Celestion at 90: Staying on top of its game8 December 2014
4. The right team and the right tools
PSNE: So Nigel comes back from China with the green light to invest in staff and machinery.
(Read part one of this two-part feature for №s 1–3!)
NW: We did invest in a lot of engineering tools as well, because ultimately we are an engineering company so we want our engineers to be as efficient as we can possibly make them.
JP: When I started in 2003, there was Ian [White] who was for many years our head of engineering (and now works for us as a consultant), Paul Cork [then senior project engineer, now head of engineering] and one other project engineer, a couple of people in the drawing office and that was it, really. Now we have a development team of 11.
PSNE: You claim to have the largest R&D team of any driver manufacturer.
JP: As well as the development team we also have a dedicated research team that feeds both the Celestion and KEF brands. That works well because ultimately, the acoustical science is the same. All research and development is conducted in the UK.
PSNE: The software is your secret weapon, right?
JP: We’ve spent 15 years developing our own software; we call it Projector. It allows us to understand the activity of each little tweak in a model of a loudspeaker design. Projector takes the principles of FEA – finite element analysis (a mathematical approach to solid mechanics) – and applies them to loudspeaker manufacture: mechanically, thermally, acoustically, electrically. We believe that no one else models all four of those elements together.
5. Reliability and consistency in manufacturing
NW: When we moved into the pro-audio sector, we realised it’s difficult to make good compression drivers consistently. We saw that as a challenge, and an opportunity. [With some manufacturers] you can get [lower] prices for the drivers but they don’t have the consistency. We put a lot of engineering and factory effort into manufacturing small precision parts to high tolerances. Because we have a large factory, we have massive capacity – and because of that we grew compression drivers manufacturing very quickly. More than 1,000 compression drivers are sold every day.
6. See it through
PSNE: What does Celestion need to do next in order to stay on top of its game?
NW: We are half way through our [10-year] journey. We are very comfortable with our strategy but as we learn about the market, as the marketplace changes, we have to tweak and refine the strategy. I guess, hopefully, what will happen over the next couple of years is that we bring out some innovative products that will hopefully change the industry.
PSNE: How often do you have to report into Gold Peak?
NW: Every quarter, more or less. On a day-to-day basis we’re pretty much left alone to run the business.
PSNE: And that works for both of you?
NW: What you seem to find is that when you run a very successful business, you are left alone!
PSNE: And Gold Peak is run by the same man who bought the company 20 years ago?
NW: Yes – Victor Lo.
PSNE: And he still has the passion for hi-fi?
Nigel Wood: Absolutely. He is very, very passionate and an interesting character: every time I meet Victor, he says, ‘You need to invest more money in this business!’ It’s a nice problem to have.
The neodymium problem
PSNE: Two years ago, you weren’t using neodymium magnets, just ferrite ones.
JP: There was a point – probably burnt into Nigel’s memory – where the price of the neodymium shot up double, treble, even more.
NW: At its peak the cost increase for us to buy the neodymium magnets for any particular driver was greater than the selling price of the driver.
JP: At that stage it becomes much more difficult to justify. What we tried to do instead was hedge against any further price increases by looking again at the well-used ferrite technology and see what we could do to that. Obviously one of the key advantages of neodymium is the weight…
PSNE: About half the weight, isn’t it?
JP: With the FEA software we looked at how we could pull out as much of the metal weight as possible to make lighter ferrite drivers, so that if the price of neodymium stayed high there was a lighter ferrite option.
NW: We now have lighter weight ferrite and neodymium drivers, so we make both types of product. Also, the price of neodymium has come down to a more sustainable level. It’s, like, three times the price of what it was three years ago – but it’s not 20 times the price.
NW: Yes – wow. That was an interesting time! Now, Today we just warn our customers about the last couple of years of volatility and that nobody really knows the future price of neodymium. Just be warned!