Saturday Interview: John Smellie spends his weekends photographing animals and tending his collection of parrots but is something of an endangered species himself.

JOHN Smellie spends his weekends photographing animals and tending his collection of parrots but is something of an endangered species himself.

For as chief executive of Stirling-based insulation producer Superglass, the miner's son is in charge of a company that is that rarest of things: a Scottish manufacturing success story.

The fact that Superglass became a listed firm which investors valued at £105m when it joined the main market last year only increases the novelty value.

Take a stroll around the plant on the grey industrial park a short drive from Stirling city centre where around 200 Superglass employees convert truckloads of glass bottles into thermal fibre and it is obvious that this is a business in which glamour is in short supply.

With the muffled roaring of furnaces melting glass at 1400 degrees and the hiss of pressing machines competing with an industrial-sized music centre, noise and heat are the dominant motifs.

But sitting at the long boardroom table in the 1970s vintage office from which he leads Superglass's assault on the market, Smellie (pronounced Smiley) regards the business with the satisfaction of a Cheshire cat.

With 35 years of running manufacturing operations under his belt, the 58-year-old's only apparent regret appears to be the fact that these days he cannot spend as much time on the shop floor as he would like to.

"I still want to go down into the factory and twiddle knobs, but they won't let me," explains Smellie, who is positively evangelical on the subject of the 24:7 commitment that manufacturing success requires.

"We're on the go all the time and every day you experience something a bit different and have a fair bit of scope to use your ingenuity."

The latter quality is something that is obviously important to a man who grew up as the only child of a miner, and whose speech still reflects his roots in working-class Stirlingshire.

"I'm a hands-on person."

As Smellie recounts the highlights of a career which started with 18 months perfecting adhesives and inks for use in the old Glasgow book-producing plant of the Collins publishing empire, an inexhaustible curiosity about the way things work fills his speech.

But one of the sweetest elements of Superglass's success for Smellie has been that it was achieved in the face of the bitter rivalry of one of the industry's biggest names.

After losing his job with the old Cape Insulation group when that firm's owners had to raise funds to help bail out Johnson Matthey bank after 11 years with the firm, in 1984, Smellie teamed up with former colleagues in a fledgling insulation supply firm called Encon.

The three men were given the chance to buy a plant owned by Cape in County Durham, which Smellie had run after spending years in charge of its factory in Stirling. City financiers agreed to provide the best part of a million pounds to fund the deal.

"But Pilkington stepped in a couple of days before the deal was to be signed and gave Cape a blank cheque and paid over £1m to stop us," Smellie recalls.

When several months later Smellie returned to the Stirling base to try to buy some equipment off the developers who were breaking it up he realised the plant could still be runnable with a bit of work.

"So I contacted my colleagues and said get yourselves up here immediately, and within three months, in July 1987, we had done a deal, bought all the equipment on site and taken a lease for 25 years."

For Smellie and company one of the main attractions of the deal was that it gave them the chance to get revenge on Pilkington, which was one of Britain's biggest industrial firms before being bought by Japan's Nippon Sheet Glass in 2006 for £2.2bn.

"We looked on it as pulling the tiger's tail; Pilkington said we would only last one year," says Smellie, a big man who speaks with a no-nonsense air that would not be out of place in an episode of Taggart.

Venture capitalists at Lloyds Development Capital were impressed enough to provide backing for the venture, reckoning if Pilkington wanted to stop them Smellie et al must have been on to something.

And so began a three-month period during which Smellie lived at his parents' house but worked so hard setting the plant up that he did not see his father.

"I used to get home in the early hours of the morning and leave in the later hours of the morning."

In the next eight years, as the phenomenon of global warming crept into the global consciousness, Smellie's conviction that soaring energy use would spark a dramatic increase in demand for insulation proved to be sound.

Superglass grew and won backing from two more venture capitalists including sector heavyweight 3i, which bought LDC's stake in Encon in 1997.

In 2005 Smellie delivered stunning proof that Superglass was a success when NBGI, the venture capital arm of the National Bank of Greece, outbid rivals to back a buyout of the business from Encon that valued it at £30m-plus.

Nonetheless, at a time when private equity firms are coming under fire from sceptics, Smellie does not appear to be eager to come to their defence.

"The buyout process was endless; they ask a lot of stupid questions.

"NBGI were pretty small and this was their biggest deal and they wanted to get into the higher echelons. They fought hard to get the business but I don't think they fully realised what they had until a year down the line when they realised it was going to increase in value significantly more than they expected."

With the economy motoring and Superglass growing fast, NBGI took the chance to exit through a flotation which delivered bumper returns.

While Smellie's 6% stake was valued at £6.4m, he grimaces at the memory of the process.

"In 2004 Knaupf (a German rival) tried to buy Superglass but the Competition Commission stopped them. From then on to the flotation we were in continuous due diligence which made running the business very difficult.

"Myself and the finance director spent a terrible amount of time away from the day-to-day."

One year on Smellie says the executive team are still climbing the learning curve involved in moving into the public spotlight. He speaks fondly of the days when they could make decisions for the long term without having to account to an army of shareholders.

Smellie is concerned that Superglass has been an innocent victim of stock market turbulence this year, during which its shares have fallen sharply.

He appears frustrated that the company's valuation has suffered from a mistaken assumption that its business will be hit hard by the slowdown in the housing market which has gathered pace south of the border.

"We have about a 13% dependence on the new build market and we do not supply any of the big guys like Barratt. We supply the small independents and these guys are never as hard hit as the big ones; there's always someone who wants a house built or an extension."

As much of Superglass's product is used to upgrade the insulation in existing properties, directors expect the firm to be a big beneficiary of government measures to stimulate energy conservation like the Carbon Emmissions Reduction Target scheme.

In April Superglass said it had maintained profits in the first half and announced plans to pay a dividend. Earnings before interest, tax and amortisation held at £4.6m in the six months to February 29, compared with the same period last time, despite a dip in turnover from £21.4m to £20.5m.

Directors want to stick to their knitting while Superglass adjusts to life on the stock market, but Smellie is full of ideas about how it could grow in future.

After mounting a sales push into Europe when the UK building industry slumped, Superglass could look to grow its exports in future, possibly through a joint venture.

Eastern Europe is an area that Smellie believes could be especially fertile.

"We could get involved in industries that don't even exist, looking at for example sustainability. There are metal-clad buildings being built in which all the parts will be reused in 20 years."

While doom-mongers question whether commodity manufacturers have a future in Scotland, Smellie notes that Superglass has held its own against the likes of Knaupf helped by rigorous cost control.

Smellie seems keen to stress that Superglass has scope to expand production on its current site in Stirling which it will not hesitate to use if market conditions suit.

And with the passion of someone who does not need to worry about fashions, he makes it clear that any moves to relocate Superglass would have to be made over his dead body.

"There was very big concern when Knaupf were there that they would buy Superglass and shut it down but it must be here for years to come."

Having shelved plans to retire at 60 and spurned several job offers, Smellie is likely to be spending his weekdays at the Stirling plant for some time yet.

"If you cut any of the directors in half you will see Superglass all the way through."

Touch of Glass

What was your childhood ambition? To be a truck driver.

What drives you? The urge to succeed and to provide employment for as many people as is practically possible.

What car do you drive? Audi A8.

What was your best moment in business? The lead up to and the start of Superglass.

What was your worst moment? Closure of Cape Insulation.