Take yourself back to 2004 and the UK civil aerospace industry was reeling from a triple-whammy of falling passenger numbers in the wake of 9/11, ongoing conflict in the Middle East and the beginnings of the global economic downturn.
Concerns were beginning to be raised that the off-shoring of low-value manufacturing jobs was just the beginning of a greater power shift from West to East within the sector and, with OEMs facing ever-increasing costs to develop new aircraft and aero-engine programmes while government support for R&D fell, it’s clear that 2004 probably wasn’t the most auspicious time to launch an aerospace business.
But that is exactly what Sigma Components did and, nearly 10 years on, the company is going from strength to strength; expanding through acquisition and organic growth to become a real player in the aerospace supply chain.
“By its very nature, the aviation industry is about travel and connecting people and places so it’s no surprise that the modern aerospace sector is increasingly global,” says Mark Johnson, managing director at Sigma Components.
“The evolutionary nature of aerospace is one of the features that makes it such a great sector to work in and, despite the challenges affecting it in 2004, we sensed there was a real opportunity for a business that could offer OEMs the benefits of traditional manufacturing expertise combined with a commitment to developing local facilities, wherever in the world that may be.
“When we established Sigma Components, China was — and still is — the real growth market. While many manufacturers were looking to simply outsource the production of basic components to a lower-cost economy, we felt that, by taking a longer-term view, it could provide an excellent platform from which to develop a new business.
“At that time, we were already seeing signs of China’s commitment to developing its own, indigenous industry so it made sense to locate there, building on existing relationships to offer OEMs looking to enter the market the benefit of capability and skills on location.”
Sigma Components opened its Chinese manufacturing site in Chengdu in 2006 — a 35,000ft2 facility supplying precision-machined aerospace components. Its Chinese operation now employees more than 140 people, with approvals from NADCAP,
Rolls-Royce, GE, Moog and Hamilton Sundstrand to name just a few.
Johnson continues: “The key benefit of having an established presence in the Asian market is that it has allowed us to create genuine manufacturing partnerships with our customers: both Chinese companies developing their own aerospace offers and traditional OEMs looking to move into the Asian market.
“While advances in communications technologies mean it is easier than ever to talk to colleagues across the globe, sometimes there’s no real substitute for face-to-face meetings and a presence on the ground when it comes to developing relationships, understanding key issues and identifying mutual opportunities.
“Similarly, the Lean revolution demonstrated the value that can be released from the supply chain simply by reducing the number of steps in the manufacturing process or distances travelled between these steps. It makes good financial and business sense to adopt a policy of localisation (not globalisation) when setting up a modern business.”
Sigma Components’ commitment to establishing "on the ground" facilities in key regions is backed up by a spate of recent acquisitions that have seen the company expand its manufacturing footprint in the UK from one site in Hinckley to five sites including Derby, Nottingham, Buckingham and Farnborough.
Johnson explains: “While the company was established to take advantage of opportunities in the Chinese market, the UK remains at the cutting edge of advanced engineering so it was important to maintain a base here.
“The acquisitions of Aerotech Tubes in Derby, Composites Engineering Group in Buckingham and PFW UK’s Farnborough site over the last 18 months have seen us bring a number of key capabilities in house, giving us considerably more flexibility and control of the supply chain, as well as ready access to the expertise we need to help customers develop the next generation of components.
“By combining the capabilities found across our UK and Chinese operations, we are also able to maximise value for customers; providing a one-stop-shop for product development, production and aftermarket care while choosing the best sites within our business for each stage of the manufacturing process or product lifecycle. This enables us to give long-term commitments to our customers and in the last six months we’ve signed several 10-year LTAs totalling over £125m.”
Following a period of integration, all Sigma businesses came under the Sigma Components brand from June 1 this year, operating under a single, transnational management team. So what does the future hold for this relative newcomer to the aerospace scene?
“I’m proud of the progress we have made since the company was formed,” Johnson says. “Everyone in the company has put in a lot of hard work to get us to this stage and, with a team of over 500 now employed across six sites, we’re excited by the opportunities ahead.
“We are currently investigating potential acquisitions in the United States to support our work with US OEMs and hope to be in a position to report developments in this area during the coming year.
“Solving customer problems and creating strategic partnerships is at the heart of our approach. As part of this, we are committed to investing in R&D and have recently secured €1.8m as part of the Clean Sky programme; working in consortium with TWI and supported by Rolls-Royce to develop composite pipe assemblies for aero-engines.
“Similarly, while capacity continues to be a challenge for the sector, we are constantly reviewing and developing our facilities to meet shifting customer demand. We have very supportive investors and in the last 12 months have invested over £2m in capital equipment. This includes £250,000 to expand our Hinckley site, creating a new product development centre and additional capacity that is already beginning to reap dividends.
“A lot has happened since Sigma was created and it is an incredibly exciting time to be in the aerospace industry. We’re now working hard to design our future and take our business to the next level. In doing this we want to maintain our agility and small company feel as we grow significant relationships with key OEMs.”
Sigma Components manufactures a range of aerospace pipes ducts and fabricated assemblies, specialist aerospace fasteners and composite components for tier-one aerospace OEMs. It will be exhibiting in the UK Pavilion at the Paris Air Show (Hall 2B, Stand G158).