Yorkshire engineering firm looks for growth on the Tyne

Jul 8 2009 by Peter McCusker, The Journal

THE new owner of a North East engineering company says it is on track for record growth after winning fresh work in the oil and gas sector.

Newcastle’s Chieftain Group, which has 650 workers and turned over £46m last year, has been built up by its owner Redhall Group since it was bought by the Wakefield company last October.

Redhall chairman and chief executive David Jackson says the renaissance of the Tyneside industry attracted him to the company.

He said he had faith in its potential even after it lost the chance to work on the £300m contract to build oil rigs for Billingham firm Seadragon Offshore, which decided to move the work to Singapore weeks after the takeover. He said: “We did not buy Chieftain for one contract. It operates in areas in which we see substantial growth. Tyneside has had a quiet time in recent years, but it is on its way back.

“With the money being spent on the former shipyards on the banks of the river there is a revival under way on Tyneside, and Chieftain will be an integral part of that.”

The stock market-listed Redhall Group is one of the fastest-growing engineering support services enterprises in the UK with annual sales increasing from £23m in 2005 to a projected turnover of £130m in 2009.

Chieftain has secured new work for its Tyneside fabrication shop with a £3m contract from engineering company SLP, which has just moved into a new Wallsend site where it plans to create 2,000 jobs.

Redhall has also introduced Chieftain to an oil and gas refinery project on the Humber, with the final value of this expected to come in between £7m and £8m. Chieftain’s continuing contracts on the submarine programme with BAE Systems for the MoD at Barrow have already earned it nearly £4m.

Mr Jackson said: “The Chieftain acquisition has given the group enhanced prospects in strategically important target sectors, particularly at Barrow. The true benefits of the acquisition will become evident over the next two years.”

Chieftain was established in 1979 and specialises in engineering services to marine, petrochemical, power, oil and gas, and process sectors.

Earlier this month Redhall, which has 1,800 staff, said its revenues for the six months to March 31 had risen to £64.8m and pre-tax profits were up to £3.1m.

Defence accounts for 20% of its revenue and the engineering activities associated with the processing of food and chemicals account for 30%.