One of the UK’s leading specialists in high integrity forgings is adding its voice to industry’s call for greater support to offset escalating energy costs.
Pontypool-based Forged Solutions Group, which works with high profile clients in the aerospace, energy production, underground mining and off-highway vehicle sectors, is calling on Government to address rocketing gas and electricity prices by exploring potential subsidies or removing some of the tax burdens.
The company has decided to increase its membership of the Confederation of British Metalforming (CBM) to include all its five manufacturing sites in Wales and England and to ensure it has the strongest possible voice and access to MPs and Business Ministers.
President Ben McIvor is also keen to address the issue of steel quotas and the negative impact they are having on production flexibility and capacity to match increasing customer demand, with his own company securing more than $200m dollars of revenue since it became an independent group in 2019.
With a site in Blaenavon, the manufacturer is keen to build on this growth and has already invested over £3m in new CNC machining capabilities and testing facilities across the group, with a recruitment push also underway to take on 25 new staff.
“We are operating in a really strange environment at the moment, where opportunities are significant, but challenges – through no fault of our own – are equally as big,” explained Ben, who oversaw the formation of Forged Solutions Group after the purchase of several sites from Doncasters and Arconic.
“The single biggest challenge for our business is energy. You simply could not have predicted what we are seeing at the moment and there are very few, if any, businesses who can sustain the meteoritic rises we’re having to endure.
“Our consumption is very intensive, and we are facing a significant increase in our energy cost rates compared to recent years. You can’t pass all of this on to the end customer, so you are then found looking at alternative solutions and this is where I feel the Government really need to step up and offer possible solutions.”
He went on to add:
“Our Blaenavon site has always been part of the CBM and we have seen first-hand the difference the trade organisation can make. We wanted to give it our full support and will now be working with it to lobby the powers that be on all the critical issues for manufacturing.”
Forged Solutions Group has enjoyed a new lease of life under the new ownership structure and being able to shape its own future has led to an increase in turnover despite the challenges of the pandemic.
A large part of the company’s work is in aerospace, with its forgings used as shafts, rings and discs for engine parts, as well as finding their way into landing gear and structural components for the main body of aircraft.
“The nature of our business means we use a lot of different grades of steel and the quota system the Government has in place is also causing operational challenges, with the UK’s allowed amount used up quickly, leading to us or our customer potentially having to pay tariffs,” continued Ben.
“In some instances, you simply can’t buy the material domestically, so you have to import it. and this approach to regulation makes it a difficult trading environment.”
The Confederation of British Metalforming, which represents more than 200 members producing fasteners, forgings and pressings, cold rolled and sheet metal products, has been in discussions with the Government for some time on the issue of energy and steel quotas.
It has been able to capture feedback from the shopfloor and galvanise industry support to provide a collective train of thought on these issues and is in regular contact with senior people from the Department for Business, Enterprise and Industrial Strategy (BEIS).
Geraldine Bolton, Chief Executive of the CBM, picked up the story:
“Now is the time for our specific part of industry to stand up and start shouting about the challenges we are facing and having the entire Forged Solutions Group on board is great news for our efforts.
“Ben has significant experience of our sector and is well respected, so it will be vital to make sure his voice and first-hand thoughts are heard by people making decisions on new business support measures.
“The forgings it makes are used in some critical applications across the world, so we have to ensure we have a UK supply chain in place to deliver the products and components we desperately need.”
In addition to lobbying, Forging Solutions Group will look to use experts at the CBM to help it access the Climate Change Agreement scheme across all its five sites, which could deliver significant cost savings in the future.