Foundry group Chamberlin gets to grips with machining woes

Profit margins improved during the year as the company tackled the issues with the machining cells at Walsall, as revenue performance demonstrated a wider picture of growth and development, rising 17 per cent year-on-year to £37.7 million.

After accounting for restructuring costs, administration and costs of closing its pension scheme, the group saw its loss for the last year reduce to £800,000 from £1m a year ago.

But the major technical problems at the new machining facility made a maiden loss of £400,000, net of compensation from Chamberlin's machine supplier.

As a result, underlying operating profit before tax fell to £400,000, from £700,000 a year ago.

Despiting the machine shop issues, it makes Chamberlin the only fully integrated supplier of grey iron bearing housings in Europe, helping it win new contracts. And the company is already benefiting from the ramp-up of a new automotive contract which helped push foundry operational revenues by 24 per cent to £26.4m.

Company chairman Keith Butler-Wheelhouse said: "While the year has delivered on our revenue expectations, margins have suffered due to the difficulties we have encountered in the start-up of our new machining facility, and ramp up of the Walsall foundry to meet unexpected demand.

"The technical issues at the new machining facility continue to improve. New products for machining are also being introduced.

"The group remains well placed for further progress over the new financial year as cost efficiencies are realised."

Meanwhile Chamberlin's engineering businesses, Exidor in Cannock and Petrel in Birmingham, also contributed to growth.

The company employs more than 130 people at its 128-year-old foundry site in Chuckery Road and its new machining centre on the Maple Leaf Industrial Estate in Walsall.

Chief executive Kevin Nolan added: "Our foundry at Walsall is our flagship operation and drives the majority of the foundry division's sales. Walsall's expertise is in producing small castings, typically below 3kg in weight, that have complex internal geometry. The complex geometry is achieved through the use of innovative core design and assembly techniques and, importantly, the foundry is capable of producing these castings in high volumes.

"The automotive turbocharger segment is a major market for Walsall, with modern designs requiring precise alignment of cooling and lubrication passages to meet the increased performance demanded by modern engines. Legislation is a major driver of this market, with the requirement to reduce nitrogen dioxide emissions promoting the introduction of smaller, turbocharged petrol engines. Approximately 74 per cent of Walsall's casting production is for petrol engines.

"Walsall is one of only four specialist foundries in Europe with the technical capability of supplying castings for turbochargers and, with our new machining capability, the foundry is now the only fully integrated supplier of grey iron bearing housings in Europe."