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Clyde is forging ahead with plans for expansion
ENGINEER Clyde Process Solutions is forging ahead with global expansion plans after reporting a rise in first half profits.
The Doncaster-based group has just opened a new operating subsidiary in South Africa, which will tap into the country's metal and minerals market.
It is also in advanced stages of negotiations to expand in the Indian market, where it hopes a new joint venture will benefit from the country's rapid growth and demand for commodities.
Clyde, which specialises in pneumatic conveying systems, which transport materials by blowing air through an enclosed pipeline, yesterday reported pre-tax profit in the six months to the end of August leapt from 400,000 to 2m. Revenue was up 39 per cent at 36.2m.
The group also proposed paying its first interim dividend – 0.75p per share – which chief executive Alex Stewart said reflected the group's strength and cash generation.
Although a small initial capital investment, Mr Stewart expects the South African subsidiary will be a "strong driver in the long term".
Clyde has joined forces with a partner in South Africa, wiping out much of the launch cost. Once fully operational, Mr Stewart intends it to follow the format of its European operations – with a sales force, engineering, project management and final assembly manufacturing operation. He expects profits to start filtering through in February 2010.
Clyde is also working to break further into the Brazilian market with its air filtering products. "We are confident of gaining share in the air filtration market in South America," Mr Stewart said.
Yorkshire will benefit from Clyde's expansion, said Mr Stewart. "We will grow in Yorkshire as it's a centre of excellence for us.
"There will be growth in engineers, research and development staff and project managers."
Clyde's strategy of growth in developing markets such as India and China is based on the mass movement of population from rural areas to cities.
"We think India is going to be a very important market for us as it urbanises and develops," Mr Stewart said.
"Almost half the population in China are still farmers and have not benefited from the economic revolution. The China and India markets will eventually be a substantial part of the group and there's no reason why combined they should not be as big as North America."
So far the group, which employs more than 50 staff in its 10 offices around the world, has seen limited effects from the economic downturn.
During the past six to eight weeks, "everyone has been holding their breath" and Clyde has seen delayed orders.
But Clyde said the strong demand for energy-saving processing systems and reducing emission levels, should see it though the slump. Its conveying systems can reduce energy consumption by as much as 40 per cent.
Clyde's order book is now close to record levels, up 65 per cent on last year at 34.5m.
During the six months, 35 per cent of its order intake came from the food industry, where its pneumatic conveying and air filtering systems are used in making human and pet food.
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Clyde Process Solutions supplies processing equipment to the iron, steel, copper, nickel, platinum, gypsum, cement, food, chemical and ethanol industries.
Based in Doncaster it employs more than 50 staff in 10 offices around the world.
The group, which can trace its roots back more than 30 years, has two subsidiaries after acquiring United States-based MAC Equipment for 43m in April 2007.
MAC Equipment is a market leader in pneumatic conveying and air filtration equipment uses to move granular or bulk materials. It designs, engineers and manufactures processing systems for companies including PepsiCo and BASF.
Clyde Materials Handling Ltd makes and designs pneumatic conveying, pneumatic injection and dome valve systems, mainly used to process granular and powder-type materials in the metals and minerals markets.
Clyde Materials Handling's customers include Codelco, Corus, Saint Gobain, P&G and Lafarge.
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