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Reshoring trend boosts sales at NPI Solutions

AN Ayrshire engineering firm that produces specialist components for manufacturers expects to record a near 50 per cent increase in sales amid signs that the kind of work that was sent overseas is now being kept within Scotland instead.

NPI Solutions is on course to grow turnover to £2.3 million in the current year from £1.6m in 2013 after winning a series of contracts.

Managing director Kevin Priestley said NPI had won £1m orders in recent months from firms in industries ranging from rail to power generation.

NPI has increased employee numbers by 25 per cent in the last six months, to 35 from 28, to cope with the workload.

Mr Priestley said the details were confidential but he estimated around half of the work concerned would previously have gone overseas.

He believes the company is benefiting from a trend for UK manufacturers to "reshore" work that they would previously have awarded to contractors in areas like Asia and Eastern Europe, where labour costs were expected to be cheaper.

In March the Engineering Employers Federation said one in six UK manufacturers had reshored work in the past three years.

"Purchasers, especially small and medium sized companies, are starting to question the value of offshoring all of their manufacturing requirements," said Mr Priestley. "The savings made in the past by outsourcing production to China are no longer guaranteed because of transport and time factors as well as other considerations, including quality."

Rising wages in China have made it harder for firms in the UK to cut costs by shifting work there.

Mr Priestley noted that NPI is also getting far more opportunities to quote for work for UK equipment manufacturers.

The company has also won work from oil and gas industry firms. Mr Priestley said oil and gas firms' demand for engineering services is so strong they are having to look beyond their traditional north east heartlands.

However, Mr Priestley noted the demand for engineering services has left some firms facing challenges hiring enough skilled staff.

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