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ISSUE ELEVEN: AUTUMN 2010

ford ability Another century of manufacturing, led by example,  built by engineers

ticking time bomb The prospect of being left behind in the race for  regional recognition

fast tracker High ranking in the Legal 500 means moaners  get short shrift

the live debate North East experts agree it pays to look over the horizon

smalls talk

A brief encounter with Tallulah Love’s creator covers ribbons and bows, burlesque and business women, top to bottom BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

NORTH EAST EDITION

Business Quarter Magazine

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£2.95

02/11/2010 08:59


WELCOME

BUSINESS QUARTER: AUTUMN 10: ISSUE 11 We hope you’ll bear with us in our liberal use of a six letter word throughout this issue of BQ. The word is Export. We haven’t gone so far as reviving a catchphrase popular during an earlier time of travail in our economy. “Export or die” was the call then and, indeed, that may apply now to some businesses, though we dearly hope not. We’d simply like every firm that as yet does not export to consider having a go. The moral that comes through time and again here in our recent Live Debate reported this issue, and from people who know from experience, is that selling abroad is much easier than many think. While the North East as a region is an exemplary exporter, the feat is achieved by a mere handful of companies. The better known ones, naturally, are the bigger ones. Yet the firms represented in our debate, in the main, were smaller ones all able to bring back a success story from foreign fields. As one speaker pointed out, it was the saving of his company and no harder to do than crossing the border into Scotland or Wales in search of new customers. As another pointed out, it’s quicker in the North East to do business from Dubai than it is in Cornwall or Devon. And beyond the debate itself, some of our outstanding business people profiled in this quarter’s issue testify to the advantages and value of having foreign customers on the database. Robert Hardy’s young pharma company at work in Cramlington exports almost all its product. Michelle Taylor also has a young company that’s finding good business across the Channel. Geoff Ford, maintaining a tradition of high engineering expertise on South Tyneside, is building sales now beyond the USA and Europe, reaching into China and,

hopefully, other additional markets overseas. John Dickson chairs a Northumberland firm in contracting which, many would consider, is very much a locally focused line of business. Yet in this particularly vulnerable time for contractors his company can rely on Europe for 25% of its income. So your company doesn’t have to be Sage or Nissan, splendid examples though they are for our argument. But the Chancellor has spoken. Tough times will remain for some time yet, and we have the benefit, through UKTI, of a support organisation whose competence has just won it a global award. Six letters then – e-x-p-o-r-t. Give it a go. Or at least talk it over with some of those who have already benefited. Who knows, it could just give that impetus you’ve been looking for.

CONTACTS ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk George Cheung Director e: george@room501.co.uk Euan Underwood Director e: euan@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk EDITORIAL Brian Nicholls Editor e: b.g.nicholls@btinternet.com DESIGN & PRODUCTION room501 e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk Chris Auld Photography e: chris@chrisauldphotography.com Peter Skelton Photography e: peterpsp@mac.com ADVERTISING If you wish to advertise with us please contact our sales team on 0191 537 5720, or email sales@room501.co.uk room501 Publishing Publishing House, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk

THE LIFE AND SOUL OF BUSINESS Send your contributions, ideas and pearls of wisdom to our editorial team at editor@bq-magazine.co.uk and, if you see us out and about, tell us what you’re doing; you may just find yourself in print.

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room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2010 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, October 2010.

NORTH EAST EDITION BQ Magazine is published quarterly by room501 Ltd.

BUSINESS QUARTER | AUTUMN 10


CONTE BUSINESS QUARTER: AUTUMN 10 BETTING ON THE FUTURE

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INTERVIEW Sir Ian Wrigglesworth on the threat of being left in the starting stalls

Features

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ENTREPRENEUR Dealmaker John Wall bets on the future, the sustainables industry

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INTERVIEW

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Helen Ager on making the Legal 500

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AS I SEE IT Loyalty is the greatest reward, says Richard Nugent

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ENTREPRENEUR John Dickson talks from a hole in the ground at South Shields

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BQ LIVE DEBATE Export. Or die? Experts offer an opinion

BUSINESS QUARTER | AUTUMN 10

100 ENTREPRENEUR Geoff Ford’s century of success

THE RIGHT CHEMISTRY

104 INTERVIEW Robert Hardy and how pharmaceuticals became a regional business force

110 IN ANOTHER LIFE Mary Ann Rogers puts down her paintbrush and goes horse riding

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TENTS NORTH EAST EDITION

LINGWOOD ON WINE

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BUSINESS LUNCH Michelle Taylor’s brief encounter

Regulars

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WINE Catriona Lingwood on experimenting

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FASHION

52

The suitability of William Hunt

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ON THE RECORD Making the news in Q4/10

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NEWS Who’s doing what, when, where and why, here in the North East

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COMMERCIAL PROPERTY The landmark developments influencing the region’s industrial landscape

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KIT Timepieces built for space travel

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THE NAME’S MARTIN. ASTON...

MOTORS Aston Martin, Le Mans and the A1M

112 EVENTS The best events this coming quarter

114 FRANK TOCK A bit of a chat from our sharp observer

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86 BUSINESS QUARTER | AUTUMN 10


ON THE RECORD

AUTUMN 10

Northern Rock is back in the news – this time positively – while specialists in trade marks, moving images, construction, corporate law and payroll continue to impress and to build on success

Flying in: The Business Angel team

>> Launches on wings A business has helped create 16 other new businesses and 25 new jobs in its area during its first year of trading, after receiving support from Business Link. Business Angel NE Ltd was launched as a support agency in 2009. Director Gemma Dawson says: “Sharing in the excitement of new entrepreneurs is a great pleasure.”

>> Northern Rock: the saga continues State-owned lenders Northern Rock Asset Management (NRAM) and Bradford & Bingley are now run under a new holding company. UK Financial Investments has put the two beneath an umbrella called UK Asset Resolution. They remain separate legal entities, with their own balance sheet and government support arrangements. Gary Hoffman, who has been chief executive of both NRAM and Northern Rock plc since the start of this year, has stepped down as chief executive of NRAM and as a member of the NRAM board. He remains chief executive at Northern Rock plc. Andy Tate, appointed to the NRAM board as chief operating officer on January 1, has also stepped down from the board, but remains in senior management with Northern Rock plc. Hoffman describes the rescue and restructure of the former Northern Rock business as successful. NRAM, which took on the Rock’s

BUSINESS QUARTER | AUTUMN 10

toxic debts, returned to profit in the first half of 2010 as income increased, impairment charges were reduced and arrears continued to stabilise. “This trend has continued in the third quarter,” he says. Meanwhile former Northern Rock chief executive Adam Applegarth and his son Greg have a new business managing property in the North East – Beechwood Property Management. Applegarth was central to the mortgage bank’s near-extinction after its overcommitment on high-risk property loans three years ago when the bank was providing 20% of the country’s new mortgage loans. The crisis required the bailout by taxpayers, still ongoing. It cost 2,600 jobs – of whom more than two-thirds subsequently found new work, the firm says. But it also took £800m out of the North East economy. Applegarth, 48, also now works for a US venture capital firm. He left the Rock with a controversial £750,000 pay-off.

>> Then there were three BQ magazine serving North East business now has a second sibling, which its publisher room501 of Sunderland has launched to cover Scotland. It is edited in Edinburgh by Kenny Kemp, Scotland’s Business Writer of the Year 2010. Kemp was formerly business editor of The Herald and Scotland on Sunday. Another BQ was earlier launched to cover Yorkshire.

>> Back among Mortals David Jeffries the original managing director of North East creative digital firm Mere Mortals has returned from overseas to re-head the business following a restructure that will distance it from games production. Steve Walmsley, his predecessor, and two other senior members have left following a re-focus on its moving image work in wake of

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what trade journal The Drum called “a significant deterioration” of trading. In 2007 Jeffries moved to New Zealand to lead a business acquired for the group. He is the only board director there now but says this may change.

Emma Gent: A top UK PA

>> Emma excels Emma Gent, personal assistant to chief executive David Grailey at qualification provider NCFE in Newcastle, was runner-up in the PA Executive Awards to find the country’s best PA. Emma, 32, says: “More PAs than ever before had entered so I was very proud to represent NCFE and the North East.”

>> Hands across the water The Swedish Chamber of Commerce for the UK now has a North East England chapter to boost business ties between our region and its Scandinavian neighbour. Caroline Theobald, Swedish Consul in Newcastle and founder of the Bridge Club Ltd, is the chapter chairman. The North East is the fourth regional chapter of the Swedish Chamber for the UK, the others being in Manchester, Birmingham and Immingham. Sweden’s biggest bank, Handelsbanken, has opened branches at Morpeth and Sunderland,


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and plans openings at Durham and Darlington. The first North East branch, Newcastle, opened in 2001. The bank has seen a 50% leap in deposits there in two years and a 30% increase in lending. It pays no staff bonuses. c.theobald@bridgeclubnorth.com www.scc.org.uk

>> Sander makes his mark Will Sander is believed to be the North East’s only solicitor also qualified now as a registered trade mark attorney. Sander, a Dickinson Dees associate specialising in intellectual property law, has given three years to obtaining his dual qualification, sitting numerous exams and attending an advanced course at Queen Mary University, London. Mark Pearce, head of the firm’s IP Group,

ON THE RECORD

says: “We’re absolutely delighted for Will. There are few solicitors anywhere in the UK with such a qualification.” Also at Dickinson Dees, two young independent financial advisers after five years’ work plus have become chartered financial planners – of whom there are only 2,000 nationally. The status equates to a first class degree level qualification. Simon Patterson and Neil Burnett specialise in pensions and investments in the firm’s wealth management department.

>> Hitting the jackpot Innocore Gaming of North Shields, whose circuit boards and software go into Las Vegas coin machines, is the North East’s sole representative in The Sunday Times Tech Track 100 fastest growing technology firms. In the same paper’s Top 250 mid-market

private companies Fenwick was 77th (up from 92). Cumbrian Seafoods of Seaham entered at 206 and Jennings the Sunderland motor dealership at 232. Within the North East, Wilton Engineering Services came top of The Journal and Ward Hadaway’s latest Fastest 50 listing.

>> Monsieur Sage Guy Berruyer is the new chief executive of Sage following Paul Walker’s decision to step down. Berruyer, who is French, previously led the Newcastle group’s European and Asian operations.

>> Newcastle at the double Newcastle is a top five UK city for entrepreneurial spirit among its students. Research from insurer Hiscox suggests 40% >>

“ The Entrepreneurs’ Forum is unique in that it embraces all ages and stages of business. There’s a vibrancy about it and there is not a single event that I’ve been to where I haven’t learned something.” Anne Ganley, Thompson Building Centres.

For more information on how to become part of this unique peer group and tap into a powerful combination of wisdom and inspiration visit www.entrepreneursforum.net or call our team on 0870 850 2233

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BUSINESS QUARTER | AUTUMN 10


ON THE RECORD of students in London are either running their own business or soon will be. Hull is second and Newcastle fifth after Glasgow and Cardiff. The city also fills top spot for the second year running in a league of the UK’s greenest cities. It has been named first among the country’s 20 biggest cities in the annual league table of sustainability, published by Forum for the Future. Sunderland is 16th.

>> Cintra of attraction North East payroll and human resources firm Cintra won top UK honour at the Annual Payroll Awards by the Institute of Payroll Professionals Judges said: “Cintra’s communications to its clients were excellent. And outstanding testimonials set it above other nominations.” The Gateshead firm’s achievement, as IPP Payroll/HR Software Provider of the Year, follows a triumph at The Culture for Success Awards. Cintra was also a finalist in The IPP Payroll Service Provider of the Year award. Chief executive Carsten Staehr says: “Without strong endorsement from our entire client base, winning would not have been possible.”

>> Many a Muckle Muckle LLP scooped every award open to law firms at the North East Insider Dealmakers Awards 2010. For the third year running, it was named

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>> QUOTE OF THE QUARTER

I’d support inheritance tax at 100%. It should all go to people less well off than you Duncan Bannatyne in The Sunday Times Magazine, 8/8/10

Corporate Law Firm of the Year. Also for the third year in a row it won Deal of the Year category (£173m sale of Visage Group to Hong Kong-based Li & Fung, in one of the region’s biggest ever private equity deals). In Corporate Lawyer of the Year award, which it has won every year, corporate finance

partner Nicola Loose triumphed. Nominations were made in confidence within the region’s business community. Also in the awards, Northstar Ventures was voted Private Equity/Venture Capital House of the Year for the fourth year running. Northstar had previously completed 29 deals, investing £5.4m across its funds.

>> Neil’s a star Neil Matthias of Shepherd Construction’s Darlington office, is Construction Manager of the Year, having beaten more than 120 finalists from all over the UK. He won the Chartered Institute of Building honour for his project management skills during the building of the £44.5m Rockliffe Hall hotel and golf centre at Hurworth, the village where he lives.

Neil Matthias: Best in Britain

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BUSINESS QUARTER | AUTUMN 10

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Hunting for hampers? Think inside the box! Create your own from our wide range of fine food and wonderful wines,


NEWS

AUTUMN 10

The ins and outs of air travel, railway development from scenic narrow gauge to serving the London Olympics, a new coat for an iPad, movie-making and boot camps for brains, not brawn >> Doubled service could boost airport The North East may eventually get two daily flights to the Middle East, Tim Clark the global president of Emirates airline hints. This prospect arises three years after the initial Newcastle-Dubai once-daily service was launched, offering connections to other countries beyond. Meanwhile a larger aircraft will be introduced next year, adding 150 seats to every flight. Twice daily is a possibility particularly cheering for Newcastle Airport, whose passenger numbers have fallen 8.9% to 4.6m during the past year – a drop blamed on recession, not the volcanic ash crisis. The fall is smaller than average for UK airports though, and turnover at £47.1m was only £3.1m down. A boost for certain will come with Thomas Cook’s tens of thousands of extra seats offered through increased holiday flights from the region. It will sell five and 10-day breaks besides weekly and fortnightly-long packages. Thomas Cook’s 54 more flights a week will include extra take-offs to the Canary Islands and Spain. Weekly flights to Izmir rise from one to two, and three flights weekly rise to five. A service to Bourgas resort in Bulgaria is also starting. But budget airline easyJet, serving Newcastle since 2003, has axed its winter services between Newcastle and Stansted, and cut flight frequency to many other destinations. Aircraft on summer routes next year will reduce from five to three. Low cost rival Jet2.com is flying now to Toulouse, Alicante and Faro, and will restore services from Newcastle to Krakow and Prague. Regional airline Flybe, another Newcastle user and one of only three major European airlines to show profit throughout the recession, is still expanding in mainland Europe, though it has ceased linking Newcastle and Cardiff. Eastern Airways, Britain’s second-largest regional airline serving both Newcastle and Durham Tees Valley, is filling the breach as it also takes over Air Southwest. It starts a new Sunday service between Newcastle and Cardiff from October 31, in place of Flybe. All the flights are around teatime. It already operates two Cardiff flights each weekday, a route it has served since 2006. Eastern’s profits fell 63% in 2009. But there were exceptional start-up expenses of £963,000 for a contract with Bristow Helicopters. Revenue fell to £70.97m, from £73.52m, but passenger numbers rose 7%. Passengers using Durham Tees Valley Airport, which has lost its Heathrow flights, will be hit by a £6 “facility” tax (£2 for children) on every flight from November 15. Passenger numbers there have plummeted from 917,963 in 2006 to 289,464 last year – the lowest level in 20 years. Critics say the additional charge will reduce numbers of Teesside travellers even more. Peel Airports, which owns 75% of the airport, says several other regional airports already impose such a charge, and Vancouver Airport Services, which bought a 65% stake in Peel last June, already operates such a levy elsewhere.

>> Free energy homes Family homes signalling an end to domestic energy bills for UK homebuyers are being developed for sale by one of the

BUSINESS QUARTER | AUTUMN 10

North East’s largest construction firms. Esh Group has developed Climat Hus – a range of Swedish inspired family homes – in partnership with Swedish timber house

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designer and manufacturer Trivselhus. They will be marketed through Dunelm Homes, the group’s housebuilding arm. Each house combines high levels of insulation, airtight design, an array of technological features and advanced building techniques. Using state incentives, Esh says the average family can expect – and plan – to pay nothing for their energy there. Chief executive Brian Manning explains: “Climat Hus represents for us a significant investment, one we believe will set standards.” The house qualifies for cash-back payments under the Feed in Tariffs (FIT) scheme and the Renewable Heat Incentive (RHI) to be launched next April. A prototype home is open to the public at The Grange development in Bowburn village, near Durham: sat nav ref: DH6 5AT. enquiries@dunelmhomes.com and www.climat-hus.co.uk

>> Alchemists look further North East business funder The Alchemists is looking now to companies with potential in London, Wiltshire and Cheshire. The company is now self-funding. It was set up in 2003 to support family businesses and reckons since then it has created more than £100m of additional wealth for the region. It was itself initially supported with £1.5m from One North East over five years.

>> Lifeline of steel The sale of mothballed Teesside Cast Products (TCP) to a Thai company is expected to secure the Redcar business for at least three decades. It is hoped following the £320m sale that steelmaking will resume early in 2011, securing 700 jobs and providing new ones. TCP was partially mothballed in February when a consortium reneged on a contract, costing 1,600 jobs.


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Richard Harpin: “We must help the next generation of entrepreneurs”

Tom Maxfield at the Baltic, Gateshead. He appealed for “a seismic shift” in how Government relates to business and promotes an entrepreneurial culture. Richard Harpin, the entrepreneur (who grew up in Newcastle) behind HomeServe said: “There is a big responsibility on us as business leaders to help encourage the next generation of entrepreneurs, especially in the North East.”

>> North Sea orders pick up >> Rally call to entrepreneurs

The region’s subsea oil sector is set for growth as bids are made for £1bn worth of new work promising thousands of jobs. Duco, the Tyneside provider of umbilicals, has an £11.5m contract for BP’s Andrew Field project in the North Sea. An offspring

Entrepreneurs across the North East are being urged to use their talent and innovation to power the region out of the recession. The calls came at the annual dinner of the 8910 Crutes Forum ad-175x120_Layout 1 by 09/07/2010 15:02 Page 1 Entrepreneurs’ chairman, hosted

NEWS

of French group Technip, Duco earlier cut its workforce from 374 to 334 in the wake of a pre-tax profits drop from £12.4m to £6.1m in 2009. Lower demand and refurbishment of ageing equipment at Walker site have impeded progress, although turnover was up from £52m to £58m. SMD of Wallsend and CTC Marine of Darlington are reportedly busy, too. Fabricom Offshore, the Tyneside subsidiary of a Belgian firm, has a contract to upgrade the Claymore oil platform in the North Sea. General Electric (GE) has been expected to step up its offer for Newcastle’s energy pipeline maker Wellstream after four hedge funds increased their stakes in the firm. A £755m bid was rejected. >>

Energetic. Down to earth. Valued. Our clients see the benefit of who we are. Call Emma Drysdale for a chat on 0191 233 9713.

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BUSINESS QUARTER | AUTUMN 10


NEWS

AUTUMN 10

The speculation has mounted as David Mullen, a former senior vice-president of the world’s biggest oil drilling company, takes over command, following Gordon Chapman’s decision to step down for health reasons. Wellstream employs 400 staff in Newcastle and 350 in Brazil, where 70% of income is now generated. The firm used to be part of US oil giant Haliburton. Elsewhere, Anson of Gateshead, specialist in oil and gas valves, has raised profits since its takeover by an American firm. It will continue investing. Offshore engineers IHC Engineering Business of Riding Mill expect to be back in profit soon thanks to new technology. Wynyard pipe supplier Glanmarl Engineering has a £1.5m plus contract from an unnamed client. It employs 80 between Wynyard and Runcorn. About 40 jobs could come with the decision by TAG Energy Solutions to build a factory turning out foundations for offshore windtowers at Haverton Hill. Corus plans 220 jobs with a similar venture near Redcar, a £31.5m manufacturing activity on part of the site where its steel plant was partially mothballed with a loss of 1,600 jobs in February. Northwards at Hartlepool, JDR Cables is stepping up cable production to equip turbines. But the US firm, part-funded by UK taxpayers to develop some of the world’s biggest wind turbines on Tyneside, is financially vexed.

Shares in Clipper Windpower plunged 30% to new lows after auditors reported adversely on the business. The mega turbines being pioneered with Shepherd Offshore could be placed in their thousands around Britain’s coastline, but a financial rescue may be needed. The AIM listed company is getting £7m in grants from the Government towards its £10m manufacturing plant proposed on the Tyne’s north bank. United Technologies, a US shareholder in Clipper, has been supportive, eager to remain associated with Britain’s belated entry into the manufacturing, which already involves the like of GE, Siemens and Mitsubishi. Lloyds Banking Group, which stymied the region’s bid to host the multi-million SeaDragon twin rig building venture on Teesside, is reviewing its offshore involvements. It was to be major funder for the £300m project that it aborted as being too big a risk for the North East. The job went to Singapore instead.

>> Cross to bear Care homes giant Southern Cross works in the shadow of a profits warning brought about, it says, by local authorities referring fewer cases in anticipation of public sector cutbacks. Based in Darlington, it is biggest in sector with more than 700 homes. It says longer term prospects are fundamental but the short-term outlook is challenging.

Northern mood: A flavour of Belsay for a Heathrow hotel

>> Taste of the North Hotel Solutions, a Hexham firm that offers a turnkey service to hotels throughout the UK, has designed and furnished 55 bedrooms at The Stanwell near Heathrow, and has supplied furniture and soft furnishings there. Managing director Paul Satow says the firm’s design ranges and themes reflect its own location, taking in Belsay – the model for The Stanwell – Raby and Eggleston.

>> Steam line extended Eight jobs are being created with a 2.5 mile extension of South Tynedale Railway, Northern England’s highest narrow-gauge run. A £75,000 grant is enabling the steam railway’s volunteers who run it to extend the present one-hour ride from Alston to Kirkhaugh onward to Slaggyford. >>

11 November 2010 - The Sage Gateshead www.eventsnortheast.co.uk/artof

BUSINESS QUARTER | AUTUMN 10

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AUTUMN 10

COMPANY PROFILE

A strong management team and balance sheet are essential in securing finance facilities

CurrEnt BAnKing trEnDs

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S part of Grant Thornton’s commitment to career development opportunities, Chris Petts, an Associate Director based in their Newcastle office, has recently completed a year long secondment with HSBC Bank in the North East. Chris was involved in a number of projects whilst on secondment, including performing due dilligence on high value new money applications. Overall Chris feels that the secondment gave him an excellent insight into the latest banking trends and developments in the current challenging economic conditions. He is now putting this insight to good use in his role which typically includes advising companies that are struggling to access appropriate funding for their needs. Chris is also well placed to advise businesses on how best to position requests for renewal or extension of facilities. We asked Chris for his views on the current state of the North East banking market. Chris commented “Accessing finance continues to be difficult, even for successful businesses, although at Grant Thornton we are noticing a level of increased availability, particularly from specialist debt and equity funders. There has also been an increasing trend for funders to undertake detailed due diligence prior to seeking credit approval for facilities. Whilst this increases up-front costs to borrowers, it also ensures all parties understand the risks and opportunities at an early stage and enables appropriate and deliverable structures to be developed early.” “There is also a distinct move away from providing traditional overdraft funding in favour of more structured finance, such as Invoice Discounting and Export Finance. This provides lenders with much greater visibility, allowing them to follow their money more closely, with the added benefit of providing the lender with direct security upon the assets which it has funded, such as stock or trade debtors.” Chris also noted the key requirements that banks

trading at or above market expectations.” Chris also commented that banks often prefer working with companies that have an appropriate overall advisory team in place as this better facilitates open and constructive dialogue to develop solutions that work for all stakeholders. Chris ended by noting “Considering the most appropriate funding structures, and how best to source them, together with appropriate stress testing and sensitivity analysis to ensure they provide adequate headroom, requires skill, experience and an understanding of the funders’ requirements. This is often best achieved by working closely with advisors and banks recognise the input and experience they bring. This is currently more relevant than ever.”

Chris Petts, Associate Director, Recovery & Reorganisation, Grant Thornton UK LLP

are currently seeking to enable them to provide appropriate facilities to companies. “A capable and well rounded management team is essential, preferably with a strong and experienced finance director. A strong balance sheet and sensible gearing of actual and proposed borrowings is also very important, with banks focusing strongly on debt being serviced from ongoing operating profits and cash generation, rather than relying on the security value of the Company’s assets. Banks are also well aware of the challenging market conditions and take these into consideration if trading has worsened - essentially if a business is

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BANKS OFTEN PREFER WORKING WITH COMPANIES THAT HAVE AN APPROPRIATE OVERALL ADVISORY TEAM IN PLACE AS THIS BETTER FACILITATES OPEN AND CONSTRUCTIVE DIALOGUE TO DEVELOP SOLUTIONS THAT WORK FOR ALL STAKEHOLDERS

For further information please contact: Chris Petts, Associate Director chris.petts@uk.gt.com Tel 0191 261 2631

BUSINESS QUARTER | AUTUMN 10


NEWS

AUTUMN 10

>> Fingertip funding Fund provider North East Access to Finance (NEA2F) has identified a growing group of small and medium-size firms in the region that would prefer a less formal introduction to external commercial investors. So it is providing a video access for potential financial investors. Businesses have 90 seconds (the length of an average lift ride) to outline their business plan and funding need. Chairman Hugh Morgan Williams explains: “All the venture capital fund managers and business angel groups are on our site. We hope businesses will adopt a Dragons’ Den style response to pitches.” The website also covers business support, gives financial updates and a calendar of events. www.nea2f.co.uk

>> Yorkshire take-off Hays Travel is making inroads into Yorkshire holiday business after buying Ripon Travel and Ryedale Travel. The Sunderland firm has merged two activities that were carried on in Ripon but said both staffs would be retained for a bigger, unified operation there. It is also keeping a branch in Knaresborough. But the North East travel industry is losing 90 jobs after TUI, owner of Thomson Holidays, First Choice Holidays and Late-Rooms.com, announced plans to close its call centres in Peterlee and Newcastle.

>> ‘Biofuels back The £43m Biofuels Corporation plant at Billingham is restarting production under new owner Harvest Energy of London. Its previous owners went out of business blaming regulatory changes for debts of more than £100m.

>> Forward into battle Engineering firm Henry Williams, best known in a 127-year history for its infrastructural work on railways, now also supplies parts for vehicles serving the British and US Armies in Afghanistan.

BUSINESS QUARTER | AUTUMN 10

The Darlington firm, which had already diversified into work for the Highways Agency, has invested more than £1.5m in its capabilities. Its 100-strong workforce is also helping to prepare the London Overground system for visitors to the coming Olympics.

>> Chemical firm raises sights Exwold Technology aims to double sales, quadruple profits and increase the workforce with a £1m investment in new equipment. Operating on three sites at Hartlepool and Billingham, it has secured £250,000 of funding from Corus subsidiary UK Steel Enterprise. The company, set up by James Robson in 1992 to process chemicals in granular form for farming has since diversified into chemicals for flame retardants, surface coatings, bioscience purposes and metal treatments.

>> Hot sales for chilled foods SK Chilled Foods now employs 500 at Tees Valley, after growing sales by more than 30% in three years. It makes own-label Chinese, Indian, Mexican and American foods. The 15-year-old business feeds £40m of sales into its American parent, the Entrepreneurial Food Group.

>> ‘Road to ruin’ warning A survey suggests 70% of firms based in the North of England fear further cuts in spending on transport infrastructure will damage their prospects over the next three years. The survey – carried out before the Government’s spending review for the Association for Consultancy and Engineering (ACE) and the Civil Engineering Contractors Association (CECA) - also indicates that 85% of companies in the North believe that addressing road capacity is important to business prospects – while 61% feel capacity on local commuter rail lines needs attention soon.

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>> Escape from troubled waters Focusing on core domestic business has enabled seafood processor and s­ upplier Cumbrian Seafoods to turn a £5.7m loss into a £2.3m post-tax profit. The Seaham firm has also reduced its workforce to 719 from 749.

>> Slotzz in nicely Two PhD students at Newcastle University are behind Slotzz, a company making bespoke, handmade cases to contain Apple iPads. Simon Barker and Leonie Cunnington were early buyers of the iPad and Cunnington felt existing cases did not suit the product. She devised Slotzz Jacket in denim outers and cotton linings, with designer fabrics, which is now produced from Greenesfield Business Centre, Gateshead. www.slotzz.co.uk

>> An early hurdle A crew from Gateshead industrial services group Pyeroy is repainting London’s Tower Bridge ahead of the 2012 Olympics.

>> Transport on the move The North East’s twin giants of public transport, Arriva and Go-Ahead, have undergone major change during the past quarter. Go-Ahead has quit the aviation market, shedding its airport parking business for £11m, and sold also its security division. Arriva is now officially part of Deutsche Bahn following a £1.6bn acquisition.

>> Into the sunshine Private equity firm Endless LLP of Leeds has bought the world’s oldest conservatory builder, Amdega, which turns over £20m a year at Darlington. The firm was founded in 1874 and employs 220 at Faverdale in the town. >>


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COMPANY PROFILE

AUTUMN 10

In their Gallowgate office, in the heart of the city, a team of entrepreneurs are investigating business opportunities to turn research and technology into money spinners for the North East. They are Newcastle Science City’s Innovation Managers, a team of future MDs researching customer-led business opportunities.

Lifting the Lid id on the innovation nnovation Machine

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eWcaStLe Science city’s plans to be at the centre of the city’s physical and economic regeneration are starting to become reality. the public consultation on Science central – a multimillion pound hQ for the region’s sustainability businesses and research – has begun and the high-calibre people needed to turn science and innovation into high-growth businesses are in place. october was a month of highs for newcastle Science city – born of a three-way partnership between newcastle city council, one north east and newcastle University – claims chief executive Peter arnold. “What’s really exciting is that the first businesses from the innovation Machine have been launched into their respective marketplaces – we’re as aware as everyone that our success will largely be measured by the independent economic contribution that the businesses we support actually deliver.” the businesses – curar therapeutics, My genomics, MeMotion and Seaward innovation – started trading in sectors as diverse as animal welfare, renewable energy logistics and personalised gene mapping. Back in July, the innovation Machine’s first business went live. adtronik is based on a novel way of monetizing photos and pictures on the web. the company now employs 4 people. Peter holds ambition for the innovation Machine. “What we’ve developed is a modular concept that could be franchised either to other regions or to innovative companies who want to see technology and understanding generating revenue quickly and sustainably.” Peter uses the example of a large fMcg manufacturer running an innovation Machine to

BUSINESS BUSINESSQUARTER QUARTER||AUTUMN AUTUMN1010

a jewel Science central might be, but in the crucible of the comprehensive Spending Review, every project has to justify survival. Peter said Science central is of pivotal importance and it has heavyweight political backing too. the project was mentioned in deputy Prime Minister nick clegg’s party conference speech in September, when he stated councils could use tax incremental funding to pay for prioritised building programmes.

Dr Peter Arnold Chief Executive Officer, Newcastle Science City identify customer-led markets and then developing products to plug those gaps. “i’ve already presented the concept to a number of major companies with innovation at their core, and the feedback has been extremely positive. there is no reason why this model could not be recreated elsewhere right across the public-private investment spectrum,” added Peter. Building success But it is Science central, the jewel in the crown of the city’s West end regeneration, that newcastle Science city is known for. in the next few years it will house university researchers and dynamic young businesses. the intention is obvious – create an environment where scientific research pollinates high-growth business.

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Piecing together the puzzle Yet Peter emphasises that newcastle Science city does not begin and end with Science central. “When i speak to potential investors, Science central is one piece of the jigsaw. Quality research, entrepreneurial spirit and robust collaboration networks are of great importance too. “in fact, they’re probably even more important. open innovation – where the best ideas come from an unlimited range of sources - rules.

“newcastle’s incredible opportunity is to combine infrastructure together with high-quality research and business innovation to give investors every incentive to locate and settle in the north east. we have to grab it.”


AUTUMN 10

Quality research But if business ideas can be sourced and developed from anywhere, is newcastle’s vibrant research community really such a big draw? “absolutely”, says Peter. “ageing and health, stem cell and regenerative medicine and sustainability in its broadest sense are three sectors which are virtually assured of creating high-growth businesses – they cover societal pressure points which we have no choice but to address. these are the university’s three strengths and they are our three themes. “factor in research hospitals and other national centres of research excellence and the business opportunities it can propel are unimaginably good,” says Peter. Externalising the Innovation Machine internally, a task team has been set up to identify technology-driven businesses that show potential for high growth. “We’ve got a mandate to help external start-ups,

COMPANY PROFILE

but we’re very selective in where we deploy our support – we have to be. for every business we support we turn down four. that’s not to say we don’t think the business has potential – many of them do – it’s simply because we apply the same criteria of development as we do for the innovation Machine: customer-led, innovationfocused businesses with high-growth potential.” out of this process, 2Pure and PSaeon have sprung in the last few months – two widely different businesses which both offer excellent growth opportunity. indirectly, however, newcastle Science city does support hundreds of businesses. it hosts a monthly meeting for high-tech businesses in the north east, called first friday – yes, held on the first friday of the month. it regularly attracts more than 100 people from a mixture of established businesses and start-ups looking to share knowledge and opportunities for collaboration. With the finer details of the comprehensive

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Spending Review unknown at the time of writing, one thing is assured: the north east will be a hard-hit region and initiatives that can create jobs in the private sector and attract private investment will be crucial. newcastle Science city, a product of the previous government, could play a pivotal role in the new government’s economic aspirations in the region.

“ageing and health, stem cell and regenerative medicine and sustainability in its broadest sense are three sectors which are virtually assured of creating high-growth businesses.”

BUSINESS QUARTER QUARTER | AUTUMN BUSINESS AUTUMN 10 10


NEWS

AUTUMN 10

>> Designs on shoe styling Peacocks Medical Group, which has been making medical shoes for almost a century, is branching into designer footwear under Chris Peacock, managing director and fourth generation member of the Newcastle-based family firm.

Step on it: (left to right) Alison Machin, Barrie Mullen, Martin Fletcher, and Andrea Clarke run business boot camps with a difference

>> Camping for fast trackers Aspiring entrepreneurs on Tyneside can develop their brain power at boot camps with a difference. Enterprise Made Simple of Newcastle is running two weekends promising advice and support. Andrea Clarke at EMS says; “People associate boot camps with physical activity. This is much more about exercising the brain and team building.” The free sessions will run over two weekends on November 19 and 26. The venue is the Calvert Trust’s outdoor activity centre at Kielder. Contact tel: 0800 988 7122.

>> Tanfield courted Liberty, the Cramlington manufacturer of electric automotives, is seeking a stake in cash-starved Tanfield which has not been welcomed. However, Liberty may create more than 500 jobs independently, following a £500,000 contract won from the Chinese Government to produce motors for 10,000 electric buses. Tanfield shares plummeted to their lowest since 2004 after disclosing it might have to sell equity at a hefty discount to raise money. Tanfield has also been looking to combine its

BUSINESS QUARTER | AUTUMN 10

British and US businesses into one to benefit from US investment grants. Elsewhere in vehicle production, Nissan is building its new Juke car, a compact sports crossover, at Sunderland. The firm has also launched the Leaf globally, first of its new generation of zero-emission cars. This model will be produced at Sunderland, and be on sale from next March. Avid Vehicles at Cramlington reports strong orders for its first electric model, a four-wheel drive utility, E-Warrior. Turnover is predicted to climb from £3m to £100m. Avid is also set to launch the Q-V, a family car. Nifco UK, the Stockton car parts manufacturer, is going ahead with plans for a new factory despite losing a £1m grant.

>> Vertu makes it 67 Fast growing motor dealer Vertu has secured £15m to fund more acquisitions over three years. It now has 79 dealerships, having bought two more in Cheshire for £4m, and through that now has its first Nissan site. Now the eighth biggest motor group in the country, it could have full-year profits of up to £6.6m. Vertu is adding 24 more staff at its Gateshead headquarters and is investing £2m in a bodyshop at Newburn. Benfield, now the UK’s biggest supplier of VW commercial vehicles, has announced record profits after a year of heavy investment. Simon Bailes Peugeot has also invested – £900,000 at its Stockton site. Pulman Volkswagen, owned by County Durham family firm Mike Pulman Ltd, is back in profit after restructuring. It bought Mill Garages of Sunderland in 2008.

>> Carbon capture intensifies Major firms in the process industry are working together on Teesside to determine the potential of an industrial carbon capture and storage (CCS) system. Working through Nepic, the new group is known as Piccsi, the Process Industry Carbon Capture and Storage Initiative. The group will progress the findings of studies

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by Tees Valley Unlimited and the North and South Tees Study, along with work on an industrial CCS network. This includes a conceptual engineering study for Tees Valley completed by Amec, also an economic assessment by Element Energy & Carbon Counts. This detailed work is the outcome of a 10 point plan by Nepic, funded by the Government and One North East, and supported by the Tees Valley Industrial Programme (TVIP). Firms involved include Amec, BOC, Growhow, Huntsman, Ineos Nitriles, Lucite, Sembcorp, Sabic and px Limited.

>> Terrorist beware The Durham University spinout firm Kromek, a developer of X-ray and 3D devices to pick out suspected terrorists at countries’ points of entry, has gained a foothold in the USA with the purchase of Nova, a 26-year-old Californian firm employing 10 staff working in similar fields. Kromek, under chief executive Arnab Basu hopes to see a £12m turnover in the next 12 months.

>> Frankly, a success Contact centre and fulfilment specialist Spark Response has won extended contracts and ongoing partnerships worth more than £30m to keep busy at Gateshead over the next four years. Managing director Peter Slee says: “Securing contracts of this value so quickly is almost unheard of in our sector – especially in this uncertain economic climate.” The firm expects £12m turnover this year. Its successes include a partnership to support EthicalSuperstore.com, the UK’s leading online retailer of ethical, fair trade and eco-friendly lifestyle products. This £2m or so contract over four years, won from competition, transfers the campaign to Spark’s Follingsby Park location from an in-house operation nearby at Team Valley. Other organisations it supports include E.ON, Red Direct, Cancer Research UK, Soap and >>


Cost oF inForMAtion sECuritY BrEAChEs soAr

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ORTH East companies are trailing the rest of the world when it comes to their planned spending on information security, according to Neil Austin, risk assurance director at PwC in Newcastle PwC’s 8th annual Global State of Information Security Survey, conducted in conjunction with CIO and CSO magazines, shows that less than a third (31%) of UK companies plan to increase spending on information security over the next year, compared to just over half (52%) of the overall global respondents. This is despite the fact that 60% of UK companies said economic conditions and the increased number of threats continue to drive information security spending. The survey, the largest of its kind, sampled some 13,000 executives and information security professionals around the world, with 640 polled in the UK. In the post-recessionary climate, it is perhaps not too surprising that North East businesses are less willing to spend on security. Yet such spending restraints could seriously undermine the ability of organisations to protect their most sensitive data.”

IN THE POST-RECESSIONARY CLIMATE, IT IS PERHAPS NOT TOO SURPRISING THAT NORTH EAST BUSINESSES ARE LESS WILLING TO SPEND ON SECURITY Outsourcing and supply chain concerns are also identified as significant drivers of security spending by the survey, with the UK out of step with the global trend. A larger proportion of UK respondents said their business partners (68%) and suppliers (66%) had been weakened by economic conditions. Globally, the survey notes that over the last four years the business impact of security breaches – including financial losses, brand and reputational damage – have more than tripled in some cases (up by as much as 233%). As if protecting data across applications, networks and mobile devices wasn’t complex enough, social networking is presenting companies with a new frontier of risk. Few, however, are adequately

prepared to counter this threat. In the UK, only 32% of organisations have implemented the necessary technologies needed to facilitate the secure use of social networking and other Web 2.0 sites. Lack of focus on social networking can expose organisations to a variety of risks, including loss or leakage of information, damage to a company’s reputation, illegal downloading of pirated material and identity theft. Social networking will increasingly play a significant role in how business gets done and the real challenge will be how to securely integrate the use of social networking technologies into traditional operating models.

For further information contact Neil Austin, risk assurance director at PwC, Newcastle on 0191 269 4029 or email: neil.austin@uk.pwc.com

Professional Development Programme Aimed at fast-track and first-line managers, this part-time programme focuses on you as an individual and looks at your development as a professional manager. The programme develops knowledge, skills and behaviour that will underpin your career development in any area of management. This is a practical programme that offers mentor support and enables you to learn alongside participants from a range of organisations. It leads to a Diploma in Management & Leadership, awarded by the Chartered Management Institute. The next programme starts in March 2011. For further information please contact: Management.development@durham.ac.uk, www.durham.ac.uk/dbs/mdc or call 0191 334 5547.

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BUSINESS QUARTER | AUTUMN 10


NEWS

AUTUMN 10

Glory, FitFlop and Running Bare. Spark Response is saving money as well as earning it – with quality manager Lyndsey Pearson a key element here. Her good housekeeping is largely credited for saving of £50,000 in running costs over two years. This has come through reduced use of energy and recycling. Carbon emissions have been slashed by 12 tonnes a month on average.

>> Clinkard steps out The Stockton shoe group Clinkard, under chief executive Charles Clinkard, grandson of the founder, has almost doubled its pre-tax profits and expects further progress. The firm, started as a shoe shop in Middlesbrough in 1924, now has around 35 outlets between Bristol and Fife.

>> Green cars progress Elektromotive has created a Charge Your Car scheme newly introduced to help drivers find and use charge points, access customer support and collect information on their electric vehicle’s charging history. Charge Your Car is the new name for the North East’s Plugged-In Places project. Drivers register on www.chargeyourcar.org.uk to receive a pack that includes their personal electronic tag for opening and using charge posts, and giving free parking while charging.

>> Tracking success Rail wi-fi pioneer Nomad Digital has a contract from train builder Talgo to provide broadband services across the USA and Canada between Vancouver and Oregon – a follow-up to an earlier launch on the Amtrak Acela fleet and contracts in Utah and Mexico. The Newcastle firm has received a further £1.5m investment for global expansion, part of which will go to setting up offices in the US.

>> Films win backing NorthStar Ventures, a venture capital specialist in creating and building early

BUSINESS QUARTER | AUTUMN 10

stage high-growth businesses across the North East has invested £101,500 in Newcastlebased Indie Stone City’s thriller film Break the Fall and £50,000 in Newcastle-based Meerkat Films’ coming documentary about camel racing in Oman. With Northern Film & Media, Northstar Ventures is backing at least 18 media projects over two years.

Easy ahead: Platform supply vessel ER Georgina, one of two German sister ships given clearer vision by South Shields firm Solar Solve Marine

>> Clearing the course Solar Solve Marine at South Shields has provided anti-glare screens for the wheelhouse windows of sister ships ER Georgina and ER Athina, platform supply vessels newly built by STX Europe at Brevik in Norway. Both vessels are owned by the Hamburg shipowner ER.

>> Training stepped up TAS Engineering Consultants at Stockton plans 25 new jobs following its acquisition by US-based GSE Systems.

>> Big savings on water A system of monitoring to save water has put Sedgefield firm Demeter Ltd into business. Schools, local authorities and NHS trusts have reported favourably on the innovation. Launched with support from the North East Business and Innovation Centre (BIC), the system called Utilities Manager was tried at a Washington school. It identified a leak costing the school more than £10,000 a year in

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unnecessary water bills. Director Andy Smedley says: “The system not only allows a monitoring of consumption levels but also highlights problems such as leaks, which can then be repaired promptly.” The software was developed after Smedley attended a development programme run by the North East BIC, as part of Sunderland’s Software City project.

>> Home working grows One North East’s pilot project, the Home Working Fund, has created 260 jobs in the region in eight months and expects to make it 360 new jobs in two years. Through the fund a new inward investor has come to the region, a local business is now speeding its growth plans, and a call and contact centre will try home working for the first time. Homesource UK, 2Touch, and Agile UK are latest participants in the scheme, managed by Entrust, to encourage firms to have workers operate from home.

>> A new face on it More than 100 jobs have been saved at Stanley in County Durham through the management buyout of a firm making cosmetic packaging. Managing director Raymond Oliver has led the team sustaining the 110 jobs after a six-month battle to keep open the factory. The company which has been renamed Sone Products Ltd was originally part of the German GEKA Brush GmbH company. Several business support bodies assisting the MBO were headed by County Durham Development Company (CDDC).

>> Apprentices for SMEs A business has been launched to help North East employers take on more apprentices. Apprentice Consultancy (AC) in Newton Aycliffe is targeting SMEs under the Government’s £150m scheme to create 50,000 more apprenticeships.


COMPANY PROFILE

AUTUMN 10

Enterprising thoughts

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Woud like to explore a fundamental issue for businesses going forward. How do we harness the talents of young people as they leave the education system and enter the world of work? Depending on who you talk to, there is a real dilemma facing young people today. Graduate jobs are few and far between, this year over 150,000 students across the UK have missed out on a university place and with record results for GCSE’s do students really want to take the chance of rejection in two years time? The question we all should be asking is what is the business community doing to help? In the North East we have a pool of talented and enthusiastic young people who are searching for a way forward. This is now the ideal time to reassess your company’s needs in the short and medium

BUSINESS QUARTER | AUTUMN 10

term. Taking on new staff eager to learn and develop new skills is one way to develop talent which is home grown and understands the way your company works. There are many ways you can take on this new talent, but have you ever considered an apprentice? Gone is the old system of youth training schemes and in its place is a new range of apprenticeships offering over 190 different skills. Some apprenticeship programmes also provide funding to help with wages and training costs. F or companies in the East Durham area, EDBS provides a free Apprenticeship Brokerage service to source, prepare and support candidates into work. So with support like that on offer, shouldn’t you at least consider how apprenticeships, local talent and enthusiasm could boost your business going forward?

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Peter Chapman, EDBS Chief Executive www.edbs.co.uk, 0191 5863366


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AS I SEE IT

AUTUMN 10

When did you last value your staff? Coming out of recession and preparing for an upturn, senior management must work well together, or a high price will be paid. So says Richard Nugent, a leadership coach who works with global blue-chip organisations and top football clubs from his North East base Coming out of recession is one of the most dangerous times for businesses. They need new working capital and training, and existing staff can become footloose after staying put during the downturn. Loyalty shown during the hard times may not be everlasting. So what should directors do to ensure that loyalty is retained as the economy picks up? Employees want from their leaders honesty and intergrity – that they do what they say on the tin. So senior leaders must have a clear vision for the next five years and must recognise the purpose. And they must live and breathe the promises made to their staff and customers. People sometimes over complicate the meaning of “brand”. Your brand is your promise to the key people in the organisation – customers, staff and clients. Break these promises and you will disappear. The two biggest lies in business today are “our customers are our heart and soul”, and “our people are our greatest assets”. These phrases or similar are often included in the values of many organisations as soon as a recession bites. Yet people are made redundant, salaries cut, pensions restricted. All this will impact hugely on customer service. It’s hardly living the values. Does this sound like

BUSINESS QUARTER | AUTUMN 10

your business? Then you’d better start recovery work now. Recognising your talent is essential. Your most talented people are the most likely to leave when the job market picks up if they haven’t felt valued during the downturn. They may quit just when you need them – as business picks up again. They’ll be taking their talent, experience and knowledge of your organisation to your biggest competitors. Having identified your talent, you must ensure they feel valued, feel they contribute to the overall success of the organisation. You must also ensure they are certain they can have the opportunity to progress their career in your organisation. Cheap gimmicks like discounted gym membership don’t work. They are seen as a bribe and affect loyalty negatively. Development of managers and leaders may have been seen once as a soft option. Now it is crucial to the success of any organisation as the economy grows. Recent research indicates it costs around £16,000 to replace one middle manager in recruitment, lost productivity, etc. Can your business afford this? One of the quickest ways a senior management team can hinder the recovery of the business is to allow the challenging times of the last three years to affect their working relationships with each other.

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I have worked at board level at some of UK’s top businesses and seen the negative effects of political in-fighting, one-upmanship and parochial thinking. The focus for the senior team has to be; what do we need to do together to enable this organisation to perform at its best? If it means setting egos aside then that’s your job. Many companies will be starting this new era with new board members either following a merger, a management buyout or restructuring. If that leads to a lack of clarity or to hostile working relationships you can be sure it will be reflected throughout your organisation. One of the biggest mistakes of senior management is to underestimate people’s ability to pick up on negative, unhealthy relationships within the senior management team. Pretending to walk the walk won’t do. If even one person in the organisation picks up that you are not all facing the right direction, the rest of the organisation will find out quickly and probably your competitors will too. Smart organisations have been looking after, and communicating well, with all their people throughout troubled times – even if those times have included redundancy and restructure. The less smart have assumed people are just happy to have a job and think it doesn’t matter how they are treated. They will suffer in coming years as their reputation dives. One organisation I met recently put their staff survey results on hold. They knew the results were going to be bad. That indicates a lack of care about the people forming the backbone of the business. Ask yourself as a boss: “Am I really doing the job I’m paid to do?” During challenging times, often the leadership team will roll their sleeves up, get stuck in and do some of the work


AUTUMN 10

useful as a short term strategy. But your job is to lead the organisation. Without that mindset you will continue to firefight. My favourite definition of the difference between a manager and a leader is that a manager works in the business and a leader works on the business. Check your diary for the past two months and the next two months. Where is most of your time spent? Is it focusing on strategy, building future business, ensuring that future economic downturn affects the organisation less through learning the lessons of the past three years – or is your time spent in meetings about policies, delivery times and lower level business issues? While the current recession has been labelled the worst since the Depression, there are some notable differences. During that time people queued around the corner to get bread. In the midst of the current recession people have queued around the corner to buy iPads. People are still spending on the things that they really want, as opposed to what they really need. If any of your competitors continue to get good results then the job of a leadership team is to regain the competitive edge. It’s not that business isn’t out there; it’s that it’s not coming to you. How can you get new ideas, explore new markets or create new products? Why not ask the people who are likely to know best, the front end of your business who serves your customers and your clients? When the pressure’s on, senior people often hide, go from meeting to meeting and distance themselves from the very ones who can give them the most valuable information. A common theme among organisations that do continue to get outstanding results in all economic climates is that its senior management is in direct contact with their front-line people. As slow growth continues to be predicted, even the possibility of a double-dip recession, organisations can break the trend in ways that are both low cost and adding value in a whole range of ways by tapping into the people who form their organisation. Money isn’t always the answer. Research shows that if people are happy in their job they will only leave for another company if it

AS ISEE IT

One of the biggest mistakes of senior management is to underestimate people’s ability to pick up on negative, unhealthy relationships within the team

Walk the walk: Richard Nugent emphasises that loyalty works both ways offers a 30% or more pay increase. Bonus systems often fail because when targets cannot be achieved, people get demotivated as they are not getting rewarded financially and they see these incentives as part of their remuneration. Stop them and it will feel to them like pay cut. Consider any of the credible research on staff engagement and loyalty. You’ll find money is never in the top five most important things, except to the lowest paid. Now’s the time – if you haven’t done it already – to add emphasis to the value of your

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workforce, otherwise what you’re doing is using your money to train staff for competitors. Loyalty is the greatest reward an employer can get from staff. If they’re willing to give loyalty, return the courtesy. Acknowledge their worth and reward in an appropriate way, whether in communication, respect or career development. n For audio discs or to contact Richard Nugent, email richard@kaizen-training.com

BUSINESS QUARTER | AUTUMN 10


ENTREPRENEUR

AUTUMN 10

in association with

Happy in a hole Now that John Dickson has both feet back on the ground, innovative ways of moving an industry forward have suddenly emerged. He tells Brian Nicholls how an old school friend made it possible Once a high flyer in both senses, genial John Dickson works now with feet firmly on the ground – and often below nature’s contour. He’s hands-on chairman of Owen Pugh Group, owner among other things of Marsden Quarry, a remarkable man-made landscape between Whitburn and South Shields. And although relatively new to contracting, Dickson is winning admiration for infusing high technology into one of our oldest industries, enabling the group also to break into the North East’s 50 fastest growing companies with average turnover growth of 14.6%. A long-term challenge will be to advocate a reincarnation for this quarry when, like others lying nearby, it finally closes. Holes in the ground fascinate. This one’s awe-inspiring – nearly 190ft deep, its 12 million cubic metres of space evidence of more than 100 years’ work there. It’s gouged from the northern most tip of a seam of magnesian dolomitic limestone that comes up from South-West England and ends here. Thirty years hence you could imagine it a permanent location for Mad Max-type films. Or, if the climate keeps warming, it could be sculpted into an amphitheatre bigger than the 2,000-seat, 2BC one that Cyprus restored on the coast at Kourion. Dickson considers suggestions attentively as he escorts visitors into the vast bowl. “We’ve still a 10 or 15-year life ahead to extract here, and five or 10 years beyond to import material for the quarry’s restoration,” he points out. “Into what? Who knows? The plan for now

BUSINESS QUARTER | AUTUMN 10

involves about a third, creating an interesting landscape with slopes, grassland, and exposed limestone escarpments. This would recreate primary limestone grassland, but that’s as far as it goes. In the end, we’ll have 75 to 80 acres of estate in an interesting position. We may try something more enterprising than just leave it standing.” A nature reserve? Foxes, voles, butterflies and moths already frequent the quarry despite the excavators, dumpers, crushing and screening machines, and the heavy trucks trundling past piled with aggregate for overseas. Three varieties of orchid – bee, pyramid and fly – also flourish, but the original Marsden Quarry nearby already provides a reserve. Trow, another quarry nearby, has disappeared under the coastal erosion rampant here. How intensely productive this area once was, with a colliery reaching seven or eight miles under the sea. Lime was made at nearby kilns for around 100 years; a paper mill stood nearby. Besides Souter lighthouse (now a museum beside the coast road from which there’s no glimpse of Owen Pugh’s pit) an entire village with streets and a shop thrived between Smugglers’ Cave and Lizard Point. It was largely demolished in the 1960s – after 86 years or so – captive to the North Sea. “All that’s gone except for this quarry,” Dickson says with empathy. “And here we are, tucked away in a green belt. We’ve half-adozen ideas of our own about what might become of the quarry site. I consider this my retirement project.”

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Indeed it will be important space in a conurbation. “Lots of people might want to come and use it,” he suggests. But there’s already a golf course nearby. So there’s more to Owen Pugh Group than eponymous yellow and maroon liveried trucks on the region’s roads suggest. Only a fraction of the firm’s 296 employees work at the quarry. Otherwise they’re into demolition, landfill, earthmoving, civil engineering of all kinds, also plant and vehicle hire, and training for the industry. Not many know, though, that the quarry makes Owen Pugh Sunderland port’s biggest exporter in tonnage. Germany, Holland, Denmark and Poland all want Marsden rock, once crushed to a constituency of a good apple crumble, as Dickson describes – “very soft and high quality, for spreading on fields to add minerals to the soil”. The 130,000 tonnes a year exported is big business for the company actually based at Dudley, East Northumberland, representing 30% of turnover. The quarry also yields dolimitic limestone for aggregate in construction, a full range from crusher run through to granular sub-base and stones of 10mm upwards. But quarrying offers a relatively low value product and, amid fierce competition, transport costs are critical. County Durham’s quarryfields at Coxhoe and Thrislington are in there pitching. Northwards and westwards, the competition looms at Longhoughton, near Alnwick, and Barrasford. So Owen Pugh’s >>


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ENTREPRENEUR

BUSINESS QUARTER | AUTUMN 10


ENTREPRENEUR

AUTUMN 10

We all stand to gain Douglas Kell, director of the Civil Engineering Contractors Association (North East), which represents 85 contractors from Berwick to Whitby, says: “John Dickson has brought lots of bright ideas into the industry from outside. We all stand to gain.” Dickson, as vice-chairman of this association and chairman of the region’s construction skills group, wants to attract more young people into civil engineering. With the shakeout in local government under way, applications from qualified and experienced personnel are growing. But the industry also needs a steady entry of young recruits to sustain skills and expertise longer term. Thirty years ago labour was often weaned off the farming community, whose young people had an adaptable and instinctive feel for machinery. However, says Dickson: “Because of Health and Safety considerations, no-one under 18 is now allowed near machinery, so you can’t even offer meaningful work experience.” His point is underlined by Derek Coe, the quarry’s deputy manager who has been 36 years with the firm. His father’s family background was farming and he went quarrying. When he took Derek along as a lad to show what goes on he was instantly converted. “There isn’t that sort of opportunity now,” Coe confirms. “Yet if young people saw first-hand the openings in this industry I’m sure there’d be more readiness to join. Even people who’ve been away from it 20 years or so, working in offices of local authorities perhaps, are surprised to see how the job’s tackled here today.” Tellingly, Owen Pugh’s staff turnover is low. The company tries to retain elements of family business. “Members from three generations of one family worked here until the grandfather recently retired,” Dickson remarks. “Some employees have been with the company for 40 to 45 years. We’ve a couple of husband-and-wife teams and father-and-son teams too.” Another Dickson goal – he encourages open days for visitors – is to see more women join the industry. He was bitterly disappointed the firm was pipped at the post recently in recruiting a woman truck driver.

core market (no pun intended) is Tyneside and South-East Northumberland. “Many quarries in the region are mothballed and some you couldn’t open again,” Dickson says. “Ours is spectacularly well positioned. Fortunately, we can take advantage.” Buying it 10 years ago was one of the smartest moves made by the firm founded in 1946. It became available when Tilcon bought out

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Tarmac, changing the group’s name back to Tarmac since it was considered more familiar. The competition authority then said the buyer had to divest quarries. Marsden was one. Owen Pugh, then the quarry’s biggest customer, was approached. Dickson explains: “Graham White, my business partner, had the foresight to say yes. It was picked up for a reasonable price because they didn’t

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want to sell it to any major competitors.” It was suggested then the quarry might have only four or five years’ life left. Tarmac had wanted to extend quarrying and had stressed a limited life for what existed to bolster its application. “We were sceptical,” says Dickson. “And 10 years later here we still are working away at it. It’s our biggest, most dramatic piece of landscape, yet many drive past, not realising its existence. It has a low impact on the surrounding population – we get some complaints when the wind whips up the dust because quarrying is inherently dusty, but we work hard to minimise that.” Owen Pugh – there was such a man – was working in 1946 for Lynwick Estates, a firm verging on bankruptcy. Pugh said at the creditors’ meeting that if they backed him he’d take over and run the business, pay off debts and provide a bright future. That’s what happened. He reformed the company as Owen Pugh Ltd, took all the equipment, paid the debts and away it went, a family firm hiring plant and working on the fringes of opencast business throughout the 1950s and 1960s. In 1952 the firm relocated to its present headquarters on part of Dudley’s colliery yard near Cramlington. In the late 1960s and early 1970s it diversified into contracting. Graham White joined in 1972, and has driven the contracting side steadily upwards. By 1997 when Owen Pugh died, his two sons were running the business and did so till 2005, when they sought an exit. Dickson recalls: “Graham and I jointly put together a management buyout deal. We took the company over and have continued to grow since. We’ve acquired other companies and are well positioned in North East civil engineering.” Though steeped in industry, Dickson had previously been outside civil engineering. He had worked for big names though: BICC cable company (1983) for example, then NEI (Reyrolle) at Hebburn. He worked abroad for nearly four years, took a career break in Venezuela, then returned to be part of the Rolls Royce Industrial Power Group. After a takeover by ABB (then the French multinational group Alstom) Dickson


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Buckets of experience: John Dickson joined Owen Pugh in 2005 to be part of the buyout

”I had no experience of civil engineering, quarrying or suchlike,” Dickson muses. “But I’ve never believed you need experience for anything you want to do in life.”

ENTREPRENEUR

found himself a global engineering director in Alstom Power’s boiler division. “I spent a lot of time in aeroplanes,” he recalls. “It’s not a terribly satisfactory way to earn a living. I covered offices in North America, three in Europe and one in Delhi – back and forward between those places all the time, it was about as close to purgatory as you can get. By good fortune I had got to a global position. But personal life was less fun; we had three children by then and I wasn’t seeing any of them, or my wife. We decided to make a change.” Looking for options, he was lucky. An old school friend arranged an introduction to the Pughs and their business. “I got on very well with them and they with me,” he says. “The rest is history. It was a wonderful opportunity.” It was indeed a homecoming. Although John Dickson was born in Sussex and he and his wife Anne had been living near Buxton in the Peak District, his family were originally from North Shields and Cullercoats, and he at 11 had returned with them to Tyneside and the Royal Grammar School. “There’s no better place than the North East,” he declares. Anne, though from Kent, feels settled too at home now between Hartburn and Scots Gap, even during the testing winters. And of course, John sees much more now of Thomas, 12, Carolyn, nine, and Hannah, six. ”I had no experience of civil engineering, quarrying or suchlike,” Dickson muses. “But I’ve never believed you need experience for anything you want to do in life.” He joined the firm in May 2005 with an “ubiquitous” title of general manager. “To be fair,” he says, “I joined to do the management buyout. We did that in October 2005, so we’re on to our fifth anniversary. We’ve had lots of fun. It’s tough, yes, but we’ve done quite well.” Turnover to March 31 rose £0.1m to £20.4m, and while post-tax profit fell to below half 2009’s figure, Dickson points out that staff retention got priority over profit. Despite civils and construction being one of the sectors worst hit in recession, the firm bought HCS Drain Services, put workers on short time during June only, and even increased the

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workforce a tad to 248. The aim now: a £25m turnover this year and 300 employees eventually. Recently Owen Pugh has worked on Nissan’s new battery plant and BEA Systems’ new factory at Washington. It has supported Durham Wildlife Trust on its wetlands project at Low Barns Nature Reserve, and restored the River Till floodplain in Northumberland. Dickson’s one of an increasingly rare breed, a relatively young pipe smoker. He says it gives “a little solace in an ever changing world”, but it’s he who at 48 is ringing many of the changes in contracting. Its £15m fleet of trucks, bulldozers and excavators are enhanced by vehicle-mounted space satellite guidance and computer-relayed instruction. Laser equipment, coupled with the digital design and mapping technology, saves time, removes need of manual pegging on site, and gives accuracy to 15mm. No quarry blasting, no backbreaking labour, but breaking tools like dentists’ giant drills drive through rock in seconds. Dickson explains: “Our advances aren’t our inventions but our combination of technologies to get full value from them. We’re trying to push boundaries.“ n

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To find out more please visit www.entrepreneursforum.net

BUSINESS QUARTER | AUTUMN 10


COMPANY PROFILE

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The National Apprenticeship Service works with a number of intermediaries to increase the number of employers actively engaged with Apprenticeships

ForMEr ApprEntiCE tAKEs LAW into his oWn hAnDs

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EMEMBERING his own time as an apprentice Legal Executive 20 years ago has encouraged a County Durham based solicitor to offer two young people Apprenticeships in his own successful law practice. Providing legal assistance to victims of accidents, Stephen Gowland happily credits the Apprenticeship programme with providing the right blend of practical training, theory and nationally recognised qualifications employers are looking for. “I began my career on a vocational training programme with the Chamber of Commerce when I was seventeen years old and was placed with a law firm in Durham. “As part of the Apprenticeship, I studied the Institute of Legal Executives (ILEX) course part time alongside my day job en-route to qualifying as a fully fledged Legal Executive and later on as a solicitor too. I established my own practice, ILS Solicitors in 2004 and have been a director of the Institute of Legal Executives for six years.” “Although today’s Apprenticeships are slightly different, with a greater variety of career opportunities to choose from, the principle of gaining high quality work-related skills and earning while you learn are the same. In particular, I believe that my career flourished as a result of being able to apply my knowledge in work related situations,” explained Stephen. Following in Stephen’s footsteps is Stephanie Taylor, 22, who has completed her Apprenticeship in Business and Administration, with support from the North East Chamber of Commerce (NECC). Stephanie is now considering ILEX qualifications to take her learning further, whilst providing support to new apprentice Eleanor Pickering aged 17.

BUSINESS QUARTER | AUTUMN 10

AS AN EMPLOYER, APPRENTICESHIPS PROVIDE AN IDEAL WAY OF TRAINING SOMEONE TO YOUR OWN STANDARDS AND WAYS OF THINKING Stephen Gowland, practice owner with apprentices Eleanor Pickering (left) and Stephanie Taylor (right) Eleanor is also a Business and Administration apprentice and is being supported in her training by ITEC North East. As Eleanor takes on responsibility for a broad range of day to day administrative tasks, Stephanie’s experience is helping to free-up Stephen’s time to such an extent that he has been able to increase the volume of business within ILS Solicitors, based at Meadowfield, County Durham. “I sit on the national council for my professional body so I have a good overview of what employers are looking for and Apprenticeships meet the brief,” said Stephen. “Speaking from personal experience, and as a small business, I have nothing but praise for the Apprenticeship programme. Apprenticeships help to kick start a young person’s career in their chosen field, whilst getting a foot in the door with an employer. As an employer, Apprenticeships provide an ideal way of training someone to your own standards and ways of working.”

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To help employers recruit the right people, the National Apprenticeship Service (NAS), works closely with a number of intermediaries to increase the number of employers actively engaged with Apprenticeships. John Wayman, regional director, National Apprenticeship Service, said: “Apprenticeships cover a vast range of occupational areas. What’s more, there is a lot of support out there for employers who are looking to recruit an apprentice. One way of doing this is through Apprenticeship vacancies, a free online system which allows employers to advertise posts to a wide range of interested applicants and enables individuals to search and apply for current vacancies.”

To find out more about taking on an apprentice call the National Apprenticeship Service on 08000 150 600 or visit apprenticeships.org.uk


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COMMERCIAL PROPERTY

AUTUMN 10

Tesco continues to conquer, Otterburn Mill flows south, Enterprise Hubs are the centre of attention, Metrocentre picks up an Apple and hotels are developing faster than they can change the sheets >> Tesco sets out its stall Supermarket giant Tesco plans to create up to 4,000 jobs with a £400m investment in the North East over the next few years. It has most recently opened at Berwick, taking on 209 staff and is opening at Bishop Auckland too. It is also creating 1,000 jobs on Tyneside to staff its new Tesco Bank’s contact centre at Quorum Business Park. Other sites will be at Gateshead, Sunderland, Middlesbrough, Bedlington, Stanley and Peterlee – all adding to 36 Tesco stores giving work to 4,000 already. But South Tyneside has aborted consultations with a Tesco-led consortium previously favoured to transform Hebburn’s town centre, stuck in the 1960s. Housebuilders and regenerators Bellway and Gentoo were also in on this £40m scheme, which included a library. Breakdown came with repeated delays and proposed amendments. Tesco got a better reception in Durham County, where the council overruled its planning officer and approved the application for a 24-hour superstore on the former steelworks site at Consett. This 60,000sq ft store will be one of Consett’s biggest investments ever, bringing also 250 new full and part-time jobs. An existing Tesco a mile away at Delves Lane will close, but the 150 staff there have the chance to transfer. An opening is expected before Christmas next year.

>> IDS goes for growth Immunodiagnostic Systems (IDS) has spread into a second building at Boldon Business Park, giving the manufacturer of advanced medical kit space to double its workforce of 100. The new lease provides 20,373 more square

BUSINESS QUARTER | AUTUMN 10

feet. Annual result to March 31 showed sales 49% up to £37.1m with profits up by 114% to £314.9m. Chief executive Roger Duggan is standing down now after leading the company for 14 years but will remain on the board as deputy chairman and head of international business development. His successor is chief operating officer Ian Cookson. DTZ acted for IGP Investments, King Sturge for IDS.

capital value of exposed and inefficient buildings will fall considerably once all commercial properties have to carry an energy efficiency rating on their sales particulars.“ Public buildings throughout the North East, however, are being moved in the right direction already. They could soon have solar panels installed extensively. The North East Improvement and Efficiency Partnership (NEIEP) is helping to guide the way to reduced carbon emissions and energy costs. Members of the North East Chamber of Commerce (NECC) and representatives of other regional organisations have also discussed input for a new NECC policy report on energy due out in December.

>> Mill on the move Marc Blomfield: “Some building values will fall considerably.”

>> Cold shoulder for exposed offices Cost cutting business owners are pushing energy efficiency higher up their agenda when considering potential new premises. Reports from the Department of Energy and Climate Change predict energy bills for businesses could rise by 26% in the next decade under the Government’s plan to cut greenhouse gases. This is already leading some firms to look closer at the energy performance of their offices. Owners thinking about relocating will benefit from energy efficiency information being made available this December, when all commercial properties will have to carry an Energy Performance Certificate (EPC) graph. Marc Blomfield, managing director of The National EPC Company, predicts: “The

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The company behind Otterburn Mill has opened a third store, its first outside Northumberland. It has secured through Carver Commercial premises formerly a farmshop at Lakeside Country Cafe, Ellerton, between Northallerton and Richmond in North Yorkshire. The company is owned by Euan Pringle, a member of the famous Scottish woollen manufacturers and already operates at Rothbury too.

>> No mad rush for the office Newcastle offers best-cost savings for businesses relocating from London, a study shows. It has beaten other English cities in a report that tells businesses they could save more than £133m over 10 years if they relocate from the capital. Yet office property markets have been slow in Newcastle this year, DTZ reports. Agents Cushman & Wakefield (C&W), >>


AUTUMN 10

COMPANY PROFILE

Helen Warden and Andrew Wilkinson established a residential letting and property management business in Newcastle just as the recession was really biting. Over two years later, DK Lettings is gaining a reputation as one of the good guys in a sector that is still unregulated. Helen and Andrew explain their commitment to raising the standards of the industry.

TRUST IS ALL IN BUSINESS

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HERE is a theory that if you launch a business in a recession and can make it work, when the good times return, it will really take off. DK Lettings, located in Mosley Street, is already ahead of the curve and its two co-directors are looking forward confidently to 2011 with plans to not only recruit more staff, but relocate to premises where they have space to extend their range of services. However, given that neither had any direct experience in the industry before launching DK Lettings, their success is all the more remarkable. Helen says: “We established the company in 2008 after identifying the need in the North East for a professionally run and fully accredited residential letting and property management service. As a sector which is not regulated and without a legal requirement for industry specific qualifications or accreditation, we could see this so often led to a patchy service for both tenants and landlords. “We knew we could raise the bar and since then, we have spent a considerable amount of time and effort pursuing that goal. We obtain most of our business through word of mouth and we are fiercely proud of the reputation we now enjoy - a direct result of our absolute commitment to raising the standards of the industry.” Andrew adds: “Our vision has always been to create a company that offers true value to clients and provides a service they can genuinely rely on. Trust is all in business and in placing it at the heart of our business dealings we have formed excellent relationships with many high profile clients. “Along with our licensed membership of the Association of Residential Letting Agents (ARLA) we are also very proud to have been awarded ISO

in much the same way as our core business with investors requesting bespoke property sourcing. Our reputation is spreading internationally too, as opportunities arise to work with partners in various European territories, so we are delighted with our progress so far and excited about the challenges which lie ahead.”

OUR VISION HAS ALWAYS BEEN TO CREATE A COMPANY THAT OFFERS TRUE VALUE TO CLIENTS AND PROVIDES A SERVICE THEY CAN GENUINELY RELY ON DK Lettings is a trading name of Davis Keep Limited which offers property solutions for private, corporate and investment clients throughout the north east region.

Helen Warden and Andrew Wilkinson of DK Lettings 9001 certification which provides independent recognition of our high standards of service and quality of business procedures. We know of no other letting agent to have this accreditation. “Now, our consultancy services are developing

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To find out more about DK Lettings go to www.dklettings.co.uk or email enquiries@dklettings.co.uk Churchill House, 12 Mosley Street, Newcastle upon Tyne NE1 1DE. Tel: 0191 230 8083

BUSINESS QUARTER | AUTUMN 10


COMMERCIAL PROPERTY analysed 14 places outside London, including Manchester and Birmingham, where relocation of a head-office with 500 people out of the capital could give cost benefits. Ben Cullen, head of the firm’s national office agency team, says a move to 50,000 sq ft (4,645 sq m) elsewhere in England would be best at Newcastle, given costs of professional fees, fit out, project management, redundancy costs, recruitment costs and relocation allowances paid to employees. He says Cobalt (which is actually North Tyneside, not Newcastle) exemplifies the quality buildings and skilled workforces on tap. It is the UK’s largest office complex, could become the largest in Europe too after work is completed on a new office block for 700. The park, a Highbridge Properties venture, can already accommodate more than 10,000 workers. The existing 9,000 is predicted to rise to 15,000 over the next five years. Private sector occupiers include Procter & Gamble, Banco Santander and Orange. Public sector organisations include North Tyneside Council, Northumbria Healthcare and Job Centre Plus. C&W reports Newcastle as having the lowest average wage bill in England however, DTZ reports take-up being muted in Q2 despite four deals. DTZ envisages a further cut in prime headline rents to £19psf by year-end. Wellbar Central is seen as a gauge as to whether further cuts will be needed to secure lettings. Tony Hordon, offices director at DTZ in Newcastle says: “General uncertainly around the economy is creating weaker occupier appetite.” Chartered surveyor Bill Naylor in Newcastle feels Quorum’s Business Park’s success run of occupancies reflects the Enterprise Zone incentive of five years rent free. This, he believes, impacts adversely elsewhere but especially in Newcastle city centre. He regrets EZs have recently created little industrial estate. The £49m sale of One Trinity Gardens on

BUSINESS QUARTER | AUTUMN 10

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the Quayside in Newcastle has proved the biggest city centre deal ever. Crown Estate sold it to Standard Life Investments, along with nearby Stockbridge House. Occupants of the seven storey OTG include lawyers Dickinson Dees, business advisors Deloitte, and bankers RBS. Stockbridge House has offices, a car park and Piccolino Restaurant. DTZ represented the buyer. Turner counsels at DTZ however: “Investor caution will apply to most secondary stock will remain vulnerable.”

>> University expands Durham University is to invest £55m in a new gateway development project over three years, £48m of which will be for a library extension, new law school and student services building on Stockton Road. Construction is led by Laing O’Rourke, with Space and PH Partnership of Newcastle and Durham respectively, the architects. Completion is expected in 2012.

>> Hotel builds gather pace

Taking shape: The Enterprise Hub offers modern space to smaller businesses at Aycliffe

>> Business on the Hub With housebuilding largely in the doldrums, Carlton & Co is driving commercial activity for smaller businesses. It has six facilities taken up or spoken for in its first of several planned Enterprise Hubs which could take in upto 50 businesses at Aycliffe Business Park in County Durham. The company, which Norman and Craig Paterson run from there, acquires distressed properties to turn into modern workspace and homes. In business since 2001, the firm has fulfilled more than £15m worth of development and contracting. Norman, a chartered builder, and Craig, a former regional production manager for Bryant Homes, have 45 years’ experience in the industry. Norman says: “We feel small and medium-size businesses should have the chance of stylish office space. This space is being eco-led.” Support services are also offered.

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Hotel development gathers pace in Newcastle with two new projects under way. Budget group Sleeperz is seeing its second UK hotel come up – a 98-bedroom, six-storey building – on Westgate Road, near the Central Station. And InterContinental Hotels has approval to start building next January a 148-bed, four-star Indigo-brand venue in Fenkle Street – beside The Assembly Rooms, and on the site of the former Eagle Star House. The hotel, bringing 80 jobs, is due to open for Christmas next year. Developer is Sanguine Hospitality Management Company. InterContinental also plans a 250-bed, four-star Crowne Plaza hotel that will provide 100 jobs and be a key development of Stephenson Quarter, a 10-acre site of office blocks and flats also behind the Central Station. The Jurys Inn Hotel coming up at Gateshead has been sold to Aviva Investors for more than £19m. The 204-room, five-floor hotel to be completed by September 2011 is near Baltic, on South Shore Road. The forward funding deal gives previous owner McAleer and Rushe Group an initial yield of 7.25%. The vendor was advised by Steerforth and Partners. Knight Frank acted for the buyer. On North Tyneside, a 125-room Hilton Hamilton Hotel is proposed at Cobalt Business Park, also shops and eating venues. But the park already has the Village Hotel opened 10 years ago, also a Travelodge and a Premier Inn. Consultants Nathaniel Lichfield and Partners have objected to the Hamilton project on >>


“The best move I ever made.�

Join the world-class companies based at Quorum Business Park in Newcastle. Here you’ll find free sports facilities, on-site events, plenty of parking and subsidised public transport, all less than four miles from Newcastle city centre. No wonder businesses at Quorum attract and retain so many of the best people.

www.quorumbusinesspark.co.uk


COMMERCIAL PROPERTY behalf of De Vere Hotels and Leisure, owner of the Village. Almost 19m visitors came to Newcastle and Gateshead last year, contributing to a 77% occupancy rate on average in existing hotels. The head of one of these told BQ: “With all this extra competition coming up it will be a fierce battle to maintain existing occupancy levels – unless even more visitors can be attracted in defiance of the cutback in public spending on tourism.” Von Essen Hotels has received approval to add 10 to 14 more bedrooms to Seaham Hall Hotel in County Durham.

For residents: How the new Wynyard Hotel might look

>> Second hotel proposed for Wynyard Plans have been publicly exhibited for Wynyard Golf Club’s projected multi-million pound hotel between Stockton and Sedgefield. It would have 50 bedrooms; a restaurant, tennis courts, a spa, pool, gymnasium, and other recreational facilities. Improvements to the golf clubhouse and course are also envisaged. And 50 upmarket homes are proposed. Stockton Council has received objections to the development beside property tycoon Sir John Hall’s existing new four-star hotel. There are about 800 high-price homes already on the former Wynyard Estate. The Stockton based Jomast Group, whose companies include the golf club, is behind the plan.

>> Rural rousers A policy of the previous government to minimise vacant retail space in recession-hit town and city centres has so far failed,

BUSINESS QUARTER | AUTUMN 10

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according to a legal specialist. Mark Clayton, commercial property partner at Latimer Hinks Solicitors in Darlington, says “meanwhile use” specimen leases published have failed to win enthusiasm among property professionals and others involved in retail lets. But Clayton believes such leases worth adapting to commercial property in general. The lease allows temporary occupation by non-commercial occupiers and minimises costs for landlords and tenants. Benefits to tenants include no rent and no obligation to repair. Landlords, on the other hand, can shift responsibility for paying business rates and the cost of insuring premises to the tenant. Also, let premises are usually more secure than unlet ones.

Entry is free. Forms are available from Sue Doberman, tel: 0191 2210359, e-mail: sdoberman@rics.org. Closing date: before the end of January. Winners will be announced at a dinner next April 15 at the Civic Centre, Newcastle.

>> Teesside estate attracts A 20,000sq ft industrial unit at Teesside Industrial Estate has been sold to Colton Packaging of Leicestershire. Jonathan Simpson at Sanderson Weatherall which made the sale for UK Land Estates, says: “Teesside Industrial Estate has outperformed all other estates in the area over the last two years.”

>> Apple at Metrocentre

>> Pubs change hands

Apple now has an 8,000sq ft store in the lower Red Mall of Metrocentre at Gateshead. Sanderson Weatherall acted for Metrocentre owner Capital Shopping Centres.

Christie and Co has sold three licensed freehold premises in Middlesbrough for clients: The Shipmate, The Bridge Inn and the former Sanctuary nightclub. The pubs have gone to pub corporates. Christie has also sold two licensed premises in South Shields: the Eureka pub and the Eivissa nightclub.

>> Best builds under scrutiny A quest is on to trace the most talented contemporary individuals and outstanding projects in North East property and construction. The Royal Institute of Chartered Surveyors (RICS) is seeking contenders for its 2011 North East Renaissance Awards. These spotlight the region’s top projects and the achievements and success of professionals in the built and natural environments. David Coulson, chairman of the regional board, says: “While building projects are the focus, we specifically highlight talented professionals behind them.” Projects or part-completions of the past three years will be considered, regardless of size or value. Past entries have included small and unusual projects, such as a religious retreat, a cattle shed and a land reclamation site, as well as multi-million pound city centre structures. Winners in four categories also automatically go through to the RICS Awards in London, which Coulson points out has an international element and platform.

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Brighter aspect: Longhirst gets an airier look

>> It’s not all books Ryder Architecture is still winning plaudits for its role in the creation of Newcastle’s new City Library. But, says managing director Mark Thompson: “Smaller niche products are also very important to us.” Indeed it has won a number of projects recently, including the redevelopment of Bolam Coyne, part of the Grade II* listed Byker Wall, also in the city. Other >>


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01429 292888 | business@hartlepoolfe.ac.uk Hartlepool College of Further Education Stockton Street, Hartlepool TS24 7NT Tel: 01429 292888 | Text “feinfo” to 88020 email: business@hartlepoolfe.ac.uk Web: www.hartlepoolfe.ac.uk


COMMERCIAL PROPERTY current Ryder projects include the restoration and development of a new banqueting suite at Ellingham Hall, Northumberland. It is working also on a refurbishment of the People’s Theatre in Newcastle and recently completed £1m worth of redevelopment in Grade II listed Longhirst Hall hotel, conference centre and restaurant near Morpeth. Longhirst Hall, designed by John Dobson, has under main contractor Brims had the ground floor structurally altered, opening up the space for a new-look reception and bar, alongside a new spa.

>> Bright shops plan City folk of working age who retreat to rural areas of the North East make a more positive impact on the country economies than previously recognised, a new study claims. Often they launch new businesses, create jobs and trade with existing firms, the Lincoln University academic Dr Gary Bosworth suggests following his research. His paper, Commercial Counterurbanisation in Rural Economic Development, was published in the journal Environment and Planning A 2010, Volume 42.

>> Woolworth take-up The biggest take-up of vacated Woolworth stores during the past year has been seen in the North East, where the occupation has risen from 10% to more than 55% of the premises.

>> Sweet prospect for toffee factory Brims Construction is preferred contractor in a £6m scheme to convert a derelict former toffee factory into a new centre for creative businesses. The Sunderland firm will provide in 12 months 25 new units of semi-managed office space at the former Maynard’s factory in Newcastle’s Lower Ouseburn Valley. 1NG, NewcastleGateshead’s city development company, has worked on behalf of Newcastle Council and One North East to bring forward

BUSINESS QUARTER | AUTUMN 10

AUTUMN 10

the area’s regeneration programme, focusing on Ouseburn. The conversion is partly financed by the European Union through £3m of regional development funds. One North East is investing £2.75m and a further £250,000 is coming from the city council. Elsewhere in Ouseburn, two out of five office suites at Media Exchange have been taken. Priority Sites, a regeneration arm of Royal Bank of Scotland, was behind the agreements for a total take-up of 4.857sq ft within the £5.2m development. Design consultants Blumilk have taken 2,673sq ft, Allmedia Ltd the advertising, marketing and new media company 2,184sq ft. A third client possibly taking significantly more space may be announced shortly.

Major move: Balfour Beatty will operate a new centre from Quorum Business Park

>> For the customers Balfour Beatty, the international infrastructure group, is setting up a customer support centre that will employ more than 200 jobs to Quorum Business Park in Newcastle. Many of the group’s UK accounting, payroll and procurement services will be centralised there. Ian Dawson, appointed head there from IBM, says recruiting is under way to have the centre running early next year. The group has taken a 10-year lease. CBRE acted for Balfour Beatty and DTZ, Knight Frank and JLL for Quorum Developments.

>> Jewel of a boutique Bespoke jewellery maker Judy Burberry, who imports precious materials from exotic locations, has expanded her business to include the redesign of vintage jewellery at The Gates shopping centre in Durham. In her boutique and workshop, Origems, she

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now puts life into old pieces her customers have inherited or tired of. She sources her materials in Asia and the Middle East, working semi-precious stones with English sterling silver to create her bracelets, earrings and necklaces. Also at The Gates, retail chain Priceless Shoes has opened an outlet in one of the larger units. The Gates has almost doubled its car parking capacity to 475 spaces.

>> Bradley bridges gap The new manager of Land Securities’ Bridges shopping centre in Sunderland is Andy Bradley, formerly centre director at East Kilbride, Scotland’s largest shopping centre with more than 240 retailers. Retail park changes hands London based Palma GVA Property Fund has bought West Denton’s 40,000sq ft retail park in Newcastle from Staffordshire Council’s pension fund for £7m. It expects to develop it further.

>> Cargo Fleet converts Python Properties the Teesside commercial developer is working on a £1.5m project creating 40,000sq ft of new business space at Cargo Fleet building, once headquarters for British Steel Teesside, then Redcar and Cleveland Council. The three-storey building dates to 1916. Peter Broome, partner in Python Properties, says: “We hope we are in some way paying respect to our heritage.

>> Culture draws tenants Listed leisure and retail units to let in Silver Street, part of Stockton’s cultural quarter, are being snapped up following refurbishment and only two shops remain, says Mark Hill, commercial property manager of Jomast.

>> Design on expansion Creative Image Design, in its seventh year, is now in bigger premises on Newcastle’s Hoults Estate. It has quadrupled turnover and taken on two more staff.


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look over the horizon The Issue: How to encourage regional SMEs to consider exporting as a way to increase trading momentum for themselves and for the region? Exporting: easier than you might think There’s no mystique about exporting. You make some sandwiches, pack a van with company samples, catch a ferry to Germany and knock on doors. That may even save your business as it did Stephen Treharne’s. This was one of the most graphic pieces of advice in a two-hour BQ debate on how to persuade more of the region’s small and medium-size firms to improve their own position and that of the North East by going into exporting. The debate was run by BQ in association with HSBC and UKTI. And among proposals for increasing export incentives, Kate Wickham (Gate 7) suggests that the Government should be asked to provide some tax relief or benefits to companies prepared to export. This could be set off against Corporation Tax, to incentify as allowances in research and development do. Pat Dellow (HSBC) wants firms to ask themselves: “What risk do we see?” Then spread the risks. Don’t rely on one market. Her bank, she says, see its growth through international business and wants to do business with firms similarly ambitious. HSBC

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operates in 86 countries to play its part in taking away the mystique. Steve Peck (also HSBC) added that China was not the only opportunity. International trade generally has been growing at a rate of 61%, in developing markets by 31%. African markets are growing. “We can help the regional community to play abroad,” he added. He instanced HSBC’s FX-risk service which twice daily updates currency exchange rates. David Coppock (UKTI) says North East exports earlier fell by about £1bn but recovered by June and now run at about £10.5bn in goods and about £1bn in services. More services can and should be involved. There are currently about 3,000 exporters in the region, but the export trade is dominated 50% by automotives, chemicals, pharmaceuticals and life sciences. “Creative services need to be doing more,” says Coppock. Why the reluctance to internationalise, he asked, when today’s developing countries are already on the way towards G20 levels? Vietnam will probably be there within 25 years. Nickie Gott (She’s Gott It), a saleswoman as well as managing director, says her company has been spreading its activities across Britain since winning a contract to decorate Edinburgh festively for five Christmases. But she has also found it quicker to get from the North East to the United Arab Emirates, a good leisure market to do business in, than it is to seek business in Devon. Her UAE opportunity arose through a chance

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The participants Paul Duncan, Director, Bonds Ltd, Castle Eden, Tow Law and Alston (steel castings manufacturer) Andy Hatton, Owner, Global Anodes, Billingham (offshore anti-corrosionists) Nickie Gott, Managing director, She’s Gott It, Durham (events organiser) Mark Cambridge, CEO, Zytronic Displays Ltd, Blaydon (touch sensor manufacturer) Andy Haddon, Business development director, Elecscoot Ltd, Consett (vehicle supplier) Pat Dellow, Area commercial director, HSBC David Coppock, International trade director, UKTI Robin Barnett, Managing director, Business Group UKTI Stephen Treharne, Managing director, Prestige Seating Technology, South Shields (seating manufacturer) Kate Wickham, Business development executive, Gate 7, Gateshead (parts supplier for offroad machinery) Jonathan Walker, Policy adviser, North East Chamber of Commerce Steve Peck, International commercial manager, HSBC Geoff Ford, Chairman, Ford Group, South Tyneside (manufacturer of aerospace and industrial components and assemblies) In the chair: Caroline Theobald, Bridge Club Ltd. Venue: Radisson Blu Hotel, Durham City. BQ is highly regarded as a leading independent commentator on business issues, many of which have a bearing on the current and future success of the region’s business economy. BQ Live is a series of informative debates designed to further contribute to the success and prosperity of our regional economy through the debate, discussion and feedback of a range of key business topics and issues.

conversation with a Belgian businessman at Heathrow Airport. Stephen Treharne (Prestige Seating Technology) started exporting from his casino and hotel seating stock after taking his company over in 1998. He exhibited in Germany initially, getting exports up to about 30%. Later, big orders at home for Gala and Mecca brought exports down to 10%, but a difficult time for the domestic gaming industry over taxation and other issues followed. He realised the business would have to close or


AUTUMN 10

DEBATE

Participants at the BQLive Business Debate were unanimous in their opinions that exporting is vital for the region’s economy

People need to know whether their product is exportable. It can be something as simple as personal skills

re-invent itself. That was when, one Sunday morning, he made some sandwiches, packed a Ford Focus van with samples and took the ferry to knock on doors in Germany, whose economy was strong and then offering a potential 20 times bigger than the UK’s. He got the orders he wanted, enjoyed socialising on the crossing, and safeguarded his selling position by checking currency exchange rates on computer screens while over there. Andy Hatton, whose Global Anodes is in its fourth year of trading (treating ships, platforms,”anything on water that can rust”) set up as an exporting company after foreign firms told him they wanted a resident

company to deal with in Britain. China was an initial consideration – the market was so crazy that people with no shipyard were offering to build ships for the Chinese – but then Brazil became the focus, and UKTI helped greatly. He feels some businesses regard exporting as a barrier in times when they have a business to run at home. But he recalls that more businesses fail coming out of recession than in it, usually because they haven’t geared up to meet demand or cannot get the necessary capital to cope with it. But you could sit at home and hang your head or you could use the time to widen horizons, he pointed out. Mark Cambridge says Zytronic has been in

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business since 1943 when it made gas masks for the home market, but has been an exporter since the mid 1970s, had got into defence, and was now in the touchscreen business. Besides exporting, it has made a successful technology transfer in Yugoslavia. Exporting is essential to a niche business project driven, he suggests. “In that situation you must go abroad and get global product recognition,” he says. He wonders if enough people look to UKTI for guidance. In 10 years his company has more than quadrupled turnover, and one of Zytronic’s products is now coming into use globally as part of Coca-Cola vending machines. Zytronic exports 93% – it may be 97% to 100% eventually. “We have to go for that. We are people in manufacturing,” he says, advising that exporting success depends on being persistent. Geoff Ford (Ford Group) stresses that exporting firms help the region as well as themselves. He blames some export apathy on a North East characteristic of “lack of >>

BUSINESS QUARTER | AUTUMN 10


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confidence”. But there’s no such thing as being too small to export, he argues, quoting the slogan “If we can, you can”. While it may not always be easy, help is plentiful. “In the end, he says, “you have to enlighten people to create a demand.” Andy Haddon says UKTI has helped Elecscoot, his three-year-old firm with a team of three, towards exporting. Elecscoot has got together with other companies into electric vehicles, including Smiths, to explore markets in Portugal. “It’s great to go abroad with companies already in the market place,” he says. His firm is now continually rethinking its product, using expert market intelligence and other business models, and appreciating the value of intellectual property. Business improves David Coppock has observed that people who export tend to be more innovative in their developments, have a more modern organisation and are more productive. Kate Wickham, who lived in Belgium for six months, says her firm Gate 7 has made many mistakes while confronting a 10-year challenge in selling its livery and safety details overseas. She believes exporters aim to be innovative because they have to be better than local suppliers in the countries into which they are selling, and must maintain quality to win orders. But she adds: “Euro markets love the Brits. The language barrier has never been a problem for us. Customers there, we find, want to speak English. They do want to do business with us and we all should realise that.” But it does require hard work and long hours. “You certainly have to push to get a sale,” she says. “But we are from the North East and can do that.” Everyone agrees that to hold a Queen’s Award is a great asset towards winning business overseas. Vanishing bedrock Paul Duncan (Bonds Ltd) has a career which has ranged from being an economist with Midland Bank – and a lecturer in the subject – to manufacturing for 25 years (NEI Parsons, ABB, Steels Engineering and now Bonds Ltd).

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with the disappearance of so many of the big domestic clients, the small firms now have to cold-sell their new products overseas without the recommendation of big UK names the foreign buyers once respected. “We don’t have that infrastructure in the North East any more,” he complained. “And I don’t think local enterprise partnerships are going to work.”

Euro markets love the Brits.You certainly have to push to get a sale, but we are from the North East and can do that Bonds is made up of two steel companies previously in difficulties at Tow Law and Alston but which now export directly. There had been hurdles but “blue horizons” have been appearing, and the pound’s position vis-a-vis other currencies has helped. Bonds doesn’t rely on foreign agents or others telling the company how things are. He criticises the UK’s economic policy in recent years of moving away from emphasis on balance of payments and towards a belief instead that financial services will fill any gap. As a result, he says, the North East lost the bedrock of support and encouragement for small businesses wishing to sell manufacturing overseas. They at one time had been able to sell overseas on the strength of telling what they did for big industrial firms at home, but

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Reasons to be cheerful Robin Barnett is a newcomer to UKTI after 30 years as a civil servant with the Foreign Office – the last four involving him in the development of UK trade in Romania. He says: “I’ve found real cause to be optimistic about exports.” He sees great opportunity for small services and cites a specialist in health and safety who, having learned the Ford Motor Company was about to open a plant in Romania, has successfully offered to teach Health and Safety there. “His business has gone from strength to strength,” says Barnett. “So people need to think whether their product is exportable. It can be something as simple as personal skills.” He saw many such opportunities in Romania taken up by Germans and Austrians. “We don’t mind losing in a fair tender when there’s no British offer that’s better, but we could have had a good chance of winning instead,” he says. He feels that with the ending of regional development agencies there is a need for networks. Barnett holds that there is no one answer to get firms exporting. Different things appeal to different people, and collectively ways must be found to stimulate belief in exporting. “It offers fantastic opportunities that will also create jobs,” he says. Jonathan Walker (NECC) confirms that many firms fear there are barriers to exporting, especially over language, rules and regulations and general understanding. Yet many businesses succeed in exporting accidentally – perhaps through a website enquiry, or indirectly from another company they know. Another issue is finance. The NECC has asked the Government to look for opportunities to increase incentives to firms prepared to venture into emerging markets. The NECC >>


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AUTUMN 10

UKTI Here to help

itself already helps with export documentation. “We can grow the export base in this region,” he says. “There’s untapped potential. Many companies that could export successfully still don’t.” Speeka da lingo BQ suggested some discussion on a proposal that while foreign languages aren’t essential they do give advantage – even if used only in socialising – and that business organisations and individual firms should appeal to the Government for action to halt the decline in language studies at school level. One theory advanced for the decline is the US influence on British culture, encouraging a widespread belief in business that the US, where English is spoken, is the place to do business anyway. There were expressions of dismay when Dellow said some schools won’t even deliver a language now. Many schools felt not enough A grades could be achieved in languages under the present system of league tables. “It may be necessary to change the structure of the league tables,” she says. Barnett says languages can be learned. It might only require some hard work. Otherwise, he advises anyone sticking to English in dealing abroad to speak slowly, avoid technical jargon, and

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follow up in writing. “The way we use English is important,” he stresses. He recommends that during conversations one should ask: “Do I speak too fast?” – foreigners being too polite sometimes to say they don’t understand. Cambridge’s experience is that many foreigners understand a North East accent more easily than some other British accents. Treharne has found many foreigners like to deal in English because it gives them a chance to be more fluent in the language. Wickham feels that in any case one shouldn’t be afraid to ask what might seem a stupid question to avoid misunderstanding. Getting advice Hatton says existing exporters should be prepared to give advice freely to novice exporters and quotes the offshore industry’s George Rafferty, chief executive of NOF, who tells enquirers: “I can put you in touch with someone but you must repay the favour later.” That way a network of knowledge develops. There was no support for the idea of doing all business online. Aside from the financial risks it’s felt there’s no substitute for dealing face to face. Networking offers a better alternative, in Gott’s view. Dellow says: “We at HSBC would certainly not make a lending decision online.”

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Economic research consistently shows companies who export to any country, in any financial climate, perform better than those who don’t. This increased performance is evident in an exporting company’s productivity, R&D investment and their financial performance. UKTI surveys of exporters highlight the benefits of gaining increased exposure to new ideas as a result of doing business overseas. This gives them the opportunity to develop new and improved products and services, which can help them to gain and retain competitive advantage at home as well as overseas. The key to entering new markets is good research; knowing your sector and your prospective market’s strengths and weaknesses. If you are considering exporting conducting some basic research about your chosen markets before you go can minimise the risks or help you maximise your investment in both time and money. Even a little knowledge about the business etiquette or the regulations covering your product can make a big difference. UK Trade and Investment has Trade teams in offices around the country who are able to assist you to develop an understanding of your chosen markets and can assist you with a number of services. For further information contact your local office on 0845 050 5054 or visit www.ukti.gov.uk

Hatton dismisses the online role saying he only ever reads online information from a handful of organisations known to him. “Otherwise I’m being diverted away from business, rather than towards it,” he says. Walker says encouraging groups of people to get together on a common theme fits the Government’s vision of the Big Society so >>


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DEBATE

AUTUMN 10

might appeal to the Government. “When our people meet at NECC events they meet to talk about business, not to make business,” he says. Dellow says an HSBC’s Exporting Academy, a free advisory event, had attracted only 16 people in the entire region, whereas another HSBC event in the region, featuring Sir Charles Denny in a workshop on foreign exchange regulation, drew an audience of around 60. Gott says that although her business centres on events she’s convinced there are too many business events of a similar nature being held. She’d like more interaction among organisations, forums and other events organisers to avoid a situation where you could almost say: “I’m not coming to work but will attend an event every day.” Peck says some people prefer to get advice one-to-one. It was then asked whether free events are held in esteem anyway. Should a deposit be charged beforehand, returnable upon attendance? Free briefings raise the question of perceived value, Ford suggests. Hatton says there are not only too many events but still too many business support organisations too. Every week, he says, he gets invitations from organisations unknown to him. He considers invitations from only four that he knows and trusts. Duncan suggests you can’t effectively sell services abroad by staying at home. One should have an office abroad. Dellow cites a recruitment company now setting up operations abroad by incubating the business in the UK first to gain projections prior to an overseas start-up. There’s wide agreement to Duncan’s observation that in advising on exports the scattergun approach and “one size fits all” theory has to be discounted. Haddon, concurring, says good results can follow from working with others in the same sector, and a clustering approach may be best. Hatton says only a positive approach to exporting works. It’s not a matter of asking a firm whether it would like to go into exporting but asking how would it like to make a lot of cash and what would it like to export? Peck says it’s no exaggeration to tell them they might earn treble what they are making now. Cambridge says there’s plenty to be learned

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HSBC - Top five tips for exporters 1. Keep up to date with foreign exchange rates when negotiating contracts as these rates can move dramatically and can affect profitability – HSBC offers a free service to receive via text message the major exchange rates twice a day. Please send e-mail to Steve Peck or Pat Dellow at the address below with the phone number of your mobile device if you wish to subscribe to this. 2. Have confidence to try and find new markets and don’t be frightened by the emerging markets that are starting to see increased trade. HSBC has commissioned a report, Mapping the World’s Trade Connections, and a free copy is available – again please email Steve or Pat. 3. Use UKTI to source information through the OMIS reports. Also look out for programmes that are being run through UKTI including Horizons, Passport to Export and Trade Missions. These provide a valuable source of information including contacts in the countries that you are looking to export to. 4. Speak to your advisers, including your bank regarding the financing of the increased working capital requirements to cover the trade cycle as facilities can be structured to allow access to cash flow. 5. Know your markets and understand the local culture of doing business in that country. STEVE PECK Telephone 0845 583 6616 mobile 07768 006 049 email stevepeck@hsbc.com PAT DELLOW Telephone 0845 584 7500 mobile 07767 006 679 email patdellow@hsbc.com

through UKTI but you can also look elsewhere for specifics. Gott believes the goal has to be discovering a spark that will get the fire going.

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Parting shots Exporters present were asked what they might be able to do to encourage others to follow. Wickham says the Government should be asked to provide some tax relief or benefits to companies prepared to export. This could be set off against Corporation Tax, to incentify as allowances in research and development do. Something could also be done about the absence of regulation over the charges for currency transactions made by the banks. Gott feels some handholding for novices is imperative, also easy signposting through the formalities, along with use of networks and more targeting of information about benefits. Hatton says that during a trade mission to Brazil he had helped other delegates to gain introductions for their companies, and he feels that can often be done on trade missions without prejudice to one’s own interests. Cambridge says that both in selling goods and services customers like to buy face to face, so there’s no substitute for shoe leather. Walker says perhaps more should be done to put clusters together. The NECC has a good record, he points out, in putting people together, and this can be done with an export focus. Treharne believes it’s essential to put round the fundamental need to identify a product with a customer. It’s necessary to consider cultures and, in so doing, convert customers into clients. “Once you have their ear you must produce to their specifications,” he says. “You must then deliver. You have to convert people to your product competently. Selling in Germany, Belgium and Holland can be as easy in a sense as selling in Wales and Scotland. There’s no passport control and free movement of goods and money. So what’s there to be scared of?” Ford thinks it boils down to convincing people they can be more successful through selling abroad, and thereby making more money.” Duncan advises cutting out agents and their fees. Exporters should travel and travel heavy. “And remember, foreigners are often more credit-worthy and better payers than customers at home.” Last words from Dellow: “Talk it over with your bank.” n


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COMPANY PROFILE

Hay & Kilner has received further praise in this year’s Legal 500 Guide, which highlights the firm’s expertise in a wide range of legal practice areas

HAY & KILNER SHOWS CONFIDENCE IN THE FUTURE

T

HIS year has been marked by a number of high points for leading law firm, Hay & Kilner. The 24–partner firm has been recommended by The Legal 500 in 23 different work areas, a clear sign of the quality and breadth of service offered. The Legal 500 is an independently researched guide to the top 500 law firms in the UK. Hay & Kilner rebranded earlier in 2010 with a bold, fresh image, reflecting its strength and confidence in the marketplace. The firm attributes much of its success to its personal approach and expertise across a comprehensive range of commercial and personal legal services. The firm was praised in The Legal 500 for its expertise in a large number of fields, including corporate and commercial, insolvency, human resources, dispute resolution, commercial property, charities, clinical negligence, and private client. Building strong relationships with clients is an area in which the firm prides itself. Martin Soloman, senior partner at Hay & Kilner and Legal 500 named ‘leading individual’, said: “We put our clients at the heart of everything we do to provide an efficient and personal service to all our business and private clients. We constantly measure and act on client feedback to ensure we are successful. We currently have a satisfaction rating of 99%. Our independently conducted research tells us we are succeeding in delivering a brand of service that is greatly valued.” Headed by named leading individual Nick James, Hay & Kilner’s corporate team also includes partners Jonathan Waters and Mark Adams. The ‘highly responsive and tenacious team’ has handled some high profile deals for their corporate clients. In the UK’s first Islamic Bond issue, Nick James helped Gateshead-

Jon Gould Wealth Management

Sarah Hall Employmenta

WE PUT OUR CLIENTS AT THE HEART OF EVERYTHING WE DO TO PROVIDE AN EFFICIENT AND PERSONAL SERVICE TO ALL OUR BUSINESS AND PRIVATE CLIENTS based International Innovative Technologies (IIT) Ltd. to raise $10 million (£6.4m.) The money was raised through a convertible sukuk placed privately with Dubai-based Millennium Private Equity. The dispute resolution team at Hay & Kilner, headed by the widely praised Martin Soloman, has an extensive capability, with particular expertise in intellectual property, contracts, construction, partnership, railway litigation, judicial review and shareholder claims. The department has been proactive in conducting mediations as a means of settling disputes. ‘Clients consider Hay & Kilner’s litigation practice ‘a pleasure to work with’, citing the ‘timely advice and cost-effective service’ provided by Martin Soloman and the team.’ The ‘pragmatic and level-headed’ employment team, led by Neil Dwyer advises on the full gamut of employment matters, from equal pay to unfair dismissal. An established reputation

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Martin Soloman Dispute Resolution

for contentious expertise means the team regularly garners heavyweight tribunal work. The team also includes recommended partner Sarah Hall, praised for her ‘practical reasoning and plain, jargon-free commentary’. Hay & Kilner’s 6-strong private capital department is headed by trust and estate expert Kirstin Cook. The team benefits from the combined legal and tax expertise of Alice Clewes who holds the Chartered Tax Adviser’s qualification. Jon Gould, a full member of the Society of Trust and Estate Practitioners, has recently joined the team from Linder Myers in Manchester. The firm has enhanced its established reputation in the field and is receiving increasing levels of referrals from accountants, bankers, Independent Financial Advisers and existing clients.

For more information about Hay & Kilner visit www.hay-kilner.co.uk or call 0191 232 8345

BUSINESS QUARTER | AUTUMN 10


COMPANY PROFILE

AUTUMN 10

Unique offering to help businesses expand

MAJor inVEstMEnt in thE pipELinE For tEEs VALLEY

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HE Tees Valley’s reputation as an international centre for energy, renewables and the process sector is being reinforced with major investments already underway across the area. Ensus, the UK’s largest bioethanol plant is now operational at its site on Seal Sands and ambitious plans by Air Products to create a waste to energy plant, along with Gaia Power’s scheme to build a biomass plant, all offer the prospect of significant employment across the Tees Valley. And while the economic climate remains fragile, the Tees Valley is confident that as much as £8bn of potential investment could be secured in areas such as oil refinery, port development and offshore wind construction in the medium term. Tees Valley Unlimited (TVU) is the unique public/ private sector partnership that is providing a focus for a range of plans that will ensure this investment is realised and that jobs and new businesses are created in the area. TVU has developed a strategy that sets out how the area will maintain this momentum and continue to be attractive to global firms. By identifying the issues that will make it easier to invest, such as a flexible approach to planning and methods to deal with high-energy costs and waste, TVU wants to create the perfect environment for business growth. TVU’s work is being formalised with a bid to Government to create a Local Enterprise Partnership in the Tees Valley. The bid aims to help further the area’s potential in developing its energy, renewables and low-carbon industries by giving it more freedom to support firms locally by addressing issues such as tax regimes and upgrading utilities supply. Through the LEP there is also the potential to bid for a national Growth Fund worth £1bn. TVU worked with business leaders, regeneration bodies and the five local authorities; Darlington, Middlesbrough, Stockton, Hartlepool and Redcar

BUSINESS QUARTER | AUTUMN 10

Dave Mitchell (left) MD of Katmex UK, with, from right, Eric Whitehouse of Business Link, Cllr Ken Lupton, Leader of Stockton Borough Council and Richard Hunter of Tees Valley Unlimited

and Cleveland to put together its LEP submission and a decision from the Government is imminent. Sandy Anderson, chairman of Tees Valley Unlimited, said: “We are keen to build on the strengths we have in the process and engineering sectors to develop new businesses and jobs in the low carbon and renewable industries. “We have companies seriously considering major investments, because of the advantages of our location and transport links, for example Gaia Power and Air Products. “We need these companies to choose to be here - ready to take advantage of the opportunities presented by the global need to reduce carbon emissions.” As well as its strong focus on energy and renewables firms, TVU’s LEP proposal also sets out how the Tees Valley aims to broaden the number of and variety of new businesses in the area. TVU sees it as vital that there is a range of types of businesses in different sectors and jobs to suit all skill sets – that will help create a more robust economy which is not vulnerable to problems in particular sectors. As part of this TVU is also attracting investment from companies such as Firstsource, SK Chilled Foods and Hertel, all of whom have announced job creation and expansion plans.

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For example TVU helped safeguard 55 jobs at a construction company threatened with closure, where the team helped secure a management buy out. Katmex was facing closure when Japanese parent company Katsushiro decided to end UK operations due to the recession. Turnover was down 50 per cent and there were 80 job losses. But managing director Dave Mitchell knew the business was worth saving and, with help from Tees Valley Unlimited, Stockton Borough Council and Business Link, Dave spearheaded a successful management buyout. Today Katmex has taken on 25 new employees and plans to take on ten more by the end of the year – providing evidence of the success a dedicated business investment team can bring about.

Further information on Tees Valley Unlimited and its activities please visit www. teesvalleyunlimited-investment.co.uk


clear practical advice

When managing risk and making complex business decisions you need a law firm that understands your point of view. At Watson Burton we take the time to understand your business objectives and work in partnership to help you achieve long-term success. To discuss your business needs call our legal experts

0191 244 4444 www.watsonburton.com


INTERVIEW

AUTUMN 10

TICKING TIME BOMB The North East’s private sector has already been left behind in the new competition for government funding. Sir Ian Wrigglesworth, vice-chairman of the £1bn fund at stake, tells Brian Nicholls in an exclusive interview how it could make up the lost ground

The North East will have some soul-searching to do if it discovers, two years from now, that it has failed to win a satisfactory share of the £1bn contained in the Government’s new Regional Growth Fund being introduced. Late out of the traps in agreeing the make-up of its local enterprise partnerships to follow the abolition of the One North East regional development agency, the region is now under threat of being left behind also in the mustering of private sector projects worthy of fund support. Ironically the fund could hardly have been led by two individuals more understanding of North East needs as it tries to build an economy less reliant on the public sector.

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Chairman Lord Heseltine as environment secretary in the early 1980s was prime mover of development corporations for the likes of Tyne, Wear and Teesside, which led to transformations evident now at Quayside’s new business area in Newcastle, marinas at Sunderland and Hartlepool and Riverside Stadium at Middlesbrough – those just a few examples. And Sir Ian Wrigglesworth, chairman of the Port of Tyne, former MP for two Teesside constituencies and past chairman of the Newcastle Gateshead Initiative, as well as running his own commercial property business – was born and bred in the North East. “Most of my life has been spent trying to >>

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help this region in one way or another,” he says. Since the 1960s and 70s he has been fighting to narrow the North/South economic divide. Deputy prime minister Nick Clegg says of Heseltine and Wrigglesworth: “Both are, like the Government, utterly committed to ensuring the parts of the country with the greatest need share in the prosperity of the future.” But Sir Ian is very disappointed by North East tardiness. Manchester, Leeds, Sheffield and Doncaster leave it behind. “The sooner the North East can get its act together, the better,” he warns. ”Some of the largest regions in the country have their proposals for local enterprise partnerships (LEPs) pretty well developed. “I know from conversations that bids are already being mounted for the Regional Growth Fund. The North East is still scurrying around trying to decide what the LEPs should be.” He was speaking exclusively to BQ having just returned from a constructive early morning meeting with the leader of Leeds Council. He wishes the North East to do well out of the fund not simply out of loyalty but out of recognition that the North East requires its support more than most. “A very clear and specific job needs to be done,” he says. “The private sector must be built up in regions too dependent on the public sector. The one region above all too dependent on the public sector is the North East. That its economy is almost 60% dependent on the public sector tells its own story.” He was still unaware at the BQ meeting what sort of LEP structure the North East was inclining to, despite LEPs’ importance in bringing bids together. Richard Moss, the BBC’s political correspondent for the North East, has calculated that the original idea was for the North East to have one LEP, then the region wanted five, then some wanted a sixth, then some wanted just one again, and that turned to perhaps two. So it could be one for the Tees Valley, and one for the rest of the region in the end. Sir Ian comments: “I’m very surprised the organisations that have put in the proposals haven’t read more clearly what the Government asks for. LEPs are supposed to

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The one region above all too dependent on the public sector is the North East. That its economy is almost 60% dependent on the public sector tells its own story

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represent travel-to-work, economic areas. Putting in a bid that splits Tyneside into three separate areas when it’s clearly one economic area seems to me madness. “County Durham putting in a bid when it’s a single unitary authority is bizarre,” says Sir Ian. “They need to get together and work together. I think too much was left to the local authorities and their prejudices and parochialism.” Though detail will not be clear until a White Paper has been published following the Government’s recent spending review, it seems businesses will be free to apply for state support independently of their local LEP. But as Sir Ian observes: “It might be seen as helpful if they do have LEP support because the LEPs are going to be business-led. Because they have been very largely based on local authority boundaries there’s something of an assumption they are local authority bodies. “But they’re business led and the North East Chamber of Commerce, CBI and other business organisations in the region will have a profound influence. They will want to develop economic strategies for their areas, so any application that comes to us dovetailing with a strategy the relevant LEP has developed will obviously strengthen its power to be accepted.” If the North East loses out by default it will be the second big error the region has made in recent years, according to Sir Ian. “We made a mistake in the North East earlier in pressing the previous government to establish regional development agencies right across the country,” he says. “By definition, if you need a development agency you have problems within your economy. I don’t think anyone would claim London and the South East have problems in comparative terms. I think antagonism grew towards development agencies in parts of the country not suffering the same problems – not least among local authorities that felt in the shire counties and some other parts that the regional development agencies were taking over a lot of their roles. “I don’t think that’s been the case in the North East or in other parts of Northern England. But I think the Government moved in that direction (abolishing development agencies) because of the antagonism.


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INTERVIEW

“When people in the North East pressed the Government to establish a whole network of development agencies I think if they had realised what they were doing they might have thought twice, though it was done from the best of motives. “We had a powerful position when we had the earlier Northern Development Company, which I was a director of. The North West had one, Yorkshire and Humberside had something similar. But we had one of the best development bodies in the country at that time and it gave us an advantage. Once the agencies were set up all over we had no particular advantage.” It seems unlikely any particular sector will be favoured by the fund though, again, the White Paper will clarify. The vice-chairman says, however: “I think it will support modern growing industries of >>

Many good things have been done by the regional development agency, and by the private and public sectors. There are many signs of hope in the North East

Hungry: Sir Ian Wrigglesworth wants individuals to develop an appetite for business

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the future. I don’t think it will be there to prop up industries past their sell-by date. We need the high technology, knowledge based industries, the sort the region has been doing very well with during the last decade, to be the basis of future private sector development. A business will not succeed unless it is investing in a market with a long term future. “There may be some instances where restructuring is taking place within an industry and we shall want to help them there to sustain themselves.” Chairing Newcastle’s bid to become Capital of Culture earlier prompts him to think a regeneration is needed in people’s heads. “The fund needs to get into people’s minds that what this is about, and particularly in the North East, is aspiration,” he says. “It’s about whether individuals have the appetite to build businesses, develop existing businesses, set up businesses. “The fund can then be a carrot helping to change people’s views both of themselves and of the region. If we don’t do that we won’t succeed.” But he’s no Jonah. “I think a transition has been taking place very well here in the past decade,” he says. “Newcastle, it may surprise people in the North East to learn, is one of the 10 cities most successful in creating private sector jobs during the past 10 years. If Newcastle can do it, others can. “Many good things have been done by the regional development agency, and by the private and public sectors. There are many signs of hope in the North East. I want to see the fund support that sort of activity. But businesses and the region need to stop thinking it’s Government’s job to regenerate the region. The region must realise it’s the region’s job to regenerate the region. “Getting this change of thinking is vital – building people’s confidence and pride, making them feel they can do it... developing a can-do culture and creating a ferment of people doing different things because they see other people doing them and succeeding in them. This can apply also to firms of accountants and solicitors just as much as to media firms or firms making computer games. Peer example is tremendously important. “The region needs people in the likes of

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Ferryhill, Easington, Tow Law and Consett no longer thinking they are necessarily going to be employed for life in one organisation. There’s a terrible parochialism sometimes in the region that we need to overcome. “In the end, it’s all about aspiration, broadening people’s horizons so they can see opportunities for themselves and for their families. Parents are tremendously important in this. That’s the important thing, changing the culture.” Think about the Normans, he urges. “If the people who built Durham Cathedral had had to wait for a government or a regional development agency to come along and give

grants it would not have been built. People built it because they had the passion and the aspiration and the self-belief. We need people in the region who are going to build a few more Durham Cathedrals without help from anyone else.” He is confident there are enough people in the region capable to get on and do that. His archetype is Sir John Hall. “He’s done a mass of things, had Government support for some of them, but perhaps another 20 like him would do it, and we’ve got them – they’re around. Also we need another 20 Wellstreams, another 20 Sages.” n

Rules of the game The Regional Growth Fund will operate from offices in the Department of Business Innovation and Skills (formerly the DTI) in Victoria Street, Westminster. The fund will be launched after the spending review and publication of its accompanying White Paper. Its modest £1bn kitty, which all the regions must share, is less than a quarter of what RDAs had received annually – and compares with an £800m cost to the North East economy of the Northern Rock fiasco. First round of bidding could take place in November and December with a second round in March, though that may be deferred slightly since a point made in a public consultation was that it was a very tight timetable for responses. Sir Ian Wrigglesworth says: “Inevitably with the abolition of development agencies there were a lot of activities already in the pipeline that they were expected to support. I expect some of those will resurface as bids to the fund.” He says the fund would consider any public sector application to transfer some of its activities, along with its employees presently handling them, to the private sector. Proposals from third sector organisations will be considered too. “There are good examples in Sunderland and Teesside of small organisations doing tremendous work helping people to develop small businesses quite remarkably,” he says. “There are various ways in which the development agencies have been able to leverage funds from Europe, and I hope the Regional Growth Fund will be able to do that too.” The White Paper will confirm the maximum and minimum amounts of funding. A minimum £1m has been suggested. “I don’t think anyone believes we can have very small businesses coming in for very small amounts,” he says. “More likely we’ll work through intermediaries for the small business sector.” Bids will be recommended to government and Wrigglesworth stresses: “We’re not doing the job RDAs used to do. They did much more in a much wider spectrum of activity.” Might the fund be extended beyond its two years as he would like? “I think it’s difficult for the Government at this stage to forecast what will happen in three years’ time. It also depends on what happens to government finances and the state of the economy. “If it’s a success I’d be very surprised if the Government didn’t extend its operation. It’s interesting that the banks have now come in with an offer for £1.5bn of venture capital funding to help businesses. I hope we’ll be able to work with them to ensure we dovetail in what we’re doing.“ Sir Michael Heseltine, Sir Ian Wrigglesworth and deputy prime minister Nick Clegg are expected to lead road shows round the country to explain and stimulate bids.

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AUTUMN 10

COMPANY PROFILE

As opportunities arise for the North East to take the lead in sustainable technologies and sustainable business strategies, Lloyds TSB Corporate Markets is acting to ensure companies emerge vigorously from the region’s economic recovery

A SUSTAINABLE ADVANTAGE

“I

HAVE to say, I find it virtually impossible to identify a single sector or, for that matter, a single customer that won’t feel the impact of the changes to our economy and our society that will come from addressing climate change and other environmental challenges”, argues Truett Tate, Group Executive Director, Lloyds Banking Group. Nowhere does that message have a more exciting resonance than in the North East. For centuries, through industrial eras based on coal, steel and ships, the region has built a singular reputation for reinventing itself to meet changing demands and new challenges. Now it’s writing a new chapter as a pioneer in sustainable businesses and renewable technologies. “We’re a region with long and proud experience of breaking new ground to make things and drive technology,” says Richard McEvoy, relationship director, Lloyds TSB Corporate Markets in the North East. “And today we’re on the threshold of another fascinating era of reinvention. The opportunity that beckons is to take the lead in sustainable technologies and with innovations that will ensure the North East emerges vigorously from the present economic downturn.” The Bank is particularly well-placed to ensure this reinvention is successful. The ethos of sustainability is already firmly embedded in its DNA. It fields one of the largest team of experts of any UK bank in the specialist field of renewables financing. The Bank is also a leading renewables bank globally by debt underwriting capability – its current renewable portfolio stands at around £1 billion. And with Richard McEvoy estimating that with around 30% of its corporate customers in the North East either directly or indirectly engaged in sustainable

Above: Richard McEvoy, relationship director, Lloyds Banking Group

“WE’RE A REGION WITH LONG AND PROUD EXPERIENCE OF BREAKING NEW GROUND TO MAKE THINGS AND DRIVE TECHNOLOGY. AND TODAY WE’RE ON THE THRESHOLD OF ANOTHER FASCINATING ERA OF REINVENTION.”

Richard McEvoy, relationship director, Lloyds TSB Corporate Markets in the North East

industries, the Bank is committed to playing a positive role in shaping the North East’s new future. What’s more, it has a dedicated Business and Environment team within its Corporate business, which is developing a partnership approach to aid businesses through the often complex tangle of legislation, regulation and general commentary surrounding green issues. The Bank’s team in the North East also works across the business spectrum, explains Richard

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McEvoy: “As well as helping with big ticket deals, we also focus on the specific interests of smaller enterprises engaged in renewables activities. “This year, we’ve run a series of leadership events in which we’ve brought together some of the biggest suppliers who are looking for support with some of the people who are actually going to provide that support, right across the supply chain. It’s all part of an invaluable specialist network we’re building, something all of our customers can use to strengthen the North East economy and act as a springboard for green technologies.” The region already boasts a number of incubator business units and science and technology parks supported by local development agencies, he says. “The geography of the region helps immensely. From the Humber all the way to the Border, a lot of the coastal infrastructure lends itself to the type of installations and on-shore receiving points to build and service offshore wind and wave capabilities. “The skills and the intellectual capital are there to be exploited,” McEvoy enthuses. “There are jobs to be created in manufacturing, installing, servicing, monitoring and training. There are immense opportunities for us as a bank to meet the needs of this new industry and develop it as a real catalyst for economic change in our region.”

Contact: Richard McEvoy, relationship director, Large Corporate North East, Lloyds TSB Corporate Markets, Tel: 0191 255 1572

BUSINESS QUARTER | AUTUMN 10


ENTREPRENEUR

AUTUMN 10

BETTING ON THE FUTURE In sustainables, we’re woefully behind many others in some respects. But John Wall, doyen of dealmakers, has been quick to spot and push the prospects. He tells Brian Nicholls how

John Wall’s bets are on the future of hydrogen cell fuel and photovoltaics. That should tell us all something. Doyen of North East financial dealers for over almost a quarter century, Wall now executively chairs Proton Power Systems which runs the world’s first ferry driven by triple hybrid fuel cell, and the world’s first bus similarly fuelled. He’s also a partner now in a leading photovoltaics business, driving sales through state incentives to develop sustainable energy. Sundog Power employs 25 and runs in tandem with Sundog Energy of Penrith which, in 15 years, has become the technical leader in commercial and domestic photovoltaics. Sundog Power offers companies cheap, clean energy – to use free and also sell without the upkeep. The revolutionary ferry operates on the Alster river in Hamburg, and you can catch the hybrid fuel cell bus, a joint advance with Skoda, in Prague – major departures, these, from the

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pasties, water and frozen food once occupying Wall’s attention. “Hydrogen fuel power’s going to be so important,” he enthuses. Involvement in Proton stems from friendship with North East entrepreneur Karl Watkin. Wall explains: “When I left PricewaterhouseCoopers, Karl rang. He’s amazing in things he generates. He told me of a great business in Munich called Proton. It was developing the technology of hydrogen power from fuel cells to drive vehicles that park up at night.” The company needed access to capital from private markets. Wall, as a director, put together a deal getting Proton onto London’s Alternative Investment Market, and among capital transforming it from a simple R&D business. With the listing there was a reverse takeover with the German firm becoming a plc subsidiary. Then four years ago Wall became chairman,

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succeeding North East automotive stalwarts Sir Ian Gibson and Bernard Robinson; the former ex-president of Nissan Europe, senior vice-president of Nissan Group and architect of Nissan’s early Sunderland success, the latter a former North East Business Executive of the Year, whose expertise in suspension systems had made Tallent a great manufacturer at Newton Aycliffe. He had also gone on to head a global suspension business when German giant ThyssenKrupp bought Tallent. Proton Power Systems plc, with Quayside offices in Newcastle, now employs 50, including physicists and engineers. It has a joint venture with Smiths electric vehicles – and Faiz Nahab, a rich Iraqi investor, is backing Proton heavily, confident it will become a £500m business. “Chairing a business very German-centric got me into a whole new world – renewables are massive business there,” Wall says. “They’re huge in a way they’ve never taken off in the UK yet. There’s massive funding and >>


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ENTREPRENEUR

Renewables are massive business in Germany. They’re huge in a way they’ve never taken off in the UK yet. There’s massive funding and enthusiasm there

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ENTREPRENEUR enthusiasm there. Proton was Karl’s idea. He’s still a shareholder. But he did what he’s good at, generated an idea, formed a team around it then let them get on with it. That’s his skill. He’s a strategist, an innovator, but isn’t into running things.” His appetite whetted, Wall examined the now faster growing photovoltaics. The UK, under EU legislation, must achieve 15% of total energy from renewables by 2020 (from less than 2% in 2009) with heat from renewables reaching 12% from 1% in that time. That 20% goal by 2020 compares with Sweden’s existing 38%. As Wall points out, technology needs a stimulus to move from very low volume, very high cost into commercial high volume and very low cost. There’s now grant subvention. Previously minor capital grants had been offered and users installing rooftop photovoltaic (PV) panels were likely to get a grant less than half of the actual cost. In Germany, Spain, France and Italy, PV panels had bloomed because feed-in tariffs had been introduced with greater incentive for users. As production had grown, capital costs had dropped, commercialising the technology. With feed-in tariffs, rooftop panels bring payment for generating, you get free energy by day and can sell surplus into the grid. Acceptance into the tariff locks you into that income for 25 years – index-linked at the initial tariff rate entered into. Wall advises householders: “If you’re 55 or 60, have a few quid tucked away and get 2.5% from a bank on your deposit account and pay tax at 40% – and if you like to stay cash liquid and want cash investments for the next 10 or 15 years – do it. And do it yourself – even if you don’t need all the electricity yourself.

AUTUMN 10

“If you can get income from the annuity coming in you’ve something interesting. Locking into an income stream that’s there 25 years, index linked, is phenomenal – tax free to householders. Where else for £10,000 can you get an 8% yield index-linked for 25 years and tax free?” Householders reluctant to install and maintain will find many companies that will oblige for a slice of the income. Wall focuses on leasing company roofs of 17,000sq ft plus, offering installation and maintenance in return for the income that can be securitised and turned into a capital sum. “As it’s retail price indexed it can carry real capital value,” he says. “It’s building an index linked annuity stream in return for an initial outlay. Make money while you sleep – that’s one of my favourite concepts.” Maintenance and monitoring are vital though; even an overall accidentally dropped on a panel will affect earnings. But Wall, wherever he is, knows from his BlackBerry if a particular roof is functioning properly. At Sundog Energy, Wall found managing director Martin Cotterell a technical expert. “He’s written the technical standards for the industry basically, and does some most interesting and demanding contracts,” he says, “like putting photovoltaics onto the roof of Kings Cross station. He told Cotterell: “With your ability and my commercial strategic funding capability I think we can put together something very interesting.” And a third partner now in Sundog Power, John Andrews, excels at sourcing and distribution amid global shortages of panels and inverters.

I spent the next five months, basically 18 hours a day, seven days a week, on completing a hugely complicated deal, then sold not three divisions for £46m but two for £47m. We kept one

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“I got five buildings just by talking to people over the Bank Holiday weekend,” Wall, a great raconteur, mentions gleefully. “You see, it’s very cash negative for businesses doing it for themselves. Our way, you’re cash positive from day one.” Astrologically, John Wall has been a typical Arian, outgoing and confident – both as dealmaker and as founder of corporate financial service in our region. Well done, the former head boy of Newcastle’s Manor Park Technical Grammar School who, between later studies at Sheffield and Newcastle Universities, laboured happily on a Leech building site at Cramlington. Visitors to Newcastle’s Metro Radio Arena and Sunderland and Middlesbrough’s football stadiums may not realise Wall’s contribution to their enjoyment. Nor residents of apartments overlooking the Tyne bridges or the attractions of Morpeth, or caravanners at Rothbury. From 1987 he led PwC’s rapid regional growth, launching the first regional corporate finance business in Newcastle, then beyond. At PwC he advised on more than 100 major deals totalling £1.5bn plus. He recruited, developed and managed more than 200 partners and 200 senior professional staff until retiring from there on his 50th birthday in 2004. After dealing for others he wanted to deal for himself. He joined Albany RTA Group, an insurance outsourcer, as chairman. First task: Effect a secondary buyout of the Albany half held by a South African company Capricorn – this for Brooks Mileson, who held the other half. Mileson was a pigtailed, larger-than-life son of Sunderland Salvationists, obsessed by fast cars and reputedly worth £75m then. Business thrived on cases of customers who, via a Peterlee call centre, could claim innocence in road accidents in their need of legal, medical and vehicle repair help. Mileson was fiery and demanding – the sort Wall gets on with. Mileson drew Wall to Albany saying: “You can be chairman. I’m sick of being chairman. Finish the buyout with the South Africans and in due course we’ll sell and get lots of money.” Wall worked a month of nights and days to fund and finalise the far-from-straightforward buyout, and succeeded. Mileson asked: “What are you doing on Monday?” Wall thought >>


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INTERVIEW

AUTUMN 10

If one of you knocks in the header in this incredibly important game, I’ll give you my Aston Martin

he’d have his first day off. Mileson said: “No. I want you to go to London. I’ve sold the business.” The sale had been secretly agreed over coffee at Newcastle Airport on the Helphire plc buyer’s arrival; three divisions for £46m. Wall recalls: “I spent the next five months, basically 18 hours a day, seven days a week, on completing a hugely complicated deal, then sold not three divisions for £46m but two for £47m. We kept one.” Mileson stayed away. He took his money to Gretna and created a real-life Roy of the Rovers story, buying the local non-league football club, and lifting it from Scotland’s Third Division to its Premiership and into the Scottish Cup Final. His addiction to tobacco killed him, sadly – 10 days short of his 61st birthday. The club went into administration. “It ended in tears,” as Wall says. “But they had a fantastic time. Mileson, chairman and owner, would queue at the turnstiles then stand among the supporters. In the changing

room beforehand he’d say, ‘If one of you knocks in the header in this incredibly important game, I’ll give you my Aston Martin.’ And he did. That’s how he was.” Wall’s deals while with PwC had included: • The hostile bid by Lyonnaise for Northumbrian Water Group (£800m) • Sale of a strategic interest in Newcastle Airport to Copenhagen Airport (£400m) • Greggs plc’s acquisition of The Bakers Oven chain (£20m) • Reverse takeover of Dalepak and Stock Exchange listing of Cavaghan & Gray plc (£80m) • Disposal of Northumbria Bus to British Bus (£25m). He masterminded PwC’s viability studies for the building of Middlesbrough and Sunderland’s football stadiums. After PwC, Wall also became director and founding shareholder of Adamson Joint Ventures, gaining permission to build 134 apartments and 12,000sq ft of offices at the

John Wall and his wife Patricia started caravanning at Beadnell 15 years ago, then sold their Gosforth home to buy the first of two houses they’ve lived in at Beadnell. Wall had decided on leaving PwC to work off two laptops and a BlackBerry. He does that while enjoying home office views out to Cheviot and Dunstanburgh Castle. Twice a week he works from a Gateshead apartment. Maybe it’s the sea air, but at 56 he looks 10 years younger than when he left PwC. One of his few indulgences is his Porsche – he’s always had one. “You get up in the morning, switch on your car and it roars... rrrrrr. It’s a lovely way to start your day with a 911 turbo,” he laughs. He and Patricia enjoy a close family life. Sons Gareth, 37, Damien and Jonathon, identical twins aged 30, are all married to “delightful girls with traditional values” who have given the Walls two grandchildren, Lily and Poppy, and a third one expected in December. Having experience of Los Angeles, France and Belgium, is he never tempted to become a tax exile? “No, you need lots of money to do that,” he laughs again. “I don’t have the massive wealth that would justify me wanting to live in Monaco or something. And I don’t think it’s a great burden if you earn huge amounts to pay 40% and keep 60%. “When you look at Monaco from the harbour it’s like an old-fashioned council estate going up the hill. Why live there?”

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Bonded Warehouse on Newcastle Quayside, and put up 125 apartments alongside the Hilton in Gateshead. Between 2006 and 2008 he chaired young entrepreneur Ian Baggett’s fast rising property group Adderstone. He was an Arrowcroft plc adviser for a £500m development in Croydon. Other assignments took in Morpeth apartments, Stobo Castle at Peebles, and a static caravan park at Rothbury, and work for the like of East Coast Properties, the Dodds Wall Partnership, August Private Equity, Primary Capital and Alchemy. He’s a consultant on business and strategy development for Dickinson Dees law firm. And he relished his role in turning Chas Chandler’s long-held vision for a major North East music venue to reality. Many thought a Newcastle Arena commercial folly, even though the city’s biggest concert venue then, the City Hall, held only 1,800. Yet many arenas rising elsewhere were white elephants, Wall concluded, financed largely by councils using grants or central funding and losing money because music was often an afterthought in their multi-purpose use. Chandler, however, had been one of the Animals, had brought Jimi Hendrix to England and ran Slade for many years. To achieve his vision he’d entered a partnership with Nigel Stanger, a talented architect and gifted saxophonist. Private investors were sniffy. The duo were struggling when they approached Wall. He, comfortable with existing work at PwC, asked: “You’ve been trying to do this for years. Why come to see me?” “We’re desperate,” came the reply. Chandler, who had the necessary contacts, persuaded Wall this arena would be different, built by musicians for musicians. Wall foresaw the revenue stream, and raised the capital. Newcastle got sheer utility, breeze block not marble, but holding 11,000. “The world’s cheapest, most basic arena,” Wall suggests. Chandler had refused any “bed sharing” with American operators. Wall, regardless, worked on Ogden, a global player. He said if they transferred some of their capital earning 3pc interest in Fed Reserve, the Arena would give 12pc. Chandler was shocked but convinced himself Ogden was his idea. Newcastle’s arena cost £12m, against £60m elsewhere. n


INSIGHT

AUTUMN 10

Ready for recovery

New faces: Some of the trainee accountants new to the North East business scene. These are with PwC

It may be some time before the economy fully recovers. But business advisers in the North East are already preparing for an upsurge of activity. Brian Nicholls reports Lacklustre though the company deals scene looks, financial services are tooling up to greet probable players who will eventually emerge. Nationally, the total of deals during Q3 (including rights issues, flotations and placements) was down 22.7% against last year’s comparable figures. But the entire value rose by 45.3% from £41.07bn to £59.67bn. In the North East alone, seven or eight potential sales or buyouts of significance are known to business advisers Deloitte now, which partly explains a refiring of the firm’s cylinders in this region. It has relocated within Newcastle from Grey Street – its home for 15 years – to gain 50% more workspace at Trinity Gardens on the

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Quayside. This, among other things, is enabling its corporate finance advisory team bridging Leeds and Newcastle to step up activity in the North East. Lloyds TSB also expects a resumption of deal activities and has expanded its corporate markets team by three to 21 in Newcastle. North East businesses have strengthened their cash resources during 2010 and are better placed to fund growth, it says. Deloitte’s relocation puts the firm’s 150-strong professional team proximate to lawyers Dickinson Dees and bankers BNP Paribas, Coutts, Royal Bank of Scotland and St James’s Place. David Frith, associate partner in corporate

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finance, says: “We’re aware of business owners who plan to exit after the present economic phase. There are also companies that see this period as an opportunity to grow by acquisition for the future. “Confidence is returning. It’s a matter of timing now – when potential sellers feel they’ll get a best possible deal.” After 18 months of depressed mergers and acquisitions (M&A) activity Deloitte’s corporate finance and tax teams in the North recently advised on three major deals, including the sale of Newcastle media group Robson Brown to American interests and Entec to Amec. Paul Woolston, senior partner of PricewaterhouseCoopers in Newcastle, says that despite the “challenging” M&A market its North East deal team’s transactions sealed have included a major investment from Barclays Private Equity for Wilton Engineering on Teesside, and Fone Logistics of Cramlington’s sale to Daisy plc. The team also secured a “significant” mandate


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from one of the world’s largest pharmaceutical companies, for whom the Newcastle team will now co-ordinate divestment services globally over some years. Improved growth and confidence across the North East is being tempered by scepticism over strength of the recovery, according to PwC. It says feared effects of public sector spending cuts and fiscal policy still overshadow. Woolston observes: “Encouraging though improved growth rates are, there’s some way to go before regionally-based businesses resurface from the recession. Property and construction still concern. Benefits may be found, though, from exploring new market opportunities.” The fog should start to clear now the Government is spelling out its cuts. In the North East and Cumbria, PwC analysis indicates effects of the downturn continuing to ease; 103 firms became insolvent in Q3. This represents a 24% fall on the previous quarter and a promising 30% decrease against the same quarter of 2009. Even on a rolling 12 month basis, a 17% decrease in insolvencies is evident. Companies have been moving sooner to have problems remedied more effectively, and some lenders have been more supportive, offering debt for equity swaps or even advancing risk capital at a suitable price. Paul Williamson, Deloitte’s senior partner at Newcastle, says: “Our relocation had been on our business plan for more than three years. Now we’re identifying new and emerging business opportunities where we can increase or develop specialist areas.” At Lloyds TSB, area director Mike Mullaney says his corporate market staff appointments are being made as corporate services already increase against a brighter economic landscape in the North East. He says expertise has been particularly strengthened to back management buyouts, and to assist owner managers ready to dispose. The banks may yet have to attend, though, to everyday needs of the small and medium (SME) business sector. Business leaders in the North East have described rises in bank fees levied on SMEs as “worrying”. Lending to manufacturers barely changed in

two months, the Engineering Employers’ Federation recently reported, and North East insolvency experts R3 believe one in 10 small businesses may close through public spending cuts. A survey suggested that the few firms in engineering finding access to finance easier were medium to large businesses – with the cost of new credit slightly up. The Institute of Chartered Accountants in England and Wales says SMEs in many sectors cannot borrow from banks as lending criteria are too restrictive. David Longstaff, regional organiser for the Federation of Small Businesses in the North East, hopes a credit task force appointed by the Government to investigate relations with banks gets trust restored. Even bigger firms fishing for acquisitions face stricter criteria in lending. The way M&A deals are being structured now is more like “the old days” with less gearing, the accountants say. Britain’s biggest banks have admitted for the first time through the task force that there have been lending problem for small businesses, and that greater support to business will now be offered through a £1.5bn fund. This will release equity in amounts of £2m to £10m to firms with turnovers in the £10m to £100m range. That may frustrate the smallest firms but it’s a start. The jobs good news is that all the Big Four

Confidence is returning to the market and it’s all a matter of timing now – when potential sellers feel they are going to get a best possible deal

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INSIGHT

accountants – Ernst & Young, PwC, KPMG, and Deloitte – have signalled nationally busier times expected by restoring their graduate intake to levels last seen before the financial crisis. They are expected to hire about 3,800 this year – more than 20% up on 2009 – and about 20 have gone to Newcastle for PwC, whose entire business showed sales growth of 4% to £2.3bn in the last financial year. About 1,100 will be hired by Deloitte, this despite Deloitte’s revenues for the year to May 31 being down £16m to £1.95bn. A dozen have come to Newcastle. Deloitte’s revenue fall is blamed on the tough economic climate, though Newcastle office has performed well, Williamson says. “It’s hard to underestimate just how difficult the economic conditions have been. But the Newcastle team have all worked incredibly hard to deliver a very positive year in which overall revenues have remained steady. “ Growth was recorded in the office’s audit and tax departments. Between this achievement and the expectation of upturn, Deloitte Newcastle is able to take a crop of graduate trainees despite many banks in their crisis being unable to place as many as before. Says Williamson: “We’re open to applications from students who have studied any degree discipline. Overall, we look for a well-rounded skill set with a strong academic background.” KPMG has placed 11 trainee graduates in Newcastle and is finding businesses, more than ever, looking for advisers, long-term. So it has also brought in David Muir as partner to head its Northern performance and technology consulting. Jonathan Hurst, KPMG chairman in the North, says Muir’s challenge is to treble the size of KPMG’s regional consulting business over three years. He joins KPMG from PwC, where he created and ran PwC’s successful consulting business for five years, was head of strategy and led its national advisory practice in technology outsourcing. He now leads KPMG’s regional consulting team across five Northern offices. About 14% of the Big Four’s new trainee recruits, on average, are regularly lost to other firms in finance and industry once they gain their accountancy qualifications. n

BUSINESS QUARTER | AUTUMN 10


COMPANY PROFILE

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Banks falter, firms in other financial services come under the lash. But Brewin Dolphin, with a major contribution from the North East, proves progress is possible in the most trying of times

BrEWin DEFiEs thE trEnD

G

LOBAL cyclones in economics seldom forewarn. Yet Brewin Dolphin has rebranded, relocated and now sailed through two and three-quarter years as a success in the challenged financial sector. In January 2008 the company specialising in private client investment and corporate advice - previously known in Newcastle as Wise Speke since 1903 - took on its present name. Three months later it relocated to its impressive new home at Time Central in the city centre. Since then some major banks have faltered, and many diverse financial businesses have been painfully pressed. But Brewin Dolphin, nationally and in the North East, has not only grown but gathered a chain of industry awards too. These include: Best Discretionary Stockbroker (Shares Magazine 2009), Best Research (AIM Awards 2009), Best Discretionary Service (Daily Telegraph 2008) and Silver Award for Customer Service (Financial Times/Investors Chronicle 2008). Already one of the largest independent private client investment managers in the UK, it has impressed the City, its funds under management having grown faster than expected. They’re up 13% in a year to £23.2bn, with Newcastle making a positive contribution. The company is on track to report sales of £241m this year. This news immediately hoisted its share price by 8% plus on being announced. John Duns, divisional director for business development and marketing in Newcastle, says: “That all this has been achieved in quite difficult times is testimony to the strength of the business both nationally and in the North East.” Newcastle is the firm’s second biggest of its 40 offices outside London, giving around 14,000

BUSINESS QUARTER | AUTUMN 10

More of the same: “We’re here, doing well and will continue to grow,” says John Duns.

clients investment advice. It employs over 350 people and is recruiting further. Significantly, Brewin Dolphin’s business has grown in wake of a decision to advertise substantially for the first time. Duns observes: “This office in Newcastle led the way, using comprehensive marketing and advertising when it carried out the rebranding from Wise Speke. Brewin Dolphin has now rolled out advertising nationally. Four factors have contributed to North East success during what are acknowledged to have been “volatile and difficult times”: • Particularly close relations with clients • A strong research base • Further development of its broad range of services, and • Close identification with the region. Through a shared ethos of emphasis on personal service, Brewin Dolphin in Newcastle now speaks of an “amazing loyalty” among its clients. “We have clients whose families have been with us for generations,” Duns says. The appeal, the group believes, lies in emphasis on face-to-face contact: no call centres, but instead a team to manage clients’ interests, and a primary contact leading that team. Whatever the investment decisions, all based

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THIS OFFICE IN NEWCASTLE LED THE WAY, USING COMPREHENSIVE MARKETING AND ADVERTISING WHEN IT CARRIED OUT THE REBRANDING FROM WISE SPEKE. BREWIN DOLPHIN HAS NOW ROLLED OUT ADVERTISING NATIONALLY

on good opportunities in different sectors, clients are kept informed about portfolio changes. Loyalty is also nurtured by a number of directors having operated for 20 to 30-plus years in Newcastle. “And long servers are complemented by directors in their early 30s, and an increasing number of young trainees joining us. That’s where the team approach shows,” Duns says. Brewin Dolphin’s equity research has a large North East contribution and is led by chief strategist Mike Lenhoff, a regular visitor whose next presentation in Newcastle will be on November 11.


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A new financial planning service in Newcastle - under George Slack, a chartered financial planner with 20 years’ experience of that activity in insurance, private banking and accountancy - is being intensively developed. It is expected to appeal widely to entrepreneurs and professional couples. Duns explains: “People often don’t realise there’s no minimum investment with us, and that we are pleased to talk with them over a long period of time. “There are many people also who may not be able to invest large amounts in a portfolio today. But we can now sit down with clients and ask where they are and where they wish to go financially. So people can become a client earlier on in the process. “It may start with planning school fees, through bonds, a critical illness policy, insurance, inheritance tax planning and perhaps a couple of ISAs may be added. That way they become a client. We want them to stay with us as the children grow and leave home, as the mortgage is paid off and they move towards investing to get an income. Elsewhere at this time, at building societies for example, cash rates can be very poor. Investing via the stock market is a very viable option.” Aware that as a major North East employer it should invest in the region, Brewin Dolphin is sponsoring extensively. Durham County cricket club, in the first year of a three year deal, wears Brewin Dolphin shirts for the County Championship, and as Northumbria University takes a massive step in sport with a £30m complex on the campus near the City Baths, Brewin Dolphin will sponsor Team Northumbria, the university’s rugby team. The group likes associating with sports that, like itself, emphasise team spirit, fairness, and upholding of values. And again, aware of its own niche in history – Brewin Dolphin dates back to 1762 – it aligns with regional institutions and traditions as represented by the Literary and Philosophical Society in Newcastle (founded 1793) and Durham Cathedral. It supports the Lit and Phil mindful not only that many of its clients are or were members, but also that innovative entrepreneurs like William Armstrong, Robert Stephenson and Joseph Swan were members once, whose

COMPANY PROFILE

Where strength lies: Brewin Dolphin’s progress in difficult times is seen as testimony to the strength of the business both nationally and in the North East.

Upholding values: Brewin Dolphin patronises sports that, like itself, emphasise team spirit, fairness, and upholding of values. pioneering encouraged a culture of investment in the region. Besides being a corporate partner of Durham Cathedral, it supports various charities. Brewin Dolphin through divisional directors and Vinay Bedi and Richard MacAlister also exercise best value principles in managing money for registered charities and communities. Expect to see initiatives also in corporate

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pensions. A team run by divisional director Don Robson is setting up and running pension schemes from Newcastle as pension deficits increasingly appear in many companies’ final-salary schemes. “Many local businesses already use the service, which is particularly aimed at small and medium sized firms”. Duns explains: “Final salary schemes are increasingly cost prohibitive, and we can help them look at cost effective measures to reconfigure and/or reduce scheme costs in many instances, as well as offering full administrative services.” The corporate advisory and broking division, which developed from the institutional business of Wise Speke and its Scottish counterpart Bell Laurie, continues under Graeme Summers, its head, to offer what it calls a “hands on local service” complementing an “over-all group offer of seamless service to directors and employees”. Clearly, many hurdles have yet to be cleared before the nation’s finances recover fully. But Duns says Brewin Dolphin is emphatic on one point: “We’re here, doing well and will continue to grow.” COMING EVENTS Tuesday Oct 26 – Stock Market for Dummies, Brewin Dolphin, Newcastle (6pm, registration 5.30). Fiona Newborough and James Cartmell from Brewin Dolphin answer your questions. Thursday, Nov 11 – Lenhoff and the Markets, Brewin Dolphin, Newcastle (noon, registration 11.30am). Mike Lenhoff, Brewin Dolphin’s chief strategist, summarises the economic position in the UK and globally.

Contact: Phoebe Walczak Tel 0845 059 6568. phoebe.walczak@brewin.co.uk

BUSINESS QUARTER | AUTUMN 10


BUSINESS LUNCH

BUSINESS QUARTER | AUTUMN 10

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BUSINESS LUNCH in association with

BRIEF ENCOUNTER So how does one go about clothing the world’s elegant bottoms and bosoms in exquisite frippery conceived here in the North East? Jane Pikett talks pants with lingerie designer Michelle Taylor It’s not every interviewee who brings me a gift of frilly knickers in a pretty heart-shaped box. In fact, Michelle Taylor is the first, and I’m thrilled. Clearly, this is not the place to be waxing too lyrically about my smalls, but these are particularly pretty knickers; frou-frou and fun in pretty shades of mint green, pink and plum with cheeky heart motifs embroidered on the bottom. Michelle, creator of these pretty knickers, has made a name for herself in upmarket lingerie design, having until relatively recently relished the role of creative director of Playboy Intimates UK. But two years ago she gave it all up to come home to the North East and go it alone. Now, after painstaking months sourcing exquisite

silks and trims and launching her debut collection in Paris to critical acclaim, she is making a new name for herself with Tallulah Love Luxury Lingerie, launched in January this year and already moving into international markets. The opportunity to take time out for lunch at the excellent Jesmond Dene House in Newcastle is more than welcome. “Lunch? I would love to!” she enthuses when I ring one wet Monday morning. “You’ve made my day!” And that is so very Michelle; an enthusiast, she is genuinely delighted and flattered to be asked, and she provides such good company that it is gone 4pm by the time we emerge from what has turned out to be a lingering midday meal.

A little bit cheeky: Michelle Taylor laughs a lot, enthusing those in her company

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Made in Portugal and the UK, Michelle’s vintage-inspired collection is romantic and just a little bit cheeky. Detail is her signature and the finest silk and French lace combine in elegant designs charmingly named Garden of Delights, Vintage Blush, Bluebirds, and Lavender Blue Dilly Dilly. A graduate of fashion marketing from Northumbria University, Michelle knows only too well the value of celebrity endorsement, and she’s already supplied members of Girls Aloud – including Cheryl Cole – with her designs, and has been endorsed by broadcaster and former star of TV’s Gladiators Diane Youdale (the glamorous ‘Jet’). Burlesque performers are as likely to wear Michelle’s striking, figure-enhancing designs as well-groomed businesswomen, and her collection is quickly gaining kudos in France – home of the world’s most discerning lingerie clientele. Michelle eats, breathes and lives her work, >>

BUSINESS QUARTER | AUTUMN 10


BUSINESS LUNCH declaring that if she could no longer design, she wouldn’t know what to do. For her, the pursuit of money is a necessity of business, but the real joy is in the appreciation of her clients. “A lovely lady emailed to say that she had been so excited after placing her order for the bridal collection that she couldn’t sleep,” she says “I thought that was so lovely, and it’s that sort of enthusiasm that really drives me.” She is inspired creatively by the fashions of the 1930s and 1940s, by architecture and interior design, sumptuous fabrics and exquisite trims and, perhaps most of all, her love of colour. “I love and adore colour,” says Michelle, who revels in the textiles of her trade. “Beautiful turquoise, blues and greens, deep purple and plum, pretty peach and shades of blush; I love them all.” Like most designers, she is happiest when creating, but she is rapidly developing entrepreneurial acumen and has gathered a team around her to support the growth of the business. Her autumn winter 2011 collection goes to bed in November 2010, and she is now actively seeking investment to take the brand to the next level supported by a brand marketing campaign. She is closely guided by her business mentors, Owen Stevens from Brand Orienteering, Matthew Rippon of BHP Law, and Stephen Slater of RMT accountants. By the end of this season, Tallulah Love will be exported to selected boutiques in Japan, Dubai, Holland, France, Germany, Spain, Italy, the USA and Russia in addition to outlets across the UK, including Fenwick of Newcastle. So is it time to swap her Jesmond base for New York, Paris or Milan? Michelle says not yet – if ever. “It’s working for me, being in the North East,” says Michelle, who is Hartlepool born and bred. “People are happy to fly here for meetings and I value the support of my family here. I think when you’re building a business, it’s important to be surrounded by a network of people closest to you.” After graduating from Northumbria University in 1998, Michelle moved to Nottingham to take up her first job with a lingerie supplier to Marks & Spencer, following that with a role in a design house supplying high street names

BUSINESS QUARTER | AUTUMN 10

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Fortunately I have a very strong grounding in the technical aspects and my designs are glamorous but also very flattering. They are designed to look beautiful and, most importantly, to be comfortable. There is nothing worse than a badly fitting bra or scratchy knickers

such as Topshop and Miss Selfridge. She then moved to Playboy Intimates UK and progressed to design director, which unavoidably brings to mind bunny girls and Hugh Heffner. She tells a hilarious story of being invited to the opening of a Hugh Heffner casino in Las Vegas and blagging her way into the VIP area, declaring herself “Playboy Playmate of the Month July 2004” as she wafted past the security men. “There I was, in a £20 Topshop dress, in this VIP party full of bunny girls, glamorous women and Hugh Heffner,” she says, laughing heartily at the memory. “It was amazing and a lot of fun.” Michelle laughs a lot. In fact, I am met by her throaty laughter floating out of the bar at Jesmond Dene House as I walk in the door. I arrive to find she has our photographer and the staff thoroughly charmed. She has an easy, open manner and a genuine love of people. A natural rapport builder, it’s easy to appreciate why people take to her, as she takes to them. Her professional relationships are nurtured, and she is now supporting three ladies in Nottingham – machinists who have set up their own small business. “It’s important to me to have my designs made in the UK and I’ve found these three

lovely ladies who are wonderful at what they do,” she enthuses. “I’m so pleased to be working with them now.” A lover of detail in design (every knicker has pretty embroidery and frills, every bra is embellished with little ribbons and lace), she has a detailed head for business, too. “Which means I have to remember to look up and take in the bigger picture sometimes,” she says, “and I’m learning to do that.” The comedy value of sitting in the elegant surroundings of Jesmond Dene House discussing undies is lost on neither of us, though what most people might not appreciate are the technicalities of lingerie design. “Ah yes, the issue of ‘hoistage’,” Michelle says, that throaty laugh to the fore again. “Fortunately, I have a very strong grounding in the technical aspects and my designs are glamorous but also very flattering. They are designed to make the most of the figure, to look beautiful and, most importantly, to be comfortable. There is nothing worse than a badly fitting bra or a pair of scratchy knickers.” She acknowledges the tension between her creative instinct and the restraints of commerciality. The best fabric and trims come at a price, after all. “My style is very detail orientated, yet there >>

New collection: Michelle Taylor’s latest designs are released in November

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INTERVIEW

BUSINESS QUARTER | AUTUMN 10


BUSINESS LUNCH are commercial confines I have to acknowledge,” she says. “I like to combine unusual colours and fabrics, though I have to remember that being commercial and marketable is just as important.” Whatever the commercial constraints, her designs are truly exquisite – their vintage style mingling with a contemporary, confident sophistication which is all the more alluring because it is not overtly sexual. Meanwhile, the Tallulah Love website is a beautiful powder pink confection populated by pretty girls in pretty boudoir poses which leaves one with the feeling that no-one should have to endure an unforgiving, ill-fitting harness ever again. If Michelle’s collection were a woman, she would be Cheryl Cole; beautiful, sweetly beguiling, and elegantly seductive in the manner of the film stars of the 1940s and 50s. Ingrid Bergman, yes. Katie Price – never. “Experience has taught me what women want from lingerie,” says Michelle. “It’s taken months of sourcing, designing, planning and soul searching to get to this point and I’m so proud that my vision has become a reality.” One of the reasons Michelle came home to launch Tallulah Love was because she craved the proximity of her family, and when she launched her debut collection at the prestigious Salon International de la Lingerie show in Paris this year, she was accompanied by her parents, her best friend and her best friend’s mother. They all know her fondly as ‘Mich’ (pron: ‘Meesh’). She is also supported by her partner Kev, who works for the Construction Industry Training Board. He’s a down-to-earth chap who, she says, helps to keep her grounded. Growing up in a working class home in Hartlepool, she was brought up to believe in hard work and tenacity; attributes which stand her in good stead. “I’m very tenacious and a natural enthusiast,” she says. “We all get knock-backs, and the fashion industry can be very hard, but I just keep going. I’m very open and very honest and that might mean I’m a bit vulnerable, but I believe strongly and passionately in those values and can only stay true to that.” She says she has managed to negotiate the intricacies of export and the vagaries of

BUSINESS QUARTER | AUTUMN 10

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international customs without too much trouble and she won a Passport to Export award earlier this year, having been part of the Passport to Export workshop with UKTI. There were effusive reviews for her debut collection, with which Michelle achieved that very rare thing – something genuinely different. Most lingerie designs are either very vintage, very staid, very contemprorary or

overtly sexual. Michelle’s designs defy one swift sound-bite – their colour, vibrancy and confidence, and their vintage elegance embodying something genuinely new and exciting. And now, I have new knickers, and they are the loveliest knickers I have ever had the privilege to wear. It seems the world is about to love Tallulah Love. n

Lunch! Jane Pikett and Michelle Taylor enjoyed the lunch menu at Jesmond Dene House, Newcastle (two courses with tea or coffee, £16.50). Staying with friends recently at the rural idyll in the south of France to which they have now, only just in their mid-40s, retired (not fair...), I was introduced to quite the stinkiest and most delicious cheese I have ever experienced. So when the waitress opened the lid of the vast fromagerie on wheels at Jesmond Dene House and my nostrils were assailed by a familiar aroma, I knew I was in the company of the good stuff. Considering the fat content, there is something paradoxical about two women meeting to discuss lingerie who begin their lunch with an enthusiastic preview of the cheese trolley. But the fromagerie at Jesmond Dene House is a truly marvellous mix of the best England and France have to offer, which makes it all the more disappointing that we were both too full to indulge when the time came. Take my advice – do not make the same mistake. Michelle’s downfall was probably the Middle White pig and potato sausages, which were hearty, succulent, encased in a gorgeous crispy coating and perfectly complemented by a delicate herb mash. My whiting was equally succulent and also treated to a crisp underside deliciously complemented by that rare treat – proper chips. But the star of the show was our starter salad of green beans, soft boiled egg, almond and delicately battered courgette – not only a fabulous mix of flavour and texture with a wonderful floral salad, but also a beautiful piece of art on a plate. Accompanied by home-made bread rolls and butter salted with seaweed (a sublime combination), if I’m honest, it was probably this that did for our hopes of cheese later in the day. The coffee and petit fours worked a treat, however, and we will keep our dreams of cheese in these elegant surroundings for next time. Jesmond Dene House, Jesmond Dene Rd, Newcastle NE2 2EY, tel 0191 212 3000, www.jesmonddenehouse.co.uk

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www.northeastaudi.co.uk Official fuel consumption figures for the Audi A8 3.0 TDI SE in mpg (l/100km): from Urban: 35.3 (8.0), Extra Urban: 48.7 (5.8), Combined: 42.8 (6.7). CO2 emissions: 174g/km. Retail sales only. Credit Example: Audi A8 3.0 TDI SE. 35 monthly payments of £629.00 Audi centre deposit contribution £4,500.00. Audi UK deposit contribution £4,000.00. Customer deposit £8,916.47. On the road cash price £55,995.00. Optional final payment £20,072.55. Total amount payable by customer £51,064.02. Based on 10,000 miles per annum. £125 acceptance fee payable with first monthly payment, £60 Option to purchase fee payable with final payment. Excess mileage charged at 10.80p per mile. Further charges may be payable if vehicle is returned. Indemnities may be required. Subject to status. Available to over 18s from participating North East Audi Centres only (subject to availability). Offer may be withdrawn or changed at any time. Terms and conditions apply, ask for details. Model shown for illustration purposes only.

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COMPANY PROFILE

AUTUMN 10

The £125m Finance for Business North East Fund opened for business earlier this year and is already making its mark supporting ambitious businesses with their growth plans….

FinAnCE For BusinEss MAKEs MArK

T

HE new Finance for Business North East Fund has made a major impact in driving deal making in the region since its launch earlier this year. That’s the verdict of key players on the regional investment scene nine months after the launch of the pioneering fund which has already injected more than £20m into regional firms in 2010. The super-fund has completed over 40 deals to date, with each of the six funds in the portfolio completing investments. More than £9m has been invested from the fund with a further £10.5m plus leveraged from the private sector. Chris Appleby, from BTG McInnes, explains: “Looking back at the regional deals market over the last 10 to 20 years, the number each year has been around the 100 mark. With so many deals already we can see the immediate impact the funds have had. “Without this intervention many of these deals simply wouldn’t have happened. The market still remains a long way from where it was but there’s certainly more optimism and activity and the funds are helping to provide traction. “We’ve shown that publically backed regional investment funds work and that private investors will invest money alongside these funds to create businesses and jobs.” Encouragingly, the deal pipeline for the funds also remains very strong with a high number of applications being received by the fund managers. Andrew Mitchell, chief executive of North East Finance, which is the holding fund manager for the portfolio, welcomed the strong demand. He explains: “We expected something of a ‘bow wave’ effect given the pent-up demand for funding since the start of the credit crunch. However, our fund managers have been absolutely delighted with the strength and quality of the deal pipeline so far.”

BUSINESS QUARTER | AUTUMN 10

David Thomas, NEL Fund Managers; Chris Smith – Technical Director, Formula Plastics; Graeme Lea – Quality Director, Formula Plastics; John Suggate – Managing Director, Formula Plastics

WE’VE SHOWN THAT PUBLICLY BACKED REGIONAL INVESTMENT FUNDS WORK AND THAT PRIVATE INVESTORS WILL INVEST MONEY ALONGSIDE THESE FUNDS TO CREATE BUSINESSES AND JOBS FUNDS IN FOCUS LOOKING FOR GROWTH: County Durham injection moulding firm Formula Plastics is planning for a brighter future after receiving investment from the Finance for Business North East Growth Fund. The Newton Aycliffe-based firm, which manufactures a range of components for the automotive industry, was hit hard by the downturn, but over the last year has begun to recover, achieving growth of 20 per cent and getting back to its previous annual turnover of £1.5m. Now, backed by an investment of £100,000 from Growth Fund, it is looking to maintain its success by recruiting a new sales manager, investing in new equipment and diversifying into new markets. It will also take advantage of a growing number of opportunities in its core operational area. The £20m Growth Fund, which is managed by NEL Fund Managers, aims to assist relatively

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mature companies at the development and growth stages. Companies benefitting will be mostly revenue generating and be looking for growth capital of up to £400,000. Further information is available at www.nel.co.uk CAPITAL INVESTMENT: The Finance for Business North East Growth Plus Fund has also made its first investments into companies within the region. While open to all sectors, it is aimed primarily at relatively mature companies seeking to achieve a real step change in the business. Run by FW Capital, the fund invests in revenue generating businesses looking for growth capital and typically provides larger finance packages than the other funds in the portfolio. The Growth Plus Fund is able to invest in the region of £500,000 up to a ceiling of £1.25m with the vast majority of deals syndicated with other investors. For more information visit www.fwcapital.co.uk/apply

NORT H E AS T

FINANCE For more information about the Finance for Business North East programme visit: www.northeastfinance.org or phone 0191 211 2300


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LINGWOOD ON WINE

AUTUMN 10

The perennial problem – should I try something new or stick to what I know – is one that faced Catriona Lingwood, but she was delighted to experiment “Would you care to be this month’s contributor to our wine tasting column?” As one could very well imagine, I certainly didn’t need to be asked twice. However, the next question was one I struggled to find an answer for. “So Catriona, what wines would you say were your favourites? Or which region do you usually go for?” In my younger days, I tended to drink the same old thing from the same old vineyard – a case of safety in the familiar perhaps, as it could be that the alternative was not to my liking. But as time went on, both my taste buds and I matured, I felt more adventurous with each passing glass; those old favourites just weren’t enough to satisfy a growing palate on their own, so a search for wines from different styles and places formed out of curiosity and necessity. Work was hectic, and as the beginning of my journey into the realm of wine tasting grew nearer, unforeseen events seemed to demand more and more of the time I had set aside to taste. It seemed as though fate was trying to prevent me from enjoying the week as finding the hours to set aside to dedicate a whole night to relaxing and sampling was becoming difficult. After the wine was kindly delivered by Michael Jobling Wines, I decided to take the opportunity to solve this problem of time by flexing my creativity and doing things differently. I was going to sample the wines on two different nights of the week. Tuesday brought about tasting the first of the

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LINGWOOD ON WINE colour, medium-bodied with a fruity finish. We found this to be a combination we both truly enjoyed – a perfect partner to the night’s meal, a personal favourite of mine; bolognaise. This could be one of the wines Robert Louis Stevenson was referring to when he talked of wine being “bottled poetry”, and with a price as low as £6.99, this is excellent value for money, a definite must-try. n

pair; Teriyaki chicken was on the menu for the evening for both me and my husband Phil. With the meal we decided to sample the Spanish white, Cantiga, Viura, Campo de Borja. The wine was beautifully creamy in colour with a good clean fruity fragrance, yet held quite a crisp and citrusy flavour. My husband stated that it was a fine accompaniment for the dish which is made with dry sherry, yet the wine

has such quality that it would make an excellent aperitif on its own. The cost is also a wonderful surprise, priced at a very reasonably £5.35 a bottle. On the following Thursday we decided it was the turn of the Sicilian red Arteo Nero D’Avola Scilia. Researching the wine, I learnt it is produced from what is deemed to be the single most important red wine grape on the island, and also one of the Italian peninsula’s most indigenous varieties. The wine itself is a beautiful deep cherry red in

White wine: 2009 Viura, Cantiga, Cambo de Borja, Spain £5.35. Red wine: 2006 Arteo Nero d’Avola, Concilio, IGT Sicilia,Italy £6.99. Both prices are per bottle inc VAT and are available from Michael Jobling Wines Ltd, PO Box 90, Ponteland, Newcastle upon Tyne, NE20 0WZ t: 0191 3784 554 info@michaeljoblingwines.com f: 0191 3784 554 http://www.michaeljoblingwines.com

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BUSINESS QUARTER | AUTUMN 10


FASHION

AUTUMN 10

in association with

INSIDER OUTFITTER Like the star footballer he once wanted to be, William Hunt is making his presence felt in the public arena with an eye for styling that engages with the ordinary people who want to feel good about themselves. It’s what his company is all about, as he tells Chris Porter BUSINESS QUARTER | AUTUMN 10

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A walk down Savile Row takes the sartorially savvy by many august institutions – Huntsman, Anderson & Sheppard, Gieves & Hawkes. These are the homes of the establishment, defiantly southern, well-to-do, understated. But then comes some upstart window of suits more rock ‘n’ roll than banking ‘n’ business, lean styles in bolder colour and with touches of 50s Hollywood, favoured by footballers and TV presenters, anyone indeed, with a reputation as something of a dandy – Eddie Izzard, Jonathan Ross, Laurence Llewelyn Bowen and Nicky Clarke... To top it off, the

purveyor to such flamboyant gents is a Northerner. One of William Hunt’s proudest moments came in 2007, when, after making Gary Neville’s wedding suit, the football professional pulled some strings and the designer was appointed to design the squad suits for his beloved home-team, Manchester United. It made for some useful PR, of course – but Hunt is seriously loyal. In 2007 he turned down a potent publicity wind-fall when asked to make the suits for Chelsea. “But I’m just not passionate about Chelsea,”

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FASHION

he explains. “I’ve also been asked to make them for the Liverpool squad. I turned that down too. But then I’d be stoned to death if I did that.” Hunt’s allegiance has roots in more than geography. He became a professional footballer himself at 18 but, luck not on his side, it was the local music scene of Northern Soul that saw him drawn away from the pitch and towards the sketchpad. His own style of dress – inspired by a seamstress aunt and structured and simple, after the engineering he had studied while playing >>

BUSINESS QUARTER | AUTUMN 10


FASHION

AUTUMN 10

If I’m looking for ideas I’ll get a load of old movies out. The clothing in them was just magnificent

professionally – caught the attention of a local retailer who gave him his first opportunity to put his designs on a commercial footing. By 1988 Hunt had opened his first store, on Chelsea’s Kings Road, before making something of a statement in 1998 by moving onto Savile Row’s hallowed turf. There his tailoring has won a reputation for certain cinematic look – the cool of Sinatra, for example, after whom Hunt has named one of this suit styles. Another is the Selleck. Yes, after Tom Selleck, Magnum PI, for whom Hunt has forecast a style re-appraisal by a still largely mocking public, much as Burt Reynolds has undergone. “Music has been a massive influence, of course,” he says. “I’ve seen Elvis, the Beatles, Punk, the New Romantics... but if I’m looking for ideas I’ll get a load of old movies out. The clothing in them was just magnificent. “What’s cooler than West Side Story? It’s just awesome. The whole idea of coloured suit linings, a signature for us, comes from that movie...” A strong, clean-lined and largely unchanging look has worked for Hunt. The last decade has seen Savile Row go through turbulent times but Hunt has played the long game. His style is consistent and business is developing – the former by extending his bespoke tailoring offer with the launch of a successful wholesale line of ready-to-wear (“it’s all structured through, I don’t really do sloppy-wear”), a shoe range for Kurt Geiger and, coming up, a chain of shop-in-shops with independent retailer Flannels.

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“There has been a lot of hype – certain Savile Row tailors have been built up as amazing and the next thing you know it’s all gone wrong and they’re gone or had to close a line down,” says Hunt. “But the whole industry has changed. I remember the days when you could rock up to a shop with a load of clothes and say, ‘Hey, I’ve got some gear, are you interested?’ and it could be being sold on the shop floor that day. These days much of the industry is too corporate, too many layers of

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middle management. I know buyers who can make buying a white T-shirt look difficult.” Those years have also allowed him to indulge other passions. Sport is never far away from his thinking. Inspired by a request to make a pair of trousers for golfer Ian Poulter, in 2005 Hunt launched his own golfwear line. It is one suitably loud in the tradition of the game’s noisy checks and pastel sweaters of the 50s and 60s. As Hunt has said before, few sports afford a man the opportunity to dress like a >>


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FASHION

AUTUMN 10

I think success in the business I work in is about retaining the passion for the clothing, keeping it small and tight

pimp and still be dressed for the occasion – and that is some opportunity for a designer’s imagination to run amok. With other brands now chasing the golf pound with a sleek and bleak style, it was entirely within expectations that Hunt might go against the grain. Indeed, brands may have developed clothing lines off the back of sports sponsorship before, but few have created a tournament out of a clothing line, too. Encouraged by the number of pros asking him to back them, in 2008 Hunt went one better and launched his own national UK golf event, the Trilby Tour. It was, of course, suitably unconventional – a chance for gifted amateurs to play under professional conditions and pressures, right down to being televised by Sky Sports, including this year’s new 12-part TV series format. Never one to miss some publicity, Hunt provides the clothes and the caddies even carry a Hunt-designed golf-bag. Last year’s winner and runner-up have both since turned pro. The event has been called the X-Factor of Golf; Hunt takes that as a compliment. The next one has already pulled in 1,200 applications to enter. “It’s when the ordinary guy gets to brush up on his golf, brush up his clothes and play on TV,” he says. “It’s not an opportunity many otherwise get in life. Of course, it’s also a promotional vehicle for the golf clothing, and has really become a business in its own right. But it fits into what we’re about as a company – making ordinary guys feel better about

BUSINESS QUARTER | AUTUMN 10

themselves, suits that make them look a bit taller and a bit more trim.” Ironically perhaps, despite the high profile clothing and sports kit, Hunt himself is little-known compared with his peers. And that is the way he likes it. Who would know, for example, that his latest project has been putting together a TV series for Sky, a drama based on his experiences in the golf world, for which Hunt devised the treatments and a friend wrote the script? It is currently

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going through budget assessments. “I think success in the business I work in is about retaining the passion for the clothing and that means it’s about keeping it small, tight, boutique,” he says. “You can still grow as a business that way, but you can only do so by finding other people who share that passion. Then you can work as a team and have a lot of fun. I like the idea of keeping my head just below the parapet. It’s worked for me.” n


LINGWOOD ON WINE

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BUSINESS QUARTER | AUTUMN 10


EQUIPMENT

AUTUMN 10

WATCH THIS SPACE, MARS A timepiece designed to withstand the excesses of space travel may have too high a specification for grounded consumers, but that’s the point, it’s authentic. And exciting

It would probably be a case of overkill to wear it on a classic car rally. After all, a watch designed to go into space far exceeds the requirement of coping with the roaring engine noises and odd rattle from a vintage Ferrari, MG or Jaguar E-Type. But, should a touch of excess be required, the Russian Space Administration might be able to supply it, together with the help of the Swiss watch brand Fortis, specialists in tough, minimalistic, functional timepieces for serious flyers and the occasional high flyer with a somewhat more grounded lifestyle. When Star City, the Russian State Scientific Research Test Centre for Cosmonaut Training, decided it needed a general-issue watch for all of its crews, it opted to have one designed to order. In developing its Official Cosmonaut’s Chronograph in 1992, the Russians turned to

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Fortis – and then asked for the watch to fulfill some challenging and unexpected specifications. It had to have, for example, no reflective surfaces – without cloud cover, glare can be a painful experience in space – as any reflection may hinder the legibility of the dial, which Fortis say should be clear at just a glimpse. But it did have to have an alarm – presumably because cosmonauts must never be late for lift-off of, course. More understandably, it had to be able to sustain massive g-forces, huge temperature variations – from a staggering 180ºC to 150ºC – and pressure differences, including the negative pressures of a vacuum, as well as provide legibility in total darkness or in unfiltered, direct sunlight. It had to be, in others words, a pilot’s watch and then some. It also happened to be the

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world’s first chronograph automatic alarm. And the first to leave the planet – tests having proven that, contrary to widespread belief, yes, an automatic would work in low gravity. Which, much as one might ask, why a timepiece capable of performance in such extremes is really required by the Earthbound and sedentary, even if they are zipping along in a Maserati. It also poses the question of why a cosmonaut needs a watch at all. But perhaps the almost-disastrous Apollo 13 mission, in which a life-or-death rocket burn had to be precisely timed using a wristwatch, answers that. “You need a solid mechanical watch in an emergency, when the electronics fail,” says Liese-Lotte Peter, director of Fortis. “It provides a sense of security. Of course, all those notions also excite the men who buy the watch >>


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EQUIPMENT

AUTUMN 10

Classic performance: Fortis is one of three partners in the Tour Britannia where pre-1981 cars get put through their paces in gentle races, hill climbs and circuits round stately homes, surrounded by beautiful countryside.

who don’t happen to be astronauts. But they do also want something that is authentic – that actually is used in space – and not something that’s the product of some marketing ploy.” That is perhaps what gets the drivers of the Tour Britannia quite so excited. As one of the main partners of the three-day event – an annual classic car rally now in its fifth year in which some 75 pre-1981 cars compete in gentle races, hill climbs and circuits round stately homes in some unspoiled corner of the UK – Fortis has won something of a reputation with them. Indeed, Fortis presents watches as race prizes and has also produced a limited edition Flieger Automatic model specifically for sale to the competitors, or free if they manage to persuade a friend to take part in the subsequent year’s event – an offer they prefer to having a discount on their entry fee. “There is a real cross-over between a love of classic cars and an interest in watches, it seems,” says Alec Pool, Tour Britannia’s commercial director. “There’s a shared

BUSINESS QUARTER | AUTUMN 10

appreciation of mechanics and for things working well. A lot of the entrants to the Tour tend to be higher net worth individuals and drawn to top-end watches and goods generally. And they understand that a mechanical watch needs looking after much as they do their cars. We even have to be careful that nowhere the Tour events are held involves a gravel drive or speed humps...” The watches certainly sound tougher than the cars. Indeed, Fortis, established in 1912 as the first specialist manufacturer of automatic watches but still a relatively niche name compared with some of the Swiss watch brand giants, has quietly built a position of influence. Its 40mm Flieger Chronograph arguably started the trend for outsize watches – and a signature style. Its designs have the aesthetic clarity of cockpit instruments and the hardiness of old boots that through the years has allowed certain models to pick up prestigious gongs, including the Long Life Design Award, the European Aviation Watch Award and, this year, the iF Product Design

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The company is partnering the Mars 500 project, an initiative to simulate a space mission to Mars. Needless to say the crew are all wearing a limitededition Fortis watch

Award, for a watch created in conjunction with Volkswagen Design and worn in the future by the commander of a spacecraft in Cargo, the first science-fiction movie made in Switzerland. Compared with its Pilot Professional, Marine Master and Flieger series, its latest model, this year’s B-47 Calculator

Tour Britannia images courtesy of Tim Hardy, www.timhardy.co.uk

GMY 3 Time Zones, has the busiest dial in its portfolio and is still a pure product of form following function, its looks being a consequence of a slide-rule. But for all that the brand makes an elegant companion to a classic car, Fortis still finds it hard to keep its feet on the ground. Last year the company enhanced its space credentials even further by partnering the Mars 500 project, an initiative between the European Space Agency and the Russian Institute of Biomedical Problems to simulate a space mission to Mars. Six people are spending every 24 hours of 520 days in the lab in spaceflight conditions to evaluate just what impact on a crew living in such confined conditions might have. Needless to say they are all wearing a limited-edition Fortis watch created for the mission. Never mind the count-down to lift-off. This will help them count down the time to getting out. n

EQUIPMENT FORTIS IN SPACE Our tradition is supporting new technology, like we did in the past with John Harwood in the development of the first self-winding wristwatch in the early Twenties. Since the companies foundation in 1912 we have continuously been producing watches and in the course of this history the FORTIS founder’s principles still remain valid and they are reflected in the current Pilots, Cosmonauts and Marinemaster watch collection. To follow the premise that “form follows function”, these lines represent watches which are functional and usefullyconstructed timepieces of high recognition and value. Today, as in the past, major developments in watches result out of sporting or military requirements. Thus, the FORTIS official Cosmonauts Chronograph was developed on request from the Russian scientific training and test centre for cosmonauts in Star City (the place where Yuri Gagarin, the first human being to go into space, was trained in the 1960s). Before the watches were selected as official items for manned space missions and on board the ISS, they had passed endurance tests on the borderline of modern physics. Since 1994, FORTIS watches have been on duty in space on the wrists of all Russian space flight commanders. At their request we have included a mechanical alarm device to the automatic chronograph movement and thus developed a new alarm calibre, the FORTIS F2001 movement (now fifth generation), a world-first Swiss patented and unique timepiece. Latest space project: MARS 500.

Ogden of Harrogate, 38 James Street, Harrogate HG1 1RQ www.ogdenharrogate.co.uk

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MOTORING

AUTUMN 10

the name’s martin. aston... Not many of us get to drive the car of our dreams, but when we do, will it live up to expectation, will it excite, inspire and enthuse? Colum Smith of The Entrepreneurs Forum parks his motorbike to take an Aston Martin Rapide out on the A1M >>

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MOTORING

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Inspirational: Colum Smith’s Aston Martin experience matched all expectations

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Have you ever met one of your sporting, business or celebrity heroes? Did it come up to or even exceed your expectations? There are a few things that currently exceed my expectations; one is my two young children, the other is my motorbike. One is safer than the other, I’ll let you decide... So imagine the prospect of being asked to take an Aston Martin Rapide for a drive for a few hours and write about the experience. Images immediately sprang to mind of the speed and style portrayed at Le Mans or in a Bond film, so where was I going to go and what was I going to do and would it exceed my preconceived notions? The first thing you notice is the tone of the car; it has that characteristic harnessed power that is determined to escape. Around the streets of Newcastle it’s not out of place, it delighted a couple of workers having a coffee break outside an office while I dropped off a few documents. Then the A1M beckoned, so far all the expectations were being exceeded. The A1M isn’t an interesting road, even in this super car, and there is a speed limit of 70mph. However, the Bang & Olufson sound system immerses you in the music. I’m not a classic musical buff but played very loud on a quality system, Gustav Holt’s The Planets – the music used in two important events of my life, the Rugby World Cup, and in place of the Wedding March at my wedding – was memorable.


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MOTORING

What Bob says...

Images immediately sprang to mind of Le Mans or a Bond film, so where was I going to go and what was I going to do?

I felt having a machine like this, even for a few hours, gives you a responsibility. The vision of the Entrepreneurs Forum is to help and inspire entrepreneurs in the North East to grow the most successful business possible. I took the opportunity to inspire some of tomorrow’s entrepreneurs by taking the car to Our Lady Queen of Martyrs RC Primary School, Esh Winning. The excitement, enthusiasm and enjoyment was immediate. The children’s knowledge was evident straight

away; it’s a V12, it costs £140,000, it has a top speed of 180+ mph. Isn’t it fantastic what children know that we don’t? The big question the children had was how could they get one; as expected they were creative in answering their own question, everything from a loan from their parents to getting it from a bank, but they all agreed the best way to get one of these was to work hard. Before I had returned to the office there was an email from one of the children saying "Now that I have seen this beauty of a car I’m determined to work harder than ever to make sure that I can take the wheel... one day" James Alderson Y5. The car didn’t turn me into James Bond. I don’t blame the car for my being too old, a little overweight and too grey. It also didn’t make me a Le Mans driver but it did match my expectations. However, as I rode my motorbike through the stationary traffic on the A1M at the end of the day I was pleased to be back on two wheels. n The Aston Martin Rapide driven by Colum Smith is priced starting at £129,990 and was provided by Stratstone Aston Martin, Stoneygate, Houghton-le-Spring, Tyne & Wear, DH4 4NJ, tel: 0191 512 3512, email paul.thursby@stratstone.com 2010 pre-registered Aston Martins available from £85,000.

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The Aston was recently described as being the most elegant four-seater in the world. After seeing the car I have to agree. The designers at Aston have worked their magic again; if you look quickly, the car looks just like the DB9. Even though it is a foot longer, it still looks like a coupé, which is all down to some clever designing. This car is very bold looking; it features the world’s first computer management system, along with a digital instrument panel – however exclusivity and brilliant styling come at a price. The Rapide is hand-built like all Astons, the car is built in Austria rather than the UK, and the build quality is absolutely excellent. Another area where Aston beats its competitors hands down is in its sumptuous interior. The mix of leather and wood not only looks stunning but has a real quality feel. It takes more than 100 man hours just to trim the interior alone. As with the DB9, the Rapide also gets a 6.0LT V12 engine. This helps propel the car to 60mph, in a touch under five seconds. Top speed is 190mph and owners may get around 15mpg. Aston has fitted its semi-automatic gearbox to the model. Manual gear changes are made by pressing the excellent steering paddles. The aluminium body is stiff and light and includes energy absorbing sections. The rear doors open out and up to look like a swan’s wing, this invariably helps access. I started thinking about how many onion bhajis I would need to supply Fenwick with to buy one! A lot, I suspect! Bob Arora is an independent car reviewer and also owns Sachins restaurant on Forth Banks, Newcastle. bob@bq-magazine.co.uk

BUSINESS QUARTER | AUTUMN 10


INTERVIEW

AUTUMN 10

FAST TRACKER

Helen Ager’s expertise, and that of her legal team, have just won national recognition. Brian Nicholls talks to an achiever who just had to come home >>

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INTERVIEW

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One thing irks Helen Ager in her otherwise zestful life: “I get very frustrated by lawyers feeling a bit sorry for themselves because theirs is now a much, much harder career than before,” she says. “You hear lots of moaning and worrying and I understand, obviously.” She’s a lawyer herself, after all, and a good one, but she adds: “We get to work with people on some of the most dramatic, even traumatic, issues of their whole lives. It’s still a fantastic career, so varied.” It is more competitive, she concedes. “But if you get these chances they’re amazing. So I get really frustrated when people moan on. Why should we be excluded when other people get pressures these days? I don’t see why lawyers should be immune.” Then she adds with an engaging laugh: “Somebody, somewhere, will get me for that!” But she argues from a strong position. She was the first female managing partner of a North East commercial law firm. Now the Legal 500, the watchword on law firms’ performances, has just described Crutes, of which she’s been managing partner since 2006 – and remains a fee earner – as being highly respected with a strong heritage in the region and a loyal following among the public and private sectors and private clients. Its quality of service and the acumen of its people are also cited. Ager and Stephen Crute, whom she succeeded as managing partner, appear on the Legal 500’s list of leading lawyers in the region – she for commercial litigation, he for public sector work. The firm’s nationally recognised expertise in insurance litigation has seen it top regional rankings this year. It has gained top spot for work in defendant/ personal injury and professional negligence, and is among the top five North East firms for its public sector litigation benefiting almost 60 local authorities across the UK. Naturally she’s pleased. It’s based, after all, on soundings of the firm’s peers and clients, and it underpins Crutes’ own client survey suggesting more than 94% of its clients as diverse as local authorities, leading insurers, health care trusts, housing groups and police authorities would recommend its legal services. The other 6% were not in a position to recommend.

BUSINESS QUARTER | AUTUMN 10

Home conveyancing gives rise to many claims against solicitors. It’s complex, and for some reason the solicitors’ profession cut its own throat by dropping prices down and down

No, she’s not the tourist guide So passionate is Helen Ager about the North East that it’s a family joke that after their first meeting her husband said she’d waxed so lyrical he thought she must be from a North East tourist organisation. “He’d never been to Newcastle,” she says. “How shocking is that? Shameful. He’s very much converted now.” She and Mark, an osteopath, met at a party. He worked in Colchester, she in London. But she was born in Newcastle, educated at Newcastle Central High School. A school-organised law weekend at Oxford University decided her career for her. She studied law at Manchester Polytechnic and Chester Law School, became a trainee solicitor at Fraser Brown in Nottingham, then Biddle and Co in London. From there she joined Kennedys insurance firm in the City as a solicitor, and it was after six years in the capital she decided she must fulfil an urge to return North. Mark still jokes that Helen lured him North. She explains: “When we were considering the move I’d say house prices up here offered marvellous property for a third of the price. He claims it’s turned out to be not quite a third. But he likes it very much. “I still adore visiting London, but quality of life here is no myth. It means the world to me that you can work hard and still be home in 15 minutes if need be. At crunch time, my husband used to drive me round places like Harpenden saying: ‘Look, this is very nice.’ But it was an hour-anda-quarter on the train to London. “I couldn’t visualise that, let alone the to and fro at the stations. We didn’t have children then, but how do you make that work? And what about when trains are cancelled? I couldn’t visualise a quality family life there, long term.” So they live at Gosforth, where Helen makes good use of time that might have been spent commuting. She’s on the board of the new Tyne and Wear Archives and Museums Development Trust, whose work will intensify as arts bodies have to engage more commercially. Weekend interests are driven by their two boys Ben, aged 10, and Hugo, seven – usually sport. She takes them to football run by the Newcastle United Foundation, and to rugby at Northern. “I’ve started this year, perhaps foolishly, to help coach in tag rugby,” she says. “The first group sent to me came trailing up and said ‘We’ve got the girl’. Little blighters!”. She also does tae kwon do with the boys, persisting though Ben is now one belt ahead and she feels that’s not on. Under pressure from Mark and the corporate community she has also taken up golf, and in between it’s films, food and friends.

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Although not the first non-Crute to head the firm founded in 1907, she’s the first woman to do so, heading also dispute resolution professional indemnity. Much of her time is taken up defending other professionals against claims; she’s an accredited mediator and contrary to some lay suspicions that lawyers prolong battles to fatten fees, she advocates early mediation to short-circuit disputes. Her commercial litigation team of “very strong lawyers with a wealth of experience”, in Legal 500 words, have carved a strong niche in complex disputes involving directors. Clients in this area have included Chevron, Metnor, and GT Group, and recent work has taken in product liability and multijurisdictional contract disputes. On her watch, the company, confounding a common belief that words like “lawyers” and “conservative” are synonymous, has re-routed. She joined Crutes in 1994 as an assistant solicitor, becoming a partner three years later. She gained the helm in 2006 with a new objective – a stronger commercial direction of full service, complementing the existing strengths in public sector and insurance work. “We were handling many volume claims – ‘slippers and trippers’ accidents and domestic conveyancing,” she recalls. “We took a view we wanted to improve our market share as a high-quality firm. Today we’re still putting distance between ourselves and cheap and cheerful, turnover-driven, high street work.” Change was made inevitable for the Newcastle-based firm in any case by two mergers to gain reach into Cumbria and Teesside. Mounseys, in Carlisle, was primarily private client and commercially driven. “I’d say that’s been very successful,” she opines, then sighs. “Dobermans – what shall I say about Dobermans? A less successful merger. Strategically it didn’t... (she measures her words)... achieve what we wanted. Our aspiration was to run claimant personal injury work, which came from Dobermans, along with Crutes’ defendant arm. There were firms then that seemed to run both defendant and claimant work successfully. “We found it, in practice, extremely difficult – and stopped trying. We decided not to pursue a proper claimant’s service. We still do some but are not looking for volume. We

INTERVIEW

Thriving: Helen Ager maintains Crutes has changed dramatically over the years tracked back to just having it as and when. “Insurance clients, we discovered, did not like us acting on both sides of the fence. Conflict arose more often than we would wish. A claimant might want to sue a council while we also acted for the council. Things made running the claimant arm impractical. “As part of a review of the firm, partly driven, I think, by decisions about Dobermans, it all came at the right time for deciding to get out of high turnover, low value work. It’s not where we want to be. We took the

opportunity to shrink claimant work back again, also domestic conveyancing, and dropping out altogether from the cheap and cheerful volume market. We also rationalised a couple of other services to get smaller but high quality delivery services.” Staff numbers are now just under 100, fewer than half in 2006, although partner numbers at 18 are much the same. Anyone who thinks business success is measured by length of payroll names should note that latest results show profits up 50% from £1.2m to >>

I’m not sure if everyone is quite aware of how much this firm has changed. The business services have been developing quickly and strongly

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Faw

INTERVIEW

AUTUMN 10

Things they do Recent Crutes work has included: Defending North Tyneside Council in eight separate asbestos prosecutions and successfully limiting fines and retaining magistrates’ court jurisdiction. In intellectual property and information technology, developing a profile in domain name disputes, as when acting for EcoPower Group. On the panel of the three main public sector insurers, Zurich AIG/Gallagher, Bassett and Travelers Insurance Company. Securing a settlement in a case involving more than 100 claims against a firm of solicitors, as well as settling a £3m mortgage fraud claim for £1m. Acting on an £8m purchase of two multi-let industrial estates in the North West, with instructions also from doctors’ practices in Tyne and Wear and County Durham.

£1.76m in the year to last March. Revenues rose from £5m to £5.3m over 12 months to last March, and 10% more in the first few months of this financial year. “Numbers peaked immediately after the Dobermans merger,” says Ager. “What happened between then and now is a combination of the strategic actions with a little bit also economy and recession-driven. I often say it was a bit of sod’s law thing for us. “We’d just done a bit of a strategic tidy-up that resulted in some staff going. We’d just

got past that and were seeing the fruits from it when the recession came. The good thing was that we had thought about our business before the recession hit.” The metamorphosis needed tactful handling of customers. “We spent a lot of time briefing our people on the handling of calls from members of the public who expected us to meet their requests,” she says. “We didn’t just turn them down but passed them to firms we knew would respond competently.” Crutes also consciously priced itself out of certain markets. Home conveyancing seemed an obvious cut-out. “It gives rise to a large proportion of claims made against solicitors,” Ager says. “It’s complex, and for some reason the solicitors’ profession cut its own throat by dropping prices down and down. It’s a very important and personal service in which people want to be able to ring their solicitor and learn what’s happening in the sale of their house. But if you’re only being paid £100, how can you give that level of service? “We decided we’d only do it in a high grade way. If necessary the business could go elsewhere. “There are lots of little businesses now wholly concentrated on conveyancing. If that’s their meat and drink, fine. And of course we now have coming down the track – I wish we could say it was wise foresight on our part but it wasn’t – the deregulation in this field. The Tescos, RACs, Co-ops and whoever else has declared an interest are moving in.” Under the so-called Tesco law non-lawyers can own and operate law firms for the first time. Ager warns: “As a professional defence lawyer, I often come across a situation where a very small piece of conveyancing may not have

We’ve undoubtedly narrowed gaps with many of our competitors in town on the commercial services,” she says. “We’re very pleased with the progress made

BUSINESS QUARTER | AUTUMN 10

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been done quite right. There are pitfalls because of the nature of the ancient English land law such as mine shafts and suchlike. People who don’t do it properly will find this out the hard way. It’s easy to overlook things, however carefully you apply yourself.” During the big changes one aim stated was to close the gap on the region’s three leading law firms by 2010. Has this been realised? “We’ve undoubtedly narrowed gaps with many of our competitors in town on the commercial services,” she says. “We’re very pleased with the progress made.” With its three operations co-ordinated – in Newcastle, Carlisle and Stockton (where it invested £500,000 in new premises) – Crutes is now out to help smaller businesses with services that include employment law, commercial and intellectual property, corporate finance, debt-recovery, and mergers and acquisitions. “SMEs,” she says, “are likely to recognise the value they can get out of their lawyers, especially in a recession.” Work in fact on private client and SME instructions is increasing. Crutes has also been called in by the like of Eaga and General Mills. Public sector work is also thriving. In this they are often dealing with huge national companies that have been brought in by their insurers. “They won’t necessarily have seen us in corporate service but, rather, litigation service, so it’s nice to talk to those companies about other services too,” she says. “I’m not sure if everyone is quite aware of how much this firm has changed. The business services have been developing quickly and strongly.” The firm is pleased by the Legal 500 description of “an experienced and thorough team”. It’s acclaimed as top regionally for health and safety and regulatory work – highly rated also in commercial property, commercial litigation, criminal law around white collar crime and private client work. Ager says: “We’re particularly pleased at so high a rating for commercial work. This is so challenging and competitive.“ Little bits in the Legal 500 did make her think though: “We can get that up next year.” However, she also, like the Legal 500 in its assessment, cited many colleagues deserving praise during this interview. n


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INSIGHT

AUTUMN 10

A FINE CATCH OF CONTROVERSY John Wall, dealmaker and enthusiastic investor in renewables – about whom you may read elsewhere in this issue – has always undertaken voluntary work. Currently, he supports young people and also, controversially, a fishing community In his support for the young people, John Wall, past chairman and president of Northumberland Lawn Tennis Association now chairs a North East development committee of The Princes Trust. This helps up to 3,500 young people a year into jobs or business in this region alone. In Prince Charles’s currently financially stretched charity activities, the trust shows a £2.6m excess of expenditure over income. More income from the private sector will be vital. Wall is also secretary of Beadnell Harbour Fishermen’s Society, caught up in a planning row over its wish to have three high-price homes built beside the shore there. Sir John Craster, who championed rural and coastal livelihoods, gave the fishermen of

BUSINESS QUARTER | AUTUMN 10

picturesque Beadnell the 18th century harbour in 1951, expecting it to be maintained. It’s the only west-facing harbour on the entire east coast, so it easily silts up and dredging is costly. When the harbour wall collapsed 10 years ago villagers fundraised – but £300,000 was needed. Wall, a permanent resident of Beadnell for many years, wasn’t into coffee mornings but said he’d try to help. He discovered a government grant of up to 80% could be had for shoreline protection and through the county council he learned match funding from Europe was also available if another 20% could be found. In the end, the harbour was restored by 100% grant funding. The £30,000 that locals raised

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supported the harbour in other ways. On receiving a lifetime recognition recently in the North East Accountancy Awards, Wall admitted at the presentation he’d never actually worked as an accountant, though qualified. “I’m good at interpreting accounts and forecasting from them,” he explains. Subsequently, however, he was asked to be secretary of the society and to look after its accounts. The books have only about 10 entries in and 10 out a year and Wall quickly foresaw recurring crisis. Commercial fishing there has slumped, with white fish virtually extinct and most catches now crab and lobster. The village economy rests today on tourism and the fishing of six families operating three boats and two cobles.


AUTUMN 10

“A hardy breed, fascinating people whose lifestyle goes back generations,” Wall says. Three years ago, with harbour dues from catches scant, WalI tackled the problem. The society’s few assets include some land Sir John also donated. Through a development partner now, the society wishes to sell this as sites for the three controversial homes. Wall says: “All money from the land sales would go into the society, a charitable trust, which could forever then look after the harbour. My vision, being a financier, has been to get enough now to create the necessary investment stream. We could pay future dues, dredge and insure. If the harbour silts up it cannot be used as a working harbour, nor can we allow public access to the piers because we need public liability insurance.” Fishermen and holiday visitors would then be penalised, he argues. But a Save Beadnell Association of 40 or so members claims the housing development would be “misplaced” and, like the parish council, opposes it. Wall contends families who’ve lived in Beadnell for generations – fishing folk and others – back

INSIGHT

If the harbour silts up it cannot be used as a working harbour, nor can we allow public access to the piers because we need public liability insurance

his society, and that many opponents are “part-time” villagers from the 70% or so of second homes there. Altogether 400 local people and 2,000 visitors have signed an objecting petition, according to James Williamson, a leading campaigner. The association has said it would buy and maintain the harbour to avoid the development, but the rival society claims no plan of purchase has been put forward, so no guarantee for the harbour exists. Partners of the society in its proposal include developer Countrylife Homes, architects idPartnership, and law firm Dickinson Dees, for whom Wall acts as

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consultant on strategy and development. There is further controversy in this normally dormant coastal village, stemming from an unrelated planning application to the county council by the Duke of Northumberland through his estates office. He wishes to build a holiday complex of 40 homes for short-term lets and a watersports and visitor centre, recreational facilities, and a car and boat park on farmland beside Beadnell Bay. This has been passed amid numerous objections. On November 4, the county planning committee considers the fishermen’s ambition. n

BUSINESS QUARTER | AUTUMN 10


MEDIA BRIEFS

AUTUMN 10

>> Down but not out Bdaily business website continues though its associated creative and marketing agency Bgroup is in liquidation, strangled by a tightening of public purse strings. Si Bales, who established the stricken business 10 years ago, is heavily backed on the website side by industrialist Roy Stanley. Bdaily has been relocated from central Newcastle to North Tyneside.

The Scrutator

Adam Parker: Down with spam

>> Next stop is (perhaps)... Sharon Hodgson, MP for Washington and Sunderland West, is backing Sun FM radio’s public campaign to have Tyne and Wear Metro system extended into Washington.

>> HR help at your fingertips A free service for employers – HRHelp. co (www.hrhelp.co) – is being run by HR specialist HR4UK.com. It offers SME-size guidance, jargon-free, on all aspects of staff employment. And it’s designed to be fair. HR4UK has given employers 30 years of human resources support – and claims that in 2009 more than 90% of all disputes adopting its approach went no further, nor did the employers have to back down. HR4UK says there’s no subscription or other obligation.

>> Well, I never Did you know Newcastle Airport was once planned for White Mare Pool, between Gateshead and South Shields? That’s one of innumerable fascinating facts to be found in Your Airport, the coffee-table book celebrating the airport’s first 75 years. It was in 1929 when the British government encouraged air travel, and the suggestion stayed in the frame until 1955 when Woolsington won out. This book has compelling text by Alastair Gilmour and fascinating pictures. (ncjMedia, £15).

BUSINESS QUARTER | AUTUMN 10

an in-house PRO with Marconi – saw an internet niche for communicators eager to reach writers and editors. Parker encouraged Dolby to launch Webitpr, one of the UK’s first online news release distributors, and later left PwC to be more hands-on. Two years ago Webitpr became RealWire, and now distributes online information to more than 5,000 websites. Parker, 39, operates from Newcastle’s Balliol Business Park East. Colin Young, Parker’s interviewer for Accountant, says he’s a clergyman’s son almost evangelical in his mission to prove that quality ranks over quantity.

>> The world’s your IP oyster

>> Is your release really necessary? About 78% of press releases e-mailed out are irrelevant to their recipients – and 55% of recipients have blocked a sender of news. That’s the finding of North East accountant turned media practitioner Adam Parker. Now, with support from PR and media, Parker has triumphed in a campaign against PR spam. The Newcastle-based chief executive of RealWire Ltd – a global news release distributor – based his estimates on responses from journalists, bloggers and editors, recipients of some of the 1.7 billion irrelevant press releases that may be e-mailed yearly to UK and US journalists. Parker trained at PricewaterhouseCoopers in Newcastle, and later became managing director of his brother’s IT firm, SCS Technology Solutions, run from a garage in Lincoln. He later returned to PwC in Newcastle as a senior manager in public sector consultancy. An Accountant magazine profile tells how he again changed course after meeting teenager Jonathan Dolby. Dolby – whose father was

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A free, online global intellectual property reference resource, giving access to intellectual property tools, can be accessed through the World Intellectual Property Organisation (WIPO). WIPO Gold has more than 1.7m records on the database at: http://www.wipo.int/ wipogold/en. And for more information try: http://bulletin.sciencebusiness.net/ebulletins/ showissue.php3?page=/548/art/18331&ch=14

>> Cut-price conferencing Newly-launched 03Talk has a conferencing service giving users access at no extra charge. It is taking on mobile network providers who cash in on businesses dialling up conference rooms from their mobiles. Most teleconferences take place on 08 and 09 numbers. The enterprising 03Talk is backed by serial entrepreneurs Nick Imrie and Kieron James. www.03talk.com

>> Amazing-ly new ventures Amazing Radio has secured £800,000 of new investment. It broadcasts from Gateshead on DAB Digital, promoting raw new musical talent. The Amazing Media Group (AMG) is now opening a London office and will launch Amazing Radio Brazil next. It came to Gateshead last December and employs 31 staff.


AUTUMN 10

COMPANY PROFILE

• NatWest and RBS see 9% growth in the North East start ups during past twelve months • New Start-up Hotline launched to help more businesses get off the ground

NATWEST AND RBS SUPPORTS SURGE IN START-UP BUSINESSES DESPITE ECONOMIC DOWNTURN

A

S Britain looks to trade its way out of the downturn, NatWest and RBS has seen a 9% rise in the number of business start up accounts opened in the North East during the last 12 months. Figures from the banks show the number of business start up accounts opened between June 2009 and June 2010 increased by 9%. Nationally, NatWest and RBS are opening more than 2,000 start up accounts per week with leisure (37%), IT (33%) and education (32%) the most popular sectors. To build upon this success NatWest and RBS is launching a free hotline service to help more businesses get off the ground. The hotline will complement the bank’s existing offer of two years free banking for start-up businesses.* Mark Winters, Regional Director Business & Commercial Banking, North East & Humber said: “This is precisely what NatWest and RBS are here for – working hard every day supporting our customers and in turn the recovery of the economy. These figures tell us that confidence is there and entrepreneurs are seizing opportunities despite tough market conditions. It’s important we build on this momentum and give more new businesses the best possible start with initiatives like our new start-ups hotline.” One example of a start up business in the area is Autoworks Express Limited who have opened a new garage combined with an Italian coffee lounge at Binchester, near to Bishop Auckland, on the A688 trunk road. The garage has been launched with a view to serving families in a friendly environment. There will be seven new jobs created on opening. The garage will use the latest technology, to offer vehicle servicing, repairs and MOTs for all makes & models, as well as a drive in hand car wash and valeting facility.

Left to right: Mark Tate, Autoworks Express; Bruce Garfoot, NatWest; Dominic Duke, NatWest

IT’S IMPORTANT WE BUILD ON THIS MOMENTUM AND GIVE MORE NEW BUSINESSES THE BEST POSSIBLE START WITH INITIATIVES LIKE OUR NEW START-UPS HOTLINE The start-up is being funded, in part, with a loan from NatWest, from the bank’s regional fund for Small and Medium Enterprises (SMEs). Mark Tate, Director of Autoworks Express said: “We’ve taken a run-down, disused building and made an exciting new amenity for the local community and anyone passing through the area by road. I’m proud of what we’ve achieved and look forward to creating a really warm and friendly atmosphere. So many garages are unwelcoming, especially for families with young children, we want to change that perception and make the annual MOT, a service or even a simple tyre replacement more enjoyable, rather than a chore.”

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Bruce Garfoot, Business Development Manager for NatWest said: “Mark’s got a really creative mind and he’s done a great job of making sure his business gets off to a great start by ensuring he has a unique selling point. He is ambitious and, in my role within the bank, it’s always a pleasure to support people like Mark with their aspirations and to help create jobs in the local area.” The new start-ups hotline provides access to a specialist team, experienced in converting business ideas into a reality. The Hotline offers a free Business Plan Review service, allowing budding entrepreneurs to road-test their ideas direct with the bank’s most experienced advisors. NatWest and RBS Start-ups Hotline tel: 0800 656 963 (Calls may be recorded)

SECURITY MAY BE REQUIRED, Over 18’s only YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE *“Free banking means that the charges for the day to day running of your account (known as your ‘service charge’) will not apply during the free banking period. At the end of this period, you will automatically move to the Standard Tariff. Charges for “Additional Services” and “Unarranged Borrowing” are not part of the free banking offer. Free banking applies to businesses that started trading within the past twelve months with projected or existing annual turnover not exceeding £1 million.”

For further information please contact: Mark Winters Regional Director Business & Commercial Banking, North East & Humber Tel: 0113 394 2067 Email: Mark.Winters@rbs.co.uk

BUSINESS QUARTER | AUTUMN 10


ENTREPRENEUR Geoff Ford’s manufacturing business has scored a century of success despite the worst efforts of latter-day banks and government, he tells Brian Nicholls True to character, Geoff Ford has celebrated his firm’s centenary in a warehouse, not some nobby hotel. “It’s nice to remind people throughout the evening that we’re first and foremost in the business of manufacturing,” he explained. The 165 guests still found the decor as striking as any hotel’s, down to the metal sculptures shaped by the firm’s own workforce. The food equally impressed. Planning for the evening on Simonside East Industrial Estate, South Shields, had been immaculate – rather like Ford Group’s daily standards in producing parts for aircraft, automotive, rail and power needs. Ford Aerospace parts are made at Tyne Dock for Lynx and Puma helicopters and fixed-wing aircraft. Ford Component Manufacturing at Hebburn specialises in precision machining, pressing and laser profiling for the likes of Caterpillar, JCB, Komatsu, Bombardier Rail, Freudenberg and Anixter. Brian Shaw, managing director of UK Trade and Investment, says the aerospace activity is a great example of how North East innovation and expertise helps the region maintain world-class standing. Its clients include BAE Systems, Honeywell, Rolls Royce, Goodrich, MOOG, APPH and Agusta Westland, from whom a recent three-year contract may prove worth £17m. Both operations, uplifted by a recent £1m enhancement of technology, epitomise the indomitable spirit of North East engineering, unyielding to barmy-brained politics, myopic bankers, mishaps and daily challenges. In 100

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100 years young years Ford Group has come through two world wars, two blazes (1948 and 2003), global depression and numerous recessions. “We’ve had to reinvent ourselves several times, every reinvention virtually a new start,” says Ford. Politically, Ford fires his frustrations over manufacturing’s struggles both right and left, blaming Margaret Thatcher for earlier attempts to kill it off, and Gordon Brown for over-favouring financial services. Now? “Chancellor Osborne’s Budget speech rightly talked of altering the balance of the economy, reducing dependence on the financial sector and lowering funding to the public sector,” he says. “But so far he has rebalanced only that side of the scales.” Both Ford Group and the Engineering Employers’ Federation (for whom Geoff is a regional councillor), want dependence on the

We used to feel confident our bank wished to back us as a viable business. But everything we ask for now is treated in isolation

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financial sector to give way to manufacturingled recovery, especially under poundfavouring exporting. David Cameron commissioned a paper by the inventive entrepreneur Sir James Dyson before the election called Ingenious Britain and Ford believes its recommendations would work for manufacturing. “I haven’t heard any government reference to it since,” he complains. “but regional development agencies are being closed by political dogma.” When he chaired a regional committee on aerospace every other region’s representative used to tell him: “I wish we had a One North East.” Now it’s going. Ford is reaping consequences. Its two companies applied separately for grants to fund growth and create jobs. “The Components bid was passed just before the General Election,” he says. “Now Ford Aerospace’s is caught in a morass and we don’t expect any of that money now.” Cutbacks in capital projects will ricochet into construction, civil engineering, equipment manufacturers and their supply chains. The UK still stands eighth in the world by value of manufacturing output, but Ford feels banks are as oblivious to this as are governments. “Ours is still trying to get used to us, despite our 100 years with them,” he says. “After the crisis they caused, banks’ idea of service seems to have changed. Everything now’s a deal, driven by returns. We used to feel confident they wished to back us as a viable business, but everything we ask for now is treated in


AUTUMN 10

ENTREPRENEUR

Fight the good fight Geoff Ford has been called Mr South Tyneside for his part in reviving this area recently pocked with unemployment of 20% and more. He chaired South Tyneside committee of the North East Chamber of Commerce and the South Tyneside Enterprise Partnership, and vice-chaired South Tyneside Local Strategic Partnership. “I’m less involved in South Tyneside now because of the need to refocus on Ford,” he says. “I’d be doing South Tyneside no favours if Ford went to the wall.” But he still heads the South Tyneside Manufacturing Forum he set up, is a regional councillor for the Engineering Employers Federation and a patron of South Tyneside Business Forum – all bearing directly on Ford fortunes. South Tyneside, the smallest borough in England and still with job concerns, is even so starting to punch above weight because, Ford says, its council and latest chief executives have supported the private sector. Now it looks as if South Tyneside and Sunderland will work more closely, which suits Geoff.

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isolation, not part of what we’d call the Ford Package.” Their demands for physical collateral is something Ford finds incongruous and disappointing. He’s the third generation chairman of the family company and the bank’s relationship director is regularly invited to board meetings. “We hide nothing,” he admits. “Currently we’ve a very attractive opportunity that could double turnover in two years. However, that would require significant commitment and investment on our part and we’d like bank support. They seem to have lost the ability to see the broader picture.” But he lashes manufacturing and engineering too. “We’ve a lot to do to repair a grubby image if we’re to attract people to a career with us,” he says. “Manufacturing offers myriad opportunities. You needn’t be an engineer to be in engineering – I’m an accountant. There are openings in sales, purchasing, quality control, IT, HR – the list is endless.” Yet Ford heard a teacher tell a youngster: “If you don’t get your grades you’ll end up working in a factory.” As if that was the worst fate, Ford fumed, then he thought: “It’s our fault we’ve let people assume manufacturing and engineering are smelly, poorly paid and unattractive.” You could eat off the polished floors at Ford, so he reasons: “We must work with education-business partnerships to attract young people to work experience, or to visit. Perhaps we should work first with their teachers.” Blue Venture, South Tyneside’s business and education link-up started and chaired by Ford, has a manufacturing manager and goes into schools. St Joseph’s, Hebburn, is a member. Mortimer Road too (his old school) is a primary school with an engineering club. Jarrow School is the only one in Tyne and Wear giving special studies in engineering, promoting diplomas in engineering, manufacturing and product design. But again, says Ford, the Government falls down... “The industry’s keen on diplomas in engineering and design,” he says. “Their element of practical work with an >>

BUSINESS QUARTER |AUTUMN 10


ENTREPRENEUR employer appeals. The new Government has removed its support for their promotion.” To employers who claim they “can’t have kids on their shopfloor” under Health and Safety regulations, Ford says: “Nonsense. You can extend your public liability cover for as little as a day.” Ford apprentices, besides support from South Tyneside College, are trained by older time-served employees encouraged out of retirement. Some young people, asked what an engineer looks like, may reply “some bloke in an oily overall with a screwdriver in his top pocket“, yet in Germany, Ford observes, engineers are revered for their skill in making things. “Why the difference” he asks. “Some people, asked to name an engineer, quoted an actor playing a car mechanic in Coronation Street. That’s our problem.” And more than 50% of UK engineering graduates finish up in financial services, “picked off by the merchant banks and their pals for their intellect”, Ford complains. Yet precision engineers like Ford still innovate. It’s one of only eight companies in the world producing laminate shimstock to seal joins between surfaces more efficiently. Instead of filing down a shim or juggling to find one fitting, Ford’s Easipeel comprises foils glued together, each two thousandths of an inch thick – peel off till you reach the required thickness. Easipeels are helping refurbish a steel mill in China. Might Ford manufacture there? He says: “For every success story about low-cost offshoring there’s a horror story. We made some parts for JCB for years then lost to India. Now we’re about to remake for them. They couldn’t get the quality right abroad.” But China offers a big market for standard parts, and Ford is appointing agents. It exports also to North America and mainland Europe, and eyes Scandinavia. “There’s no source of laminate shimstock there,” he explains, “nor in India, Australia, Israel or South Africa. Mining machinery in South Africa and Australia needs them, and there’s a healthy aerospace industry in South America to explore.” At home, Ford is looking to electric cars and wind turbines and given its work already for Bombardier it’s watching closely at attempts to

BUSINESS QUARTER | AUTUMN 10

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No family pressure At 67, Geoff Ford is inevitably asked if the group will remain a family business or be sold on, perhaps through management buyout. He replies: “There are still many challenges I feel I can help to overcome. I thoroughly enjoy challenges, and working with good people.” Geoff and his wife Marilyn, who live in Durham City, have two sons. Dan, 29, is an actor. Chris, 25, is an economics graduate from Hull who, sponsored in his studies by Ford where he presently works, has just qualified as a management accountant. Neither son is pressed to request the mantle. “Chris probably ought to have a look elsewhere, maybe Australia, Canada or New Zealand,” says Geoff’s voice of experience. His father never pressed him. After Mortimer Road School, Tunstall Preparatory School, Sunderland, and Durham School, he decided at 16 to be a chartered accountant. He served articles at Vasey Oliver and Co in South Shields, and later was a management accountant at a Newcastle steel foundry, George Blair and Co (now Astrum at Stanhope). After a spell with Transitron UK Ltd of Maidenhead, he spent a year as internal auditor for Burroughs Machines, and loved working for an American firm in France. When in 1974 his father said a decision was needed about the firm’s future, Geoff decided at 30 he had something to offer and took the opportunity. “If Chris wants to return to Ford full-time after working elsewhere that’s up to him,” he says. Since 1974, Ford turnover has risen from £330,000 to £10m, breaking the £1m mark in 1979. It launched into aerospace in 1982, three years before Geoff became chairman on his father’s death. The company received the Queen’s Award for Enterprise Promotion in 2007, Ford himself the MBE in 2008. The devastating 2003 explosion and blaze at Tyne Dock knocked growth back years. Ford had feared for the company, especially when the insurer didn’t pay out for three-and-a-half years. “I think they were holding out to see if we ran out of cash and would sell on what we had left,” he muses. The council helped provide a site at Monkton in Hebburn where pressing resumed. This year Aerospace is on a programme of continuous improvement with the Manufacturing Advisory Service, also a two-year Knowledge Transfer Partnership with Newcastle University to improve production of Easipeel. Component Manufacturing is advancing in laser cutting. The group works off three-year plans now, and Geoff Ford expects controlled expansion will see the group in business for a long time to come.

bring assembly of Hitachi trains to Newton Aycliffe. “Come recovery, which we don’t see till 2011, there’ll be significant opportunities, especially on the components side,” he says. “A number of competitors have gone out of business – we’re well placed to take advantage.” Only twice during a 75-minute interview does Ford sounds hesitant – when asked about job cuts, and about providing parts for British helicopters used in Iraq and Afghanistan. The workforce is down 40 to 152. “We employ fewer than when I joined in 1974, largely through recession but also because advances in technology require fewer people with more skills,” he says.

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He regrets the job losses, also two painful pay cuts made, each for three months. He says: “I’ll be eternally grateful for our workforce’s sacrifices. But we’re leaner and fitter now. We’re well placed to be greater than before. I’m not sure I’m pleased about sacrifices our troops are being called to make. Iraq was a con and if the Russians gave up on Afghanistan what makes anyone think we’ll fare better?” However, without the helicopters, he agrees, British forces would be even more vulnerable. Today aerospace work provides £5m of the £8m currently coming in. When sales regain 2009 levels of £10m, probably next year, aerospace’s share could be £6m. n


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INTERVIEW

AUTUMN 10

THE RIGHT CHEMISTRY

The MBO that Robert Hardy and his team carried out has led in six years to an international force, exporting 95% in the highly competitive sector of pharmaceuticals. Brian Nicholls reports

Start a business and it may turn out a Topsy. Dr Robert Hardy’s chemistry is doing that... “I’ll be honest,” he says, “when we first did our management buyout we weren’t looking to take over the world, as it seems now. We were looking for an acquisition of one site.” But, like Topsy, Aesica Pharmaceuticals is growing and growing. Six years on, Hardy as chief executive talks about it becoming a global principal in its league. Aesica isn’t a name you’ll see on packets of pills. Its strategy is not to move into its own products. “We’re business to business,” Hardy explains. “We don’t want to compete with our customers. We manufacture some of the biggest products in the world now, but you won’t see our name on them. We manufacture some of the biggest drugs our customers have.” A paying proposition: Revenue at £100m is already four times higher than projected at start-up in 2004. The company employs more than 700 staff, about 160 at Cramlington. “We want by 2013 to treble the size of the business again,” Hardy says. “We want sales of about £300m.”

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He’s relaxed, a stranger to hyperbole, as he explains the trajectory. “Our buyout team had all been a while in the industry – I’ve been in it for more than 20 years. “The first part had been very enjoyable. Later I spent a lot of time closing places, rationalising, so, as a team we wanted to build something. We saw opportunity at Cramlington, where we could buy out the site of BASF for whom we’d worked. We had people, we could take over three products and a customer list. “BASF had kept us well away from customers, though. So first, we had to get out and understand our customers. Our products had previously gone to a big warehouse in Germany. We now had to organise all our own distribution and customer links.” This has been done. The business had been mainly about supplying active pharmaceutical ingredients (APIs) to the generic industry, and had few very large contracts with any major pharma group. The new brooms also wanted to sweep into contract manufacturing for large pharma groups. Hardy, 52, says: “You can do this organically – through your sales team moving gradually through hierarchies of big companies to get

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business. But that’s a long-term process for any company without history. I’d probably have looked a lot older and a lot greyer relying on that.” Fortunately, the industry is changing. Big boys are concentrating on research, development and brand-building. “They view the middle bit now – the manufacturing and development – as non-core, since they have assets under-utilised.” So they’ve been outsourcing products and offloading some manufacturing assets. “All this played into our hands,” Hardy says, smiling. “We picked up some nice assets a lot cheaper than we could >>

Home base: Robert Hardy has worked hard to grow Aesica Pharmaceuticals in the North East


AUTUMN 10

INTERVIEW

We don’t want to compete with our customers.We manufacture some of the biggest products in the world now, but you won’t see our name on them. We manufacture some of the biggest drugs our customers have

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INTERVIEW

AUTUMN 10

The majority of our business is with large US pharma companies. Our relationships there are probably the strongest and best we have – probably because the US tends to be at the forefront of this outsourcing

have built them, and with ready-made contracts to supply.” There were then three priorities: (1) Do something about the cost base since big pharma groups, many agree, can be very extravagant on this. (2) Grow the business in a way they can’t because they cannot sell to their competitors, whereas Aesica could sell to anyone, and (3) Develop firm relations with the organisation the business had been bought from. Hardy says: “That allows us to develop strategic tie-ups. So we move from no relationship to strong relationship with that organisation over two or three years.” And that’s Aesica’s model. Having worked up the active chemical side (the API), the firm in 2006-7 diversified into making the formulated products – tablets and packaging – this through acquiring a site from Abbott Laboratories in Kent. Relations with Abbott bore fruit. “We’ve brought lots of new business to the site,” says Hardy. “Although Abbott or any big pharma company nurture sites they own, the sites now reach a point where they no longer have a life within those larger organisations. Most assets we’ve bought have been from organisations with no further need of them. “By about 12 months ago, 95% of our business was going overseas. But all our manufacturing assets are in the UK – not a bad place to manufacture from at the moment. “However, we’d no development ability for

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formulated products. We could develop processes for chemicals, upscale and manufacture chemicals, and could then tablet, bottle and pack them, but we couldn’t come up with new formulations, such as new types of tablets and new delivery systems.” Recent acquisition of R5 Pharmaceuticals in Nottingham completed the jigsaw. But Hardy realises difficulties can recur. The recent loss of a major client will bring closure next year of Aesica’s Ponders End, North London, business, costing 50 jobs if staff relocations can’t be made. A year’s search had failed to fill the gap. But, as Hardy says, growth continues in the group otherwise. With space scarce at Cramlington, Aesica could have used surplus office space once filled by Merck Sharp and Dohme at Ponders End. Instead, 18 months ago, Aesica relocated its head office to fast-growing Quorum Business Park in Newcastle for Cramlington to concentrate on production. At Queensborough in Kent, where a majority of staff are now, a new £3m facility to package pharmaceuticals will operate from next year. Hardy says philosophically: “We’ve a very exciting company, and I work on the principle that people will always need medicines – maybe even more if the economy worsens!” The firm has sales offices in the USA and a representative office in Shanghai, agents too in Europe, Japan and Israel. But most of the workforce is in the UK.

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How pharma became a regional force Pharmaceuticals thrives in the North East because pharma companies enjoyed incentives to relocate to the region in the 1970s, and a strong base of heavy chemicals had been established on Teesside through ICI some 44 years before. When Boots came to Cramlington, part of a major influx into Northumberland, it near-neighboured Merck Sharp and Dohme, Glaxo, Sanofi and Pfizer. Most of the work coming in, though, was manufacturing, with research and development done usually elsewhere. One advance, however, is that a North East of England Process Industry Cluster of 500 firms flourishes. Hardy says, though: “I can’t see many people building new plants in the North East when India is so much easier and cheaper. So you must get the best out of existing assets. Any built in Europe tend to be in Eastern Europe.” Research and development now? Hardy feels the region must prioritise building its technology and innovation. Aesica’s growth at Cramlington has all been in technology. “All our plans there are around the front end, development,” he discloses. “That’s where our company will spend in the North East.” As for sales, the US is a very easy business patch, he finds. “Developing relations in Japan takes time and you must work at it,” he says. “But we now have great relations there. We sell to India, Pakistan, Turkey, Australia, Africa and places you wouldn’t believe a UK manufacturer could compete in – like Iceland.”


AUTUMN 10

INTERVIEW

The Asia strategy has its own drive, will follow its own process. We’re looking closely at building a development centre in India next year. There are always issues to building and recruiting in a foreign country, but that’s out of our hands

Well, well: Robert Hardy and his team work on the principle that people will always need medicines

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Hardy affirms: “It’s particularly important to get some manufacturing asset in the US. Our customers there want to talk to something more substantial than a salesman in their own time zone. Our biggest market is the US. So we’re looking for a US formulation site and have targets. But the deal has to be right. “Also we’d like greater presence in mainland Europe – we’re looking to manufacture there too. We’ll look to expand our technology base. There’s little we can’t do from a chemistry perspective, but in formulation we’ve a narrower offer. We want to expand that. We’ll

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INTERVIEW

AUTUMN 10

look to buy more sites from big pharma, growing our strategic relationships, and we’ll look at other businesses too. “In generic API strategy we need some assets partnership, probably a development presence in Asia – and probably India. We’ve a plan for that. There’s tremendous scope everywhere as the industry undergoes change. In contract manufacturing’s shakeout, some big winners will result.” For firms of Aesica’s size and nature fast growth is feasible. “It’s not just we have lower overheads,” he points out. “Small and virtual companies now account for 50% of all new products. So the R&D pipeline of big pharmaceutical companies is drying up a little. “They’ve assets maybe 30-50% empty – no new products to put in them. They can’t produce for each other. They’re globally pressed by governments also to reduce prices and increase accessibility of medicines.” Pfizer’s supply base is very fragmented. Intense consolidation is expected in the supply chain to big pharma. But competition resulting is strong, both in the USA and Europe. “The majority of our business is with large US pharma companies,” says Hardy. “Our relationships there are probably the strongest and best we have – probably because the US tends to be at the forefront of this outsourcing. UK companies are a little behind and European companies lagging a bit more.” Aesica sees Asia, Europe and the USA as differing strands. Hardy explains: “The Asia strategy has its own drive, will follow its own process. We’re looking closely at building a development centre in India next year. There are always issues to building and recruiting in a foreign country, but that’s out of our hands. “The US plan, too, is out of our hands. There are two or three targets, but many things must fall into place at the same time. In Europe, there are lots of targets, more opportunity, although things there change, month to month.” Nick Jones, chief financial officer, is exPricewaterhouseCoopers and has been with Aesica nearly a year. He’s heading merger and acquisition activity, considering up to 10 different potential buys at a time. n

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‘It could have been anywhere but we like it here’ Robert Hardy, a chemistry man through and through, would like to give an impression his eureka moment came with a chemistry set in his youth. “Like all young lads, if you made something that stank or exploded you liked doing it,” he says. It took more than that, however, to excel. A Cumbrian from Whitehaven, he lived near an Albright and Wilson chemicals factory, his father worked in chemicals, and he did well at chemistry in school. “People might struggle with the concept now, but chemistry was my favourite subject,” he says. At university in Nottingham he studied organic chemistry and gained a PhD. ”I like cooking now because it’s a bit like that,” he says. “Follow a recipe and out comes a cake. I’m more into making organic molecules.” In the East Midlands, he met Sally who became his wife and they lived there many years. His career had started with Boots, developing raw material for Neurofen, and on many more projects including Ibuprofen, Boots’ own non-steroidal anti-inflammatory drug. His numerous jobs with Boots included a spell working in Texas. He was a plant manager when BASF acquired Boots’ pharmaceutical division, and found it took time for the companies to integrate, Boots solidly and traditionally British, and BASF solidly and traditionally German. For BASF he led the development organisation in Nottingham, then was sent to Cramlington as site director before heading up all BASF’s UK pharma operations at Beeston and Cramlington. “I was responsible for rationalising that business and bringing it from a major loss into profitability, closing the Beeston site,” he says. When BASF sold off its pharmaceuticals but kept its chemicals, Cramlington was quite profitable. BASF looked to sell it. Hardy recalls: “I was heavily involved in the sale process and decided, ‘if all these guys think it’s worth buying, maybe I should try to buy it.’ So we got involved with PwC and were advised we had a good chance. They would get us some financing. “As for local support. Northumberland County Council’s (business development manager) Graham Adams was a great help. I’d no idea how to do an MBO, but we’d known Graham for some time. I phoned him and said I’d like to buy the site but had no idea what I was doing. “Graham and the council introduced us to the like of PwC and to Eversheds to get us talking to banks and private equity investors, also One North East. Without all that local encouragement we probably wouldn’t have got started. We had a lot to be thankful for, being in the North East. “When you talk to institutional investors it’s difficult to answer when they ask: ‘Why the North East of England for your project?’ But all our management team wanted to grow something in the North East. It could have been anywhere – but we like being here.” Robert and Sally Hardy, and son George, 17, live now at Darras Hall, handy for Robert’s golf at Ponteland. George, looking for a university, favours Nottingham. “He’s showing some interest in chemistry – to his mother’s dismay,” his father confesses. ”I always enjoy talking about Aesica but even my wife doesn’t want to listen any more. She’s heard it all before.” But, like most of the other chief executives, Hardy can also add in truth: “My wife’s very supportive.”

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GREAT BUSINESS PARTNERSHIPS START WITH A CONVERSATION LET’S TALK To see how we can apply our expertise and experience to support your business, start a conversation. Contact Rob Wiggins, Business Engagement Manager on 0191 227 3576 or robert.wiggins@northumbria.ac.uk www.newcastlebusinessschool.co.uk

NEWCASTLE BUSINESS SCHOOL inspiringexcellence


IN ANOTHER LIFE

AUTUMN 10

Horses for courses Gallery owner Mary Ann Rogers is one of the UK’s most popular artists – winner of the Best Selling Published Artist 2009 award by the Fine Art Trade Guild. Her gallery proliferates with her dramatic studies of hounds, foxes, hares and other animals of Redesdale – such as Swaledale sheep, game birds and her own beloved dachshunds, chickens and guinea fowl. Her paintings, limited edition prints and bespoke gifts are a pleasure to consider in her gallery overlooking the River Rede at West Woodburn in Northumberland, and also at the Blagdon Gallery, Seaton Burn. What you won’t know is that if Mary Ann Rogers had chosen another career it might have made her headline news in equestrian events instead. Here she tells why... I was consumed throughout my childhood by a deep interest in animals in general – horses in particular. I would crane my neck on car journeys to stare at horses and ponies in fields. Walks in the country were extended as I hung over walls of fields containing horses, trying desperately to lure them over with apple cores or handfuls of grass. My childhood fantasies were full of ponies, and my schoolbooks were covered with drawings of them. I have no idea why little girls get obsessed by horses and ponies. Even stranger, why it continues to adulthood in some cases. A retired farmer at Embleton, where my family spent all our weekends and holidays, taught my older sister and me to ride, and took immense pleasure in watching us struggle to stay on those naughty ponies that sometimes

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simply bucked their riders off and galloped home. From there, I managed to find other people’s ponies to ride, and even found myself riding some quality horses in exchange for endless dirty stable duties, which I loved. Circumstance and ability led me into art, where I feel extremely fortunate to do what I do and even make a living. At times during my teens I considered working with animals – perhaps veterinary work or entering the mounted police force. Sadly, I peaked academically long before my O levels, let alone A levels, so becoming a vet was never an option. Apart from a spell when I was an impoverished single parent, struggling to make ends meet as an artist, I have had a horse to ride for pleasure. However, until fairly recently, I have never entered competitions, apart from hunter

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trials (cross country competitions). But my latest horse, Spencer, has proved an extremely willing and biddable fellow who has been dragged to lessons to improve our dressage and jumping and led me to broaden my horizons beyond the local and riding club competitions. We have been doing BE eventing at intro level this year and I have absolutely loved it. Yes, I could have done this – I have the competitive edge and the inability to resist a challenge, particularly the challenge to face my own fears and test my nerve. I think it may be just a little too late to switch careers at this stage, so Mary King, Oliver Townsend, Zara Phillips, you can breathe a sigh of relief. And I can dream... n www.marogers.com


AUTUMN 10

COMPANY PROFILE

It’s not just about bringing jobs and investment to Sunderland, it’s about creating a home for national software innovation

sunDErLAnD soFtWArE CitY: BuiLDing For thE FuturE

S

UNDERLAND Software City is supporting the North East’s growing national and international reputation for excellence and innovation in software with everything from skills to state-of-the-art infrastructure. Initial designs have just been unveiled for the proposed £10m Software Centre which aims to bring up to 140 hi-tech jobs to Sunderland City Centre. The cutting-edge centre - planned for Tavistock Place, near Mowbray Park - will include 53,000 sq ft of space to grow for 60 cutting-edge businesses, as well as exhibition space, showing visitors in a fun and interactive way the role software plays in their lives. Janet Snaith, Head of Business Investment, Sunderland City Council said: “I am delighted that we are moving into the planning stages for this landmark building. “The Software City Initiative has already proven to be a huge success and new businesses have moved into the council’s Evolve centre at Rainton Bridge Business Park. “I am sure that this building will prove equally successful in generating new businesses and jobs in this exciting new hi-tech sector.” Subject to further planning permission being granted, work on the building could begin early next year and be completed in early 2012. Bernie Callaghan, Chief Executive Officer of Sunderland Software City, said: “This development is not just about bringing jobs and investment to Sunderland - it’s about creating a building both the city and the region can be proud of, which we hope will become the home of regional and national software innovation. “The building is also a sign of the progress being made in the North East in cutting-edge

The proposed £10m Software Centre industries, underlining our region’s industrial rebirth.” Sunderland Software City is about much more than bricks and mortar though. The initiative supports the growth of the software industry in the North East with everything from one-onone business and technical mentoring, assistance with financial and business plans to introductions to potential investors, collaborators and customers. They also operate an Intelligence Service, a rapid research facility helping software businesses understand their sector, customers and competitors in more detail. The service is free to qualifying companies. One company to have benefited is 1DayLater. The Tyneside firm – who develop online time management software helping companies keep track of their outgoings- has been named by PCmag’s as one of the best free software of 2010 and by the BBC as one of the best sites on the web, but 1DayLater’s Paul King still recognises the impact of the best business intelligence. “There’s really no substitute to knowing who your customers and competitors are and what opportunities and threats are out there,” he said. “When we were developing a software tool for the conferencing industry they gave us a

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ready-made database of end-users and potential partners. “They’ve given us a great overall picture of the business landscape as a whole, allowing us to make well informed management decisions during our software development, and we have already recommended them to businesses we’re close to.” Software City also runs a series of professional skills events giving local businesses the skills and connections to compete on a global level. The following events take place in the coming months: • Business Blast Off: Delivered by Codeworks, four sessions aimed at anyone considering setting up a software/digital business teaching them the fundamentals of business in a simple and understandable way. More information from alison.wilson@codeworks.net • Stimulating Software Innovation: Providing one-day course giving an up to the minute view of the software industry and potential future development. More information from sam.fuller@ne-bic.co.uk (Next event November 18)

More information on the initiative is available at www.sunderlandsoftwarecity.com

BUSINESS QUARTER |AUTUMN 10


EVENTS

AUTUMN 10

BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to: editor@bq-magazine.co.uk. The diary is updated online daily at www.nebusinessguide.co.uk

NOVEMBER

16 NOVEMBER ICAEW (NR) Career Clinic, Thistle Hotel, Middlesbrough (9.30am). Contact: tel 0191 300 0532, marie.rice@icaew.com

3 NOVEMBER Winning New Business, How to Trade with Aid and Development Agencies, Service Network event, Tyneside Cinema, Newcastle (11.45am). Contact: tel 0191 244 4031, events@service-network.co.uk

17 NOVEMBER Tomorrow’s World, Grow or Go, Service Network study of operational and management structures (noon), Assembly Rooms, Newcastle. Contact: tel 0191 244 4031, events@service-network.co.uk

4 NOVEMBER Building Business for Growth, Enterprise Forum event open to all North East business owners and managers, and featuring Sir Tom Farmer, (Kwik-Fit), Tony Moloney (Enterprise Foods), with Tom Gutteridge and Guy Browning. Hilton Hotel, Gateshead (9.30am). www.enterpriseforum.net

17 NOVEMBER ICAEW (NR) Improve your Business Performance through Strategic Planning, Allergate House, Belmont Business Park , Durham (1.30pm) Contact: tel 0191 300 0532, marie.rice@icaew.com

4 NOVEMBER Managing your Business to Success, Jacksons law firm seminar, Central Square, Newcastle. Contact: seminars@jacksons-law.com 4 NOVEMBER Jeremy Darroch (BSkyB) and explorer Sir Ranulph Fiennes speak at NECC’s Tyne and Northumberland Dinner, Civic Centre, Newcastle. Tel 0300 3036 322, events@necc.co.uk 5 NOVEMBER Are You Emotionally Intelligent? Free workshop for future business owners, Victoria Boardroom, Teesside University (1.30pm). Tel 01642 384 400, edp@tees.ac.uk 5 NOVEMBER BNI Endeavour Networking, Sporting Lodge, Middlesbrough (6.45am). r.rushby@alpha-systems.co.uk 6 NOVEMBER Legal requirements for websites and e-commerce, free Burnetts law firm briefing, Lansdowne Terr, Gosforth (12.30pm). Emma Barnes, tel 01228 552222, e-mail events@burnetts.co.uk, See www.burnetts.co.uk 9 NOVEMBER Keeping it in the Family, Service Network event on challenges facing family businesses, Newcastle Racecourse (8am). Contact: tel 0191 244 4031, events@service-network.co.uk 10 NOVEMBER North East Expo, free networking event sponsored by Sage, Newcastle Racecourse. www.northeastexpo.co.uk 11 NOVEMBER Lenhoff and the Markets, Brewin Dolphin, Newcastle (noon, registration 11.30am). Mike Lenhoff, Brewin Dolphin’s chief strategist, summarises the economic position in the UK and globally. 11 NOVEMBER Business for Life Awards (the North East’s health care “Oscars”) Assembly Rooms, Newcastle. Contact: claire.mitchell@celsgroup.com 11 NOVEMBER ICAEW (NR) Career Clinic, Falcons Rugby Club, Newcastle (9.30am). Contact: tel 0191 300 0532, marie.rice@icaew.com 11 NOVEMBER ICAEW (NR) Cost Optimisation and Risk Management in the Public Sector, KPMG, Quayside, Newcastle (5.30pm). Contact: tel 0191 300 0532, marie.rice@icaew.com 11 NOVEMBER Mock Industrial Tribunal, organisers: Dickinson Dees, Weightman Associates, The Journal and Evening Gazette, Teesside. Wynyard Rooms, Wynyard (9.30am). Contact: Ashleigh Smithson, tel 0191 201 6092, Ashleigh.smithson@ncjmedia.co.uk 11 NOVEMBER Marketing: The Art of ’10, CIM event, The Sage, Gateshead (9am), www.cimevents@cim.co.uk 11 NOVEMBER BNI Eldon Networking, Pitcher and Piano, Newcastle (7am). Nick Collins, members@bnieldon.co.uk, See also www.bnieldon.co.uk 12 NOVEMBER BNI Endeavour Networking, Sporting Lodge, Middlesbrough (6.45am). r.rushby@alpha-systems.co.uk 15 NOVEMBER Newcastle Law Fair, organised by Newcastle Law School, St James’s Park, Newcastle (1pm on). Tel 0191 222 7678, angela.smee@ncl.ac.uk 15 NOVEMBER Closing date for joining Jan 16 to 22 UKTI Market Visit to Bombay and Pune, Jan 16 to 22. Contact: tel 0845 05 05 054.

BUSINESS QUARTER | AUTUMN 10

18 NOVEMBER BNI Eldon Networking, Pitcher and Piano, Newcastle (7am). Nick Collins, members@bnieldon.co.uk, See also www.bnieldon.co.uk 19 NOVEMBER BNI Endeavour Networking, Sporting Lodge, Middlesbrough (6.45am). r.rushby@alpha-systems.co.uk 23 NOVEMBER ICAEW (NR), Tax basics - refresher course, Ramside Hall Hotel, Durham (9.30am). Contact: tel 0191 300 0532, marie.rice@icaew.com 23 NOVEMBER ICAEW (NR), VAT Update, Ramside Hall Hotel, Durham (1.30pm). Contact: Marie Rice tel 0191 300 0532, marie.rice@icaew.com

DECEMBER 1 DECEMBER Managing Talent: human resources legal update, Service Network event, venue tbc (9am). Alexis Towell tel 0191 244 4031. Register: www.service-network.co.uk 2 DECEMBER ICAEW (NR), Tax update, Ramside Hall Hotel, Durham (9.30am). Contact: tel 0191 300 0532, marie.rice@icaew.com 7 DECEMBER Innovation Strategy for the NE Chemistry Using Industries 2010, Nepic and CPI update and relaunch event, MSD Biologics Ltd, Billingham (1.30pm). Contact: tel 01642 442560, kath.birkin@nepic.co.uk 8 DECEMBER No Phishing, free workshop for future business owners, Victoria Boardroom, Teesside University (1.30pm). edp@tees.ac.uk, tel 01642 384 400. 9 DECEMBER NOF Annual Dinner and Awards, venue tbc. jgray@nofenergy.co.uk. 9 DECEMBER– BNI Eldon Networking, Pitcher and Piano, Newcastle (7am). Nick Collins, members@bnieldon.co.uk. See also www.bnieldon.co.uk 15 DECEMBER Winning New Business, Christmas networking, Service Network event (4pm), St James’s Park, Newcastle. Contact: tel 0191 244 4031, events@service-network.co.uk. 15 DECEMBER ICAEW (NR) Acting for Farmers, Ramside Hall Hotel, Durham (1.30pm).Contact: marie.rice@icaew.com 0191 300 0532 31 DECEMBER Closing date for UKTI Market Visit to New York, Mar 12 to 18.Contact: tel 0845 05 05 054. Please check with the contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above e-mail address of any changes or cancellations as soon as they know of them.

KEY:

Acas: Advisory Conciliation and Arbitration Service, CECA (NE): Civil Engineering Contractors Association (North-East), CIM: Chartered Institute of Marketing, HMRC: Her Majesty’s Revenue and Customs, ICE (NE): Institution of Civil Engineers North East, ICAEW (NR): Institute of Chartered Accountants in England and Wales, North Region, NECC: North-East Chamber of Commerce, NSCA: Northern Society of Chartered Accountants, FSB: Federation of Small Business, Tbc: to be confirmed.

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Contact the Events Team 0191 236 2020 info@newcastle-racecourse.co.uk www.newcastle-racecourse.co.uk J571 NCA Price Freeze Conference Packages BQ mag ad.indd 1

23/09/2010 17:22


BIT OF A CHAT

with Frank Tock >> Bulls and bears stay in the South Few will remember the gas mantles, chalk blackboards and three-piece suits of Newcastle Stock Exchange – or most of the 11 firms of brokers once doing the business there. That doesn’t stop us masticating with other provincials Business Secretary Vince Cable’s suggestion to revive regional stock exchanges. Scots jumped at the idea of one in Glasgow or Edinburgh but keep their bawbees in their pockets still. The Institute of Economic Affairs, like the Federation of Small Businesses, is in favour. Cable thinks more local investors would put money into small regional businesses of, say, £10m turnover, which cannot afford an AIM presence, far less a full share listing. While it may seem incongruous amid global markets to revert to the 1970s before London’s square mile seized all the action, Newcastle could theoretically in today’s electronic dealing, plug into Mumbai or Chicago perhaps, and seek the overseas as well as local investment which would be necessary surely to make the idea viable. Who but a homesick North Easterner, though, or Karl Watkin, would respond – even though bigger North East firms perform better than average as a group within the main list? Bear in mind, the InvestBX online stock exchange set up two years ago with £3m of public funding still has only three members. Even the AIM seems unable to satisfy totally now. You’ll have noticed North East firms withdrawing. Paul Williamson and David Frith who, as Deloittes executives, know of many firms’ capital needs, see running costs as main

BUSINESS QUARTER | AUTUMN 10

AUTUMN 10

deterrent, particularly in ensuring security to an acceptable standard. In any case, they add, critical mass would require the entire North – Yorkshire, the North West and the North East to operate from one exchange. That, I say, suggests Leeds. Colin Hewitt, head of commercial law at lawyers Ward Hadaway, shares my doubt of a local revival. It’s a shame, given how difficult some very sound North East firms find it to attract institutional investors. Looks like the jobs of venture capitalists and regional growth funders are safe. BQ would like their views. Meanwhile, don’t replace the mantles or invest in chalk.

>> Been there, done it People in the North East worry about personal debt more than almost everyone else in the UK, research by the insolvency trade body R3 suggests. But why am I not surprised?

force does much of the suitcase trundling now. But Hardy is still fascinated by the variety of business cultures in different countries. In Japan, he soon learned it was considered loss of face to argue a point. And the glamour of travel soon fades, he found, when you find from experience it’s often only hotel entrances, meeting rooms or airports you see on entering yet another country. “It’s no great trip when everything you’ve eaten has been in an airport or on a plane – especially in the US,” Hardy says. “My worst experience there was flying all the way to Fort Lauderdale to see a potential customer. I was met in the foyer of the place, wasn’t even offered a coffee, held a 10-minute meeting and that was it.” But Japan? “They treat you very well, are always courteous and want a long meeting, They’re likely to take you for dinner. In the US you know you have a good relationship if you find yourself dining with the guys you’re working with. If you have an hour or a two hour meeting there that’s truly a great relationship.” Even Europe has its foibles. “We’d find it much easier to sell in France if we had a facility there,” says Hardy. In the UK we’ll buy from almost anyone. Robert Hardy’s pleasure in spending more time on home ground is hardly unique, you’ll have gathered from reading about Owen Pugh’s John Dickson, also in this issue.

>> Don’t be so tight

Fascinating: Robert Hardy on culture

>> Home sweet home Robert Hardy, apart from regular visits to big customers in New Jersey and Chicago, doesn’t travel as far and as often as when he first got Aesica Pharmaceuticals under way. The North East pharma firm’s growing sales

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Are companies really so hard up they can’t afford to reply to their unsuccessful job applicants? It’s demoralising enough for folk out of work to have to write myriad applications little expecting success. They deserve the courtesy of a reply. Writing back to hundreds perhaps at a time costs. But e-mail is not expensive, nor even an advertisement in a newspaper thanking all failed applicants. Some firms don’t even reply when applications include a stamp-addressed envelope. Who in these Scroogey set-ups gets the job of steaming off stamps?


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Nurturing entrepreneurial talent

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T I M B E R L A N D

H U D S O N

N A PA P I J R I

J E F F E R Y

W E ST

WWW.JULESB.CO.UK

A C O R N R O A D , J E S M O N D , N E W C A S T L E U P O N T Y N E . T: 0 1 9 1 2 8 1 7 8 5 5

MAN

F I N K L E S T R E E T, K E N D A L , C U M B R I A .

T: 0 1 5 3 9 7 2 3 8 7 4


BQ North East Issue 11