Semi Scenic chief’s plea for clearer criteria over funding

WITH so much attention focused on industries such as renewable energy it is easy to forget that Scotland still has many successful firms in businesses some associate with the country’s past.

In this week’s SME Focus, an entrepreneur who runs a successful semiconductor services business complains firms like his are starved of public support agencies because they do not meet the rigid criteria set by development bodies.

Name: Don Nicolson

Age: 44

What is your business called?

Semi Scenic UK Ltd

Where is it based?

East Kilbride

What does it produce, what services does it offer?

Primarily refurbishing equipment for the Global Semiconductor manufacturing market through a unique partnership with a major industry player Lam Research (which designs and manufactures equipment that is used to make computer chips). We also offer after-sales support to customers throughout Europe for Lam products.

To whom does it sell?

Our products ship to most of the silicon wafer fabrication facilities used for the manufacture of all types of microchips. These include Bosch, International Rectifier, Analog Devices, Dynex Semiconductor, Semefab (Scotland) Ltd, and most major wafer manufacturers throughout the world.

What is its turnover?

Previously £1.5 to £1.8 million. Projection for this year is £4m plus.

How many employees?

20

When was it formed?

2003

Why did you take the plunge?

After working for Lam Research for nine years, we realised that all the remaining customers who still used Lam equipment would need ongoing service and support, even though Lam was struggling to see a future in Scotland.

We saw an opportunity in the semiconductor market to provide expert local support to our customers. A flexible pricing model was the stepping stone to supplying refurbished equipment to an identified niche in the market.

It was a difficult decision for the family as we had two young children at the time, but I believed with the opportunities identified we could build something successful.

What were you doing before you took the plunge?

After graduating from Strathclyde University I worked as an engineer at NEC Semiconductors for 3 years before joining Lam Research as a Field Service Engineer.

During my 9 years at Lam, I travelled extensively and lived abroad, before coming back to Scotland as Northern Europe Customer Service Manager. Working at Lam gave me the grounding for what has been achieved since, and they were a great company to work for. However, I needed a new challenge and felt a change of direction was required.

How did you raise the start-up funding?

The four founding directors used redundancy payments to provide the necessary start-up capital. I was not initially targeted for redundancy but managed to persuade the right people that they should let me go. These initial payments were paid back within the first year and we have not borrowed any funds since.

What was your biggest break?

During the early stages our it was the faith placed in us by one of our customers (Analog Devices, Limerick) to provide a refurbished system when we had no previous track record.

This was a major investment for the customer and gave us the confidence to move forward. The biggest break overall came during the 2008/9 downturn, when we became Lam’s European vendor for refurbished process equipment. The current growth in revenue is down to our ability to take advantage of that situation.

What was your worst moment?

Having to reduce the headcount during the initial stages of the recent recession.

What do you most enjoy about running the business?

Having the autonomy to make decisions quickly. Being free from the frustration of bureaucracy that comes with working for a large corporation. Providing employment and seeing people develop through the success of the Company. The constantly changing Semiconductor market makes sure life is rarely dull and there are always challenges to address.

What do you least enjoy?

When the demands of international travel impacts on family life and I am forced to miss out on family activities.

What is your biggest bugbear?

Seeing some, apparently poorly run, businesses being funded by the taxpayer with little chance of a return on the investment whilst businesses running profitably and providing secure employment struggle to receive any backing.

The most important criteria is that they tick the current “boxes” the policy makers have decided on as being important at that particular time.

As our business does not design any innovative products and our industry sector has fallen out of favour, we struggle to have any serious discussion on public finance opportunities. How to make good choices when deciding what businesses should be invested in needs to be looked at, as I believe there is room for improvement.

What are your ambitions for the firm?

To develop a global capability for supporting all Lam’s outsourced after-sales and system refurb requirements. To do this we would have to become multi-national, adding many aspects to our business especially in terms of sales, procurement, supply chain management capability etc. Maintaining our reputation for high-quality products throughout this growth is vital to the chances of these ambitions being fulfilled.

What are your top priorities?

Maintain our current single- vendor status with the original equipment manufacturer; increase our overall business capability in the procurement and supply chain areas; ensure our business model constantly adapts to our changing market conditions; maintain a sound financial basis throughout all our future growth plans; develop people to take advantage of the opportunities and help the company achieve its ambitions.

What could the Westminster and/or Scottish Governments do that would help?

There needs to be more focus on supporting growth service and manufacturing companies in the nanotechnology sector.

Too much is being wasted on funding “innovation” that does not materialise into real market products. Due to us not having any products that are classed as innovative, support of any description is very difficult to even apply for.

Semi Scenic are succeeding despite our geographical location and competing in a Global market. Much greater emphasis needs to be placed on helping successful young growth companies penetrate international markets irrespective of sector or classifications.

The thinking behind some of the changes to learning in schools needs to be seriously looked at. In my recent experience, having two sons at school age, there is now a movement to remove all competitiveness from children where there can be no winners and losers.

This is poor preparation for the real world and the growing global markets in which we now have to compete; a greater business influence in education and other public sectors is desperately needed.

What was the most valuable lesson that you learned?

Follow your instincts and don’t get drawn into analysing decisions in too much depth – invariably the “gut-feeling” is the correct one.

In addition, I have come to realise the important part trust has played in our success and the time building strong business relationships is well spent.

How do you relax?

Watching football, going to the gym, reading and attending the kids’ leisure or school-related activities.

I also try to spend quality time with my wife and two boys, and be at home for evening meals whenever possible when I am not travelling.

Even if it usually means returning to the computer and phone afterwards, particularly due to the time difference with the United.States.

Source: heraldscotland

For further information please contact Semi Scenic:

Tel  +44 (0)1355 222166

Fax  +44 (0)1355 222794

E-mail info@semiscenic.net

October 2010