The task of meeting Wales’ skills needs in a changing economy is a collective endeavour. Business has a critical role to play in ensuring the nation’s workforce is ready for the future.

Carmarthenshire metal powder manufacturer LSN Diffusion is a fantastic example of this. Not only is it providing high-skilled employment in its local community, but it is also giving employees a chance to improve and grow their skills and knowledge through higher education.

LSN Diffusion has been supported through Business Wales Accelerated Growth Programme (AGP). The AGP provides targeted support for ambitious, growing firms. The programme is part-funded by the European Regional Development Fund through the Welsh Government.


Here, Phillip Allnatt of LSN Diffusion shares an overview of the company’s story and how business can be about more than just the bottom line.


Tell us about LSN Diffusion
LSN Diffusion is founded on quality and innovation, and I think businesses like ours will become increasingly important to the Welsh economy as we move into the future. We’re a cutting-edge company producing high-quality products for manufacturers in various sectors.

Here at our headquarters in Llandybie, near Ammanford, we produce metal powder for clients worldwide. We established the company because we knew this sector and the science behind it; we knew metal powder and its potential. We could see the potential for providing metal powder products for high-end brands such as Audi, the nuclear industry and medical devices.


We are a global business operating from Carmarthenshire. We export most of our output to Europe and Asia. And we’re growing. We’ve expanded quite substantially and now employ more than 120 people. As we’ve grown, we’ve created new and valuable high-skilled jobs – we employ several graduates and post-graduates. We also have 12 employees studying for their first degrees with the University of Wales Trinity Saint David.


This is a capital-intensive industry, so we’ve had to seek capital to support the company’s growth. But we succeeded and secured £3 million in start-up investment from directors, employees, and an angel investor.

It’s been an exciting journey so far. We’re optimistic about what’s ahead. We’re proud of what we’ve achieved so far, and we’ve quickly become a key employer in the knowledge economy in this part of Wales.


What are your proudest moments in business so far?
First, we need to make a profit so we can invest in the business, take on employees, expand and become sustainable. So becoming profitable was a milestone which gave us all a tremendous sense of pride. It demonstrated that we were doing the right things and that LSN Diffusion has a secure and exciting future.

Because we have been able to achieve that profitability it has meant that we can upskill our workforce and add value to the local economy. I think this is important not just for us as a business but also for the broader health of the economy and our local community. In addition, we have allowed employees to further their skills by supporting them to study for degrees at The University of Wales Trinity Saint David. Seeing our people develop and improve their knowledge and skillset has been an enormously satisfying part of the evolution of the business.


What challenges have you faced in business?
We’ve had plenty! But I think challenges are a shared experience for anyone in business.

For example, in our early years, we faced stiff competition from established players in the market, who had been operating for many years and had a solid customer base. As a new entrant to the market, this was tough, but it also motivated us – we knew we could provide quality and add value.

There were other challenging areas, but the support from the Business Wales Accelerated Growth Programme (more of which later!) was key to our early success. We had to ensure our metal powders met the highest standards required by our customers and met stringent delivery times. And as the business grew, we faced the challenge of scaling up operations to meet the demands of our growing customer base, which meant significant investment in equipment and people.

We also worked with Welsh Government, which owns our premises, to find solutions to our growing energy needs. For example, we needed to use more power as the business expanded. This has been a challenge, but we’ve worked to ensure we can meet that challenge and put our company on the front foot as we move forward.


Of course, we have had to deal with issues posed by Covid-19. When the global market shut down, we had to use the furlough scheme and adopt working from home for some staff. As the market opened up, we re-started production – the nature of this manufacturing business is that a large part of the workforce can only work in the factory. It meant we had to follow the guidance on social distancing and other associated measures to ensure our staff remained safe, supported and healthy.


If you were starting again, what would you do differently?
Hindsight is a great thing in business! We’d have raised more capital initially to improve operations and cash flow. We would also have used that capital to recruit experienced managers, which may have helped accelerate our development and ability to compete sooner. But as I say, hindsight is a beautiful thing!


How has support from Business Wales AGP helped your business?
There have been plenty of ways in which the Business Wales Accelerated Growth Programme has given us vital support. As I alluded to earlier, their support was crucial when we were starting out. In terms of quality control, Business Wales AGP was essential in ensuring we were heading in the right direction and able to compete with our global competitors.


Our expansion and scaling up have involved the cultural development of our leaders at various levels. Business Wales AGP helped with that development and training need through its coaching support. But it’s also been there to help with other areas too. These include process measurement, efficiency and productivity planning and measurement, information technology, marketing, management development, culture change, finance and investment. The programme truly takes a holistic view of a business and fills the knowledge gaps which can assist in its success. Business Wales AGP also helped us secure an Economic Resilience Grant.

Meanwhile, we’ve had assistance from Welsh Government with initial start-up grant funding and, as the landlord of the premises we occupy, has supported us with on-site improvements.


Business Wales AGP has been a source of expertise and much-needed advice, which has been invaluable in our development and success.


What advice and guidance would you give other businesses starting out?

  • Look for a trusted source of advice, such as the Business Wales Accelerated Growth Programme. The best way to grow a business is by bringing in new perspectives and expertise. It’s a mistake to think you know it all.
  • Raise more capital than you think you need.
  • Eliminate inefficiencies and implement best practices to streamline processes, reduce costs and improve overall performance.
  • Recruit the best people you can and invest in their development.
  • Invest in technology to ensure you have reliable data for decision-making.


Select here to learn more about LSN Diffusion and what they do.


Further information on the Business Wales Accelerated Growth Programme


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The Business Wales Accelerated Growth Programme is a pan-Wales programme part funded by the European Regional Development Fund through the Welsh Government.

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