Dara Changizi never intended to buy a print finishing company. He is a commercial property specialist with a substantial portfolio and reputation as an entrepreneur in Glasgow. Which is why in 2016 he was asked to look at a deal. A management team hoping to fund the management buyout of long established trade finisher ACA had run into difficulties in finding the necessary financial support. After struggling to find backers for a single deal, the team had split the operational business from its premises in order to make funding more attractive. Changizi was approached: Would he buy the factory and rent it back to the business?
“It was put to me as an MBO by Scottish Enterprise,” says Changizi. “I spoke to the guys. They were very much production focused rather than sales led. I was concerned about how they would grow and pay me the rent. They were prepared to borrow money from the previous owner of the business to do the deal – and there simply was not enough cash coming in to the business to do that.”
It needed more. Changizi could become the outside investor. “ACA had been here for 30 years, it had a robust but steady turnover with peaks in election years and had weathered the 2007/08 crash. If they could get the gearing right, I thought it would work.”
That was when ACA was a conventional print finishing business with fold, stitch, trim and a perfect binder running up the middle of the factory which is close to Glasgow Airport. There was a lot of foiling capacity, Bilhofer laminators and UV varnishing. However, over the years a customer base in Scotland and into the North East of England had gradually shrunk, along with the contraction of commercial printing, leading to the sales problem that Changizi had identified.
There was also some die cutting and carton work, dating back to the start of the business when it had operated as a trade die cutting service from its owner’s garage. By now a Yawa die cutter, supported by Heidelberg Cylinders and clam shell platens, handled that carton work. This was supported by a comprehensive in house die making operation, which was also producing dies for the foiling side.
The set up had been enough to attract a significant customer which had signed a deal promising volumes of work for which ACA would need to achieve BRC certification to prove it could handle food boxes under the regulations. This was news to Changizi, as nothing to this effect had been mentioned in the bill of sale, he says.
A court case followed. But there was still the matter of the customer to satisfy. ACA needed to build a separate clean room within the factory and needed more money to do so. Enter Anton Kaszubowski, a City investor and friend of Changizi’s. “We had bought the company at the start of November 2016. The customer came for an audit in December and asked to see the BRC room,” says Changizi. “We managed to agree some breathing space by accepting a progress audit every three months while also changing the shape of the factory to accommodate the necessary enclosed space.” By the end of 2017, Kaszubowski was on board.
“I realised that the business needed reorganising on many different levels,” he says. “Brexit was looming and creating challenges, the product mix was changing – partly due to the uncertainties around Brexit. The result was that cracks were showing in the management team.”
That management team needed a shake up, moving people to roles better suited to their talents, he says. “It was about looking at the business holistically, where there were challenges and problems we had to find solutions. The last three and a half to four years has been about restructuring the business to make it more efficient and leaner.”
Today ACA is somewhat different to the company that Changizi had first discovered. The commercial side of the business is now playing second fiddle to cartons and was even before 2020 arrived to devastating impact on the economy. ACA had no choice but to use furlough as commercial work simply stopped. “We noticed about two years ago that demand for perfect binding was falling, we simply were not getting the run lengths we had previously, but also that carton work had been on the increase over the five years,” says Chingazi.
After a wobble, carton work has continued, as has book cover work for Bell & Bain. A workforce of 70 became 35 overnight. The company also produced boxes for anti Covid face masks and continues to do so. “Demand for packaging went through the roof. And that made our minds up,” he says. The perfect binding line was sold along with other equipment tied to conventional finishing, resulting too in a tidying up of the tangle of different businesses under the ACA umbrella. The company recruited Jes Crossley, formerly Heidelberg’s packaging equipment rep in the region, to be business development manager; it upgraded its Sakurai screen varnishing line and acquired a second and a second Moll folder also arrived. Now, a second nesting box erector is on order, along with another folder gluer. An Easymatrix from Heidelberg was delivered in September following the installation of a Serviform LineA, an advanced Italian machine to automate the shaping of the cutting steel rules needed for making the dies. These are supplied to companies across the country along with brass dies shaped on the only CNC lathe of its type in Scotland.
The Easymatrix is a big step forward in productivity and efficiency, not least because it has a stripping function. Makeready is already down to 30 minutes from around two hours and the machine is not fully bedded in yet, with training of operators still underway.
The two Bilhofer laminators had come to the end of their life after 20 years and have been replaced by an Autobond laminator, which is fitted with a second set of heated rollers to deliver a better finish for luxury packaging. It has been the right approach: “Packaging has been going from strength to strength,” says Changizi. A deal with Taskforce, a more conventional trade finisher from Edinburgh, has meant that ACA can continue to serve existing customers while offering additional service to the Taskforce customer base.
Efficiency has been helped by a focus on upskilling staff. People can no longer be defined by the one machine they know how to operate. Instead, there is flexibility across the company because people can run several machines where required, foiling platen operators are being trained to run the die cutting platens, the Easymatrix included.
The changes have also affected how the machines were laid out. Previously any new machinery was added where there was space. Now products are grouped: the two Sakurai lines run alongside each other, the Cylinders are lined up and so on. The three foilers are in the BRC room along with a nesting machine.
Three-and-a-half years after the new owners took on the task of restructuring the business, ACA is very different. It is much leaner, more efficient and ready to progress. “We have had to reinvest in the business to make it as strong as possible going forwards,” says Changizi. “I’m proud of what has been achieved. One of the attractions of the business was that it has tried to have as many processes in house and under one roof as possible. Nobody else in the UK could do exactly what this trade house could. With the right organisation, I could see that this would work.”
Crossley is onboard to explain the production possibilities to a client base in cartons, using contacts among carton converters established during his years with Heidelberg. He will lift up a sales and marketing effort that four years ago was clearly failing – despite its capabilities in value added finishing, ACA has no presence in the Scottish drinks industry when, for some, being able to say ‘produced entirely within Scotland’ is important. It is about creating the awareness that ACA is a nationwide business and what its capabilities are. “We have to make people across the county more aware of ACA,” he says. “We have the logistics to service printers down south – and already have a customer in Devon. We have to promote ACA as a business and for people to understand that we are not just a Scottish company, but that we are a national service provider.” This is possible thanks to the pallet distribution network that ACA uses, meaning it is no more expensive to ship a pallet to London than to ship the same pallet to Kilmarnock.
ACA’s future unquestionably lies with packaging. While commercial print work has picked up of late, it remains well below previous levels, while carton volumes remain higher than pre pandemic levels.
A second nesting machine is on order and will be sited next to the first. The opportunity is about providing cardboard containers for the fast food industry. These are plain boards with a water based barrier coating so they can be recycled. It is logical to brand these to the fast food outlet, and indeed with traceability of packaging being introduced, branding may become a requirement. It is logical too for ACA to supply these directly to a restaurant or food outlet with orders placed via a dedicated website. That is under development.
Kaszubowski adds: “We are still very much on a journey and we know it will take time. Now the employees can see the vision that the business is working towards. We know we can’t control the market – but we can control ACA.”
