24th February 2005
Hardmetal engineering building firm foundations thanks to SWIG

When Redruth-based Tungsten Carbide Ltd went up for sale after its owner decided to pursue other interests – the future looked bleak for its staff.

But with the backing of South West Investment Group, Andrew Hosking, MD of Redruth-based Welding Electrode Store Ltd (WES Ltd) spotted the potential in Tungsten Carbide and secured a life line for the company and its staff.

Hardmetal Engineering (Cornwall) Ltd, was formed in 2003 to buy Tungsten Carbide’s assets, supported by SWIG fixed finance of £47,250 to complete a package of assistance with Barclays Bank to facilitate the whole of Tungsten Carbide’s capital plant and equipment.

As a result all nine staff were taken on by Hardmetal, saving jobs and ensuring time served skills and expertise remained firmly in the county. In addition, the purchase of the assets as a whole allowed the new enterprise to take on the goodwill, customers and order book of the existing company.

“It meant the survival in Cornwall of a highly specialised business”, says Andrew Hosking, Hardmetal’s Managing Director.

“Tungsten Carbide was pre-eminent in niche hardmetal engineering, providing solutions for the aerospace, canning and electronics sectors. It was one of the very few companies in the UK involved in this type of work, and 85 per cent of its custom was from outside Cornwall.

“It had operated profitably despite minimal marketing activity, indicating considerable scope for expansion.

“We had worked with SWIG previously and found them extremely good to work with. The application process was fairly straightforward and we secured the funding in about a month. Without the funding we would not have been able to put the deal together - it is as simple as that.

“What we have been able to do as a result of the funding is create a sound platform on which to develop opportunities for growth for Hardmetal. We have been able to approach the future with the confidence and knowledge that we have the support, the skilled staff and the application to succeed.”

The new operation was set up as a wholly-owned subsidiary of Welding Electrode Store Ltd (WES), an existing SWIG Growth Fund client with extensive experience and a strong reputation for supplying the automotive industry with all types of resistance welding equipment.

“It was an eminently sensible arrangement”, Andrew says, “because both Hardmetal and WES operate within complementary sectors of the specialist engineering industry.

“Furthermore WES also had factory space it was not using, which meant both companies could operate from under one roof and also have room for expansion.

“Another important consideration was that WES was already supplying major car manufacturers and as a result would have found it difficult to diversify into new markets because of the demands to continually fulfil its existing customer requirements.

“Hardmetal, with its highly specialised focus, is perfectly placed to open up fresh ground and to exploit opportunities to the mutual benefit of both companies.

“I think good things lie ahead. None of this would have been possible without the loan aid arranged by SWIG and by the knowledgeable and heartening support it has provided at every stage.

“Jobs have been saved and under another name a South West company that offers rare skills to UK industry not only survives but goes forward,” said Andrew.