March 2008

NEWS

Bank cuts rates as economy continues to slow

The Monetary Policy Committee of the Bank of England cut the main bank interest rate by a quarter of a point to 5.25 per cent in early February. The move was widely expected, and came against a background of a weakening UK economy. “The prospects for output growth abroad have deteriorated and the disruption to global financial markets has continued,” said the Bank, which also noted that credit conditions for households and businesses were tightening and growth in consumer spending had eased, while business surveys indicated that the economy was likely to slow further. “These developments pose downside risks to the outlook for inflation,” it added. A survey of industrial production released on the same day showed a fall of 0.2 per cent in manufacturing output between November and December and a decline of 0.1 per cent for the fourth quarter as a whole, compared with the previous one. Surveys of house prices have shown values flat to falling while the number of new mortgage approvals has fallen to its lowest level since 1995, when the UK was emerging from the last housing recession. Numbers of unsold homes are also growing. A survey of consumer confidence by Nationwide bank showed a sharp fall in January, to the lowest level since the survey was launched in May 2004 – although in the same survey consumers expressed a determination to continue spending.

The CIPS/NTC Purchasing Managers’ Survey for January showed a slight improvement to 52.5 (from a four-and-a half-year low in December), indicating that the economy is still growing, though at a slower pace. Prices, however, are continuing to rise, both prices of materials and prices charged by producers, which reached a 10-month high. Companies cited higher utility prices as a key driver of inflation, together with higher wages.

Service sector employers expressed less confidence in the business outlook than previously, with expectations of activity for the next 12 months at their lowest since October 2001. Some of those surveyed said that they thought conditions would worsen further, and that the UK may be heading for a recession. The survey did contain some good news. Service companies reported an increase in new work, and a number of them took on more staff in January. Overall, however, employment rose at only a modest pace and levels of new business remained low.


Private equity is key driver of UK business success
Private equity companies continue to be a major driver of the UK economy and its global competitiveness, according to a report by the British Private Equity and Venture Capital Association (BVCA). Companies backed by private equity investment have created new jobs at a much faster rate than other private sector companies, claimed the BVCA. In the five years to April 2007, it said, private equity-backed companies in the UK increased their staff worldwide by an average of 8 per cent a year, compared with 0.4 per cent for FTSE 100 companies and 3 per cent for FTSE 250 firms. Their investment and spending on research and development also increased faster than the national average, as did their sales and exports.

On average, said the BVCA, companies that have received private equity funding employ just over 500 staff in the UK, and during the five-year period had annual sales revenues of $92m. The majority of such companies are medium-sized and fast-growing. Their sales rose by 8 per cent over the five years, compared with 6 per cent for their FTSE 100 counterparts and 5 per cent for FTSE 250 companies. Exports grew by 10 per cent a year, compared with a national growth rate of 4 per cent, while corporate investment rose by 11 per cent annually compared with 3 per cent nationally. R&D expenditure increased by 14 per cent a year on average, compared with national growth of 1 per cent over the same period.

Of the companies responding to the survey, 91 per cent said that, without private equity, their business would not have existed or would have developed less rapidly. Of those reporting growth, 84 per cent said that it was organic, rather than by acquisition. After the provision of capital, nearly half of respondents listed strategic direction, financial advice and help with contacts as the three key ways in which private equity houses had helped with the development of their businesses.

For the financial year 2006/07, it is estimated that private equity-backed companies generated total sales of $620 billion and exports of $120 billion, and contributed nearly $70 billion in taxes to the Exchequer. Over the five years, total sales revenues were around $2,662 billion, with an export value of $372 billion and tax contributions amounting to $280 billion.

British private equity firms have invested more than $140 billion in some 25,000 UK businesses since 1984. The companies they invest in now employ 1.1m people, while the number employed by all the companies they have ever invested in is about 3m people, or 21 per cent of all private sector employees. In 2006 the UK industry accounted for 57 per cent of all private equity investment in Europe. “Private equity contributes more R&D, more investment, more jobs, more sales and more exports,” said Simon Walker, BVCA chief executive. “This report is an antidote to some of the myths about private equity.”

LSE boosts profits and opens office in Beijing

The London Stock Exchange (LSE) has opened its first branch in China, in a bid to promote greater investment in the UK by Chinese firms. Prime Minister Gordon Brown formally opened the new Beijing branch in January as part of his official visit to China. He joined LSE chief executive Clara Furse to commemorate the stock exchange’s latest step into the international market. It will offer Chinese firms access to European capital at a lower cost than US rivals. Ms Furse said: “The presence of the British Prime Minister underlines our government’s strong support for our strategic relationships in China. We feel sure that having a permanent presence in Beijing will ensure we remain the world’s most successful major exchange for capital raising by international companies.”

At present there are 68 Chinese companies from 20 different sectors listed on the LSE, and Mr Brown said that he was keen to double that figure over the next five years. The launch came after the joint announcement by the Prime Minister and Chinese Premier Wen Jiabao that they hoped to increase bilateral trade between the two countries to $120 billion by 2010.

Meanwhile, the LSE reported a big rise in revenues for the final quarter of 2007, helped by its purchase of Italian exchange Borsa Italiana in October. Revenues for the three months to December 31 rose by 87 per cent compared with the same period a year earlier, to reach $335.8 million. For the nine months to 31 December, they grew by 47 per cent year-on-year to hit $742 million. Leaving out the impact of the Borsa Italiana purchase, the increase was 19 per cent. According to the LSE, trading in cash equities had been particularly strong and the merger was going well. “We are making good progress on integration of the businesses and we are confident of a good outcome for the current financial year,” said Ms Furse.

General Electric of the US is moving the headquarters of its core consumer finance division, GE Money, from Connecticut to London. GE is one of the oldest and largest companies in the US, and its decision to relocate this $25 billion business underlines its increasingly global nature. It is also a feather in the cap of the UK capital, which has been challenging New York as a global financial centre. The origins of GE Money date back to the Depression era of the 1930s; today, with $200 billion of assets, it is the world’s largest provider of private-label credit cards. The relocation means that two of GE’s six divisions – accounting for about a quarter of its annual sales – will be based in the UK. Its healthcare business has been based in the country since 2004, when it bought UK diagnostics group Amersham.

London builds global business and cultural links
London Business School (LBS) has achieved the highest position ever attained by a European school in the latest Financial Times ranking of full-time MBA programmes. LBS ranked number two in the world, rising from fifth place from last year and overtaking Harvard Business School, Stanford and Columbia. Its performance was indicative of an increasingly successful challenge by European schools in a sector that has traditionally been dominated by US institutions.

The Wharton school at the University of Pennsylvania once again took the top slot, which it has held for eight of the 10 years the ranking has been published. However, four European schools made the top ten, with Insead of France in joint sixth place with Singapore and Spain’s Instituto de Empresa in eighth position. One of the UK’s newest business schools, the Judge Business School at the University of Cambridge, came 10th, up from 15th last year. Judge only began offering its one-year MBA programme in 1997.

There has been significant growth in management education in Asia over the past decade, according to the FT. China has more than 100 institutions offering accredited MBA degrees, and two of them – the China European International Business School (Ceibs) in Shanghai and the Antai College of Economics and Management – this year achieved a place in the top 100. They were joined for the first time by an Indian institution: the Indian School of Business in Hyderabad was at number 20, having introduced its MBA programme just six years ago.

The FT rankings assessed schools in three different categories: the success of their alumni; the global focus of the school; and its record in generating ideas. LBS scored highly because it ranked third in research this year, behind much bigger US rivals Harvard and Wharton. Salaries reported by alumni working outside the US helped to boost the scores of non-US institutions. Alumni working in the US reported lower salaries than their counterparts in Europe and Asia.

Think London, the inward investment agency for the UK capital, is rolling out its business incubator service, Touchdown London, to Mexican companies looking to invest in the city, in partnership with serviced office company Avanta. The announcement was made in Mexico by Michael Charlton, the organisation’s chief executive, who paid a week-long visit in early February. While there, he met with Mexican companies in the financial and business services, food and drink, energy, technology and creative industries sectors. He said: “Mexican businesses have traditionally looked to the US to invest and grow, but an increasing number are now looking to Europe as part of their globalisation strategy. London’s economic growth, together with the wealth of opportunities surrounding the 2012 Olympic Games, offers huge potential for Mexican companies.”

Touchdown London, already available to Chinese and Indian companies, is a start-up service designed to help businesses with a ‘soft landing’ in the capital, including subsidised office space and support services. These include assistance with company registration, access to service providers such as accountants and lawyers and day-to-day office facilities, including a fully-staffed reception and meeting rooms.

Mr Charlton’s visit to Mexico to followed a successful trip by the Lord Mayor of London in 2007, after the country was identified as a high-growth market by UK Trade & Investment’s Emerging Markets Forum. It is currently the 13th largest economy in the world and is set to grow to fifth largest by 2050. It is also the biggest market in Latin America in terms of FDI outflows: these are forecast to rise from $6.8 billion this year to $8.5 billion by 2011. London’s economy is predicted to grow by $80 billion by 2012 and will offer huge opportunities to Mexican companies looking to invest there, was the message that Mr Charlton wanted to put across.

The latest company to be helped by Think London to set up an office is Mercantile Exchange, a wholesale foreign exchange brokerage company from Toronto, Canada. The company has established its European headquarters in Canary Wharf in east London, its first office outside Canada. It began operations in a serviced office with one member of staff but has quickly expanded to four people; it now aims to employ around ten people and to move into its own offices by the middle of the year. “London was the obvious choice for us as it is the ideal city to place yourself for access to the rest of Europe. We couldn’t have achieved such a smooth set-up without the help of Think London,” said Udish S Wijay, the company’s vice president and general manager.

Another new arrival in London is the UK’s first Korean Cultural Centre, which opened at the end of January. The centre will showcase examples of work from every cultural discipline, from visual arts to theatre and food. It is based in Grand Buildings on Trafalgar Square, and its interior space has been designed by renowned artist Jeong Hwa Choi. In addition to an art gallery, lecture room, theatre and cultural lounge, it hosts a library and high-tech information resource, with support from South Korean companies such as LG Electronics and Samsung. It will offer Korean language courses and specialist lectures by academics and experts.

Events at the Korean Cultural Centre UK, the 12th of its kind in the world, kicked off with a month-long exhibition showcasing Korean composer, performer and artist Nam June Paik. Also featured were 23 internationally known and emerging Korean artists. Kyu Hak Choi, director of the centre, said: “We will continue our good relationships with organisations such as the London International Mime Festival, the Liverpool Biennial and the Thames Festival to create dynamic and engaging events off-site throughout 2008.”


UK energy market remains ‘most competitive in Europe’
The UK’s energy market remains the most competitive in the EU and the G7, according to a new report from Oxford Economic Research Associates (Oxera). The report, commissioned by the Department for Business, Enterprise and Regulatory Reform, monitored the competitiveness of energy markets in 2005 by assessing a range of factors, including market shares in generation and supply, the separation of transmission from generation and supply, and the availability of regulated third party access to transmission and distribution networks for gas and electricity. The UK was the most competitive country for both the electricity and gas segments and topped the overall rankings, followed by Sweden and Finland.

Only 11 of the 27 EU members, and none of the other G7 countries, have deregulated their energy markets sufficiently to be assessed, concluded the report, although a further eight EU members were expected to qualify for assessment in 2007. Business Secretary John Hutton said: “Creating an open and competitive energy market has meant that UK consumers have consistently benefited from amongst the lowest energy prices in Europe. While it is true that wholesale energy prices are rising, greater choice and transparency are clearly the best protection against these costs being disproportionably passed onto consumers. That is why we want to see the UK’s open and transparent markets replicated throughout the rest of Europe.”

A university spin-out company in Yorkshire and Humber is developing a new digital modelling tool for use by the nuclear waste management industry. StructureVision, based at the Leeds Innovation Centre at the University of Leeds, uses innovative software solutions to improve safety and efficiency in nuclear waste management. It has recently opened an office at the Daresbury Science and Innovation Campus in Cheshire to help develop the tool. The project is being supported by $700,000 of funding from the Northwest Regional Development Agency (NWDA). The region is seen as the main strategic location for the delivery of the project as it is home to three of the UK’s major operational nuclear sites. Over the next ten years, StructureVision will roll out the product to a market which it values at over $200m.

In the renewables sector, the world’s first commercial tidal energy project has been launched off the coast of Anglesey in North Wales. The scheme, developed by npower renewables and Marine Current Turbines (MCT), will generate up to 10.5 MW of power. MCT’s newly established development firm SeaGEn Wales will conduct the tidal farm project, which is expected to be commissioned by 2012 at the latest. Martin Wright, managing director of MCT, said: “[npower renewables’] involvement in SeaGen Wales highlights the very real potential that decentralised tidal energy can make to the UK energy mix. It is also a significant step in commercialising the technology, not only to deliver [the UK’s] carbon reduction targets but also to open up new opportunities for our technology to be deployed in other parts of the world.”

The East of England is to use $160 million allocated by the European Regional Development Fund (ERDF) to help local firms take advantage of opportunities to get involved in offshore energy projects in the North Sea. Richard Ellis, chair of the East of England Development Agency, said: “The southern North Sea is currently emerging as the worldwide focal point for strategic development and deployment of new offshore and renewable energy technologies.” He added that the ERDF project and the existing OrbisEnergy business centre would help the region “to capitalise on its vast natural energy resources”.


Government scheme aims to boost take-up of apprenticeships
The Department for Innovation, Universities and Skills (DIUS) has launched an ambitious scheme to extend the take-up of apprenticeships by school leavers. Its Apprenticeships Review outlines plans to make such schemes a mainstream option for 16-18 year olds, alongside other education and training routes, and to ensure a significant increase in apprenticeships for older learners. By 2013 every school leaver will be guaranteed an apprenticeship place, provided she or he has at least five passes at GCSE level. The government wants to see one in five of all young people undertaking an apprenticeship within the next decade.

Measures to be introduced under the plan include a new National Apprenticeship Service that will encourage and support employers and promote apprenticeships in schools to young people from the age of 14 onwards. There will be a pilot wage subsidy programme for small businesses, making it more attractive for them to offer apprenticeship places. Many will become eligible for direct financial support for the on-the-job training, and they will also be given more control over training content. In addition, DIUS will lead a drive to increase the number of apprenticeships in the public sector and will set up a task force to improve the take-up of apprenticeships in London, where there is currently a shortfall.

John Denham, Secretary of State for Innovation, Universities and Skills, said: “Over the past decade we have more than doubled the number of young people and adults starting apprenticeships. The number successfully completing apprenticeships has risen from around 40,000 in 2001/02 to over 100,000 per year now. We project that the number successfully completing them will rise further to around 190,000 per year in 2020.”

The government has also launched new hubs of training excellence for the chemicals, pharmaceuticals and polymer industries. They will form part of the National Skills Academy for the Process Industries, the fifth such academy to be launched after those for Construction, Manufacturing, Food and Drink Manufacturing and Financial Services. A sixth National Skills Academy for Nuclear has been approved and will be launched shortly.

Contributing $46 billion to the economy and employing 420,000 people, the process industries form an essential part of the manufacturing supply chain, producing essential materials such as biofuels, plastics, rubber, pharmaceuticals and chemical additives. To date, 50 employer organisations – representing 12 per cent of the sector and 50,000 employees – have pledged financial support totalling over $2 million to establish the new academy. Companies backing the initiative include BASF, SembCorp Utilities, Invista Performance Technologies, Johnson Matthey and Banner Chemicals. It is anticipated that at least 16,000 learners will undertake training via the academy over the next five years.

A growing number of employees will seek to extend their careers beyond the state retirement age over the next 15 years, according to a new report from the Chartered Institute of Personnel and Development (CIPD). The survey of 1,000 workers aged between 50 and 64 found that 38 per cent planned to continue working after they reach 65. At present only 11 per cent of the workforce do so.

Among those who did not intend working past 65, 31 per cent said they would reconsider their decision if they were allowed to work flexibly. Another fifth said that they would be tempted to work on if they were offered a deferred, larger state pension. The main reason for wishing to stay in work was the need to continue earning. Charles Cotton, the CIPD’s reward adviser, said: “It is clear that government policy could do more to encourage more older workers to stay on by extending the right to request flexible working beyond parents and carers and making pension arrangements more flexible.”
 

In addition, all of its current temporary manufacturing staff will be offered permanent positions on a rolling basis throughout the year, subject to performance and sustained volume. These measures will allow Nissan to implement a third, night-time shift on the line responsible for Qashqai production.

Trevor Mann, senior vice president for manufacturing and supply chain management, Nissan Europe, said: “This is a tremendously positive move by Nissan and represents a great vote of confidence both in the success of Qashqai and in the Sunderland workforce. This level of recruitment in the Western European car manufacturing sector is rare, and reflects the ongoing commitment Nissan has in its UK operation.” The Qashqai was designed at Nissan Design Europe, based in Paddington, London, while technical development was undertaken at the company’s technical centre in Cranfield in Eastern England.

BA introduces City business service to New York
British Airways plans to launch a new all-business class transatlantic service between London City Airport and New York. The niche service will be the first long-haul route to operate from London City, which serves the financial districts of the City of London and Canary Wharf. It will compete with new all-business class services launched recently by start-up carriers Eos Airlines and Silverjet, based at Stansted and Luton airports respectively. A third all-business carrier, Maxjet Airways, went bankrupt in December.

Willie Walsh, BA’s chief executive, said that the new service would fly “between the heart of the two largest financial centres in the world”, offering a check-in time of 15 minutes at either end. The route is a key market for BA, and the new service will be complement the flag carrier’s existing 11 flights daily between London Heathrow and JFK and Newark airports. Flying twice a day, the service will use Airbus A318 jets, the smallest Airbus aircraft, which are able to land on the airport’s restricted runway. BA reported a strong increase in profits in the first nine months of 2007, despite difficult market conditions and the biggest ever quarterly increase in fuel costs.

Regional Development Agency (RDA) Advantage West Midlands is to invest $200 million to help redevelop Birmingham New Street railway station – the single biggest investment in a regeneration scheme made by any RDA. The commitment is part of an $800 million package of government funding for the Gateway Plus project, announced by Transport Secretary Ruth Kelly, which will transform this major passenger hub. The scheme focuses on relieving congestion at the station, which is used by 17 million passengers each year. It involves the construction of new station entrances and escalators to all the platforms, and will double the size of the station concourse, incorporating a large atrium to introduce natural light.

It is hoped that the project will prove to be a catalyst for the regeneration of the area around the station and will provide better pedestrian routes into and across the city centre. Construction work will begin in 2009 and will be carried out in two phases, with completion anticipated by 2013/14. In addition to Advantage West Midlands’ contribution, Network Rail will provide $254 million towards the project and the Department of Transport $360 million.


Shrewd investment strategy results in big boost for bioscience
Medical charity the Wellcome Trust has announced that it will increase its spending on research by 60 per cent over the next five years to $8 billion, the biggest ever outlay by a UK charity. The new commitment will provide a significant boost for British bioscientists, who are already due to benefit from increased government spending on health research. The Trust says it is able to afford the increase in spending because its investments have performed so well. Its endowment value has risen by $16 billion over the past five years to reach $29.4 billion, just below a peak of $30.2 billion in summer 2007.

“We take a very long-term view of our investments. We can commit ourselves to spending $1.3 billion a year over the next five years, plus a one-off special dividend of $1 billion that will be spent on big projects, including the new UK Centre for Medical Research and Innovation in London and the Health Research Innovation Challenge Fund, a new partnership with the Department of Health,” said Dr Mark Walport, director of the Trust.

Wellcome, a leader in human genetics research, will expand its investigations into the genetic foundation of common diseases such as cancer, diabetes and psychiatric illness. It will continue to spend most of its money in the UK, but there will be some investment overseas, with one priority being biomedical research infrastructure in Africa.

The Trust has made big changes in its financial holdings since 2006, having heeded the warning signs in international credit markets. It has sold equities worth $8 billion, including 70 per cent of its UK equity holdings, and has reduced its exposure to commercial property and private equity buy-outs. At the same time it has increased its holdings in Asian and emerging market equities, hedge funds, currency and venture capital funds, and residential property, and has built up a cash reserve of $2.4 billion.

In a separate development, a total of $40 million is to be invested in research centres across the UK to fund studies designed to tackle key issues such as obesity and smoking-related illnesses. Five public health facilities will be established in Newcastle, Cardiff, Cambridge, Nottingham and Belfast, with each research centre awarded $10 million over the next five years. The venture is being funded by the UK Clinical Research Collaboration, which is led by the Economic and Social Research Council and includes the National Institute for Health Research, the British Heart Foundation and Cancer Research UK. The centres will use the money to create new academic posts and develop training programmes for staff, as well as to fund new IT systems and scientific equipment.

Pioneering stem cell research company Stem Cell Sciences (SCS) is to restructure its commercial operations worldwide, consolidating its activities at expanded facilities at its headquarters at the Babraham Research Campus in Cambridge, Eastern England. It will shut down its former base in Edinburgh, Scotland and will streamline operations in Melbourne, Australia, making its facility there a centre for research excellence. The new laboratory and administration facilities adjacent to its existing site on the Babraham Campus will become its operational HQ from 1 March, housing all administrative and operational functions. The site has been home to its pharmaceutical services division since 2005.

The changes are the result of a strategic review that the Board, in conjunction with new CEO Dr Alastair Riddell, commenced in 2007. “This restructuring will provide the basis of a new, more commercially-orientated Stem Cell Sciences,” said Dr Riddell. “We believe we have the people, the products and technological understanding to play a key role in the growing stem cell research market.” As well as increasing its business development efforts, SCS will initiate a programme to realise the full commercial value of its existing intellectual property portfolio with the signing of a series of non-exclusive licenses.

New projects set to spark growth in creative industries

A purpose-built research and development centre for the ICT and creative industries is set to open in Bristol, South West England. The Pervasive Media Studio is the first of its kind in the UK and will provide scientists with resources to explore GPS, wireless and smartphone technologies. It is hoped that the centre will support the South West’s $18.6 billion creative economy by providing workspace where researchers can collaborate on new technologies to make media more accessible. The initiative is a collaboration between HP Labs and Watershed Media Centre, the University of West England and the University of Bristol. Clare Reddington, managing director of Pervasive, said: “Our aim is to bring together the talent, ideas and research to do this here in Bristol and create a unique centre that can hold its own in the international creative arena.”

A new mobile TV system that could realise the commercial potential of mobile broadcasting will be tested in London this summer, as part of a collaboration between leading telecoms firms Orange and T-Mobile. The companies will share masts and 3G spectrum space in the first commercial trial of TDtv technology, which was developed by US wireless company NextWave at its UK base in Chippenham, South West England. The six-month trial follows initial tests carried out in Bristol in 2007. The technology pilot will showcase the business potential of mobile TV, which could be significantly bolstered by the 2012 Olympic Games. Allen Salmasi, chief executive of NextWave Wireless, described the trial as “an important milestone in the evolution of mobile multimedia”.

In Lancashire, North West England, the University of Central Lancashire officially opened its new $30 million Media Factory in late January. The facility is intended to nurture student, graduate and entrepreneurial talent and to strengthen the North West’s reputation as a centre for the creative industries. It provides UCLan students with access to industry-standard performing arts and multimedia facilities, while a business incubation centre gives graduates and local business people opportunities to turn creative ideas into commercial reality. “The Media Factory is set to make a valuable contribution to the Lancashire Economic Strategy. Developing the creative and digital industry is an important part of moving the economy up the value chain”, said Nick Briggs, director for strategy and business development at the Lancashire Economic Partnership.

Brazilian firm Stefanini IT Solutions has identified the UK as a strategic market for the software and IT sector and one that is central to its own global expansion plans. The Sao Paulo-based company has experienced a strong second year of growth since establishing an office in the UK in 2006. It now plans to use its London base to invest in other UK ventures and to pursue opportunities across Europe. At present 20 per cent of its operating volume is made up of foreign activities – a figure that its president, Marco Stefanini, wants to increase to 50 per cent by 2011. He described the UK as a priority market because of the number of global companies that are represented there. “Besides British enterprises, we also serve many companies that know Stefanini in Brazil and extend their services to other locations. That is the reason it is so important to have a foot in this strategic market,” he commented. The Stefanini Group is a multinational corporation with more than 4,500 employees and 31 offices in 11 countries, and is one of Latin America’s leading IT consulting firms.

High-quality business accommodation set to come on stream
A major gateway to Bristol city centre, in South West England, is to be transformed through a mixed-use development scheme that will include 300,000 sq ft of residential, retail and office space on a prime site next to Temple Meads Railway Station. The land, known as Plot 6, measures 4.5 acres and lies between the station and Temple Quay. Joint landowners Network Rail and the South West RDA are looking for a private developer to deliver the scheme, which will also include a 522-space multi-storey car park for station users. The development will mark the beginning of the third phase of the $1.5 billion Temple Quarter project, which has already seen derelict land at Temple Quay transformed into a thriving office district. Construction work on Plot 6 is expected to take about three years and, subject to planning consents, is scheduled to start in 2009.

The first two companies are set to move into premises on a new business park at Dursley in Gloucestershire, part of the town’s flagship Littlecombe regeneration project. Littlecombe comprises a new community of 600 homes and a 10-acre business park providing 170,000 sq ft of employment space on a 92-acre brownfield site. All of the business units at Littlecombe Business Park meet the highest ratings for the environmental impact of new buildings, and will be heated by an on-site wood-burning biomass system, which will provide them with a sustainable alternative to fossil fuel power. The first phase of the business park comprises 16 units for small and medium enterprises with a total floorspace of 27,900 sq ft. It includes one 6,400 sq ft detached unit and another 15 units ranging from 1,000 sq ft to 2,000 sq ft, which are suitable for industrial, warehouse and office use.

Work has begun on the Dovefields Business Centre at Uttoxeter in the West Midlands, a scheme that will provide 20 small office suites for companies on flexible terms when it opens in the summer. Funded and developed by Staffordshire County Council, it is expected to create 50 new jobs over the next seven years as well as 18 new businesses. In addition to the units, the centre will include break-out rooms, a formal meeting room and car parking. It will be managed by Staffordshire Business Innovation Centre, which will also help provide business support to the occupants.

Work has started to build ten new units at the Eurokent Business Park in Ramsgate, Kent in South East England. The five-acre site is located just off a new road currently under construction and close to Kent International Airport. Approximately 35,000 sq ft of new commercial floorspace will be created at the site. The scheme forms part of the South East of England Development Agency (SEEDA)’s wider regeneration plans for the whole of the Thanet area of East Kent. Ramsgate is one of several coastal towns set for major regeneration under SEEDA’s targeted Coastal Strategy, due for publication later this year.
 

Regional News
The European Space Agency (ESA) has chosen Astrium, based in Stevenage in the East of England, to produce critical components for a spacecraft that will be launched on a mission to Mercury. Astrium is one of a number of sub-contractors working on the $520 million BepiColombo project. BepiColombo will carry out the most comprehensive study of Mercury ever and is the first dual mission to use spacecraft developed in both Europe and Japan. Astrium will develop and construct the complete composite spacecraft structure and its dual propulsion system, and will carry out mission analysis over the next six years. Roughly a quarter of the whole value of the ESA contract will go through the UK. According to Dr Jerry Bolter, Astrium UK’s project manager, developing the structure forms the backbone of the assembly. “It carries the instruments, it carries the heavy tanks; it enables the entire suite of instruments and equipment to survive the rigours of launch,” he explained.

MRP Electronics, a leading producer of printed circuit boards (PCBs) based in Bedford Eastern England, is aiming for a 300 per cent growth in revenue over the next three years, following its acquisition by French electronic and electro-mechanical sub-assembly manufacturer Asteel. The deal forms a key part of Asteel’s plans to become a global leader in the design and manufacture of electronic and electromechanical sub-units for major prime contractors. MRP specialises in surface-mount PCB assembly and is one of the UK’s leading CEMs (contact equipment manufacturer), with established customers in a range of industry sectors, including defence, medical, consumer, finance, measurement equipment and telecoms. The company has a floor space of 30,000 sq ft, four production lines, 130 staff and a turnover in 2007 of $24 million. As part of the Asteel group, it is now one of the largest CEMs in the UK, and will look to achieve revenues of $100 million within three years. “This acquisition could not have happened at a better time as some of our larger customers were considering taking their high-volume work to the Far East,” said MRP managing director, Mike Perry.

International steel giant ArcelorMittal has acquired NSD Limited, based in Scunthorpe, Yorkshire and Humber, a leading steel distribution company specialising in sales of heavy sections and tubes. NSD, based on the town’s South Park Industrial Estate, has a turnover of $120 million and around 100 employees. Meanwhile a new $16 million speculative office development is to be built on a four-acre site on the Normanby Enterprise Park, on the outskirts of Scunthorpe. The development, off Lysaghts Way, will comprise 10 two-storey office blocks, with car parking for more than 200 vehicles and associated roads and services.

A report prepared by Manchester University for The Northern Way, an initiative established by the three RDAs in the north of England, says that greater cooperation between northern cities would allow them to compete more effectively with London. In the north, Manchester and Leeds and their surrounding areas top the hierarchy of economic growth and potential. A second tier is composed of Newcastle, Sheffield and Liverpool, while a third, where recent economic performance has been relatively poor, comprises Middlesbrough, Hull and Carlisle. The report argues that stronger links between Manchester and Leeds would provide the best opportunity for the north to replicate the success of London. However, it says, the cities currently operate largely as self-contained economic units, replicating one another rather than looking for synergies. It calls for the development of a clear economic plan for improving links between them, and across the north, as well as with London.

Leading specialty chemicals company Perstorp of Sweden has acquired the caprolactones business of Solvay Group in a $297.2 million deal, after the European commission ruled that it would not distort competition in the EU. Caprolactones are used to make adhesives and paints, and in the aerospace and medical industries, and Solvay’s business, based in Warrington, North West England, is the largest of its kind in the world. It recorded sales of $89.2 million in 2007, but Perstorp plans to double its capacity by 2011 while also increasing capacities for downstream derivatives. “Perstorp’s aim is a long-term commitment in the caprolactone market. To meet the market’s demand for growth, we intend to establish close collaboration with key customers and develop new application areas,” said Mats Persson, the Swedish company’s executive vice-president.

A new business park is to be developed on the 20-acre site of a former council housing estate at Gorsey Bank, Stockport in North West England. The mid-urban development will comprise 270,000 sq ft of B1 office accommodation and will house up to 2,500 employees. It forms part of a major regeneration plan for Stockport and will help the town in its aim of becoming the main employment destination for south Manchester.

Biotechnology company RNL Bio of South Korea has opened a European division at Newcastle University in North East England. The company, which specialises in stem cell research and the development of therapeutic products and regenerative medicine, has signed an initial 12-month tenancy agreement for a unit at the ‘Cels at Newcastle’ bio-incubator at the University’s Medical School. The move will create three jobs initially and around 14 more in the future. RNL Bio will use its new base to develop stem cell therapy products for diseases by isolating and culturing stem cells derived from a range of sources. At its base in Korea it is currently conducting research to develop a new herbally-derived product to treat diabetes.

A new body has been set up in North East England to help develop the region’s food and drink industry. The North East England Food and Drink Group will be responsible for helping businesses, raising awareness and increasing the availability of produce from the region, with the aim of boosting sales. It will operate under the brand Taste North East. “We not only see accredited regional food and drink hosts helping customers choose from a wide range of local recipes in outlets throughout the North East, but also a growing popularity and availability of our produce in the rest of the UK and overseas,” said Jack Jeffery, chairman of the North East England Food and Drink Group and of Northumbria Larder, two organisations that are leading the initiative.

Work is under way on Tanfield Lea Business Centre, a new development at Tanfield Lea Industrial Estate in County Durham, North East England. The centre, which will house 36 business units in a three-storey building, is aimed at new and expanding businesses and will include a lettings policy aimed at encouraging young people to pursue self-employment. It is hoped that it will act as a catalyst for private sector-led investment and development on the estate; its backers believe that it has the potential to create up to 200 new jobs. Construction is due to be completed in March 2009.

Siemens Healthcare Diagnostics has announced a major expansion of its manufacturing and distribution operation in Llanberis in Gwynedd, North Wales. The German-owned biotech firm is expected to create 200 new jobs over two years, adding to a current staff of over 300. The plant, located on the site of an old slate quarry, makes reagents, used in blood analysers in hospitals worldwide to diagnose medical conditions. Steve Britton, the company’s managing director, said: “We plan to double our production capability by hiring new employees and adding highly-automated equipment, without expanding the footprint of the facility.” Siemens Healthcare is one of the world’s largest suppliers to the healthcare industry. Formerly known as Euro/DPC and owned by Los Angeles-based Diagnostics Products Corporation, it was acquired by Siemens last year. Welsh Deputy First Minister Ieuan Wyn Jones hailed the move as one of the most significant private sector investments in the area.
 

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