January 2008

NEWS

Financial sector reinforces UK’s status as global trading hub
Despite recent turbulence in the financial markets, international business in the UK’s financial services sector showed robust growth in the first nine months of 2007, according to the latest International Financial Markets in the UK report from IFSL (International Financial Services London).

According to IFSL, the UK claimed a 17 per cent share of net issues in the international bond market in the first half of 2007, up 15 per cent from 2006. At the end of 2006, 79 per cent of European-based hedge fund assets were managed in London, with a combined value of $360 billion. The UK’s share of the global hedge fund market more than doubled between 2002 and 2006 to 22 per cent. Private equity funds based in the UK accounted for 14 per cent of global investments in 2006 and 28 per cent of funds raised.

In the insurance sector, premium income in the London market totalled $48.6 billion in 2006, down 9 per cent from the previous year, but premium income in the UK market as a whole grew by 16 per cent to a record $387.8 billion. London claimed a 23.7 per cent share of the global marine insurance market in 2006, the largest in the world.

Derivatives trading on the Liffe exchange totalled 724 million contracts in the first three quarters of 2007, up 28 per cent on the same period on 2006. In April 2007, London accounted for 43 per cent of global OTC derivatives trading, the same as in April 2004, consolidating its position as the world’s leading global derivatives centre. The US, with nearly a quarter of turnover, is the only other major centre for OTC derivatives trading.

London is also a major centre for niche OTC derivatives markets, such as credit, energy, and freight derivatives, which have grown rapidly in recent years. Liffe is the second largest exchange worldwide, accounting for 25 per cent of international exchange-traded turnover by value, exceeded only by the Chicago Mercantile Exchange, which has 46 per cent. It is also the leading exchange in the trading of short-term euro interest rate contracts.

More than 95 per cent of international business in non-ferrous metal futures is transacted at the London Metals Exchange, while nearly a half of global crude oil futures are traded at ICE Futures Europe. London is also an important source of remote trading, with 46 per cent of Eurex trades originating from the UK in the first nine months of 2007.

In addition, London accounted for 34 per cent of global foreign exchange trading, with volumes growing from $753 billion in April 2004 to $1,359 billion in April 2007. The city is also central to the world’s carbon markets; in 2006 exchange contracts traded on the ICE Futures exchange accounted for 82 per cent of European trading.

‘City-type’ employment totalled 338,000 at the end of 2006, up 13,000 from the previous year, reported IFSL. In the legal sphere, four of the Global 100’s six largest firms, based on revenue, were from the UK in 2006/07. Overall, the UK’s financial services trade surplus increased by nearly a third in 2006 to $50.2 billion. In the first half of 2007, the surplus reached $30.4 billion.

 

A warm welcome for business from all international investors
The UK government has signalled that investment by sovereign wealth funds operated by China and other countries, such as the oil-rich Gulf states, is welcome. City minister Kitty Ussher, speaking at a financial markets conference in London, said that the city was the logical operations centre for sovereign funds, and added: “I want to send a strong message today that Britain is open for business to investors of all nationalities.” This included China Investment Corporation (CIC), which has $200 billion in funding at its disposal. Ms Ussher told Lou Jiwei, CIC chairman: “Using London as a base allows funds to keep close to the world’s financial markets. We welcome funds using London in that way.”

The UK’s open-door approach contrasts with a more protectionist stance adopted by France and Germany, which want to shield domestic companies from politically motivated foreign takeovers. Sovereign wealth funds have begun to attract criticism following the rapid growth of their war-chests and a growing focus on investments in strategic industries, such as telecommunications, energy and financial services. Concerns about poor transparency and close links to national governments have led to protectionist moves against them. Recently, for example, CNOOC of China was forced to abandon a bid for Unocal in the US.

UK ministers have expressed concerns about the possibility of a sovereign fund taking over a strategically important company, such as an energy provider, and in December alarm bells rang when Baosteel Group, China’s largest steel-maker, considered launching a bid for mining group Rio Tinto. Ms Ussher urged sovereign funds to operate responsibly. “All investors need to behave commercially and be seen to behave commercially, and they have to meet the appropriate standards of governance and transparency,” she said.

A new paper from the Financial Services Authority (FSA), the UK’s financial services regulator, points out how flexible regulation is increasing the opportunities for UK-based Islamic financial products and services. The Islamic finance market has grown at a rate of 10-15 per cent annually in recent years and is estimated to have a global value of about $500 billion. In the UK, the FSA has encouraged growth of the sector by providing an open and flexible regulatory environment, which accommodates both Islamic and non-Islamic financial institutions. It was the first European regulator to authorise a wholly Islamic bank, and other Islamic financial institutions have since been authorised.

Callum McCarthy, chairman of the FSA, commented: “There is huge potential for an expansion of Islamic offerings in the UK’s financial markets, which will in turn boost London’s position as an international financial centre. We believe in a ‘no obstacles, no special favours’ approach when authorising new financial institutions and welcome the development of this market.”

A recently launched US hedge fund, Pentwater Capital, has set up a new subsidiary in London. The Chicago-based fund, which runs around $1 billion of funds globally, has registered Pentwater Capital Management Europe as a limited liability partnership. The UK venture, set to open in mid-2008, will employ ten staff members and will focus on investment opportunities in company restructuring and takeover options. Pentwater Capital launched its hedge fund with $1.4 billion in October 2007.

The Chancellor of the Exchequer, Alistair Darling, has officially opened the National Skills Academy for Financial Services at City College Norwich in the East of England. Insurance giant Norwich Union is supporting the new Academy, investing $400,000 in the initiative over the next five years. Teresa Sayers, chief executive of the Financial Services Skills Council (FSSC), said: “Much of the FSSC’s newest thinking, such as the new foundation degrees in financial services, has been piloted with employers in Norwich and with the City College in Norwich with great results.”

London aims to capitalise on Indian connection
Six out of ten Indian and US companies based in London believe that the city offers the best return on investment (ROI) for expanding into the global marketplace, according to research commissioned by Think London, the capital’s inward investment agency. London was identified as the European city where US and Indian companies grow fastest, according to Penn Schoen & Berland, authors of the report. According to Think London, this is the first time that a survey of foreign direct investment has taken into account ROI and growth, as well as corporate social responsibility and environmental factors, in assessing the relative performance of European cities.

The report identified three key factors as being most important to US and Indian businesses when expanding into Europe. First, companies generate a better ROI in London than anywhere else in Europe, with four times as many US and Indian companies in London stating that their ROI was “significantly higher than [their] other European offices”. Second, companies grow faster in London: half of European-based companies and four out of five London-based companies said that their group’s London office generated the highest revenue compared with other European locations. Third, London was considered the best location for softer factors such as corporate social responsibility and environmental best practice, with 46 per cent of Europe-based respondents identifying it as an ideal location for these factors.

London also offers a greater range of opportunities for diversification and expansion into new business areas. Think London’s research found that only a fifth of Europe-based companies had experienced a great deal of diversification and expansion into new business, compared with nearly a third of companies based in London. Michael Charlton, chief executive of Think London, said: “US and Indian businesses are the top two sources of new FDI projects into London. This research demonstrates that these companies investing in a London presence do indeed get a better return when compared to other European locations.”

The survey was carried out to coincide with a visit to India by Ken Livingstone, the Mayor of London, who spent a week in the country with a high-level delegation at the end of 2007 The aim of the visit was to strengthen relationships between London and India in business, tourism, academia, creative industries and film. Mr Livingstone was accompanied on the trip to Delhi and Mumbai by a delegation of London business ambassadors, who attended a total of 47 meetings, conferences and events. Already 15 Indian businesses which attended Think London business seminars during the trip have expressed an interest in establishing a presence in the UK.

Building on the success of the visit, Think London has launched an initiative in partnership with serviced office company Avanta, to help Indian businesses establish themselves in London. Touchdown London is a dedicated start-up service, offering Indian businesses a ‘soft landing’, including subsidised office space and support services in the capital. The new service was announced at the agency’s annual Indian Business Reception, which celebrates the UK’s economic and cultural links with India. Over the past three years, Think London has assisted more than 50 Indian companies to set up and expand in London, generating 1,257 jobs. Companies it has helped recently include Punjab National Bank International, Orchid Chemicals, HDFC, Wipro and Exilant Technologies.

In 2006, Indian companies raised a total of US$2.7 billion on London’s Alternative Investment Market (AIM) and a further $200 million on the main and securities markets – almost treble the US$1.1 billion they raised in 2005. In 2006/2007, India accounted for 14 per cent of all FDI projects in the UK capital, up from 6 per cent over the same period in 2000/2001. There are over 10,000 Indian-owned businesses in London, employing 49,000 people; these businesses generate a combined turnover of $14.4 billion and represent 5 per cent of the city’s economy.



Manufacturing sector remains upbeat in face of credit squeeze

In a statement explaining its decision, the Bank’s Monetary Policy Committee blamed deteriorating conditions in financial markets and “a tightening in the supply of credit to households and businesses”, which threatened to depress growth and allow inflation to fall too far below the official 2 per cent target. Its analysis of the credit squeeze matched that of the Organisation for Economic Co-operation and Development (OECD), which commented: “The UK could be more vulnerable than most countries to the impact from financial turmoil and because of evidence that the housing market is turning sharply down.”

Despite the credit squeeze, UK manufacturing companies experienced their strongest trading conditions for more than a decade in 2007, and most say that uncertainty over credit is not seriously affecting their plans for investment. EEF, the manufacturers’ organisation, reported that growth in output and order books remained robust in the final quarter of 2007, making the year the most positive overall since 1995.

The balance of companies planning to increase rather than decrease capital expenditure was 15 per cent, above the long-term average but less than in the previous quarter. A balance of 19 per cent of companies expected to increase their output over the first quarter of 2008, down from 35 per cent in the previous survey. Just 3 per cent of respondents said that the cost of credit had increased significantly, although 28 per cent had experienced a moderate impact. Most were able to fund expansion from retained earnings, but a fifth of companies said that the credit squeeze had affected their plans for investment and expenditure.

There was a greater slowdown in consumer-oriented business, such as white goods manufacturing, and companies were more confident about exports to European and Asian economies than they were about domestic sales. Fewer companies reported an increase in employment in the last quarter, although the balance remained positive, and equal proportions planned to increase and cut jobs over the next three months.

The EEF predicted that engineering output would expand by 1 per cent in 2008, with manufacturing growth steady at 0.8 per cent. Steve Radley, the organisation’s chief economist, said: “Despite rising oil prices, a falling dollar and a more uncertain economic outlook, manufacturers recorded another quarter of healthy growth and are looking to the future with a degree of confidence.”

British manufacturers are also increasing productivity at a faster rate than many of their international rivals, according to another EEF report, despite a 20 per cent decline in employment in the sector over the past six years, greater than in the US, France, Japan, Germany and Italy. Much of the improvement, said the organisation, is due to increased investment in the design and development of new products. Manufacturers are also doing more to train shop-floor workers, empowering them to make decisions about how to boost output without detailed instruction from supervisors.

Manufacturing productivity, expressed as output per person/hour, rose by nearly 4 per cent annually between 2000 and 2005 – less than the 5.5 per cent achieved in the US, but above the average increases in Germany, France, Italy and Spain. “It seems manufacturers in the UK are now in a better position to withstand problems such as weaknesses in key markets or a strong pound,” said Mr Radley.

Asked which factors they thought most crucial to increasing global competitiveness, 25 per cent of the companies surveyed said that in the next few years they would put the greatest emphasis on designing new products, while 23 per cent said that improving production and assembly was the most important factor. More than 20 per cent said they would focus most resources on adding service operations to manufacturing – for example, through trying to win maintenance contracts.

A study by the University of Sheffield’s Institute of Work Psychology, meanwhile, highlights how more UK manufacturers are placing their faith in teamwork in factories. Many companies now divide their employees into small groups charged with devising their own solutions to challenges, such as how to improve quality or cut waste. Professor Stephen Wood, one of a team of workplace psychologists who studied the training methods of more than 300 companies, said that efforts to empower workers were by far the most important of the various ways in which companies have sought to boost productivity. “We found that companies which devolved more decision-making responsibility to frontline employees showed an average annual 7 per cent increase in value added per employee,” he commented.

Pioneering UK companies lead the way in high-technology growth
More high-growth technology firms are based in the UK than anywhere else in the Europe, Middle East and Asia (EMEA) region, according to the latest Deloitte Technology Fast 500 rankings. The Fast 500 programme, launched in North America in 1997, recognises the technology companies that have achieved the fastest rates of annual revenue growth over the past five years. In the EMEA region, the programme is in its seventh year.

Israeli firms took the top three places in 2007; Voltaire Ltd was the top performer, with a five-year growth rate of 50,612 per cent. However, the UK had the most companies in the rankings, accounting for 91 of the Fast 500, followed by France with 68. Three UK companies made the top 20. Software company ByBox Holdings Ltd, based in Wantage, Oxfordshire in South East England, was ranked number five, having achieved a five-year growth rate of 15,272 per cent. Edinburgh-based Rocela Ltd, another software firm, was ranked seventh, with growth of 11,546 per cent. London-based communications/networking company Virtual IT Ltd was 14th, with growth of 5,075 per cent.

Average growth rates in the EMEA region were the highest since the Fast 500 began in 2001, and confidence is high despite economic uncertainties, according to Deloitte. This is in stark contrast with North America, where average five-year revenue growth rates have fallen from a peak of 6,772% in 2002 to 1,823% in 2007. Igal Brightman, global managing partner of Deloitte’s technology, media & telecommunications (TMT) industry group, commented: “These businesses are successfully managing exponential growth and, in particular, finding the right people in the right places to drive that growth.”

The World Economic Forum meanwhile has announced 39 visionary companies as its Technology Pioneers 2008, in three main categories: Energy/Environment, Biotechnology/Health and Information Technology. Twenty-three of the companies selected by the Geneva-based organisation were from the US, while the UK and Israel each boasted three. Sweden and Switzerland had two each, while Canada, France, Germany, India, the Netherlands and Russia had one apiece.

The UK Technology Pioneers 2008 are Oxitec Ltd (in the Biotech/Health category) and Garlik Ltd and Imaginatik (both IT). Oxitec was founded in 2002 to develop and commercialise science and technology developed at the University of Oxford. The company has patented a novel technology platform, called RIDL, which provides environmentally friendly pest control products to the agriculture and public health sectors.

Garlik is the first company to develop a web-scale commercial application of semantic technology, which enables consumers to find out what personal information about them is in the public domain and to manage their online identities. Imaginatik is a long-time leader in enterprise idea management. Its flagship solution, Idea Central, is designed to elicit ideas and insights from employees and enterprise partners, providing a collaborative space to develop ideas, along with sophisticated tools to evaluate and select the best ideas for implementation.

The Technology Pioneers 2008 were nominated by technology experts, including venture capitalists, technology companies, academics and media. The final selection from 273 nominees was made by a panel of leading experts appointed by the World Economic Forum, with guidance from Accel Partners, BT and Deloitte Touche Tohmatsu. Technology Pioneers are invited to participate in the World Economic Forum’s Annual Meeting in Davos, Switzerland, from 23-27 January 2008 and in the Annual Meeting of the New Champions in Tianjin, China from 25-27 September.

“This year the World Economic Forum received a record number of applications from companies around the world. From a highly competitive field, we are extremely pleased to have a community that is using innovation and technology to dramatically affect the way society and business operate and doing so in a markedly collaborative manner,” said Peter Torreele, managing director of the World Economic Forum.
 

Exeter named top university; UK entrepreneurs blaze trail in Europe
Exeter University has been named University of the Year in the Times Higher Awards 2007, held in London at the end of November. Exeter, located in Devon, South West England, was picked out by the judging panel from the 90 per cent of UK universities that entered this year’s awards in one category or more. Under the leadership of vice-chancellor Steve Smith, the university has invested some $280 million over the past five years and has nearly doubled in size while securing its academic reputation.

Three projects in particular impressed the judges: the new Cornwall Campus, near Falmouth, set up as part of the Combined Universities in Cornwall project; the Peninsula Medical School, a joint venture with Plymouth University set up in 2002; and the $28 million Great Western Research project, led by Exeter and involving all the South West’s higher education institutions. This latter project has boosted postgraduate development in the region, funding 74 PhD studentships and 20 three-year research fellowships to date.

The Lifetime Achievement Award was made to physicist and Nobel laureate Sir Peter Mansfield. Sir Peter originally left school at 15, intending to train as a printer, but returned to study physics at Queen Mary College in London. Having gained his PhD in 1962, he joined Nottingham University in 1964, where he has remained, currently as professor emeritus. It was at Nottingham in the 1970s that he pioneered magnetic resonance imaging, a technology that has changed the face of healthcare. MRI scans are now a standard diagnostic tool for many diseases and conditions. In the experimental phase, Sir Peter tested the technology on himself, thereby capturing the world’s first MRI scan of the human body.

In 2003, he won the Nobel Prize for Physiology, with the late Paul Lauterbur, for their work on MRI. In honour of his achievements, Nottingham’s Magnetic Resonance Centre is named after him. Baroness Kennedy, one of the judges, said: “Here is a man who left school at 15 and ended up winning a Nobel prize. What an incredible and inspirational story.”

The North Staffordshire Regeneration Zone (NSRZ) in the West Midlands, winner of this year’s Enterprising Britain competition, was named runner-up in the Enterprise Support category of the European Enterprise Awards, which were held in Portugal in December. The European Enterprise Awards, now in their second year, recognise outstanding initiatives that support entrepreneurship at a regional level, and are inspired by the UK’s successful Enterprising Britain contest. The Paper Trail, runner-up in the British awards, was runner-up in the Responsible Entrepreneurship category. The two UK projects beat off competition from over 350 entrants from across Europe.

Enterprise Minister Stephen Timms said: “North Staffordshire Regeneration Zone and The Paper Trail are fantastic examples of British enterprise and thoroughly deserves this recognition. By adopting a positive ‘can do’ approach to local enterprise and regeneration, both initiatives have helped to transform the social and economic prospects of their areas.”

Government backs ambitious scientific research programme
The Department of Innovation, Universities and Skills (DIUS) is to invest some $2.6 billion in research aimed at meeting the key challenges facing the UK and the rest of the world. Secretary of State John Denham said that the funding would be shared across four ambitious programmes focusing on climate change, the ageing process, energy and global security. According to Mr Denham, the programmes could lead to scientific breakthroughs allowing, for example, the mass production of non-polluting cars or new treatments for incurable diseases such as Alzheimer’s and Parkinson’s.

The programmes will bring together the expertise of UK-based scientists across the seven UK Research Councils. Funding is being made available through the science budget allocations published by DIUS earlier this [financial] year, as part of the Comprehensive Spending Review (CSR). DIUS will spend almost $12 billion per year on science and research by the end of the current CSR period in 2010/11. Key allocations include $4 billion for medical research over three years – a rise of 30 per cent – to fund basic and translational research.

In particular, the settlement will enable the refurbishment of the Laboratory of Molecular Biology in Cambridge and the development of the new UK Medical Research Centre in London. It will also be used to support the development of the Harwell (in Oxfordshire) and Daresbury (near Manchester in the North West) sites as Science and Innovation Campuses. A further $200 million of planned investment will be spent on multi-disciplinary programmes covering the digital economy and nanoscience, in addition to work being undertaken by Research Councils individually in these areas.

The $1 billion UK Centre for Medical Research and Innovation will be built on a site near the British Library and St. Pancras station in London. Due to open at the end of 2013 and to employ 1,500 people, it will carry out research into new treatments that the National Health Service will be able to trial and adopt for diseases such as cancer, stroke, heart disease, diabetes, meningitis and tuberculosis and viruses such as influenza and HIV.

Researchers and funding for the project will be provided by the Medical Research Council, Cancer Research UK, University College London and medical charity the Wellcome Trust. Scientific planning will be led by Paul Nurse, president of New York’s Rockefeller University and winner of the Nobel prize for medicine in 2001. Prime Minister Gordon Brown has welcomed the new centre, saying: “It is a once-in-a-lifetime opportunity for Britain to establish itself again in the leadership of medical science.”

International investment boosts UK bioscience sector
A consortium of leading science and medical institutions has joined forces to form a commercial company that aims to position London as the leading European centre for genetic medicine. The London Development Agency (LDA) has contributed $2 million in funding to help set up London Genetics Limited, which will manage partnerships between the healthcare industry and centres of excellence in genetics-based medical research. The new company will work in partnership with University College London, the Institute of Cancer Research, King’s College London, the London School of Hygiene and Tropical Medicine, Queen Mary University, St George’s University and Imperial College London.

Celtic Pharma, an international pharmaceuticals firm, is to set up a private equity fund in the UK to encourage investment in the biotech industry and the development of new medicines. It is hoped the fund, which will be organised alongside a similar scheme in the US, will raise $1.5 billion for the pharmaceuticals industry. This will be used to support smaller research companies working on the early stages of drug development, in particular products undergoing Phase I clinical trials.

US bioscience company Bioeden, which has its UK base at the Daresbury Science and Innovation Campus in Cheshire, North West England, has discovered a new method of extracting stem cells from children’s milk teeth that is attracting interest from around the world. The Texas-based company has secured a patent on the method and is working with scientists from India, Italy and the US to investigate treatments for diseases such as multiple sclerosis, Parkinson’s, Alzheimer’s and heart disease.

Contract clinical research services company ClinTec International is to locate its new global corporate headquarters in Glasgow, Scotland, creating up to 240 new jobs over the next three years. ClinTec already has operations in all key and emerging clinical research markets globally, and the new headquarters will support its ambitious growth plans in a market currently worth an estimated $14 billion per year.

ClinTec provides specialist clinical consultancy to pharmaceutical and biotech companies worldwide, and develops and implements the clinical trials of a range of new drugs. The new HQ will house its human resources, finance, IT, marketing, legal, corporate development and sales functions, as well as a team of clinical professionals who will manage the implementation of trials. The new project has been supported by a Regional Selective Assistance Grant of $2.7 million.


New projects to boost expansion of renewables sector
The UK government has given the go-ahead for a 350MW electricity generating plant fuelled by wood chips in Port Talbot, South Wales. The facility will be the biggest biomass plant in the world, and will generate enough ‘clean’ electricity to power half the homes in Wales, using wood fuel from sustainable sources in the US and Canada. When completed at the end of the decade, the $800 million plant will contribute around 70 per cent of the Welsh Assembly’s 2010 renewable electricity target. It is one of eight major renewables projects approved in the past 12 months; the others include six offshore and one onshore wind farms and the Wave Hub marine energy project, located off the coast of North Cornwall.

In December, Energy Secretary John Hutton launched a Strategic Environmental Assessment of the seas surrounding the UK, paving the way for a possible ‘third round’ of wind energy development. He will also chair a panel of experts to advise him on renewable energy, as the UK government aims to meet the EU target of 20 per cent renewable energy by 2020.

Speaking in Berlin, Mr Hutton said: “The draft plan I’m setting out today could allow companies to develop up to 25GW of offshore wind by 2020, in addition to the 8GW already planned. The UK has some of the best offshore wind resources in the world, a long history of design, installation and operational expertise in the offshore environment and the skills and manufacturing capability to transfer to this exciting new sector. [It] is now the number one location for investment in offshore wind in the world and next year we will overtake Denmark as the country with the most offshore wind capacity. I want to ensure the UK remains one of the best places for renewable business.”
The proposal for a ‘third round’ of offshore development would open up the vast bulk of the UK’s continental shelf to large-scale development, and could help to generate enough power for up to 25 million homes by 2020. The Government is also working on a regulatory regime to ensure that all offshore projects can connect to onshore electricity transmission and distribution networks quickly, securely and cheaply. A new Energy Bill to be introduced shortly will provide greater support and incentives for developers of offshore wind, wave and tidal energy projects.

A new innovation centre will support the growth of the environmental technology sector in Peterborough, Eastern England. The city is home to one the largest clusters of environmental technology businesses in the UK, with a total of 340 companies. Phase one of the new Peterborough Innovations Centre is due to open at Peterscourt in January, with plans to expand after an initial three-year phase. Initially, it will provide incubation facilities for 25 early-stage companies, and will support the development of 2,500 environmental technology companies across the region via a virtual enterprise hub network.

Food and Farming Minister Jeff Rooker has opened the UK’s first bioethanol plant in Wissington, Norfolk in Eastern England. The plant is run by British Sugar and is located alongside the world’s largest beet sugar factory. It will produce 70 million litres of bioethanol annually from 110,000 tonnes of locally-grown sugar beet. The sugar factory’s combined heat and power plant also provides energy for the bioethanol plant, meaning that the bioethanol produced delivers lifecycle carbon savings of 60 per cent compared with ordinary petrol.

The UK’s environmental industries are growing rapidly. The sector already employs more than 400,000 people in 17,000 companies, with an annual turnover of more than $40 billion. The amount of electricity produced in the UK from renewable sources has doubled to almost 5 per cent since the introduction of the Renewables Obligation in 2002. Current forecasts are for a further tripling to around 15 per cent by 2015.

In the short term, the UK could produce enough biofuels for around 2.5 per cent of road transport fuel needs without increasing pressures on the environment. In the longer term, according to ministers, advances in technology will see a wider range of ‘second generation’ biofuels enabling a much greater biofuels penetration.


Regional News
South African healthcare firm NetCare has acquired nine hospitals from rival Nuffield through its General Healthcare Group (GHG) subsidiary. The transfer, part of a $280 million deal set to be completed by February, will see the merger of GHG with BMI Healthcare, which has sites in Birmingham, London and Lancaster. NetCare first established a UK presence in 2001, and opened its first regional treatment centre in Scotland, in the grounds of Stracathro Hospital. The company owns a 50.1 per cent stake in GHG, the UK’s largest hospital operator, after leading a consortium to take over the group in 2006.

A survey by the Thames Valley Economic Partnership suggests that Reading in South East England is second only to London in terms of attracting inward investment. The Thames Valley town is located near London and a short drive from Heathrow Airport, making it a good location for international firms. Much of the investment in the region is geared towards IT, software and communication technologies, with companies attracted to Reading by the presence of large multinationals such as Microsoft, Vodafone and Cisco Systems. Successful local start-ups include the like of AppSwing, which has grown by 600 per cent since setting up in the town four years ago. In addition, Reading University has a strong research reputation, being ranked one of the top ten academic institutions in the UK for research.

A recent arrival in Reading is French security software editor Mobilegov, which has set up an office in Green Park, next to companies such as Cisco, Symantec and LogicaCMG. Mobilegov is a global player in data loss prevention, specialising in software that protects organisations against the use of unauthorised equipment. Founded in 2004, its head office is based in Sophia Antipolis, the French Technopole. It has two main offerings: Device Authenticator, which protects networks against the use of removable media devices such as memory sticks and external drives, and Device Linker, which allows the use of USB sticks only on authorised configurations. Mobilegov has built a significant network of partners in Europe and starts its operations in the UK with LogicaCMG. The company is supported by the French government and its solutions are used by organisations in a variety of markets, including military and defence, nuclear and energy, universities and R&D.

Eudyna Devices Europe Ltd, a leading Japanese wireless and optical equipment manufacturer, has consolidated its Thames Valley operations on the Slough Trading Estate. A new 7,384 sq ft unit brings together the company’s warehousing facilities with its head office function, which was previously based in Maidenhead. Slough Trading Estate, which has good access to major motorway routes and Heathrow Airport, is a popular base for global companies. Occupants include Ferrari, Fiat Auto (UK), Black & Decker, Dr Reddy’s, Research in Motion, LG and O2, and a wide range of sectors are represented, in particular automotive, biotechnology, logistics and electronics.

Swedish bank Handelsbanken has opened a branch in Wakefield, Yorkshire and Humber. The branch, located at the town’s new Calder Business Park, will be the bank’s fifth in Yorkshire. It recently became the first foreign bank to open in Doncaster, and has also opened branches in Leeds (in 2001), Hull (2004) and Sheffield (2006). Handelsbanken is one of the largest banks in the Nordic region, and extended its operations in the UK in the early 1980s. Today it has more than 550 branches in the Nordic countries and operations in 20 countries worldwide, employing more than 10,000 people.

The Institute for Microstructural and Mechanical Process Engineering at the University of Sheffield (IMMPETUS), in Yorkshire and Humber, has been awarded a five-year funding package of $11 million from the Engineering and Physical Sciences Research Council (EPSRC). The grant will provide a major boost to the UK’s metals manufacturing industry, enabling IMMPETUS to provide research and technology to companies in a wide range of market sectors. Professor Mark Rainforth, director of IMMPETUS, said: “The traditional approach to manufacturing has been development through a ‘black art’ process that tested hunches by trial and error, but this is now badly outdated. Instead, manufacture is about prediction and control, to promote ‘right first time’ production.”

Sheffield University has also won a $1 million grant from the EPSRC in partnership with aircraft manufacturer Boeing. Its Advanced Manufacturing Research Centre (AMRC) will use the funding to launch advanced manufacturing techniques. The AMRC, set up jointly with Boeing and based within its Faculty of Engineering, is a $90 million partnership between the university and over 40 companies. The Centre has developed MANTRA, a specially equipped HGV fitted with the latest manufacturing equipment, which will introduce companies to its latest production engineering techniques. MANTRA will focus on advanced machining, which involves tooling optimisation, damping and post-machining inspections and advanced assembly, which includes GPS, laser alignment, smart tooling and robotics. 

Corus, Scunthorpe	Steel-maker Corus has announced an $18 million investment in its Scunthorpe steelworks in North Lincolnshire, in a major bid to reduce dust emissions. Work will start soon on installing new technology at the basic oxygen steel-making (BOS) plant, and will be completed by the end of 2008. The multi-million dollar investment is the biggest spend in Scunthorpe since Corus was taken over by Indian steel company Tata in April 2007. Also in Scunthorpe, work has begun to transform a former furniture factory on the town’s Skippingdale Industrial Estate into a $20 million industrial warehouse and distribution centre that will be marketed to national logistics companies. The development, dubbed Opus Maximus, is expected to be completed by April 2008, and will create up to 100 new jobs.
Guangzhou Xiangxue Pharmaceuticals of China has set up a new research centre at Meditrina, the newest bioincubator building at the Babraham Research Campus in Cambridge, Eastern England. Xiangxue is the 50th company and the first Chinese business to take a place on the campus. Her Excellency Madame Fu Ying, Ambassador of the People’s Republic of China, officially opened the company’s new R&D base, the XiangCam TCM (Traditional Chinese Medicine) Research Centre.	Babraham Research Campus, Eastern England
The Centre represents a pioneering collaboration between Xiangxue, research organisations in China, the University of Cambridge and other UK research establishments, and aims to illuminate the science underpinning TCM theories and practice and to facilitate interaction between Eastern and Western practices. Xiangxue was assisted extensively in setting up it new operation by inward investment agency East of England International (EEI). Meditrina is named after the Roman goddess of medicine. Cranfield University in Bedfordshire, Eastern England has officially opened its Hexagon Loxham Precision Laboratory, a new facility designed for ultra-precision research. The new laboratory will aid Cranfield’s research into the manufacture of mirrors for the NASA James Webb Space Telescope. It will also help scientists develop technologies for finding earth-like planets and forms of life in space, as well as medical devices to extend and enhance human life. The 400 sq metre facility boasts a state-of-the-art temperature and humidity-controlled workspace and is the latest addition to the Cranfield University Precision Engineering Centre. This centre of excellence in advanced manufacturing technologies houses the most accurate diamond machining facilities in the world.

An $18 million business incubator is to be established in Daventry, Northampton, in the East Midlands. The initiative, the Innovation Construction Development (ICoN), will accommodate 60 businesses, and is being funded by the University of Northampton and the East Midlands Development Agency (emda). As well as research facilities and a conference centre, ICoN will have close links with the Universities of Nottingham, Loughborough, Leicester and Lincoln.

The UK’s National Centre for Zoonosis Research, dedicated to the study of animal-borne human diseases, has opened at the veterinary campus of the University of Liverpool, in North West England. Funded by the Northwest Regional Development Agency (NWDA), the Zoonosis Centre is a collaboration involving the University of Lancaster, the Health Protection Agency (HPA) and the Veterinary Laboratories Agency (VLA). It will investigate new and emerging zoonotic diseases such as SARS and avian flu, as well as diseases such as rabies. Around two-thirds of all human infections are transmitted from animals, both wild and domestic, including most cases of food poisoning. Dr Chris Parry, medical microbiologist and co-director of the centre, said: “Antibiotic resistance is a problem in many zoonotic bacteria, and this complicates the treatment of patients. The Centre brings together scientists with different backgrounds in order to tackle not just theoretical issues but very practical problems in disease control and management.”

A new business support website has been launched to promote Lancashire in North West England. The site, at www.makeitlancashire.com, offers directories of accessible funding, business support and a searchable database of 3,000 commercial locations and properties, together with contact details for the county’s local authorities. Also in Lancashire, the Asahi Glass Company of Japan has opened a new plant in Wyre, its first outside Japan to manufacture the ETFE polymer. The opening of the plant – attended by His Excellency the Japanese Ambassador, Yoshiji Nogami – marked the completion of an initial $50 million investment by Asahi, which has created 20 full-time jobs. Finally Panopticons, an ambitious project to put a series of landmark sculptures on the Pennine hills around East Lancashire, won an award in the Totally Inspired! category of Art 07 in October. The Panopticons sculptures – located at Burnley, Blackburn, Haslingden and Wycoller Country Park in Pendle – are intended to symbolise the area’s renaissance.

Panopticons in Lancashire, North West England. Clockwise from top left: Halo (picture Nigel Hillier);
Colourfields (Ian Lawson); Atom (Karen Williams); Singing Ringing Tree (Gayle Knight).

International contact centre twenty4help, based at the Watermark in Gateshead, North East England, is looking to recruit an additional 150 staff as it expands in the region. The centre, which was recently acquired by French company Teleperformance, provides round-the-clock helpdesk and multilingual technical support to hardware and software companies around the world. twenty4help, founded in Dortmund in Germany in 1992, currently employs 400 staff in the UK, 250 of them in Gateshead, and expects to increase its workforce to around 550 over the next few months. Klaus Oesteroth, managing director, said: “Our aim is to become one of the top ten outsourced contact centres in the UK and its leading provider of technical support services, a position we already hold in Europe.” Teleperformance has five sites across the UK, but the twenty4help site in Gateshead is its only technical support division.

US computer giant Dell is expanding its presence in Edinburgh, Scotland as it targets the burgeoning financial services sector. The company is taking on more product, sales and finance technicians, including 50 finance specialists, in the Scottish capital, despite a 10 per cent cut in its global workforce. Charles Quinn, Dell’s Scottish director and general manager, said: “Technological developments are currently lightning-fast and through our growth plans here in Scotland, we aim to be the front-runner to win key blue-chip new business.” Dell acquired local IT services specialist ACS a year ago and, according to Quinn, more acquisitions are planned as the company transforms itself from a PC manufacturer to a provider of technology services. It currently has 850 staff in Scotland and is set to top 1,000, due to expansion at its City Park headquarters in Glasgow, which is increasingly handling EMEA product and sales technical business.

Dublin-based food group Greencore has spent $30 million on two new UK acquisitions, Danone’s mineral water facility in the Brecon Beacons in Wales and the Ministry of Cake, based in Somerset in South West England. According to Greencore chief executive Patrick Coveney, the investment will complement the firm’s current operations, which include mineral water production in Scotland. He commented: “The Ministry of Cake enhances our growing presence in the food service sector and the Blaen Twyni facility [in Wales] is a valuable addition to our thriving water business, [including] the strongly growing flavoured water market.” Greencore is an international producer of convenience food, and is billed as the largest sandwich manufacturer in the UK. It has bases in four European countries and a combined annual turnover of over $1.6 billion.

Irish-owned Quinn Glass has invested $82 million to upgrade two furnaces and install the most up-to-date inspection equipment at its plant in Derrylin, Co Fermanagh in Northern Ireland. The investment will increase the company’s operating efficiency, increasing its annual capacity and its level of exports and creating 20 new jobs. Quinn Glass is owned by the Quinn Group and operates from two sites, one in Derrylin where it currently employs 378 staff, and the other in Cheshire, North West England. It is the second largest glass container manufacturer in the UK.

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