News

 

May 2001

Investment reaches record levels

The stock of foreign investment in the UK rose to a new high of more than $452 billion in the fourth quarter of 2000, according to balance of payments figures released by the Office for National Statistics. This was $118 billion - 35 per cent - up on the fourth quarter of 1999, demonstrating clearly that international business confidence remains strong in the country’s economy.

Meanwhile research by investment agency London First shows that London is still the most popular city in the world for foreign companies. A survey by the agency reveals that the UK capital is home to 13,150 overseas-owned companies from 92 different countries. Companies cite many reasons for locating in London, but top of the list are the city’s global status, the English language and the ease of international travel. Other major attractions include London’s entrepreneurial environment, its ready supply of skilled professionals and its vibrant cultural life.

 

High-tech companies keep faith in the UK

Despite the global economic slowdown emanating from the US and led by the previously high-performing technology sector, high-tech companies continue to set up shop in the UK, attracted by its advanced telecommunications infrastructure, its large pool of skilled labour and its strategic location for European markets. Recent arrivals include US engineering consultancy Weidlinger Associates, which has opened its first European office in Dunfermline, Scotland, where over the next five years it plans to create 20 new engineering jobs at PhD and master’s degree level. The company uses the latest computer simulation technology in its structural and civil engineering, applied mechanics and advanced engineering analysis work.

In Belfast, Northern Ireland, Skillsoft (UK), a subsidiary of Skillsoft Inc. of New Hampshire, has opened a $2.2 million e-learning products development centre. The company, which delivers customised interactive training via the internet, will create around 40 jobs, mostly for software engineers, at the site. Also in Belfast, Nortel Networks of Canada and Xilinx Inc of California have combined to announce a three-year support package for a programmable systems laboratory at Queen’s University. Nortel will provide the new lab with programmable communications technology while Xilinx will supply it with the development environment for work on implementation techniques and applications.

In London, Canadian company Eftia has opened a European office. The Ottowa-based company develops operational support system products for next-generation network and service providers. Also establishing a new European headquarters in London is the International Systems Security Certification Consortium, a Massachusetts-based non-profit-making organisation which trains and certifies information systems security professionals worldwide. And theglobe.com Network, a network of online communities that specialises in bringing together users around topics of shared interest, has opened a sales office in the UK capital. The New York-based company specialises in customised community solutions such as e-mail clubs and website building tools, and also owns a leading games information community, games.theglobe.com.

Just outside London, at Heathrow, Nupremis of the US has opened a European internet data centre (IDC). The company, based in Boulder, Colorado, provides managed enterprise applications and managed security, server and storage solutions from a network of IDCs in the US and Europe. At nearby Maidenhead, another US company, White Pajama, has opened a European office. Headquartered in Hayward, California, White Pajama is an applications service provider which specialises in customer contact solutions for small to medium-sized enterprises.

BridgeWave Communications of Santa Clara, California has opened a research and development centre in Cambridge, Eastern England. The company, an innovator in wireless access systems, is hoping to change the economics of wireless broadband deployment by providing an interface between wired and wireless broadband networks. Also in Cambridge, at Trumpington, a new subsidiary of German company WebPark AG has set up a UK operation. The company is an applications service provider which offers software platforms for business-to-business exhibitions and marketplaces on the internet. It is the first European online marketplace provider to receive Microsoft Windows 2000 server certification.

At the same time, a $48 million government initiative to create 5,000 jobs in the IT industry is to be repeated in other sectors of the economy facing skills shortages, such as the construction, retail and hospitality industries. The government will fund apprenticeship schemes to train workers and it is expected that companies will pay a ‘finder’s fee’ for workers they take on, although the amount has still to be set. Five urban areas will be selected for pilot schemes for the IT apprenticeship programme. Companies taking part include Cap Gemini, Cisco Systems, Ernst & Young, IBM, Dixons, Microsoft, Consignia, Siemens, EDS, Oracle, FI Group, Sage Group, BT, RM and EDS.

 

Union merger heralds new era of co-operation

The AEEU engineering trade union and the MSF general technical union have merged to form a new ‘super-union’ which, they believe, will help usher in a new era of industrial relations. Members overwhelmingly supported plans to create the second biggest union in the UK, after the public services union Unison. The new group will have more than one million members, together with assets estimated at more than $140 million and an annual income of more than $84 million.

According to leaders of the two unions, the merger echoes the type of consolidation seen in Germany, where five service sector unions merged recently to form Verdi, the largest trade union group in the free world, with more than three million members. Consolidation on such a scale increases opportunities for pan-European co-operation and helps organised labour deal with increased globalisation, they say. The AEEU has already begun negotiations to include Unifi, the 200,000-strong finance, banking and insurance union, within the new entity. "This ‘super-union’ will give us the resources to set the agenda across every sector of the UK economy. We’ll be the only union capable of helping people cope with the changing world of work," said Sir Ken Jackson, AEEU general secretary.

Employers welcomed the new union as likely to lead to more co-operative industrial relations. The consolidation of unions is a trend that has been going on for many years, said the Confederation of British Industry, and companies had no reason to be apprehensive.

 

Post Office reform completed as conveyancing goes electronic

The Postal Services Act 2000, the culmination of the government’s programme of reform for the Post Office, came into force on 26^{th March. The act transforms the Post Office from a statutory authority into a government-owned public limited company (plc), freeing it to compete more effectively in the global communications market. "These changes fundamentally alter the postal services market in Britain, paving the way for greater competition and higher standards of service to consumers throughout the whole country," declared industry minister Alan Johnson.}

An independent regulator, the Postal Services Commission (known as Postcomm), will ensure that the delivery of post to every address in the UK at a uniform tariff is maintained, but will also be able to license other companies to provide postal services. A consumer body, the Consumer Council for Postal Services (Postwatch) has been set up to work with the regulator to improve standards. The Post Office Group recently relaunched its international business operations under the name Consignia, although this will have no bearing on UK postal services offered under the Royal Mail brand.

The government has also published draft legislation that will see electronic conveyancing for property transactions introduced by 2002. At present property deals are done only on paper, but section 8 of the Electronic Communications Act, planned to be in force by next summer, will give the green light for the introduction of e-conveyancing. A land registration bill drawn up by the Land Registry and the Law Commission will be published later this year.

Some three million land transfers are carried out each year in the UK, and the switch from paper to the internet is expected to make the process easier and more streamlined. Paper and electronic documents will co-exist for a period of four years, but ultimately paper will be phased out in favour of the internet. "We are trying to make the UK the best environment in the world for e-commerce by 2002 and to offer electronic service delivery from all government departments by 2005," said David Lock, minister for property law.

 

R&D link-up highlights role of universities

A Regional Development Agency (RDA) and a group of universities in the North of England have teamed up in a pioneering partnership that spotlights the role played by universities in boosting regional economies. The RDA, Yorkshire Forward, and the nine universities of the Yorkshire and Humberside Universities Association (YHUA) have formed a strategic alliance whose aims include an increase in the number of spin-out companies generated by higher education institutions and the encouragement of inward investment in the region by matching investors’ needs against the institutions’strengths in research and technology, as well as their skills and training provision.

A prime example of the type of project the alliance wants to attract is Boeing’s new centre at the Advanced Manufacturing Park at Waverley in Rotherham. The aerospace giant was persuaded to locate in the area by the proximity of the world-class engineering faculty at Sheffield University, which offers a multi-disciplinary approach to manufacturing problem-solving.

Between them, the nine universities of the YHUA contribute $2.8 billion annually to the economy of Yorkshire and Humberside. They turn out around 10 per cent of the country’s total number of graduates each year, and of these around 40 per cent qualify in science and technology-related subjects.

Meanwhile, government investment agency Invest.UK has launched a one-stop website which gives inward investors a detailed overview of research and development activity in the UK as a whole. The site - at www.ukresearchanddevelopment.com - covers projects and opportunities at science parks, universities, R&D organisations and national laboratories.

Launching the site, e-commerce minister Patricia Hewitt said: "Visitors to the new site will be able to immediately identify which UK centres have the technical expertise to help them develop their businesses and products. In our experience, small R&D programmes between universities and companies often grow into major development and manufacturing projects."

 

DETR survey throws spotlight on transport

The fourth edition of Transport Trends, published by the Department for Transport, the Environment and the Regions, provides an illuminating snapshot of the state of domestic transport in the UK. For example, the survey shows that in 1999 some 34 per cent of all energy consumption in the UK was used by transport. The total licensed vehicle stock in the UK at the end of that year was 28.4 million vehicles, of which 85 per cent were estimated to be cars. Cars accounted for 81 per cent of motor vehicle traffic, while light van traffic accounted for 11 per cent. The total of freight moved (tonne-kilometres) has increased by 176 per cent since 1950, and 65 per cent of this is moved by road. The price of petrol and oil in 2000 was around 20 per cent higher in real terms than in 1980, but the real price of motoring overall was lower than 20 years previously.

The 2001 survey also contains a number of essays examining specific areas of interest in the transport sector, including the government’s Ten Year Plan for Transport, attitudes to transport policy and the effect on road traffic of last autumn’s ‘fuel protest’. Air travel and travel by taxi also come under scrutiny. One statistic thrown up is that UK airports are used by 170 million passengers annually, treble the number 20 years ago. And who would have thought that there were 20,000 licensed black cabs in London? The figure represents an increase of about 40 per cent since 1985 and compares with a total of 42,000 licensed taxis in the rest of England and Wales put together.

 

Road schemes to get regions moving more smoothly

Deputy prime minister John Prescott has announced a series of regional transport improvement schemes as part of the $252 billion Ten Year Plan for Transport announced by the government last July. The scheme is aimed to help build an integrated transport infrastructure across the country while reducing congestion and pollution.

The flagship announcement for the North of England is the $682 million supertram light rail project for the city of Leeds. Bristol in the South West is also to get a $272 million light rail scheme, while in both regions a number of road improvement schemes are also planned. In the South East the South Hampshire Rapid Transit light rail scheme, worth $266 million, will improve transport links around the city of Portsmouth. A $150 million scheme which includes the construction of a 1.7km tunnel will improve the A3 trunk road at Hindhead in Surrey, while $21 million has been earmarked for the Kent Fastrack scheme, which will improve public transport provision in the Thames Gateway area to the east of London.

In the East of England, a $43 million scheme will relieve congestion on the A1 between Blyth and Peterborough by replacing a series of roundabouts with flyovers and underpasses. A similar scheme, worth $115 million, will speed up traffic flow on the A46 between Newark and Nottingham in the East Midlands. In the West Midlands, a $52 million project will improve public transport in Birmingham, while nationally $224 million has been awarded to the Highways Agency to set up and operate the Traffic Control Centre Project, which will monitor traffic countrywide and provide road users with up-to-the-minute information on traffic conditions.

 

Rail and sea schemes boost transport links

On the railways, John Prescott has given the official go-ahead for the second and final phase of the Channel Tunnel Rail Link (CTRL), currently under construction between Folkestone in Kent, South East England and King’s Cross Station in Central London. The link, designated a strategic Trans-European Network (TEN) route, will carry high-speed passenger trains as well as a limited number of freight trains and will replace the existing route into Waterloo Station.

The CTRL is currently the UK’s biggest construction project, stressed Mr Prescott, at a signing ceremony involving the government, London and Continental Railways (the company building the line) and Railtrack (the company which will operate it). Half of the first phase has now been completed, on time and within budget.

The second phase of the CTRL will not only provide a vital new transport link, but will also contribute significantly to the regeneration of the Thames Gateway, East London and the Medway towns of north Kent. Two new international passenger stations - at Ebbsfleet in Kent and Stratford in East London - will be built in addition to the existing Ashford station, and these will contribute to the creation of 50,000 new jobs and 26 million sq ft of industrial, commercial and retail floorspace. "This agreement shows just what can be achieved when the private and public sectors work together in partnership," said Mr Prescott.

At Wentloog in South Wales, one of the UK’s most technically advanced international rail freight terminals has opened for business. The $21 million Freightliner Cardiff terminal, developed by a public/private consortium, will provide industry in the region with a gateway to Europe and markets worldwide. The terminal has been built as an open access facility and meets the stringent security requirements needed for the operation of Channel Tunnel services. The Welsh Development Agency, together with Cardiff City Council, has plans to develop a 36-acre park for rail-related businesses adjacent to the terminal. "This world-class rail freight facility is as important for the competitiveness of Welsh industry as the second Severn crossing," said Wales’s First minister Rhodri Morgan, opening the new terminal.

In the North West of England, the Mersey Docks and Harbour Company (MDHC) has acquired Heysham Port Limited from Sea Containers in a $35 million cash deal. Heysham, situated on the Lancashire coast some 50 miles north of Liverpool, offers port facilities to freight and ferry operators, principally to Ireland and the Isle of Man, as well as to some specialised offshore suppliers. MDHC, which also operates the ports of Liverpool and Sheerness in Kent, sees the Heysham acquisition as important in strengthening its share of the Irish Sea market.

In Yorkshire and Humberside, the Simon Ports and Transport Group is planning a major expansion at its Humber Sea Terminal. The project, which could create up to 200 jobs, will include the construction of extra berths and the development of a 260-acre brownfield site. And at nearby Immingham, DFDS Tor Line is to introduce a ferry passenger service to the port of Gothenburg in Sweden. The company is to introduce cabin accommodation on three of its cargo ships, which make daily return sailings between the two ports.

 

Grimsby profits from strategic location

If you want to be a winner, go to Grimsby. That’s the message of the latest Key British Enterprises Survey by business research firm Dunn & Bradstreet, which reveals that the North East Lincolnshire town, in the Yorkshire and Humberside region, has the highest percentage of profit-making companies in the UK. The survey looked at 50,000 UK businesses in 150 towns and cities, and found that Grimsby topped the poll, with 88.5 per cent of its top businesses reporting a profit. This is the second time that the town has come out top: in 1995 it was also the best performer, with 89.5 per cent of its businesses making a profit.

Grimsby has a population of 160,000. Its industrial base has changed in recent years, with a number of new industrial and business parks, including the strategically sited Europarc, growing up along the A180 highway. The area has a significant food industry and is also strong in the chemicals and distribution sectors. Perhaps its greatest assets are the twin ports of Grimsby and Immingham, which in 2000 handled more than 50 million tonnes of cargo, more than any other UK port.

Despite the number of successful companies in the region, however, local leaders are keen to address the problems of social deprivation that still exist. "Of course we welcome this news but, despite having top-performing companies in the area, we still have high unemployment," said Cllr Len Taylor, leader of North East Lincolnshire Council. "I would like to think this will encourage more large companies to locate here, bringing jobs to local people."

For those who’d like a piece of the action, the North Lincolnshire Business Directory 2001/2002 could prove a valuable resource. The directory, just published, lists details of some 1,200 manufacturing and service companies active in the area. The cost is £15/$21; contact Ann-Marie Walker at ann-marie.walker@northlincs.gov.uk.

 

Around the regions

• Trade and industry secretary Stephen Byers has officially opened Toyoda Gosei’s new $45 million automotive components plant in Rotherham, South Yorkshire - the Japanese company’s first in Europe. [see picture] Toyoda Gosei, a subsidiary of Toyota, will create 400 jobs at the plant and has already recruited 100 workers. The plant, on which work began in July 1999, is one of 23 Toyoda plants outside Japan and is second in size only to the company’s facility in the US. It will produce rubber weatherseal strips for car doors and windows for Toyota plants in nearby Derbyshire and in northern France, while also supplying Honda plants in Europe.
  
  Toyoda Gosei's car-components factory, Rotherham
  
• The East Midlands has become the first region of the UK to receive formal approval from the European Commission for funding under the European Union’s Objective 2 programme. The $308 million package, which runs until 2006, opens the way for bidding to begin on development projects and will benefit the cities of Derby, Lincoln, Nottingham and Leicester, the coalfield areas of north Derbyshire and Nottinghamshire, rural Lincolnshire and parts of the Peak District. In Leicester, a new company has been set up to co-ordinate a regeneration plan for the city.
• Matsushita Communication Industrial Co (MCI), a subsidiary of Matsushita of Japan, is to set up a research and development base in Thatcham in Berkshire, in South East England, which will create 400 skilled engineering jobs within two years. The company’s mobile communications division will establish a new engineering development centre on the site, which will develop Panasonic dual-mode phones for third-generation mobile communications systems.
• Power Kinetics (UK), a subsidiary of Power Kinetics International of Malaysia, has opened an international distribution and support centre at Strood in Kent, South East England, creating 30 new jobs. The company designs and develops power production solutions. The new centre will serve markets in Europe, the Middle East and Africa.
• UltraRF Inc of Sunnyvale, California, a manufacturer of high-performance laterally diffused metal oxide silicon (LDMOS) RF power semiconductors for the wireless industry, has opened a laboratory and engineering design centre at Twyford in South East England. The centre, equipped to make complex measurements on the full range of power transistors and modules, will serve the company’s European markets.
• Elite Electronic Systems, based in Enniskillen, Northern Ireland, is to begin manufacturing fibre-optic products as part of a $4.2 million expansion plan that will create 114 new jobs over the next three years. The company is one of only four in the world approved by global industry leader Nortel Networks to supply it with fibre-optic assemblies.
• Greater Manchester, in North West England, is one of the UK’s most popular locations for customer contact centres, according to a survey carried out on behalf of Manchester Investment and Development Service (MIDAS). The city has 111 such centres, shading other call centre hotspots such as Glasgow, Cardiff and Newcastle. The centres employ nearly 11,000 full-time customer service advisers, compared with 7,500 in 1998.
• Also in Manchester, Exxon Mobil (Esso) has chosen the Salford Quays business district as the location for a new central customer service centre that will support its fuel marketing business across 14 European countries. The 38,000 sq ft centre, at Exchange Quay, will open for business on a phased country-by-country basis, beginning this summer and working up to a full staffing level of 300 advisers by 2002. It will service the needs of retail, industrial and wholesale customers and will feature the latest in internet and telephony customer service technology. It will offer services in nine different European languages, with most of the multilingual staff being recruited locally.
• LANSA Ltd, the UK subsidiary of Australia-based LANSA Holdings Inc, is expanding with a move to a new European headquarters in St Albans, Eastern England, where it will create 15 new jobs. The company, a leading provider of application development tools and services for software, distributes its products in 68 countries worldwide. It was previously based in nearby Hemel Hempstead.
• Sharp of Japan has set up a new subsidiary, Sharp Telecommunications of Europe, in Bracknell in Berkshire, South East England, which will develop mobile telephone technology and next-generation internet applications for the international market. Initially employing 30 people, the subsidiary’s workforce will grow to between 100 and 150 within two to three years.
• Fujitsu has announced plans to establish a new R&D centre, Fujitsu Laboratories of Europe, at Uxbridge, also in South East England. The centre will concentrate on basic research and development in devices, software and services for the IT and telecommunications sectors, and will also deal with standardisation activities. Its remit covers the UK as well as countries such as Germany and France. Its initial focus will be on 3G mobile communications, nanotechnology, network administration, opto-signal transaction and the development of new materials.
• Endemol Entertainment of the Netherlands, which develops and produces content for television and online platforms, has acquired London-based television production company Brighter Pictures. The UK company has an international reputation for cutting-edge format-based entertainment programming.
• Australian group Spotless has bought London-based Braitrim Holdings for $171 million. Braitrim is a leading European supplier of garment hanger programmes and labelling and packaging systems, with bases in several European countries, including Germany and France, and outlets in Asia, North Africa and the Middle East.
• E.ON of Germany, the world’s largest private energy service provider and also its largest speciality chemicals group, has made a $14 billion bid for London-based utility company Powergen. The board of Powergen, which generates and distributes electricity and also markets and trades electricity and gas, has unanimously approved the offer. Besides energy and chemicals, Dusseldorf-based E.ON’s core activities include telecommunications and real estate.

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