Aerospace firm expands to Mexico
A company which manufactures turbine blades for aero engines and gas turbines is building a new plant in Mexico – creating jobs and increasing the company's turnover by millions of pounds
Engineering firm JJ Churchill has signed an agreement with Mexican partner company, The Offshore Group, to make gas turbine components.
The factory in Sonora state, in the north of Mexico, is the company's first overseas manufacturing venture and will supply blades to turbine manufacturers in Mexico, the US and Canada under the North American Free Trade Agreement (NAFTA).
Andrew Churchill, managing director of JJ Churchill, which is based in Market Bosworth, said they would be investing £3 million in the first three years, eventually creating 40 jobs out there. He said: "This is going to let us do high volume production which will secure jobs here while letting the company grow overseas.
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"We are already supplying quite a few orders overseas, but this will be our first overseas manufacturing venture."
He hopes the expansion will help the company's annual turnover grow from the current £23 million to £50 million by 2019.
Mr Churchill travelled to Mexico last month to join a trade delegation of UK firms who met David Cameron, George Osborne, and Trade and Investment Minister Lord Green along with Mexican President Felipe Calderón.
The Offshore Group will build the new plant and oversee local administration, while JJ Churchill will lease the site and oversee the manufacturing. It is hoped work on the plant will start this year and it will open at the end of 2013.
Mr Churchill said the Mexican base will mean it can supply parts for turbine manufacturers across the NAFTA area without having to worry about import/export duties and sales and corporation taxes.
He said because they were a hi-tech firm, they were not using Mexico for its cheaper labour, but for its location. He said no UK jobs were under threat.
Founded in 1937, the family business has 133 people in Market Bosworth working in four main markets – aerospace, defence, industrial and power generation.
It sub-contracts for multi-nationals such as Rolls-Royce, BAE Systems, Cummins, Perkins, Siemens and Alstom, doing development, testing and assembly work on long-term projects.
Mr Churchill said the company was hit hard by the economic downturn in 2009, with turnover dropping from £18 million to £9 million, and staff having to be cut from 168 to 92.
The deal for the new plant was signed at the British Ambassador's residence in Mexico City, thanks to support from UK Trade and Investment (UKTI).
Lord Green said: "British expertise helped to build Mexico's railways and canals, but UK firms currently account for less than one per cent of Mexico's imports.
"We need to turn this performance around in one of the world's most promising markets."
Today, the UK is Mexico's fifth largest investor, having spent more than £5 billion there since 2000.