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Renishaw plc

Renishaw plc

New Mills
Wotton-under-Edge
Gloucestershire GL12 8JR
United Kingdom
Telephone: ( + 44) 1453524-524
Fax: ( + 44)1453524-901
Web site: http://www.renishaw.com

Public Company
Incorporated:
1973 as Renishaw Electrical Ltd.
Employees: 1,512
Sales: £125.35 million ($177.3 million) (2000)
Stock Exchanges: London
Ticker Symbol: RSW
NAIC: 334519 Other Measuring and Controlling Device Manufacturing; 334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

Renishaw plc is the worlds leading manufacturer of test-probe and measurement equipment for Co-ordinate Measuring Machine (CMM) systems offering precision sensitivity up to one-third of a micron. The company, based in Gloucestershire, England, is structured into six divisions, each focusing on a specific CMM product applications: Machine tools, Lasers, Calibration, Encoders, Digitizers, and Spectroscopy. Three additional divisions, Technical Services, Manufacturing Services, and Corporate Services offer support to the companys product divisions. Renishaw, led by founders David R. McMurtry, chairman and CEO, and John Deer, deputy chairmanwho together own more than 50 percent of the companys stocknot only leads its market but has long functioned as its chief pioneer. The company holds a large array of patents, many of which are under Mc-Murtys name, protecting its products and technologies, and is well known for defending its patents against infringements. The company operates on a worldwide basis, with one-third of its sales coming from the United States. The United Kingdom represents 11 percent of sales, and the company generates more than 35 percent of its revenues in Europe. Japan is another of the companys major markets, generating 12 percent of its revenues, which topped £125 million in 2001. The company is present in more than 20 countries worldwide.

Inventing an Industry in the 1970s

David McMurty worked as an engineer at Rolls-Royce during the 1970s, and, as Assistant Chief of Engine Design, was closely involved in developing the Olympus engine used to power the Concorde jet then under development. In 1972, McMurty was asked to come up with a solution for measuring the tiny tubesas small as one-quarter inch in diameterused in the Olympus engine design. Traditional measuring devices were unable to provide post-production measurementa necessary step for ensuring the safety and viability of the enginebecause they tended to deflect the thin tubes. McMurty took the problem home with him, and, over the weekend, developed the worlds first touch-trigger probe, using materials that included six ball bearings and even a piece of his bedroom carpet. Mounted on a standard measuring machine, the touch-trigger probe offered a far more sensitive reading than any other available technology and was to remain an industry standard into the next century.

Rolls-Royce instantly saw the potential of McMurtys invention, and protected it with a patent, listing McMurty as the inventor. The patent was owned by Rolls-Royce, however. Yet McMurty already looked forward to adapting the probe for use in other industrial applications. In this, McMurty was encouraged by his first third-party order, for ten probes from CMM maker Notsa.

McMurty had already gained some commercial and manufacturing experience, having formed with a partner a small company, Shepherd and Adams (the name came from his wifes and his partners wifes maiden names), to design and build components based on other McMurty inventions. In 1973, McMurty joined with another Rolls-Royce engineer, John Deer, who specialized in power plant aerodynamics and had experience in machine shop engineering, to acquire a license from Rolls-Royce to develop new products based on the touch-trigger patent.

In order to secure the license, Deer and McMurty acquired a dormant limited liability company, Renishaw Electrical Ltd. Through Renishaw, Deer and McMurty were granted the license agreement with Rolls-Royce and began developing their first touch-trigger products, under the S&A name, in McMurtys garage. Both McMurty and Deer remained employed at Rolls-Royce, producing their prototype probes in their spare time. In order to fill the Notsa order, production was moved to Deers home. Notsa then included the probe as part of its display at a trade fair, and the device attracted interests and orders from other CMM manufacturers. The new business encouraged Deer to leave Rolls-Royce and became Renishaws first full-time employee in 1974.

Renishaw had a growing business but did not own its own product. In 1976, Deer convinced Rolls-Royce to sell a 50 percent interest in the touch trigger patent to Renishaw. The company then bought its first dedicated facility, a former ice-cream factory in Wotton-under-Edge, in Gloucestershire, and began manufacturing under the Renishaw trade name. By then, Renishaw had nine employees and had already gained its primary position among the worlds CMM manufacturers. The company soon extended its range, adapting its technology for use on CNC machinery.

McMurty continued to move up in the Rolls-Royce ranks, and by 1977 he had been promoted to Deputy Chief Designer. However, McMurty chose instead to pursue Renishaws development, reducing his role at Rolls-Royce to that of a two-day-per-week consultant. McMurty was a prime force behind development of Rolls-Royces M45 Quiet Engine and remained with that company through the completion of that project. At last, in 1979, McMurty left Rolls-Royce to join Renishaw full time.

The arrival of McMurty signaled the start of a new era of product development at Renishaw, as McMurty turned his design genius to adapting and expanding the companys technology to a wider range of applications. McMurtys designs not only improved Renishaws product line, it also kept new products at the forefront of the companys growing industry niche. From the outset, however, Renishaw distinguished itself by its careful safeguarding of its technology. The company maintained a strict policy of pursuing patents for its new designs. As McMurty told the Financial Times: The first patent set us off on a track we have continued with. We develop only products that are patentable and that can be commercialized. Renishaw also proved itself an aggressive combatant when it came to protecting its patents against copyright infringement, to the point where, by the late 1990s, the companys legal department was a steady contributor to the companys profits.

International Expansion in the 1980s

Renishaw began to grow quickly at the start of the 1980s. After expanding its first manufacturing facility in 1980, the company, which by 1981 was posting nearly £3 million in sales, purchased a 14-acre site in a former wool mill outside of Wotton. This site, New Mills, became the companys headquarters and, after an extensive renovation, opened officially in 1985.

By then, Renishaw had already become an internationally operating company. In 1981, Renishaw set up its first foreign subsidiary, in Chicago, Illinois, bringing it close to the U.S. automotive and other industries. The United States was quickly to become Renishaws primary marketby the turn of the century the company posted some one-third of it sales in the United States market alone. That same year, the company launched Renishaw Electronics (Ireland) Ltd., later renamed Renishaw (Ireland) Ltd., in order to add manufacturing capacity.

In 1982, Renishaw turned to Japan, establishing the subsidiary Renishaw KK in Tokyo and opening a regional office in Nagoya. The following year, Renishaw went public, taking a listing on the London Stock Exchanges Unlisted Securities Market. By 1984, Renishaw had stepped up to a full listing on the London main board. Nonetheless, McMurty and Deer maintained majority control of the company, leading the Financial Times to the describe the company as being in a no-mans land between public and private.

Yet with McMurty and Deer at the helm, Renishaw often flouted current-day management wisdom. The company insisted on maintaining strong cash stock piles, and, in times of economic recession, refused to consider laying off employees as a means of maintaining its profitability levels. The company also insisted on maintaining full control of its manufacturing process, to the point where it designed its own continuous unmanned production system, dubbed Ramtic, giving the company still tighter control of its just-in-time manufacturing process. Renishaws insistence on self-reliance even led the company toward developing its own in-house travel agency, responsible for coordinating travel within the companys growing international network, in 1986, the company moved into Germany, launching its Renishaw GmbH subsidiary.

Company Perspectives:

Renishaw will design, manufacture, and supply metrology systems of the highest quality and reliability to enable customers worldwide to carry out dimensional measurements to traceable standards. Our product offerings will enhance quality and productivity, and we will strive for total customer satisfaction through superior customer service.

Our aim is to provide leading edge technology by encouraging innovation to address our customers needs. We are committed to sustained growth through continued investment in product development and manufacturing methods. Renishaw wishes to be recognized collectively and individually as leaders and contributors in our field and our community. We wish to achieve our aims in a way that is caring, open, and honest. Renishaw is an environmentally conscious and responsible company. We will strive to ensure that all aspects of the business have the least harmful effect on the environment.

An important step in Renishaws history came in 1987, when the company purchased the remained 50 percent of its original touch-trigger probe patent from Rolls-Royce. By then, that patent had given the company virtual monopoly control of its market niche, with its market share estimated to range up to 80 percent. The company had meanwhile continued to build strongly on that foundation, adapting its technology to a variety of industrial applications. Renishaw also entered other, related fields, such as the development of spectroscopy products, including Raman and photoluminescence-based microscope and spectroscopes. Other patents gave the company leading positions in areas such as microchip inspection devices; systems for testing aircraft wing response to turbulence; and a system, developed in the 1990s, for using computer-controlled scanners to provide more accurate measurements of gaps between teeth.

Renishaw made its first and only acquisition in 1988, acquiring Frances Periferic SARL, a maker of terminals for CNC machine tools. Renishaws interest in that company, renamed Renishaw SA in 1990, was especially in its established distribution network, giving Renishaw a strong introduction into the French market.

World Leader in the 21st Century

At the end of the 1980s and the beginning of the 1990s, Renishaw stepped up its international expansion, launching subsidiaries in Italy in 1989, Spain and Switzerland in 1991, and Hong Kong in 1993. The company was also expanding its manufacturing base, opening a new facility, the Technology Centre, on its Wotton headquarters and manufacturing campus in 1990. A further addition to that facility was made with the completion of a new machine shop in 1993. By 1997, the company was expanding again, in the first phase of what was seen as a long-term expansion program designed to double the size of the companys Gloucestershire campus.

In the late 1990s, Renishaw continued to build on its commanding world leadership position, opening a number of new offices around the world. The company entered South America, with a subsidiary in Sao Paulo, Brazil, in 1996. By then, the company had also begun to build its interests in the Pacific and Far East, opening representative offices in Singapore and Beijing, China, in 1994, then in Jakarta, Indonesia, in 1995. Renishaw added a new office in Shanghai in 1997, while adding a presence in Seoul, South Korea, in 1999 and in India through new subsidiary Renishaw Metrology Systems Private Ltd. in 2000. The company also strengthened its position in the Pacific region, launching subsidiary Renishaw Oceania, based in Australia.

In 2001, the company made its first moves into the Eastern European market, establishing a 5050 joint venture agreement with RLS merilna tehnika d.o.o., of Slovenia. As part of that agreement, RLS was to handle the marketing of Renishaws products in Slovenia, Croatia, Hungary, Romania, and Bulgaria, while Renishaw agreed to introduce RLSs products in its own markets. In that year, also, Renishaw established a new Dutch subsidiary, Renishaw International BV, to support its business in the Benelux market.

Renishaw suffered from the economic downturn at the turn of the century, particularly as its largest market, the United States, struggled to throw off a possible recession in 2001. The company continued to boast revenues gains, however, boosting its sales past £125 million for that year. With a portfolio of more than 700 patents, many of which were signed by chairman and CEO McMurty, Renishaw seemed certain to continue its tradition of technological inventiveness into the twenty-first century.

Principal Subsidiaries

Renishaw Inc. (United States); Renishaw GmbH (Germany); Renishaw KK (Japan); Renishaw International BV (Netherlands); Renishaw Metrology Systems Private Ltd (Bangalore); Renishaw Oceania Pty Ltd. (Australia); Renishaw SA (France); Renishaw (Hong Kong) Ltd; Renishaw SpA (Italy); Renishaw Iberica S.A (Spain); Renishaw A.G (Switzerland); Renishaw Latino Americana Ltda (Brazil); Renishaw (Ireland) Ltd.

Principal Competitors

Badger Meter, Inc; Controlotron Corporation; Euro Tech Holdings Company Limited; HORIBA, Ltd; ILX Lightwave Corporation; Marpos SpA; Mesa Laboratories, Inc; RADCOM Ltd.; Rohde & Schwarz GmbH & Co. KG.

Key Dates:

1972:
David McMurty invents the worlds first touch-trigger probe.
1973:
McMurty and John Deer acquire Renishaw Electrical Ltd and acquire license to produce touch-trigger probes.
1983:
Renishaw lists on the London Stock Exchanges Unlisted Securities Market.
1984:
Renishaw lists on LSE main board.
1990:
The companys international expansion includes Italy, Spain, Switzerland, and Hong Kong.
2001:
Renishaw forms joint-venture distribution agreement with RLS of Slovenia to enter Eastern Europe.

Further Reading

Investment Column: Renishaw, Independent, January 25, 2002, p. 21.

Marsh, Peter, Technology Entrepreneur Has the Measure of His Markets, Financial Times, September 1, 1999.

Potter, Ben, How Renishaw Measures Up, Daily Telegraph, October 1, 1999.

Renishaw Group Profile 2001, Renishaw Plc, Wotton: 2001.

Swann, Christopher, Six Ball Bearings and a Piece of Bedroom Carpet, Financial Times, October 23, 1998.

M. L. Cohen

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