A TEESSIDE engineering company has nearly doubled its sales after setting out to find new markets instead of relying on the steel industry.
SBV Fabrications, which employs around 250 people in Middlesbrough and Hartlepool, worked for years mainly supplying steel company Tata in Redcar, until the blast furnace was shut down in 2010.
The company’s turnover went from £6m in 2009 to £4m the following year.
“That made us think that we shouldn’t put all our eggs in one basket. We decided we would look to new markets to find new sources of income,” said Samantha Condren, who with David Geary bought out the business in 2008.
“The difficulties that everyone in our sector experienced when the recession hit are well known, but by widening our horizons, we equipped the business to not only get through the worst of the downturn, but to also be ready to capitalise on new opportunities as things began to slowly improve.”
The company is working again with SSI, which took over the Redcar steel plant in 2011 for £300m, but since 2010 has been providing steel fabrication, mechanical engineering machining and engineering services to an ever wider range of companies. It saw its turnover increase first to £7m and then last year to £12m since its first contract to build a steel structure for the nuclear industry. It has since worked on increasingly large contracts for a variety of industries.
Condren added: “Moving into new markets and thus widening our customer base means we’re less dependent on one sector and the inroads we’ve already made into areas like the oil and gas, mining, and offshore sectors have given us the appetite to do more in these areas.
“To do this, we need to invest in the right equipment, processes, premises and people.”
The company has been building up equipment, staff and space and is now considering taking more space over the next couple of years. To provide working capital for the expansion the company won a £400,000 grant from NEL Fund Managers from the Finance For Business North East Growth Fund. As the firm wins new business it will recruit up to 40 staff this year and the same next year.
Jane Siddle, investment executive at NEL Fund Managers, adds: “The SBV management team’s ambitious and open-minded approach shows that, even when economic conditions are tough and difficulties arise, businesses with the right strategic and tactical approach can succeed.”
Managed by North East Finance, the fund will see £125m of investment capital injected into the region by the European Investment Bank and the European Regional Development Fund 2007-13 over a five-year period.