An ability to adapt in the midst of a global pandemic, aided by swiftly restructured financing, helped one British company to switch from making packaging to PPE to support the NHS in their hour of need. Juliette Salgado Smith investigates

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The coronavirus pandemic has exposed the UK’s reliance on cheap overseas suppliers and highlighted how dependent we have become on overseas production of all kinds of products across many different industries.

One stark example has been the country’s shortage of personal protection equipment or PPE, with a string of headlines in the media over the last few months of frontline NHS staff having to provide their own PPE as hospitals run out.

It was stories like these that caused one Welsh firm to react, changing their production in late April from sustainable packaging and manufacturing for the food and pharmaceutical industries to producing face visors for NHS and other key workers.

The firm, Transcend Packaging, has switched to producing category 2 face visors – designed for single-use and to provide protection from airborne liquid particles – in a bid to help both NHS and other key frontline health workers.

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The move was facilitated by Close Brothers Asset Finance, by restructuring the manufacturing firm’s finances.

Following the UK lockdown that began in March, the closure of cafes and restaurants resulted in a sudden lack of demand for Transcend’s biggest selling product – paper straws.

Transcend, which has a contract with McDonald’s to supply paper straws, saw a dramatic decline of 90% in sales in April alone.

Lorenzo Angelucci, the company’s managing director, was concerned that the firm had manufacturing capacity that was under-utilised, and saw the opportunity to repurpose its raw materials and equipment to help with the national challenge of sourcing PPE.
single-use visor

It was his idea to transform its business operations and utilise the firm’s experience, expertise and resources to design and produce a single-use face visor.

Motivated by the wish to help the NHS and to make sure the firm’s sales didn’t further suffer from the negative impacts of Covid-19, Transcend was forced to reshape its operations.

The pandemic paved the way for new thinking and innovation within the firm.

As Angelucci explained in a Life Sciences Hub Wales podcast, he realised the need for PPE fairly early on, when he heard from a doctor friend of his in Milan that he was using his own diving mask at work and then from another doctor in Cardiff who was using his own goggles.

Transcend turned to key strategic partner Close Brothers Asset Finance to restructure the firm’s finances. Close Brothers – who have been working with Transcend since late 2017 and leased all the original equipment to Transcend – moved quickly to arrange a fresh and unique finance deal for the firm that would allow them to begin producing and manufacturing face visors at the earliest possible opportunity.

Close Brothers Asset Finance

As Paul Philbrick, sales director at Close Brothers Asset Finance’s print division, explained: “When Transcend reached out to us to see if we could re-structure their agreements to free up headroom and allow them to manage cashflow during the current pandemic, we didn’t hesitate.”

By rescheduling leases to reduce cash flow burdens on the company, capital was freed up for Transcend that would have usually gone to making lease payments.

Extra working capital, combined with the freeing up and managing of cash flow enabled Transcend to switch production to the face visors. This restructuring of the firm’s finances ultimately would allow Transcend to realise its goal of using their manufacturing expertise to produce face visors.

Transcend “rapidly jumped into action” according to communications director Channing Nuss, to produce the new face visors. The firm was able to act quickly as they had access to all materials and machinery needed, meaning no new leasing of equipment was necessary.

With a raw material supply chain already in place, Transcend rapidly designed, produced and received CE approval for their new disposable plastic face visor in-house in just one month.

The Welsh government agency Life Sciences Hub Wales advised the firm extensively on how to gain the essential CE mark for production.

In a discussion on the agency’s podcast Angelucci explained: “We are a food and pharmaceutical-oriented company, so we understand the standard required to manufacture this product … so for us the transition to produce high standard visors was pretty straightforward.”

He went on to say: “We got the CE mark in record time, in 10 days. I’ve never seen before such speed in certification.”

Just three weeks after beginning production, Transcend was meeting its target of selling a million face visors per week by late May.

Plastic-free visor

Transcend have recently developed a plastic-free face visor as an alternative to the original one, which fits better with their sustainability and environmentally-friendly ethos.

Transcend are supplying primarily to a UK market, and their customers include the NHS in Wales, local councils, care homes and schools.

They have also donated some several thousand face visors to various care homes and local hospitals in the UK. After first being trialled in hospitals across Wales, Transcend are now exporting to Italy, Greece, Japan and Ireland.

However, Transcend’s story is not unusual; rather it is part of a wider nationwide effort from UK manufacturing firms to maximise output and sales in difficult circumstances whilst adapting their operations to help the NHS.

Following the government’s request to UK manufacturing businesses to switch production towards PPE, UK manufacturers of all shapes and sizes have risen to the challenge of producing PPE so desperately needed by the NHS and other front line health and social care workers at this critical moment.

Firms like Transcend have had to reshape their operations in the past few months, often having to manufacture entirely new products by adapting production lines and utilising underused resources and raw materials.

Like Transcend, they have had to employ flexible business strategies and use their experience and expertise to step up to the challenge and opportunity that the pandemic has provided them with.

Had firms like Transcend not acted quickly to produce what were often entirely new products, far more employees would have been furloughed and UK packaging and manufacturing businesses would have seen further losses.

As lockdown in the UK is easing and restaurants and cafes reopen, demand for Transcend’s paper straws is rising again. It is inevitable that the straws will once again become Transcend’s biggest selling product, perhaps as early as June.

However, according to Justin Bailes, co-founder and director of corporate and business development at Transcend, as long as Transcend continues to see procurement pipeline for the face visors, the firm will continue to produce them as long as there is, “ongoing demand for face visors”, although not at the same level that was seen at the height of the pandemic.

Post-lockdown demand

It is likely that in a post-lockdown UK, demand for Transcend’s face visors will shift from the health care sector to a wider industry base that may include shops, schools, hairdressers and supermarkets.

“The one thing that has become apparent during the pandemic is that no country can rely wholly on China to supply them with their PPE”, says Justin Bailes.

Given that the value of domestic capacity and local production capability have been highlighted by the pandemic, the question remains whether the government will adopt a more UK-centric approach to sourcing production in a post Covid-19 UK, in order to ensure that as a society, we can be source more domestically and thus be better prepared for a future public health crisis.

Juliette Salgado Smith is studying for a BA in history and politics at the University of York