Business
Update on US Contract and OEM Approvals
Update on US Contract and OEM Approvals.
About this update from Velocity Composites Plc
[{"type":"text","content":"\n\n \nReach\n11 March 2024\n \n \nVelocity Composites plc\n(\"Velocity\" or the \"Company\")\n \nUpdate on US Contract and OEM Approvals\n \nVelocity Composites plc (AIM: VEL.L), the leading supplier of advanced composite material kits to the aerospace market, is pleased to update on positive progress in the delivery of Velocity's first major contract (the \"Contract\") with the Company's US launch customer (the \"Customer\"), a Tier 1 aerospace manufacturer.\n \nIn line with the Company's original announcement on 20 December 2022, the Contract is worth $20m per annum in revenue over at least the next five years starting from 1 January 2024. Since completing the construction of the Company's new US-facility in Alabama in 2023, Velocity has been on-boarding the new business for the Contract. This is a complex and lengthy process, including a detailed qualification procedure known as First Article Inspection (\"FAI\").\n \nFollowing a key OEM approval by GE Aerospace, Velocity expects the FAI process to be fully complete for these four key programme blocks by the end of April 2024, ensuring that the Company is on target to meet its FY2024 forecasts. \n \nThe total project is split into four individual aircraft programme blocks, to be delivered sequentially within a 12-month transfer plan. The project involved close co-operation between Velocity and the Customer to verify that the kit engineering data for each block had been transferred accurately, followed by the manufacture of the first kit for each component manufactured for evaluation by the Customer. Once transferred, Velocity becomes the sole approved supplier of the kits. Only once each block completes the FAI process is Velocity then able to build towards full volume production.\n \nAt the end of FY2023, the first two blocks had been completed and ramped up, which accounts for over 50% of the annual value of the Contract. The FAI process for the third block is well underway. The final block required an additional approval from the OEM, GE Aerospace, which is supplied via the Customer, and it is this final approval that has now been obtained.\n \n \nJon Bridges, CEO, Velocity, said: \"After a rigorous audit process and customer liaison, we are pleased to receive supplier approval that allows the fourth block ...