New TES Aviation Group jobs forecast as Japanese invest
Two Japanese firms have invested tens of millions of pounds in a Bridgend-based aviation company which is predicting an extra 70 jobs by 2015.
Mitsubishi Corporation has taken a 35% share of TES Holdings, the parent group of TES Aviation Group, which is based on Waterton Industrial Estate.
Another 25% has been bought by the Development Bank of Japan.
The aircraft maintenance business currently employs 127 people and has a turnover of £63m.
FROM SMALL BEGINNINGS
TES Aviation Group chief executive Ashley Cooper has come a long way since starting the company in his front bedroom in 1995.
Before that, while he was working for GE Aviation at Nantgarw near Caerphilly, he first had the idea that he could save airlines money in the way they maintained the engines on their planes.
In the early days one of his high-profile customers was Easyjet.
TES managed its engines, allowing Easyjet to focus on what it did best which was attracting customers.
A key to the company's success is the way it overhauls old engine parts and then recycle them, making huge savings.
This deal is also striking because in the context of tight credit conditions, TES Aviation has managed to land two investors with deep pockets.
Expansion is expensive but with big backers behind it, this company should have no shortage of cash as it grows.
The shares were sold by DVB Bank SE, which retains 40% of TES Holdings.
Clients include Airbus and Martinair, part of the KLM Group.
Ashley Cooper, chief executive of TES Aviation Group, said the company predicted it would employ more than 200 people by 2015, and the turnover would increase to more than £100m.
He added: "TES has very exciting times ahead.
"We will be developing our product range and our service offerings across our global client base and expect significant growth, opportunities and exciting challenges at both our Bridgend HQ and franchise operations in Singapore and the US."
Established in 1995, TES has grown from a turnover of £12.6m in 2007 to more than £63m in 2011.Spare parts
Mr Cooper said a large part of the aircraft engine maintenance business involved replacement parts.
"You have two choices - you either fit new or you fit an overhauled reconditioned as-good-as-new part at half the price. So the market is really driving towards getting quality overhauled inventory at the lowest price, so they can drive down cost."
He said the easiest way to do that was to buy the assets, dismantle them, refurbish them and then provide the parts back.
"So, I buy whole engines, I buy whole aeroplanes.
"If there is some useful life left then we'll lease them out as a spare because when you maintain an engine you take it off, but an airplane needs to continue to fly, so you fit a spare - you lease it.
"Once it becomes un-serviceable and the useful life has been consumed then we dismantle it into pieces, refurbish those pieces then sell them back into the market place," he added.
The Welsh Secretary Cheryl Gillan welcomed news of the investment.
"This is exactly the kind of high quality inward investor that we seek to attract in Wales," she said.
"The aviation industry is a key driver of the UK economy, and this announcement today presents the company with an excellent opportunity to develop their product range and expand the business in overseas markets.
"It is a real vote of confidence in the talent, expertise and skills of our workers and will in no doubt further enhance the UK's reputation as a premier location for this kind of investment."