Posted on 21.05.2010 - 11:00 EDT in GENERAL NEWS by Rons_ROV_Links
World-Leading Tyneside firm SMD has secured new contracts worth in excess of £60m as it remains on track to triple revenues in the space of five years.
The subsea oil and gas engineering specialist was crowned the region's fastest growing company last year, having increased sales from £37.5m in 2007 to £50m in 2009.
With revenues projected to reach £75m this year chief executive Andrew Hodgson says he is confident of achieving sales of £100m in 2011, and £120m by 2012.
SMD has refocused since its 2008 MBO which was supported by private equity firm Inflexion. It has extended its product range in the subsea oil and gas and cable-laying sectors as well as focusing on new product areas including nuclear decommissioning and renewable energy.
The company which is based on the banks of the Tyne at Wallsend, next door to Swan Hunter, has also expanded its geographical reach, having opened an office and support centre in Singapore, and is in the process of establishing a presence in the United States.
Mr Hodgson is bullish about its prospects, with SMD having secured two new contracts worth a total of £60m in recent months, boosting its order book to over £100m.
One contract, which has been renegotiated up from its previous value of £30m to £50m, is seeing SMD currently develop the world's first underground mining equipment to extract copper from the Pacific sea bed off the coast of Papua New Guinea.
The second contract for up to £40m is close to being signed, with SMD reluctant to elaborate on this until it is complete.
SMD has also launched a joint venture with tidal energy developer Atlantis Resources Corporation (ARC) to manufacture the world's largest tidal turbine system, which will be tested this summer off the Scottish coast.
Mr Hodgson, who was brought as the company's chief executive by Inflexion just months after the MBO, said: "We are the world leaders in the design and manufacture of subsea ploughing and trenching equipment.
"These have always been the traditional strengths of SMD but we have now expanded the range of our subsea equipment as well as expanding our global reach.
"Brazil and America are two off the fastest growing markets for subsea oil and gas recovery and that is why we have had to establish a base in America.
"But as well as our traditional strengths we have started to look at where our subsea technologies can also be used.
"Our aim at the time of the private equity investment was to treble turnover by 2012 and we are on track to achieve that."
Mr Hodgson believes its partnership with ARC provides tremendous opportunities for growth.
Its tidal power generation device, which will be trialled off the Orkneys this year, costs in the region of £3m and if successful tidal power generation farms will consist of over 100 of such devices.
The company is looking to break into the nuclear decommissioning industry and earlier this year made strides into the market with the purchase of Hallin Robotics Ltd (HRL), from Hallin Marine Subsea International.
HRL has facilities in Malton, North Yorkshire, and Seascale, Cumbria, and these now operate under the SMD Robotics banner.
Mr Hodgson added: "With the demand in the decommissioning market for nuclear and oil and gas growing we hope to achieve a leadership position in this market."
SMD, which won the fastest-growing company in The Journal Ward Hadaway Fastest 50 annual awards for 2009, has increased its workforce from 175 to 200 in recent months and expects to be employing 250 people by the end of the year.