How do you turn great scale into true international clout? Small but carefully chosen steps are the approach taken by Atkins, the UK-based design engineering company which, with a turnover of £1.26 billion ($2.46 billion), describes itself as the largest engineering consultancy in the UK, the largest multidisciplinary consultancy in Europe and the fifth largest design firm in the world.
Its December acquisition of Dutch aerospace engineering firm Nedtech - with 50 employees, a turnover of just £3.5m in 2006 and gross assets of £1.9m - hardly seems like a move that would have much bearing on Atkins' world standing.
But, says Atkins aerospace managing director Neil Kirk, this seemingly small acquisition comes with two important benefits. One is expertise in designing high-lift devices that complements Atkins' own competence in wing structures and fuselage (it did the certification analysis for the Airbus A380 wingbox, for example), to give the company a whole-wing, even whole-aircraft competence.
Other clients include Rolls-Royce, the UK's Ministry of Defence and Civil Aviation Authority, the European Space Agency and EADS Astrium, and current projects include supporting development of the Airbus A350, A380, A400M and the Lockheed Martin F-35 Joint Strike Fighter.
It would have been possible to simply hire engineers with the capabilities that come with Nedtech, but Kirk says the advantage of acquisition is far greater: "Nedtech gives us a footprint into Europe from which we can expand," he adds.
Atkins' objective is to build on its success in winning contracts to help Airbus develop aircraft including the A380 and A330-200F and become a transnational supplier to the airframer and a strategic partner for EADS. Nedtech, Kirk notes, is Amsterdam-based and very active in Germany and has excellent business relationships with Airbus management in Bremen and Hamburg.
Those relationships, combined with Atkins' scale, make it a "relatively small step" up to the next level. Atkins' objective is to treble its aerospace turnover to £60 million by 2012.
But ultimately, it wants to use its mass to consolidate the German supply chain, which is today very fragmented, says Kirk. "Large companies like to deal with large companies," he adds. "It gives them comfort."
Exactly how Atkins may fit in with Airbus will be determined in part by the evolution of the A350 programme, to which Atkins would like to contribute its composites experience in fuselage and wings. But that programme is at "an interesting stage", says Kirk, with risk-sharing partners - big, tier 1 suppliers - being selected and manufacturing sites being divested.
Atkins is not a risk-sharing partner, he says, nor is it a manufacturer. Rather, as a partner, it works with companies ranging in size from Airbus itself to small manufacturers of component parts to provide the engineering support that gets them from the initial stage of concept design to detailed designs for manufacturing. As Kirk says, that means going from "it's going to work" to "how it's going to work".
Right now, Atkins' aerospace client base is very Europe-centred. North America is "aspirational" and a medium-term objective, he says. The group has 1,000 employees in China, but no aerospace presence there and Kirk does not suggest that may change soon. He describes China as an "interesting conundrum" but a very hard place to develop what he calls a "valued partner relationship".
India, on the other hand, holds great promise and Atkins has had good results recruiting engineering talent there. Kirk says the cost advantages of being there are "rapidly eroding", but it is still cheaper than the UK and engineering skills are high quality.
The company's strategy is to be close to its clients but deliver a globally sourced expertise, he says. For example, Atkins Deutschland in Hamburg is run and staffed by Germans, recruited locally - it is not a German branch of Atkins UK. Kirk says Atkins must be a global player: "We have a policy not to be British."
Source: Flight International