Derby start-ups advance to test markets beyond UK

Think of Derby’s contribution to the world and you think of aero engines, cars and trains. It is indeed strong in these areas, yet it aims to show that it offers more. As befits one of the birthplaces of the Industrial Revolution, Derby is emphasising technological expertise and innovation as it builds business links around the world.

So alongside big employers such as Rolls-Royce, Bombardier and Toyota, there is scope for globally focused start-ups. The 17-strong core team of Katapult, founded by a group of creative arts students, designs family attractions for the leisure industry’s biggest brands such as Legoland Discovery Centres and Cartoon Network. So far it has entertained 50m visitors at 81 theme parks in 18 countries.

“We capture the innovation and creative spirit of Derby,” says Dawn Foote, co-founder and chief executive, while adding “that’s not nuts and bolts or planes or trains”. At Ireland’s Tayto Park, Katapult has designed entertainment for crowds queueing for the popular Viking Log Flume ride. This includes interactive games and augmented reality enabling families to see themselves dressed as Vikings.

Katapult has also designed attractions for Cartoon Network World Kuwait, an indoor family entertainment centre opening this year. While marketing its expertise globally, Derby is pushing to attract overseas investors. Derbyshire has since 1998 been twinned with Japan’s Toyota City.

More recently, it has twinned with the industrial city of Hefei in China’s Anhui province.

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Marketing Derby, the inward investment agency, organised a mission to the World Manufacturing Convention in Hefei last September. Bloc Digital, which applies digital technologies to industry, won an order there to design an augmented reality marketing app for a Chinese manufacturer. Derby exports more goods and services on a per job basis than any other UK city, says the Centre for Cities think-tank.

Exports totalled GBP6.1bn in 2017, of which 90 per cent were manufactured goods, dominated by Rolls-Royce. The city of 250,000 and its surrounding area is home to 43,000 engineers. The average weekly wage of GBP619 is much higher than a national figure of GBP497.

Yet Brexit worries some manufacturers. Toyota, which employs 2,600 outside the city at Burnaston, warned that restricted access to the European market could threaten the building of new models at the plant. This is in spite of the fact that, overall, Derby may be partly protected because two-thirds of its exports go outside the EU.

Despite Brexit uncertainty, Dedienne, a French company that supplies stands for aero engines, recently established its UK base in the city. French engineering consultancy Alten has opened a Derby office.

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Other overseas investors include SNC Lavalin, a Canadian rail consultancy, FTT, a Florida-based aerospace engineer, and Spanish consultancy RDT Engineers. Pattonair, an aerospace supply chain management specialist, owned by private equity interests in Los Angeles, employs 600 people in Derby and a similar number overseas.

Its owner has just merged it with a US counterpart, Wesco Aircraft Holdings. Much of Derby’s manufacturing is high-tech. It had the UK’s fourth highest patent applications per 100,000 residents in 2018, after Cambridge, Coventry and Oxford, according to the Centre for Cities.

Pentaxia (see picture) a supplier of advanced composite components to industries such as motorsport, aerospace, automotive and defence, was co-founded in 2008 by managing director Stephen Ollier after a career in railway engineering. Its annual sales are near GBP10m and it employs 160. About half of what Pentaxia makes is exported by customers.

Although its direct exports are only 5 per cent of turnover, Mr Ollier expects this to grow to 25-30 per cent as sales expand to GBP25m by 2025. “The government thinks composites will quadruple in five years and they’re already growing at a hell of a rate. Everything has to be lighter and stronger,” he says. “Derby as a major manufacturing location has a responsibility to help the UK grow specialist markets following Brexit,” he adds.

But he is wary of engagement with China, pointing to its drive to become dominant in sensitive technologies. Davis Derby, based in the city since 1843, specialises in electronic equipment for hazardous environments such as mines and quarries and fleet management systems for forklift trucks. It once tracked the UK coal industry’s fortunes.

Two-thirds of business is now in exports to such as Russia, Kazakhstan and Vietnam. “The technology that we have is still in demand,” says Gerry Beetles, executive chairman.

Bloc Digital’s director Keith Cox sees a niche for companies like his to help larger businesses grapple with the digital revolution.

Bloc is on track for GBP500,000 of business in the US this year; total sales push GBP3m. “Our speed and quality of work is unusual for our cost,” he says. “We are still small enough that we can be agile.”

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