Manufacturing Strategy Revealed by Surface Transforms

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Source; Surface Transforms announcement

KNOWSLEY, U.K. — Surface Transforms (AIM:SCE), manufacturers of carbon-fiber-reinforced-ceramic brake discs, announced that, following internal analysis and extensive discussions with its furnace supplier partners, it is updating its manufacturing strategy which will have the effect of:

  • saving approximately £10 million in equipping the entire Knowsley factory
  • increasing 2023 sales capacity by £15 million p.a. from £35 million p.a. to £50 million p.a. with no new capital equipment cash requirement
  • reducing implementation time for equipping the entire factory by approximately 18 months
  • significantly increasing capacity implementation flexibility beyond 2022 as the business grows over the next two to three years
  • reducing Surface Transforms’ projected carbon footprint using more environmentally friendly furnace technology

By way of background, the company has until now, had the strategy of equipping the Knowsley factory in a series of five modular, relatively independent but identical production cells, being built at one cell roughly every 18 months at a cost of approximately £10 million per cell. Cell One is complete. The company raised £20 million in February 2021 to equip Cell Two and to provide additional working capital enabling site capacity for £35 million sales when complete in early 2023.

Related post:
Tier-One Supplier Deal for Surface Transforms

In addition, Surface Transforms recently announced the completion of contracts to be a tier-one supplier to a North American and a European auto maker which could result in up to £25 million during the life of the contracts.

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Kevin Johnson, Surface Transforms CEO, commented:

“At the time of the fund raising we said that we thought there could be sufficient demand to fill the Knowsley factory by 2025, albeit the sales were then, and are still now, only partially contracted. Our continuing discussions with existing and potential customers together with increasingly encouraging test results have not only lifted our confidence in this view but led us to the conclusion that we may require this capacity by 2024. This new manufacturing strategy will achieve the primary capacity objective with the added benefit of reducing overall capital expenditure. There are numerous positive cash implications, and we continue to work with our customers to convert the significant number of active projects into firm agreements to fill this capacity.”

The entire announcement and its details can be viewed by clicking HERE.

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