Here we continue our interview with Kaha Avaliani thoughts on the development of our industry and the Kloeckner UK business in 2017, looking specifically at developments within Value Added Services and the Automotive Industry.
Value Added Services – Westok
Kloeckner Metals UK Westok are dedicated to growing the value added services offering with an investment project that will be completed by mid-2017 and which will help us to provide our customers with a wider range of services than now.
Investments in Westok are an on-going matter, as it was only two years ago that we made a larger investment for Westok to have a unique hydraulic assembly machine to improve efficiency and reduce dramatically potential health and safety hazards.
I describe Kloeckner’s penetration of the automotive sector as a logical continuation of our investments in KMUK’s Dudley site. A bit more than three years ago we bought our first Tube Laser Processing machine and by now, capacity-wise, it is the second biggest tube laser processing facility in the UK.
In June 2016, after an 18 month long process, we obtained ISO/TS 16949 Quality certification which is specifically dedicated to the automotive industry, in a bid to open more accounts in this sector.
We believe automotive is important for Kloeckner because firstly, automotive manufacturing is growing in the UK and it’s probably one of the very few areas that keeps on developing and we don’t see that slowing down in 2017 and beyond.
Around 1.6 million cars were built in the UK in the first 11 months of 2016, up 9.6% from the same period in 2015. Industry analysts predict car output to reach record levels of around two million units by 2017, overtaking the 1972 record of 1.92 million.
The UK currently exports 77.3% of its car output, 57.5% of which goes to Europe. Since Brexit there have been talks of tariffs on automotive exports to Europe of a potential 10%. We have forecasted that even if a deal is struck with the EU that does not favour this industry sector in the UK, it won’t happen for at least two and a half years so we don’t expect to see any deterioration until then. The appetite for British-made quality is still strong in other markets around the world especially for the likes of Land Rovers and Jaguars.
This then indicates that the weaker the pound gets, the more competitive all goods from the UK are within the global market. Secondly, supplying more and more into sectors like automotive makes our colleagues across all disciplines be more focused and unequivocally follow very stringent technical, technological, processing and quality rules and expectations of that specific industry. This, in turn, helps us to further change the mentality and the culture of the organisation.
One of the main reasons that we managed to have such a successful growth at our Dudley site is because our competitors are not always well equipped to deal with these kind of customer expectations. We believe that we’re much better positioned and able to accommodate our customer’s needs.