Just over a year since taking over as chief executive, David Bond says a shift upmarket is driving a transformation that includes tackling loss-making divisions, spending a record £10m on research and creating a new confidence in the company’s unique capabilities.
Price hikes of up to 30 per cent have sparked “quite a few arm wrestles” with customers, some of which have been lost. But profits are up, debt is down and the £140m order book is the biggest on record.
Mr Bond took over the “fundamentally good” business from Graham Honeyman in June last year. He has brought in all-new top team and continued a ‘premium’ repositioning that reflects how, in the defence sector at least, it has few competitors and “in some areas none.”
The 700-strong firm makes reactor components for Royal Navy nuclear subs. It is also selling castings to the US Navy.
Mr Bond, who came from BAE Systems, said: “The exciting thing for us is the US recognises the quality of the work we are doing. They have very limited capacity, their industrial base is quite thin.”
Uniquely, he says, Forgemasters has a ‘brains trust’ of more than 100 scientists and engineers, some 60 apprentices and forging, foundry, machining and testing services. It gives total control over manufacturing and high levels of security.
The transformation plan also includes ‘multi-skilling’ staff so they can move sections if not busy and £10m on civil nuclear manufacturing techniques - it’s biggest ever research project.
Mr Bond said he felt the weight of history.
“When you’ve got a company that dates back to 1805 it does weigh on you as a leadership team. It forces you to think long term.
“We could have cut the apprentice programme, investment in machinery and testing equipment. But we carried on and sacrificed the sugar-hit of short term profit.”
Forgemasters fell to a loss three years ago and shed 100 jobs.
Today it aims to supply the next generation of nuclear power stations and small modular nuclear reactors. SMRs could hit a ‘sweet-spot’ at a firm which already has expertise from work on nuclear subs. Mr Bond states.
But whatever the potential, they can never be complacent. Customers always have a choice and the government is distracted by Brexit.
He added: “Civil nuclear feels like it is spinning its wheels and Brexit is not helping.”