UK SMEs are investing, creating jobs & expanding

The Manufacturer recently sat down with members of the Manufacturing Assembly Network, one of the UK’s leading manufacturing collectives, to discuss their experiences of 2017.

Aluminium casting producer, Alucast, has seen its order book reach a five-year high - image courtesy of Alucast.
Aluminium casting producer, Alucast, has seen its order book reach a five-year high – image courtesy of Alucast.

UK manufacturers, for the most part, demonstrated a strong performance over the course of 2017, seemingly shaking off the immediate effect of the vote to withdraw from the European Union.

Increases were reportedly measured across all four metrics – output, orders, employment and investment.

However, investment intentions are still lower than would be expected considering the recent growth, possibly a result of continued uncertainty surrounding Brexit.

That may characterise the national picture, but doesn’t represent what individual businesses are experiencing. Take MAN, for example, whose members have announced increased investments, full order books, rising international demand and expanding workforces.

The Manufacturing Assembly Network cluster group features eight sub-contract specialists and an engineering design agency. All are small or medium-sized companies and for the most part all are based in and around the Midlands.

As 2017 drew to a close, The Manufacturer was invited to attend one of the MAN Group’s regular strategy meetings. The event was held at the University of Warwick’s WMG, which the cluster has worked with to complete more than 10 projects, resulting in over £2m of new orders.

Muller Holdings is a privately-owned subcontract machine group. It’s Redditch-based CNC site has been extremely busy, supported by investments totalling almost £1.5m over the past 24 months in new equipment and technology.

More investments are to come in 2018, according to managing director Adam Cunningham, who noted that automotive was responsible for a large part of Muller’s current growth.

Muller’s growing order book is being supported by further investments in 2018, according to its managing director – image courtesy of Muller Holdings.
Muller’s growing order book is being supported by further investments in 2018, according to its managing director – image courtesy of Muller Holdings.

Other sites within the Group, which cover high-volume machining and miniature turned parts, have been steady throughout the year, but are now seeing an upturn.

That’s not that surprising given that Muller covers a broad spectrum of markets.

Cunningham commented: “As one market plateaus, another grows. To be honest, that’s been the story of not only the past two years, but the past two decades; it’s not unusual and something we are used to dealing with.”

One market which has significantly contracted is oil and gas, yet even here, MAN is seeing growth.

Director of Kimber Drop Forgings – part of KimberMills International, Geoff Turnbull said: “Our order book is reasonably high at the moment and has been quite buoyant for the past three years.

“That growth is coming mainly from the petro-chem industry where many businesses are struggling currently; but for us, it seems to be on an upward trend.”

Kimber has recently invested more than £1m in a new forge and as a consequence has been able to re-shore some production back to the UK. The business previously had several products that had to be made in Poland because of their size. The new facility has enabled it to pull some of that work back into the UK and provide jobs here.

Export focused

Brandauer is a precision stamper and toolmaker, with an annual turnover of around £8m. Almost 75% of its sales are exported, a key factor in the business’ growth to date, according to CEO, Rowan Crozier.

Manufacturing Assembly Network - Brandauer is a precision stamper and toolmaker, with an annual turnover of around £8m – of which almost 75% are exports – image courtesy of Brandauer.
Brandauer is a precision stamper and toolmaker, with an annual turnover of around £8m – of which almost 75% are exports – image courtesy of Brandauer.

The past 24 months have been mixed, Crozier noted, but the firm is now safely back on an upward trend: “In our first financial quarter of 2016/17, we started strong, but it then dipped quite significantly for about six months following the Brexit vote.

“It reached a point where I had to make some difficult decisions to reduce our overhead costs. I’m happy to say that from January 2017 onwards, the business has performed incredibly strongly. Our half-year results showed we were just 10% off our full-year profit target.”

In 2017, Brandauer invested close to £1.2m on new machines, automation systems and several pieces of specialised equipment.

The story is the same at Barkley Plastics, where a £500,000 investment in larger-sized moulding machines has resulted in a “better than ever” order book and the creation of several new jobs.

Business development manager, Matt Harwood noted: “Tier 1 automotive manufacturers are increasingly outsourcing plastic moulding work rather than performing it in-house. That’s a demand we have been quick to spot and capitalise on.”

Similarly, aluminium casting producer, Alucast, has seen its order book reach a five-year high.

Chairman and owner, Tony Sartorius explained: “Recent growth has been driven by a decision we made two years ago to seek additional business in lightweight materials.

Lightweighting is an issue that the automotive industry has been increasingly exploring, obviously to save weight and improve on fuel efficiency and carbon emissions, and we’ve capitalised on that.

“Furthermore, complex components are increasingly being made as an aluminium casting, whereas previously they may have been welded assemblies or iron castings.

“That has benefited us and we’ve positioned ourselves to take advantage by exploring technology and improving our internal capability to further address the demand.”