More than just boys with toys

As part of this month’s Success 2008 series in conjunction with the North-East Chamber of Commerce, Lindsay Parker discovers how it takes the heat out of clients’ problems.

SITTING in reception at Darchem Engineering Limited, a board showing the company’s specialist areas gives the first clue as to who its clients may be. There are fighter planes, warships, a nuclear plant, commercial aircraft and high-powered cars.

It’s clear from the beginning that Darchem deals with some pretty big guys – boys and their toys, the company’s sales and marketing director, John Padbury, says jokingly. But very lucrative toys nonetheless.

Darchem has been at Stillington, near Stockton, for more than 50 years. It has recently been named company of the year in the North- East Business Awards and was a finalist in the British Chamber of Commerce’s Business of the Year Awards. And it’s not difficult to see why.

“We have a lot of good people who’ve worked here for a long time,” says John. “But we also realised quite early on the importance of customer satisfaction and working with them to give them what they want. At the end of the day, we’ve got to have very good delivery, quality that is 100 per cent and at an affordable price.”

Examples are sitting in their exhibition space. The company has four market-leading business units – turbine structures, aerospace fabrications, insulation systems and thermal protection systems.

In the aerostructures section, a metal duct is on display. It exhausts hot air out of the biggest jumbo jet in the world, the new A380 Airbus, spitting the waste out into the atmosphere. It was designed in conjunction with Airbus’s engineers specifically to fit within the aircraft’s wing. Over at the turbine structures section, warship intake and exhaust systems are designed and manufactured with the latest contract success – the UK’s two new aircraft carriers.

Metallic honeycomb products comprise a further part of the unit’s work. The products look like organic bee honeycombs – hence the name – but are made out of metal.

They’re used to straighten air in wind tunnels – ideal when Lewis Hamilton’s designers are testing a model of his Formula One car, trying to reduce the drag. The honeycomb structures are incredibly strong and can be used for other products such as energy absorption devices.

“They’re used as buffers at the front of trains and also in the nuclear industry, to put it under things, such as canisters, that you’re afraid of damaging if dropped,” says John.

The company is also renowned for its lightweight insulation systems.

Fifty per cent of aircraft structures today are made out of composite materials – plastics in the form of hardwearing layers of carbon fibre and resin which you’re more likely to find as part of your tennis racket or golf club shaft. Composites don’t like the high temperature much, so Darchem produces insulation systems that protects the parts from heat sources.

“They tend to be required around turbo chargers, exhaust systems, catalytic converters and aircraft engine exhausts,” says John. “For the Boeing 737, used by Ryanair, they wanted to go for a composite thrust reverser, so we had to design and manufacture a system to protect it from the heat. The insulate we use is picked specifically for the thermal characteristics that are needed – sometimes it’s a microporous ceramic powder and sometimes it’s a fibre.”

Their insulating materials are also used on more exposed parts of the plane with Darchem providing insulation for the wheels and brakes to protect the tyres and axles.

“The worst case for wheels and brakes is when you have a fullyloaded aircraft with all the passengers and maximum fuel load and the pilot wants to take off and then changes his mind,” says John.

“All he can do is brake and deploy his engine’s thrust reverse system.

When he does that his wheels can glow red hot, even white hot, and the tyres can burst. Our technology helps stop the tyres bursting until the aircraft has come to rest.”

Single-aisle commercial aircraft are an important part of Darchem’s business, with the Boeing 737 and Airbus A320 production rates at more than 30 aircraft per month.

Darchem’s products are designed and manufactured on site before being shipped across the world to aircraft production lines in Kansas, Seattle, Toulouse, and Hamburg.

Almost two thirds of the company’s work is for the aerospace industry and 40 per cent of its business is exported abroad.

Darchem was born out of the old ironworks on its current site in Stillington and was formerly known as Darlington Chemicals – hence its name. In 1953, Darlington Chemicals won the licence to manufacture Refrasil, which was used in insulation blankets to protect airframes from the intense heat of new aero gas turbines, and the company was born.

The British Refrasil Company was set up in 1954, specifically to carry out the work, and in 1960 it changed its name to Darchem Engineering Ltd.

The success of the company has been largely down to its ability to move with the times and listen to what its customers want. In the Eighties, the firm catered more for the nuclear field. When the UK and European nuclear industries died, the business moved in the direction of the aerospace market.

“If we fast forward five years from now, we’ll probably see a reemergence of the UK nuclear market,” says John.

One of the major challenges the company faced was just after the September 11 terrorist attacks on the Twin Towers in New York, which effectively cut their aerospace work in half. It had been building systems for the Boeing 737 aircraft at 30 planes per month and the production rate reduced to 14.

But today, it is back up at 34.

The company is aware, however, that it may face challenges again. It is waiting to see whether there will still be the demand for air travel and hence planes in today’s economic climate, for example.

“We’re still hopeful that next year’s turnover will be bigger than this year’s, with our sales growing overall, regardless of whether some of our customers reduce their demands,” says John.

The company hopes to see a turnover of £60m next year and it has an impressive order book of more than £100m to help it achieve that figure. Its clients include Airbus, Boeing, BAE Systems, Rolls Royce and the Ministry of Defence, commissioning work which helps keep its 600 employees at Stillington, and 150 at Gloucester, extremely busy.

In April this year, the firm announced an expansion of three of its business units, including its thermal protection facility, which is a world leader in producing passive fire protection systems for the offshore, petrochemical and nuclear industries. The company uses technology it has developed in proprietary products such as the Darshield and Darmatt – the latter of which looks like a close-fitting plastic blanket. These can be wrapped around valves and actuators to provide fire protection for up to two hours at temperatures of 1,200 degrees centigrade. It means in the event of a fire, the plant operators can shut down their systems as the valves have been protected from the high temperatures and can still operate.

The company has already furnished insulation systems for the nuclear reactors in France, Sweden, Finland and China.

“We’re exporting this technology all over the world,” says John. “This business unit alone turns over circa £10m per year and with the nuclear industry re-emerging in the UK we feel Darchem is in a good position to pick up the nuclear insulation work once they start rebuilding nuclear reactors.”

Much of the company’s work is rather secretive, given their clients.

It has recently won an £8m contract with the Aircraft Carrier Alliance to produce intake and exhaust systems for the new warships HMS Queen Elizabeth and HMS Prince of Wales, which are expected to enter service in 2014 and 2016 respectively.

“We’ve got some fantastic programmes around the world,”

says Jim Love, the company’s financial director. “They range from the fastest and biggest aircraft to some of the most powerful cars in the world, through to the nuclear and oil and gas industries.

“The thing that cuts across all these markets is our ability to do the thermal engineering. Our company position statement is ‘taking the heat out of your problems’. Anything to do with high temperature, we’re interested in.”

The company sees that in the future those fast cars, planes and ships will only become more powerful and thus the demand for their products will increase.

“As temperatures increase, we’ll ideally design a new generation of insulation systems that can withstand those temperatures while still providing a lightweight solution that’s affordable,” says John. “Our strategy is to keep in our thermal engineering niches and working in a number of different markets so that we don’t put all our eggs in one basket. We have a good spread of markets and customers so we’re as well positioned as we can be given what the future might hold.”