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North East Engineer Collects National Honour

On 6th May, North East engineer and entrepreneur, John Reece, was at Buckingham Palace to receive his MBE, announced in the New Year Honours List.

Awarded for services to engineering, manufacturing and innovation, it recognises a 30 year career in which he has been responsible for the success of two international engineering businesses on Tyneside; Soil Machine Dynamics (SMD) and Pearson Engineering, and more recently his role as Chairman of Reece Group, of which Pearson is a subsidiary.

Pearson Engineering and SMD achieved outstanding international success by being highly innovative, developing engineered products that became market leaders on a global stage. John Reece not only provided leadership for both companies but was also the director responsible for research and development, and product design. His vision and drive enabled both companies to develop world-class products as well as achieving considerable commercial success.

More recently, John has built on that success by creating the Reece Group, which currently includes five engineering businesses operating in a diverse range of markets, with over 400 employees.

Commenting on his career to date and the award John stated, “The award of an MBE is greatly appreciated. The last 30 years has, like in most businesses, been a roller coaster ride but I am pleased that the success of both SMD which I ran for 20 years and more recently Pearson Engineering and the Reece Group has been recognised. The support of my wife Sue and my family has played a vital role in this success, as have many of the people I have had the good fortune to work with along the way. This journey is by no means over; we have -ambitious plans for the future expansion of the Reece Group and its continuing contribution to the North East economy.”

Describing current plans and the strategy behind the Reece Group John explained, “Following the success of our Defence business Pearson Engineering, we had the funds to diversify our operations. Since the beginning of 2012, we have acquired three engineering businesses; Responsive Engineering, Pipe Coil Technology and Velocity, and in addition started up our own innovation centre. We also completed the acquisition of the iconic 350,000 sq. ft. Armstrong Works based on the banks of the Tyne along Scotswood Road. Previously owned by Vickers and latterly BAE Systems the site was acquired to house our expanding operations.

“The acquisition of Responsive Engineering, a sub contract fabrication and CNC machining company has given us a manufacturing base upon which we plan to build a number of product businesses. With our recent acquisitions we are now operating in the defence, subsea, construction and general engineering markets as well as oil and gas.

“Developing a group is not without its challenges. In early 2014 we embarked upon the redevelopment of Armstrong Works, at a cost of £10m, which we plan to complete in the third quarter of 2015. As part of this programme four group businesses are moving to the new site which, however good the planning, will cause some disruption to operations.

“Whilst our goal to diversify operation is aimed at reducing risk and taking advantage of new markets we are subject to the vagaries of the global markets for our products and services. At the time of acquiring Responsive, oil prices were high and investment by the industry helped grow the operation. Unfortunately the falling oil price has now reduced investment by the oil and gas companies and this has affected the Responsive order book. Whilst prices appear to have stabilised and have improved to circa $65/barrel this is someway from the $115/barrel in July 2014. Our strategy in this area is now to capture a greater share of a reduced market. Fortunately as a family business, we are in a position to look to the long term and further diversification will allow us to ride out similar fluctuation in other markets.

The purchase of Armstrong Works has increased the capability of businesses within the group, and created new opportunities. Due to the extensive capacity of the new site and the expertise and skills retained within its businesses, Pearson Engineering has been able to offer an armoured vehicle refurbishment and upgrade service. This has already paid dividends resulting in the company recently being selected to undertake a structural scanning assessment of the British Army’s Challenger 2 tank fleet on up to 60 vehicle hulls. This contract will provide valuable information for the whole fleet management of the Challenger 2 tank platform by the UK MoD and it is great to see tanks back on Tyneside.

John acknowledges acquiring businesses can be expensive, so in addition to acquisitions the group has created its own research and development centre, Reece Innovation. It has already recruited highly experienced mechanical and electrical engineers as well as sensor technologists and material scientists. The aim is to develop ideas from within the business for new markets as well providing a design engineering service for customers who have complex engineering problems to solve. Up and running for less than 12 months, Reece Innovation is developing a range of products for the water utility, defence and oil and gas markets. Looking forward John is excited by the opportunities available to the group as it completes its move to Scotswood Road, he added: “No doubt 2015 will be challenging, completing the move and establishing the businesses in our new premises, but with our recent investments and the support of those we employ, we have a great opportunity to continue our success over the next decade and beyond.”

Whilst the development of his early businesses and more recently the creation of the Reece Group has been a primary focus for John, he has also taken a strategic approach to ensuring that the future of the engineering sector is given a helping hand.

As one of the most successful entrepreneurs in the north east he recognises that the future of the engineering sector needs to be secured by encouraging young people to aspire to become engineers and that the sharing of resources, interests, expertise and skills is key to this.

Through a number of charitable foundations, support has been given to a range of projects. The Reece Foundation has made significant donations to fund initiatives such as bursaries scholarships at local schools and universities, an engineering suite at St Cuthbert’s school in Newcastle and an engineering building at Cambridge University. Other support is extended to the local community in the west end of Newcastle through the Reece Group and also via John’s personal trust, The Springfield House Trust which is focused on supporting the least advantaged people in the local community.

This was posted in Bdaily's Members' News section by Leigh Chelton .