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Praise where it's Dew

Dew is a name synonymous with long established contracting. Now part of a larger family, the company tradition is being successfully exploited as David Hayward discovers.

Accountant Hugh Grayson had a few problems last month when adding up the figures for his company's entry into this year's NCE contractors file.

As chief executive of Oldham-based Dew Construction, it should have been easy simply to extract civils turnover. But Grayson is also chairman of parent Dew Pitchmastic which, under its larger banner, carries out a fair proportion of the overall civil engineering workload.

This cross fertilisation within the group is deliberate. Dew aims to offer a specialist contracting service to its clients; but one with a very broad base.

Present the group with a brief for any structure - bridge, high rise block or canal - and its engineers will offer to build it from new or to tackle virtually any repairs needed on an existing structure.

Recladding, concrete repairs, heritage restoration, stonemasonry and waterproofing techniques by the armful vie with steel fabrication, piling and design and build in the portfolio of services offered.

'We think the best way to be successful is to offer something others do not, so we specialise,' says Grayson. 'But we specialise in-house and can offer clients a genuine one-stop shop.'

His philosophy looks sound. Since the merger of Dew and Pitchmastic five years ago, group turnover has increased 25% to £88M. And last year's 52% hike in civils turnover to £44M, puts Dew among the fastest risers in NCE's league table.

The 1994 merger was in practice, a reverse takeover of Dew by Pitchmastic, a company half its size. And on the face of it the participants appeared to be odd partners.

George Dew, a solid, traditional and well known general contractor, had been in its home town of Oldham for 60 years. Pitchmastic - lesser known, younger and smaller - specialised in waterproofing using, in Grayson's words 'black sticky stuff'.

But both had lived through turbulent times; in and out of takeovers and public ownership. And according to Grayson - who himself spearheaded a management buy-out of Pitchmastic in 1981 - both companies had been asset stripped by large multi- disciplinary owners.

Dew arrived at the merger table with the proud boast - which still holds good - of never having suffered an annual loss since its birth in 1934. But its then owner Allied Partnership, had gone bust leaving Dew with a 'for sale' sign.

Pitchmastic, then owned largely by Grayson, was looking to expand and Dew, he says, 'had too good a pedigree not to be saved'.

Today's integrated group, with regional offices in London, Edinburgh and Bristol, can point to Dew engineers rebuilding the stone facade of a large Manchester department store or driving sheet piles for the foundations of a new Channel Tunnel Rail Link bridge across the River Medway.

Its signboards appear on refurbishment work ranging from high rise housing in Gibraltar to reopening a stretch of the Rochdale canal filled in by an earlier band of Dew engineers more than 20 years ago. To add variety, the company is also building competition sized table tennis halls in Jersey and laying Portuguese setts and Chinese granite alongside Edinburgh's Holyrood Palace.

A pair of company brochures in the entrance foyer of the group's Sheffield headquarters sum up both the merger and its philosophy. One outlines its services in 'conserving the past', and the other in 'creating the future'.

Alongside lies a third brochure, known internally as the knitting pattern for its portrayal of a maze of lines linking the company's specialist services with a range of applications.

With so much on offer it seems surprising that Dew remains only a middle ranking contractor. But, claims Grayson who is still the majority shareholder, the positioning is deliberate.

'I am quite happy to sit just below the big boys and concentrate on what we do best,' he says. 'We are selective in our workload and must sometimes harness the natural enthusiasm of our marketing teams to seek more work, at the risk of losing our specialist qualities.'

In common with many of today's contractors, Grayson talks of concentrating on best practice, partnering and value engineering. What is different is that he claims this has been company practice for decades, long before these buzz phrases were invented.

The majority of the company's work is still won through competitive tendering, but Grayson boasts an impressive list of regular clients who put lowest price second to overall value. Railtrack, the Highways Agency, British Waterways and the National Grid have all come back for more.

Grayson's four decades in the construction sector have left him feeling more of an engineer than an accountant. And he likens his marketplace to an eight cylinder engine. 'With eight cylinders, some markets will always be going up,' he quips. 'Naturally, we would like them all up at once but, as with a real engine, it is not realistic.'

Market sectors range from new build and structural repairs to industrial complexes and social housing refurbishment. One which is currently proving disappointingly sluggish is rail.

Grayson is uncharacteristically restrained in his analysis of this market. But he admits to being 'disappointed 'that such a promising sector appears to have succumbed to construction's all-too-frequent method of progress; the stop-go cycle.

Last year on the back of training some 570 direct and subcontract staff to trackside safety, Dew carried out £19M worth of work for Railtrack, ranging from station refurbishment to bridge repairs. This year, £14M would appear an optimistic estimate - down 30% on expectations.

But the industrial building and social housing refurbishment sectors are rising faster than expected and should compensate.

Dew's chief executive is less restrained in his views on another construction talking point; management contracting. 'I do not like it. It has no legitimacy in our industry and we prefer to be the doer.'

He claims that the one-off use of a range of specialist contractors provides less security and reduces overall value for clients when compared with Dew's one-stop, in-house approach.

Grayson is equally scathing over the 'appalling' way much of the industry still treats subcontractors. 'The attitude has long prevailed that subbies are there to be bashed,' he says, referring to the way they are repeatedly screwed down on price by main contractors.

He accepts that, in past recessions, Dew's hands were far from clean; but the company now sees such an approach as being counterproductive and ultimately a false economy. Instead he seeks out longer term partnerships with a group of subcontractors.

Grayson even extends this selection process to his clients. 'Some want too much for less money and fail to appreciate the shared benefits of value engineering,' he argues. 'They want quality but only alongside cut- throat tendering and a confrontational approach to payments.'

'Fortunately,' he concludes, 'we can choose to some extent the clients we trust and are happy to work for.'

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