Optare hails £6.2m deal to make buses for Arriva

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BUS maker Optare has won a £6.2m contract to build 50 buses for transport giant Arriva.

The Sherburn in Elmet-based company said the buses will be a mix of single deck and lightweight Versas.

Optare’s chief executive Jim Sumner said: “This is great news going into the New Year and demonstrates that investing in new fuel efficient products targeted at the major fleets is the right strategy.”

Five vehicles will go to Arriva Midlands, 10 to Arriva the Shires and 34 to Arriva Southern Counties. Delivery will take place in March, April and May.

The Optare Versa model weighs relatively little, which saves on fuel costs. It comes in four lengths: 9.7, 10.4, 11.1 & 11.7 metres with space for up to 44 seats.

Optare has made a significant investment in new hybrid technology.

It has also invested in low carbon technology through the Government’s green bus fund.

Earlier this week it reported a 106 per cent increase in sales to £46.7m in the six months to September 2012.

The company manufactured 350 buses in Yorkshire during the period.

It reduced direct labour costs from 15.2 per cent to 7.9 per cent of sales and cut administration expenses from 23.7 per cent to 10.2 per cent.

Optare consolidated operations from former sites in Rotherham, Crossgates and Blackburn at a new 140,000 sq ft base in Sherburn in Elmet. Mr Sumner has axed nearly half the workforce since he joined in June 2009. The company employs 430 people, down from 900.

He said: “It’s not something I’m proud of but that’s something it’s taken to rescue the company.”

Back in 2009, the company was struggling with problems including production delays, soaring costs, rising debt, withdrawal of trade credit insurance and falling spending by bus operators.

A year ago, Ashok Leyland, which is part of the Hinduja Group, increased its shareholding from 26 per cent to 75.1 per cent in return for a refinancing, after Optare’s attempts to access bank finance failed.

The Indian owner has invested £1m in the first half in new computer-aided design systems, paint plant and new product development.

Mr Sumner, who agreed to stay on for a period following the Ashok Leyland takeover, will leave the business this month.

He said he is considering a number of options.