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'Offshored' jobs heading back to West Midlands

Rising costs in China and the Far East means a boost for Midlands employment.

CAB Automotive, which makes components for car interiors

Hundreds of jobs have been brought back to the West Midlands as firms win business back from Eastern Europe and the Far East.

Rising shipping and labour costs in China are helping manufacturers in the region to secure business previously sent offshore.

About 1,500 manufacturing jobs which moved offshore to cut production costs have been brought back to the UK since 2011, and more are expected to follow with costs, quality and reducing lead times cited as reasons.

The international success has led to a surge in investment from engineering firms in the region – representing significant progress with finance hard to come by in recent years.

Among those to benefit are Birmingham firm Barkley Plastics, which has won business back from China, the Czech Republic and Germany in the past year.

Business development engineer Matt Harwood said: “Barkley has had quite a lot of work which was previously done overseas come back in the past year.

“We have had work for Marks & Spender that was originally made in the Far East – earphone and desktop tidies – which we now design and produce.

“We have also had products like an avian bird deflector – which goes on telephone lines – which was supposed to go to the Far East but because of our knowledge and accessibility they are doing it here.

“And we have had a few automotive products – like a light guard for Nissan, which would have been made in Japan but we are doing it here.”

Barkley is on course to see its turnover grow to about £6 million this year, up from £5 million last year.

It was hit hard by the recession, which saw its workforce reduce from 200 to 90, but has seen that increase to 100 in recent times and has had to take 10 agency staff on to complete reshored contracts.

Mr Harwood added: “It has happened in our sector quite a lot, and it is the same in injection moulding – there is a lot more interest in buying in the UK than going to the Far East.

“The prices in the Far East aren’t a lot cheaper than they used to be.”

UK Trade & Investment recently joined forces with the Manufacturing Advisory Service to launch Reshore UK, a push to encourage reshoring.

Competitive corporate tax rates and a strong regulatory environment are helping to secure more business.

Reshore UK will provide a matching and location service, access to advice and support and a named individual to help each company.

MAS’s role is to help support small and medium sized businesses to be globally competitive and to ensure there is capacity in the UK supply chain to take advantage of the reshoring opportunities. UKTI will use its global networks to attract foreign companies to invest.

Elsewhere in the UK, the likes of model train manufacturer Hornby, food manufacturer Symingtons and Vent Axia have all returned work to this country.

Advanced manufacturing firm RDM Group is currently responsible for producing the rechargeable integrated torch that is fitted as an approved accessory to Jaguar and Land Rover vehicles. Part of this work was previously carried out in China, but due to issues with logistics, control over manufacture and cost, this has now been brought back to the UK for manufacture.

The firm recently invested £400,000 in a new advanced engineering and vehicle build centre as part of plans to bring work back to the region from the Far East.

The Coventry-based firm is creating 25 new jobs on the back of the investment, and is targeting a £25 million turnover.

The 20,000 sq ft facility on the Bilton Industrial Estate will see it fit out with two CNC machines, three injection moulding machines, a laser engraver and a dedicated area for vehicle conversions and builds.

Group chairman David Keene told the Post: “The investment in the Advanced Engineering Centre gives us a fantastic platform to take in-house a lot of the work we’d subcontracted previously, a considerable amount of which was going out to the Far East.

“This means we have greater control over quality and we can avoid some of the logistical issues we’d faced over the last twelve months, both benefits that we can immediately pass on to our customer base.

“Increasingly, we are working on niche projects that require greater involvement at the design stage and a flexibility to be respond to clients within a few hours. All the indicators suggest that our approach is proving successful and this will no doubt lead to further opportunities within our local supply chain.

“Can the UK become the reshoring nation? I don’t see no reason why not. We have the technical capabilities, we have the innovation and, thanks to market changes, we are now equally competitive.

“However, it’s not easy and UK firms have a role to play in making sure we are set up to take advantage of this trend.”

Tipton-based Cab Automotive, which produces interior components including seats, arm rests and dashboard consoles, has invested to buy its 200,000 sq ft factory in Tipton on the back of new growth.

Contracts with BMW and Renault have helped the firm, which was born out of the MG Rover collapse, to its fastest-ever growth.

The firm has now secured £7 million of new contracts to supply parts for the new BMW Mini and the seat foams for the Renault van. These latest successes will help it push turnover towards the £40 million level and create jobs. Finance director Richard McCulloch said he worked with the Manufacturing Advisory Service to secure £1 million from the Regional Growth Fund towards the £4.5 million cost of buying the factory.

McCulloch said: “We’ve gone from £20 million in 2012 to a predicted £40 million by the end of this year, with plenty of new opportunities in the pipeline. Managing this growth was one thing, but at the same time we were told by our landlord that there was a chance our facility could be sold. The only solution was to buy the land, as that would give us the platform and security to plan for the next decade.”

He added: “Without the strategic and financial support we received we may have had to look outside the region for our next base, which wouldn’t have been ideal from a skills point of view. Thankfully, we are here to stay in the Black Country and will hopefully be in a position to create more local jobs shortly.”

Cab Automotive has spent more than £4 million on capital equipment, a foam production line, new machines for wrapping BMW Mini arm rests and a new water jet cutter.

It already supplies the likes of Jaguar Land Rover, Aston Martin, Nissan, Toyota and McLaren Automotive and another recent contract win will see the company design and manufacture a bespoke rear passenger iPad tray for the Bentley Mulsanne. Rachel Eade, MAS automotive sector lead, said it was heartening to see an automotive supplier experience dramatic expansion after overcoming the volatility of the sector and the global downturn in 2009.

She said: “The company is now on the verge of moving from a SME into a larger manufacturer. Importantly, it is staying in the West Midlands, creating skilled jobs and, where possible, sourcing from the local supply chain.”

Mr McCulloch and chairman Brian Miles formed Cab Automotive in 2005 out of MG Rover’s demise. The company created 56 jobs and took over Lear’s factory on the Vaughan Trading Estate, starting life supplying up to £3 million of components into Jaguar and Land Rover sites across the UK.

 

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