The social enterprise which hand-makes beds for the Queen has spoken of how it was forced to diversify from offshore clients amid the oil downturn.
Prior to the price drop, around 70% of Aberdeen-based Glencraft’s business came from supplying mattresses to North Sea oil and gas platforms.
Glencraft, which is a registered charity employing people with disabilities, was forced to diversify amid the loss of business.
Managing director Graham McWilliam said: “Like many other companies in Aberdeen, there was an over-reliance on the offshore oil and gas market and anything between 65-70% of our business was offshore.
“That’s all very well until the oil price hits $25 a barrel and then the operators stop spending money on these types of things.
“There is a number of companies that weren’t spending on that area and I can understand why, it’s not seen as high-priority.
“As a result of that, we diversified into a luxury range which gives us a higher margin. It’s a less competitive area, because there is a lot of competition in that low-to-mid market for mattresses.”
The firm was forced to reduce hours for its workforce amid the downturn, and moved into luxury mattresses in order to diversify the business, attracting customers from overseas regions like China and Dubai.
Mr McWilliam said the social enterprise’s royal warrant to supply mattresses for Queen Elizabeth at Balmoral helped build-up that part of the business.
However, since the oil price has returned to relative stability – last month reaching $85 a barrel – Glencraft has seen interest returning from the energy sector.
Going forward, it expects the industry to make up a “sizable part” of the business, worth up to a million pounds annually.
It is currently developing a special mattress, which is being independently fire-tested, which would be suitable for high-hazardous areas like offshore platforms.
Mr McWilliam said: “We’ve budgeted within our strategy document for it to be a sizeable part so there’s no reason why it couldn’t be half a million to a million pounds-worth of business annually if we get this right.
“We’ve a tangible enquiry to us now that could be worth six-figures to us, but that is why we need to get that luxury mattress certified to get it through those fire tests.
“There’s certainly a lot more interest than there was and I think a lot of that is borne by necessity.
“A lot of these platforms have been lying not fully operational for some time and, like every other bit of kit on that platform, the mattresses won’t be in the best shape.”
Glencraft’s workforce has now returned to full-time and the charity’s outlook has “never been healthier”.
Mr McWilliam added: “There are challenges for our workforce, there’s no getting away from that, however I’m encouraged by the size of the order book and the work in progress.
“People don’t like change in any industry.
“My view is we should be standing on our own two feet and generating enough trading income to make sure we have excess funds.
“I think for us as a social enterprise in employing disadvantaged people it can be seen as more challenging but we’ve given ourselves a good opportunity to grow this business.”
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