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05 January 2018

Chain reaction - group thinking works for South West precision machining consortium APEC

APEC consortium members APEC consortium members
The Hinkley Point C nuclear power station project promises to deliver billions of pounds-worth of opportunities to UK suppliers. As a result, four small engineering companies have joined forces to put them in with a better chance of gaining some of that bounty, but, as Andrew Allcock learned, they are already reaping benefits

The construction cost for Hinkley Point C (HPC) nuclear power station is estimated at around £20 billion. According to lead partner EDF Energy, some 64% of that value is expected to come from UK firms.

In a recent news report, the original 2025 switch-on date has become 2027. Nevertheless, there will be work aplenty for a host of UK suppliers during build, with efforts to use local firms a stated EDF aim.

Chris Langdon, Hinkley Supply Chain Team project lead, says that the South West is expected to benefit to the tune of some £200 million annually during the construction of this facility.

There’s also the Nuclear South West public-private partnership (NSW – http://nuclearsouthwest.co.uk) that boosts prospects further, saying: “The South West is set to become a nuclear hub in the next two decades, with 15 projects worth £50 billion to our economy.”

Since 2010, companies in the South West have been able to tap into this potential via the Hinkley Supply Chain Initiative (www.hinkleysupplychain.co.uk), now operated by Hinkley Supply Chain Team. The initiative includes The Somerset Chamber of Commerce, Business West and manufacturing and business development experts from SWMAS.

Advanced Precision Engineering Consortium, APEC (www.apec-uk.com), which was created some 24 months ago, is just one result of that initiative. Tim Parker, general manager at Bridgwater-based member company Berry & Escott Engineering, explains how APEC came about: “With the Hinkley Point C nuclear new build on the doorstep, there were various seminars and roadshows going on all across the South West, organised by Somerset Chamber of Commerce. We quite often saw the same faces, some of whom we already knew. For example, I have known Andy Riste at Metaltech [Chard] for years and we knew TMB Patterns, which is located just around the corner, although we hadn’t really dealt with CAM Machine Components [located in Clevedon, Avon] before. We were all saying that there is the potential for so much work coming from nuclear new build, but no one company would be able to cope with it and we’d all like a bit of it.”

Image caption: The APEC members – L-R: Bill Colquhoun, TMB operations manager; Simon Farr, CAM Machine director; Gervase Winn, CAM Machine director; Andrew Maynard, Amitec director; Ken Stockham, TIS director; Tim Parker, Berry & Escott general manager; Chris Escott, Berry & Escott director

That was clearly true for the four firms that founded APEC, whose headcount varies from around 14 for CAM Machine Components to approximately 75 for Metaltech and TMB Patterns, with Berry & Escott falling in between, claiming some 40. Also, taking into account the size of each firm’s turnover, it was less likely that one of them alone would win any of the larger contracts, because it might be considered too risky. Continues Parker: “Pooling all of our resources together, you have a consortium of over 200 employees with a turnover in excess of £10 million. So, suddenly the risk factor element for any of the Tier 1s dealing with us has been dramatically reduced. We could say that, as a group, we can service your needs.”

CONSORTIA CONVERSATIONS

He explains that it was supply chain engagement manager Sam Evans at Somerset Chamber of Commerce that spoke to the companies, highlighting the other consortia that had already been established. These include Somerset Larder, set up in 2014 by six Somerset food producers to compete for large catering contracts, and Somerset Passenger Solutions, established in 2015 by a family business and a national bus operator to bid for the HPC main bussing contract.

Meetings were held at Somerset Chamber of Commerce where members of other consortia came in to talk to the potential partners. “We, the four companies, kept discussing the idea and, after a couple of months, said, ‘let’s see if we can sort something out between ourselves’.”

Usefully, all of the partners were working towards, or had just gained, Fit For Nuclear accreditation (Fit4N). In fact, all were already involved with the nuclear industry on various other projects, such as decommissioning. Once a decision was made, forming the consortium proved easy, because, as the general manager says, “we just gelled as personalities”.

Gervase Winn, director of CAM Machine Components adds: “Everybody was very, very nervous at first – a ‘you’re not going to see what I’m doing’, sort of thing – but fairly quickly it all opened up and now we’re all working together and sharing knowledge, which has been a great bonus for us all, no holds barred. It’s great! Very enlightening, in fact.”

Now part of the HPC supply chain database of 4,000 companies and with its own website and marketing collateral, APEC is ready. Parker suggests that currently it is civil engineering that is the major HPC activity, while at the end of the project there’s probably a couple of years of fitting out, with machined components coming “somewhere in the middle” of the 10-year project, with a “a large volume over three to four years.”

The big prizes held out are for components such as ‘embedment plates’ (sunk within concrete and to which other items are secured) plus pipe and HVAC brackets – a figure of 600,000+ has been quoted by EDF for embedment plates, for example, while it says there are “a thousand kilometres of steel pipework”. With the likely quantities split between five or so main contractors, Parker states: “You are looking at colossal volumes, and if you transfer that to machining and halve it, there are still colossal volumes.”

There is no legal entity to the consortium, it is all based on “gentlemen’s agreements”. Accepting that that might not be how things have to be in the future, Parker says: “It works very well as it is at the moment. Any enquiry to APEC goes into a common email account that all receive; likewise with phone calls. We all quote, but whoever seems best suited offers a reasonable price and has capacity to do it, takes the lead on that job.

If for any reason there are bits that they can’t do, there are another three companies that can take on some of that other work – but the lead company manages the overall package.

“We are doing a fair amount of work for each other that has absolutely nothing to do with nuclear at all. We’ve done low volume intricate 3D machining for Metaltech that it preferred not to do, which helped them out with their customer; we have subbed work out to CAM Machine, sliding-head work, because we were overloaded. The volumes were high for us, 100- to 200-off, but would probably have been too small for Metaltech, which also has sliding-head capability.

WORK SHARING ESTABLISHED

“As it happens, Berry & Escott was already undertaking some work for TMB Patterns. Since coming together for nuclear new build, this cross-pollination outside of that specific area has grown,” the general manager reports.

Apart from work sharing, there are other benefits: “Even down to borrowing tooling and gauging; that’s working well,” states Andy Riste, Metaltech’s manufacturing manager.

The sharing out of work is made easier by the fact that the areas of activity of the four APEC companies do not overlap in any major fashion, even if their equipment is similar on occasion. Metaltech Precision has some multi-axis mill-turn CNC machines (Doosan, Mazak), small VTLs (Doosan) twin-pallet vertical machining centres (Mazak), plus fixed-head (Mazak) and sliding-head (Star Micronics GB) lathes. Heavy fabrication, assembly and testing are also part of its mix.

CAM Machine is similar to a certain extent, having many Doosan CNC turning centres, plus Doosan vertical machining centres and one Citizen and one Doosan sliding-head machine, but the two companies serve different customers and industries.

TMB Patterns is a thermoforming mould tool maker, working mostly in aluminium. Three years ago, the company invested around £2 million in a 24/7, automated facility for mould tool production. Boasting Erowa robot-fed Hermle and DMG Mori machining centres plus an EDM die-sink machine, it is housed in a temperature-controlled facility and additionally machines non-mould components. A large double-column surface grinder, a Perfect PFG120-200AHD (RK International Machine Tools) followed, while the arrival of a Grob 5-axis machining centre with 1.5 m diameter capacity complete with aluminium swarf compactor is imminent – the latter an investment of some £900,000.

Berry & Escott is a low-volume, bespoke manufacturer offering design, development, fabrication, bending (Amada pressbrake) and machining services (XYZ Machine Tools-supplied machining centres, milling and turning machines), with 20-off a batch run for the company – “an inconvenience for Metaltech,” Parker suggests.

And he adds: “Within the companies, we are looking at different elements. Of course, before the consortium’s existence, the members would still have had to work with others, but now that APEC has been set up, each of the firms use the others as preferred suppliers. This shortens response time and there is confidence in the standard of work supplied. It is also easier to have discussions regarding pricing, where a company may have only allowed a certain amount for an operation but where things don’t turn out as planned. In such cases, discussions about equitable sharing of profits are much easier to have, because there’s an ongoing business relationship, rather than a one-off chance at profit.

“Regular meetings every other month are the forum for general discussions between the four parties, and this works because there is open and honest communication.”

This year, the group had its first collective presence at an event, Southern Manufacturing in Farnborough. Useful contacts were made that may yet deliver results, with the consortium aspect of great interest, the group reports.

It was also a good learning opportunity, Parker adds. “Certainly it was for CAM Machine and Berry & Escott, as we have never attended events as individual companies. As a group, the cost is only 25% each.”

The consortium has, more recently, added two new members, one for non-destructing testing, Technical Inspection Services (UK) and coatings specialist AMITEC UK, both based in Clevedon.

The consortium is now pretty well formed, says Parker, who concludes: “We are now in a great position to services customers’ needs and each of the six companies has their own relationships from which the consortium benefits.”

While the HPC prize is, as yet, unquantifiable, one thing is clear – working together as APEC is already paying off for this group of forward-looking South West companies.

First published in Machinery, October 2017

Andrew Allcock

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