A Northumberland-based manufacturer and supplier of heat exchanger tube is looking to increase its workforce by half after a major investment in enhancing the work it can do in-house.
Salem Tube International is Europe’s largest stockist of steel heat exchanger and boiler tubes, and works with household name clients around the world in a wide variety of industries, including petrochemicals, oil & gas and power generation.
The Prudhoe-headquartered firm is investing a total of £2.4m in new premises, equipment, systems and staff training to enable it to carry out more of the processing work that its products require itself, thus increasing the amount of project revenue it is able to keep hold of while also reducing costs and maintaining a tighter grip on quality control.
Salem Tube International has worked with regional fund management firm NEL Fund Managers to secure a £750,000 investment from the Finance For Business North East Growth Fund as part of fulfilling its development plans.
The purchase and installation of new machinery which enhances the surfaces of the tubes that Salem produces has now been completed, and the management team is hoping its increased capacity will lead to 16 new positions in sales, production and quality control roles being created over the next three years, to add to its existing 31-strong workforce.
Established in 1992, Salem Tube International provides ISO9001 quality-certified bespoke tubing products up to 28m in lengths, and also offers a worldwide emergency delivery service to support companies with immediate repair or replacement needs.
Around 80 per cent of its business comes from clients around the globe, and it maintains a number of overseas offices in locations in Western Europe, Scandinavia, the Middle East, Far East and Australia in order to service their requirements.
Managing director Howard Ions says: “We’ve made a conscious decision to look after more of the elements of the contracts we undertake ourselves, which will not only increase the amount of revenue we’re able to retain and decrease our costs, but will also give us absolute certainty that we’re providing the quality of product that our customers expect.
“We think it will take us around three years to fully establish our extended operations, and we know that we’ve got a lot of work to do to achieve this, but we also know that there a lot of new commercial opportunities out there for us to target, both with existing and new clients.
“As we grow, we’re going to need to employ new people to produce the new work we’re undertaking, and we’re hoping to see our workforce expand by around half as much again over the medium-term.
“The Growth Fund provided the right investment option for us at the right time, and the NEL team has been easy to work with right through the application process – we’ve suited it each very well, and we’d happily do it all again.”
Jonathan Luke, portfolio manager at NEL Fund Managers, adds: “Salem Tube International is a North East business that’s succeeding around the world through its commitment to the highest quality and customer service standards, and their strategic approach towards building on this success presented us with an excellent investment opportunity.
“A key imperative for Growth Fund investments is the creation of new jobs within the North East, and Salem Tube International’s plans are strongly focused towards achieving this goal.”
Aimed at regional businesses which are at a development and growth stage, the Growth Fund forms part of the wider Finance for Business North East Fund.
Managed by North East Finance, it will see £125m of investment capital injected into the region by the European Investment Bank and the European Regional Development Fund 2007-13 over a five year period.
NEL is looking to make around 130 investments over the five-year life span of the Growth Fund, and is actively looking to speak to ambitious north east companies with robust business plans.
For more information about NEL’s investment criteria, visit www.nel.co.uk or contact the investment team on 0845 111 1850.
The ERDF 2007-13 programme is bringing over £300m into North East England to support innovation, enterprise and business support. It will help create and safeguard 28,000 new jobs, start 3,000 new businesses and increase the region’s productivity by £1.1bn per annum.