A long-term trend in aerospace has seen aircraft manufacturers and their first-tier systems integrators dealing with fewer suppliers to avoid the hassle and risk of managing contracts with hundreds of individual providers. This can create a problem for small and medium-sized enterprises, (SMEs). They might be very good at what they do, but they can lack the scale and diversity to bid for more complex work packages and lose out on potentially lucrative business as a result. The alternative is that they are pushed further down the supply chain.
A group of suppliers in Northern Ireland is confronting this challenge by doing what no other local aerospace cluster – at least in the UK – has attempted. Five firms – most of them family run and all of whom offer a different specialism from engineering services to metal finishing and injection-moulded plastics – have formed a consortium to offer services directly as a second-tier supplier to large aerostructures manufacturers. Although all the members retain their independence, the new entity – Causeway Aero – offers customers a single point of contact and acts as a single legal entity.
Member firms are shareholders in Causeway Aero, with their senior executives making up its board of directors. Under the set-up, parts machining company Moyola, finishing services provider Dontaur, plastics specialist Denroy, engineering house BASE, and sheet metal fabricator Hutchinson AeroTech will pool their competencies, allowing the consortium to pitch for work packages that require a variety of expertise, from engineering and design to finishing treatments or sub-assembly. Member firms will then be paid for the work by the consortium they themselves own.
It is certainly an innovative approach and goes beyond previous similar efforts. Other groups of SMEs in the UK and elsewhere have collaborated to bid for projects on an ad hoc basis. However, the consortium – being formally launched this week at Farnborough – is the first time individual businesses have formed an actual company, says network facilitator Paul Shields, whose position is funded by Invest Northern Ireland, the agency that aims to attract business to the province and ensure its SMEs in key industrial sectors such as aerospace are equipped to compete globally.
Denroy
Unlike its southern neighbour – whose specialities are maintenance, repair and overhaul and aircraft finance – Northern Ireland’s aerospace sector has traditionally been focused on a single original equipment manufacturer – Bombardier (formerly Short Brothers) – and a local supply chain based largely within a 30km radius. Bombardier, which bought Shorts in 1989, today makes aerostructures in Belfast for the parent company – including the wing for the CSeries – as well as for third parties. For most of the SMEs in the province, Bombardier remains their biggest aerospace customer.
However, Shields stresses that Causeway – its name a reference to Northern Ireland’s most famous geological landmark, Giant’s Causeway – is “not Bombardier-centric”. While the Canadian company is the province’s only major aerospace concern and Shields expects Causeway to do business with it, Bombardier will not be the “exclusive focus”. In fact, several of its members already work for Spirit AeroSystems and other major contractors to Airbus, BAE and Boeing, and Shields expects that they will be able to use those relationships to negotiate for more complex contracts through Causeway.
This is a view echoed by Mark Semple, managing director of Castledawson, County Londonderry-based Moyola. “Moyola’s capabilities do not extend to sheet metal or design engineering, so this is what Causeway gives us,” he says. “When discussing increasing our product offering to our customer base; some of our customers have indicated that they are out-sourcing work packages elsewhere because they believed we were limited to our current competencies.’ They wanted to deal with one customer offering a range of services. Creating Causeway allowed us to pool our strengths with other companies without losing our independence, and work with people who have the same mindset about business growth and development.”
Moyola, a supplier to Airbus and Bombardier products since the mid-2000s, has been expanding fast, having just doubled in size by acquiring a factory next door that it now plans to fill with £3.5 million-worth of machinery. Moyola, which employs 120 people, specialises in milling five-axis, build-to-print aluminium components and assemblies, the largest a CSeries bulkhead. However, Semple says lacking its own engineering offer has been a drawback. “With a company like BASE on board, we have the potential of getting on projects further upstream,” he says.
Fellow Causeway member BASE is a very different type of business to Moyola. Rather than working at CNC machines, the privately-owned company’s 25 employees sit at computers in an office in a gleaming new science park in Belfast’s Titanic Quarter. Founded in 2000, BASE specialises in bespoke engineering projects and has participated on every Bombardier aircraft programme for the past 15 years, says commercial director Peter Hinds. It also works on defence and aircraft interiors projects for contractors including GKN and Marshalls.
Denroy in Bangor brings another element to the party again. Best known for its Denman range of hair care products, around a third of its £15 million revenue comes from aerospace. “We must be the only company who go from air shows to hair shows,” quips chairman John Rainey. The company’s injection moulded plastic products end up on the Eurofighter Typhoon, Airbus A400M, Hawk, and Bombardier C-Series, Global Express and CRJs, and range from internal brackets to external components and cockpit fixings. The company specialises in the processing of PEEK [polyetheretherketone] materials and also offers rapid prototyping through 3D printed parts.
Shields says Causeway Aero “studied the characteristics that differentiate successful Tier 2 suppliers”. These include, he says: having a design and assembly capacity, and the ability to work with advanced materials. For that reason, Causeway is considering adding a member with an expertise in composites. “Half of the structural weight of a modern aircraft is manufactured from advanced materials and for Causeway Aero this spells out having access to both advanced metals and advanced composites,” says Shields.
The Good Friday agreement of 1998 signalled an end to the province’s long-running “Troubles” and helped usher in a new era of economic prosperity, political cooperation and better inter-community relations. Since then, says Shields, Northern Ireland’s supply chain has “attempted to collaborate meaningfully” with several less successful initiatives. Causeway is different to previous “project-centric” collaborations because it is based on a genuine “collaboration strategy” rather than simply being “reactive to an ongoing bid request”, he says.
While Shields is realistic enough to admit that Causeway Aero is at the “small beginnings stage”, its launch at this week’s Farnborough air show “represents a step closer to the formation of the Northern Ireland Tier 1 integrator that industry and government say they want”. And it will do it without the need for mergers and acquisitions, something the province’s strongly-independent family-owned aerospace firms are much less keen on.
Source: Flight International
