27.01.2004

JCB to start engine production

JCB has purchased an 18,000 square metre warehouse from Hays Distribution on the Dove Valley Park industrial estate on the A50 in Foston, South Derbyshire, UK, for an undisclosed sum thought to be between £5 and £10 million.

Planning permission to use the building for manufacturing already exists, having been granted by South Derbyshire District Council to previous applicant Conder. JCB plans to move in and start equipping the new plant immediately, ready for low volume production at the end of the year. The first engine is expected to roll off the assembly line by October 1, with output 'progressively' increasing in 2005.

JCB chief executive John Patterson said: "This is a historic occasion for JCB – this is the first time we have built our own engines. Most of our competitors make their own engines and this enables us to follow a similar path to control our own destiny."

The new business will trade as JCB Power Systems Ltd and will eventually produce diesel engines for around 70 per cent of the company's off-road machines including all JCB telehandlers.

The company announced in August last year that it was to develop the new engine in close partnership with engine specialists Ricardo, AVL, Cosworth Technology and Krause. The engine is being specifically designed for the off-highway equipment sector.

The new plant is expected to create over a 100 jobs with the prospect of future expansion of up to 200. The company currently buys most of its engines, around 40,000 units a year, from Peterborough based Perkins, which is owned by larger rival firm Caterpillar. For the foreseeable future JCB will continue to source 1, 1.5 and 2-litre engines from Perkins.

Four and 6-cylinder desel engines will be used for JCB's 'Loadall' telescopic handlers, rough-terrain fork-lifts, backhoe loaders, wheel loader/tool carriers, robot skid steer loaders, hydraulic tracked excavators and articulated dump trucks.

Patterson said that the engines would initially be made solely for JCB machines: "The investment so far, which includes development work already carried out, works out at between £75 and £80 million. We looked at a number of sites, including abroad, but knew that such an important development needed to be close.

"We had looked closely at an existing site near the headquarters but decided that it would have been a short-term measure. The site at Dove Valley is long-term and there is room for expansion and it is ideally situated close to our headquarters at Rocester.

"This facility is ideal in all respects with excellent links with existing JCB factories in Rocester, Uttoxeter and Cheadle, which was one of the main reasons we chose the site.

"While the factory is bigger than our initial production needs, it does provide us with the capability to expand in the future as we manufacture more and more engines. JCB has always bucked the trend and we tend to do our own thing, in all probability we will increase production at our Staffordshire factories this year."

Sir Anthony Bamford, JCB chairman and managing director said: "The JCB engine will give higher performance than existing engines and also comply with future worldwide emission requirements. When manufactured, the engine will enable JCB to supply the best possible power train package for its customers.”

JCB employs more than 4,000 people worldwide and produces more than 130 product lines on four different continents – with bases in the UK, US, India and South America.