£1 million loan helps secure Jaguar contract.
A Reading-based components manufacturer is creating twelve new jobs, and safeguarding a further 56, after securing a £1 million national tooling loan from Finance Birmingham.
Magal Engineering Ltd – which designs and manufactures automotive components for global names including Jaguar Land Rover, Ford and Daimler – secured the loan after winning a contract to manufacture parts for Jaguar. The automotive giant will use the components in engines being made at its new £500 million i54 plant in Wolverhampton.
To operate at full capacity for the contract, Magal required finance for a suite of tools to make the components – the cost of which would be reimbursed by Jaguar Land Rover once full production began. The loan supplied by Finance Birmingham ensures that the company has the initial funds to obtain the correct tooling for the contract. It was secured from the national £24 million Tooling Funding Programme, which is part of the Government’s Regional Growth Fund.
Magal’s CEO Gamil Magal said: “Magal’s ability to supply components to Jaguar relied on our ability to acquire new tools and take on more staff. Finance Birmingham’s loan will enable us to deliver this contract efficiently and on time. This is a new step forward for Magal, which will help us to realise our future as an integral part of the UK’s growing automotive sector.”
Rob Wilson MP – who represents Reading East – toured Magal’s site in Woodley, Reading, on Friday 24th October to see how the funding would be used. He added: “By providing loans to companies like Magal, which have the skills and ambition to grow, the Government’s Tooling Funding Programme is proof of how central funding can be used to guarantee the future of local firms and their employees. My tour of Magal has shown how the firm will build on this success and continue to work with major companies from across the globe.”
The UK Government has identified a £3 billion opportunity for domestic suppliers to provide parts to UK-based vehicle manufacturers, according to the Society of Motor Manufacturers and Traders (SMMT).
Steve Hetherington, Tooling Investment Director at Finance Birmingham, advised Magal and helped to prepare the company’s bid for the loan. He said: “The strength and reputation of the UK’s automotive industry continues to gain momentum, providing new opportunities for its suppliers. Magal’s new contract with Jaguar highlights how expertise within the automotive supply chain is winning work and creating new jobs. The Tooling Funding Programme is open for business and we hope to help many more companies achieve these goals.”