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BACKGROUND
Northern Engineering Industries (NEI) Ltd was formed in 1977 by the merger of
Clarke Chapman and Reyrolle Parsons. The group has widespread engineering
interests and comprises a significant proportion of the heavy electrical power
plant industry, manufacturing steam turbines, boilers, transformers and
switchgear. The group has the in-house capability, unique amongst UK firms, of
offering a complete power station package, and a sound reputation in this
country and abroad for technical excellence.
2. While group results show a healthy trading position - a £15,000,000 profit for the half year to June 1981 (up 20% on the same period in 1980) on a £331,000,000 turnover (up 22%)
amongst the individual companies.
there remain management and marketing weaknesses
This is made evident in the group's failure to
secure major power plant export successes on the scale of its UK competitor, GEC.
Nevertheless, NEI Ltd export orders for the half year were valued at £110,000,000, double the level of the previous year.
Investment Project
3. In October 1980, NEI Ltd was offered assistance under Section 7 of the Industry
Act totalling £9.765 million in support of a number of projects throughout the group. NEI Power Engineering was allocated £1.75 million of this towards a
£19,000,000 project to refurbish and extend the company's tube and assembly
shops at Gateshead and to re-equip them for boiler manufacture for the AGR
programme. The project was expected to safeguard existing jobs and to provide
for 139 more at Gateshead during the lifetime of present contracts. Progress
has been good. No 4 Bay uses Swedish ESAB welding robots for want of suitable
UK equivalents. However, detailed development work to adapt the robots to their
task was carried out by NEI who have considerable expertise on advanced welding
techniques.
NEI Power Engineering Ltd (NFPE)
4. The company, recently renamed from Clarke Chapman Power Engineering Ltd, is
formed from a number of mergers, under the latest of which in 1975 production
was rationalised to give the Gateshead company responsibility for UK power
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