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Company Profile: Space Air: larger-than-life company with old-fashioned ethics

Neil Afram (below), Mr Space Airconditioning, cares passionately about his staff, his business and the industry of which he is a part. Paul Braithwaite visits his Guildford office to meet him
Company Profile: Space Air: larger-than-life company with old-fashioned ethics
WITH Neil Afram, managing director of Space Airconditioning, what you see is what you get.

Do a deal, shake on it, and it is done!

Neil is a man of his word.

He may be larger than life - and at times his language may be colourful - but he has not got to own a company turning over £24million by welshing on deals.

And he is not just interested in the money or Space Air. He is obviously steeped in the work of the industry. He is president of HEVAC and also president of FETA. He is a vociferous defender of the industry who will fight his corner with the conviction of a man who knows he is right against 'ignorant' national and European politicians and all comers.

Space Air itself has been involved in the much-publicised move by Daikin to control its UK distribution which has left just Space Air and Daikin UK as the two distributors.

So to the first question I asked: As Daikin has bought out the other distributors in the UK, was Space thinking of adding another couple of manufacturers to its portfolio?

Neil shook his head and smiled: 'Daikin has the best equipment and this is where we want to be.'

Next question: Then why should a client choose the distributor when a contractor can go to the affiliate Daikin company?

First, Neil insists, Space Air has 25 years in the business 'and that must count for something'. 'What Space Air brings to the party is its entrepreneurial skills.'

And it works, he believes, with Daikin backing Space Air as much as its own affiliate - 'and sometimes a bit more'.

Space Air is, Neil claims: 'Daikin's single biggest customer in the European network of distributors'. But he admits he could not handle Daikin products for the whole of the UK and neither could the Daikin affiliate so they co-exist quite well.

Neil is justly proud of the fact that he has an input into future products. He knows many of the Japanese bosses from when they were on secondment in the UK and now they are back with Daikin Japan, they recognise his expertise in the market and they are not afraid to use it to their advantage.

As well as the company's Guildford head office, there are four branches in Bristol, Leeds, Birmingham and Manchester, all linked into the same computer database system. This technology can be used by specialists to give estimated capital costs, running costs and projected energy-saving figures for all types of systems.

Further, the company also offers detailed system schematic drawings complete with control wiring and pipework layouts, all absolutely free of charge.

There are some 90-plus valued employees. And they are valued.

'I make sure the best employees choose to stay with the company,' he says. He admits one or two good people got away but only one or two! But then Neil insists: 'I have got to believe this, haven't I.'

He adds: 'When someone joins my company, I say to them 'all I am offering is a piece of land 6ft x 2ft'.'

No, Neil does not intend to kill them with hard work but to offer the security of employment which is now lacking in today's job market.

'I want them for life.'

And employees who do not perform?

'The business is so transparent they know they are not performing and so does everyone else. They leave.'

Neil adds that other employers have nothing to fear from him as he will not poach staff.

'I hate it when people poach staff from me.'

He uses a couple of agencies. So what is the criterion for employees?

'I want people with attitude.'

Sales-staff don't get commission but they are incentivised.

Again, Neil emphasises: 'I look after my staff'. But the staff do have to perform. Currently each sales person should be turning over £750,000. For the future, it will have to be between £1.5million and £2.5million.

But they cannot reach these sorts of figures without the infrastructure to support them. And this is what Space Air is concentrating on - and targeting its existing customers.

'When I have a new product I do not go to Mitsubishi's customers and try to sell it to them I go to my existing customers. I want long-term associations. Price is, I believe, secondary.'

The philosophy seems to work.

The Daikin showroom at Space Air


Five years ago Space Air turned over some £29million. This year the turnover figure was £24million. Not bad when prices in 2002 - 2004 dropped by up to half.

As for the future, in five years time turnover will be up to £35million.

'The idea behind all the innovation in the market is to generate extra sales, not replace existing ones,' says Neil.

'You will never find Space Air purposely stealing business from other manufacturers.'

But, and it is a big but, Neil also warns those other manufacturers to lay off his customers, 'it's an unfair practice'.

'With Daikin's support, Space Air has the ability to fight its corner.'

He cites last year when another manufacturer attempted to dump products on the market, offering prices of less than 50%. All the other manufacturers were forced to react.

'In the end everyone was a loser and the first company never increased its market share.'

Neil is adamant.

'To maintain and increase your share you need to grow the market. Our industry in the UK is very small. It should be £2bn or £3bn, not the £700million it is.'

Neil says the problem is that the industry is so busy selling against each other that it does not bother to stretch its horizons.

He adds that when Space Air exhibited at a recent public Built Environment show, he was amazed at the number of enquiries it received.

'We do not even talk to developers, preferring to visit consultants or main contractors because of the comfort zone.'

Neil says the industry does not know how to market itself to the domestic arena.

'There is a massive domestic market out there but we don't know how to explore it.'

But it will take time to educate the public to realise there is more than just gas-central heating. And domestic air conditioning (heating, cooling, ventilating), in our experience, is not price sensitive. Further, every householder converted is a potential customer in the commercial sector as only 40% of offices, warehouses and commercial building have air conditioning, he insists.

But too much work and the skills shortage clicks in. Neil has an answer for this too.

Under the normal modern apprenticeship scheme, apprentices are a burden on the company until they have passed certain exams.

But some equipment these days is virtually plug-and-play with a bit of brazing.

'It would only take a couple of weeks to train an apprentice to do this work safely and this could free up a skilled installer to do more complicated work.'

Neil is not advocating that the apprentice does not go on to complete the modern apprenticeship. All he wants is that, with the skills shortage, the apprentice should be able to pay his way quickly.

Space Air also has its own apprenticeship scheme with three apprentices working their way through the system.

And the 450 dealers also have their own schemes. Neil adds: 'Distributors are often seen as box movers but it is clear that the role played by Space Air goes a great deal further than this.

'The company endeavours to offer the highest level of customer service. It understands the importance of offering a comprehensive, well-informed and dependable service while also offering the best technical and commercial air conditioning solutions.

'It helps that Space Air starts with an unbeatable range of products.'

As well as selling the Daikin range, the company also makes about 400 accessories such as weatherproofing or discharge spigots.

Neil admits the company makes money from this but 'not a lot'.

'The idea is to offer a complete service. The reason I added accessories is that during my visits to sites, I could see that virtually every one needed some accessories.'

Neil adds: 'Space Air ensures that, whatever the application, the equipment is offered with the appropriate accessories expertly made or assembled, tested and often factory fitted.

Neil equates Space's role in the accessories sector to one who sits high on a fence. From the vantage point he can see all that is happening.

'A dealer might have his own workshop but he will, of course, only concentrate on the products he is selling. Space Air can see the whole picture.'

It all helps to give consultants and m&e contractors the confidence to deal with Space Air.

Neil is, he emphasises, probably going to die in harness. 'But I am going to live a long time and the systems are in place so that Space Air will go on.'

Obviously, a company with which to do business!

SpaceAir's training room
1 April 2006

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