July, 2004

News

UK leads revival in European FDI
Foreign direct investment (FDI) into Europe started growing again in 2003, reversing a three-year decline, with the UK and France in the forefront of attracting funds from overseas. The number of direct investment projects into Europe during the year was 1,933, an increase of 2 per cent over 2002, according to accounting and consulting firm Ernst & Young in its European Investment Monitor 2004 Report. The UK emerged as a clear leader, with 453 projects against 370 in 2002, or 23 per cent of the total, up from 19 per cent a year earlier. France was in second place with 313 projects, compared with 254 a year earlier.

The EIM report, which uses data from Oxford Intelligence, paints a picture of a patchy recovery. Germany and Italy, for example, both saw a fall in the number of investments, while Denmark, Sweden and Norway recorded aggregate growth of 15 per cent. Investment into the new European Union accession countries fell by 17 per cent, after growing 16 per cent the previous year. However, this reflected the fact that many investors had already moved to stake a claim before the accession date of 1 May. Aggregate investment into the eurozone was stable, but the three EU members outside the EU (the UK, Denmark and Sweden) saw an increase in project numbers.

The growth of FDI in the UK and France was due largely to expansions of existing projects, although the countries of origin differed. The UK attracted much of its investment from the US, while in France most came from other European countries. Intra-European investment was the driving force behind FDI across the continent, with US investment falling back to the pre-dotcom levels of 2000/01. The countries of Central and Eastern Europe, particularly Russia, Hungary, Poland, the Czech Republic, Romania, Slovakia and Bulgaria, recorded a large increase in new manufacturing projects, rather than expansions.

The automotive sector accounted for the largest number of FDI projects, with 12 per cent overall. The UK was the most popular destination for auto assembly projects, with 18 per cent of the total, compared with 13 per cent a year earlier. France was the most popular for automotive components, with 20 per cent of the total, followed by the Czech Republic with 18 per cent. Software was pushed into second place, with 180 projects, 7 per cent down on 2002’s 294. The US was the dominant investor in this sector, accounting for 59 per cent of all investments, and the UK was the prime recipient. The next biggest sectors were business services, the food industry and pharmaceuticals, all at around 7 per cent, and electronics on 6 per cent.

The biggest single investor was Toyota Motor Group, with 12 projects, followed by Nestlé SA and Robert Bosch GmbH (nine apiece) and Coca-Cola Corp, DaimlerChrysler and General Electric Co (eight). The largest growth by project type was in manufacturing, followed by contact centres and headquarters. Within manufacturing, machinery and equipment, plastics and rubber were sub-sectors that performed well. Other sectors showing strong growth included business and financial services, food, paper and pharmaceuticals. The biggest single decline was in the number of sales and marketing operations.

Barry Bright, EIM director at Ernst & Young, said: “The relative success of the UK in attracting foreign investment reflects the strength of its domestic economy and its position in the economic cycle. While all eyes have been on the ten countries that have joined the EU, it is clear that the UK’s economic growth rate is still a big draw to foreign investors.”
 

London tops investment league for sixth year running
For the sixth consecutive year, Ernst & Young’s EIM report shows London to be the most popular destination in Europe for FDI projects. The UK capital remains in a league of its own, accounting for 112 new investments in 2003, or 6 per cent of all investment into Europe. Among the 20 most successful European cities it accounts for 25 per cent of the total, receiving double the investment of Moscow and Barcelona, placed second and third, and five times as much as Paris, its traditional rival.

The city attracted investment from 27 different countries in 2003, with investors from emerging markets more prominent than ever before. In addition to traditional sources, projects came from countries such as Russia, Zimbabwe and the Philippines, while China, India and Israel have emerged as key investors. London is particularly attractive for companies looking to establish European headquarters operations, accounting for 17 per cent of all such investments. Companies that have recently established European HQs there include Australian IT company Basis Technologies; Intas Pharmaceuticals, one of India’s fastest-growing firms; the Korea Culture and Content Agency, which assists Korean companies in the creative industries; and Chinese computer hardware manufacturer Chuang Sheng Electronics.

“Companies from across the globe profit here from a world-beating combination of factors, including unparalleled access to all markets, a comprehensive and high-quality property market, a powerful communications infrastructure and the most diverse and skilled workforce in Europe,” commented Marc Stephens of the London Development Agency.


Opinions split on euro membership
When it comes to FDI, Ernst & Young concludes that no country has suffered for being either in or out of the euro, the European single currency. “While the political debates on the merits of the euro continue, companies are simply getting on with their investment plans. Investment in the European Union gives access to an integrated market where it is no longer necessary to set up in individual countries to access particular markets. EU accession has widened this market further, and now investors will be looking at the next wave of EU contenders,” said the company’s Barry Bright.

The Economist Intelligence Unit, however, sharply disagrees. In a survey of 500 executives, it forecasts that FDI into the UK will more than double next year, but that the UK’s non-membership of the eurozone will cost it one-third of potential annual inflows. The survey shows that executives believe, worldwide, FDI will rebound by 31 per cent after three years of decline. The UK total will also increase, but its share will remain below previous levels. The UK’s share of investment in the EU has fallen each year since the euro was launched in 1999, as have those of Denmark and Sweden, the other two EU members not to have adopted the single currency.

“The UK’s position outside the eurozone is costing the country dearly in lost FDI,” said Daniel Franklin, editorial director at the EIU. “The survey of executives also reveals poor perceptions of the country’s attractiveness as a target for investment, making it difficult for the UK to regain its share of FDI against strong global competition.” The EIU’s data include mergers and acquisitions, which are excluded from Ernst & Young’s EIM survey.

Globally, the EIU doubts whether the UK can recapture lost ground. It points out that US investors rank the country below the eurozone on many investment criteria, and only Japan is perceived as having higher labour costs. It believes the US will retain its position as top FDI recipient over the next five years, but that Asian economies will strengthen their position as the main emerging markets.


UK remains top destination for US manufacturers
Europe is still the top investment destination for US manufacturers, with the UK leading the field amongst European countries. The UK is the top location for US investment outside North America, with only Canada claiming a larger share, and is likely to remain so as the US economy stabilises after the global downturn, according to a new report from professional services firm Deloitte & Touche.

The report, Globalization Divided? Global Investment Trends of US Manufacturers, reveals that US manufacturing investment overseas fell from a high of $43 billion in 2000 to $29 billion in 2003. Europe continued to claim the largest share of this, although its portion fell from $17.7 billion in 2001 to $15.7 billion in 2002. FDI into Central and Eastern European countries in particular has picked up since 2002, anticipating the May 2004 enlargement of the EU.

The highest levels of investment in 2002 were in the chemicals and pharmaceuticals sectors, with transportation equipment, food and machinery also making a substantial contribution. The biggest fall was registered in the computer and electronics sectors, which plummeted 123 per cent, from $6.6 billion in 2001 to a negative $1.5 billion. Mergers and acquisitions, such as Chiron Corp.’s acquisition of the UK’s Powderject Pharmaceuticals for $810 million, contributed to the totals.

The report found unevenness in the worldwide slowdown in US manufacturing investment. American companies were concentrating their FDI in higher-wage countries, such as the UK, Canada and Germany, while in lower-wage, fast-growing economies such as Brazil, Korea, China, India and Mexico, they preferred to enter into partnering or outsourcing arrangements with local vendors. “This trend is quite troubling because it means, in essence, that US manufacturers may be paying ultimately to create their own competitors,” remarked the report.


Manufacturing recovery appears to be gaining pace
An upturn in the UK’s engineering and manufacturing sector appears to be strengthening, although contradictory data suggest that the recovery is still fragile. A survey by manufacturers’ organisation EEF shows output and orders growing in the second quarter of 2004 at their fastest pace since late 1996, driven largely by an increase in exports. In April, output grew by 0.9 per cent, its fastest rate for 22 months, after falling 0.3 per cent in March. The survey also shows that, nationally, for the first time in six years companies are planning to increase their investment and are not reporting job cuts. However, increasing costs have been reflected in higher prices, and margins remain under pressure.

All sectors reported growth in the past three months, with a global recovery in investment spending underpinning the improvement for basic metals and mechanical engineering. However, the positive balance for motor vehicles fell sharply from the first quarter, due to a decline in domestic orders. Regionally, performance was even, with improvements across the UK, although the largest number of new jobs was created in the South. The electronics sector was the main engine of growth in the South and in Scotland, while the North West and North East have profited from an upturn in mechanical equipment.

Manufacturing is forecast to grow by 0.9 per cent this year and by 2.7 per cent in 2005, while growth in engineering is predicted at 1.8 per cent and 4.4 per cent respectively. However, high oil prices and the strength of the pound remain obstacles that may hinder growth. Manufacturing accounts for almost a fifth of the UK economy but the sector has long been in the doldrums, particularly when compared with the buoyancy of consumer demand and the housing market. Official figures suggest it is still technically in recession, although manufacturers themselves are more optimistic than at any time in the last few years.

Recent surveys suggesting that orders, output and optimism are all growing strongly appear to have reassured the Bank of England on the wisdom of a further rise in interest rates. On 10 June it hiked its based rate by another quarter of a percentage point to 4.5 per cent, the second monthly rise in a row. The Bank is concerned that surging house prices and record personal borrowing risk fuelling inflation, and was keen to send a warning signal to borrowers. In spite of three recent rate rises, house price inflation has surged to 20 per cent annually and consumer debt is approaching $1,800 billion. The Bank’s annual inflation target is 2 per cent. Analysts believe it likely that the base rate will rise again to 5.25 per cent by the end of the year; 26 out of 32 economists polled by Reuters predicted that the next increase would come in August.


Industrial disputes fall to record low
The number of industrial disputes leading to strikes in the UK fell to a record low of 133 last year, down from 146 in 2002 and 194 in 2001. Just under half a million working days were lost, compared with 1.3 million in 2002, with some 150,000 workers involved in strike action, according to the Office for National Statistics. This represented one day lost for every 10,300 working days, compared with one in every 3,900 in 2002.

The strikes were mainly in the public administration (28 per cent), education (26 per cent), and transport, storage and communications sectors (25 per cent). The most days were lost in London, Northern Ireland and Scotland, and the least in the North East, Eastern England, the East Midlands and the South East. The ONS’s provisional estimate for the first three months of 2004 is that 372,000 working days were lost, with 135,000 workers involved in 40 stoppages.

There seems to a shift in priorities in workers’ concerns, with more of last year’s stoppages spurred by issues surrounding working time and pensions, rather than the traditional areas of contention of pay, redundancies and working patterns. In the long term, the trend for strike action is firmly downwards, with an average of 660,000 working days lost each year in the 1990s, 7.2 million in the 1980s and 12.9 million in the 1970s.

Multi-sector initiatives aim to boost productivity
A new network of Sector Skills Councils (SSCs) has been set up to lead the drive to improve skills and productivity in targeted business sectors. The SSCs are independent, employer-led organisations that also involve trade unions and professional bodies, working in partnership with government. The network is underpinned by the Sector Skills Development Agency, which promotes effective working between sectors. Each SSC will agree priorities and targets with employers and partners in its sectors to address four key goals: reducing skills gaps; improving productivity and performance; increasing opportunities for the workforce to improve its skills, including action on equal opportunities; and improving learning supply, including apprenticeships, higher education and occupational standards.

In another initiative aimed at boosting productivity, the government has announced 124 awards worth $333 million to support knowledge transfer from universities to business and the wider community. The awards, valid for the academic years 2004-06, represent the second round of funding for the Higher Education Innovation Fund (HEIF2). They will help institutions across England transfer knowledge in a number of ways, including networking between universities and businesses; providing venture capital seed funding for early-stage exploitation of ideas; and entrepreneurship training and professional development for students and academics. In addition, a network of 22 new centres for knowledge exchange activity will be set up across the country, to act as best exemplars in skills training and how to engage with small and medium-sized businesses. Collaboration is a major feature of HEIF2: of the 124 successful bids, 46 are for collaborative partnerships involving more than 100 higher education institutions.

Optimism in the City as car-maker eyes high performance
Biotechnology is one of the key industry sectors supported by the government, and science minister Lord Sainsbury has pledged more action to help it maintain its position as the second largest biotech sector in the world, after that of the US. At a recent conference, he agreed with the industry’s contention that financial institutions should make it easier for companies to raise capital for growth, and promised he would try to persuade institutional investors to relax their rules for biotech companies.

In the financial and business services sector, prospects are improving for workers. In a survey by recruitment company Manpower, employers were revealed to be more enthusiastic about hiring new staff than at any time since 1998. The number of employers who planned to take on more permanent workers in the third quarter of this year outnumbered those who planned to reduce staff by 16 percentage points. Until recently, many companies have maintained only skeleton staffs, following the downturn in the sector.

The Centre for Economics and Business Research predicted that City jobs in London in international financial services were set to rise by 8,000 this year to 318,000, followed by a further rise of 5,000 next year, contrasting with a low of 300,000 two years ago. The figures seem to indicate that, despite the current trend for offshoring, there is room for the sector to grow. However, the news was not all positive: Manpower found that the reason some firms were taking on extra staff was to deal with a greater perceived burden of controls and legislation.

In the automotive sector, General Motors’ UK subsidiary Vauxhall is to enter the fast-growing performance car market. It will launch a new brand, VXR, which will be used for high-powered versions of every car in its range over the next three years. The company plans to set up a product development centre at Luton in Bedfordshire, Eastern England, with production facilities to follow either at the same location or at Ellesmere Port on Merseyside. A network of 75 specialist VXR dealers will also be established. The venture will be rolled out across Europe, with similar models to be offered by GM’s German subsidiary Adam Opel, under the brand Opel Performance Cars (OPC). However, Vauxhall will take the lead in development and some models will be available only in the UK. When the operation is fully up and running, sales of VXR/OPC models should reach up to 30,000 a year, says the company.

In aerospace, the US-owned Goodrich Corporation has officially opened its new Aerostructures Maintenance Repair and Overhaul (MRO) facility at Prestwick International Aerospace Park in Glasgow, Scotland. Goodrich is the park’s first tenant, occupying a custom-built 120,000 sq ft unit that cost $16 million to build. The new facility is the first of three planned phases that will eventually see the company occupy 250,000 sq ft at the park. It will provide maintenance and support for nacelles and engine thrust reversers, flight controls, quick engine changes and engine components. Staff will be on call 24 hours a day, throughout the year, and will provide Fast Response Teams ready to respond to customers’ needs at short notice. In the past year, Goodrich has despatched teams to the US, Jamaica, Mauritius, the UAE, France, Spain and Denmark, as well as a number of UK airports.

The textiles industry in the East Midlands has received a boost with the opening of the East Midlands Textiles Association (EMTEX)’s new design and technology facilities, based at the Designer’s Forum offices in Nottingham. Fashion and textiles companies, individual designers and students will be able to access the latest CAD resources, including specialist software for product, weave, knit and print design, as well as website and graphic design packages. The textiles industry is a key sector in the region, employing some 60,000 people.

Scientific innovations maintain UK’s cutting edge
A fresh initiative in the North East will see the establishment of a new scientific research centre, the first of its kind in the UK. The Institute for Bioinformatics (IfB) will be based within university and business locations in the region, and will bring together biologists, physicists, mathematicians and business experts, using powerful supercomputers to analyse biological information. The centre will build on the North East’s world-class R&D base, working to create new drugs that are individually tailored to patients’ needs and better target disease. Its first phase will create up to 20 graduate jobs.

The UK’s first cryogenic freezer to be registered as a medical device and used for the storage of human tissue has been installed at Plymouth International Business Park in South West England. An expanding British company, BioVault Ltd, has moved into a 6,800 sq ft unit on the site, handling sensitive and valuable biological samples from the National Health Service and from private clients around the world. The secure cryogenic deep-freezer can maintain samples in liquid nitrogen vapour at temperatures below -180°C, including stem cells used in chemotherapy treatment. This effectively halts the sample’s ageing process, meaning it can be preserved for decades without deteriorating. Plymouth Hospitals NHS Trust is one of the key partners at Plymouth International, and the site has its own Medical Zone which has already attracted a number of healthcare companies.

Scientists at the University of Cambridge are celebrating the latest Good University Guide, published by The Times newspaper: the venerable academic institution came out top in 10 of 16 science subjects the guide assessed. Its areas of excellence included aeronautical, chemical and general engineering; materials technology; molecular and organismal biosciences; and pharmacology. Cambridge also came out top in the newspaper’s teaching assessment, and had more students taking first- or upper second-class degrees than any other institution in the country. The university, situated in Eastern England, lies at the heart of an important cluster of biotech and hi-tech companies and research institutes.

BT puts VoIP at heart of network transformation
BT (British Telecommunications) has unveiled a five-year plan for the transformation of the UK’s telecoms networks. The carrier’s 21st century network (21CN) programme is designed to underpin the next generation of converged, multimedia communications services. At the heart of its plans is a switch from the existing public switched telephone network (PSTN) to a multi-service internet protocol (IP) based network that will carry both voice and data services. The mass migration of customers from PSTN- to IP-based networks will begin in 2006, with the majority scheduled for transfer by 2008.

The growth of VoIP is being fuelled by the increasing penetration of high-speed broadband internet connections. BT aims to make broadband available from 99.6 per cent of its UK exchanges by summer 2005, and in Scotland the Scottish Executive has pledged that every community in the country, however remote, will have affordable broadband access by the end of 2005. According to the telecoms regulator Ofcom, there are currently 4 million broadband users in the UK, with 40,000 new connections being made every month. Some 53 per cent of UK adults have internet access at home, up from 50 per cent last November, and of these 25 per cent have a broadband connection. This represents around 15 per cent of all UK homes using a high-speed connection, either via a phone line, cable or wireless.

Meanwhile, Ofcom has ordered mobile operators to cut the fees they charge rivals to carry calls on their networks. The decision, following an inquiry into mobile operators’ wholesale charges, will see average termination charges cut by around a third.

Kiwis encouraged to make more of investment services

UK Trade and Investment (UKTI), the government’s inward investment agency, plans to work more closely with its counterpart New Zealand Trade and Enterprise (NZTE) to attract more companies from New Zealand to the UK. The two agencies signed a memorandum of understanding in London in June. NZTE-London estimates that the UK subsidiaries of New Zealand ICT companies already employ more than 300 people in the UK. However, a survey of 32 New Zealand companies already established in the UK revealed the surprising fact that none of them had approached any of the UK’s inward investment agencies.

“New Zealanders often have a do-it-yourself approach to entering the UK market and then are frustrated with how long it takes to get established. Even something as seemingly straightforward as setting up a bank account can take a long time and that is the kind of practical advice UKTI can provide,” said NZTE chief executive Tim Gibson. Other UKTI services include help with visas, finding premises, accommodation and even schools, as well as trade promotion services through a network of regional and international organisations. One of the key initiatives that will be supported is the Beachhead Programme, which is designed to help New Zealand high-tech companies set up a UK office and build their business. There are currently nine companies on the programme, but it has capacity for more.

The East Midlands Development Agency (emda) has set up a new website (at www.emda.org.uk/sfi) to guide companies through its Selective Finance for Investment (SFI) range of grants. SFI grants replaced Regional Selective Assistance (RSA) and Regional Enterprise Grants in Assisted Areas of England in April. The scheme is discretionary, meaning that certain location and employment criteria must be met, but provides assistance towards fixed capital expenditure such as land, property, plant and machinery costs.

RSA grants are still being paid out in some parts of the country, however. For example, the Northwest Development Agency has recently made an award of $900,000 to Canadian-owned Alcan Packaging. Alcan, which produces food packaging at its operation in Salterbeck in Cumbria, has used the grant to help pay for a state-of-the-art gravure printing press. In addition, 25 jobs have been safeguarded at SAI Automotive Washington Ltd with the aid of a $225,000 RSA grant from One NorthEast. The company produces textile components such as carpets and parcel shelves for the automotive sector, supplying customers such as Honda’s plant at Swindon in the South West.

Agreement on air cargo as hauliers get helping hand
The UK and Ireland have struck a new agreement that should boost cargo-handling at airports on both sides of the Irish Sea. The agreement allows security-approved firms (‘known consignors’) in Ireland to transport goods directly to Heathrow, Prestwick and other UK airports for onward shipping, without the need for them to undergo further security checks in the UK. Similarly, known consignors in the UK will have their cargoes accepted for onward shipping through Irish airports. The agreement should reduce delays and additional costs, and facilitate the movement of air cargo in both countries.

For road hauliers, the Highways Agency is developing a new internet portal designed to help with route planning for large and abnormal loads. Hauliers transporting abnormal loads – defined as exceeding 2.8m wide, 18.65m long or 44 tonnes gross in weight – are required to notify the police and highway and bridge authorities before venturing out on the roads. This involves a lot of labour-intensive paperwork, particularly if the route cuts across different authority areas. The first phase of the ESDAL (Electronic Service Delivery for Abnormal Loads) portal, due for delivery in the autumn, will allow hauliers to quickly identify which authorities they need to notify when moving a load. Eventually, it is planned, the portal will supply a ‘one-stop shop’ for notifications, together with near real-time route planning assistance.

Property developers start building for the future
Speculative office development appears to be on the way back in both the City of London and Manchester, North West England’s leading business centre. For the first time in two years, a major City scheme is to get off the ground without prelet agreements with prospective tenants. An existing building owned by insurer Scottish Widows in Aldermanbury Square EC2 is to be demolished to make way for an 18-storey tower that is due for completion in October 2006. In Manchester, two speculative schemes are set to get under way. The first, at Rosetti Place on Quay Street, will provide 51,000 sq ft of offices, 65 flats and a boutique hotel, and is set for completion in December 2005. The quoted rent is $44.50 per sq ft. At 50 Princess Street, on a site opposite the town hall, redevelopment is planned of an existing building that will provide 56,600 sq ft of offices and 21 car parking spaces.

Elsewhere in London, a new 14-storey office block with 103,000 sq ft of space on Tottenham Court Road W1 is due for completion by next summer. Arts Council England is lined up to be the first tenant of Metropolis House, and is negotiating a 45,000 sq ft prelet for the three podium floors of the building. In Victoria SW1, the West End’s largest new development has secured its first tenant. Energy trader Vitol has signed up for the top floor of Belgrave House, a 275,000 sq ft development on Buckingham Palace Road. Rents for the building are being quoted at $99 per sq ft. Other major new developments are available in the same area, including the 234,000 sq ft Victoria Plaza and the 650,000 sq ft Cardinal Place.

For companies looking for something a little different, British Waterways has begun marketing the UK’s first floating offices. It is offering three converted barges, each with room for about 10 staff, in the restored Paddington Basin in west London, and is preparing another three for the same location. It also plans ‘business barges’ for Bow Back Rivers near the Lee Valley and at Limehouse Cut, both in the East End, while it hopes to offer much bigger floating offices in the Docklands financial district. The public sector body, which owns the UK’s canal network, is hoping that entrepreneurs and small companies, particularly in the creative industries, will be attracted by the novel idea of being surrounded by water.

Around the Regions
Taiwanese-owned Enta Group, an IT group based in Telford in the West Midlands, has invested a further $1.8 million to expand its internet services business Entanet. The group began operations in 1990, and has since grown to notch up annual sales of over $95 million. It has more than 150 employees and is based in a 90,000 sq ft office built in pagoda style from traditional Taiwanese materials.

Power management technology company International Rectifier (IR), based in El Segundo, California, is to expand its workforce and double production at its plant in Newport, South Wales. The company plans to bring online a facility for fabricating 8-inch wafers, creating around 120 engineering and production jobs. Many of these will be devoted to IR’s latest high-voltage integrated circuit (HVIC) technology, a new departure for the Newport plant, which until now has specialised in low-voltage devices. The HVIC wafer produced on the new line will be used in integrated motor controllers for a variety of industrial and automotive applications.

Also in Newport, Cogent Defence and Security Networks, the UK operating arm of EADS, has opened a new 30,000 sq ft R&D facility at Celtic Springs. The new HQ building will create 180 new jobs, bringing the company’s workforce in the city to more than 700. Cogent produces secure electronic communications equipment for the civil and defence sectors. It has recently won major contracts, including being part of the Paradigm Consortium and being named preferred bidder for the Skynet 5 defence programme.

Newport’s regeneration ambitions have taken a further step forward with a framework plan for a 2,500-acre expansion of the town, involving redevelopment of the redundant part of the Llanwern steelworks, being put out to public consultation. The plan, drawn up by urban regeneration company Newport Unlimited, includes a strategic employment site that could create up to 7,000 new jobs, along with a new link road to the M4 motorway and up to 5,000 new houses. In the city centre, separate plans have been announced for a new five-storey office block with 60,000 sq ft of accommodation.

Ocwen Financial, based in Palm Beach, Florida, is to establish a data centre and technical support facility in Belfast, Northern Ireland, creating 12 new jobs. The company is a leader in the deployment of software, VoIP and network technology, and the new $8.5 million centre will provide half of all the processing capacity and communications support it requires for its operations worldwide. It will also act as a global communications hub, supporting international voice and data transport, routing and monitoring.

BT is to create 194 new jobs in Northern Ireland by upgrading and expanding its call centre at Enniskillen to create an e-customer services (e-cs) centre. Enniskillen is one of 33 centres BT has designated ‘Next Generation Contact Centres’, but will also now be one of a small number handling the company’s e-cs channel, dealing with customer enquiries via the BT website and by e-mail. The expansion brings the workforce at the centre to 480.

FG Wilson, a wholly owned subsidiary of Caterpillar Inc, has been chosen as the Invest Northern Ireland Exporter of the Year, after increasing its exports by 13 per cent to $608 million in 2003/04. The company is the UK’s largest manufacturer of diesel- and gas-powered generator sets, and one of the largest in the world. It has the capacity to produce more than 50,000 gensets per annum, exporting its products to 170 countries. Based at a 700,000 sq ft factory in Larne, it is one of the largest employers in Northern Ireland, and worldwide has a workforce of more than 2,500.

Spanish engineering company EINSA has opened its first UK base at Orton Southgate in Peterborough, Eastern England. The company specialises in aircraft handling solutions for both military and civil applications, and produces items such as aircraft steps, cargo transporters and baggage carts. It has won a 25-year contract from the Ministry of Defence to maintain equipment for the Royal Air Force, and plans to acquire land in the town where it can build a factory and expand its operation.

Peterborough has prepared a bid that it hopes will result in the first Urban Regeneration Company to be set up in Eastern England. There are already 16 URCs across England; Peterborough will learn later in the summer from the office of the Deputy Prime Minister whether it has been successful in creating a seventeenth. Meanwhile there is plenty of new office accommodation coming on stream in the town. The first phase of 14 two-storey office buildings being developed at Swan Court, Cygnet Park should be ready by the autumn, with units ranging in size from 1,700 sq ft to 9,500 sq ft. Three new units have been added to the Vitas Business Centre at Fengate, and work has begun on the new $5.4 million South Fens Business Centre, which will provide 20,000 sq ft of serviced office space for up to 20 companies in the food technology, biotech and IT industries. The centre is scheduled to open in March 2005.

ZF Lemforder UK, the British subsidiary of the ZF Group of Germany, is to invest $15.5 million in its plant at Darlaston in the West Midlands, creating 30 new jobs over the next three years. The company supplies automotive suspension parts to customers such as Aston Martin, Jaguar, Land Rover, BMW, Ford and Toyota. It will use the new investment to install new machinery, upgrade buildings, expand its technology centre and create a training facility.

Guangzhou Panyu Haojian Motorcycle Industry Company, based in Guangzhou, China, has established a sales and marketing office and a warehouse in Cardiff, the Welsh capital, to serve UK and European markets. The company, which manufactures Sukida motorcycles, plans to expand the operation to include product assembly and distribution within the next 12-14 months. Its total investment will amount to around $5.4 million, and it will create 10 new jobs over the coming year.

Italian company Finmeccanica has agreed a deal in principle to buy the 50 per cent shareholding in helicopter manufacturer Agusta Westland owned by its UK-based joint venture partner GKN. The transaction, which is worth $1.8 billion, is subject to regulatory clearances and approval by GKN shareholders, and also presupposes the award by the UK Ministry of Defence of a contract to re-equip the army and Royal Navy with a fleet of re-manufactured Lynx helicopters. Finmeccanica is also set to acquire real estate assets worth $112 million from GKN.

Gemplus International, a Luxembourg-based manufacturer of smart cards, is to move its entire European production of PVC smart card bodies to a specialist manufacturing facility at its UK site in Havant, South East England. It will produce a variety of laminated smart cards at the plant, including bank cards.

US survey software producer Perseus Development Corporation, of Massachusetts, has opened a European office in Flackwell Heath in South East England. The new office, under the name Valloria Software (Perseus UK), will provide sales and training services, as well as product and implementation support for the company’s customers.

Sensory Networks, a developer of hardware acceleration technology for network security applications, has opened its European headquarters in London. The company, based in Palo Alto, California, produces a range of platforms and accelerators for anti-virus, anti-spam, content filtering, firewall and intrusion detection systems. Another Californian company, OmniTrust Security Systems, based in Mountain View, has opened an office in London to cover the EMEA region. OmniTrust supplies content security software that enables organisations to share confidential information with partners, suppliers and customers on websites, portals, document management systems and e-mail.

ADC, a Minneapolis-based provider of global network infrastructure products, services and software, has opened an operations and test facility for its systems integration business unit at Papworth Everard, near Cambridge in Eastern England. The new facility includes controlled environments for the pre-configuration and testing of network equipment, a warehouse facility and sales and administration offices, and will serve as the focal point for the company’s services throughout Europe. ADC Systems Integration provides a broad range of services for operators of fixed wire, wireless, cable and other networks.

Curtiss-Wright Controls Inc, the motion control business of Curtiss-Wright Corporation of New Jersey, has acquired Primagraphics, based in Cambridge, Eastern England, for $21 million. Primagraphics is a command and control, video and graphics specialist, and develops radar processing and display systems for military and civil applications. Its cards and solutions are used in air- and shipborne command and control consoles, vessel tracking, air traffic control and air defence systems.

Respironics, a leading US supplier of sleep and respiratory products, has offered $44.6 million to acquire its UK distributor, Profile Therapeutic. Profile, which is based in Bognor Regis on the south coast of England and specialises in products that improve sleep and the treatment of respiratory patients, has distributed Respironics’ products in the UK for more than 15 years. The acquisition has been approved by the boards of both companies, but remains subject to regulatory and shareholder approvals.

System integration consultancy CIBER, based in Greenwood Village, Colorado, has acquired Ascent Technology, of Hinckley in the East Midlands, for around $40 million. Ascent, a value-added reseller (VAR), is the author of a proprietary suite of CRM software, and a partner for both SAP and Sage enterprise resource planning (ERP) solutions. It is said to be Sage’s most successful partner worldwide, and was SAP’s UK VAR of the Year in 2003. CIBER offers services in both custom and ERP package environments, across all technology platforms.

French-owned Sunbelt Software, based in Worcester in the West Midlands, has moved into larger premises and plans to increase its workforce later in the year. The company provides support for Windows-based applications, specialising in business continuity and disaster recovery. Its products include spam-blocking devices, network security, remote control and network sniffers.

French company SR Teleperformance, a provider of outsourced CRM and contact centre services, has acquired a 92.5 per cent stake in UK-based contact centre operator MM Group. The founders of MM Group will retain a 7.5 per cent shareholding and will continue to manage the company. MM Group is based in Bristol, South West England and operates a network of multimedia contact centres across the UK.

Regional Development Agency Advantage West Midlands was responsible for half of all the inward investment jobs coming into the region in the past financial year, chalking up 3,664 of the total 6,948 jobs created or safeguarded during 2003/04. This was a marked improvement on the previous year, when it accounted for 25 of inward investment jobs. Among its successes were persuading Mitsubishi Motorsports to stay in the region, safeguarding 200 jobs, and decisions by French-owned Plastic Omnium Automotive and Hitachi Metals of Japan to set up operations at Hams Hall and Tipton respectively, each creating more than 100 jobs. In all, there are 2,100 foreign-owned firms in the West Midlands, employing more than 200,000 people.

The East Midlands has climbed from 35th to 28th place out of 71 European regions, moving closer to its goal of becoming a top 20 region by 2010. Factors used to formulate the table include GDP, employment rates, the environment, and equality between the best and worst performing parts of each region. The East Midlands has overtaken previously strong performers such as the Schleswig-Holstein region of Germany, which has slipped from 25th to 43rd position. It performed particularly well in terms of employment and unemployment, ranking 9th and 18th respectively.

MIDAS (Manchester Investment and Development Agency Services) helped to secure inward investment of $125 million in 2003/04, more than three times its original target. A total of 4,603 jobs were created or safeguarded in the Manchester region as a result of the investment. MIDAS handled more than 1,400 enquiries from prospective investing businesses during the period, and actively helped 109 to locate or expand in the area. One recent success story is US teleconferencing company Moreson Conferencing, which has opened an office at Manchester Science Park. Based in Birmingham, Alabama, Moreson claims to be the largest company in its sector. The new facility, which will go live later this year, will arrange and oversee international conference calls for corporations worldwide.

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