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Merc Engineering
A Capital Investment Grant of £42,600 is helping an East Lancashire precision engineering company shift smoothly through the gears of growth.
Barrowford-based Merc Engineering used the funding package from the Northwest Regional Development Agency (NWDA) to help purchase a £220,000 computer numerically controlled (CNC) precision machining tool that is already generating handsome returns.
Merc supplies precision engineered components to the defence, aerospace, motorsport, railway and oil and gas sectors. The family-owned business has chalked up impressive growth, with headcount rising from 17 to 54, while turnover has tripled to £3 million, in just six years.
The new machinery is used to make flanges and fittings for sub-sea pipelines for the North Sea oil and gas industry, as well as machine-gun components for the defence sector.
"We had taken on some new customers and tried to do this work on existing machinery, but it was a loss-making operation," explained managing director Les Nuttall. "This new machinery has put the work into profit and we have grown significantly as a result of the investment."
Not only does the state-of-the-art equipment make Merc Engineering more attractive to new recruits, but it also sends out a clear message to customers, suppliers and competitors that Merc is a serious and ambitious player.
"I wouldn't hesitate to recommend NWDA funding. The Capital Investment Grant was a substantial cash sum and we could not have purchased the machinery without it," said Mr Nuttall.
"We had received grants previously and used an agent to complete the forms. However, on this occasion we decided to do it ourselves and, despite some initial apprehension, it was relatively straightforward. Much of the information was to hand in the form of business plans and cashflow data, and the experience was actually beneficial as a learning exercise."
The NWDA-funded machinery is part of a broader expansion programme that has seen Merc acquire a total of six new CNC machines, worth £766,000, since 2007.
With tougher competition from Eastern Europe and South-East Asia, Mr Nuttall believes investments in advanced machinery and highly skilled people will provide the necessary drive to push the business towards its ambition to become a world class manufacturer.
The company has also hit the acquisition trail with the recent purchase for £1.2 million of neighbouring engineering business Bright Spark Engineering, which employs 14 staff and turns over more than £500,000.
Bright Spark has significant expertise in five-axis horizontal machining and operates in the aerospace industry, producing components including military seating, commercial seating, and bed seats for Virgin's first class cabins.
"With Bright Spark on board I know we can make this market a big success. Aircraft manufacturers need suppliers they can rely on at any time, who can produce the high quality of parts required for such an exacting industry," added Mr Nuttall.
The acquisition has major synergies as Merc has an extensive track record in the aerospace industry, manufacturing parts for Rolls Royce for more than 15 years. The company has also been involved in the development of major defence projects such as the ASRAAM missile and the 1000lb bomb for Royal Ordnance.
Merc is currently going through the approval process for AS 9100
accreditation, which will help win even more aerospace contracts.
