Alan Smith, appointed the new MD of Welsh//Slate following fraud allegations against the previous management at the Alfred McAlpine business, talks exclusively to Natural Stone Specialist about the future of the operation

By the final quarter of this year Welsh//Slate should be breaking even and should be back in profit next year, says Alan Smith the new managing director of the Alfred McAlpine business.

On 30 April he started a multi-million pound programme of quarry investment and spoke to customers about increasing prices of roofing slate by 30%. "Customers are perfectly happy about it," he says. "Everyone realises prices are far too low." He says it is an increase in net price, not list price, as customers lose some of the heavy discounts they have been receiving. "I have been very pleased with the understanding from customers in these difficult times. They have been very understanding and are more than willing to work with us. They understand if we don\'t work together there might not be a Welsh slate industry."

Alan was appointed to head the business after Alfred McAlpine Plc uncovered what they believe is fraud by previous managers. Former managing director Chris Law and operations director Geraint Roberts are no longer at Welsh//Slate in Penrhyn, north Wales, and five other senior members of the management team have left. Alfred McAlpine say they believe "the managers involved were not motivated by personal gain" and that they have ruled out civil proceedings as no significant amount of money is likely to be recovered. North Wales police are investigating.

Under the new leadership of Alan Smith the architectural stone side of Welsh//Slate has already been mothballed and the showrooms at the Business Design Centre in Islington, London, and Leuven, Belgium, closed last month (April). One of the quarries has also been closed and the workforce of just over 400 has been reduced by more than 160. Alan told NSS: "I see my job as saving 250 jobs."

Alfred McAlpine Plc say that sales and production volumes of Welsh//Slate have been overstated for several years and slate has been pre-sold at substantial discounts. They say the whole episode will cost the firm £40.4million. After the discovery in February of the misrepresentations of the Welsh//Slate business, Alfred McAlpine Plc delayed publication of their financial results to take into account the reality at Welsh//Slate.

Last month they published their figures for the year ending 31 December 2006. They showed pre-tax profit of £18.7million on turnover of £1,176million. The group\'s finance director, Dominic Lavelle, has now also resigned although chief executive Ian Grice has said he was not implicated in what happened at Welsh//Slate.

After the discovery in February of what were described as "accounting irregularities" at Welsh//Slate, Alan Smith received a call from Ian Grice. "He said he had this problem," says Alan. That was on a Wednesday in mid-February. The following Monday Alan took up his position as MD of the slate business. Alan\'s background is in aggregates. He spent 16 years with Pioneer and 10 years with Aggregate Industries, ending up as managing director of five of their businesses - Bradstone, Aggregate Supplies, Brook Concrete, Stoneflare and Border Stone.

When Aggregate Industries were taken over by Swiss company Holcim last year, Alan made a lifestyle decision to leave and start his own firm, Stone Paving Supplies, importing natural stone from India and China for the hard landscaping industry.

He says he has "parked" Stone Paving Supplies, passing on orders and enquiries to others, to concentrate on Welsh//Slate. "I have a full time job for a number of years at Welsh//Slate," he says. He is planning to relocate from Derbyshire to Wales.

Last year a new £6million factory was opened at Welsh//Slate which doubled the amount of roofing slate that could be produced from extracted block. There have been commissioning difficulties that have led to issues of quality control, but Alan says: "We have three production lines in the factory but at any point in time we have only had two operating because we can\'t get enough block out of the quarries."

The investment in the quarries will include an experiment with sawing the slate from the face rather than blasting it. Alan also says he is "sympathetic" towards increasing the range of sizes of slate on offer and to producing specials for the niche, top-end and heritage markets in which Welsh roofing slate operates. He is focussing on the roofing slate business because he sees anything else as a distraction - roofing should produce sales of £20million a year whereas architectural slate sales amount to only £1.5million.

And he is unequivocally focussing on the future. "I have not spent one minute of one day looking into the history of it," he told NSS. "I\'m looking at where we\'re going now."