The chairman of offshore firm SMD has unveiled plans for the firm to launch its third North East base next year as it targets £150m turnover.
Subsea robotics firm SMD has been serving the oil and gas markets for 53 years from its base at Wallsend’s Turbinia Works, and it has recently been reaping the rewards of expanding into the wider renewables markets, spurring an ambitious expansion project which is now taking shape.
Having recently launched a new distribution facility at New York Industrial Estate, the company plans to create new facilities to house its R&D work, services capacity and production of its all-electric ROVs (remotely operated undersea vehicles). The Tyneside firm recently sold the first of its world-leading electric submersible robots – technology bosses will help to underpin its future growth.
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Chairman Mike Jones says plans for the new factory have now moved a step closer, with the firm in discussions to create a new factory which would add around 30,000sqft of space, that it plans to open by the first quarter of next year. He said the new facility would increase its manufacturing, lab and office space by a third, to 120,000 sqft.
The news comes as the firm publishes its latest accounts, showing an increase in turnover and profit in 2023. Turnover rose 38% from £39.8m to £55.01m. Gross profit rose from £12.4m to £14.5m, while operating profit jumped from £3.8m to £5.3m.
Within the accounts, the company – part of Chinese giant CRRC Corporation Ltd – said it is also planning to almost treble turnover to £150m by 2030, a goal which would also see it create new skilled jobs. It said: “Further growth to £150m is targeted by 2030 through applying our core skills to a wider group of markets, products, services and geographies. Our growth will be mainly organic.”
Following publication of the accounts, Mr Jones highlighted a further year of investment ahead at the business, telling The Journal: “It’s a good set of figures to have with good growth - nearly 40% - and it’s profitable growth which is important. As a consequence of that we’ve been recruiting a lot of people.
“We took on more than 50 people last year and we’re planning recruitment of around 50 more people again this year, and obviously those are all high quality jobs, including graduates and shop floor apprentices. There has been some specialist areas, particularly within software and electric engineers where you are competing with a lot of people for those jobs but it helps when things are going well, people are enjoying working in a company doing well, and it helps that what we do is right up there in energy transition and that interests a lot of young people, certainly.
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“It’s good to see good profitable growth which is following the strategy that we set a few years ago which was to invest a lot more in R&D and technology and that is bringing through a lot of the growth. And we’re trying to balance ourselves between where we’ve been traditionally - with equipment - with services, so it’s much more balanced in that sense.”
SMD’s engineers were the first to market an electric remotely operated underwater vehicle (ROV) – the new Quantum EV – having developed electric drives to replace hydraulics. Around £5m has been invested in the vehicle’s development, beating competitors around the world to produce high-powered vehicles that are more energy efficient, require less support while also posing less risk of producing oil leaks.
Mr Jones said: “We’re looking at developing a new purpose-built factory to build those ROVs, so growth will take us beyond our footprint in Wallsend and to house our technology unit. We still also see growth in our traditional trenching business too, because of the global growth in offshore wind and also try to develop our services business, and we’re also looking at new businesses which could be part of the growth.
“We’re in negotiation with various parties and have some different options but we want to get an extra 30-40,000 sqft of production and office space, and that will principally be based around an assembly facility for those world class ROV systems. We’ll keep that local and we’d like it to be somewhere close to our existing facility if we can so it’ll still be in the North East.”