Surface Transforms makes  ceramic brake discs for high performance cars at its Merseyside factory and has secured a new £4.3m contract – the latest in a series of deals. Tony McDonough reports

High performance brake disc manufacturer Surface Transforms (ST) is to transform its Merseyside factory after securing more multi-million pound contracts.

Based in Knowsley, ST has established a niche as a specialist manufacturer of carbon fibre reinforced ceramic brake discs for high performance cars. Customer have included Aston Martin, Porsche, Ferrari, Nissan and the Liverpool-made BAC Mono.

In July, the company reported a 34% rise in revenues to £1.2m for the first half of 2021. And, following a string of new contract wins, the business expects profits and revenues to grow significantly over the next five years. As of April its order book stood at £43m.

Now that order book has grown further still. In August the company announced a £20m contract win with a major US carmaker. And, this week ST has been selected as a tier one supplier to a European automotive customer. That deal is worth €5m (£4.3m).

Following internal analysis of its operations, and discussions with its furnace supplier partners, it is now updating its manufacturing strategy. Until now ST has separated its factory into individual production cells for each customer. Now the plans is for the entire plant will operate as a single production facility.

This will result in £10m of cost savings following the implementation of the new strategy which is expected to take 18 months to complete. By 2023 this will increase the sales capacity of the business to £50m a year. It will also help the company reduce its carbon footprint by using more environmentally-friendly furnace technology.

Earlier this year ST, which is listed on the Alternative Investment Market, completed a successful £19m fundraising as well as securing a £1m Liverpool City Region Combined Authority loan. Its primary objective is to ultimately provide a factory with sales capacity of £75m a year.

Chief executive Kevin Johnson said: “At the time of the fundraising 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.”

The latest €5m contract will see ST supply its carbon ceramic brake discs to the unnamed ‘mainstream’ customer. Revenues from the deal will be spread over five years  2024 to 2028.

Mr Johnson added: “The significance of this relatively small contract lies in it being the first example of the implementation of the multi-year ‘carry over’ agreement concluded with OEM 5 (the customer) at the time of the initial contract award in July 2019.

“This envisaged further awards, of varying sizes, over several years. A further award in 2020 did not happen because of a COVID-induced programme cancellation by the customer. It is good to be now back on track. The engineers in both companies are now working on the next vehicle brake disc that is available for award over the next year.”