Mike Kalli

4 July 2002



The MD of chemical specialist Ideal Manufacturing, talks to LCN about his company's development in the UK, its ventures into the Asian markets and projects in mainland China


LCN : What is your own background, how did you come to start Ideal Manufacturing and how has it developed over recent years?

Mike Kalli: After completing my PhD I worked as the chief chemist for a chemical company for about three years. I then got involved as partner and managing director of a newly formed company manufacturing and supplying chemical products to the food, beverage and industrial laundry sectors. It showed promise but I was forced to change direction.

In 1982 I established Ideal Manufacturing. I started by supplying a range of products, contract or toll manufactured for us, to our specification.

  In 1984 we moved into our own manufacturing unit in Northants. The business grew steadily and our activities became more varied. By 1992 we were employing around 45 people and had a cumulative turnover of £4.5m.

The recession of the early '90s presented its own challenges, which we successfully met. Indeed these latter years have taught me more about running a successful company than the previous 15. I am more confident than ever about realising the company's true potential.

LCN: What currently are the company's main areas of interest and its main products?

MK: The principal activity is and has been as a comprehensive supplier to the laundry industry - both directly and through a growing number of own-label clients for whom we manufacture.

Additionally over the years we have developed, mainly for clients, a complete range of drycleaning detergents and spotting agents. The wide scope of formulation and application technology that Ideal has enables us to get into a diverse range of industries quickly and to be the perfect partner for any organisation that wishes to form its own unique range of products.

Ideal manufactures for a range of industries including: industrial laundries and drycleaners; food and beverage; personal care; automotive; boiler treatment; and denim processing. The company is currently working with QVC (the television retail sales channel) to put in place a range of retail products.

The products that are our key to the future in the laundry industry are: Prime, a concentrated, highly active and streamlined liquid detergent; Natural liquid starch, our highly concentrated, perfumed, stable liquid starch; and Duo, our combination fabric softener/sour.

LCN: Explain your company's operation both in the UK and in global markets. Where are its main strengths?

MK: The company's momentum is accelerating in three distinct areas. First, direct supply to the UK laundry industry. This division is spearheaded by our experienced and knowledgeable sales manager, John Hickman. His technical and sales expertise is complemented by the creation of the most effective liquid concentrate products and a very reliable automated dispensing system.

Second, our success in export markets has come about for two principal reasons: our effective and highly concentrated liquid technology and George Lawrenson, the man whose engineering skills have enabled effective and consistent dispensing of our products. George has recently been appointed as a director of Ideal Manufacturing.

We are now proud to be the principal suppliers in Hong Kong and Taiwan and are poised, through our associate company Hong Kong Ideal, to be a major player in the emerging mainland China market. Additional development is concurrently taking place in UAE and Saudi Arabia.

The third area is contract manufacture. This helped us through some difficult times in the mid-'90s. Some of the companies for which we created an own-label range of products have prospered and more continue to contact us. The products associated with this area range from retail lines sold through the television shopping channels to specialist bactericidal items for the food and beverage industries.

LCN: You have particularly ties with Asian and Middle Eastern markets. How did you come to be involved in these markets?

MK: Opportunities are created when the right mix of products, supplied at the right prices and offering the optimal results are offered at the most opportune time.

I have been personally familiar with the China market since 1993. I formed a joint venture in China, and visited various parts of the mainland on numerous occasions. However, our current progress is very much attributable to George Lawrenson's understanding and appreciation of Chinese people.

As for the Middle Eastern market I feel that I can claim some credit for our development in this sector, partly because I can relate to the Middle Eastern business mentality from my own origins (Greek) and our continued dialogue with key players in the Emirates and Saudi Arabia.

LCN: What are your impressions of the laundry and drycleaning industries in these markets? How is the Asian market faring now?

MK: There was a lot of uncertainty prior to and up to the handing over of Hong Kong to China. The commercial awakening of China over the past eight years has been dramatic. Every time I visited Beijing from 1993 to now I have seen a dramatic transformation in the skyline.

The relaxation of rules concerning joint venture companies has meant serious commercial investment by Western companies and this growing commercial activity in Asia has stimulated the Hong Kong market. I believe we shall see continued business growth for some time.

LCN: To illustrate what you are doing, tell us about some of theprojects you are working on in Asia?

MK: Two of the larger projects that we are contracted to for the next three years are Vogue Laundry (Hong Kong) and New China Laundry (in New Territories). Both are larger and more modern than many European commercial laundries and we anticipate they will be our platform into mainland China. Both required a lot of input from us they involved automated liquid concentrate installations.

We have many other clients in Hong Kong, but Vogue and New China Laundries are the two biggest commercial laundry groups in Asia. This has come about by very competitive tendering and the provision of our fully built liquid concentrate detergent Prime, coupled with our concentrated Natural liquid starch and our liquid fabric softener/sour. All products are supplied in concentrate form, dispensed through automatic control systems that monitor usage and provide management information.

The projects have involved considerable investment. These laundries are huge in both the numbers of machines and the daily production output. They are of paramount importance to Ideal. All products are supplied directly from our Northants factory. These laundries will spearhead our growth into the emerging China market.

LCN: What are your impressions of the market in Hong Kong?

MK: In one word, I would describe the Hong Kong market as "vibrant". I believe that Hong Kong will continue to grow and it will increasingly achieve prosperity by acting as an intermediary between mainland China and the western world. The Hong Kong Chinese are astute, honourable people who drive a hard bargain.

LCN You are now embarking on projects in mainland China?

MK: We recently attended a trade fair in Beijing with our associate company Hong Kong Ideal. That week in Beijing has resulted in the appointment of numerous agents and distributors in various regions of mainland China. This was supported by the positive responses we had from numerous hotel managers we met there.

LCN: The Chinese market is predicted to be set for substantial growth with the entry to the WTO and the 2008 Olympics. How do you expect the market to change and develop?

MK: I have already witnessed considerable development in mainland China since 1993. I believe that the growth pattern will not only maintain but accelerate between now and 2008. China is very rich in resources (both human and otherwise) and it is steeped in over 5,000 years of history, so there is much to see and experience in this country for the tourist and the businessperson of the future.

LCN: How will your own company be affected by this growth? What are its strengths in working in this market?

MK: I believe this growth to be a golden opportunity for both Ideal Manufacturing and our Hong Kong associate company and this will make a significant contribution to the future of Ideal.

Ideal has evolved and matured as an innovative manufacturing company over the last 20 years and we are ready to meet the challenges of the future. Our strength in the laundry industry is our understanding of the needs of the industry. The laundry industry is now, in contrast to 20 years ago, almost entirely fully automated. The supply [of chemicals] in 25kg bags is a thing of the past. We believe that the future lies in total automation and this demands highly concentrated liquid products, supplied in bulk, linked to a fully automated hands-off supply system. Laws governing the handling of chemicals and waste packaging laws will help to force this trend.

LCN: As the Chinese market opens up to Western companies, how do you expect competition to develop?

MK: Ideal's advantage at the moment rests in our product innovation and our application skills. As the market opens up I believe that things will get more difficult unless we can continue to innovate or create more formalised associations with our Asian partners.

LCN: What advice would you give to companies contemplating involvement in this area?

MK: Understand your market and respect your partners!

LCN: How do you see Ideal Manufacturing progressing in the next five years or so, in the UK and globally?

MK: I hope that the three areas described above will continue to develop, and that in so doing will provide the benefits that all my personnel deserve as most of the people in Ideal have been with me for many years.



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