A growing Northumberland engineering business has opened up a new revenue stream with the backing of a second investment from regional fund management firm NEL Fund Managers.
Advanced Composites Engineering manufactures premium quality composite tubing for businesses across a wide range of sectors, from defence and aerospace through to sports equipment, marine and other commercial and industrial applications.
Formed at the start of 2021 by a team of experienced engineers who had previously worked together, the Cramlington-based firm has now taken on full responsibility for manufacturing and supplying a customer’s 50-piece industrial cleaning kit that is used by household name clients around the world.
The new contract gives Advanced complete control of the production process, allowing it to respond quickly to changing customer needs and manage the manufacturing process much more efficiently.
Advanced Composites Engineering worked with NEL in 2021 to secure an initial £95,000 investment the North East Small Loan Fund Supported by The European Regional Development Fund, which allowed it to secure the initial resources it required to service more and bigger clients within and outside its home region.
And it has now gone back to NEL for a further £150,000, this time from the North East Growth Capital Fund Loan Fund Supported by The European Regional Development Fund, to support the delivery of its new service line.
Two new jobs have already been created as a result of the new contract, with more expected to follow through the coming year, and plans are also being put in place to build the company’s presence in the US market on the back of it.
Having surpassed last year’s target of increasing its turnover by twenty per cent, Advanced Composites Engineering is now looking to increase it by a further 40 per cent in 2023.
As well as creating composite tubes, it also offers additional services including surface machining, drilling, milling and turning which enables it to deliver assembly-ready components or products to its clients.
It has also recently achieved the industry-leading ISO 9001:2015 standard for Quality Management Systems.
Don Robinson, director at Advanced Composites Engineering, says: “2022 was a challenging but successful year, and we’re now well set to build on what we’ve achieved so far.
“Being effectively given responsibility for our client’s reputation with their customers is a real vote of confidence in the quality of service we provide and the reliability with which we deliver on our promises.
“Taking on this new contract and bringing in other additional business gives us a greater degree of certainty on our business forecasting, but also means that we need to increase the stocks of raw materials that we hold in which we need to make further capital investment.
“We’ve had a positive relationship with the NEL team since their first investment went in, and as we knew how the investment process worked, it made sense to discuss the next stage of our development with them.”
Jane Siddle, senior investment executive at NEL Fund Managers, adds: “The experience of its management team, a skilled growing workforce and their willingness to go above and beyond for their customers has put Advanced in a strong position to take big strides forward this year.
“Having a readily available supply of growth capital to help businesses evolve through the different stages of their development is an essential part of any healthy economy and we’re very pleased to be adding another company to our long list of repeat investees.”
NEL Fund Managers has been accredited under the Recovery Loan Scheme by the British Business Bank to provide loans of between £25,001 and £250,000 to regional firms as part of its wider investment offering of up to £500,000.
The North East Growth Capital Fund has been designed to create around 790 jobs in more than 70 regional firms over the life of the programme and offers unsecured investments of up to £500,000 to established businesses looking to realise their growth potential.
The overarching £120m North East Fund will provide financial support for more than 600 businesses, creating around 3,500 jobs and delivering a legacy of up to £80m for further investment into the region.
For more information about NEL’s investment criteria, visit www.nel.co.uk or contact the investment team on 0345 369 7007.