August 2007

NEWS

Prime Minister Brown gives government a facelift

The Rt Hon Gordon Brown, Prime Minister	It was all change at the top on 27 June 2007, as former Chancellor of the Exchequer Gordon Brown succeeded Tony Blair as Prime Minister and set about shaping his new Government. Mr Brown’s reshuffle saw every Cabinet portfolio assigned to a new minister, with the exception of Defence. As widely expected, Alistair Darling succeeded Mr Brown as Chancellor. Less predictably, David Miliband became the youngest Foreign Secretary for decades, while Jacqui Smith became the first ever female Home Secretary.
The Rt Hon John Hutton MP, Secretary of State for Business, Enterprise and Regulatory Reform	John Hutton, formerly Work and Pensions Secretary, was appointed Business and Industry Secretary, heading up a new department formed from the now defunct Department of Trade and Industry (DTI) – the Department for Business, Enterprise and Regulatory Reform (DBERR). Stephen Timms will be Minister of State for Competitiveness. Ian Pearson will be the new Science Minister, succeeding Malcolm Wicks. He moves over from Defra (the Department for Environment, Food and Rural Affairs) to take up his post in the newly created Department for Innovation, Universities and Skills (DIUS), which incorporates part of the old DTI and part of the former Department for Education and Skills. DIUS also includes the office of the Government’s Chief Scientific Adviser, Sir David King.
Lord Digby Jones of Birmingham, Minister of State for Trade and Investment	In a move that signalled Mr Brown’s determination to build “a government of all the talents” and his desire to improve relations with business, he appointed Sir Digby Jones, former head of business organisation the Confederation of Business Industry (CBI) as Minister for Trade and Investment. Sir Digby will perform an ambassadorial role for British business overseas, with his department being part of DBERR. He has been critical of Government policy in the past, but Mr Hutton welcomed his appointment. “We’re trying to get the [business] focus right across government. I want the department to be a very, very powerful voice for business,” he said. In addition, a 15-strong advisory Business Council has been set up, giving leading business people a say in how policy is formulated.

Another big jump in overseas investment, says UKTI

The UK attracted a record 1,431 investment projects from overseas companies in 2006-07, according to the annual report of inward investment agency UK Trade & Investment (UKTI). The total number of projects was up 17 per cent from 1,220 the previous year, and these projects created 36,526 new jobs and safeguarded a further 41,831 around the country. Some 600 of the total (42 per cent) were new projects, and accounted for 55 per cent of all the jobs created. Another 334 (23 per cent) were expansions by existing investors, and these were responsible for 41 per cent of the new jobs created. Mergers & acquisitions and joint ventures accounted for 497 of the total number (54 per cent), up 32 per cent from 2005. There was a 47 per cent increase in the number of new headquarters projects, with 223 investments involving the setting up of new HQ operations in the UK.

Once again the US was the biggest single source of investment, with 540 projects or 38 per cent of the total – a long way ahead of second-placed France, with 95 projects (6.6 per cent). Investment from US companies created 13,326 new jobs; the next biggest source was Indian firms, which were responsible for creating 5,130 jobs. The number of investment projects from Japan, India and Ireland fell from the previous year, but the number of Chinese projects almost doubled, from 27 to 52, making China the eighth largest inward investor.

By sector, the financial and IT sectors between them accounted for a third of new jobs, with manufacturing, R&D and distribution also making significant contributions. Services sector projects accounted for 40 per cent of the total and manufacturing projects 21 per cent. The number of business services projects rose by 122 per cent to 156, financial services projects were up 32 per cent to 99, software and computer services up 82 per cent to 274 and life sciences up 37 per cent to 133.

(l-r) Andrew Cahn, chief executive, UK Trade & Investment; Lord Digby Jones of Birmingham, Minister of
State for Trade and Investment; Brian Shaw, Managing Director, Business Group UK Trade & Investment

John Hutton, the new Secretary of State for Business, Enterprise and Regulatory Reform, said: “For the fourth consecutive year, the UK has attracted a record number of investment successes, maintaining its position as the largest recipient of foreign direct investment in Europe and second only to the US worldwide. ... Increased headquarter projects and the growing number of expansions from existing investors suggest that companies are recognising and capitalising on the UK’s ‘multiplier’ effect. Not just an investment destination, the UK acts as their catalyst for global growth.”

According to Sir Digby Jones, the new Minister for Trade and Investment, the UK has 1 per cent of the world’s population but 8 per cent of its FDI stock. Its financial services sector is responsible for 30 per cent of global currency transactions, and the world’s top ten pharmaceutical manufacturers all have bases in the country.

His vision of the UK as a globalised business centre was reinforced by new figures from the Treasury, which showed that foreign ownership of British companies has risen from 30 per cent to 50 per cent over the past decade. The big increase in foreign ownership reflects the recent surge of takeovers by overseas companies and the increasingly international outlook of institutional investors. The Treasury also pointed out that business is becoming increasingly globalised, with a third of all trade now being conducted between arms of multinational companies.

UK remains leading destination for European FDI
The UKTI figures do not include estimates of the value of FDI, but the agency’s latest statistics are consistent with estimates published by the OECD (Organisation for Economic Cooperation and Development), which has calculated inward investment into the UK at $183.6 billion in 2006, second only to the US. They are also consistent with a new report by Ernst & Young, the annual European Investment Monitor (EIM), which showed the UK consolidating its position as the leading inward investment destination in Europe. In 2006 the UK attracted 686 inward investment projects, according to Ernst & Young, a 20 per cent rise from 559 in 2005. This represented 19.4 per cent of all investment projects across Europe; France came second with 16 per cent.

The EIM survey – claimed to be the leading database of direct company investment across Europe – revealed an increase in the total number of investment projects across Europe, up 15 per cent from 3,066 in 2005 to 3,531. Besides the UK, Germany, Spain, Switzerland and Italy all recorded significant increases, but investment in France grew only modestly, with its percentage share declining. Investment in Western Europe from the US increased by 22 per cent, from 813 projects to 990, and there were also rises in the number of investments from companies in the UK, Switzerland and India. Germany, the second biggest source of investment, is currently concentrating its attention on Eastern Europe, according to the report.

The US remains the biggest investor overall in Europe, although the North American zone’s combined share of European FDI had fallen from 46 per cent in 2000 to 30 per cent by the end of 2006. US companies were responsible for 289 projects in the UK in 2006, representing approximately 30 per cent of all US investment into Europe, and for 42 per cent of total UK inward investment. India is now the second biggest source of investment into the UK, according to Ernst & Young, with the UK claiming more than half of all Indian projects in Europe in 2006. Overall Indian investment into Europe increased by 66 per cent and into the UK by 53 per cent over the course of the year. The UK also attracted growing levels of investment from Brazil, Russia and China. France was the UK’s seventh biggest investor, with 31 projects.

The UK also leads Europe in attracting research and development projects, with 21 per cent of the total, followed by France and Spain with 10 per cent each. Software was the biggest overall investment category, and again the UK was top of the list in this sector, with 35 per cent of all projects for the year. In fact, said Ernst & Young, the single biggest inward investment trend for the year was US software companies setting up operations in London. In addition, the UK was the largest recipient of electronics investment with 21 per cent of the total, ahead of France and Germany, and claimed almost three times as many financial services projects as its nearest rival, Germany.

Geographically, investment in the UK is increasingly concentrated in London and South East England, reflecting the dominance of the services sector in these regions. The share of UK investment claimed by London and the South East rose from under 30 per cent in 1997 to 52 per cent in 2006 (361 projects). By contrast, Paris claimed just 19 per cent of all investment projects in France, Madrid 29 per cent of Spanish-bound investment and Stockholm 42 per cent of FDI projects in Sweden. Other UK regions successful in attracting investment were the North West, where total projects rose by 25 per cent from 32 to 40, and Scotland, which saw a 90 per cent surge in project numbers, from 33 in 2005 to 63 in 2006.


Robust growth leads to further hike in interest rates
The UK economy grew at an annual rate of 3 per cent in the first quarter of 2007, higher than most other major economies, according to the Office for National Statistics (ONS). Gross domestic product (GDP) grew at a rate of 0.7 per cent compared with the previous quarter. This was unchanged from previous estimates, but revisions to earlier data pushed the annual growth rate up from 2.9 per cent to 3 per cent. The ONS’s revised national accounts also showed that GDP in 2006 was $16.6 billion higher than previously thought, although growth was unchanged at 2.8 per cent. The Treasury has estimated that the long-term sustainable growth rate of the UK economy to be around 2.5 per cent.

Industrial production and manufacturing output both grew faster than expected in May, said the ONS. Industrial output rose by 0.6 per cent from April to May, the biggest monthly increase since November 2006, while manufacturing output grew by 0.4 per cent. This was the first time that manufacturing output had grown for three consecutive months since March-May 2004. The ONS said that the recovery was helped by the completion of major shipbuilding work and rising output from the Buzzard oil field in the North Sea. Activity in the service sector also picked up in June, pushing consumer prices higher. “The general picture is that the economy is growing strongly,” said one analyst, Michael Saunders of Citigroup.

The strong economy meant that the rate of consumer price inflation remained above the Government’s long-term target of 2 per cent. As widely predicted, in early July the Bank of England raised its main interest rate by a quarter of a percentage point to 5.75 per cent, the fifth increase since August 2006. Interest rates are now at their highest level for six years, and many analysts believe they will reach 6 per cent by the end of the year, as the economy continues to grow at a steady pace and inflation takes time to decline.

Sterling has also hit a new high against the dollar, reaching $2.03 on 11 July, and remaining for several weeks above $2, a level it last reached in 1981. In general terms the pound has been strong for the past decade, making life difficult for UK exporters (as well as American visitors to the UK), but the current exchange rate is attributable more to the decline of the dollar. In trade-weighted terms against a basket of currencies, sterling is only 3 per cent higher than in 1998. The recent rises in interest rates, however, have seen an influx of funds on the money markets, forcing the pound higher against the greenback.

Despite the increasingly unfavourable exchange rate, the UK economy remains flexible and responsive. Manufacturing exports actually grew by 10 per cent in 2006, according to manufacturers’ organisation the EEF, with some companies circumventing higher exchange rates by setting up production facilities overseas. Other analysts point out that in trading terms Europe is far more important to the UK economy than the US, with UK trade with the EU being at least three times greater than trade with the US and accounting for about half of all British exports.


International competition drives down corporate tax rates
Competition for investment is driving down corporate tax rates around the world, according to a survey of 92 countries by professional services firm KPMG. The average rate worldwide fell last year from 27.2 per cent to 26.8 per cent, said KPMG, with 18 countries cutting company tax rates. Most made relatively small adjustments, apart from Turkey, which slashed corporate rates by a third to 20 per cent. Two countries increased their rates.

The biggest reductions were in Europe, which as a block already enjoys the lowest corporate tax rates among developed economies. Low rates adopted by new members of the European Union have pushed rates down from an average 38 per cent in 1996; seven of the 27 EU members cut their rates in 2006, driving down the average by 1.6 percentage points to just over 24 per cent. The average rate in the Asia-Pacific region remains largely unchanged at just over 30 per cent, while the average for Latin America fell by 0.5 percentage points to 28 per cent. The EU has the highest indirect taxes, however, with value added tax (VAT) on goods and services averaging 19.5 per cent, compared with 17.7 per cent in OECD countries, 14.2 per cent in Latin America and 10.8 per cent in Asia-Pacific.

The rate of decline in corporate tax rates has slowed compared with the past decade, but further cuts are in the pipeline – from the UK, Germany, Spain, Singapore and China, among other economies. “It looks as if international tax competition has some way to go yet,” concluded Loughlin Hickey, head of tax at KPMG.


LSE poised to acquire Italian stock exchange
The London Stock Exchange (LSE) is to buy its Italian equivalent, the Milan-based Borsa Italiana, for $2 billion, in a move that will create a group worth some $7.8 billion. The deal is still to be confirmed, but if approved by shareholders it will strengthen confidence in Italian business in European markets, according to the two bourses. The governor of the Bank of Italy, Mario Draghi – who ten years ago privatised the Borsa Italiana – said it would bring the Italian stock market out of its present isolation, while other analysts said the merger would make international capital more accessible to Italian entrepreneurs. Shareholders in the Milan stock exchange will be offered 4.9 shares of the LSE for each ordinary share in the Borsa Italiana, with the new board comprising seven British members and five Italians.

Global stock exchanges have increasingly been seeking partners in recent years, in a bid to boost business and cut costs. A month before the latest deal, the New York Stock Exchange completed its takeover of Euronext, which controls stock markets in Paris, Amsterdam, Brussels and Lisbon. The US exchange NASDAQ retains a 30 per cent stake in the LSE after a failed takeover bid for the London exchange, though the LSE’s acquisition of Borsa Italiana will dilute its holding to 22 per cent. In May, NASDAQ agreed to buy Swedish stock exchange OMX in a recommended $3.7 billion deal.

Meanwhile the LSE has reported a 19 per cent jump in revenues year-on-year for the three months to the start of July, to $202.2 million. Between April and June, average daily trading volumes on the exchange’s electronic SETS system reached 501,000 – 51 per cent higher than in the same period in 2006. The average daily value traded also rose by 27 per cent, to reach $16.8 billion.

Creative industries ‘rival financial services’ in value
The value of the UK’s creative industries – such as fashion, television, the music industry, architecture, theatre and computer games – is now “broadly comparable” to that of the financial services sector, according to a new report from the Work Foundation, commissioned by the Department for Culture, Media and Sport. The creative economy employs 1.8 million people and generates exports worth more than $8 billion annually, more than any other country in the world, said the Foundation, which called the sector a “great unsung success story”.

In its report, the Work Foundation said: “From music to gaming, TV to fashion, industries powered by creativity are steadily transforming the commercial landscape.” However, it warned that “without careful policy-making, targeted public investment and a supportive institutional architecture, the flow of creativity worth commercialising may begin to slow.”

One area that shows little sign of slowing is the Bollywood film industry, as Hindi-language film production companies from India increasingly look to London stock markets to raise funds for expansion. In the past three months, no fewer than three Indian companies have sought a listing on the London Stock Exchange’s secondary board, the Alternative Investment Market (AIM). The latest is Pyramid Saimira Theatres, operator of one of India’s largest cinema chains, which is looking to raise $150 million by publicly listing a production and distribution market on the London market. “We will invest in content that will be produced in India and distributed not just in India but around the world,” said PS Saminathan, the company’s managing director.

Pyramid Samira’s move follows a recent $109 million IPO on AIM by Indian Film Co, launched by India’s Television 18 Group, and an $80 million offering by UTV Motion Pictures, which is controlled by Indian businessman Ronnie Screwvala. India has the most prolific film industry in the world, with more than 1,000 productions a year, and is trying to build a stronger profile for its offerings overseas – particularly in the UK, which recently hosted a Bollywood version of the Oscars.

In another development, the BBC (British Broadcasting Corporation) has confirmed its plans, and signed contracts for, the relocation of five of its departments from London to Salford Quays in Manchester, North West England. The BBC’s relocation is a vital element in the development of mediacity:uk, a 200-acre scheme that aims to establish a new media community for the creative industries, including broadcasters, advertising production companies and other media-related businesses, in Manchester. They will occupy new, high-specification office, studio and production space in a waterfront setting at Salford Quays, which is already home to many businesses and several important cultural centres.

mediacity:uk, Manchester, North West England

The BBC plans to relocate 1,500 London-based posts in its Children’s, Children’s Learning, Sport, Radio Five Live and BBC Future Media and Technology (including parts of BBC Research & Development) departments to Salford by 2011. A further 800 staff currently based at the Corporation’s Oxford Road site in Manchester will also be relocated to the new site. In the first phase of the development, BBC staff will move into three new mixed-use buildings containing 500,000 sq ft of accommodation and including office space, production facilities and a studio block.

Brian Gray, chairman of the Northwest Regional Development Agency (NWDA) and chair of the mediacity:uk steering group, said at a ceremony to mark the signing of the contracts: “This event signals the start of mediacity:uk. With the BBC signed up to the project, we can now move swiftly to transform this area into an internationally significant media community that will provide the very best facilities for creative companies to thrive. mediacity:uk will position the North of England firmly on the media map, not only in this country but on the world stage.”

In the East Midlands, the Greater Nottingham Partnership has approved funding of $700,000 towards a $1.6 million project to convert a former Nottingham fashion centre into a Digital Media Technology Centre. The project will be part of the Nottingham Science City initiative and will form a network with the city’s Broadway Media Centre and the Institute of Creative Technology. It will support high-growth businesses in the design and technology sector, with the potential to create up to 20 new businesses.

The airport’s owner BAA (British Airports Authority) said that the new terminal would set new standards in environmentally sensitive construction, and would cut carbon dioxide emissions by 40 per cent compared with the buildings it replaces. Terminals Three and Four are also being refurbished under the programme, with the first phase of an upgrade at Terminal Three due for completion this year and improvements at Terminal Four due to be finished in 2009.

Tony Douglas, CEO of BAA Heathrow, said: “By June 2012, most of our passengers will be travelling through terminal facilities that aren’t even open today and we will have either rebuilt or redeveloped all our other terminals. Heathrow will be like a new airport for London.”

In North East England, a new non-stop daily service to Dubai will be launched from Newcastle International Airport on 1 September. The Emirates Airlines service will be the first ever long-haul route to operate from Newcastle, and will provide easier access to the region from the Middle East, as well as opening up destinations in Southeast Asia, the Far East and Australia.


Infrastructure improvements to boost rail network
Infrastructure improvements are also planned on Britain’s passenger railways, with Transport Secretary Ruth Kelly setting out the Government’s spending priorities for the years 2009-2014 in a statement to the House of Commons. In a bid to reduce congestion on the network, 1,300 new carriages will be added to the pool of rolling stock, longer platforms will be built at a number of stations and signalling will be upgraded. In particular, major interchange stations at Reading in the South East and Birmingham New Street in the West Midlands will be revamped, while the go-ahead has been given for an extension of London’s Thameslink line.

Ms Kelly’s statement was accompanied by the launch of a White Paper on the future of rail over the next 30 years, with a focus on expanding the network’s capacity. Separately, discussions with business are under way to revive Crossrail, the proposed east-west London rail route that has been on the back burner for several years, but which has been given new impetus by the 2012 London Olympic Games.

In the rail freight sector, EWS (English Welsh Scottish Railways), the UK’s biggest rail freight operator, looks set to be taken over by Deutsche Bahn of Germany in a deal that could be worth as much as $500 million. The volume of goods carried by rail in the UK has grown by 60 per cent in the past 11 years, and a merger of the two companies would allow the state-owned Deutsche Bahn to expand its European freight business. DB has also recently purchased a stake in Transfesa, a Spanish road/rail logistics operator that specialises in transporting cars.

EWS, which employs 5,000 people and is based in Doncaster in South Yorkshire, took over British Rail’s freight business in 1996. The company controls two-thirds of UK rail freight volumes and has an annual turnover of $1 billion. It operates more than 1,000 freight trains a day across Britain and into continental Europe via the Channel Tunnel, and has recently expanded into France by setting up a subsidiary, Euro Cargo Rail.

EWS has recently begun running up to ten container trains a day to the recently upgraded rail terminal at the Port of Southampton in southern England, the UK’s second largest container port, operated by Associated British Ports (ABP). It is estimated that the upgraded facility will remove 1.4 billion tonne-kilometres of road traffic over a ten-year period. The refurbishment was funded under the IMPACTE (InterModal Port Access and Commodities Transport in Europe) project, which forms part of the European Union’s Interreg IIIB programme aimed at upgrading transport links in northwest Europe.

The UK’s largest container facility meanwhile, the Port of Felixstowe in Eastern England, celebrated a new record for the number of containers handled on a single vessel in June, with the call of Xin Hongkong, a vessel owned by China Shipping Container Lines (CSCL). The port achieved 5,610 container moves on the 9,600 teu ship, in what is thought to be the largest ever exchange of containers at a UK port. In a further demonstration of its commitment to its operations at Felixstowe, CSCL has recently opened a new multimillion-pound headquarters building just outside the port.

New projects boost development of biofuels industry
Britain’s biofuels boom shows little sign of abating, with oil giant BP making two major new investment announcements at the end of June. The first is a $400 million project to build a ‘green fuels’ plant on the outskirts of Hull in Yorkshire and Humber, in a joint venture with Associated British Foods (ABF) and chemicals firm DuPont. BP and ABF will each hold 45 per cent of equity in the new venture, with DuPont holding a 10 per cent stake. The plant, on BP’s existing site at Saltend, will produce ethanol from wheat, turning out around 420 million litres, or 330,000 tonnes, a year from 2009. It will require about 1 million tonnes of feedstock annually, and wheat will be sourced locally via an agreement between the joint venture company and two other ABF businesses, Frontier Agriculture and AB Agri.

BP and DuPont will also build a demonstration plant capable of producing 20,000 litres of biobutanol, a more advanced biofuel, from a variety of feedstocks. Construction work on the new facility will begin early next year, and the plant is expected to create 70 full-time jobs. ABF will also build a separate plant at Wissington in Norfolk, with financing from the European Investment Bank – the first time the EIB has funded a biofuels project. This plant will produce ethanol from sugar beet, with a target output of 70 million litres of ethanol a year.

In its second project, BP will invest at least $64 million in a joint venture with D1 Oils, a listed UK-based alternative fuels company, to develop the inedible oilseed jatropha as a biodiesel. The joint venture, D1-BP Fuel Crops, will invest $160 million over five years in the planting of jatropha, which grows in tropical and sub-tropical areas, on wasteland and marginal land. D1 has already planted or obtained rights to 172,000 hectares of jatropha in India, Southern Africa and Southeast Asia. It has 32,000 tonnes of processing capacity at its factory in Middlesbrough, North East England, and plans to add a further 100,000 tonnes of capacity this year. Under the Government’s Renewable Transport Fuel Obligation (RTFO), BP and other petroleum companies must produce 5 per cent of their fuels from biofuels by 2010.

Elsewhere in the renewables sector Enercon, of the world’s leading companies in the wind energy sector, has chosen St Ives in Cambridgeshire, Eastern England as the location for its new UK headquarters. The German-owned company, which will create 15 new jobs, worked closely with East of England International (EEI), the region’s international business support organisation, to identify suitable premises. Christoph Klimek, service manager at Enercon, said: “St Ives is an ideal location for our new UK base, providing easy access to our existing projects in this part of the UK as well as excellent national and international connections.”

Regional news
International aerospace and defence group EADS (European Aeronautic, Defence & Space Company) is to establish a new innovation centre at Portsmouth, South East England, near the existing UK base of its subsidiary Astrium. The investment is part of a major new programme, Innovation Works, which aims to develop the group’s capacity in the UK through closer links with government, universities and business, and is supported by the South East England Development Agency (SEEDA). There will also be innovation centres in Bristol in South West England and Newport in Wales. To support the development of Innovation Works UK, EADS plans to establish a research foundation to encourage technology initiatives in the aerospace sector.

GDV Subsea, a newly-established Norwegian company, has acquired GDV Offshore AS and Oceanteam 2000 Ltd, based in Great Yarmouth in Norfolk, Eastern England. Oceanteam 2000 has an extensive track record in providing diving and remotely operated vehicle (ROV) services to the offshore oil and gas, submarine cable and renewable energy markets. GDV Subsea is aiming to become a top contractor in the worldwide offshore sub-sea market and has raised $104 million in equity from a group of Norwegian institutional investors, which it will use to fund a vessel building programme.

Yorkshire and Humber has become the first region to launch a National Skills Academy for the financial services sector, the first of seven such academies planned around the UK. The Leeds-based institution will provide a single source for recruitment, training and education in the region and, according to its backers, will support a demand-led approach to public funding, ensuring that regional funds are applied to the needs of local employers.

Werma Signaltechnik, a German manufacturer of signal devices, has opened a new UK facility in Kettering in the East Midlands. The company is a leader in technology for optical and audible signal devices, including signal towers, signal beacons, buzzers, horns and sirens. Its new facility comprises a warehouse and sales office and employs eight people.

German-owned Fresenius Kabi Ltd and partner company Calea have opened a combined headquarters and aseptic manufacturing and dispensing facility on Manor Park in Runcorn, Cheshire, North West England. Fresenius Kabi is Europe’s leading healthcare company in the fields of clinical nutrition and infusion therapy, while Calea provides high-technology clinical homecare for patients. Previously the companies’ operations were spread over three separate sites in the Runcorn area, but the new HQ (the building of which was supported by a Selective Finance for Investment (SFI) grant of $978,000 from the Northwest Regional Development Agency) offers room for expansion. At present the companies jointly employ 350 people in the UK, but plan to take on a further 50 by the end of the year.

Software development company Liberty Information Technology (LIT), a subsidiary of US insurance company Liberty Mutual Group, has announced a $13.2 million investment in its facilities in Belfast, Northern Ireland, in a move that could create up to 175 new jobs. The expansion will allow the company to develop capability in new technologies and to develop business analyst skills specific to the insurance and financial services industries, helping it to create new IT products and services for its parent company. This is its fourth investment in the province since 1997, when it was set up as Liberty Mutual Group’s first software development centre outside the US. Economy minister Nigel Dodds commented: “The [$13.2 million] project is a further endorsement of the skills that Northern Ireland has to offer the international finance and IT sectors. We have a talented pool of graduate and experienced software developers whose abilities are increasingly attracting and retaining investment from around the world.”

In another expansion project, Citi Markets and Banking (CMB) is to establish a new Legal & Compliance Division at its Belfast Centre of Excellence, creating up to 39 new jobs. This will be the third division established at the Centre, following the original technology division formed in 2004 and an operations group announced earlier this year, which itself will create 117 new jobs during 2007. Over 400 new people now work at CMB’s Belfast Centre, and this number is set to grow to more than 700 by 2009. The Belfast team will work with the company’s London office to support its Markets & Banking operations across the EMEA region. The new Legal & Compliance Division will be responsible for areas such as transaction negotiation, document execution and compliance and regulatory requirements.

Indian-owned Tech Mahindra Limited, a global IT and telecoms firm, is also to establish a Centre of Excellence in Belfast. The centre will provide business service delivery, including solution design, to customers primarily in Europe and the US. The investment will create more than 200 jobs, generating $42 million in salaries, over the first three years. It brings to over 2,500 the number of people in Northern Ireland employed by Indian companies. Sanjay Kalra, president of strategic initiatives at Tech Mahindra, said: “Our growth requires high-class talent with the right attitude and a good work ethic. Belfast has this refreshing attitude and the spirit of innovation in abundance.”

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