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South African automotive electronics specialist eyes Cambridge for HQ

Written by Lautaro Vargas

Wednesday, 09 April 2008

The company has a strong presence in the US trruck market The South African automotive specialist that bought Pi Technology in 2006 is proposing to make Cambridge the entire group’s global headquarters under major new international expansion plans. Control Instruments (CI) Group has stripped the group down to two lean divisions, Pi Shurlok – previously Pi Technology – and CI Automotive, and is now reinvesting in major staff growth at several of its facilities, particularly in South Africa and the US. The restructuring of the business has added a manufacturing capability to Pi and a European presence to CI, opening the door to new opportunities for the two and allowing them to keep pace with changes in the automotive industry. CI Automotive supplies branded products to the sub-Saharan Africa automotive aftermarket, while Pi Shurlok continues to specialise in the design of a wide range of electronic products for the automotive industry and has an enviable record of one in four heavy trucks in the US using its engine control systems. CI Group’s chief executive, Richard Friedman, has relocated from South Africa to Pi’s historic Milton Hall site to run Pi Shurlok where he will also continue to oversee CI Group and which, if it sustains its current growth rate, will become its permanent head office. Friedman believes the acquisition of Pi Technology was crucial to the future of both Pi and CI following a degree of “turmoil” in the international automotive sector. “There have been fundamental changes in markets over the last four years,” he said. “CI has world class manufacturing, but decisions by motor manufacturers were no longer being made in South Africa. They were moving all engineering back into Europe and the UK, so we needed a presence there. “Meanwhile at Pi the problem was that it acted purely as a consultancy, providing advice and products design, but that’s where the work would stop – customers wanted more than just consultancy. Pi had engineering, but motor manufacturers wanted a one-stop shop solution, a business that designs and manufactures, so it made sense to bring the two businesses together; it was a perfect opportunity.” One which Cambridge sits at the heart of according to Friedman. Despite initial job losses as part of the restructuring in both South Africa and Cambridge, major recruitment is now part of the strategy. Pi also has additional design and development facilities in Detroit, US, Rodgau in Germany and Pietermaritzburg, South Africa, now home to its manufacturing facilities. Friedman says CI is expanding its South Africa design team from around 20 people to 40, while its Detroit, US, operation is set to increase from 35 people up to 60 over the course of the year. Expansion on a smaller scale is also happening at Cambridge with engineers and production staff coming on board. Pi Shurlok’s OEM services are still central to success with its well established record in the US truck market –  provides automotive engineering services and develops and manufactures electronic products for the international OEM market, focusing on North America, the UK and Europe. “Cambridge is the nerve centre of the business and where all the key decisions are made,” said Friedman. “There’s a huge degree of expertise and knowledge in Cambridge and it is also in an ideal global position, midway between the US and South African operations.” CI Group’s new structure is intended to drive up profits through a new focus on core automotive offerings rather than fleet management, which it sold off for £65m to TeleMatrix. It incurred significant costs in the first half of 2007 as it restructured the business and profits suffered incurring a £4m pre-tax loss, with Pi in particular, responsible for a £4.5m loss. CI’s annual report said this was due to worldwide impact of cancelled orders, delayed new model launches locally and significant downward price pressure from the OEMs as well as a considerable drop in business for the consulting business in Pi, mainly due to problems experienced by some of its major customers. However, CI reports that this lost business has subsequently been replaced and the customer base significantly expanded, particularly in the US. A 57 per cent revenue increase, up to £55m, for the group’s ongoing operations in 2007 also provides positive notes and though Friedman won’t make any forecasts for 2008, he says the first three months of this year are “significantly up on last year.” Set as favorite Bookmark Email This Hits: 578 Trackback(0) TrackBack URI for this entry Comments (0) Subscribe to this comment's feed Write comment This content has been locked. You can no longer post any comment.

 

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