Dyson Group PLC

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Dyson Group PLC

381 Fulwood Road
Sheffield
S10 3GB
United Kingdom
Telephone: +44 114 230 3921
Fax: +44 114 230 8583
Web site: http://www.dyson-group.com

Public Company
Incorporated: 1958 as J&J Dyson PLC
Employees: 855
Sales: £59.54 million ($114.7 million) (2004)
Stock Exchanges: London
Ticker Symbol: DYS
NAIC: 327124 Clay Refractory Manufacturing

Dyson Group PLC is engineering a transformation for the mid-2000s. The company has pinned its future growth on an extension from its traditional business manufacturing refractories and other ceramics into the high-performance materials market. For this effort, Dyson has acquired two companies at the dawn of the 21st century. The first, Saffil Ltd., purchased in 1999, develops and produces chemical fibers for use as heat insulation for catalytic converters and other applications. The company's Ecoflex support mats, End Cone Insulation, and Ecoform metal matrix reinforcement fibers permit catalytic converters to run hotter more quickly, thereby operating more efficiently for reducing pollution emissions; the materials also permit automakers to move catalytic converters closer to the engine block, further reducing emissions. The second company acquired by Dyson is Millennium Materials Inc., based in Knoxville, Tennessee, which specializes in producing high-performance ceramics and metals products, such as Carolite, an aluminum composite developed to provide greater stability to high-speed computer hard drives. Other Millennium products include foamed ceramics, coatings for asbestos, and ceramic preforms. Dyson continues to produce refractories and industrial ceramics, through subsidiaries Dyson Ceramic Systems and Hi-Por Ceramics, and supplies and services thermal process plant systems through subsidiary Dyson TPM. The company intends to continue to exit low-margin operations as it transitions itself into a high-performance, high-margin specialty products group. The company is listed on the London Stock Exchange and is led by Chairman Tom Brown. In 2004, the company posted sales of nearly £60 million ($115 million).

19th-Century Refractory Group

The Dyson group has its origins in the early 19th century, with the founding of a ceramics factory in Sheffield in 1810. The need for heat-resistant bricks for the newly developing furnaces driving the Industrial Revolution led the company to become an important producer of refractories and related ceramics products. Dyson's primary market became England's steel industry, and the group remained focused on that market into the 1970s.

By the late 1950s, Dyson had grown to include three clay preparation plants, each equipped with modern, gas-firing tunnel kilns, as well as ten intermittent kilns. The company also boasted complete brick shaping and drying facilities, in order to produce a wide variety of refractory shapes used for the production of steel ingots.

Dyson, which came under the ownership control of the Lomas family, began an expansion effort in the late 1950s and early 1960s. In preparation for this, the company launched a public offering, listing on the London Stock Exchange in 1958, becoming J&J Dyson PLC. Nonetheless, the company adopted a two-tier shareholding structure, with control of the voting rights shares remaining within the Lomas family.

Dyson's first major acquisition came in 1962, when the company picked up rival Ceramic Holdings. By 1965, the company had expanded again, this time buying a majority stake in Pickford, Holland, another refractory producer. By 1966, the company had completed its acquisition of Pickford, Holland. The two companies had enjoyed some degree of cooperation for some time, and the addition of Pickford, Holland enabled Dyson to extend its range of refractories.

Diversifying in the 1970s

During this period, Dyson also extended its operations to other areas, such as the supply of laboratory equipment, the operation of motor vehicle and truck dealerships, a building supplies business, as well as an operation producing trailers for automobiles and other vehicles. Nonetheless, the company's primary operations remained focused around servicing the steel industry.

Dyson targeted further growth in its refractories operations through the end of the 1960s. In 1967, the company made its next major acquisition, when it agreed to merge with Price-Pearson Refractories. This raised the company's market value to more than £5.3 million. Two years later, Dyson added another Sheffield-area company, with the purchase of Thomas Wragg and Sons. That business specialized in fireclay refractories.

The global economic slump brought on by the oil crisis in the 1970s severely affected the steel industry. Dyson found itself highly vulnerable to the steel industry slump, which worsened toward the end of the decade. In the late 1970s, therefore, Dyson made the decision to diversify its industrial materials beyond support for the steel industry to expand into the ceramics industry in general.

This decision helped to shield the company from the worst effects of the steel industry crisis. Nonetheless, the difficulties of its major customers caught up with the company by the early 1980s, as it slipped into losses. Dyson's fortunes picked up again only with the revival of the steel industry—soon to go into high speed, driven by a massive and global building boom. By 1984, the company was once again turning a profit.

Dyson began a new growth phase in the early 1990s. In 1990 the company extended into fiber-based coals and logs, buying those operations from Foseco FS Ltd. These operations were renamed Dyson Domestic Ceramics and placed under the company's Dyson Refractories division, extending the company into the production of radiants and slip cast components, especially ceramic fiber components for ovens and other home appliances. The extension of the company's refractories arm into a wider pool of products prompted the company to change the division's name to Dyson Industries in 1992. The rising adoption of ceramic fibers among the group's industrial customers prompted Dyson to abandon slip cast and radiant production in 1993.

Dyson expanded again in 1996, buying up the artificial logs and coals operation from Thermal Ceramics, a producer of ceramic fiber. The company then renamed its fiber-based business as Dyson Ceramics in 1997. The company also began developing a new nonfiber, porous ceramic production technology, which it debuted in 1999. The company's research and development efforts had resulted in the formation of Dycats, a business producing catalysts and absorbents. By 1999, Dycats had readied itself for commercial operations, and this division was sold to ICI in 1999, for £8.1 million.

High-Performance Strategy for the New Century

Dyson continued to boost its ceramics operations into the 2000s. In 2000, for example, the company bought Wade Ceramics, a ceramic fibers manufacturer based in Stoke-on-Trent, for £1.5 million. That year, also, the company purchased Hewitt Refractories' kiln furniture business for £1.4 million, which was then added to another Dyson holding, Diamond Gimson, operating in Stoke-on-Trent. That acquisition was quickly followed by the purchase of Acme Marls, also based in Stoke-on-Trent in 2000, at a cost of £1.9 million. Following the acquisition of Acme Marls, Dyson merged it with Diamond Gimson and Hewitt, forming Dyson Ceramic Systems in 2001. In another extension of its refractories operations, Dyson bought Willan Metals' refractory division, which was merged into Dyson's Precision Ceramics division.

By then, however, the company had decided to change its strategy and transform itself from a low-margin industrial materials producer into a specialty producer of high-performance materials. The move toward this strategy began in the late 1980s with the appointment of Mike O'Brien as company chief executive. Investor interest in the company consistently had remained low, in part due to its focus on "old-fashioned" industry, and in good part because of its archaic two-tiered shareholder system.

Yet although the company weathered the recession of the early 1990s, it began to face increasing pressure from a new range of lower-priced competitors, chiefly from the fast-developing Asian markets. The company recognized that in order to survive, it needed to extend itself into higher-margin, more specialized categories, and for this the group required a stronger capital base. In 1998, therefore, the Lomas family agreed to abandon the two-tiered shareholder system, and all of the company's shares were ranked on an equal basis.

Dyson now began to seek the proper format for carrying out its transformation strategy. In 1999, the group found its first target, when it purchased Saffil Ltd. from ICI for £3 million. That company had been a pioneer in developing fibers providing heat resistance for the new catalytic converters designed by the automotive industry in the late 1970s and early 1980s. The catalytic conversion process, which required high temperatures to achieve maximum efficiency, also required specially designed materials capable of providing heat resistance and insulation.

Company Perspectives:

Dyson has material technology that has the potential to deliver substantial growth, supplying leading-edge, multinational programmes in the automotive, electronics and aerospace industries.

By 1980, Saffil had begun commercial sales of its material. The company then developed fiber pre-forms for reinforcing engine blocks and pistons in 1985. By the late 1990s, Saffil had become one of the top suppliers of heat-resistant fibers to the worldwide automotive industry. Soon after its purchase by Dyson, Saffil expanded its operations, buying up Fibre Techniques Ltd. This acquisition boosted the company to the level of a Tier 2 Automotive Supplier. Under Dyson, Saffil also expanded geographically, adding new subsidiaries in Japan and the United States, as well as a production plant in South Africa.

Dyson's shift into high-performance materials continued into 2001. In that year, the company acquired Millennium Materials Inc. Based in Knoxville, Tennessee, Millennium had carved out a strong niche as a producer of advanced materials, especially new lightweight metal and ceramics materials. Among the company's most promising products was its aluminum composite substrate, Carolite. This material targeted the computer hard drive market, promising a more stable surface so that hard drives could achieve higher speeds. Millennium began cooperating with the world's top hard disk manufacturers in order to adapt its technology to their specifications. By the end of 2004, the company announced that it was ready to launch large-scale commercial production of the new material.

In the meantime, Dyson shed much of its now noncore operations, including the low-margin portions of its ceramics business, as well as nonrelated businesses, including its automotive dealerships, sold off in 1999. Instead, Dyson concentrated on reinventing itself as a high-performance materials specialist. As CEO O'Brien described the group's transformation to the Financial Times: "It is evolutionary. We were always in materials technologies at high temperature; our expertise is the development of materials to fit specific applications." Dyson appeared in shape to reach its 200th anniversary in 2010.

Principal Subsidiaries

Dyson Ceramic Systems; Dyson Industries PLC; Dyson Refractories; Dyson TPM; Hi-Por Ceramics Ltd.; Millennium Materials Inc.; Saffil Ltd.; Saffil America Inc.; Saffil Japan Ltd.

Principal Competitors

Corhart Refractories Corporation; RHI AG; Minerals Technologies Inc.; Industrie Ceramiche CISA-CERDISA S.p.A.; Amalgamated Metal Corporation PLC; Didier-Werke AG; Imerys TC; Holcim France S.A.; CERIC S.A.; CeramTec AG; Flemings Fireclay Manufacturing Ltd.; Diploma PLC.

Key Dates:

1810:: Refractory production begins in Sheffield.
1958:: The company goes public as J&J Dyson on the London Stock Exchange.
1962:: The company acquires Ceramic Holdings.
1965:: The company acquires control of Pickford, Holland.
1967:: The company merges with Price-Pearson Refractories.
1969:: The company acquires Thomas Wragg and Sons.
1977:: A diversification drive is launched to reduce reliance on the steel industry.
1990:: The company extends operations into fiber-based coals and logs, acquired from Foseco FS Ltd.
1993:: The company focuses on ceramic fiber coal products.
1998:: Two-tier shareholding structure is abandoned.
1999:: The company launches a strategy to transform itself into a high-performance materials group, buying up Saffil Ltd.
2001:: The company acquires Millennium Materials, based in Knoxville, Tennessee, as the second stage of its high-performance transformation.
2005:: Millennium expects to launch commercial-scale production of the new hard drive material Carolite.