IN this week’s SME Focus we hear from a construction specialist who harnessed Chinese manufacturing expertise to launch a business successfully at what may have been about the worst possible time.

Name:

Keith J Macnair.

Age:

47.

What is your business called?

Duncryne Ltd.

Where is it based?

Glasgow and we use storage and distribution facilities in Renfrew and Birmingham. We operate internationally, with an office in Shanghai, which involves twice a year trips for factory inspections of our operations in Guangzhou.

What does it produce, what services does it offer?

Duncryne is the sole supplier of Econic magnesium oxide (MgO) boards - high quality, fire-resistant, structural, dimensionally stable substrates and sheathing. Unlike most building boards, Econic is engineered from magnesium oxide, quarried from Magnesite in the Mongolian mountains. Once calcified, it is combined with magnesium chloride, extracted from sea water, producing a chemical reaction and a molecular fusion, giving the boards their incredible strength and robustness. It is also green, using 20 per cent of the embodied energy of Portland Cement.

The boards' ability to withstand extreme weather is a strong factor for off-site manufacturers.

Econic has been used internally for high impact walls in social housing, hospitals and schools. All pattressing - the containers for the space behind electrical fittings - in the fire corridors of the new Queen Elizabeth University Hospital are Econic.

Whom does it sell to?

Render manufacturers. Econic has been fully tested as an external rainscreen and its dimensional stability and robustness make it ideal to take external finishes, such as paint, cement, acrylic and lime renders. For external sheathing we deal with installers and manufacturers of light gauge steel frames. We are also endorsed by the Structural Timber Association and work with timber frame manufacturers and installers.

What is its turnover?

It was £330,000 last year. We are projecting an increase over the next three years to in excess of £1m due to the development of system-led solutions directly with off-site manufacturers.

How many employees?

Econic is supporting eight jobs in warehousing and logistics and we are actively considering how best to increase our sales and technical presence across the UK.

When was it formed?

March 2010.

Why did you take the plunge?

I had been successfully trading with my own consultancy business, KJM developments, involved with commercial-led development for the likes of Miller and retailers such as WalMart and ScotMid. However, the recession of 2008 tore the market apart. I went to China to see my colleague based in Shanghai and together we looked at a number of different prospects and we decided MgO offered a robust opportunity.

We inspected a number of manufacturers across various regions of China and we were suitably impressed. Our China base helped source experienced manufacturers well versed in international trade and UK quality standards.

How did you raise the start-up funding?

We didn't require it. There are three of us involved with the project and two of us chose to invest sweat equity for two years during the testing and development period. It was ultimately a two and a half year gestation period and we didn't actually start to sell the product until 2013. Our director in China provided working capital to purchase stock and fund testing. At the moment, the business has no bank debt whatsoever, a good stock level and a directors' loan account of £100,000, so we're are a very healthy position for moving forward.

What was your biggest break?

I do not think there has been any precise moment of a breakthrough, more a gradual haul while accruing vital knowledge of the UK trade and distribution relationships. We probably tried to do too much with limited resources at the outset but now feel the business has reached a solid position from which to expand and meet increasing demand.

What was your worst moment?

There have been lots of difficult moments over the two and a half years and I suppose the worst moments were periods of what seemed at the time like self-doubt and introspection. But in retrospect, it was actually healthy self-examination and it helped us find the ways that we could make it work. It was the positive feedback we continually received that assured us to keep going.

What do you most enjoy about running the business?

Every day is an adventure, and I like adventure. I qualified as mechanical engineer and I have 25 years' experience in construction. I love developing customer relationships and finding solutions to technical and commercial challenges.

What do you least enjoy?

Paperwork. It has to be done, because I like and expect an orderly house. We now have excellent logistics support from Commands of Drumchapel and accountancy advice from Wylie & Bisset.

What are your ambitions for the firm?

To achieve £700,000 in sales this financial coming year and to move into new sectors such as rail and tunnelling. We are interested in the global offshore accommodation sector and we are hopeful that new technologies will help the construction industry to really embrace off-site manufacturing, leading to opportunities in system-led production.

What are your top priorities?

Improving the awareness of Econic in the south-east, where the construction market is more concentrated.

What could the Westminster and/or Scottish governments do that would help?

Facilitate technically coherent support and improve grant funding opportunities for innovative products.

Having the ability to access funding for accredited testing and to reduce timescales for that work and development would most help. We work with Edinburgh, Glasgow, Strathclyde and Caledonian universities, but academic findings are not recognised as "Notified Bodies", therefore all our accredited testing and certification has to be done outside Scotland. This is a time and money drain but nevertheless critical to the development of the business.

What was the most valuable lesson that you learned?

There have been many and we are still learning. We have had to maintain a focus on the bigger picture. There is no real substitute for perseverance and hard work provided you believe in what you are doing. It was foolhardy to launch a new business in the depths of a recession. However, we are now well into game time and relishing the growth challenge.

How do you relax?

Golf, is a passion but not at the moment, since a broken thumb did for me back in June. In the last few years I’ve been studying Spanish history and became intrigued by the dark secrets of 20th Century Spain. I enjoy learning the language and love exploring the different regions out there. The wine is not too shabby either.