CRC Evans, a global coatings and welding contractor, is opening a new UK manufacturing and testing hub in Burnley in the third quarter of this year. This "next-generation supersite" will consolidate its manufacturing bases into a single centre of excellence for specialty welding and coating.

Strategic Rationale and Market Diversification

The investment aims to service the company's expanding international contract base. While North Sea upstream activity is stable, the site will support growing work in the Middle East and South America. An initial pre-qualification job involves coating work for a TechnipFMC-serviced project in Brazil. The company is actively hiring, with about 200 people already at the site.

Growth and Sector Outlook

This expansion occurs despite a challenging UK upstream climate. The company is bullish, citing a record month and $37 million in contracts won in January, including work for the UK's Liverpool Bay carbon storage project. While upstream currently constitutes about 80% of business, the goal is to diversify, with an aim for 40% of contracts to come from nuclear, aerospace, and renewable energy by 2028.

Challenges in Carbon Capture and Storage (CCS)

CRC Evans sees opportunities in CCS, such as Norway's Northern Lights project, but notes sector development is slower than expected. The complexity involves aligning emitters, transportation operators, and storage operators, who often lack common ground. The CEO suggests onshore CCS and regulatory pricing mechanisms could help drive down costs and promote development.

Global Footprint and Future Strategy

Following a 2022 acquisition, the company now operates in over 100 countries, accessing growth in regions like the Middle East, exemplified by a recent welding contract for Qatar's Al-Shaheen field expansion. In the UK North Sea, contract activity with major service providers remains stable. Looking ahead, the company plans mergers and acquisitions focused on technology, including internal pipeline coating, robotic welding for nuclear pipelines, and pre-prepared pipelines for district heating systems. The CEO emphasizes that technological advancement is crucial for the UK to compete with lower-cost labour countries.