Chirton Engineering secured a Let’s Grow grant which has been pivotal to the business coming through the recent difficulties of the oil and gas sector and finding new markets.
The North Shields-based company was one of the first to win a grant under the scheme which it used to buy state-of-the-art machinery, create jobs and diversify.
“Without that initial Let’s Grow support we wouldn’t be where we are today,’’ says business development manager Michael Morris.
The engineering business was founded by Paul Stewart in 2003 with just four employees in 500 sq ft premises. It grew steadily to the stage in 2013 where it had 53 employees and an annual turnover of £3.6m.
At this stage the business applied to the newly formed Let’s Grow Fund for a grant to help it acquire new machinery. “In 2013 we realised we were at the next stage and wanted to push on and meet the demands of the subsea oil and gas sector and further investment was needed,’’ says Morris. Chirton successfully applied to Let’s Grow for a grant of £200,000 to help towards buying more than £1m worth of new machinery. Thanks to Let’s Grow, Chirton was then able to acquire state-of-the-art equipment.
“The grant enabled us to go for Rolls-Royce standard of machinery rather than Mercedes,’’ explains Morris. The investment also led to the creation of 16 jobs. The collapse in the oil price over the past year has hit investment in the offshore sector and put a brake on Chirton’s growth plans but diversification is helping the company to weather the storm.
Even though there was a downturn associated with exploration there was still demand for safety components. Chirton also expanded into component manufacturing for manufacturers including McLaren as part of a strategy of collaborative innovation with its core customer base.
The company was also placed in a stronger position in 2014 when it was acquired in a £2.75m deal by Carlisle-based agriculture, food and engineering group Carrs Milling Industries.
Carrs, which produces farm products and ingredients for the ready meal and baking industries and had been searching for a business to complement its own engineering division, acquired the entire share capital of Chirton. Chirton continued to be led by its existing management team, including managing director Paul Stewart. Carrs backed its new acquisition with a further investment of nearly £1m in new machinery and a move into 50,000 sq ft premises on the Tyne Tunnel Trading Estate, up from 16,500 sq ft in its previous base .It also brings great new opportunities in new markets for Chirton.
Another Carrs subsidiary Bendalls Engineering, also based in Carlisle, has secured a set of multi-million pound framework agreements to supply Sellafield with complex components for some of the site’s most critical facilities. This has led to precision machining work being subcontracted to Chirton.
“It has opened doors within the nuclear industry supporting the framework bids that are already in place,’’ says Morris. The company, which last year had a turnover of £4.2m, is now bullish about its future.
“We are still very positive. We are vigorously pursuing new markets and we are getting good responses,’’ says Morris.
And the company is still appreciative of the help given by Let’s Grow. “We needed that injection,’’ adds Morris. “We could have got funding from banks but it would have held us back. We would still have achieved the things we wanted to achieve but it would have taken longer.
Let’s Grow not only gave support to the business but we feel it was a recognition that we were doing something right and that if you do that there is support there to enable you to go forward. To get that recognition was very important to us because you can tend to think you are ploughing a lonely furrow doing a lot of unseen work, not just for the company but for the region.’’
Phil Sly of BE Group, which administers Let’s Grow, says: “Chirton is a fantastic company but it is not one to rest on its laurels. It is constantly identifying different sectors to which it can bring its expertise and grow.
“It has been a very satisfying company to work with. The grant to Chirton is really the epitome of Let’s Grow: they were given the grant, made the investment, created the jobs and found new markets.’’