MERLIN DIESEL SYSTEMS - INSIDE MARINE

MERLIN DIESEL SYSTEMS

CASTING A SPELL ON DIESEL MACHINERY

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MERLIN DIESEL SYSTEMS

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PROFILE

CASTING a spell ON DIESEL MACHINERY With customers in over 100 countries, the UK’s Merlin Diesel Systems is a substantial and critical supplier of a variety of products and services in the worldwide diesel engine supply chain. Having firmly established its presence in the automotive market, the company has recently made a significant acquisition and stock investment that will substantially grow its share in the marine market. Merlin Diesel Systems’ management team spoke to Richard Hagan about this latest development and what it means for the company’s future.

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he history of Merlin Diesel Systems can be traced all the way back to 1947 when the company was first established in West Yorkshire by a certain Mr CT Rhodes of Halifax.

Fast forward to today and it has grown into a veritable powerhouse within the diesel spares and servicing industry both in the UK and abroad. From its headquarters in Preston in Lancashire, Merlin Diesel supplies over 50,000 parts to customers in over 100 countries.

Exporting in high gear Whilst the domestic market is an important part of Merlin Diesel’s business, export markets remain the company’s biggest source of revenue, according to Technical Director Scott Bramley: “Exporting spare parts is a major part of our business; we export about 65% of our products. Most of that is diesel fuel injection parts and complete units, with probably a 50/50 split between the two.

“We export parts like injectors, fuel pumps, pressure sensors and pressure control actuators,” he continued. “It could be for marine or heavy-duty automotive.

Within the automotive sector, we are seeing real growth in areas like agriculture and highway, and now also marine as we start to widen our envelope.”

Merlin Diesel supplies a comprehensive range of products and services to the automotive, heavy industry and maritime sectors. The company’s very large production centre is said to boast one of the biggest and most sophisticated diesel workshops in the world.

The company’s portfolio consists of two main categories: fuel injection spares, and test equipment solutions.

Its spare parts product range spans diesel fuel injection parts from well-known, recognisable manufacturers such as Bosch, Delphi Technologies, Yanmar, VDO, Perkins, Denso and many more.

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MERLIN DIESEL SYSTEMS

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PROFILE

Meanwhile, its test equipment range is sourced from similarly recognisable brands such as Bosch and Hartridge (a subsidiary of Delphi-BorgWarner), as well as manufacturing its own range of bespoke test equipment. Customers can choose from a variety of test benches for every conceivable application, all supplied directly by Merlin Diesel.

Stockholding cushions the blow While the business continues to show strong growth, the team threw the spotlight on ongoing global parts shortages and supply chain price increases as a major source of headaches for its growth plans.

“We’ve got some big challenges with shortages,” confirmed Mr Bramley. “It has cost us a lot of turnover, but so much of it is out of our hands. Some parts only have one supplier, so we can’t seek alternative sources for those. Additionally, we’re dealing with rising costs and there’s very little we can do to control that.”

Sales Director Derek Henry agreed: “Some of our main suppliers have had six price increases in the last 18 months,” he lamented. “To try and manage that is very difficult.”

Nonetheless, he highlighted the company’s robust stockholding as a major advantage at a time when stock shortages have become a chronic problem.

“One of the strengths of our business model is that we have quite a sizeable 4

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amount of stock, and that’s really what drives a lot of our business and our success.

Where most suppliers run out of particular parts, we still have stock. Today, we have £21 million in stockholding, and that tends to be a real strength for us.”

Regardless of supply chain challenges, the company registered a record sales month in March 2022. “Our customer base is growing,” said Mr Henry. “Globally, diesel continues to represent a huge opportunity for us.”

Maritime market expansion In 2021, Merlin Diesel concluded a substantial investment into sister company Tyne Electro Diesel. The transaction saw Merlin acquire a 52% share of Tyne Electro Diesel, a service provider focusing on the overhaul and repair of marine diesel systems. This acquisition is part of the company’s strategy for growing its market share in the maritime space.

“It’s crucial to our business moving forward,” Mr Henry remarked, singling out opportunities in the repair of injection components in large engine equipment as a future driver of growth for the business.

“At the moment, there’s limited repair solutions for certain fuel injection systems in large engine equipment,” he explained.

“With our investment in Tyne Electro Diesel, I think there’s a lot of opportunities.”

Additionally, the company’s unique test bench services are on hand to continue

delivering substantial value to its efforts within the marine environment, where its Merlin DC-80 series test bench and Mark 6 common rail marine injector testing solutions are proving popular.

Factory expansion Merlin Diesel has enjoyed ongoing sales growth for the past two years, with a £5 million sales growth in 2021 alone. To accommodate the company’s current and future growth forecasts, it is in the midst of a major physical expansion of floor space and production capacity.

“We’re changing the whole workshop from the ground up,” said Mr Bramley.

“We’re building a component assessment room as well as a cleanroom for product assembly. We’re also restructuring internally and adding an extension to the building to cope with our growth.”

“Our test equipment division is also being expanded to give it more space because it’s really growing fast,” added Managing Director (Test Equipment Division) Mike Rawlinson. “Our diesel injector remanufacturing service has always shown strong growth, but the last two years in particular have highlighted the need to expand our capacity in order to be more efficient.”

Once the £1.5 million expansion project is complete, Merlin Diesel will boast an extremely impressive 7,000 square metres of covered floor space.

them, there’s a near-constant flow of new recruits joining the business, with a particular focus on apprentices.

“We’re trying to bring in and train up as many young people as we can,” Mr Bramley explained. “It’s very difficult to bring in fully-trained diesel engineers simply because there’s just not that many of them around.”

To ensure that it retains its highly-skilled staff, Merlin Diesel has implemented a pay structure that is competitive, within a healthy and properly equipped workspace.

“We like to promote people from within, and there’s a clear chance of progression to management roles,” Mr Henry noted. “We also pay an annual bonus and a generous pension. It’s about ensuring that we look after the staff as best we can.”

Room for growth Going forward, the team was optimistic about the future.

“We still think there’s a lot of room for growth in the industry for us,” Mr Bramley

asserted. “We want to look for new opportunities. We see a slight diversification from automotive, looking more towards the agricultural and industrial side of the business. And we want to look at contract business if we can find the right partners.

The future looks bright.”

Mr Henry’s focus was on a return to trade shows. “There are a number of shows we will be attending. Globally, we’ve historically been very proactive with visiting and exhibiting at shows. We’re about to attend Motortec in Madrid, Rematec in Amsterdam, SMM in Hamburg and Automechanika in Frankfurt. Towards the end of the year, we will also be in Paris, Dubai and Shanghai.”

Mr Rawlinson concluded with a brief highlight of the company’s ethos. “It’s not just about winning the sale,” he said. “It’s about customer retention and welcoming feedback. We’ve got a great management team and fantastic staff, supported by excellent telesales staff both here in the UK and in our export team. They all go the extra mile.” n

Injecting new people With all of this new space comes the need for additional staff. The company has brought in a new management team to oversee its expanded operations. Under Inside Marine

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