Changing economies and buoyant sterling may daunt York and North and East Yorkshire entrepreneurs from manufacturing exportable products, but they should heed the lessons discovered by Business Editor RON GODFREY at Elvington's Sheppee International.

ONCE there were bitter days for Sheppee International. Then there were better days.

Now the Elvington firm which manufacturers and exports high-precision machines for the world's bottle making industry is "absolutely flying."

That is the proud description from its managing director Jeffrey Yoward, the man who literally had the bottle to lift one of the oldest manufacturing companies in the York area out of the mire and send it soaring, turning it into one of the region's most successful exporters.

He has started 2007 with the kind of dilemma that other manufacturers would die for if the latest conclusions of the Chartered Institute of Purchasing and Supply are anything to go by.

Its survey, published last week, reports that "UK manufacturing ended 2006 on a subdued note, as growth of output and new orders eased further."

That gloom, fuelled by the strength of sterling, is a million miles away from the euphoria at Sheppee, at Halifax Way, on the Airfield Business Park, where Mr Yoward says: "I wish I didn't keep looking over my shoulder to see if the bubble will burst. It hasn't. It won't."

It seems that there is an endless world demand for Sheppee's "warehandling" systems - a highly technical mechanical-electrical process which receives glass containers on a conveyor and martials them into a "lehr" - an area where they cool down from a high of 270 degrees centigrade.

But each container, whatever size or shape, is miraculously positioned exactly two millimetres apart. Touching means scarring and waste.

A photograph on the wall of Mr Yoward's office of a line-up of his directors at last year's Glasstec international industrial show in Dusseldorf testifies to their pride in their precision products - in this case a transferring device which wowed visitors with its capability of handling 1,000 bottles per minute.

So what is the dilemma? Well, for the past five or six years production has increased while there have been a steady 40 people on the payroll, but such is the volume of orders for 2007 that recruitment of perhaps another five people will become necessary over the year.

"In the next six months we have a demand we have never experienced before. By next month we will have expanded our assembly area by 30 per cent.

"If I look back three years ago we were turning over £2.2 million and had the same number of employees. Now we are looking at £3.7 million turnover by June. We are absolutely flying, " he says, and begins to list all the countries which have put in orders, but then stops.

It was easier to explain that Australia and New Zealand were the only countries that didn't order and that is because all their bottle making factories are owned by Sheppee's competitors.

How different all this was from the dark days of 1992 when Sheppee was based in James Street, York, and many of its of its 90 workers protested outside on a sleety December evening as the company announced that it was going into receivership.

It was a scenario foreseen by Mr Yoward who had resigned as works director six months before the firm went bust.

He recalls: 'The writing was on the wall, with a £1.5 million overdraft being breached every month with not enough cash coming in to repay the debt.

Besides, it was on three acres of land, the value of which was at that time decreasing.' It was a sad Christmas that faced the workers, but all the more tragic because it seemingly meant the end of an endeavour whose beginnings were in 1904 when Colonel Francis Sheppee bought his commission out of the Indian Army and began to build steam traction engines.

Its products changed into motorbikes, washing machines and vacuum cleaners, then finally and exclusively making engineered products for the hot glass container industry all over the world.

But Mr Yoward was ready to save the day with former sales director David Tucker. They had pre-prepared a business plan and staged a buyout with backing from outside investors such as Yorkshire Enterprise, and a Barnsley machine repair company called ISM.

Principal investors were Mr Yoward and John Pratt, who is still a non-executive director. Other shareholders today are Gary Parkin, the finance director and Richard Moore, sales director.

One of Mr Yoward's first decisions was to steer away from manufacturing glass making machines and concentrate on warehandling. He also cherrypicked their key staff from the best and most experienced workers from the old firm. It paid off handsomely. The share capital from outside investors of more than £1 million has since been completely repaid.

Healthy cash reserves meant that three years ago they rebuilt their Elvington office "and we have not used our overdraft facility for the past ten years, " says Mr Yoward.

Along the way Sheppee scooped major awards, including the Yorkshire Evening Press Exporter of the Year in 2000 and was a finalist the following year.

Another decision was to outsource half of the manufacturing - much of it mechanical engineering - to firms close to home in Yorkshire with careful monitoring processes put in place to ensure excellence. "We reckoned that should trouble times return we would bring back more tasks in-house.

But that hasn't happened for seven years. It is not an issue."

So what is the secret of consistent success against the tide? "That's easy, " says Mr Yoward. "The secret is to remain in the forefront of technology and never to compromise on quality."

And how to counter the high value of the pound?

"I have to say that we are not cheap but we are cost effective and we give 100 per cent service.' Another secret is continuity. Alongside the proudlydisplayed winners' certificates in the reception area is a magnificent model of a 1924 Cykelaid, one of the glorious two-stroke motorbikes invented by Colonel Sheppee" It's worth saluting.