Yahoo News Surviving the unprecedented: how two companies are adapting to save jobs during the Covid-19 crisis
‘Switching from whisky to hand sanitiser was a lifeline for us’
As producers of award-winning single malt whiskies and spirits, Penderyn Distillery in the Brecon Beacons turns over a healthy £12m a year and employs about 60 people.
But the impact of Covid-19 posed a sudden and very serious threat to its future, according to chief executive Stephen Davies, from Port Talbot.
“As well as being a local visitor attraction, we make premium spirits and sell to around 40 countries,” he says. “So when the pandemic hit and things started closing down, we lost most of our export business. And the travel retail sector – what you’d call ‘duty-free’ – that closed, too. The only part of the business still functioning was the UK supermarkets.”
Fortunately for its employees, Penderyn Distillery’s products are found in most UK supermarkets. “Luckily, that is a reasonable-sized part of our distribution, so while the first couple of weeks were very uncertain, we could see supermarkets were able to fill the shelves and logistics seemed OK.”
All tourism trade, however, stopped virtually overnight. “Last year we had over 40,000 visitors to Penderyn, but we had to close the visitor centre and our distillery shop straightaway,” says Davies. “When the [Welsh] government said brewery and distillery shops were allowed to open again, we reopened but we weren’t getting any customers because people weren’t allowed to travel.”
The situation looked so worrying that Davies made the decision to furlough half the distillery’s staff using the UK government’s Coronavirus Job Retention Scheme. “The first few weeks were incredibly uncertain and while it did settle down a bit, it was a very reduced level of business compared to what we’d normally expect,” he says. “The furlough scheme was hugely important in terms of being able to hold on to staff, helping us through that time. It was pretty straightforward – the first submission went in and the payment came through as we were told it would, so it worked very well.”
But while remaining staff focused on supplying supermarket orders, another business opportunity had presented itself.
“Being a distillery and producing a very high strength alcohol, we were approached by people saying they couldn’t get hand sanitiser anywhere,” says Davies. After researching the idea, he decided the team could start making sanitiser on the premises.
“We produced it and supplied in bulk for industrial customers as well as producing smaller 180ml bottles with atomiser sprays. We started off using our own – fairly expensive – alcohol, before buying cheaper alcohol which meant we were able to deliver it at a better price,” he says.
Within weeks, the distillery had signed a contract to supply the NHS, as well as donating large quantities of stock to local charities. “That was a good thing to do but the sanitiser was genuinely a lifeline for us too, because it gave us an income,” says Davies.
Now, a handful of staff have returned to work while the distillery continues to produce sanitiser. “We brought back 10 staff last month, which is great because it reflects activity levels rising, but we’re still not allowed to open the visitor centre, which is frustrating,” he says.
Despite the difficulty the last few months have brought, he remains hopeful for the company’s future. “I’m always optimistic,” he says. “When you’re in a long-term business like making malt whisky, you tend to have a long-term view of business because it takes a long time to make the product, develop the markets and build your reputation. We’ve got plans to build a new distillery next year and we’ll be looking to grow our export markets. It’s against the background of uncertainty, but we’re trying to be optimistic. I think we’ve got a lot to look forward to.”
‘There’s a lot of families that we support – it’s important to look out for them’
For any company, the welfare of staff is a key concern, especially when the business is brought grinding to a halt by a global pandemic and subsequent lockdown. But for a large employer at the heart of a small community, those concerns are heightened further. When the coronavirus lockdown came into effect in March, Aberdeenshire-based JBS Fabrication Ltd had to cease virtually all of its operations. The company, which provides engineering solutions to the energy sector, employs 48 people at its base in Peterhead as well as two employees in the US.
“Preparation and planning is something we do on a monthly basis, but I don’t think anyone could really have anticipated the world coming to a standstill,” says sales director John Dudgeon. “I think it took us all by surprise how quickly and ferociously it spread.”
The company has four main divisions: a global-leading screw conveyor supplier to the oil and gas sector; subsea excavation services; blast containment; and a fabrication and engineering division. But with work on hold, like many other companies, the business turned to UK government support to ensure it could keep its future – and that of its staff – secure in such challenging times.
JBS secured a £1.2m Coronavirus Business Interruption Loan (CBIL) from Barclays, as well as a capital repayment holiday, and also used the UK government’s furlough scheme to secure the jobs of all 48 staff.
“We followed the [UK] government advice and had everyone on the furlough scheme,” says Dudgeon. “We now have a number of people off the furlough scheme now things are lifting a bit to do some of the more business- critical jobs. We’re hoping to get all 48 back as quickly as we possibly can.
“Up here in Peterhead it’s a small community and we’re a fairly large employer so it’s really important to us that we get through this with as many or all of the staff that we’ve got intact from when we entered into this horrifying situation. There’s a lot of families that we support here at JBS and it’s very important for us to look after them.
“As a business we’ve also topped up the furlough scheme so the staff have been retaining 100% of their salaries. We appreciate most people do live on a month- by-month basis and we want to support our staff as best as we can for as long as we can.”
Those 48 jobs are among nearly 800,000 jobs across Scotland that have been secured with UK government support – including 628,000 furloughed jobs and 146,000 self-employed people who have received support. Dudgeon says that UK government support has been “hugely beneficial”, but adds that while something like the coronavirus crisis could not have been predicted, it has encouraged the company to explore other avenues – including further increasing its involvement in the renewables sector.
“This has made us look at our business and the sectors we’re operating in. I think the oil sector has had a bit of a double blow obviously with the oil price crashing as well. Renewables is becoming a bigger and bigger industry. Our subsea excavation tool is involved in a lot of renewable projects particularly. We’ve always had a real focus
on renewable energy and I think that focus has intensified with the slump in the oil price and the drilling market,” he says.
“We also have been looking into potential new divisions. At the moment we’re investing in a division that would be based in Miami which is going to be developing products using nanotechnology.”
While the past few months have been testing, with some uncertain times still ahead, Dudgeon is optimistic about the future. “The world will go on and business will pick up again,” he says. “We are just really concerned with making sure we get through it with the staff we came into it with still intact.”
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