Avingtrans to close and sell its Maloney Metalcraft operation in Aldridge

AEROSPACE, energy and medical sector components manufacturer Avingtrans has announced restructuring plans which will include the closure and sale of its Maloney Metalcraft operation in Aldridge.

Production is to be switched to an “outsourced global supply chain”.

At the time it was taken over by Avingtrans last year, 85 people worked at Maloney’s Aldridge site.

In a statement to the London Stock Exchange this morning, the firm said it had encountered a number of issues which are affecting its operations.

“At the time we announced our full year results at the start of October, we noted the sizable task remaining to integrate Maloney and Metalcraft. The steep decline in the oil price – and the resulting delays in a number of project decisions – has presented the group with the need to implement an accelerated cost reduction program across the energy and medical division,” it said.
 
“This will involve the closure and sale of the Maloney Aldridge site, which is already in progress.

“Following the resulting transfer of the design and engineering activities to new offices, manufacturing will be transitioned to an outsourced global supply chain, both lowering cost and improving logistics. This will be supported by the larger Metalcraft facility in Chatteris.”

Avingtrans said that in the medical business, the rate of production in China remains low, but demand from Siemens has stabilised and the slow ramp-up in their activity continues.

It said it was also seeing increased activity with other medical market prospects.

The group is also restructuring its aerospace operations.

“While the market for our aerospace products and services remains buoyant, including increased activity with several existing and prospective aerospace customers, significant restructuring by one of the company\’s key customers is affecting short term demand in our aerospace division,” it said.
 
“In response, the board has decided to broaden the group\’s site rationalisation plans, which will deliver greater production efficiency and cost improvements to Sigma Components.

“This extensive programme involves the closure and merging of our Derby site into Swadlincote (formerly RMDG) and the reorganisation of Buckingham Composites. 

“Farnborough will concentrate on complex fabrications, while our Hinckley rigid pipe centre of excellence will further rationalise machining, resulting in an increased role for Sigma Chengdu.”

At the beginning of October, Avingtrans announced record full year revenues, boosted by the strong aerospace sector.

Revenue rose by 33% to £60.3m (2013: £45.3m) for the year ended May 2014.
 
But, as a consequence of the issues highlighted today, the firm’s board said it now expects group revenue and profitability in respect of the current financial year to be similar to that reported for FY14, excluding the revenue and initial losses from the RMDG acquisition.

“The steps set out above will improve operational efficiency and we expect the full year impact of these actions to be approximately £0.6m, the full benefit of which will be reflected in FY16,” it said.

Aldridge-based Maloney, formerly Exterran UK, was rescued by Avingtrans in 2013 when the engineering group bought the business for a token £1 in a deal which saved the jobs of 85 people.

The Westgate-based factory designs, fabricates and installs products for the global oil and gas market, including equipment solutions for petroleum production, gas processing, produced water treatment and aftermarket parts and services.

 

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