ELECTRIC vehicle firm Sevcon has announced plans to double its North East engineering team to 80 and recruit additional worldwide sales staff - as it seeks £6m from shareholders to support its growth.
The innovative Gateshead-based business, which is listed on the Nasdaq in the United States, has launched a rights issue saying some of the additional funds may be used for potential overseas acquisitions.
Matt Boyle, president and chief executive of the electric vehicle control manufacturer, says the global on and off- road hybrid and electric vehicle market is set to move into a new gear.
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The rights issue follows a strong recent showing with revenues and profits rising sharply in the last few months.
Sevcon’s research and product development is conducted from its Team Valley headquarters, where it employs a team of 40 skilled hardware and software engineers.
Mr Boyle said: “Realistically we are looking at doubling the size of the Gateshead engineering team to 80 staff to meet our projected demand and we also want to increase our global sales team from .
“A number of significant new opportunities are currently presenting themselves and we are scaling the business to meet these growth projections.”
Sevcon recruits staff from across the globe but has concerns, like many of its North East peers, that the region’s schools are not encouraging enough youngsters to study the STEM subjects and pursue engineering careers.
Last year, in a bid to secure a pipeline of skilled staff it established its own student bursary scheme, which is currently paying the tuition fees of four students at two of the Tyneside universities, Newcastle University and Northumbria University.
Almost all of Sevcon’s sales are overseas and the company has highlighted Asia, and specifically China, for major growth opportunities.
Earlier this year it signed a joint-venture with a Chinese automotive supplier Risenbo Technology. Operating as Sevcon New Energy Technology, the new company will sell Sevcon products to tier one automotive suppliers in China.
Mr Boyle added: “The Chinese are far ahead of the rest of the world in adoption of low carbon vehicles. Last month the Chinese government said it would remove six million older polluting vehicles from the road this year, and replace them with lower polluting gas or pure electric cars.
“The desire of Far East governments to reduce the number and type of polluters isn’t limited to passenger cars, but includes buses and trucks, although rather than producing pure electric vehicles they are trying to promote hybrid technologies as well.”
“The far east in general and China especially, have reached an inflection point in the electric vehicle market.”
Further details of the rights issue were announced on the Nasdaq recently, with the company’s market statement saying: “The net proceeds will be used for general corporate purposes and growth, including funding Sevcon's ongoing research and development and product commercialization initiatives and acquisitions of other businesses.”
Mr Boyle said: “We believe that when we identify a possible acquisition, it would be desirable to have the resources at hand to complete any transaction quickly."
Revenues for the Gateshead-based company for the six months to 31 March , this year, were £10.7m compared with £8.6m in the first six months of 2013.
Profits came in at £534,000 compared to an operating loss of £940,000 in the first six months of last year.