Rex Rozario, Part 4: A 10,000-ft. view of his Business Ventures, the Industry, and Life
In our final installment, Rex describes the common thread woven through all of his successful business ventures and varied interests: confidence and the fortitude to follow his dreams until they are realized. Rex also takes a look back at the evolution of the global PCB industry, and explains his approach to profitability, which includes building (and rewarding) a successful team.
Click here for Part 1, Part 2, Part 3
Rozario: I’d like to tell you about my next venture.
Matties: Please do.
Rozario: I believe you've got to constantly look at things and different areas, and so I do have a successful restaurant in Exeter.
Matties: What's the name of the restaurant?
Rozario: Rendezvous. Of course, it is a French word that means “meeting place,” and fortunately it is next door to the law courts, so it's in an area where there are lawyers, accountants, bankers and so forth. At lunchtime, mostly the pin-striped guys are there and it's like their clubroom. It’s sustaining with all the competition. Sometimes, if you do something different, in the right area, it works.
And the next venture I'm looking at is in Devon. At the moment, there are five celebrity chefs in the UK. One is the executive chef at a hotel called Gidleigh Park, not far from here. The Sunday Times has named it the best restaurant in the entire UK for the last three years. It has two Michelin stars. I'm joining forces with this guy and he's leaving his other activities and we are creating a new hotel that’s going to be called Lympstone Manor. It's going to be open in 2017 on Valentine’s Day, February 14th, so you have an invitation.
Matties: Thank you. So about a year from now?
Rozario: Yes. It’s at a beautiful site right on the Exe Estuary, and actually when the tide comes in some of the water under the bridge comes into the property. So we are planning to have a little bar there and if you have a small boat you can come in and have a drink. You must continue to think about these things and continue to try new stuff. I'm one of those people who continues to adapt often. I don’t say, “Okay, let's call it a day and finish up.” Opportunities are coming up all the time.
Matties: That's going to be fun. Rex, I understand you had yet another life: as owner of a highly successful marina. What can you tell us about that?
In 1974, I bought my first boat and kept it at the Mayflower Marina, a large coastal marina located near the steps, where the British forefathers from the Mayflower set sail for America. Back then a developer was building some new high rise flats by the riverside. They had 96 flats built and the developer got into financial trouble and went into receivership, or what we call liquidation. I got a group together and we formed a consortium and we bought the business from the liquidator.
Then we got a few more members to come and join us and decided it would be a members’ marina. Eventually, we managed to get 90 people and put all our cash together. Of course we didn't know how to run a marina, so we recruited a guy who had just left the Navy. He knew something about ships and all that and got it going. We had the flats and the apartments as well and for a time we had to maintain all that. Then we realized that the marina was held with chains because it's a floating marina. On the chains were mussels that had attached to them. And I said, "Why don't we go into mussel farming?" So for a short period, we were into fish farming.
Then we realized we should concentrate on the marina and just keep the thing floating, and make it the best marina we could. So we dropped the fish farming and we sold all the flats, because we had a maintenance issue there, and straight away we managed to get an anchor, which is like a Michelin star for marinas, and we finished off with four anchors. I was one of the founding directors. We were not getting paid for anything; it was purely at our expense. Later, of course, we started paying the guys. I'm still involved. I'm now the Chairman of the Directors Remuneration Committee. I look at the accounts and decide if there is a rise or whatnot. Fortunately for us, there are 600–700 marinas in the UK, and the last two consecutive years we were voted the best marina in the UK.
Matties: That’s fantastic.
Rozario: That's another achievement, and it’s the thinking that anything you start you should always go for the best. That's a built-in thing, to not be satisfied by just having something, and then stop worrying about it.
Matties: So your advice to someone is that if you're going to do something, go for the best.
Rozario: So many people go into something and then back out. My belief is if you've got an idea of what you want to do, you’ve got to really believe in it 100%, and you go for it at any cost, whether you go down the first couple of times or not. Get up and start coming back again and you’ll make it. It's something that if you believe in it, you can create it. It's worked for me.
Matties: Not everyone has that sort of fortitude though. Special people are able to do this I think, but we see so many people fail, too.
Rozario: Sometimes it is because something changes their mind and they want to dive into something else. That's my life and my story and the story so far at Graphic. We are very confident and we've always been profitable. We could have been the largest, but to be large and big wasn't in my mind or our people’s here. Beautiful for us is the bottom line. Everybody who works at Graphic, that's what they're looking at. Every month my managing director brings in all the staff, a group at a time, and it's all open. He goes through everything that we have done, manufactured, and the wages and everything else and the cash there.
Matties: They all know about your sales and profits and all.
Rozario: If they made the targets then they get a bonus on top as well, but they’ve got to make it. From that point it's worked for us, especially when you consider that we are in a rural place, not a major city, and everybody here has been trained by the people here. We have very strict training set up here.
Most of our engineers and designers come locally from school. Not everyone has a degree, but these guys have the top skills and they're here because they have the attitude and the idea that they can do it.
Matties: What sort of revenues do you have here?
Rozario: We're about $27 million here, and then if you take us collectively with China, DSG, and also Hong Kong, which is a trading company and a separate production company, our annual total, including the States, is about $90 million. That's fine, but again, it's about the profitability.
Matties: What sort of percentage profitability do you get?
Rozario: Gone are the days when we used to get about 16% profit; I think we possibly range about 9–10%. In these difficult times that's very good. This year we are planning for China, without any further investment, to have the capacity there alone to do about $75–80 million. It's not that difficult. It’s a possibility.
Also as you know, the world situation has slowed down a little bit. We're now looking at global sales in places like the U.S. to get more agencies and more people linked in, so I think that will make a difference.
Matties: What's the business climate like here? Is it robust at the moment? Where are you at?
Rozario: I think generally worldwide, because we are in the U.S. and Europe, it's slowed down quite a bit, but we are steady. It hasn't slowed down the situation.
Matties: Have you seen a decline year over year? Is that what you're saying?
Rozario: When I say slow down I don’t mean a decline itself, because most of our customers are still developing things. For instance, they'll only order what they require, because these days we can deliver just-in-time. There's no future looking for large orders over a long period. Some months it's very good, some months it slows up, but on average it’s been keeping steady.
Matties: Congratulations, you've done a great job. It's been an exciting career for you.
Rozario: Thank you very much for finding the time to come by. It's very important and I think you guys are doing a grand job, because not many new people in the business even realize the PCB is a European thing. Paul Eisler escaped the Nazis to come to England. It was developed here and then it went to the States, then Taiwan, it flipped into Hong Kong and then off across the borders to China. If you really think about that first circuit in the world, Paul Eisler never dreamt that what he put together would someday become China's biggest economy.
Matties: That must have been exciting for you to be a part of it and to look back on it, like when you walked into the managing director's office for that first meeting and they said, "We're putting together this group."
Rozario: I felt like I was shivering, I didn't know what the guy was going to say and of course he didn't know what he was talking about. That made it even worse, because I didn't understand what he was trying to say. It was later on we realized that we got to start something from nothing, and it was a lot of fun as well, to send a board to a customer and if there was a break you would just say, “What's the matter? Just solder a link across it.” Today, the slightest little blemish of a mark and it comes back. Those were the good old days. It was like working in a dark room looking for a black cat.
The whole company was like a family business. I have a good team here and about ten years ago when it was just Graphic, I decide to part off about 20% of the business amongst the top senior guys. So they're also shareholders. Of course then we acquired Denmark, and we acquired China and the USA and they're still involved with all of that.
Matties: Their shares cover that; that’s fantastic.
Rozario: What was a small pocket is now...
Matties: A deep pocket.
Rozario: Well, at some stage if they sell it off or whatever then they’ll get a nice benefit for coming in. My policy has always been, and it was like a catchphrase here, that people make the difference. In many cases they do, because it's their efforts and what they put into the business that helps, and some people put in 110%. They got a piece of the profits instead of the owners just taking it. I was fairly fortunate. We all had a lot of business and we were one of the biggest exporters. My whole comfort has never been from the company, like my house and my boat and all these things. I don't even have a company car. If I do something I would rather pay it back than expense for it. I think the guys over here appreciate all that, that it's not been taken off and spent on whatever. That's where we stand with the company itself and about 12 people are now involved as shareholders as well.
Matties: You bring a lot of your profit back into the company.
Rozario: With the profit we are making we are now adding an extension to the building, which is going to cost about 1.2 million pounds.
Matties: Do you finance that yourself, or do you use cash flow?
Rozario: No, the building is leased to Graphic by my property company, Kirton Ventures Ltd., who will finance the building. In China, we’re also looking at the next stage and then at some point we’ll have to build an extension.
We haven't taken any returns or dividends in China. It's always been plugged back into the machinery. You saw the machines in the shop when you visited, and if you tried to count it and put a price to it, we're talking about mega bucks there, in the millions of mega bucks. It works for us. If you want to stay in front and do things, then you have to do that and not take your money and run and do whatever you want to do.
Matties: And you're still having fun. What else are you going to do?
Rozario: I'm still enjoying it. Doing things like talking with you today. I enjoy meeting people and I'm very fortunate to travel the world and to also be the Secretary General of the World Electronic Circuits Council, because I'm constantly in communication with everybody. In India, we have the Indian Printed Circuit Association, who over the years hasn't been getting into many world conferences and things like that, but now we have the largest electronic association in India who wants to join the WECC. I discussed this with IPC and we feel they are qualified. At first, IPCA objected because they didn’t want another big brother in India.
At these exhibitions, what you don't see behind the scenes is that we have our WECC meetings, our standards meetings, and we're constantly talking to each other and talking about technology as well. Over the last two years, some of the associates from China, Taiwan, and Japan have been talking about the science park at Exeter, and looking at whether it can get a group together to start looking at further developing PCBs from design to manufacture, as a joint effort.
All these things are going on behind the scenes, which sadly a lot of people in manufacturing are not a part of because they decided not to get involved with the federations, thinking it isn’t cost effective or whatever. But there is a certain benefit, knowledge-wise, and when something new is happening they can get the facility to use them even with a competitor.
From that point, I'm quite happy about what we have done. Otherwise, most people I know now have retired years ago and disappeared out of the scene. They don't come to anything and nobody is in contact. I had an old boys’ network about 10 years ago with Bill Miller, of Prestwick Circuits. If you remember, he was one time president of IPC as well, and the only British guy before me to join IPC. All those people aren’t in communication or contact, but I still do meet people like you.
Matties: It's fun. I've been in this industry 30+ years. There are a lot of really nice people in this industry.
Rozario: I think the Far East can’t even appreciate it, because the West has given them a huge livelihood. To think that it all came from UK and the USA and now Asia capitalized on it, because again, the difference was that most of the companies in the USA, the small shop boards just stayed small. They didn't automate, where people in Taiwan saw reason to do it in a bigger way, with bigger factories and more automation and they're still around. The little guys, which were good companies, suddenly couldn't sustain the business. I feel there's still hope for us in the future. I want to be there for many more years and make sure that I can see the next generation of technology.
Matties: Looking at the platform you built and the way you're doing it, I don't see any reason why you wouldn't be around.
Rozario: Thank you for your confidence. I hope so.
Matties: It seems like from a young man at 19 starting in Richmond, helping the Rolling Stones get a launch, and Jim Marshall, who went on to start Marshall amplifiers, you were there on the ground floor of that as well.
Rozario: I realized how he built the first 15 amp bass amplifier because bass needed that sound, and then suddenly that took off like hotcakes. Then he went to 25 watts and 50 watts, and then at 100 watts he went into a manufacturing unit and forgot the music shop he had. That just stayed behind with members of his family. He concentrated on the amplifier manufacturing and Marshall took off. He started in a little town outside of London called Hanwell and I was there.
Matties: Yeah, you were around for the start of a lot of the things, hanging out with Marshall and Paul Eisler and all that.
Rozario: The whole purpose is we're all born the same way and we have a choice in the direction we want to go. Most people get that option, some don't take it, some prefer a different job, but some stay there until they retire. Some decide to try something new. I was always curious and doing something different and new and following it up. Obviously, it’s difficult in this computer world. I wouldn't say I'm 100% computer literate, but I get by.
Matties: But you're smart enough to surround yourself with people that do. That's the difference. Having the wisdom to know what to do, if not necessarily knowing how to do it.
Rozario: And getting a team who has confidence in you and believes in what you do. They have to believe in you to have a following and think, "Okay I believe I can do it." In the early days, when we first started here, undergraduates were coming home to Crediton for their recreations. Two guys from Bristol University, who were studying aerodynamics, were here for two weeks of vacation work, and decided not to go back. I said to them, "Go back and finish. You guys are at university and should finish." They said, "No. This is something we want to do."
I still look for things that could happen. About two years ago in my own country of Ceylon (now Sri Lanka) where they produce a lot of clothes and cotton and such, I stumbled into the development of a natural substitute for silk. They found that bamboo, which is the plant grown widely in the eastern Asian countries, could actually produce a substitute silk from the bamboo fibers. They developed this and as soon as word got out, the Chinese got wind of it and grabbed it. Of course they don't patent anything and now it's a big industry starting off with producing an artificial silk with bamboo.
I had an opportunity to join a company in the Far East where I would be financing the package and I looked at it. I looked at all the numbers and thought well, it's a long way away; you’ve got to be on the premises or you can finance something and find out in the end that it could all disappear. But it's a new technology and it was worth looking at.
Matties: It's being mindful and open-minded about all it all.
Rozario: Other than that I’m glad we're still here and hope that we can grow stage by stage, and hopefully I'll be talking to you in a few years about something else like all the progress we have made with the new factory.
Matties: And we'll be at the opening of your new restaurant in one year’s time. It's good to stay busy and you obviously have a lot going on, so I appreciate you taking the time to speak with me today and wish you the best of luck with these new endeavors.
Rozario: Thank you, Barry.