JCB has delivered a rare boost for British manufacturing after unveiling plans to spend £100m modernising its flagship UK factory and global headquarters.

The firm, known for its distinctive yellow diggers and agricultural equipment, will spend the funds radically overhauling its current plant in Rocester, Staffordshire, which has been in use since 1950.

It said that the complex, which was originally converted from a cheese factory 75 years ago, had become an obstacle to boosting production of its machinery equipment. The move will help safeguard 8,000 jobs. 

The modernisation plan comes as the business, controlled by the billionaire Bamford family led by Lord Anthony Bamford, struggles with soaring costs, weak demand and the impact of US steel tariffs.

JCB is one of Britain’s largest privately-owned manufacturing groups, employing 19,000 at 22 construction plants around the world.

It was founded by Lord Bamford’s father, Joseph Cyril Bamford, in 1945 and today turns over nearly £6bn a year.

While a weaker global market last year caused the business to axe 230 agency workers, it is understood that the investment aims to help current staff become more efficient at building its equipment at speed.

As part of the plans, JCB will construct a fully automated powder-paint facility within the plant at a cost of £60m while changing the layout of the shop floor and upgrading production lines.

Graeme Macdonald, JCB’s chief executive, said the end result will be “unrecognisable”.

“With all the investments we’ve made over the last 20 years in India, the US, China and Brazil, we needed to modernise our headquarters,” he said.

Mr Macdonald added: “You would never design a factory the way it’s laid out today. So we’re taking the opportunity to make it leaner, more efficient and more cost competitive.

“We just couldn’t build enough. We will definitely solve that problem and we can then fulfil demand from all the other parts of the world.”

JCB’s factory overhaul marks a rare vote of confidence in the future for a manufacturing sector that has been in headlong retreat.

UK factories last year consumed the least energy in 50 years, with the decline almost entirely because of shutdowns and closures.

Britain also ranks outside the top 10 manufacturing nations for the first time since the Industrial Revolution, behind countries including Mexico.

The overhaul will be made easier by the opening of a new $500m (£373m) factory in Texas which will begin production next year.

When that plant is up and running, it will be able to take pressure off the Rocester site, which currently fulfils the bulk of US orders.

Mr Macdonald said that once the two projects have been completed, JCB’s annual production capacity will surpass 200,000 machines, compared to the 120,000 built last year.

While the increase in US output will help soften the blow from the extension of Donald Trump’s steel tariffs to cover construction machinery, he said it will still have to absorb hundreds of millions of pounds in additional annual costs.

He predicted that the slump in demand will not ease until 2026 or 2027 as construction firms that made record purchases of machinery in the wake of Covid rein in spending.

Lord Bamford said the UK investment will put the Rocester site “at the forefront of our industry”.

“Obviously, we are expanding overseas, not least in America, where we have been for decades. But the UK is our home,” he said.

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