£20m deal with Rolls-Royce sure sign firm can compete with world
10:00 14/04/2009
FIVE-YEAR DEAL
Dean Doherty, global purchasing executive for Rolls-Royce and Paul Fabrications finance director Alan Turner centre, and managing director Ingard Sagstad
A CASTLE Donington firm says its latest big order is evidence that the UK can compete with lower-wage economies.
Paul Fabrications has linked up with Rolls-Royce in an agreement to provide replacement parts for jet engines already in service.
The deal would be worth up to £20m up to 2014.
A variety of components for numerous different engines will be manufactured at the firm's Castle Donington base for use in Derby, Germany and the United States.
Paul Fabrications has an annual turnover of around £9m and has been producing parts for Rolls-Royce for the last five decades.
The new contract is the first new agreement between the two companies since 2005 when Paul Fabrications moved into its 40,000 sq ft manufacturing base at the Willow Farm Business Park in Castle Donington – a move which coincided with an investment of some £1.2m in the business.
Managing director Ingard Sagstad said: "This contract shows that by investing in innovative technologies, facilities and working practices, we can compete with low-cost economies.
"It is a clear indication that our investment has paid dividends."
Dean Doherty is Rolls-Royce's combustion and casing global purchasing executive.
He said: "The long-term agreement is an excellent example of what can be achieved by our two companies working together, particularly over the past three years when we have seen significant improvement in Paul Fabrications' performance.
"It was not without its major challenges by any means but, with both teams' willingness, drive and longer-term view of what could be achieved, these were overcome.
"I would like to thank everyone involved through the improvement journey as they deserve the credit for this achievement."
Alan Turner, Paul Fabrications' finance director, said: "This is a tremendous vote of confidence to everyone in the business and clear indication that an organisation of our size can compete in the global supply chain if they are forward-thinking and prepared to put quality and customer service at the top of the agenda.
"It is vital to the future of the business that we continue to develop long-term trading agreements with major companies such as Rolls-Royce."
Mr Sagstad said: "To survive in the current climate, change has to become a basic essence of the business. By adopting this we believe we will secure further contracts."
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