavy-construction industry, but the company’s profits failed to dazzle the stock market. By the 1960s the firm was generally recognized as a rather stolid blue chip: safe, slowly growing, and modestly profitable. Between 1966 and 1970, for example, sales increased from £300 to £400 million but profit remained around £20 million. Investors were sometimes made uneasy by BICC’s heavy dependence on the price of copper, which it needed to make its power cables. Importing some 300,000 tons a year, the company’s profitability was directly tied to the fluctuating copper market. In addition, BICC’s product mix was not calculated to excite the interest of stock watchers. Contracts for the electrification of a London subway extension or the widening of highways do not provide the cachet of a so-called glamour stock.

With or without the market’s enthusiasm, however, BICC continued its steady growth throughout the 1970s. Its Australian division became easily the largest of BICC’s many overseas operations, while the U.K. construction arm, Balfour Beatty, remained the company’s most reliably profitable subsidiary. In 1979 BICC began diversifying into the rapidly growing electronics field, for a more balanced and, hopefully, recession-proof portfolio. The firm bought Vero, a U.K. manufacturer of printed circuit boards, and the U.S. companies Boschert and Sealectro, makers of switching equipment and high-frequency connectors, respectively. Chairman Sir Raymond Pennock predicted that by 1990 a quarter of BICC’s revenue would be generated by electronics. Of equal interest was the 1981 agreement with Corning, the U.S. glass maker, to build a plant in Wales for the purpose of manufacturing fiber optical cables. These hair-thin fibers of glass are capable of transmitting many more telephone and data messages than comparable copper wires and were certain to become the new standard for long-distance trunk lines. The Corning-BICC plant was finished in 1983 at a cost of £17.5 million and was an immediate success.

In 1981 BICC sales hit £1.36 billion and its profit £102 million, both healthy figures, and the company looked forward to the new decade with much confidence. The worldwide recession of the early 1980s soon took its toll, however, with profit levels slipping into a trough from which they did not fully emerge until 1987. Halfway through these doldrums, in 1984, the BICC board of directors named Sir William Barlow as its new chairman. Barlow, the former head of Britain’s postal service, soon brought in Robin Biggam as president and CEO, and the two men designed a program of sharp labor cuts and further acquisitions to prod their sleepy giant. Upper-level management was also shaken up, the much-heralded electronics division pared down to a handful of companies in fields directly allied to BICC’s main interests, and the Australian division, Metal Manufactures, restructured to provide greater control. Most significantly, BICC closed out the decade with several major purchases of foreign cable companies. Its acquisition of Cablec and BRIntec in the United States made BICC the leading high-power cable maker in North America, with combined sales of around US$750 million.

For the first time, BICC expanded into continental Europe, with the purchase of Ceat Cavi, Italy’s second-largest cable concern, and of 20% of GEGC, Spain’s cable leader. With the imminent end of all European trade barriers, BICC is thus well positioned to compete for transnational cable contracts.

The combination of stringent staff reductions and international expansion showed excellent results. In 1987 profits finally passed the 1981 level, with the company recording earnings of £128 million on sales of £2.49 billion. The following year showed further gains, as did 1989 over 1988. Earnings in 1989 were £201 million on sales of £3.79 billion. With Balfour Beatty ready to bid on a number of large contracts in the rebuilding of Britain’s infrastructure, BICC heads into the 1990s in a strong position. Though still not exactly a stock market celebrity, this quiet industrial powerhouse continues to build on its exceedingly firm foundations.