ALL signs point to Mexico for pothole-fixing group Velocity after the firm sealed a five-year deal worth £7.5m to repair roads across 21 South American countries.
The Sunderland-based company will provide their technology to Mexico- based Ecotech to repair roads across growing economy countries such as Brazil, Argentina, Chile, Colombia and Bolivia.
Representing Velocity’s biggest-ever overseas contract, the deal is worth about £1.5m a year and will increase the company’s annual £6.5m turnover by 25% in the next 12 months.
The deal came about through internet marketing, where Ecotech discovered Velocity’s technology and services.
Hailing the deal as “massive”, Velocity’s recently appointed managing director Dominic Gardner said: “This represents the biggest contract in our history by some margin, so it is fantastic news for the business.
“Ecotech turned to Velocity after searching the global market for a world-class road repair specialist.
“They have major road repair challenges right across South America, so our technology and services are going to be in extremely heavy demand.
“Although we’re one of the world leaders in pothole repair technology we haven’t won any contracts with our local councils, which is an area of some disappointment for us.
“While our main focus remains very much on the UK market, helping local authorities to tackle the country’s major pothole problem, we’re elated to make such a big breakthrough, though it will be a challenge too.”
The deal follows a takeover of the business by the Reece Group and a series of major contract successes in the UK including the highways authorities of Essex, Kent and Cheshire.
Velocity provides a complete road repair service, inclusive of machines, materials and operation teams, to authorities throughout the UK.
Capable of repairing up to 150 potholes, Velocity’s self-contained machines manufactured in the company’s Sunderland workshops carry all the necessary equipment and materials to repair potholes and other road defects.
To meet Latin American demand, Velocity will produce 60 of their specialist machines for shipping across the Atlantic at the rate of one a month over the next five years.
The deal will also create at least six new full-time jobs at Velocity’s Sunderland workshop.
Reece Group subsidiary Pearson Engineering, which makes counter mine equipment for the military market, has worked closely with the Velocity manufacturing team to make their production process ready for larger volumes.
John Reece, chairman of Reece Group, said: “This contract is evidence of the potential we spotted for significant overseas expansion with the help of additional investment that the Reece Group has supplied.
“There are potholes in roads all over the world and the combination of Velocity’s technology and support service provide an excellent solution, particularly at a time when there is pressure on public expenditure.”
The Reece Group is also the holding company for a number of North East engineering businesses including Pearson Engineering, Pearson Engineering Services and Responsive Engineering Group, operating in the defence, subsea and construction markets.
The group’s strategy is focused on expanding the business in existing and new markets both organically and through acquisition.