08/05/1983 – The Herald – When I last wrote about Thor Ceramics of Clydebank, back in June 1989, I described how the family-owned firm, whose origins ran back to 1981 and which once described itself as a firm of hi-tech plumbers, was contemplating some hard choices. I hinted then that Thor was on the brink of a significant tie-up with a major European multinational. The deed was done a few weeks later, when Thor, which makes the ceramic nozzles and tubes used in concast steelmaking, became an offshore subsidiary of the big German group, Didier Werke, the world’s largest supplier of industrial ceramics and refractories.
It could have been another sorry chapter in a very familiar story. The progressive erosion of the Scottish corporate base, through friendly acquisition or hostile takeover, with management control, R&D, even whole production lines eventually leaching away, disappearing down the A74, over the North Sea, or across the Atlantic. To outside observers, it seemed an open question whether Thor would still be around in Clydebank in 1993. Would the business slip away quietly to pastures new beside the Rhine? Far from it. Thor is still very much alive and kicking on Clydeside. A couple of weeks back it figured for the third time in the Queen’s Awards, adding a second export achievement award to the one picked up in 1986. In 1989, Thor also chalked up a Queen’s Award for technological achievement.
Ravenscraig has gone and the rest of British Steel has been going through a lean time. These days, Thor exports more than 90% of its production to markets in nearly every corner of the globe. Its biggest single customer last year was Krakatoa Steel in Indonesia. But that’s only part of the story. Far from being absorbed without trace within Didier, the Thor Ceramics plant at Clydebank is calling the shots in the production of resin-bonded alumina graphite nozzles, stoppers and valves within the wider international group.
In January, 1991 Thornton closed down alumina graphite production at Krefeld and moved it to Clydebank. Currently Thor at Clydebank is involved in a technology transfer exercise to Didier’s American plant in Cincinnati. There are plans to build 50,000 sq.ft of new production and office space at Clydebank, rationalising facilities on the site. Thor, whose name is given equal billing with Didier in marketing material for the alumina graphite product range, seems to have an assured place of influence within its new, wider family. Needless to say Thornton has been learning German, fast. ”I’m nearly fluent,” he reports, having only started learning after the takeover. In 1991, he visited Germany every week bar one, leaving each Sunday, returning each Tuesday. The rest of the time he ran Clydebank. But why should the world’s leading ceramics and refractories company devolve so much apparent power to a Scottish subsidiary, acquired less than four years ago? Thornton has little doubt about the answer. ”We had been supplying Didier for five years with products they couldn’t manufacture for themselves. We made them with their name on them. It was good business and the relationship suited us,” he explains. ”They had a huge R&D department. They had tried to go their own way in the technology. But they failed. They simply couldn’t master the cost-effective manufacture of isopressed ceramic tubes.” So Didier bought the people who could. But the Germans could still have done what many others have done before them. Having bought the technological edge which had been eluding it, Didier could have decided the new asset could be deployed just as effectively in its own back yard. But that transplant to the Rhine hasn’t happened. ”This is a particularly complex process to get right,” says Thornton. The shapes required are increasingly diverse and complex. The material mix has to be right. The mould is them put under intense pressure in isostatic presses build into the factory floor. The components are then cured at high temperature in kilns. Jim Thornton, now retired but still retained as a consultant at Thor, personally laid the foundations of his company’s technical reputation.
Having pioneered the techniques at the Vesuvius works in Ayrshire in the 1970s, Thornton senior repeated the trick for another UK refractories group, Dyson, then decided to do it again, on his own account. ”To succeed needs an intimate understanding of the process routes and advanced materials technology,” adds son Alan. ”Over the years we have built up a great deal of know-how and experience of the temperatures and pressures required to make a successful end-product.”Didier could have tried to transfer that knowledge back to Germany. The fact that it hasn’t is praiseworthy. Its chairman had approached Jim and Alan Thornton several times about doing the kind of takeover deal which was finally signed in 1989. ”We had always said no,” says Alan. ”We had grown rapidly to the point where we employed 230 people. But, by 1989, interest rates and exchange rates were turning against us. We were losing money. ”Either we took a machete to Thor or we found a bigger parent. We looked at all the options. The problem of tying ourselves to another British company was that they would strip out all the overheads . . . the research effort, the sales and marketing side . . . They would leave us, at best, as a manufacturing centre and we didn’t want that. ”Jim and I were sitting in this office discussing the options and we finally decided what to do. We phoned Didier’s chairman and told him: ‘We want to sell Thor and the price is x.’ Within four weeks the deal was done and dusted. It was all very amicable.”
Indeed, at first, Alan Thornton retained a minority equity stake, almost as tangible evidence that this was not to be just another asset-strip. That stake has since gone, but has been replaced by other, even more eloquent, evidence of Didier’s good faith. But was selling a bitter choice to make? ”It was harder for Jim,”says son Alan. ”He could see all the dynasty implications. I had become MD in 1988, but I could see the predicament we were in. It was the best solution.”
Thor’s export reach is extraordinary. Markets in Australia, India, Indonesia, Korea, New Zealand, South America, and China are all growing. Thor is even contemplating the creation of a satellite plant in China. But the location of these growth markets worries Alan Thornton longer-term. ”I’m concerned that most of the growth seems to be outside Europe. With our Japanese and Korean friends getting into the business we need to balance our exposure in these markets with a stronger European marketplace.”
Margins in what’s left of the UK market are extremely tight. But Thornton would like to see more demand in countries like Germany, France, and Italy. Russia and some of the former Soviet satellites are one bright prospect. ”Only some 6% of steel production in Russia is currently continuously cast. Elsewhere in the world it’s nearer 90%. That has to be a tremendous prospect and we’re already picking up orders. We’ve got one from the only Russian plant making steel belting for car tyres.” Thor expects to capitalise on two other developments. It is well placed as the alumina graphite product becomes more and more sophisticated, involving more complex shapes and incorporating up to six different material mixes in a single tube. Beyond that, steel production is going to move into thin-slab and then thin-strip production, effectively removing the need for hot rolling mills. Thor sees these quantum changes as a further competitive opportunity.
The other development is growing demand for a quite different set of engineered ceramics, nitride bonded silicon carbide ceramics. Here we are into twenty-first-century technology. Where a Thor nozzle for use in steel production has a production life of between five and seven hours, this other product range – Thor originally dubbed it Nicarb, but Thornton thinks that sounds like a toilet product – may be expected to operate in baths of molten aluminium for up to six months. ”This is a very sexy product,” says Thornton. It has applications in aluminium diecasting, in spray nozzles in flue gas desulphurisation, in highly abrasion-resistant burner quarls, where the raw pulverised fuel is blown in. Although it is still only a small part of Thor’s total business, it has considerable potential. ”My main aim,” says Alan Thornton, ”is to attract more group investment into Scotland and manufacture more group products here. We can do it because we’re more efficient and more cost-effective.”
This is one foreign takeover of a Scottish company which is manifestly working to Scotland’s advantage.
09/03/2001 – The registrar of Companies for Scotland hereby certifies that Thor Ceramics Limited having by special resolution changed its name, is now incorporated under the name of R.H.I. Refractories UK Limited.
