A WELL-ESTABLISHED plumbing firm has launched a restructuring plan to overcome a downturn in sales as a result of a drop in social housing projects.
Bishop Auckland-based plumbing, heating and electricals company K Hewitt & Co Ltd, which has been in business for 30 years, generated £9m in sales for the year ending April 2012 but projections are that this may have dropped by £3m when the latest accounts are published.
Turnover has been affected as a direct result of local authority budget cuts, prompting director Craig Hewitt to carry out a review of the business.
However, Hewitt hopes a new Government scheme could counteract local authority losses, as he hopes to take advantage of a new Government- backed initiative to fight fuel poverty, which could help the company avoid making redundancies.
Hewitt said: “Over the years our traditional market sector has been social housing refurbishment.
“Unfortunately, this sector is suffering a major downturn in work because of two main factors.
“As we all are aware, the Government is slashing the budgets of local authorities, which in turn means the budget normally available for planned housing maintenance has been cut.
“The Government’s Decent Homes programme is in its final stages. Like many long-established local construction businesses, we are feeling the effect of this.”
The company hopes to return to growth on the back of the Energy Company Obligation (ECO) scheme, under which low-income households could get a free boiler replacement to help cut energy costs.
The firm is an accredited delivery partner of the scheme.
Hewitt said: “We plan to return to growth as a company in the coming months and expand into the domestic market with the help of the ECO scheme.
“As part of these plans, we would hope to create new employment opportunities in the local area in the future.
“Over time this will give us a more stable platform to remain an important employer in the area and sustain our workforce.”
The company, which employs 62 people, recently acquired an electrical business and it has diversified its offering to include mechanical and electrical engineering. Training also remains a high priority.
He said: “We have been trading for over 30 years and during this time we have gathered together a fantastic workforce.
“We have numerous plumbers that have been with us for over 25 years, our operations manager started as a plumbing apprentice with us and our receptionist joined us at 16 from leaving school.
“We believe our investment in training will ensure that we have the best possible engineers and create efficiencies and stability for the future.”