Viewpoint: Tony Wells

July 29, 2020

Offsite construction is becoming increasingly popular in an industry that needs to be more productive and more sustainable. Merit has been delivering projects using an offsite model for many years and in 2018 was named North East Business of the Year. Richard Dawson speaks to managing director Tony Wells, who is also preparing to take part in the famous 24-hour Le Mans race this September

Tell me about your career before joining Merit…

I studied electrical and electronic engineering at Newcastle University and then went to work at British Steel on Teesside. I joined just after the time of Ian MacGregor when they had cut staffing levels from 22,000 to 7500, plus contractors. I was there for three years and I think it shaped me as a person. Then, when Fujitsu opened a new facility in Newton Aycliffe, I went there as an electrical engineer before moving to become facilities manager at a new Siemens factory in Newcastle. It was a £650 million investment and I was more or less first in and last out from the management team. After that, I started my PhD in semiconductor research and almost finished before taking the job with Merit.

When did you start at Merit and how has the company changed over the years?

I started with Merit in 2002. It had been operating since 1983 as a kind of bulk piping company and when I took over in August 2002, I went through the accounts and realised we were  about ten weeks away from going bust. After two weeks, I had to make a third of the workforce redundant and repurpose the company. It was a brutal restructuring because we needed to stop the cash burn immediately. Afterwards, I remember we made £2000 that first month and then won a couple of new contracts, which set us on a path. We were back up to full strength within about five months of the restructuring. The business now focuses on clean technology buildings, with a strong emphasis on offsite manufacturing. We’ve been operating out of our Cramlington facility since 2004.

What is Merit’s offsite construction model?

Our approach to offsite construction came out of the research I’d done for Siemens on how to build facilities more efficiently, cost effectively and lay them out for better process interactions. In recent times, the digital revolution has enabled that offsite manufacturing solution to take off. We use a hybrid model, where about a quarter of the work done is done onsite and the rest is done offsite. We want to become a construction exporter and keep jobs here in Northumberland.

How is Merit striving to become more environmentally sustainable?

We have a zero-carbon emissions policy. You see a lot of companies with intentions of getting to net-zero by 2030 or 2050, but we thought, let’s ban fossil fuels now. We were working on a project for Rolls Royce in Nottingham and we wanted to make it work from an environmental as well as financial and operational point of view. By eliminating the natural gas system and using heat pumps and heat recovery, we managed to deliver a zero fossil fuels building for the same price and the client saved £106,000 a year in energy savings. We want to be a leader in greening the construction industry.

How does Merit set itself apart from competitors?

We’re not interested in a race to the bottom. Where we leverage savings is through intelligent design, not reduction in margin. Otherwise, you have companies basically doing projects for free and going bust. You’ve got to have a sustainable business; it has to be profitable and we do that by charging a bit more than we pay and making savings by integrating virtually all of the design work in house.

How did you come to build the new Cell and Gene Therapy Catapult in Stevenage?

We were lucky because the tender coincided with Carillion going bust and that gave us a chance as an SME going up against big contractors that turns over £3-4 billion per year. The client was also very open-minded about offsite manufacturing, which we used to deliver the whole project. We ended up saving a considerable amount of money and completed in 40 weeks – exactly half of the time originally quoted.

What is your long-term outlook for the business?

Following the coronavirus pandemic, there’s a lot of attention on infection control within hospitals so we’re launching Merit Health to deliver step-change design upgrades through offsite manufacturing. We’ll be able to provide a hospital for the same price in half the time with much better infection control. That’s a big push for the business.

Outside of work, you are an experienced endurance racing driver. Where does this interest come from and what have been your highlights to date?

I never had the opportunity to go motor racing when I was a kid because I never had the cash. So when I got the chance as an adult, I jumped at it and managed to win British and European titles racing sports cars. My driving partner and I then got into the Le Mans series.

You are due to take part in the world-famous 24-hour Le Mans race this September. What can you tell me about it?
We won the Asian Le Mans title this year in the LMP3 class and that gave us automatic entry to the Le Mans 24 hours. It was unexpected as I only started racing in 2011. The championship is ongoing now and the 24-hour Le Mans is still going ahead but has been massively condensed. Usually, it’s spread over a few weeks in June but because of the pandemic, they’ve consolidated it down to less than one week in September. It’s going to be pretty intense.

Merit
www.merit.co.uk
@WeAreTeamMerit

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