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From Westminster PPE frustration to royal approval for timely expansion - Arco MD opens up on 2020


2020 was always going to see a marker set in the history of the huge Hull family firm as it opened its £30 million National Distribution Centre and saw a new city centre headquarters start to emerge.


But those at the helm of the 134-year-old firm found themselves thrust into a frustrating and frenetic pandemic situation when they were in the box seat to deliver.


Overlooked by government despite being the UK market leader - and more than good enough for the Scottish NHS with whom it secured a huge contract - Arco, like many, also had to close one third of the business down - then restart it - while taking the extraordinary step of chartering 10 planes to bring vital items of personal protective equipment in from trusted suppliers.


While Mr Evison desperately hopes lessons will be learned in Westminster from the handling of the PPE scandal, the unprecedented events of the past year have underlined the family firm’s strength. It was also a stroke of good fortune that the huge state-of-the-art shed - vital capacity as the UK needed a master distributor - completed at the right time, even if Arco, and clearly the Department for Health and Social Care, didn’t realise just how quickly it would be put through its paces.


“Our existing customers were front-of-mind in all the decisions we have taken,” Mr Evison said. “A lot of companies sold their souls to get good contracts, we shut the business down with the intention to make sure we got supplies for existing customers.

“We have been around for 134 years, and what was really important was we could keep clients supplied when supplies were pretty short.


Our focus was to make sure we could get the supply. Food production, industrial production, are strong sectors for us, and we are the warehouse for those companies, relied upon, so it was critical to do that. Any excess was here for front line workers, yet out of it all, we were 0.07 per cent of supply. It was a whole area of frustration.”



Thomas Martin, chairman of Arco, and the position paper it has produced.



Arco’s credentials were clear - not just from the stated position, released last month - subsequently picked up in a parliamentary analysis of the hard-hitting National Audit Office review - but similar scenarios that should have acted as a playbook.


“We are able to guarantee strong supply because we own the supply chain that starts in China. We don’t just source a manufacturer, we have a team there and we make sure we understand products are ethically sourced, the workforce is treated properly and more importantly, that goods are compliant,” Mr Evison said, of the 10-strong Arco workforce in the Far East.


Laboratory services are embedded within the operation. It has published technical papers on the right equipment for the right environment, while working with the likes of London Eye, the BBC and Ericsson on service contracts.


“We don’t just buy and sell it, we use it, train it, work with it,” he said. “That’s why we can talk about safety.”


And this is where the issue with government procurement - raised in a positioning statement released by chairman Thomas Martin and then in Westminster debate by constituency MP Emma Hardy - has been tough to take.


“My biggest issue after this pandemic is that we worry the government - if it is issuing contracts with unknown entities - is not prioritising compliance and safety. Everyone asks if I’m disappointed we didn’t get the contacts, but my biggest issue for me is the health and safety of the market place being diminished by decisions made.


“It is like an MoT on a car, you rely on it to know the brakes are good. If you put a mask on you need to rely on it, the workforce needs to rely on it.


“It is critical to me that health and safety compliance and enforcement is maintained.

“We offered our resource. We wrote to the government offices, involved direct contacts with procurement teams, offered what products we had, offered our expertise and offered our supply chain - we never got a response.


“We did participate in three contracts, we’ve provided respirators for ICU and that was a really thorough process.


“We helped through Ebola, we helped through foot-and-mouth, and we helped through swine flu - it is not as if we weren’t known. We have been very public and helped support government response, yet for whatever reason they took a very different approach.

“At the time it was difficult, we had just come out of Chinese New Year, getting to speak to anyone was tough.


“We chartered 10 planes - we had a 747 with 20 million masks on board - not something in February I thought I’d be doing in May.”


The fact stock sat idle as wards relied on the likes of pivoting 3D printers irks. But the bond with customers has strengthened and the role deepened as it continually met demand.

And with such cargoes touching down at Stansted, the need for the National Distribution Centre couldn't have been clearer than the blue light it was bathed in for recognition of the key workers it served - or wanted to.


“We assumed it was to be a five to 10 year period before it was full,” Mr Evison said of the expansion alongside the A63 entrance to Hull. “It went very quickly from taking a walk around in February wondering how we would fill the place.


On the ground: Part of the first consignment of 19 million face masks ordered by Arco.


“What this has done in the short term has filled it, and in the long term we will end up holding a bit more stock. Strategic partnerships are really important for us to hold stock for some of the NHS trusts, we can cycle stock through so it doesn’t go out of date.


“The benefit of a family-owned business is we can take a longer term view and prioritise long term growth and we have a history of doing that. Four years ago we doubled the packing tables, which doubled the amount we could handle - so that really helped as well.”


While coronavirus has dominated the year, what 2020 had set out to be has also happened too, with Princess Anne doing the honours on the big build in September, as she had the original expansion.


“We’ve opened a distribution centre, we’re in the final stages of re-writing a website and there’s the new head office too - we’re looking at a £70 million investment,” Mr Evison said.

“There are not many people investing in offices, or retail footprint, but that will set us up for a long term position. We’ve invested in over-the-counter, we’ve moved the one in Hull and have a further five stores now operating - taking us to 46. They offer a range of products but also showcase our expertise.


“The HQ will be a great statement for the business ,we want to attract the best talent, we want to develop people in the Hull area.”


And it is the people who have seen it through, of which Mr Evison is in no doubt.


“Experience came to the fore as locations were made safe, and processes were put in place, while every employee received a pack of 100 face masks and sanitiser for themselves and their families. Staff who couldn’t work had salaries topped up.


“The biggest thing was making sure we had done the right thing for our colleagues, and we have had a lot of supportive feedback,” he said, with half of the 1,650 employees in Hull and East Yorkshire.


Paying tribute to the “absolutely brilliant” team, he said: “We had to shut the retail business, safety services and training, and our embroidery business. We had to manage and support one third of our people out onto furlough, then had to bring them back into work safely after the first lockdown - making sure people really understood what we were doing, fetching them in safely.”


It worked, and the distribution element was also named Safety Team of the Year by Safety and Health Practitioner, while Arco has also won several awards from customers for service in unprecedented times.


“We could have profiteered from what went on, but we battened down and focused on supply,” Mr Evison said. “It has been a real rollercoaster year. We relied heavily on colleagues to do the right thing, which they have done, while falling back on experience.”


Turning to performance, with end of year results from June not public yet, he said: “ It isn’t a record year - possibly an average of the last five years. The first three or four months will reflect the closing of businesses, and as we came out [of lockdown] lots of businesses have been procuring safety equipment, and we’re showing good sales growth at the moment.


“It has got to be balanced by economic uncertainty - many areas like oil and gas have struggled, which we’re strong in - and Brexit, which is a worry. We have a business in Ireland, so we’re watching what happens there.”


Last year it turned over £282 million, the year before £295 million - with the EU exit uncertainty blamed for the tough market and trading conditions it entered the current period in.


One of the “best meetings of the year” has been the community panel, where Arco gives back - regularly one per cent of profits. Through Covid, 44 causes close to the heart of employees that suffered were awarded £1,000.


It has come alongside other donations to hospices, Operation Lifestyle, Yorkshire Air Ambulance - financial support and crew suits - as well as The Deep, Cat Zero, Ron Dearing UTC and £250,000 to the National Emergencies Trust.


And has Arco heard back from Whitehall?


“We’ve had an acknowledgement from the DHSC, confirming they believe they have done the right thing and traded with the right people,” Mr Evison said. “We are trying to help and support the debate. We all have a responsibility to protect the population.”


It has come alongside other donations to hospices, Operation Lifestyle, Yorkshire Air Ambulance - financial support and crew suits - as well as The Deep, Cat Zero, Ron Dearing UTC and £250,000 to the National Emergencies Trust.


And warning shortages are still evident in some categories, notably certain masks and gloves, Mr Evison warned: “The pandemic remains dangerous, we are not through it in any way, shape or form.”


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