Castings is a market leading castings and machining UK industrial company supplying mainly into the commercial truck market. The company has two iron foundries in the UK: at Brownhills in the West Midlands and William Lee in Derbyshire. I went up to the Brownhills foundry operation to meet Adam Vicary, CEO and Steve Mant, FD. We were also joined in the meeting by Chair Brian Cooke.
Firstly, it was reassuring to see the company following all the Covid-19 protocols. There was a temperature check on arrival, hand sanitising stations, face coverings were worn and despite the fact that it was a cold and wet day the windows were opened in the large meeting room.
The foundry uses the traditional approach of pouring molten iron into silica moulds. There is a mix of manual and automated work going on and the use of robots is impressive. A lot of investment has been made in automation over the last 5 years. The finishing processes have largely been completed although there are opportunities throughout the foundry and in machining. With the advances in automation, robotics and AI they believe they can make productivity improvements for the next 5 years. In a number of cases where an individual used to work on a single machine they can now work on multiple machines at the same time.
The machining business has gone through a tough time of late and has been particularly hard hit during Covid as demand fell off a cliff. Demand has recovered but it will take 2 years to completely fill up capacity. Once achieved management feel there is no reason why this division shouldn’t generate 8-10% operating margins. If the machining division returns to these sort of margins then the picture for the group should be of overall margins in the 10-12% range. This division is already well invested and there were a number of sparkling new machines running with very few operators. Further investment though is being made in automation and here the engineering passion from CEO Adam really came through as he talked about how they designed robotic solutions to enable automated processes. The two-armed robotic arms on show twisted, picked and placed with great dexterity to moved large iron castings to the right location to be automatically machined. In this era very few people want to move 35kg parts all day.
Investment in digital has been made in…
