Prudhoe firm looks to expand after factory move

Posted by The Journal on Nov 3, 09 09:15 AM in News

An industrial tubing business has overcome a number of problems, including a colony of greater crested newts, and has moved into a new £3.5m factory as it looks to triple its turnover from £10m to around £30m.

Northumberland-based Salem Tube International has recently seen the completion of a new 70,000sq ft factory near its old site in Prudhoe and expects its sales to rocket as a result of the increased production space.

Nigel Allan, Operations Manager of Salem Tube International Ltd in Prudhoe

Nigel Allan, Operations Manager of Salem Tube International of Prudhoe

The firm said that the new site, which is part of a wider £4m investment into the business, would allow it to increase its 30-strong workforce to 50 over the next two years to help it deal with increasing demand from overseas markets.

As well as looking to expand its operations into countries in South America, including Brazil, Argentina and Chile, the firm also expects to receive £5m worth of business from the UK Government's nuclear power programme.

The firm, which was founded in 1992 and works predominantly within the petrochemical industry, produces and packs a large variety of prefabricated industrial tubes, including heat exchanger tubes and 'U' bent tubes.

Although the firm expects its investment to pay dividends, it did say that it had been adversely affected by the steep decline in commodity prices, with nickel, one of its main raw materials, dropping from $52,300 per tonne to around $16,000 per tonne over the last two years.

Howard Ions, managing director of Salem Tube, said: "We haven't had it all our own way of late, especially in terms of the prices of certain metals.

"However, we are certainly defying the general recession as our products remain fairly niche and are sold within a market that it still growing in many areas, especially overseas, which makes up for 70% of our sales.

"We now see South America as an exciting growth area and are now able to meet growing demand for our products with the help of the new facility."

The firm, which can count BP and Shell among its customers, said it would be retaining its old 15,000sq ft facility in Prudhoe and that it was looking to rent it out before deciding whether it would form part of its future expansion plans.

Mr Ions had planned to move into the new purpose-built facility last year after receiving planning permission in 2005, but saw his plans scuppered by a colony of greater crested newts.

Construction firm Whelan, which built the new site, was given the task of relocating the newts to a nature reserve without infringing upon their natural hibernation period.

Mr Ions said: "Those newts were an absolute nightmare. We believe that they were dumped their as they are usually found in the South East and North West of the country.

"After lengthy negotiations we were able to rehome them and begin building the new facility.

"We are now finally able to move on to our next stage of growth and, although we are held to ransom somewhat by the commodity markets, we should be able to hit our financial targets and create the jobs we need."

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