If they have the tools, they should IMHO make up a batch and try selling it in the normal channels at the same price (per length) as 120. Maybe a couple different (and slower) emulsions. That way, I suspect they'd maybe get the volume to make the tools worth running.
Doing tiny hand-packed one-off batches guarantees higher prices than the market will bear, which pretty much means the capital cost of the cutting/punching tools will be wasted.
But then, Ilford are doing pretty damn good without my advice already.