Back Too the Future; Darchem Is Going Back to What It Does Best -Making Money Fro Om the Burgeoning Nuclear Power Industry. JEZ DAVISON Profiles a Business That's Moving Forward by Going Back in Time

Evening Gazette (Middlesbrough, England), August 23, 2011 | Go to article overview

Back Too the Future; Darchem Is Going Back to What It Does Best -Making Money Fro Om the Burgeoning Nuclear Power Industry. JEZ DAVISON Profiles a Business That's Moving Forward by Going Back in Time


Byline: JEZ DAVISON

WHILE most companies are casting their eyes towards the future, Teesside engineering firm Darchem is looking to the past.

But don't for one minute think that's a negative tactic.

The Stillington-based firm is simply going back to what it did best 25 years ago, making high-quality engineering systems for the nuclear industry.

As the last quarter of the 20th century faded away, it was forced to diversify into other areas as nuclear work fizzled out.

That tactic proved to be a masterstroke, ushering in lucrative work for Darchem in the defence, oil and gas, automotive, aerospace and naval marine markets.

But now the company is refocusing its business model to protect itself from deep public spending cuts which have wounded some of those key markets.

The defence industry has been hit particularly hard. Several projects have been axed or postponed indefinitely, causing anxiety for firms that operate in the sector.

The prospect of losing vital revenue streams has forced Darchem to look to other markets.

And its eyes are now set firmly on its tried and trusted ally, the nuclear power industry, after the UK Government set out plans for millions of pounds of investment in nuclear infrastructure. The White Paper on Electricity Market Reform, unveiled by Energy Secretary Chris Huhne last month, aims to incentivise companies by offering subsidies to operators of nuclear power stations - part of a wider move to alter the UK energy mix in favour of cleaner forms of electricity generation.

And Darchem, which has been dabbling in the sector for more than two decades, is aiming to cash in.

The sector currently accounts for about 6% of the firm's pounds 65m annual revenues - but managing director Graham Payne believes that could rise to 40% over the next few years.

He said: "We always knew that the defence budget would come under pressure - but at the same time we can see the resurgence of new nuclear projects.

"Companies now are very much focused on the new-build projects in the UK. The Government has taken a positive view of nuclear power, which is a wonderful opportunity for the UK manufacturing industry.

"If you are successful in the UK market you become engrained in the supply chain. That can open up opportunities further afield."

Right now Darchem is bidding for two weighty projects that would see it make thermal insulation systems for nuclear reactors.

If those two bids come off, they will generate up to pounds 100m for the company and create 100 new jobs. That would continue Darchem's recovery from a difficult recession which forced it to shed more than 50 jobs at its Stillington plant in the early part of 2010.

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Back Too the Future; Darchem Is Going Back to What It Does Best -Making Money Fro Om the Burgeoning Nuclear Power Industry. JEZ DAVISON Profiles a Business That's Moving Forward by Going Back in Time
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