Defence Surge Exposes Gaps in Specialist Engineering Supply Chain

Engineering specialist BEP Surface Technologies is seeing a new wave of defence-related enquiries and RFQs for specialist grinding and hard chrome plating, highlighting vulnerabilities in the UK engineering supply chain as the government increases defence spending with SMEs. 

Andrew McClusky (pictured), managing director of BEP Surface Technologies, says: “We’re seeing a marked increase in defence enquiries. Defence manufacturers need specialist capabilities, but the supplier base they have relied upon has reduced. Capacity cannot simply be recreated when demand suddenly increases.” 

BEP’s experience echoes research it conducted earlier this year, which found that the number of independent electroplating businesses in the UK had fallen from 80 in 2015 to 67 in 2025 – a decline of more than 16%. At least seven of those remaining were already insolvent or winding down when the research was conducted. 

“When we published that research, our concern was that the UK was steadily losing specialist surface engineering capacity,” explains McClusky. “The enquiries we’re now receiving from defence reinforce why that matters. Grinding, plating and other specialist processes may sit several tiers down a supply chain, but they can be critical to manufacturing, refurbishing and maintaining high-value components.” 

McClusky believes increased defence expenditure represents a significant opportunity for British SMEs, but warns that scaling capacity will require investment in machinery and skills. 

“For an SME, increasing capacity requires considerable investment before the work is delivered. You need equipment, people and technical expertise, but also confidence in the long-term pipeline to justify that investment. Greater visibility of future defence demand would allow businesses to make those decisions earlier.” 

The MOD’s SME Action Plan, published in July 2026, aims to improve SME access to defence opportunities and increase supply-chain resilience. For 2027/28, the MOD is targeting £2bn in direct SME spend and £5.5bn indirectly through its supply chain. 

“The opportunity for British manufacturing is significant,” concludes McClusky. “Success should be measured not simply by how much defence expenditure reaches SMEs, but by whether it leaves Britain with more engineering capability, skilled people and stronger domestic supply chains.” 

More information www.bep-st.com 

UK Steel DG

UK Steel has appointed of Peter Brennan as its new director-general, taking over the leadership of the trade association at a pivotal moment for the UK steel industry. Brennan succeeds Gareth Stace, who steps down after 12 years as director-general but will remain with UK Steel as an adviser for a short transition period before leaving the organisation. Having worked at the heart of UK Steel’s policy and advocacy work, Brennan brings extensive knowledge of the industry and the challenges and opportunities facing UK steelmakers.  

More information www.uksteel.org 

IPercept Raises $16.5m Funds to Redefine CNC Service 

Stockholm-based IPercept has raised a $16.5m to redefine CNC-specialised industrial service in Europe and the USA. The round was co-led by Isogon Ventures and 2150. The company’s existing investors – Luminar Ventures, RunwayFBU, J12 Ventures and AI.Fund – all participated. IPercept’s patented plug-and-play MRI for CNC machines unlocks scalable data, so operators can now see inside critical machinery at a component-level like never before. It essentially enables CNC machine tools to report their own mechanical condition. With this funding, IPercept will scale its operations, grow partnerships and extend its data platform. 

More information www.ipercept.io 

Nasmyth Secures Air Inlet Manifold Contract for Coolbrook

Nasmyth has been awarded the first Air Inlet Manifold contract by Coolbrook for its pioneering RotoDynamic Heater (RDH) technology, marking an important new programme for Nasmyth within the industrial and energy sectors. The contract follows several months of close collaboration between the two companies and will see Nasmyth produce a key element of the RDH system. It provides Nasmyth with an opportunity to apply its established precision engineering, fabrication and extensive manufacturing expertise to this fast-growing multi-million pound market. 

More information www.nasmyth.com 

Made Smarter Teams Up With Toyota

Made Smarter South East, the Government-backed technology adoption programme, has teamed up with the Toyota Lean Management Centre (TLMC) to bring manufacturing and continuous improvement expertise directly to SME factory floors. Together the organisations have developed a two-day programme tailored to SMEs, helping manufacturers improve processes, eliminate waste and boost productivity before investing in new technology. 

The programme was successfully piloted in Buckinghamshire, bringing together 14 manufacturers hosted at Ercol in Princes Risborough factory. Day one combined expert-led workshops and practical exercises with a factory tour, while day two took the learning directly into selected businesses. 

More information www.tinyurl.com/4zxthect