“We manufacture industrial coatings and paints which we sell to end users and licensees all over the world,” says Watkinson. “We work with power stations, oil refineries, pulp and paper mills, offshore oil rig installations, the list goes on.”
Corrocoat operates in a niche market. “We work in areas no one else wants to go,” explains Watkinson. “If you’re after standard industrial paintwork, you won’t come to us. Our coatings are more expensive than a standard industrial paint. But, if a standard industrial paint won’t work or it only works for a couple of years then you come to us.”
In order to make the most of this small section of the market, Corrocoat has become a very international operation. “We follow our clients around the world where we can,” says Watkinson. “You have to be international if you want to work for blue chip corporations like BP.”
The strategy has paid off: Corrocoat currently has operations all over the world, from the Czech Republic to Indonesia. Turnover last year hit £10m. And the contracts are still flooding in.
Watkinson recently struck a deal with Indian group Kirloskar Brothers, the third largest engineering firm in the country. Corrocoat has developed a coating to reduce energy consumption in pumping systems, which is being applied to 850 of Kirloskar’s own pumps, used by the Indian Ministry of Defence for remote regions and border outposts.
But rather than receiving a royalty from this license agreement, Watkinson has opted to take a 35 per cent shareholding in the company instead. It’s a smart investment as the deal will yield substantial new business. “Over the next few years we expect to see a tenfold increase in production capacity in India to fulfil a growing order book,” says Watkinson.
“We’ve done this in other regions in the past. The most successful joint venture has been a South African operation where Corrocoat now owns 78 per cent of the partner company.”
But international expansion comes at a price, especially when you’re entering volatile markets.
Watkinson had his fingers burnt back in 1999 when he tried to break into the Ukrainian market. “We bought a property out there,” he explains. “And the building was literally stolen out from under us. It wasn’t legally available when we bought it, but we signed the deal under the terms that it was about to become legal.”
“When it did, the building never became ours. Our partner got into financial difficulties and sold the building on.”
It was a tough break for the SME. “We paid $70,000,” says Watkinson. “It was worth $1,00,000 by the time it was sold, but we never saw a cent.”