UK: Chemring Group - flaremaker seeks new flair. (1 of 4)

UK: Chemring Group - flaremaker seeks new flair. (1 of 4) - Chemring Group enjoyed a radar-dazzling war. Now it aims at a different target: to capture a bright new peace. Annabella Gabb reports from the battle front.

Last Updated: 31 Aug 2010

Chemring Group enjoyed a radar-dazzling war. Now it aims at a different target: to capture a bright new peace. Annabella Gabb reports from the battle front.

With a whoosh of displaced air, the bright white of a decoy flare rips the grey sky over Salisbury Plain. No, it is not a third world war or Saddam's revenge. On a windswept Wiltshire hilltop, technicians at marine and military pyrotechnic specialist Pains-Wessex are testing a fresh batch of rockets for delivery to the Royal Air Force.

It is a sight familiar to all since the images of the Gulf war dominated the nation's television screens. Flickering monochrome shots of heat-seeking missiles exploding in mid-air, seduced away from targeted planes by infra-red decoys, brought the technology of war into the living room.

For Pains-Wessex and its sister company, Chemring Ltd, producer of the radar-confusing chaff which also did sterling service in the Gulf, life has been hectic since January 15. The war may be over but business has remained brisk. With protective clothing manufacturer Vacuum Reflex, the two companies make up Chemring Group, perhaps the purest defence company quoted on the stock market. Its products range from the missile-cheating countermeasures and chaff for military use to more humane distress flares and lifejackets for shipping, insulated clothing for coldstore workers, and leisurewear.

The headlines which Chemring products gained in the Gulf earned the company a reputation far greater than its actual size. With a current market capitalisation of £29 million and 1990 sales of under £30 million, Chemring is small fry in the industry.

Yet over the past decade the publicity-shy group has quietly carved itself a number of lucrative niches and profits multiplied in the 1980s. On the defence side, currently accounting for over 60% of turnover, it is European market leader and Britain's only producer of radar-reflective and screening materials, the product of leading-edge technology. Ironically, the process starts simply with the melting down of thousands of marbles, enough to make a small boy weep. But out of this emerge aluminium-coated glass filaments with exact specifications, designed to confuse even the most sophisticated enemy radars.

Chemring began life in 1905 as an electrical and chemical engineering firm. It has been in radar-reflective equipment since the 1939-45 war but today's products are light years from "window", the bundles of aluminium foil dropped from Lancaster bombers to blind German radars guarding the Channel.

The other leg of the business, added in 1986, came with the £14 million takeover of the larger Pains-Wessex group. Founded in the mid-19th century, Pains-Wessex also ran a famous fireworks business, jettisoned in 1980 to allow the company to concentrate on its higher-technology activities. Today Pains-Wessex's Schermuly brand name is synonymous with flares in military circles. In civil markets the group has used its technology to build an equally significant presence in marine safety.

The merger was a logical move. The two parties had built up a relationship over many years of common projects. Now they collaborate on a regular basis - for example, on the Sea Gnat, the ship decoy used on most NATO vessels, including those in the Gulf. Pains-Wessex assembles the projectile, including the explosive components that deploy the chaff payload produced by Chemring.

Despite its impressive record, however, Chemring was no more immune than any other defence contractor to the upheaval that hit defence markets before Saddam hit Kuwait. When the Ministry of Defence put a moratorium on defence procurement, the company was left waiting, with many anticipated orders unconfirmed. Its share price plummeted from £6 to 350p. The orders finally came through late in the year, but not before the delay had done considerable damage. For the first time ever, pre-tax profits fell - down 12.8% to £4.1 million (before exceptional item) on sales down 2.5% to £28.2 million. But, claims group chief executive Philip Billington, "we went out of the year with the biggest order books ever".

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