ISSUE FOUR: SUMMER 2011
drama of a dram man Wallowing in single malt – and lapping up every drop of it aye aye captain The man involved in building the world’s most stylish boats the boy’s got talent Dance champion now leading in a different direction you’ve had your ‘delice’ Basketball supremo talks Rocks and rolls out his ambitions
music, man ISSUE FOUR: SUMMER 2011: SCOTLAND EDITION
Entrepreneur Chris Gorman downloads his formidable talents into mobile phone technology and the Top 40 BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS
Business Quarter Magazine
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BUSINESS QUARTER: SUMMER 11: issue FOUR Welcome to our fourth issue of Business Quarter Scotland. That’s a full year of publication already – so thank you to everyone who has been so supportive and encouraging about our arrival on the scene. There is no denying it has been a bloody hard year for many of us – running a business in the last two years has been pure purgatory. Recovering from a recession is like waking up from general anaesthesia after a major operation. You need to shake off the grogginess and it’s a long slow process to full health and vitality. So relax. Chill out. Make sure that you get time over the summer to recharge your batteries. Recuperate. Mend. Gather your strength. Stick BQ in your suitcase and enjoy reading it on the sunbed by the pool at the villa. Because when you come back in late August, we will need everyone with even an ounce of enterprising flair in Scotland pulling together. Since our last edition, Alex Salmond has swept to power in Scotland. Congratulations to him on a brilliant political campaign that destroyed Labour in Scotland, but neatly sidestepped the question of how we pay for the services we wish to use. The SNP have a very powerful mandate for change in Scotland. Can they do something better for Scotland without alienating our neighbours, friends and customers? Do they have the sensitivity and collective intelligence to tackle the underlying issues facing Scotland? We sincerely hope so. And the SNP administration must embrace an enterprise culture as never before. And they must remember that the biggest market for Scottish goods and services remains England, so choose your words wisely. BQ Scotland is 100% squarely behind the joint recent open letter in Scotland on Sunday from the Entrepreneurial Exchange, the Saltire Foundation, Scottish Institute for Enterprise, Young Enterprise Scotland and the Prince’s Scottish Youth Business Trust, calling on a national action plan to promote ethical entrepreneurs. Their call to arms said: “By creating a vibrant entrepreneurial economy we will ensure a bright economic future –
more jobs, more wealth creation, more tax take. But also it enhances our ability as a country to solve deeply embedded social problems.” It is simply shocking that there is a “lost generation” of entrepreneurs in their mid thirties and early forties who have little interest in creating wealth for our small nation. And we’re not talking about housing scheme drug dealers here. It is absolutely unacceptable that we have allowed such a deep dependency system to become ingrained in parts of Scotland where human beings have lost the impetus to do things for themselves. We agree with the signatories that there is an opportunity for the Scottish Government to facilitate a joined-up business-led National Entrepreneurial Action Plan. But please, not another quango, run by bureaucrats, but directed by proven business leaders like Sir Tom Hunter and Bob Keiller and others we have featured – and will continue to feature – in BQ Scotland. We must showcase the success stories and help people with aspirations find that sense of purpose and dignity. BQ Scotland remains a magazine committed to celebrating entrepreneurs and business people in all their forms and those professional services people – and this includes bankers and financiers too – who support wealth creation. So have a great summer. Enjoy this edition of BQ, which has some exclusive interviews and remarkable insights to get the juices flowing, but make a mental note to return to the fray, refreshed, after the August Bank Holiday. Ready to stoke the fires of Scotland’s economy. Kenny Kemp Editor, BQ Scotland PS If you know someone who would like to receive copies of BQ Scotland delivered to them by subsription, drop an email to email@example.com We’ve introduced a small annual charge to cover postage and package.
CONTACTS room501 ltd Christopher March Managing Director e: firstname.lastname@example.org George Cheung Director e: email@example.com Euan Underwood Director e: firstname.lastname@example.org Bryan Hoare Director e: email@example.com Mark Anderson Director e: firstname.lastname@example.org EditorIAL Kenny Kemp Editor e: email@example.com Alastair Gilmour Sub-editor Jane Bradley Editorial Design & production room501 e: firstname.lastname@example.org Photography KG Photography e: email@example.com advertising For advertising call Alistair Fleming on 07818 411195 / 0191 537 5731 or email firstname.lastname@example.org room501 Contract Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk 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 © 2011 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, June 2011.
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BUSINESS QUARTER |SUMMER 11
CONTE BUSINESS QUARTER: SUMMER 11 mark of a man
40 listen to the music That’s what entrepreneur Chris Gorman did next – and will keep on doing
10 hide and seek Scotland’s leather industry has a worldwide reputation for quality
20 entrepreneur John Jones created Vanish, but it left a mark on him for the rest of his life
44 dram man drama
Mike Keiller is wallowing in single malt – and he’s lapping it up
72 aye captain Stewart McIntyre is involved in building the world’s most stylish boats
30 science appliance
76 the boy’s got talent
Dr Rabinder Buttar wants her clinical procedures firm to be a global leader
Former champion dancer David Harper is big in education and training
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TENTS SCOTLAND EDITION
34 COMMERCIAL PROPERTY
The landmark developments creating our industrial landscape
46 BUSINESS LUNCH
Ian Reid talks basketball – of course – and discusses his plans for the sport
52 WINE Graeme Finnie accounts for a sample
54 MOTORS PFA chief executive Fraser Wishart discovers he’s a big Mercedes fan
6 ON THE RECORD Doing the positives in business
58 FASHION Chris Porter has his eye on golfwear
12 NEWS Who’s doing what, when, where and why, here in Scotland
28 AS I SEE IT Iain Scott says ‘no no’ to the status quo
66 equipment Hook? Slice? Computer says ‘yes’
80 Jock Yuler Gripping gossip from our backroom boy
58 BUSINESS QUARTER | SUMMER 11
ON THE RECORD
>> Stepping down There is no-one in Scottish business and industry as highly regarded as Bill Gammell, yet he maintains – on his retirement – that he has employed many people in Cairn Energy who are brighter than him Leadership changes always provoke searching questions about the future for any business. But when the company is Cairn Energy, the Edinburgh-based oil and gas exploration and production business listed on the London Stock Exchange, then it is of genuine interest to Scotland’s entrepreneurial community. The decision by Sir Bill Gammell to step down as chief executive of Cairn Energy is highly significant and it represents the changing of the guard at one of the UK’s most inspiring businesses. Sir Bill has been one of the longest serving chief executives of a listed UK company and he now becomes non-executive chairman. Cairn’s chairman Norman Murray leaves to takeson the chairmanship of oil giant Petrofac. Sir Bill’s leadership style, in contrast to those within banking and Sir Fred Goodwin’s in particular, set the tone for the culture within this oil company. Sir Bill enjoys a close relationship with his friend and colleague Norman Murray, saying: “He has provided me with constructive challenges, wise counsel and valuable guidance”. Bill Gammell is a collegiate leader. He has often said he has no monopoly on the business thinking and that he employs people who are better qualified and more capable then he is. “One of the few talents I have is the ability to employ people who are brighter than me,” he once said. “I encourage other people to hire those who are better than themselves in some way. I want to know how to get something done, not all the reasons to stop something happening.” He is what Jim Collins in his book Good To Great, calls a Level Five leader – and these types of leader are in short supply in business. He wrote: “Level five leaders channel their ego needs away from themselves and into the
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larger goal of building a great company. It’s not that they have no ego or self-interest, indeed they are incredibly ambitions – but their ambition is first and foremost for the institution, not themselves.” And while there are many within Cairn Energy who have helped to create this extraordinary success story, two people – both retiring from the board – have been singled out for their abilities in shaping Cairn. Sir Bill was generous in placing on record his sincere thanks to Malcolm Thoms and Phil Tracy for their substantial contribution to the success of Cairn over the last 22 years. He said: “Their advice, judgement and contribution at the Cairn board as well as their leadership on numerous projects including the development of the world-class Mangala discovery in Rajasthan have helped transform a small oil company with UK onshore producing interests valued at $10m in the early 1990s to one of approximately $10bn today.” Malcolm Thoms joined Cairn in July 1989 and since 2006 has been chief operating officer responsible for running the day-to-day business, while Phil Tracy, who joined in 1988, has been project director for the Mangala
discovery. Both men have played a massive part in Cairn’s entrepreneurial ambition. Sir Bill describes himself as a “contrarian”, who has often gone against the grain. People such as Thoms and Tracy, new chief executive Simon Thomson, Dr Mike Watts, and managing director Jann Brown have been there to mould and refined this corporate culture, keeping it on track, as the organisation expanded. Sir Bill will continue as chairman of Cairn India and will retain overall responsibility for the current Vedanta transaction, allowing his diplomatic skills to be used to the fullest. Norman Murray, still only 62, becomes Petrofac chairman, but he also a non-executive director of Greene King and Robert Wiseman Dairies. He spent 25 years in the venture capital industry and was co-founder of Morgan Grenfell Private Equity Limited and was also a director of Morgan Grenfell Asset Management Limited. For the new chief, Simon Thomson – an Aberdeen University law graduate with a diploma from Glasgow University who has been with Cairn for 15 years – the potential opportunities in Greenland will be his biggest challenge. “I am looking forward to leading Cairn as we continue to seek to create and deliver material value for shareholders,” he says. “Cairn’s key strength of entrepreneurial exploration remains the focus of the group, offering investors significant growth potential in combination with underlying asset value and balance-sheet strength.” Cairn India is listed on the Bombay Stock Exchange and has interests in 11 acreage blocks in India and Sri Lanka, with Cairn holding a 62.2% interest in Cairn India. Capricorn Oil, a 100% subsidiary of Cairn, is focused on exploration in Nepal, Greenland, Tunisia, Albania and Spain. n
ON THE RECORD
>> Another perspective Even the world’s most influential business leaders have to continually reassess their techniques and revisit ‘the message’. So, Susan Scott tore up the script and dug deep into personal relationships for guidance
The North West coast of America is the base of some of America’s biggest companies; Starbucks, Amazon, Microsoft and Boeing. This also feeds hundreds of smaller and medium-sized companies who supply these major organisations. It’s also home to Susan Scott, leadership development thinker and best-selling author of Fierce Conversations, listed as one of Wall Street Journal’s Business Books of the Year. Recently she came to Edinburgh to speak to a Vistage International (UK) conference in Edinburgh, introduced by Paul Pinson, its Scottish chairman. BQ caught up with her to ask her more about her work with top-flight chief executives. “Many of today’s business leaders insist that their job is to grow the company and the stock price, by whatever means,” she says. “And while conventional measures of business shouldn’t be ignored, I propose that human connectivity, as opposed to strategy and tactics, is the next frontier for exponential growth and the only sustainable competitive edge.” She believes people are hungry to connect, to be known as unique individuals and this must have an impact on how we design business strategies and market products and services.
“Yet too much business communication is still stuck in the information age,” she says. “Too often we treat our conversations and our relationships as we do our emails – one way, directive, quick, clipped, efficient.” She maintains that changing the way we speak to each other in business is vital. Susan began her career as a high school English teacher. She says: “My family moved to Seattle, Washington state, in the late 1970s, then I switched to became a head-hunter. But I missed teaching, so took a job heading up a training organisation. I then started my own training company and was then approached by Vistage to become their first female chair.” Vistage now has 600 chairs involved with chief executives and chairs around the world. She was chair in Seattle for 14 years where she ran two groups on non-competing business leaders. Each group was 16 CEOS, so she dealt with 32 of Seattle’s business leaders. “This is really where my work was developed,” she says. “In the early days there wasn’t any real training for chairs and chief executives. The one-to-one meetings were very important. We got together to deal with their most pressing issues. There was a lot happening in Seattle and other chairs asked for my help.” In 1999, she listened to David Whyte, the Yorkshire business strategist, and he talked about “fierce conversations” – a phrase which “ripped right through” her. She says: “Next day I was meant to lead training for 16 of the international chairs and that night instead of going to the banquet, I sat in my hotel room, tore up the outline I’d been teaching for years and started all over. “I’d felt for some time there was a deeper and richer conversation that needed to be done with business people. It was about the quality of the conversation and this took everything to a whole new level.”
Her training programme spread like wildfire across the US. But it had a personal edge as well. She had left a long-time marriage and was deeply sad. She and her partner had simply stopped talking – she realised that “the conversation is the relationship”. “If the conversation stops… that’s what happened in my relationship and it explained so much to me,” she says. Relationships deteriorate one missing conversation at a time and, says Susan, this applies to business. “Everything that we teach applies to our personal as well as our business applications. “If a problem exists, it exists whether we talk about it or not, so we might as well talk about it.” She says in any business it is about understanding that there is more than one reality in the topics being discussed around the board room table. “Each person has a useful perspective that needs to be understood before a decision is made. As we are trying to climb out of the global financial mess we’re in, there is a new capacity that is really important for leaders, that is the capacity to connect with their employees and customers at a deeper level.” One of the Scottish delegates was Stuart Gibson, a former HBOS telecom and technology manager, who wrote the Reform Scotland Digital Power report, published last year. He is now managing director of Funded Solution, based in Edinburgh. “I thought the Vistage event was very good,” he says. “There is something really powerful about being a good listener. All too often we prefer to be doing the talking, long on our own views and perhaps a little short on the facts. Susan Scott’s message is very much about carefully defining the problem before embarking on a solution.” n www.fierceinc.com
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ON THE RECORD
>> Farming ploughs ahead One in ten jobs in Scotland depends on farming, so it’s a vitally important business sector. The Royal Highland Show is its showcase
The innovation and entrepreneurship among Scotland’s agricultural and rural industries has often been under-appreciated. Yet for generations the farming sector has spawned some of Scotland’s most successful businesses. When you add on the secondary food and drink industry, you have a major source of wealth for the economy. And the Royal Highland Show at Ingliston, outside Edinburgh, is the showcase for so much that is good and new in the food and farming. Stephen Hutt is the new chief executive of the Royal Highland and Agricultural Society of Scotland, incorporated under royal charter as a
charity with 14,500 members. He agrees that farming and ancillary rural businesses haven’t always received the plaudits it deserves when it comes to innovation. “Farming doesn’t exist in isolation in Scotland. It is bound up in everything we do as a nation,” he says. “One in ten jobs depends on farming and the agricultural services industry. The task of the society is to promote Scottish farming and its products to the public at home and abroad.” Since 1784, the Royal Highland Show at Ingliston has been one of the original social networking opportunities for thousands of farming people. And this makes it a catalyst for ideas, change and part of the curriculumbased education programme for 70,000 Scottish schoolchildren. “The four-day event has something for everyone. There is the livestock show, the machinery displays, the food and drink exhibitions and the crafts. This is an important fixture in Scotland’s economic calendar.” Hutt believes that the Royal Highland Centre and Showground, beside Edinburgh Airport is a considerable economic boost for Scotland.
Impact studies have shown that while the adjacent Edinburgh Airport is worth £263m, the Edinburgh International Festival and the Fringe worth £251m, the most recent study was that the Royal Highland Society is worth £250m a year to the Scottish economy. Hutt says: “People think about the show as our major event, but we are working throughout the year to support farming in Scotland. There are around 240-250 events each year at the centre with millions of visitors. This all goes back into our promoting Scottish farming.” The society has planning permission for a £30m redevelopment of the 280-acre Royal Highland Centre to include two new hotels, a Scottish Centre for Excellence for primary and secondary produce, an expanded agri business hub, and new conference space. The society’s awards and grants are also important for business. And this year £400,000 has been presented to promote innovation. This year’s sponsors include RBS, Marks & Spencer, Asda, The Co-op, Vion Food Group, Quality Meat Scotland, Edinburgh Airport, Lactalis McLelland, Mitsubishi and McDonald’s.n
Innovation attracts medals Five silver medals have been awarded by the Royal Highland and Agricultural Society of Scotland for technical innovation. The awards – sponsored by the Hillhouse Quarry Group – encourage and recognise innovation in the design and manufacture of machines, equipment and appliances which advance the effective and efficient practice of agriculture, horticulture, equestrian, forestry and estates services. The silver medal awards are: NT4 BIBBB Squeasy Lambweigher, BIBBB Equipment, Strichen, Fraserburgh. The product allows lambs to be weighed more quickly. The lamb is held by the operator pulling the crate towards itself. The lamb cannot move about, thereby giving a steady reading. Wrapide CW-01, Front Machinery, Branxton Farm, Leven, Fife. This is a bale wrapper specifically designed to weather-proof round bales of hay or straw so they can be stored outside with minimal wastage. The method reduces wastage and helps free-up valuable shed space.
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Vegcraft ProFill, Vegcraft, Crofts, Redford, by Arbroath. This system speeds up sprayer filling, inducting both liquid and powder chemicals directly and quickly into the sprayer. The unit has a large stainless steel hopper and washing area with six independent container cleaning nozzles providing continuously clean water. TagFaster, Roxan ID, Dunsdale Road, Selkirk. This invention makes the burdensome task of electronic tagging vastly more convenient. The invention delivers pairs of tags in alternating colour sequence and in matching number sets, one set for each animal. Agricultural Products Manufactured From Recycled Plastic, Solway Recycling Ltd, Shawhead, Dumfries. Solway have an extensive range of lambing pens, adopters and a lamb warming box. Also available is a full range of animal shelters for pigs, dogs and poultry. Non-absorbent recycled plastic material means there is much less disease pressure and pens are easily steam-cleaned.
BMW | MINI Business Partnership YOUR COMPANY BENEFITS.
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EVEN MORE COMPELLING OFFERS. BMW 320d EFFICIENT DYNAMICS SALOON £355 PER MONTH (PLUS DEPOSIT)*.
• 109g/km CO2 • 13% BIK (per month 20%=£61, 40%=£121)** • 68.9mpg (combined) • Complimentary Bluetooth telephone preparation.
For more information, please visit www.bmwbusinesspartnership.co.uk
Official fuel economy figures for the BMW range: Extra Urban 26.2-78.5mpg (10.8-3.6l/100km). Urban: 14.6-56.5mpg (19.3-5.0l/100km). Combined: 20.3-68.9mpg (13.9-4.1l/100km). CO2 emissions 325-109g/km. *Offers available to business users only, figures exclude VAT. Participating dealers only. Not available in conjunction with any other offer. Figures include service maintenance and repair for the duration of the contract. Hiring examples are based on 36 month BMW Corporate Finance agreements for the model shown, a BMW 320d EfficientDynamics Saloon, a deposit of £1,065.00 followed by 35 monthly rentals of £355.00, mileage charge in excess of contract mileage 8.68 per mile. All agreements are based on a contract mileage of 30,000 miles and are inclusive of metallic paintwork. Vehicle condition charges may apply at the end of your agreement. Figures are correct at time of publishing and are subject to change without notice. All hiring is subject to status and available to over 18s in the UK only (excluding the Channel Islands). Guarantees and indemnities may be required. Hiring facilities provided by BMW Financial Services, Europe House, Bartley Way, Hook, Hampshire RG27 9UF. **All BlK data published is supplied by Kee Resources’ KwikCarCost. All BlK data is valid at 01 May 2011. BMW EfficientDynamics reduces BMW emissions without compromising performance developments and is standard across the model range.
Leading Scottish leather firm gets under the skin of export There’s no sitting around for one Scottish manufacturing group – on the contrary, it’s making huge strides in the tough US market
What does a top-end Nokia smartphone, the seats in the Oxo Tower restaurants, the upholstery in a top-of-the-range Saab, the fabric on the Boeing 787 Dreamliner, or the captain’s chair on a super yacht have to do with Scotland? The answer is supremely well finished leather which comes from one of Scotland’s unexpected exporting gems – the Scottish Leather Group, whose exports make up over 80% of turnover. And one of its companies, Bridge of Weir Leather Company, has just set up a business in Detroit to work more closely with Motown car industry. Group managing director Iain McFadyen says the main reason for winning work in a global market are strong environmental credentials and emphasis on quality. “There are thousands of tanneries, particularly in places like Italy, China or even India,” he says. “We’re different because of the quality
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of our products. We’ve invested very heavily in people.” Bridge of Weir Leather is already a world leader in the field of quality motor vehicle leather upholstery and the office opening and appointment increased its capability in the US. Tom Kiepper has been appointed vicepresident, sales, for North America, joining from competitor Eagle Ottawa, where he has more than 20 years’ experience in working with a range of leading brands such as Toyota, Nissan Honda and Chrysler. This is exactly the kind of appointment that Scottish businesses require to get under the skin of export potential. Bridge of Weir Leather director, Jamie Davidson says: “Opening this new office places Bridge of Weir Leather very well to develop the automotive offering that we successfully run in the UK, Europe and most recently, in China, with the launch of the joint
venture, Zibow. Tom comes armed with the right experience we need for him to take Bridge of Weir Leather to North American OEMs (original equipment manufacturers) and sell our low-carbon products, which is a major focus of all car manufacturing.” Tom Kiepper says: “Although Bridge of Weir already has a presence here, the scope is immense. I am looking forward to working with a company which is continually innovating and staying one step ahead.” It’s a point shared by Iain McFadyen, who took over from John Henderson in December 2008. He is managing director of both NCT Leather and Bridge of Weir Leather Company. “If you are making products for the automotive industry it has got to have some very high specifications,” he says. “Our leather can be exposed to varying climates – sun, rain, cold – and so it has to perform, not crack or fade. So we make a performance product and I think we are technically ahead of some of our competition.” He says from an environmental standpoint they are least five years ahead of the competition. “There is no other company that has invested in a waste to energy plant like we have here. We are doing a lot of research and development into new products, new finishes and new colours.” The group, which employs more than 550 people, exports to 36 countries and processes over 900,000 cattle hides a year, with a turnover of around £65m. Today, Scottish Leather Group comprises of four leather manufacturing subsidiaries and a technology company, all in the west of Scotland: Andrew Muirhead and Son, Bridge of Weir Leather Company, WJ and W Lang, NCT Leather and SLG Technology. Scottish Leather Group, formed in 1965, is a privately owned, independent company and is the largest leather tannery group in the UK. n
Scottish firms across a variety of sectors are reaping the benefits of trading in overseas markets thanks to the ongoing assistance offered through Smart Exporter.
Smart Exporting – the key to business growth
ncouraging international trade and developing the global profile of dynamic Scottish companies is paramount to the country’s long-term economic growth. Key public and private agencies are working together to drive forward this message in line with the Scottish Government’s new five year International Trade and Investment Strategy. Whilst the international trade arena offers significant development opportunities for Scottish businesses, there is no one-size-fits-all approach, and businesses looking to invest in overseas markets must have a strategy in place to help maximise success. Smart Exporter is a service available for Scottish companies and individuals looking to develop their exporting knowledge. Created through investment by Scottish Development International, a collaboration of Scotland’s Chambers of Commerce represented by Scottish Chambers International (SCI) and the European Social Fund, it provides a range of free and heavily subsidised services designed to help companies meet the challenges of expanding overseas – from market awareness advice, to strategy development assistance and technical support. After 25 years of successful trading in the UK, Clackmannanshire company, Harviestoun Brewery was struggling to manage its overseas operations until it obtained expert advice through the Smart Exporter initiative. Advice was delivered to the company’s management team in the form of a two day Strategy Workshop. That was three years ago, and now the brewery is successfully trading in 15 international markets, and has tripled its export business. Managing director, Chris Miller explained: “My co-director and I were very experienced in the
i’m not exaggerating when i say it’s the most worthwhile two days we have had in the last five years
domestic drinks business, and although we recognised the potential in foreign markets, we lacked the necessary expertise. “We spent two full days with a specialist looking at where we wanted Harvieston to be – we explored new markets in detail looking at per capita spend and willingness to try new products. “We found that new products were an integral part of the strategy with regard to our export business, and the Smart Exporter strategy workshop helped us with the design of the brand as well as with marketing, PR and e-commerce advice. “The Strategy Workshop gave us access to first class resources which as a small company we don’t have...and would be too costly to bring in. “The workshop lasted two full days and because of the doors it has opened up to us since, I’m not exaggerating when I say it’s the most worthwhile two days we have had in the last five years.” Businesses taking advantage of the Smart Exporter programme can access expert advice at every stage of their international trade development process.
Whether a business is looking to explore new opportunities overseas, or already has considerable experience in international markets, Smart Exporter offers tailored products and services to suit the requirements of the individual enterprise. Free or heavily subsidised support is available in the form of interactive workshops, seminars, one-to-one sessions, in-house training and online support and diagnostics. For further information about Smart Exporter, please telephone 0800 019 1953, email email@example.com or visit www.smartexporter.co.uk
BUSINESS QUARTER | SUMMER 11
Scottish business may still be in the doldrums, according to estimates, but a bank’s lending hits a new high, disabled entrepreneurs are given a boost, people are on the move, and Monty opens a package are encouraging investors, companies and entrepreneurs to visit the new Dundee.” Dundee City Council and Scottish Enterprise have committed more than £72m from 2009-2017 for the Dundee Central Waterfront project.
>> Bright Purple brightens Singapore
>> Oil giant FMC working with university Global oil and gas solutions provider FMC Technologies is working with Glasgow Caledonian University (GCU) to deliver a pioneering five-year research and development collaboration within the subsea oil and gas industry. New technology is being developed in Scotland to enable safer and more efficient oil recovery from deeper water and harsher environments. The collaboration will combine expertise in electronics, optoelectronics, electrical power and instrumentation at GCU with that of subsea engineering and optoelectronics within FMC. The venture will also involve staff exchange, student placements and research studentships. FMC Technologies has a dedicated optoelectronics research and development group based in Glasgow to focus on developing integrated sensing solutions. The partnership with GCU will include a collaboration focused on future subsea optoelectronic systems.
>> Dundee moves into top flight Dundee’s £925m waterfront project has moved into the UK’s top 20 regeneration projects, putting the city into the premier league of major UK schemes such as London’s Olympic Park, Greenwich Peninsula and Wembley City. Dundee Waterfront has secured the £43m V&A Dundee as its flagship and the project has soared to 18th position in this year’s research by specialist publication Planning (in association with Regeneration & Renewal). The
BUSINESS QUARTER | SUMMER 11
Top 100 reveals Dundee Waterfront emerging as Scotland’s second-largest regeneration scheme – behind Glasgow’s Clyde Gateway (£2.5bn), but ahead of Leith Harbour (£744m), West Lothian’s Heartlands scheme (£500m) and Glasgow’s Oatlands regeneration (£222m). Mike Galloway, Dundee’s director of city development, said: “Most of the sites have now been cleared, the waterfront area is attracting significant interest and there is further investment to come. Dundee Waterfront is fully open for business and we
Edinburgh-based Bright Purple Resourcing, the financial services recruitment people, have opened an office in Singapore. The opening came on annual results showing a doubling in turnover to £37m – up from £18.6m last year – and a rise in net profits to £1.4m in the 2010/2011 financial year. Bright Purple’s Singapore operation will be headed up by Iain Geddes who worked previously in Edinburgh for 16 years as a director with Search Consultancy. Bright Purple’s managing director Nick Price said: “This expansion offers huge opportunities for our business – most of the nations in the area are currently experiencing double-digit growth and many sectors including banking, manufacturing need staff.”
>> Fitness firms flexes its muscle Anytime Leisure, a leading independent provider of fitness equipment, has bought Cardinal Sports. The merger pushes Anytime Leisure, whose services and experience include equipment sales, gym design and maintenance, and leisure club management to the forefront of the UK commercial fitness industry with a combined turnover of £4m. Paul Bodger, managing director of Anytime Leisure, said: “The acquisition of Cardinal Sports is great news for Anytime Leisure staff and customers. We’ve been growing rapidly for the past two years and the whole team has
been working hard to consistently deliver high service levels. “Cardinal has one of the best reputations in the UK for sports and fitness equipment.“ The company clients include Gleneagles, Mar Hall, Nuffield, Diageo and the Universities of St Andrews, Glasgow and Edinburgh.
>> McClure completes £250m investment rounds Law firm McClure Naismith has marked the end of the original Enterprise Zone period by completing three syndicate investments valued at more than £250m, with more than 1,100 private investors participating. Two of the deals will see purpose-built data centres built at Dunalastair in North Lanarkshire to provide the latest in secure and low-energy storage for the telecoms and financial services industries. The third deal is for new grade A offices to be built at Cobalt Business Park near Newcastle. McClure Naismith provided legal advice on the structure of the Syndicate Investment vehicle and funding, and closed all three deals in just six weeks. The Enterprise Zone Investments were placed by Chancery (UK), an accountancy firm specialising in advising high net worth individuals and businesses.
>> Scottish spin-outs in Top Ten Two of Scotland’s universities are in the UK top ten for spinning-out companies. While London’s Imperial College has produced more spin-out companies than any other British university over the past decade, Edinburgh and Strathclyde have also been successful. A survey by Spinouts UK, an internet database with information about the commercialisation of intellectual property created by British universities and higher education institutions, reveals that ten universities have produced more than half of all UK spin-outs. Imperial formed 59 spin-outs in 2000-10, followed by Oxford (55), Edinburgh (49), Cambridge (44), Warwick (36), Strathclyde (35), Newcastle (28), Bristol (28), Sheffield (28), Queen’s University Belfast and
Leeds (both with 25). Between them, the universities have spun out 412 companies. Between 2008-10, Edinburgh was top of the list with 16 spin-outs, followed by Newcastle (11), Imperial College London (9), Strathclyde (9), Oxford (9), Warwick (9), Cambridge (4), Queen Mary’s London (4), Queen’s University Belfast (4), Ulster (4) and Heriot-Watt (4). Total value of the spin-outs is more than £3bn. Successful spin-outs include the $1bn sale to the American pharmaceutical giant Amgen of BioVex, a company started ten years ago by a
researcher at University College London to bring to market a class of drugs for treating cancers; ApaTech, a spin-out from Queen Mary University of London which has developed synthetic bone materials for orthopaedic and dental applications, was sold last year to the American healthcare group Baxter for $330m, and the biggest recent flotation was that of Nanoco Technologies, a Manchester spin-out that develops applications for nanoparticles, which floated in December 2008 with a value of £150m. >>
>> Clydesdale Bank open for new lending Clydesdale Bank has underlined its commitment to business by advancing £2.1bn of new lending to business customers in the six months to March 31 2011. This is a 62% increase on the same period last year. The bank has promised £10bn of new lending to UK business and mortgage customers by October 2011. Overall, the bank has advanced £8bn of new lending in the last 18 months – a strong illustration of its commitment to growth. The bank’s Investing for Growth initiative, was launched last spring across its 73-strong network of Financial Solutions Centres – 15 of which are in Scotland, including Glasgow, Edinburgh, Aberdeen, Stirling, Ayr and Dunfermline – which is designed to help successful businesses grow and develop. Lending highlights in the past six months include a new funding £4.5m package for Scotland’s leading coatings manufacturer, £3m backing for a Glasgow printing firm, and £4.9m support for an acquisition by one of the UK’s major bingo club operators. Scott McKerracher, regional director for Clydesdale Bank in Scotland, said: “Clydesdale Bank has continued to focus on supporting customers in these uncertain times. Despite the subdued market demand for credit, we have continued to offer genuine financial choice in the market.” The Investing for Growth support package offers both new and existing business customers a dedicated planning service and a more flexible approach to lending. Examples of Scottish businesses which have taken advantage of new lending include: • John Watson & Company: Clydesdale Bank agreed a £3m funding package with the printing firm. The deal will help fund expansion plans including the installation of a new label press at its Glasgow city centre premises. • Spencer Coatings: The Aberdeen-based coatings manufacturer received £4.5m to support planned growth in overseas markets, including the potential acquisition of a China-based specialist manufacturer of pipeline coatings. • Fraser Capital Management: Lanarkshire-based Fraser Capital secured tailored loans worth £4.9m from Clydesdale Bank to help fund the expansion of its Club 3000 bingo chain. The company has acquired seven additional outlets from North of England-based Buckingham Bingo. The acquisition will help to boost the company’s turnover over the next 12 months from its existing £5m to around £20m. • Glasgow Centre for Reproductive Medicine (GCRM): A £1m funding package will enable Scotland’s leading independent IVF fertility clinic to purchase the upper floor of its existing premises, doubling its size from 4,000 to 8,000 square feet. • RT Stuart: The Fife-based firm operates 16 retail outlets and is now looking to expand into the wholesale market by supplying bakery and butchery products to small-scale, private supermarkets with the support of a £1m funding package.
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>> John Wood Group picks up Scottish plc of the year award Oil and gas services giant John Wood Group won the Scottish plc of the year award in April 2011. Wood Group’s acquisition of rival PSN to create a global market leading position and a £560m contract to build a new gas-fired power station in Israel were viewed as highlights. A Lifetime Achievement Award went to Sir
Moir Lockhead, who recently retired as chief executive of First Group, while Chief Executive of the Year was Martin Gilbert of Aberdeen Asset Management. Mid-sized Cap of the Year was Craneware, whose profits rose from £5.9m in 2009 to £7.3m last year on turnover of £28.4m, while Aberdeen Asset Management was Large Plc of the Year. Other winners were: Outstanding Private
Company, Schuh; Social investment in Scotland, ScottishPower; Global Reach award, John Wood Group; Sustainability award, British Polythene Industries. It was the 13th Scottish plc awards organised by Scottish Business Insider and PwC.
>> BQ People on the move Paul Matthews has been named as chief executive of Standard Life’s UK business. His appointment allows group chief executive David Nish to focus on shaping the future direction of the Edinburgh-based business. Since joining in 1989, Matthews has held a number of senior positions including director with responsibility for the retail, corporate and direct to customer businesses in the UK. Jim Leishman has been appointed facilities manager at Semi Scenic, the East Kilbride-based semiconductor equipment refurbishment specialist. Based at the Science Park in East Kilbride, Semi Scenic has doubled its headcount from 12 to 24 and Jim’s role is considering options for relocation.
Graham Rogers has appointed a new director within Barclays global shared services hub in Glasgow. He takes up the role of head of settlement, securities and asset servicing for Europe, managing an international remit of teams across the Barclays Wealth and Barclays Capital businesses. Rogers joins following a 26-year career in Morgan Stanley, Mitsubishi Finance, Scandinavian Bank Group and TSB. The appointment reflects the success of Barclays Wealth’s and Barclays Capital’s shared services hub which, with more than 1,800 staff, is one of Glasgow’s top ten employers.
Oliver Routledge, an expert in renewable energy, has joined property consultancy Knight Frank in Scotland to help advise landowners and investors on the potential that can be generated from Scotland’s natural resources. He joined Knight Frank as an associate in August 2010. Bidwells has strengthened its Inverness team with two appointments, Clive Meikle and Denis Torley. Clive Meikle joins as partner, heading up the team of nine delivering a property and land agency service across the Highlands. Denis Torley joins Bidwells as a forestry consultant from Highland Council.
Craig Turnbull, a construction law specialist, has been appointed managing partner of MacRoberts LLP. He succeeds Michael Murphy who is stepping down after nearly six years. Neil Kelly, a partner since 1991 and head of construction, has been appointed chairman.
Ken Green, formerly with Scottish Enterprise, has joined Metis Partners as a business analyst. The Glasgow-based intellectual property asset specialist now has a team of seven in the process. Green was a member of Point Source management team for more than 10 years when it expanded from £300,000 turnover in 1997 to £15m in 2008, when it was sold.
If you’d like to include someone on the move, please email firstname.lastname@example.org
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>> Lover’s retreat gets fivestar kisses The Hideaway Experience at Balkello near Dundee, which offers eco-friendly luxury accommodation, has been awarded five stars by Visit Scotland. Owners Caroline and Ross Millar have developed a range of five-star experiences, including the Lovers’ Hideaway and the Honeymooners’ Hideaway, the only purpose-built, five-star lovers’ retreats in the UK. Riddell Graham, director of partnerships at VisitScotland says: “We’re delighted that the new Lovers’ Hideaway and the Honeymooners’ Hideaways have achieved this level of award, as it not only reflects the quality on offer at these properties, but it acts as an incentive to other tourism businesses that it is possible to combine sustainability with a bit of luxury.”
>> Saracen opens base in Edinburgh Saracen Fund Managers, the independent investment management company, has opened its Edinburgh office. Saracen aims to grow the business under the helm of chief executive Graham Campbell. John Dunsmore, the former chief executive of Scottish & Newcastle and current chief executive of C&C – owners of Magner’s and Tennent’s Lager –
opened the office. Saracen aims to increase funds under management in the Saracen Growth Fund, with focused marketing and roadshows around the UK. The Saracen Growth Fund, co-managed by chairman Jim Fisher and investment director Craig Yeaman, will form part of the platform to develop new funds. Daniel Leaf, appointed as head of research, will help lead the development of research and analysis. Graham Campbell, chief executive, said: “Our Edinburgh relocation will help us focus on growing the business. It provided an opportunity to revitalise the Saracen brand to reflect today’s investment world. “The new branding also reinforces our investment values and philosophy in a clear, differentiated style and boldly highlights the alignment of Saracen with our investors and with the successful performance of our Growth Fund.”
>> Monty links up with a fair way to help a good cause
Scottish golf legend Colin Montgomerie has launched the Malmaison and Hotel du Vin group’s package for those who enjoy the greens and fairways of Scottish golf courses. The group’s hotels offering the package will provide advice on where best to play, from championship courses to local gems, and offer golf club storage as well as flexible breakfast
times to ensure guests don’t miss early tee times. A donation from each golf package booked will be made to the Elizabeth Montgomerie Foundation, the charity set up by the Scots golfer in memory of his late mother. This follows on from the £1-per-stay initiative which each of the Scottish hotels in the group set up to support the foundation, raising over £150,000 so far. Colin Montgomerie said: “It’s great to see Malmaison and Hotel du Vin creating this package for golfers and I’m grateful for Hotel du Vin and Malmaison continuing to support me and my charity. I would encourage golf enthusiasts to come and experience these packages – not only will you enjoy a golf break in style, but you will also be raising funds for a very good cause.” >>
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>> Envirowheel will colour in the grey areas One of the first tasks for Stewart Stevenson, the new minister for environment and climate change (pictured right), was the launch of an online portal for environmental business support in Scotland. Scottish Business in the Community, BT Scotland and the 2020 Climate Group teamed up with Scotland’s key agencies to create the Envirowheel, a support tool designed to help businesses identify saving money and become more sustainable. The launch – Stewart Stevenson is pictured with BT’s Brendan Dick, Scottish Business in the Community’s chief executive Jane Wood, and Ian Marchant, chief executive of Scottish & Southern Energy and chairman of the 2020 Climate Group – followed the inaugural meeting between the 2020 Climate Group and Prince Charles, Duke of Rothesay, at the Palace of Holyroodhouse. Each section highlights help available in key areas of the Scottish Government’s Climate Change Delivery Plan – energy, transport, waste, water and behaviour change – as well as key areas of business improvement, finance and legislation. The Envirowheel has been created with support from the Carbon Trust, Energy Saving Trust, Zero Waste Scotland, SEPA and Scottish Enterprise. BT Scotland director Brendan Dick, who chairs Scottish Business in the Community and is a member of the 2020 Climate Group, said: “Smaller businesses are confused by the variety of free environmental support available. Many don’t have the time or resource to make it a priority and don’t know where to start their environmental journey. The Envirowheel will help businesses in all sectors to understand what’s needed and integrate good practices into their workplaces. It’s not just about being responsible or meeting obligations, but it can also save them money.”
>> Family matters when setting up a business Scotland’s young start-up entrepreneurs rely on family more than any other individuals or the banks when setting
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up a business – with 25% of them seeking funding from close family and 14% from other relatives. However, despite a recovery in activity following the credit crunch and recession,
there remains a significant gap in training to educate the country’s future business owners, says the Global Entrepreneurship Monitor (GEM) 2010. The report’s author, Dr Jonathan Levie, of the Hunter Centre for Entrepreneurship, at Strathclyde University, said: “About twice as many young entrepreneurs value the advice of friends and family as those who value the advice of professional business advisers, even though most of their family and friends have had no experience of running a business themselves. This raises questions about the quality of advice they are getting.” The report also highlights a “lost generation” of entrepreneurs with a gap in total earlystage entrepreneurial activity for people in their thirties – in stark contrast to the trend for the rest of the UK. Dr Levie said: “We cannot recover this lost generation, but we can help prevent another through universal provision of training in starting a business in colleges and universities. If we do not, much of Scotland’s investment in enterprise education in our schools could be wasted.” Scotland’s annual GEM report encourages the Scottish Government to look at enterprise policy in an integrated way and fill the gap in third-level education. The report proposes that by implementing a comprehensive action plan, the rising level of disinterest in entrepreneurship could be addressed. Sir Tom Hunter, who endowed the Hunter Centre for Entrepreneurship at Strathclyde, said: “Fundamentally, Scotland needs to drive more economic development, both corporately and entrepreneurially, and if we do not drive a definitive strategy to do so – that includes a supportive tax regime, fiscal policies that drive growth and ground level support for start-ups – we will be an economy destined for reverse gear. “Our new Government should take a fresh look at enterprise policy across all the environments through which our young people travel – including further, as well as higher, education. Scotland has led the world in the past; it’s time for it to lead again for our national future.” >>
As well as having a role steeped in history, Sheenagh Adams, Keeper of the Registers of Scotland has a very modern approach to running Scotland’s land registration.
Putting customers at the heart of what we do
heenagh Adams witnesses history: It’s her job. As Keeper of the Registers of Scotland and Deputy Keeper of the Great Seal of Scotland, Sheenagh is surrounded by history. She heads up Registers of Scotland (RoS) and oversees the secure registration of Scotland’s 350,000 plus annual property transactions. The lineage of RoS and its role in the governing of Scotland belies its modernity. Although the organisation is not far off celebrating 400 years of recorded legal property ownership, and was the first nation in the world to do so, it is really only in the last 30 years that significant changes have taken place. The huge paper ledgers and maps have gone and now property ownership is recorded on bespoke databases and summarised on Land Certificates. Sheenagh sums up the role of the organisation: “Then and now, the purpose of registering property ownership is to prevent fraud and provide the security of title that is vital to economic stability and growth.” Sheenagh joined RoS in 2006 when she became the organisation’s Managing Director. She will soon pass her second anniversary as Keeper, having being appointed on 1 July 2009. “Technology has been an obvious driver for change over the last few decades and, as this opens up more opportunities, RoS has moved its systems online to make them more accessible and provide improved services to customers.” But is not enough to just develop systems; Sheenagh is committed to ensuring that they meet the business needs of RoS’ existing and potential customers. “There is still so much potential for our products to help other organisations deliver better service and realise efficiencies. For example, it is
Sheenagh Adams with The Great Seal of Scotland of which she is the Deputy Keeper and the First Minister is the Keeper. The Great Seal of Scotland is attached to Royal Warrants, Charters and Letters Patent (Parliamentary Bills). estimated that local authorities have been able to identify and collect an additional £90 million in unpaid Council Tax each year as a result of using our online searching system Registers Direct.” One of RoS’ most recent web-based advances has been ARTL (Automated Registration of Title to Land). This secure eRegistration product allows solicitors to complete the online registration of a property, along with applying standard securities and discharges, in just 24 hours. It also attracts lower fees. Recently, Glasgow City Council saved over £63,000 in fees just by using ARTL. The new Scottish Government has made it clear that its focus is the economy and a competent service to the public. Sheenagh believes that this chimes well with RoS: “Both of these are of
incredible importance to us. We underpin the Scottish economy by providing safe and secure title to land that is backed up by a State guarantee. “The last few years have undoubtedly been challenging, as the property market has declined. We have worked to testing efficiency targets and we have taken active steps to reduce our workforce, which has shrunk from over 1300 staff to 1200. We have reviewed our fees to restore them to a cost recovery basis, though, in real terms, we are still charging less than we did in the mid-1990s. As Scotland’s only Trading Fund, we receive no money from the tax payer; all of our costs are met from the fees we charge for our registration and information services. We are utterly committed to providing excellent value for money and putting our customers at the heart of our business.” Sheenagh is ready for the continuing but rewarding challenges that lie ahead. As she says herself: “We already hold 16 registers and we will soon be taking on the Register of Crofts. Whatever the Scottish Government asks RoS to take on we have the expertise and the will to deliver excellence.”
Kenny Crawford, Head of Commercial Services, Registers of Scotland. email@example.com
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>> Scottish economy in doldrums in 2010 Scotland did not manage to pull itself out of the doldrums in the last quarter of 2010, although construction saw an improvement. The main findings of Scotland’s chief statistician were: gross domestic product (GDP) fell by 0.4% between the third and fourth quarter of 2010. On an annual basis, comparing 2010 with 2009, GDP grew by 0.8%. During the fourth quarter of 2010, output in the construction sector fell by 2%, the production sector fell by 0.5%, and the services sector fell by 0.1%. On an annual basis, output in the services sector fell by 0.1% while the production sector grew by 0.5%, although the construction sector grew by 11.2%.
>> Disabled entrepreneurs impress business guru Leading entrepreneur Sir Tom Hunter visited Glasgow’s Royal Strathclyde Blindcraft Industries (RSBi) and was impressed with the range of opportunities the manufacturing facility provides for disabled workers. Pictured here he is shown how a roof timber kit is assembled by RSBi worker Ross McLure. “I have been very impressed with the workers I have met on my visit to RSBi,” said Hunter. “They are entrepreneurs in the true sense of
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the word. They contribute to a successful business and are carrying out a range of skilled jobs.” RSBi is now one of Europe’s largest assisted workshop facilities, employing 260 workers and is operated by City Building, Glasgow City Council’s arm’s-length construction company. RSBi has had a presence in Glasgow for more than 200 years.
>> Scotland secures £74m in R7D investment Scottish Enterprise (SE) has helped spark £74m of investment in new research and development projects with companies based in Scotland in the last year. The figures, announced at the Scottish Technology Showcase, show that through its innovation funds, SE invested £20m in 179 separate projects which helped to leverage a further £54m investment in the projects by the companies themselves. The investment, through the R&D, WATERS and SMART: SCOTLAND grants, helps companies to develop new products, increase their competitiveness and access new markets, both at home and overseas. Paul Lewis, director of commercialisation at Scottish Enterprise, said: “These are very encouraging results. Over the past 12 months, we’ve supported more projects through our R&D funds and leveraged significant investment from the private sector. “This is helping companies to sharpen their competitive edge and encouraging them to exploit new technology to improve their business. “It’s supporting growth in those sectors where Scotland can compete internationally. “If we are to accelerate Scotland’s economy and boost long term growth and employment, we need to help more Scottish companies adopt this innovative mindset and our R&D funds are one of the ways we’re doing that.” One of the largest grants was to Toshiba Medical Visualisation Systems for £3m towards the development of medical
imaging technology that will make it easier for clinicians to diagnose and plan treatment for patients in areas such as heart disease and cancer. Other examples include: Gigle in Edinburgh, creators of chip technology for multi-media home networking; Dundee-based Dynamo Games, a games developers working within the social, smartphone and tablet gaming sectors; and Antoxis from Aberdeen, developers of drug compounds to lead the fight against cell-damaging free-radicals associated with conditions such as Alzheimer’s and diabetes. Companies in the energy sector secured the most number of grants with 49 projects receiving £8.6m of SE investment, which leveraged £28.5m from the companies.
>> Consortium picks up medical funding Aridhia Informatics, a leading Scottish health informatics company, has joined forces with two NHS boards and two universities to pick up funding from the Technology Strategy Board. The project aims to tailor therapy of cancer patients by linking the molecular signature of different cancers to the right medicine and correct dosage. The consortium won funding from the Stratified Medicine Innovation Platform, an initiative managed by the Technology Strategy Board which is overseeing an investment of over £50m of Government funding in innovative research and development. Aridhia Informatics, set up by entrepreneur David Sibbald and Professor Andrew Morris, is the lead technology partner in the DECIPHER project, which will see the company working in partnership with NHS Lothian, the University of Edinburgh, NHS Tayside and the University of Dundee. Aridhia was formed as a joint venture in early 2008 with the National Health Service in Tayside, the University of Dundee, and Sumerian as partners and shareholders. Aridhia now employs a team recruited from both industrial and academic backgrounds.
The Business & Enterprise Group is an independent, nationwide group of companies that specialises in business improvement, economic development and enterprise services. Its aim is to help more businesses to start, succeed and grow. Here Chief Executive Alastair MacColl explains how the Business & Enterprise Group has itself expanded via acquisitions enabling it to offer a wider range of services.
Working to help others work for themselves...
HE Business & Enterprise Group, one of the UK’s leading specialists in business improvement, enterprise and economic development will be working to help Scottish entrepreneurs start their own businesses and kick-start the economy. And, with the creation of jobs via the growth of private sector companies, high on the Government’s political agenda Chief Executive of the Business & Enterprise Group Alastair MacColl, says it is a great time to think about going into business for yourself. “We have developed a comprehensive portfolio of services - tailored to meet the specific needs of businesses - and are increasing our presence in Scotland to help people who have innovative ideas for sustainable businesses to get them off the ground, creating economic growth and jobs. “It is also very much about helping existing firms to move to the next level by sharing our expertise, providing access to investment, international trade support, supply chain development and procurement. “We are a rapidly growing UK-wide company working for household name clients such as Marks and Spencer, Heathrow Airport, United Utilities and NPower as well as public sector bodies such as the Skills Funding Agency, the Ministry of Defence and a number of local authorities. “In fact we recently changed our name to reflect our growing presence on the national stage, moving from Business & Enterprise UK to the Business & Enterprise Group. “We have some significant opportunities on the horizon and expect to increase our work in
Alastair MacColl, chief executive of Business & Enterprise Group
the range of services we can offer and recently acquired Business-to-Business Exhibitions Ltd (BtoB) which specialises in creating and delivering business support projects and events. “BtoB was a fantastic company for us to acquire helping us to meet our ambition to deliver business development and enterprise initiatives across the UK. “We have also acquired NDI UK, the commercial arm of Northern Defence Industries, adding to our portfolio.” Last year alone the Business & Enterprise Group supported more than 20,000 companies and helped create 5,885 jobs. This year it aims to improve on that total by delivering the best business support services in the UK. As well as providing excellent service to its clients the Business & Enterprise Group’s commitment to its staff was recognised recently when it was named as number 52 in the Sunday Times national top 100 best companies to work for list 2010.
we have some significant opportunities on the horizon and expect to increase our work in scotland and other parts of the uk extensively over the coming year Scotland and other parts of the UK extensively over the coming year. “As an expanding company we are broadening
For further information about the Business & Enterprise Group visit www.business-enterprise.net or call 0191 426 6100.
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The man who invented Vanish
and HOW it left an indelible mark on him John Jones discovered a sticky cleaning substance in an Ayrshire coast stockroom and turned into a global brand leader. But he tells Kenny Kemp how the forced sale of his business was a watershed in his life Once upon a time there was a miserable Welshman with millions tucked away in the bank. John T Jones was a middle-ranking sales and marketing man who stumbled on a sticky substance that became Vanish, the global cleaning phenomenon. It was invented and developed by Jones in Scotland but he was forced to sell the expanding business that he loved. By 1986 he was living a life of sybaritic pleasure in a beautiful villa in rural Costa Blanca with a bijoux apartment near Mandelieu, outside Cannes. As he lounged on Bernardo, his 55-foot motor yacht, moored at La Napoule, on the Cote D’Azur, he could see his Aston Martin DBS being washed and valeted on the quayside. Next to him
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on the deck was his bikini-clad wife, Liz, a former model. He says: “I can clearly remember sitting on my boat, looking out across the marina thinking to myself, ‘Why am I so unhappy?’ I have money – lots of money – luxury cars, houses, freedom. In fact, everything I had ever dreamed about having… and yet I felt completely and utterly depressed.” Even today, 25 years later, John Jones – now at 69, infinitely happier and at peace with his past – still shakes his head with disbelief about the cleaning brand that he discovered and nurtured. For all that the textbooks say about business “not being personal” and that you should never get emotionally attached, in John Jones’s case, they are talking baloney.
“I don’t expect you to understand this,” he says. “I didn’t understand it myself – and still don’t. What I did with Vanish was perhaps the great achievement in my business life – and I missed it profoundly after I was forced to sell.” He now lives much more modestly in a comfortable detached home on the banks of the Firth of Forth, with his partner Jane and his loyal eight-year-old dogs, Sirius and Theos. He works as an occasional business mentor, happy to pass on nuggets of advice to emerging entrepreneurs, including Katarzyna and Ewa, the founders of the Polish recruitment business Pol-UK. And a recent talking spot at the PLC – Power Lunch Club – resulted in a minibus tour of interested business people wanting to hear more from “The Incredible Mr Jones”. >>
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ENTREPRENEUR Let’s put Vanish in some sort of context. It is a massive global brand worth hundreds of millions of pounds a year. It sells in the United Kingdom, Russia, South Korea, Spain, Italy, Germany, Australia, Poland and Turkey. It is also sold under the brand name Spray ‘n’ Wash and Resolve in the United States. It’s a Super Brand now owned by Reckitt Benckiser, (RB) based in Slough, one of the world’s leading manufacturers and marketers of branded products for the household cleaning market. Vanish sits alongside another 18 “power brands” that include household names such as Dettol, Harpic, Strepsils, Clearasil, Durex, Nurofen, Gaviscon, Finish and Cherry Blossom. RB’s annual report for 2010 says that the fabric care market, including the water softeners and laundry detergents, brings in £1.57bn a year – a large chunk of this is for Vanish and all its variants. It is little wonder John Jones can’t quite believe it all. The Vanish story is a classic tale. “I had just completed an assignment for a Lancashire soap manufacturer,” he says. “It was very boring but it paid the bills and I was thinking about my next move, without a particular plan, when the phone rang.” It was the early 1980s and a Clydesdale Bank manager who had been working with Jones, then in his early 40s, on business restructuring, called him up. “John, I know you normally do sales and marketing assignments, but I have an unusual close-down project in a place called Skelmorlie,” he said. The company chairman had suffered a heart attack and the business needed help right away. Jones says: “I found a wonderful little office on the waterfront at Skelmorlie, near Largs in North Ayrshire, with fabulous view across the Clyde to Bute and Arran.” The Projectina company, named after a Swiss microscope, had been set up 23 years earlier, the previous 17 years as the main agent for Nikon, selling and servicing optical microscopes in the UK and Europe. It had a turnover of £1m, staff morale was high and everything was in good shape. “Normally, as a consultant, you arrive at client company with all sorts of disasters happening or about to happen, but not here, this was a
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For the first time in my business life I had the opportunity of putting something together of real quality that I had absolute confidence in refreshing change,” he recalls. The Japanese directors of Nikon had visited owner and chairman Roy MacFarlane, thanked him for his work, then broke the news that they had now formed Nikon (UK) Ltd. His contract was not being renewed and they wanted to negotiate a compensation package. The shock was too much, McFarlane collapsed and was rushed into hospital. “I took on the assignment and set about selling off assets and liaising with Nikon to employ the field sales engineers, helping to find the administrative staff alternative employment,” he says. He was rummaging through a stockroom with Patricia MacFarlane, the chairman’s wife, when he came across a large tin of a toffee-like substance on a shelf that smelled like Vick’s Vapour rub. When Jones pointed it out, Patricia explained: “Roy brought that back from Australia. It cleans the microscope slides.
It’s very powerful, it’s bio-degradable, germicidal and sometimes I use it in my washing machine to remove stubborn stains.” Jones took a sample home to try it out. His hobby was boating and his clothing was regularly covered in all sorts of dirt and grime. His wife Liz tried it out on the baby clothes. They found it worked on just about everything. This was powerful stuff. It was a Eureka moment as Jones thought that this substance that might make a unique Fast Moving Consumer Goods product, so he began investigating its potential. Nielsen’s market research said the stain-removing market was worth a meagre £3m and supermarkets were not particularly interested. The available products, Dabitoff and Thawpit, contained carbon tetrachloride, which was a highly flammable substance. Jones went to see Stuart Harvey, a senior lecturer and chemical scientist at Paisley
College of Technology (now University of the West of Scotland), and Dr Nichol, one of his chemical engineering colleagues. (Harvey taught from 1960 to 1994 and died in 2010, aged 75.) They identified the chemical compound and whether it would be safe as a consumer product. It was too raw and needed to be homogenised for general use, so John contacted his previous soap-making friends to see if it could be incorporated into a bar of soap. Back at Paisley, the chemists tested the product and found the results were outstanding. Roy MacFarlane was convalescing at home when John Jones told him of the discovery. “At first, he seemed a bit concerned that, as an expensive consultant, I had been spending time on something that was outside my remit,” he says. “When I explained the results and progress so far, I got him interested and he asked about our chances of success.” They were very slim. “Well, how much would it cost?” he asked. Jones suggested about £30,000 risk capital then, if it was a proven winner, considerably more. He gave a sample bar to Patricia MacFarlane and her friends and less than a week later she called saying everyone thought the bar was remarkable. Instead of remaining a consultant, Roy McFarlane made Jones an employee, giving him a major stake in the business. He became obsessed by the product. Bob Gillies, an accountant with business advisers Nelson Gilmour Smith, was taken on by Jones as part-time managing director, working in the firm’s 95 Bothwell Street office in Glasgow. Formal agreements with the Paisley scientists were completed and they put together the blend concentrate. Dr Nichol designed and built a small manufacturing laboratory alongside the office and a Lancashire soap manufacturer was appointed under the expert control of Len Richardson. All that was needed was a name and a sound business and marketing plan. Sam Gaunt, a Glasgow packaging and artwork designer, came up with the name so it became Vanish, with the strapline: “Put a little magic in your home!” “For the first time in my business life, I had the
opportunity of putting together something of real quality that I had absolute confidence in,” says Jones. “I ensured that only the best natural ingredients were used and the finest quality packaging possible were placed into this consumer product.” Jones had to crack the major retailers and the supermarkets, but head office buyers were reluctant to meet with a Welshman punting a stain remover. He was told it would take three to six months to achieve a “listing” and only if they approved the product in the first place. He says sheer enthusiasm and dogged determination eventually wore them down. Advertising support was a vital part of this. He went to see Scottish Television about a start-up campaign. But the optimum number of TVRs (television rating points) to create a major impact was estimated at around £110,000. Jones doorstepped STV’s managing director Bill Brown and convinced him that he had the greatest invention to hit the household since the wheel. “Amazing, I got my campaign for just £12,000 with a promise that on the back of the success of Vanish I would give lots of PR support for television advertising with STV,” he says. He did a deal for last-minute, full-colour inserts with IPC for space in magazines such as Woman’s Weekly, and Mother and Baby, and recruited a team of “in store” promotion girls
with special outfits to wear. In eight months Vanish had 70% distribution in the main supermarkets and department stores throughout Scotland and was estimated to be in one in every four homes. The brand achieved cult status. The television and magazine advertising was doing its job. The sales curve went through the roof, growing at 20% per month, month on month for three years. “I sold the product for 49p,” says Jones. “No discounts or special deals, the demand was such that we had a tiger by the tail. We ran a free ‘stains help line’ for customers, which seemed to fuel demand even more. The unsolicited mail from our customers meant the local post office had to put on an extra delivery van.” They received thousands of letters from delighted customers. There were letters from men who got rid of lipstick on shirt collars before their partners saw it; from an Irish goat society for getting rid of the smell of goats; from those able to remove stains from their teeth; and even from a Metropolitan police officer who said Vanish removed traces of blood from his uniform – and his truncheon. They extended the range. First came Liquid Vanish, a carpet shampoo competing with Cusson’s 2001, then Vanish HS, a deep-cleaning hard surface cleaner for the >>
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ENTREPRENEUR kitchen and bathroom. Expansion continued overseas too – it was called Vantina in France, Magic in Belgium, and Endit in Canada. “Although I registered the Vanish name in the UK, I was unaware that the brand name of Vanish was a toilet bowl cleaner in Canada,” says Jones. It was named Wipe-Out in the US. “Life was very good,” he says. “I was an adrenalin junkie working like a whirling dervish, finding it difficult to sleep or live any kind of life outside the business – and selfishly giving little or any thought to the wellbeing of my wife and daughter.” He now admits this obsession led to the break-up of his marriage. Soon Vanish’s reputation was attracting the industry major players such as Procter & Gamble, Reckitt and Coleman, Lever Brothers, Cussons and Johnson & Johnson. The wolves were circling. Jones started receiving offers for well into seven figures. “After a meeting with Bob Gillies, we thought we had to meet with the principle shareholders, mainly the MacFarlane family, to decide on a course of action,” he says. “I tried hard to convince them not to sell. But Roy said, ‘I am sorry John, I know you wanted to carry on, but I would love to be a millionaire before I die.’” He got his wish. Roy MacFarlane died eight months later, his wife a year after that, and then their son 18 months later. The company was sold for an estimated £30m to Certified Laboratories, the maker of Finish dishwashing powder. They were not the highest bidder, but they offered the best deal to the Projectina Team. But the sale was a rude awakening for John Jones who believed Vanish’s new owners managed to the spoil business relationships he had built up over the years. “It is difficult to describe how I felt as a conspiratorial witness, under contract to complete the handover,” he says. “I lost my control and instead of earning the respect of my new graduate marketing peers, found myself back in that company sewer of politics and competitive executive one-upmanship that I so despised in the corporate arena.” He was a very wealthy man charged with the job of handing over the business to the new owners over a six-month period. He was then given an exclusive consultancy in Europe to
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I lost my control and found myself back in that company sewer of politics and competitive one-upmanship that I so dsepised in the corporate arena develop the products in France, Italy and Spain. He worked with the company until 1990, but latterly he had very little to do. He moved to Spain and worked in France, Italy and Belgium; the new owners happy for him to visit the divisional directors who were very polite, but not that interested in new projects. “I couldn’t help thinking that I had lost my touch in selling new ideas and concepts and was missing something or doing something wrong,” he remembers. Unknown to him, Vanish was being sold to Benckiser plc. “I was told that my lucrative contract would be honoured and they would continue paying me, but they did not envisage using me at all. Already severely depressed, I didn’t have a job any more either... and what is even worse couldn’t get another one or I would contravene my contractual obligations.” He felt trapped in a situation that would take years for him to resolve. He spent time playing with property deals in Spain and getting his
fingers burned. Then he went to Ireland and tried to set up a property business there. He ended up in Glasgow involved with property projects around the old Garden Festival site. John Jones took years to find some kind of satisfaction about his business life, something he talks about readily today. “I think I work well with business owners because I understand how it feels,” he says. “I talk about the features and the benefits of any product and why it might be successful, to deal with objections and look at realistic solutions. It’s basically ‘human engineering’. “I’m also a believer in keeping things very simple in business. I hate complicated things. KISS – Keep It Simple, Stupid – is still one of my mantras in business.” He’s also a very honest and approachable business figure keen to share his story – a salutary tale for all those fledgling entrepreneurs who love what they do. As Joni Mitchell put it: “You don’t know what you’ve got til it’s gone.” n
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At Bank of Scotland and Lloyds TSB Scotland we make it our business to understand your business. As part of Lloyds Banking Group, we have access to a wide range of sector-specific information and financial products with an aim to meet the needs of each and every one of our customers.
The right guidance and support, at the right time
oth Bank of Scotland and Lloyds TSB Scotland relationship managers work closely with all their customers to gain an insight and understanding of their business and their sector. By recognising the different periods of development in a business relative to economic fluctuations, we aim to support long-term ambitions through the good times and the bad, and to provide informed and appropriate guidance together with tailored financial options. An existing business looking to acquire a competitor, for example, requires very different financial support from a property developer financing a refurbishment. Our years of experience working with Scottish business has taught us that one size fits all banking simply doesn’t work and that by developing good relationships with our customers we are better placed to support their immediate and longterm financial goals. Recent interaction with MNM Developments (see case study) is a perfect example of Lloyds TSB Scotland Relationship Manager Graham Dunlop using his sector experience to the company’s advantage. Recognising MNM Developments’ ambitions Graham suggested a Lloyds TSB Scotland Development Loan for a Residential Build Project; a product purposebuilt for this sector. This kind of solution typifies the assistance that all Bank of Scotland and Lloyds TSB Scotland relationship managers can provide; matching lending facilities, from the broad range of finance options from selected companies
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across the Lloyds Banking Group, to individual business needs. Different funding packages suit different businesses enabling them to capitalise on an upturn, or restructure in a downturn, and we source and package the most appropriate products for our customers’ ambitions. Term loans benefitted many businesses during the recent economic turbulence especially in the manufacturing sector. Making funds available to purchase stock, machinery, assets or even rival businesses at greatly reduced prices gave some businesses a significant advantage when the economy began to recover. While the future and long term objectives of any business should be at the forefront of any business owner’s mind, cashflow management on a day-to-day basis is fundamental to running a sound business. With interest rates and yields as they currently are, the security and flexibility of working capital is essential and short-term finance, such as an overdraft, can be very helpful in terms of daily operations. Overdrafts can support a company’s trading
by developing good relationships with our customers we are better placed to support their immediate and long-term financial goals
position during periods of intense economic fluctuation particularly in sectors such as tourism and catering, with high upfront costs and a seasonal customer base. Bank of Scotland and Lloyds TSB Scotland are here for Scottish businesses and work hard to understand the requirements of your business and the market within which it operates. We aim to provide you with the highest level of customer service, providing the right guidance and the right support, at the right time, to help your businesses grow.
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The property sector has not been without its challenges in the last few years. Despite these, family-firm MNM Developments have sold all available stock on their South Edinburgh development site in record time. According to Marc Teague, Director of Business, this can be attributed to meticulous attention to detail and quality. “The quality of fixtures and fittings, and the finish in our kitchens is second to none and really help our properties stand out from the crowd.” With over 30 years experience in the sector, MNM took advantage of a Lloyds TSB Scotland Development Loan for a Residential Build Project to finance this particular development. Tailor-made for this sector the
Loan releases funds in monthly instalments, as required by the developer, and is then repaid when the units are sold on. “The Bank has been absolutely fantastic,” says Marc, “and so positive in their banking approach. When we first approached them, we knew what funding we wanted and how it needed to work and the bank were perfectly placed to deliver exactly that. “Our relationship manager could appreciate how our unique needs worked within the sector and understood that each individual case is different. Having the support of a bank that genuinely understands both the business and the needs of the property sector is an invaluable asset.” The success of this most recent development
has brought forward MNM’s plans for a further two sites and once again they’ll be using Lloyds TSB Scotland for all their banking requirements. Indeed one of its sister companies has been so impressed by service levels that they too are moving their business account to the Bank. Relationship manager Graham Dunlop oversees the MNM Development account and has been able to bring wider property knowledge, experience and funding support to realise the company’s ambitions. “Having Graham onside as part of the team has been absolutely fantastic,” acknowledges Marc. “bringing his sector knowledge into the equation makes understanding and communication so much easier.”
Any property given as security which may include your home, may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it. This advertorial is produced for information only and should not be relied upon on as offering advice for any set of circumstances and specific advice should always be sought in each situation. All lending is subject to a satisfactory credit assessment. Please remember we cannot guarantee the security of messages sent by email. Bank of Scotland plc. Registered in Scotland number SC327000. Registered office: The Mound, Edinburgh EH1 1YZ. Lloyds TSB Scotland plc Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. SC95237. Telephone: 0131 225 4555. Authorised and regulated by the Financial Services Authority. The Lloyds Banking Group includes Bank of Scotland plc and a number of other companies using brands including Lloyds TSB, Halifax and Bank of Scotland, and their associated companies.
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AS I SEE IT
status quo is a no no Successful entrepreneurs are able to see the chaos in the world – and create opportunities. Is this something you’re doing, asks Iain Scott Nearly all of our most prosperous, successful companies and organisations were started in an economic downturn or period of financial instability. The reason is quite simple. Entrepreneurs capitalise on chaos because they not only think differently and see opportunities where others see threats, they act on this knowledge. They translate this into swift action and reap the financial rewards. They do not acquire this ability, knowledge and skill while in the womb – they learn it. For them the status quo is not acceptable. Conversely, the natural reaction of existing businesses is to move into management mode to make the status quo more efficient, to ruthlessly control overheads and cut staffing. But while these companies may survive, they do not necessarily prosper. Why? Because they fail to capitalise on chaos. They look down, not up and they look at the world as it was, not as it is. Since the financial meltdown of 2008, the economic landscape across the world has changed dramatically and still continues to change. The companies that prosper – not incrementally but significantly – are the ones that ensure that everyone in the business stops thinking and acting like managers or employees and starts thinking and acting like entrepreneurs. They find ways of doing things differently for less and getting more as a result.
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Businesses are staffed by people – they make the profits – and if they can find a better option they will go, often to start a business in competition. So if entrepreneurs can capitalise on chaos, why can’t you? Or to put it another way, can an existing business become more entrepreneurial and create significant new profits? In 2008 I put my approach to the test, courtesy of a regional development agency. At that time they were keen to find ways of enabling existing businesses to grow by unlocking enterprise talent from within. Would I be interested in applying the techniques on creating more entrepreneurs to existing businesses? My work in this area goes back nearly 20 years, to when I was designing and delivering a range of sessions aimed at people across the UK who could start a business – and a high growth one at that – but were not motivated to do so. Nearly a thousand people from all walks of life took part. To achieve this I started work on how people learned to be enterprising and how companies could create enterprise activity from within. I was not teaching entrepreneurship per se, but identifying how attitudes and behaviour change. Two key things emerged.
AS I SEE IT
Our process succeeded because we opened minds and got people thinking and acting like entrepreneurs, but within a company or organisational context
Firstly, for the entrepreneur there is no such thing as a separation of business and personal issues (“It’s not personal, it’s business”: The Godfather); the two are inextricably linked. The Mafia and most academics and business support activity had got it wrong. Business is a social phenomenon and enterprise activity is learned behaviour. Above all, any activity had to be fun. Fun is what drove innovation. Fun came from not doing the obvious and fun came from pushing it through and profiting from it. Secondly, this enterprise thinking and action process is the same for existing businesses. In short, if you were the managing partner of a law firm or the managing director of a medium-sized business could you get your team to learn to think and act like entrepreneurs? Would it be long and complex? Would it generate significant new income streams? And, above all, would you let it be fun? Over a period of months we put these companies through Cognitive Business Therapy sessions. We wanted participants to have fun, be comfortable with themselves and learn how to tackle problems and opportunities in an entrepreneurial way. In essence, they as individuals working for a
company had to capitalise on chaos. They had no teams, no resources they had to do it all themselves. The results confirmed that yes, you can unlock enterprise potential from within. Yes, you can stimulate new profits from within. And, most importantly, if you treat people as entrepreneurs-in-waiting as opposed to employees or managers, a whole new – and lucrative – world emerges. Our process succeeded because we opened minds and got people thinking and acting like entrepreneurs, but within a company or organisational context. The fact that we did this post-banking crisis was also crucial, for as one participant said, “We started thinking about the way the world and the market is now – not the way it used to be.” The final outcome was clear for me. Management is dead, long live entrepreneurship. So are you ready to capitalise on chaos and grow your company the enterprising way? n Iain Scott is a specialist in how people and companies learn to be enterprising. He is the creator of www.cognitivebusinesstherapy.co.uk and author of The Accidental Entrepreneur’s Handbook. His new series of Coffee, Scones and Business Therapy starts at Hotel Du Vin One Devonshire Gardens, Glasgow, this autumn.
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A clinical performance
Dr Rabinder Buttar is one of Britain’s top entrepreneurial woman. She has ambition to build Glasgow-based ClinTec International into a global leader in the sphere of clinical trials. But, as she explains to Kenny Kemp, there are plenty of hurdles in the way of success
If First Minister Alex Salmond requires an exemplar for his vision of a more optimistic and progressive Scotland, then he should look no further than Dr Rabinder Buttar, president and chief executive officer of Glasgow-based ClinTec International. This entrepreneurial scientist, born in the Punjab, raised by hard-working immigrant parents, educated at an inner-city state school in Glasgow before heading to the nearby university, is a perfect role model for much that is good about our small nation. She is building ClinTec International into an admirable global business, bristling with
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opportunity and employing local graduates in science and biomedicine. In April, a pinnacle was becoming a recipient of the Queen’s Award for Enterprise in the Birthday Honours list. The company was the UK’s 27th fastest-growing, privately-owned technology company in last year’s Deloitte fast track listing. She has a string of awards, including Scottish Businesswoman of the Year in 2008. But there are no easy wins and guarantees of success. The sale of Scottish drug maker ProStrakan, one of the country’s biggest biotech companies, to Japanese firm Kyowa Hakko Kirin, highlights the profound difficulty
of building a company of scale. ClinTec International can’t hide from its own growing pains with its investors Elephant Capital recently forced to write down some of its investment because revenues are taking longer to come on stream and the markets are extremely tight. Elephant management says it believes in Rabinder’s business model and supports management efforts to achieve her highly ambitious business plans. Nevertheless, Rabinder Buttar is determined to create a much-needed Scottish-based success. From the glass-fronted eyrie on the seventh floor of 133 Finnieston Street there is a
I didn’t say I’m going to be an entrepreneur because it wasn’t something I knew about wonderful urban panoramic view across the Clyde towards the Finnieston crane which once loaded steam trains made in Springburn on to ships that took the locomotives to India and beyond, to the rocket spires of academe at Gilmorehill. Although born in the Punjab, Buttar speaks with a wonderfully gentle Glaswegian burr. “People recognise my Scottish accent,” she says. “I was at an Asian business event with David Cameron at 10 Downing Street. One of the guests was German and said I was speaking German with a Scottish accent, and another said I was speaking Punjabi with a Scottish accent. That was quite interesting.” Her mother and father, both teachers, placed great store in education, so they came to Scotland when she was five. Buttar was educated at Woodside Secondary School, in the heart of Glasgow, whilst her two younger brothers and two younger sisters went to a school in Bishopbriggs, on the outskirts of Glasgow. She points northwards from the full-length office window. “It was out there. It was just a normal Glasgow comprehensive. But it was closed a number of years ago. My parents wanted us to have the best education possible. It was an important factor – even today our parents are always telling us to do your best.” Her brother is ClinTec International’s senior director Bobby Bal, an MBA graduate and former Deloitte management consultant, while one of her sisters, Satinder, is a consultant in endocrinology at Raigmore hospital in Inverness, the other works in film and television, and her other brother is a property developer. “Family is really important to me and we all get on well and we meet as often as we can,” she says. Rabinder Buttar was one of a handful from her school to go to Glasgow University, just across
the Kelvingrove Park, and lapped up her science course. “I was learning all about those complex biochemical pathways,” she says. “I really felt I wanted to do something that was much closer to medicine and helping patients.” She went on to University of Strathclyde where she undertook a PhD in immunology, developing novel methods for the production of human monoclonal antibodies and looking at their use to treat various diseases. “At the time, this was a novel aspect of science,” she says. “Georges Kohler, Niels Jerne and Cesar Milstein shared the Nobel Prize for medicine in 1984 for the discovery of monoclonal antibody production. Milstein was working in Cambridge at the time and I was excited about working on such high profile technology at the time.” She worked with Professor Bill Stimson, her mentor, and her research involved the West of Scotland Blood Transfusion Service with her PhD being assessed by the Boots – Celltech. “Professor Bill Stimson was very entrepreneurial and even today I’m amazed how he is still active in research with his own laboratories,” she says. “He’s set up several innovative companies and inspired me many years ago. I was fortunate to be his research assistant at that time. “I felt I wanted to work in something closely related to medicine or pharmaceutical development, working with people and patients. I couldn’t describe the job at the time. Being a clinic research associate was a new kind of job. I was one of the first clinical researchers going into the industry. I saw how dynamic it was trying to get a product onto the market.” Running her own business wasn’t on her radar at this stage. “I didn’t say I’m going to be an entrepreneur because it wasn’t something I knew about, but I had a vision of getting some kind of product
– a drug, medicine or treatment – from the workbench through to the healthcare market as fast as possible. This meant moving into industry.” Her husband, Amrit, whom she met at university, was working as a dentist, and relished the prospect of working abroad, especially in Germany. Buttar joined him and wanted to use her immunology background to find a suitable job. She had already gained commercial experience with Wellcome, now GSK, and Wyeth – now Pfizer and she followed another path in learning, spending a number of years working for a Japanese firm in Germany. She says: “I wanted to work with a Japanese company to experience a different culture and styles. I joined Fujisawa which was opening its European headquarters in Germany.” It complemented Buttar’s experience, giving her a chance to see the whole drug development process from start to finish. “We took a drug from Phase I clinical trials to market launch. It was a novel immunosuppressive drug used for the prevention of rejection in liver, kidney and heart transplantations and I was very happy to be involved in a dynamic and growing company. They brought in scientists and researchers from all over the world. It was a mixture of the best talent from across Europe. “It was a very ambitious and demanding thing to do, to take a drug from early clinical development through to its successful registration in Europe and US and onto the market. We had a core team of 18. We had to find solutions and that meant hiring in resources, even finding the latest technology to measure drug blood levels in patients. We did all this in the space of four years. “If you got the dose too high when we were doing trials, you increased toxicity and the patient could die; if the dose was too low, the organ that was transplanted would be rejected, and the patient can die. So finding the correct ‘therapeutic window’ to be used in clinical trials was vital for us.” Buttar was responsible for designing and undertaking the first paediatric trial, which was often emotionally challenging dealing with young lives. “My job was to hammer out protocols with >>
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the best paediatric transplant surgeons in hospitals across Europe,” she says. It was massively successful and the result was Prograf, an immunosuppressant compound sold in 90 countries. Over the next ten years, Prograf became a “blockbuster” drug – essential for all organ transplants – and one that earns more than $1bn a year. This gave Buttar a brilliant insight and opportunity because she had to handle with all aspects of clinical drug development but the intellectual property remained with Fujisawa (now called Astellas). “I learned a lot about the process and also working in a business environment,” she says. In 1994 to 1996, she took some time off to look after her two baby sons, and set up ClinTec International as a small clinical research organisation (CRO) and consultancy in her home in Dinslaken in Germany. But, with young children, having her extended family around her became important and she wanted to come back to Scotland. She came back to London in 2006 and then moved the base to Scotland in 2007. “I already had a base in the UK and ClinTec International was registered in the UK in 1997. I had a German and a UK office but returning to Scotland was all to do with building a larger infrastructure for global growth.” For Rabinder Buttar, a successful CRO has to be prepared to adapt and enlarge its geographical coverage to suit the changing requirements of the clients, who are the major pharmaceutical firms or “Big Pharma”. “The ongoing trend towards mergers and acquisitions among larger pharmaceutical and biotech companies shows no sign of abating in 2011,” she says. “Going hand in hand with this trend is the super pharma strategy to be risk averse, leading to R&D budget being slashed.” “Everyone in Scotland is still involved in early stage drug development; we don’t have many products that are in the clinical phase yet. There is a huge gap because there is not enough funding in Scotland. We need to drive and push from early stage development to later stage development. It’s the later stage development that will create the blockbusters. Scotland is still a long way off from having blockbusters.”
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So ClinTec International has grown into a global CRO. “Our clients are 11 of the top 25 pharma in the world, four or five of the top ten,” she says. “We also work with biotechnology companies, large ones and small start-ups. We have a mixture of clients.” With grant support from the Scottish Enterprise, the head office was set up in Glasgow where 45 people work as project managers, clinical research associates and in corporate, human resources, marketing and business development functions. ClinTec undertakes Phase I to Phase IV clinical trials in 40 different countries in hospitals around the world and there are 15 regional country heads and six regional hub offices, including a large Indian office in Bangalore, where 50 people are employed. “In Scotland it has been great to find a willingness of people to become involved in the company; they share the vision to grow this into a highly successful company. Almost everyone is a graduate or postgraduate from a Scottish university. Many have had working experience abroad and realise there is a company now operating in Scotland that can give them career opportunities. We’ve been very successful in bringing people back home. That’s good.” Another plus is that ClinTec has been able to offer active commercial research projects for the graduates of Glasgow and Strathclyde and other colleges in the West of Scotland. “As a result, they are reconnecting with the universities and their research departments,” she says. “This brings closer
links between industry and academia.” Her brother Bobby Bal joined, setting up financial systems, raising vital capital with investors, and looking at business development. “We are putting in management processes to act like a shadow plc, which gives us the option of going for a flotation in three to four years,” he says. AIM-listed Elephant Capital, a private equity group specialising in companies interested in India, took a 28.6% stake in the company in August 2010 after injecting £8m. Through this ClinTec has appointed three new directors to its board. Gaurav Burman, managing director of Elephant Capital; Anand Burman who is the chairman of Dabur, the world’s largest ayurvedic and natural health care company with around 350 branded products from toothpaste to fruit juices, and Jim Hauslein, ex-chairman of Sunglass Hut. Gavin MacKenzie, the ACCA-trained ClinTec finance director, explains: “We have different revenue streams in multiple currencies. A large proposition is global clinical resourcing and that means we can identify and recruit clinical researchers from 80 countries worldwide and place them into client projects and programmes. This means steady income. We hire the experts and they get moved around within the pharmaceutical industry to work across product pipelines, depending on the needs. We are in a strong partnership with Merck and other big pharma using this business model which is really effective.” ClinTec’s geographical diversity is one of its strengths, says Rabinder Buttar. And her Indian
cultural heritage is a positive asset giving her a foothold into the sub-continent. “I’ve always wanted to create good clinical research in places that have been neglected, such as India,” she says. “We’ve always gone where no-one else had been. I went to Eastern and Central Europe before the global players came, then we went to India before the global players, and now we’re in the Middle East and Africa, where the global players are still to come.” In 2010, ClinTec launched its own Academy of Clinical Excellence, which is training researchers in Dubai and Saudia Arabia to adopt best practices. The company is also working in China, Singapore and Thailand. Buttar feels that the Big Pharma and the CROs must take more responsibility for training of its people and ensure the highest global ethical standards in research and testing. She is keen on doing oncology trials successfully in the emerging markets. The issue is that regulations are not as well established in all the emerging markets, and this throws up the potential for abuses. Board forums and ethical committees are still in their infancy in some emerging countries and Rabinder wants the emerging nations to adopt the codes and regulations of the EMA, (European Medicines Agency), and US Food and Drug Administration. She is vociferous on the controversial issue of licensed proprietary drugs and generic drugs and how they can be used to help the sick and poor of the world. “India has an abundance of generic drugs,” she says. “It is known for its generic drug manufacturing. If Indian and Western drug companies can collaborate, they can produce new chemical entities in ‘novel’ drugs. I’d like to see a lot more novel drugs produced in partnership between India and Western companies, actually originating out of India. We were involved with Dr Reddy’s laboratories to introduce India’s first novel and anti-cancer drug to the global market place. Partnerships like that should be more looked into and encouraged.” She adds that it is not just an Indian issue. She suggests that Scotland must have an enterprise programme that specifically looks at
partnering emerging market scientists and Scottish-based scientists to produce novel drugs. New trials are looking at cancer therapies, with oncology one of the biggest challenges. She says there are different protocols for different types of cancer, while cardiovascular drug testing is still increasing, as is diabetes. Other more rare diseases such as Gauchers’s, a genetic disease, and Hepatitis C are prevalent in select populations and because of ClinTec’s vast geographical coverage extending into even remote regions it is one of the few CROs in the world to be able to support companies developing drugs for rare diseases. “India has the largest population of diabetics in the world,” says Buttar. “The incidence is very high and it is also increasing in the Middle East, where there is a large number of diabetics and those liable to become diabetic. These are diseases that are common in Scotland and people should be collaborating in the area of testing. “There’s untapped market there. All the major prevalent diseases can be found in the Middle East and investigators are extremely interested in being involved in research.” So what is her ambition now for the business? “I never think of my business just in Scotland although we’ve got a committed and
enthusiastic team here but we’re also really working closely with all our country managers who aspire to achieve global levels of excellence in every aspect of their work.” How does she define her business culture? “There’s open and transparent communication,” she says. “It is about ensuring we have trust; we all want to do a good job and work together.” And how does this world-traveller, now in her late 40s, with a large number of speaking engagements and conferences to attend with a family in Glasgow, unwind and keep her mind fresh? “I’m very interested in Ayurvedic medicines and the Ayurvedic treatments,” she says. “I value the weekends in Glasgow. My two sons who are 14 and 16 have been studying for their Intermediate grades and Highers. We have a lot of family get-togethers.” But she loves her work – and the daily challenges it brings. “My vision is to continue to build the company across the globe,” she says. “Yes, it has been very tough and some of our contracts are taking longer to come to fruition, but this is a fact of life. “I still see Clintec International becoming a £50m turnover company within the next three years.” n
A Scottish bio-tech minnow to watch Bio Images Group is increasing staff from nine to 14 to handle new business it is winning from global pharmaceutical companies. Sales of £1m in 2010 are expected to double during the course of this year. The Glasgow-based group, which announced expansion into Asia, is hiring five PhD level formulation scientists, including Dr Fiona McInnes, previously a lecturer at the University of Strathclyde, as development director. Bio Images Group, based at Glasgow Royal Infirmary, employs a staff of world-class scientists with experience in drug formulation. It has customers in North America, Europe and Japan. One of its trading arms, Bio Images Research, is a leading player in the field of gamma scintigraphy imaging, which allows non-invasive visualisation of drug formulations and body systems. Another group business, Drug Delivery International, provides formulation services and develops technologies for licensing to pharmaceutical or generic companies. It recently completed a licence agreement in respect of three University of Strathclyde patents in the area of controlled drug release. Ian Stillie, a director of Bio Images Group, says: “We are steadily building the group’s sales with major contracts from US and Asian pharmaceutical. We will double our turnover this year and are pressing ahead with our plans to establish a wholly-owned commercial presence in Singapore this year.”
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Rail investment pays off, top grade space in high demand, Land Rover accelerates, a church goes for a million-plus, merger will create huge benefits, Grasshoppers leap, and the Lewis mail gets through
>> Strata House ready for occupants Strata House, at Cardonald Business Park in Glasgow, is being jointly marketed by Jones Lang LaSalle and Knight Frank, on behalf of Henderson Global Investors. Strata House is a three-storey office pavilion with accommodation ranging from approximately 2,500 sq ft up to 17,500 sq ft
with on-site car parking. The building offers refurbished office suites on flexible floor plates that lend themselves to both open plan and subdivided layouts. The suites are available to let on flexible lease terms either individually or on a combined basis at a competitive quoting
rent of £12 per sq ft. Strata House occupies a prime location at the entrance to Cardonald Business Park, approximately ten minute’s drive south west of Glasgow city centre. The location benefits from access to the M8 motorway and the Clyde Tunnel.
Since the launch of the code in Scotland, it is fair to say that a greater degree of professionalism has been brought to the way investors provide and charge for services
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>> Merger joins Jones Lang LaSalle with King Sturge Commercial real estate firms Jones Lang LaSalle has merged with property consultancy King Sturge. The combined firm will be a clear leader in Scotland, the UK and Europe, with enhanced strength and depth of service. Under the terms of the transaction, Jones Lang LaSalle will pay £197m to the partners of King Sturge, with £98m in cash and the balance paid out in cash over five years. All 43 King Sturge offices across Europe, including 24 in the UK, will become part of Jones Lang LaSalle and will operate under the Jones Lang LaSalle brand. Integration of business lines and teams, and the full rebranding of all business activities, has already started. Chris Macfarlane, of King Struge in Scotland, said: “Bringing our two firms together makes good business sense given the highly complementary strategic and cultural fit. Together, we will form a much stronger team in Scotland which can only be of benefit to our clients. We will retain our shared focus on delivering great client service ensuring we can fulfil their needs by providing a comprehensive range of services.” Alasdair Humphery, of JLL in Scotland, said : “Technically, Jones Lang is buying out the shares of King Sturge partners, but the real motivation was to achieve synergy and to grow the joint business.”
>> Code on service charges is updated Scotland’s chartered surveyors have launched the second edition of a code of practice intended to stop costly disputes between commercial property owners and occupiers over service charges. The Royal Institution of Chartered Surveyors (RICS) has updated its Service Charges in Commercial Property code building on the themes of the first edition with greater emphasis on communication, timeliness and transparency. Two “model lease clauses”
have been drawn up to help the legal profession ensure these standards are being met in new and renewal leases. The updated guidance now requires occupiers to be proactive with managers and investors, while the issue of sustainability is addressed for the first time. RICS Scotland director Graeme Hartley, said: “Since the launch of the code in Scotland in 2007, it is fair to say that a greater degree of professionalism has been brought to the way investors provide and charge for services. However, more can still be done to resolve potential disputes.” Key areas include: • Giving occupiers the right to challenge
service charges. To do this cost effectively, leases should include an Alternative Dispute Resolution (ADR) clause. • The cost of improving or equipping a building should not, generally speaking, be included in the service charge. • Service charge operations should not be run to make either a profit or a loss, except for a reasonable commercial management fee. • Service charges should be demonstrably fair and reasonable. • Management fees should include a reasonable profit element to ensure the requisite element of professionalism. • Alternative dispute resolution can play a key part in managing issues relating to the charges and delivery of services.
>> Armadale Station moves into the development phase Asda, Bellway Homes and Taylor Wimpey have been given the go-ahead to construct a supermarket and 180 houses at Armadale Station development in West Lothian, one of the largest regeneration projects in Scotland. This marks the culmination of eight years of work by the SDA Ltd, the development company, with assistance and support from West Lothian Council, Armadale Community Council and the local community. The recent opening of a railway station on the Bathgate to Airdrie line – connecting Edinburgh and Glasgow – has sparked fresh opportunity for the community. The masterplan includes 1,000 houses, a hotel, a care home, leisure facilities, industrial and offices. The Asda store of 40,000 sq ft will create 150 full-and part-time jobs and generate around 4,500 permanent jobs. Sandra Carter, from the Armadale Station development, said: “We are delighted to have such prestigious operators as Asda, Taylor Wimpey and Bellway Homes. This is a fantastic opportunity to be involved in one of the most exciting regeneration projects taking place in Scotland, especially during such a challenging time in the property industry.”>>
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>> High Street investment A Dundee bank building has been sold for £1.95m, in a deal brokered by Drivers Jonas Deloitte. The 100% prime retail investment property is located at 7 and 8 High Street, a prominent corner position opposite the eastern entrance to the city’s 400,000 sq ft Overgate Centre, Dundee’s largest shopping mall.
>> Grasshoppers hops into Glasgow A new penthouse hotel has opened in the heart of Glasgow’s city centre. The 30-bed Grasshoppers Glasgow boutique hotel is just metres from Buchanan Street, the city’s premiere shopping street. Councillor Gordon Matheson, leader of Glasgow City Council and chairman of Glasgow City Marketing Bureau, said: “The opening of the new Grasshoppers Hotel is fantastic news for Glasgow. Developments such as these are driven by Glasgow’s success in forging ahead with plans to create customers through major events, conferences, tourism, and through its position as Glasgow: Scotland with style. The 2014 Commonwealth Games necessitates major infrastructure development which in turn encourages investors to develop their business interests in Glasgow.”
>> Langlands is a great fit Langlands Industrial Estate in East Kilbride has been sold to property developer and investor Helical Bar in a £5.9m deal, reflecting a net initial yield of 10%. The seller was Henderson UK Property Fund. Built in 1990, the multi-let estate contains 22 units totalling 14,198 sq m. Duncan Walker, of Helical Bar, said: “Langlands offers modern high quality industrial stock in an attractive business park with easy access to major transport links. “It fits well with our strategy to move equity into higher yielding investment properties where we can apply significant asset management to deliver future return”.
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>> New renewable site for Coatbridge Shore Energy has secured planning approval for £50m waste recycling and renewable energy generation facility at Carnbroe, near Coatbridge in Lanarkshire. The facility will handle 160,000 tonnes per annum of waste recycling and renewable energy generation helping to meet the Scottish Government’s Zero Waste Plan. The project will create 50 jobs. Simon Howie, the award-winning entrepreneur who is managing director of Shore Energy, said: “We look forward to demonstrating that the extra processing capacity will deliver real choice as well as a competitive landscape for the local councils and commercial operators which will help keep the costs down for local tax payers, especially in light of the massive landfill tax costs which Scotland faces over the coming years.”
>> Kitchen firm sinks investment into new showroom Scotland’s quality kitchen retailer, Kitchens International, has opened a new 2,000 sq ft showroom on Great Western Road, Glasgow. Director Paul O’Brien said: “Expanding to Glasgow is the right move for us as we have been servicing this market from our Edinburgh and Broxburn showrooms. However, we have seen an expansion in demand from customers in the West of Scotland.” With a turnover at more than £9m, and 15% year-on-year growth, Kitchens International designs and installs kitchens from British and
German manufacturers, such as Stoneham, Callerton, Mowlem & Co, Poggenpohl, Leicht and RW Kuhlman. “The kitchen industry is a strong and vital part of the interiors market as the kitchen increasingly becomes the heart of the home,” said O’Brien. “With more stay-athome entertaining the kitchen is the focus of the home.”
We have seen demand from customers in the West of Scotland >> Glasgow team heads for River City The Glasgow office of engineering consultancy Buro Happold, in conjunction with it international partners, has won through to the final stages of a multi-million pound project to masterplan the expansion of the city of Gothenburg in Sweden in a project which is known globally as RiverCity, Gothenburg. The team emerged from 84 entrants to secure a place on the shortlist of ten. Each team is taken part in a workshop at Gothenburg’s City Hall with final proposals to choose the winner submitted in September.
>> The Tun has new lease of life Jones Lang LaSalle has restructured the lease for the General Medical Council (GMC) who occupy 2,500 sq ft at The Tun, Holyrood Road, Edinburgh. The new lease is for 10 years with a tenant-only break option at year five at a rental of £20 per sq ft. Geoff Scott of Jones Lang LaSalle, who represented the GMC, said: “Tenants with forthcoming break options or lease expires this year are able to restructure their leases on more favourable terms, given current market conditions. Appointing an adviser is
worthwhile in such situations to ensure the optimal financial package is obtained. “The market is still very tenant-led, but there is a growing shortage of sub-5,000 sq ft grade A offices in the city centre available for immediate occupation, making this part of the market tighten slightly. “Tenants will obtain the best deal by restructuring this year.”
Mearns, Glasgow, for a price in excess of £395,000. La Vita Pizzeria owns a chain of familiar restaurants including La Vita in George Square, Spuntini, off Byres Road and La Vita in Bishopbriggs. The delicatessen is being refurbished and will be called La Vita Picolino, opening in December. Marco Arcari and his son Marco Arcari Jnr said: “We have been waiting for a long time to secure the right premises in Glasgow’s South Side. We live nearby so we wanted to buy local premises to focus on casual dining. La Vita Picolino will be relaxed and open throughout the day from breakfast onwards.“
>> John Clark expands with Land Rover
>> Gio-Goi opens in Buchanan Street CB Richard Ellis (Scotland) has secured an occupier for an existing lease at 50 Buchanan Street, Glasgow, on behalf of Give. Fashion retailer Gio-Goi took up the lease in May, expiring in September 2019, at an annual rental of £375,000 for the two-storey location comprising 2,239 sq ft at ground level and 2,045 sq ft in the basement. This will be Gio-Goi’s first store in Glasgow since opening its first Scottish store in Aberdeen in October 2010. Kevin Sims, retail director, CB Richard Ellis, said: “We received a number of serious enquiries for the property, demonstrating continued demand from occupiers keen to secure representation on Buchanan Street.” CB Richard Ellis (Scotland) represented Give, while Culverwell acted on behalf of Gio-Goi.
>> La Vita takes bite at Peckham Local food chain La Vita Pizzeria has bought Peckham’s delicatessen in Newton
The John Clark Motor Group is investing £6m in its Pentland Land Rover dealership at Newbridge as it takes over the Land Rover franchise for Edinburgh and the Lothians. The new dealership is developing a 3.45-acre site alongside the M9, opening in January 2012. The new 30,000 square ft Pentland Land Rover premises will provide more space than the existing dealership on Lanark Road in Edinburgh. he move will create 20 new jobs, with further opportunities being created as the business develops. John Clark, chairman and managing director of the John Clark Motor Group, said: “This is a very significant development for the John Clark Motor Group and marks our appointment to take over the Land Rover franchise for the whole of Edinburgh and the Lothians. The expansion is the latest stage in our commitment to Edinburgh and our investment of £6m in this new dealership underlines our confidence in the future strength of this market and the Land Rover franchise.” The John Clark Motor Group is Scotland’s fourth-largest motor trade group and within the top 30 in the UK. It has an annual turnover of £280m, has 680 employees and 16 motor trade businesses in Aberdeen, Dundee, Fife and Edinburgh.
>> Tollcross church sold as place of worship Shepherd Chartered Surveyors has sold the iconic Central Hall at Tollcross in the city centre to Morningside Baptist Church for “over £1m”. Occupying a prominent position on the corner of Earl Grey Street and West Tollcross, the historic category B listed property has a domed circular corner tower and seating for a congregation of 750. David Maxwell, of Shepherd, acting on behalf of the City of Edinburgh Methodist Church, said: “Following much interest in this unique building, we are delighted to secure this sale to another Edinburgh-based church, thereby ensuring that the building will continue to be used as a place of worship.” In 1901, Edinburgh Methodist Mission made its permanent home at the newly-completed Central Hall, after worshipping at a number of other locations in the west end of Edinburgh since 1888. At that time Central Halls were being established in towns throughout the UK, with Edinburgh’s being one of the first steel framed buildings. The building was designed (unlike other churches) to be used as concert halls, cinemas and community activities as well as for Christian worship. From the start, weekly activities were provided “to attract people into the premises and to improve them spiritually, morally and culturally once they were there”. >>
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>> Lewis premises delivered to Royal Mail A former industrial unit has been converted into a delivery office for Royal Mail in Stornoway, Isle of Lewis. The £400,000 project, by Knight Frank, took four months to complete and converted the existing building into a new sorting office with associated service facilities. It included the extension of the yard to accommodate the Royal Mail delivery vehicles, a canopy to protect vehicles from bad weather conditions and a new public enquiries office. Royal Mail’s delivery office in Stornoway has been housed in temporary accommodation since 2007 following a major fire. Roddy Morrison of Knight Frank said: “We are really pleased to have provided architectural and lead consultancy services on this project. We have managed to convert an existing unit into a facility that meets current Royal Mail standards.” Meanwhile Knight Frank’s commercial team in Edinburgh has moved to 33 Castle Street from offices at Edinburgh Quay. The Edinburgh residential team has moved to temporary offices at 1 St Colme Street.
>> Top grade demand snapped up Investors will begin snapping up secondary properties because of a shortage of grade A property, says a commercial property expert. As demand for grade A commercial property begins to outstrip supply in certain areas of the country, renovated secondary buildings are likely to be the hot spot over the next few years, says Lorraine Macphail, who heads up business and financial adviser Grant Thornton’s property and construction division in Scotland. She predicts commercial property investors will turn their hands to renovating existing buildings in order plug the gap in supply, while attracting tenants looking for occupancy flexibility. “With the lack of new space coming on line, the supply of grade A space is expected to tighten towards the end of 2011, maintaining existing rental levels which is good news for investors,” she said. As construction work declines significantly, and is unlikely to pick up until 2014, investors should be considering renovated secondary properties for a higher yield. “While investors won’t receive the rent levels currently associated with grade A property, which is around £30 a square foot in Aberdeen and £27.50 in Edinburgh and Glasgow, they will obtain an attractive return to reflect shorter lease terms and weaker covenants.” Proposed development may qualify for Business Property Renovation Allowance (BPRA) which means investors or property developers may be able to claim tax relief on their capital spending on the renovation of currently vacant property.
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>> Stirling hub for CKD Galbraith Scotland’s independent property consultants CKD Galbraith has opened a Central Scotland “hub” office, based at Stirling Agricultural Centre. The office, staffed initially by 20 people, will provide property services to the agricultural and rural sectors. The Stirling office will enable CKD Galbraith to strengthen its alliance with United Auctions, Scotland’s leading livestock auctioneers and procurement specialists.
Investors will obtain an attractive return
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What Chris Gorman Did Next He remains one of Scotland’s most inspiring entrepreneurs, combining his knowledge of mobile technology with a love of chart music. Chris Gorman speaks to Kenny Kemp about the passions that continue to drive him in business Is Chris Gorman mellowing? Once the irrepressible optimist with the Midas touch who defined the essence of an emerging generation of Scottish entrepreneurs in the brash Noughties, Chris is definitely more considered and measured. Thankfully, some things haven’t changed; the loquacious networker is still evident; the self-deprecating Teesside humour and matey banter; the generosity of spirit and candidness. And there is still the party-loving animal; although he readily admits it takes longer to recover from the excesses of dusk-till-dawn sessions.
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But there’s a sense that Chris’s mellowing is due to the valued enjoyment of precious leisure time spent with his wife Mary and their family. Sitting in the office of his expansive Bridge of Weir home, he recounts a family excursion to an upmarket Scottish holiday park where the whole family gathered for an old-fashioned few days of Scottish fun and games – this was just a few weeks ago, so the family are firmly connected with terra firma. Chris Gorman OBE might be a more measured person, but what he did next in business is interesting for the seasoned entrepreneur
watcher because it shows that you can never write off someone who made their wealth in their thirties just because they are a decadeand-a-half older and wiser. Chris Gorman is working as hard as ever. One of his business interests is the music PR agency Lucid. A major player in that space, the company reflects the meaning of its name; shining, transparent, easily understood, intellectually bright and not confused, sane. Gorman spends most of his working week in London. The Met Bar in Park Lane’s Metropolitan Hotel is where the movers and
shakers of the UK’s music industry hang out after a hard day at the recording studio. The Met Bar, open until 3am with its resident DJs and mixologists, has played a significant part in his evolution. Over the last 16 years, Gorman has clocked up more than 1,700 nights at the hotel, famed for its contemporary urban sophistication. He is the most stayed guest at the uber-chic establishment – no mean feat. “I love the hotel, but it’s not a cheap one,” he says. It’s here that he was introduced to a twenty-something music impresario called Charlie Lycett, the founder of Lucid. Lycett’s fiancée Nikki managed PR for Met Bar and over the years the pair became friends with Gorman. A fortuitous dinner was arranged at Cipriani (now C London) and there the two men hatched an ambitious business plan. “We harnessed the power of social networks to identify upcoming bands as it is very difficult to get into the Top 100 of anything,” Gorman recalls. “Unless a band or a record is promoted smartly, these charts remain pretty static. Viral marketing is powerful but there is a fine art to making it work. “It’s a substantial challenge to break through. We took what we knew, developed and shaped it into what we wanted to be and patented it.” Gorman connected with Joanna Shields and Michael Birch (of Bebo at the time) and did a deal with them to integrate their ideas into the music philosophy of the social network and were rewarded with half-a-per-cent equity in exchange for the patent.” When Bebo was bought by AOL for $850m in 2008 their half-a-per-cent translated into $1.5m. This amazing reward hit the bank account on the day that Charlie Lycett and Nikki got married; quite a “dowry” for the newlyweds – and for Chris Gorman! In July 2010, Sony Music approached Gorman and Lycett, wanting to buy into Lucid. Lycett became managing director of the famous RCA record label in the UK, and Gorman became commercial consultant to the Sony Music Group and both continued to drive the Lucid business to ever-greater heights. Separately, he developed a long-standing idea he had which combined his communications
One of the things I learned along the way is that success or failure always revolves around people and music expertise – ChartsNow was born and the development began of this full-on mobile music app which would give listeners Top 40 charts downloaded daily to their mobile. But, more of this in a moment. Looking back to December 2005, Chris Gorman endured the famous court case involving the feuding business leaders at the Gadget Shop being dragged through the High Court in London. Gorman and fellow entrepreneur and close friend Sir Tom Hunter ended up in the witness box. “The dispute caused me a lot of distress on a personal level,” he says. “We were growing the Gadget Shop in a big way; it was a great business and was tracking to be a great investment.” The Gadget Shop was in dire straits when Gorman bought it in 2002.
“The idea was to spend three months in the business and sort the finances out,” he says. “Within that time we were running at between 10-15% positive like-for-likes and we’d cleared a lot of the old stock. We were bringing cash back into the business, so I decided to stay involved in it and drive it. That was great until we had the fall-out. “Two inherited shareholders took umbrage to another business deal that we did and decided to sue. Even although I knew my integrity and business ethos were as solid as ever, the court case knocked me to a degree I never expected. I was involved with the minutia of the business because I was the CEO and when it came to court I was involved in every single point tabled by the the lawyers. The business went into forced administration and I was devastated to lose the brand and lose a tremendously valuable, successful and driven workforce. I lost so much more than money on this; truly devastating.” From the long list of success, there has been other “failures”. Reality Studios, a recording facility in Johnstone set up by Chris and Mary Gorman never took off financially but it helped him break into the music industry and ultimately made money when Mary transformed the site into real estate. “I don’t have a problem with failure,” he says. “I’ve been involved with smaller things that haven’t worked and I very quickly get to the point where I say, ‘This isn’t working’. I don’t have an ego that says everything has to work, and failure teaches valuable lessons on how to do things better next time around. “The life of an entrepreneur involves risk and you have to be a strong and passionate enough to put everything on the line. You’ve got to give it everything you can. It’s when you don’t recognise that it isn’t working – for whatever reason – that you might be in trouble. One of the things I’ve learned along the way is that success or failure always revolves around people.” When an entrepreneur spreads their interests across a multitude of things it is important to know they have good people that can be trusted to deliver. “It becomes more important in terms of having the right team of people around you,” says Gorman. “Can they deliver in the way >>
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ENTREPRENEUR you want them to deliver and do they have the capabilities, the connections, the networks? Do they have the ability to keep on moving and changing? Are they the best in their field?” He says that when people start businesses they often have a rosy picture of what they want to get out of it, yet business life is seldom as simple. So is the “mellowing” Chris Gorman more cautious and contrite? Absolutely not. “My fundamental views on business haven’t changed,” he says. “My glass is still half-full, never half-empty. I still have the belief that I will find a way through a situation. I believe that where there’s a will there’s a way – sometimes it’s very hard – but I think an entrepreneur must have the tenacity to keep trying.” Like many others, he admits he lost a lot of money in the recent credit crunch – but smiles and says: “I lost my money – not anybody else’s. It was a tough time. I was fortunate in that I didn’t have any leverage. I didn’t borrow from the banks. And if I wanted to continue living my lifestyle – which is not cheap – then I had to make more money.” What has defined Gorman’s success has been his partnership with others, starting with Richard Emanuel and John Whyte who set up DX Communications back in 1993. His latest business thrust is the combination of his interest in mobile phones – which brought those first millions with DX – and music, which has been one of his enduring passions. And here Charlie Lycett rejoins the story. Lycett set up Lucid in 2003 with Mick Garbutt, who began his career in a Virgin Records shop. A specialist music PR and plugging agency promoting the UK’s most successful labels and artist including Kylie, NDubz, George Michael, Shakira, JLS, Jamie Cullum, and many others, Lucid dominates the industry. “Charlie is one of the youngest CEOs of a record label ever,” says Chris Gorman. “His father was head of Radio One for a very long time so he has grown up surrounded by icons of the music industry. Charlie has an amazing pedigree within the industry and we connected so well that he asked me to come and join Lucid. At the time, it had three people and was turning over £30,000 a month. Charlie said to me, “If you can make a fortune
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Charlie said to me, if you can make a fortune over one idea over dinner, see what you can do with Lucid over one idea over dinner, come and see what you can do with Lucid.” Lucid was a successful lifestyle business making money by getting artists on radio playlists, but Gorman has helped move it to a new level, buying out Mick Garbutt’s stake in 2008. He brought to the party an understanding of how to make the business work more effectively. He set out a strategy for Lucid, increasing its involvement in the industry from purely radio into television and online. Within 18 months, Lucid had grown to 30 people with a turnover of nearly £200,000 a month. Building on their world-class credentials, Charlie Lycett was approached to become managing director of RCA in the UK, a record label steeped in the history of popular and classical music. Sony invested in Lucid and
Chris Gorman became an integral part of the development team. For many years RCA was the home of Elvis Presley before eventually being bought by Sony Records in 2008. While Charlie Lycett works on running the label, Chris Gorman works on looking after new acts and developing the business into new areas. He says: “Charlie and I work well together because I don’t interfere in the music. I love music but I don’t profess to have anything like the expertise that he and his team have. Normally you put a product on a shelf and people buy it, but in a talent-based industry like pop music, the ‘product’ is human and is a totally subjective entity. We deal with sometimes volatile creatives who have strong opinions and ideas. You make people celebrities, but then you’ve got to micromanage their expectations.” Gorman’s latest venture – a progressive mobile music application called ChartsNow, a standalone business – is perhaps the last big opportunity for the record companies and recording artistes to get a new stream of revenue. “No one has really harnessed the ability to make music work commercially on mobile,” he says. “There’s been lot of pseudo deals with networks but the take-up of music on mobile is still very limited, apart from the ecosystems of iTunes and iPhone. “All the research that we did showed that the 13 to 24-year-old market was still untapped. But this wasn’t just about young people. Our research showed that one of the things the over 55s would like on their phone is music, but they didn’t have a clue how to do it. “Even when you look at youth, the amount of time spent downloading a track is phenomenal. If you want to have music on your phone the download process is still very clunky.” At peak times in London it takes an average of eight minutes to download a four-minute song. In this vicious circle, the mobile companies weren’t getting the revenue, so they were putting this development at the tail-end of their service. “The phone networks are facing ever increasing demand for data down their lines and there are physical laws of nature saying that you can’t put any more down the pipe,”
says Gorman. “Until we get 4G this won’t improve so if you want to keep current and up-to-date with your music, it’s not easy.” So what was the Gorman solution? A little touch of genius – similar to the electricity companies using night-time tariffs to pump water to the hydro-electric stations – when a music fan goes to bed, new charts are pre-loaded overnight onto their phone. Each morning the charts are updated, so that the music fan – jazz, rock, rap, classical – can listen to their Top 40 tracks. “When you’re on the Tube, you don’t have to download it from a cloud or some other remote system,” he says. “You’ve got nothing to wait for and it changes automatically every day with new songs coming through. You don’t have to think about it, it’s all done for you.” It sounds so obvious, but getting around the music industry and securing agreements has been back breaking. For Gorman and Lycett, it has taken two years of background work to get the idea and the prototype off the ground; putting in £1m of their own money. They raised an extra £750,000 seed funding from friends wanting a slice of the action, and are about to embark on a fund-raising round for at least a further £5m. “Because we are in the industry, it is a lot easier to go and talk to people,” he says. “We know a lot of people at senior level in the industry and have engendered trust over many years of delivering results. “It’s an idea that everyone I see gets excited about. They all see the opportunity, then pause and say, ‘well that’s going to be difficult to get the economics to work, to get the technology to work’.” But Chris Gorman is tenacious and found a team to make it work. He has been working with Mark Lewis and Chris Carlson on the technical end of the project and a team of around 12 senior music figures. In early June, the Beta development was launched on Android and Blackberry. “We’ve got the economics working and the technology, but it has been a long two years to get this far,” he says. “We’ve had to deal with music publishers, the labels, artistes, the legals, and so on.” The deal is simple: for around £1 a week a
listener will have unlimited access to Top 40 charts on their mobile. “The music industry has been in decline,” says Gorman. “The major companies who spend huge amounts on major artists and marketing need to feel certain about revenue streams. While they embrace new opportunities they want to manage it very closely. With this business all the labels have a stake in its success and we work together to drive it.” The software also builds up a picture of what the music fan is listening to. ChartsNow is not limited to the UK; with global aspirations the company has done deals
in Australia, New Zealand and South Africa. “We see ourselves as being the music and content enabler behind a mobile network or an online retailer. It’s simple and easy to download applications for your mobile phone and we have harnessed an easy and direct route to consumers.” At the time of interview, Chris Gorman was in talks with some major players in the industry which would catapult his ideas into the music stratosphere. For those who admire the spirit of enterprise, what he does next is always interesting. n
Chris Gorman’s breakthrough Chris Gorman was a millionaire before his 30th birthday. He took out a £25,000 loan to invest in DX Communications, starting in an office in Govan in 1993 then grew to 170 shops within five years. The business, with Gorman holding a 25% stake, was sold to BT Cellnet in 1999 for £42m. He still has a framed bank statement in his Bridge of Weir office of his first tranche of £1,077,00. “I’d always said that by the time I was 30 I’d be a millionaire and one month before my 30th birthday we sold 25% of the business to Cellnet,” he says. “So I got a cheque for £1.077m a month before I was 30. Any deal I’ve done since then hasn’t been quite so life-changing; that one was.” His next move was setting up internet consultancy Reality Group with his wife Mary, which was way ahead of the curve. By 2000, Gorman could see the way the market was headed and was thinking about an exit when GUS made an offer of £35m. Reality was started, developed and sold in under two years. Since then he has been involved with a number of projects and commits time to a very successful few that include Truphone, the first truly global mobile network that offers low cost mobile, local and international calls, using VoIP. Then there is Quintessentially, a global private members’ club with a 24-hour global concierge service, and part of the world’s leading luxury lifestyle group. “Quintessentially provides a passport to the very best that life has to offer,” he says. “We’re now in around 60 countries. Travel, music, art, food, drink, hotels, clubs, spas, chauffeur driver, restaurants or – most particularly – service, they are committed to the notion that quality matters. We’ve also added security, private events and education and the fastest-growing area is the Far East.” An integral part of his success, his wife Mary is also emerging as an entrepreneur in her own right. She is the CEO of Indiba Partners, a medical technology company based in Barcelona, pioneering the use of radio frequency-based technologies for non-invasive aesthetic beauty treatments. Mary is involved in the exclusive roll-out across the UK. Meanwhile, Chris Gorman still lectures in entrepreneurship and is a visiting professor at Glasgow Caledonian University and the University of the West of Scotland. He is also a governor of the Royal Scottish Academy of Music and Drama. He was a founder of the Entrepreneurial Exchange and remains the embodiment of its mantra; Work Hard, Play Hard and Put Something Back. Recently, he launched a sister organisation, The London Entrepreneurial Exchange which has attracted some of the UK’s best known entrepreneurs.
BUSINESS QUARTER |SUMMER 11
Scotch runs through the veins of Mike Keiller. He’s a global whisky man who has worked at the sharp end of rationalisation. He runs Morrison Bowmore in Glasgow, the only British part of the private Japanese drinks giant Suntory. Kenny Kemp travelled to Springburn in Glasgow to meet him
The dramas of a dram man Scotland my auld, respect Mither! Tho’ whiles ye moistify your leather, Till whare ye sit, on craps o’ heather, Ye tin your dam; Freedom and Whisky gang thegither. Tak aff your dram! Robert Burns in a poem addressing the Scottish Members of Parliament in 1784. Scotch remains our gift to the world. It’s a beverage that binds our nation in culture and our sense of business as one of our biggest export industries. And Mike Keiller is one of the stalwarts of this industry who understands its magic, mystique and how its global business model has evolved to meet changing circumstances. Fifty years ago there was a plethora of Scottish-owned whisky firms gallantly marketing their own brands. But this was never sustainable. Today that has changed. And many of our familiar whisky brands are owned by larger multinational companies
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beyond our shores. And while this is a sad fact of life that ownership has moved beyond Scotland, there is no other place on Earth that can produce and bottle Scotch. So beady-eyed commuters on the Edinburgh to Glasgow line might have spotted the headquarters of one of Scotland’s smaller whisky companies. Before the tunnel which takes you into Queen Street, you pass on the right a large dark warehouse and bottling plant with the hogshead barrels stacked on top of each other. Once Springburn was world famous for the steam locomotives it produced; today North
Glasgow has to deal with its own demons of unemployment and deprivation, but one of the jewels is Morrison Bowmore Distillers. More recently, another whisky icon, Drambuie liqueur, has moved to be mixed and bottled at Springburn, with the special recipe of herbs and spices kept under wraps. Mike Keiller is the chief executive of Morrison Bowmore Distillers who produce the famous Bowmore Islay Malt, Auchentoshan Lowland Malt, Glen Garioch Highland Malt, and McClellands, the number four malt in the US. He’s a suave and decidedly-trim fiftysomething, dressed in chinos and a Ralph >>
It’s all to do with learning quickly and excellent communications. If you don’t like change then you really need to find another job BUSINESS QUARTER |SUMMER 11
Lauren open-necked shirt. He’s a globetrotter who has survived the turmoil and the transformation of the whisky industry. Born in Perth and educated at Perth Academy, he qualified in his home city as a chartered accountant in 1977 with a local firm. “I always wanted to go into industry,” he says. “That was the purpose of the qualification, to have a back-up. I joined the whisky industry via Bell’s in Perth. Guinness took us over and soon after that they acquired the Distillers Company Limited (DCL). That’s when my career evolved.” The convulsions of Scotland’s whisky industry dominated the business news pages in Scotland in the 1980s. In 1987, United Distillers was created by combining Arthur Bell and Sons of Perth with the DCL, now both part of the Guinness empire. “Clearly, when you have two big take-overs into a major group, your life is going to change,” he recalls. And it did for Mike Keiller – in no small way. “I got the chance to get the senior position as finance director in United Distillers UK, which was based in Cherrybank in Perth,” he says. While some will look back on this as a traumatic time for the whisky industry, and subsequent upheavals of the Guinness share scandal involving Ernest Saunders, for Keiller – then in his early thirties – this was a magnificent chance. “Being a finance guy in a bigger operation presented more opportunities,” he says. “There were new systems and lots to learn. There was a different approach. It was a massive period of change. It was also a chance for me to stamp my own mark on the systems and information requirements for a brandnew business.” The transformation from Bell’s Scotch Whisky group, which included the ownership of Gleneagles Hotel and the North British (now the Balmoral Hotel), the Canning Town Glass Company and Towmaster Transport distribution business, was huge. The whisky business was quickly being turned into a gigantic sales and marketing machine for United Distillers. “The information system for a multi-national sales and marketing unit is very different from what was a group of integrated Scotch whisky
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companies,” says Keiller. But a lot of what I learned then has held me in good stead for my job here at Bowmore in the last 11 years.” Mike Keiller immersed himself in strict financial management. Global drinks companies on the stock market require a detailed understanding of their potential future markets, especially when it comes to Scotch. “My experience then was that you have to have available inventory in terms of whisky stock to meet future unknown sales forecasts,” he says. “If you have too little, you can’t grow. If you don’t have the stock you can’t make future profits.” Keiller says that many people underestimated the scale of the capital required in the industry to produce, and then store, liquor for up to 25 years. He picks up a pen and sketches a wave-like graph showing the cycle of whisky distilling. It involves the investment by the industry, then how supply and demand has traditionally impacted on prices. In the last 30 years when there has been excess whisky capacity, this has been sold off more cheaply. “It’s an added challenge that no other industry has, except perhaps the cognac industry,” he says. It requires, he says, a long-term business mind set to protect a company’s future legacy. Arthur Bell was run by the renowned Scottish business figure, Raymond Miquel, who had become managing director of the firm in 1968
aged 37. His management style was uncompromising but highly effective. “He was a very single-minded individual,” recalls Keiller. “He was charismatic but an autocratic leader. He was obsessed with the longer-term approach. He would not compromise on pricing for the sake of short-term results.” Keiller acknowledges the importance of long-term pricing as one of the key business nuggets that he picked up from his spell with Miquel. “He was greatly criticised at the time. But people have forgotten his strengths and what he achieved. I think my focus on long-term value came from his obsession about the longer term.” In 1990, Mike Keiller was promoted to European finance director within United Distillers and given the task of developing and strengthening business control within its drinks subsidiaries and joint ventures. At one stage there was a “forest” of 360 small independent distributors with their own ways of working that needed to be chopped down, and Keiller became the axeman. The 360 eventually became approximately 20 over a very short period. “Additionally we had to prioritise what our marketing budget should be spent upon,” he says. “New systems had to be set up. What was interesting was learning how brands are built and evolve. “I spent four years as the finance director but the product range of United Distillers was not yielding sufficient growth. The bias of the portfolio was towards gin and whisky and, in Europe, those categories were ex-growth.” Throughout this time, all the major drinks companies were beginning to prioritise their global brands, learning to concentrate the marketing firepower on the mega brands such as Guinness, Johnnie Walker, Smirnoff, Gordon’s Gin and Bailey’s Irish Cream. In 1994, Keiller came up with the concept and business case for change in Project Reagan. He says: “We decided that we would create a single back office including logistics and customer service to serve the whole of Europe. We were one of the first companies to attempt this. The aim was to get one system serving all the thousands of customers across
Europe. There wasn’t the internet then but there was improving telecoms technology and computers which made this possible.” By taking away the work of the back office, the local sales and marketing teams could be left to focus on developing the brands. “To survive all this and take it forward was very interesting,” says Keille. “It’s all to do with learning quickly, sound training and excellent communications. If you don’t like change, then you really need to find another job.” In May 1997, Guinness merged with Grand Metropolitan, creating United Distillers & Vintners, which became Diageo. Keiller was given a major role in preparing the merger planning for Europe in Diageo. “Once we went live I worked with the new managing director of UDV UK to select a new management team, sales force, head office for the new business,” he says. “It was a giant project with not far off half the people having to go. It all had to be professionally and sensitively managed – and ruthlessly, if you like. Having already made the decision to leave after the merger I found the role a positive experience on which to exit. “I now had major experience of mergers. The key learning is to ensure a very strong, change management process that is fair. If the process is transparent, then people will understand and support change. However transparency and honesty has to be backed up by a good planning process.” Ironically, he was involved in the final decision to shut down Cherrybank in Perth, where he started his career. “I knew all the people but it was the right thing for the business at the time,” he says. “It wouldn’t have been the right thing for Bell’s. But everything had moved on. It was a different beast.” So, at 44, he moved on for a spell with British Telecom as a director of financial planning and control in the UK. But he was lured back into the whisky industry when he was offered a role with Morrison Bowmore Distillers, a stand-alone business and originally a whisky brokerage created in 1951 by Stanley Morrison, but a part of the Japanese drinks giant Suntory. Suntory is a family-run company with a strong ethical connection to health and the
Our focus on the single malt category has done a great job for us. We’re now a niche-branded goods company
environment – indeed, one of its major brands is bottled water. Whisky production in Japan was started by Shinjiro Torii and Masataka Taketsuru who travelled to Glasgow to learn the art of distilling. The first distillery set up by Torii, was Yamazaki, between Osaka and Kyoto, which later became Suntory. “I could see a way forward with this job,” says Keiller. “Suntory had bought the business in 1994 but hadn’t changed anything. It was a very friendly acquisition. This was essentially to secure a foothold in the market and support the business in Japan. Traditionally, they were large purchasers of whisky which they blended for the local market.” Suntory had been a great ally to the Morrison family prior to this. Whisky is still a cyclical industry with periods of oversupply and undersupply, which impacts on the pricing. Keiller says: “I was brought in because the business had not been changed since Suntory acquired it. The previous managing director Jim Forbes was retiring at 65. The original rationale for buying Morrison Bowmore had changed because the domestic whisky market in Japan was in steep decline and the business had to be set up to exist on its own.” Mike Keiller says there was limited focus on single malt brands at the time, especially the flagship Bowmore from Islay. “The key to the business in 2000 was value-for-money blends in South America,
such as Clan Roy and Rob Roy. We were the market leaders in Venezuela at one time. The priority was bulk trading whisky and blends. Then there were the single malts. “We were left alone to run the business. In 2003, we incurred a trading loss. The South American business wasn’t making money and declined because of Venezuelan currency issues. There were joint ventures in Uruguay, Chile and Spain which were loss-making.” Mike Keiller had to sort it all out – along with a massive pension deficit which peaked at an estimated £30m. “From 2004, it’s been about sorting out all of these challenges,” he says. “We had huge surplus whisky assets from the blended whisky days and we were helped by a whisky market cyclical upturn. So, instead of our whisky being worth £9m, it was worth £27-30m in the market. This helped sort out the pension problem. Single malt is now the focus. In 2000, it was 12% of the business, today it is 100%. Last year the company turned a profit of £5m, which Keiller says is down to the teamwork and focus at Morrison Bowmore. The HQ site is being refurbished with £5.5m for new bottling plants and storage. The annual turnover is now £40m and the company employs 200 in total, with 150 at Springburn. Mike Keiller is proud of MBD’s success and the repositioning of the brands, including Auchentoshan, a triple-distilled lighter malt hitting a market for the new whisky drinker. He has recently expanded the sales and marketing team with new appointments, including such people as Phil Nickson, Paul Goodwin, Claire Keene, Joe Hughes, and Iain McCallum, who has been appointed master of the malts. He joined from school and became distillery manager at Auchentoshan, aged 33, the youngest in the distillery’s 185-year history. “We’ve got a much better business model,” says Mike Keiller. “Our focus on the single malt category has done a great job for us. We’re now a niche-branded goods company. We want to build the strength of the brands and that will take years. We have the knowledge, passion, skills and backing to succeed” It seems there is no rush when it comes to Scotch whisky. n
BUSINESS QUARTER |SUMMER 11
BUSINESS QUARTER | SUMMER 11
a whole new ball game A former banker is now heavily involved in sport – but Ian Reid’s approach is different – refreshing even – as Jane Bradley discovers >>
BUSINESS QUARTER |SUMMER 11
Ian Reid, echoing the wording of his former colleague Sir Fred Goodwin’s recent superinjunction, does not want to be identified as a banker. “We don’t talk about that,” jokes the former head of savings and investments at the Royal Bank of Scotland. “I don’t think I was a traditional banker in any sense of the word.” Ten years after retirement from the financial world and now the owner of Scotland’s most successful basketball team and the founder of sports charity Scottish Sports Futures, Reid is anything but the traditional banker. His team, the Glasgow Rocks, is a key member of the British Basketball League, while his charity venture, Scottish Sports Futures (SSF), attracts hundreds of youngsters, many of them
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from underprivileged households, to its Twilight Basketball venture held at 17 locations around Scotland every Friday night. The programme aims at keeping troubled youngsters off the streets by inspiring them to get involved in sport. “Sport has got such a great reach out for young people,” explains Reid. “Some of the challenges that our communities face in some areas of Scotland are truly horrendous and that manifests itself first of all at primary schools. You hear some stories that really are quite shocking. There’s a lot to do.” Unlike most professional sports team owners, Reid’s focus is more not-for-profit than big business. “I’m pretty much hands-off with the Rocks
now and I am hands-on with the charity,” he admits. In stark contrast to the US NBA league – which is a massive, cash-rich industry of the magnitude of the English Premier League, Reid’s basketball team has more altruistic motives. All of his players are involved with his charity. “They are paid a fraction of what they are paid in the American league,” he laughs. “But it’s important for the Rocks that any players we recruit have to be happy to do charity work. We won’t take on any players who won’t get fully involved in the community. “It gives the guys who are presenting a skill they can use later in life – standing up and speaking to people. The margin between being a multi-millionaire player with the NBA and delivering a Jump To It programme in Govan is infinitesimal.” His team, which started off life in Edinburgh at Meadowbank Stadium, became the Glasgow Rocks in 2003 when Reid was offered a “sweetheart deal” from Braehead. Amid growing uncertainty about Meadowbank’s future at the time, the Rocks made the move. And the Rocks, which owns a proportion of the national UK league, has gone from strength to strength, near-selling out the 1,000 capacity at its stadium in Glasgow’s Kelvinhall at most matches. But the players are not the only ones who are not rewarded for their efforts as much as their American counterparts. Reid, whose main career is now centrered around his work with Scottish Sports Futures, does not draw a salary from his team. “We kid ourselves on that we break even,” he laughs. “The reason we kid ourselves on is that I don’t draw down any money for the work I do for the Rocks – it’s a labour of love, stroke hate.” His move into sport began ten years ago, when he made the decision to retire from RBS. “For a long time I was one of the youngest people attending meetings, then all of a sudden I was one of the oldest,” he remembers. “It became clear to me that it was time to move on and do something else.” He started his career “licking stamps” at the bank and worked his way up to become head of training and later managing director of the
Basketball embraces music – the hip-hop culture – it’s a game that attracts edgy kids. Worldwide, it’s larger than football
bank in Switzerland – then head of savings and investments in RBS’s retail bank. After his retirement, he set up an events company through which he organised Europe’s largest investment convention and became involved with Edinburgh’s Hogmanay. “It was through that activity that I came across Edinburgh’s basketball,” he explains. “At that time, it became clear that things that were going forward were involved with sport, music and events. “Basketball seemed to fit neatly into that. It embraces music – the hip-hop culture – it’s a game that attracts edgy kids. Worldwide, it’s larger than football – but it’s not larger than football in Scotland and I don’t think that’s going to happen in the next few
years. However, it does have a growing band of enthusiasts.” In addition to his Friday night outreach project, Scottish Sports Futures also teaches basketball in schools through a programme called Jump to It, led by the Rocks players. The sport is now the third most-played sport in Scottish schools and SSF is in the top 10 per cent of Scottish charities, in terms of size. “The players are role models,” he says. “A lot of the boys we’re working with don’t have father figures and that’s what we find with the players – they’ll hang on every word they say. A lot of the players have come from really difficult backgrounds as well – some have used the sport to get out of the ghettos so they can empathise quite a lot.
“They can say to them, ‘Hey, it’s one thing now that you’re using knives, but what happens when you get onto guns?’. We want to help young people to move on, to learn what they can do with life. “When we started out, we were almost 100 per cent white and now we’ve 19 different nationalities playing on a Friday night. It’s breaking down barriers.” The renewal of a £1.95m grant from Cashback for Communities – which uses the proceeds from criminal assets seized by police to pay for projects in communities which have been badly affected by criminality – will fund SSF over the coming three years, when Reid hopes to involve 35,000 children in 450 schools in his programme. “One of the biggest challenges at the moment is financial,” says Reid. “We’ve seen a lot of smaller charities go to the wall, but we’ve been fortunate. It costs us £1m a year to do what we do, but a lot of the traditional funding sources have dried up.” To plug the gap, Reid is going back to his former world – tapping corporates’ social responsibility budgets. “What we’re trying to do now is recruit for sports funding from the private sector,” he says. So far, Shell has sponsored Twilight Basketball, but Reid hopes to attract major firms in Fife where he plans to roll out a specific project in the coming months. “If we’ve got a big project, we’d look at who the local companies are,” he says. “These are their future consumers. It’s good for the companies and it’s good for us.” “In our experience, businesses started off wanting to do the right thing for the community. Now, much more, it’s got to support the business itself. So if we’re approaching any company, we’ve got to give them a logical reason for supporting a basketball team. “When the penny drops that we can do a lot more through sport than develop the best – best rugby players, best football players – then it’ll be even more effective. Part of our role is to try and replicate the community element into other sports as well.” Reid hopes to expand his reach to athletics programme – a sport which meets his bent >>
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BUSINESS LUNCH for equal opportunities activites – which both boys and girls can play. “We’re lucky with basketball, because if it was football or rugby, their players are... marginally better rewarded, shall we say,” he admits. “Our players are really enthusiastic about doing it. It would be hard to get Premier League football players to do that.” He is granted three work permits for American players to join his team – while another three are Scottish, the remainder come from the rest of the UK and the EU. A one-tier league in the US means that a high number of top players do not make it to the top clubs on the other side of the Atlantic. “That leaves some really really high quality players available to other clubs throughout the world,” he says. He is thinking of expanding his charitable programmes overseas – perhaps initially to the Baltic states, where SSF director Charles Cormack has links. But while a keen sportman himself – Reid was a successful swimming champion, competing all over the world for his club when living in Switzerland – he admits he has rarely picked up a basketball. “Bounce a ball and throw it in a net? No,” he deadpans. “But I’m told it’s more complicated than that. “I won’t do it now because I don’t want any of the players to see how inept I would be. I’ll let them nurse the myth that maybe he was good one day. “Maybe he could have been a contender”. n
We’re lucky with basketball because if it was football or rugby their players are... marginally better rewarded. Our players are really enthusiastic about doing it BUSINESS QUARTER | SUMMER 11
You’ll have had your ‘delice’ On the former site of Gordon Ramsay’s Scottish eaterie Amaryllis, the Bistro at One Devonshire Gardens – now part of the Hotel du Vin chain – is run by head chef Paul Tamburrini. The imposing dining room is fairly formal – perhaps slightly too formal for the location, but nevertheless adds a grandeur to the eating experience. Ian Reid and I – both regular restaurant-goers – puzzle over the fancily-worded menu for some time. I am perplexed by the “mollet egg”, while he ponders over what exactly makes up a chocolate “delice”. “We had to ask about things the last time I was here as well,” he laughs. Feeling adventurous, I opt for the mollet – which, it turns out, is actually a fairly simple boiled egg with a soft poached centre. It comes with rocket and some shavings of tasty parmesan. Ian decides to have the smoked kipper parfait – followed by smoked salmon fishcakes. “I don’t see a smoked fish dessert, so I think I should be OK,” he muses. Both of his smoked fish courses are proclaimed to be excellent, while my seafood veloute and crab soufle are light and delicious, if perhaps a little over-salted. A side of spinach tops it off nicely. For dessert, Ian chooses the caramel parfait – honey ice-cream and salted caramel – while I have the perplexing-sounding chocolate delice – which is fairly “delice”, but a touch too creamy and bland for my taste. The accompanying pear sorbet, spiked with bits of pear, adds a nice edge. The service is attentive without being overwhelming and our overall experience is of a satisfying meal. I’ll just make sure I take my foodie dictionary next time.
OFF the whole collection.
BENVENUTI A CASA
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FINNIE ON WINE
I have to say that despite a general preference for white wines, this didnâ€™t get off to a great start, by looking like Liebfraumilch
BUSINESS QUARTER | SUMMER 11
FINNIE ON WINE
An Alsatian without a bite Graeme Finnie, the new managing partner of French Duncan, finds time in his hectic schedule to sample some interesting foreign wines There are some unexpected offers when you become managing partner of a Scottish accountancy firm. Since taking over day-to-day running of French Duncan from Robert Kerr, who steps up as chairman, I’ve been out meeting a host of entrepreneurs and business people. But when BQ invited me to sample some wines, it seemed like a rather different type of opportunity. I was invited to turn up at the Corinthian in Glasgow (which looks fabulous after its recent refurbishment). I have to say that despite a general preference for white wines, this didn’t get off to a great start, by looking, as it does, very much like a bottle of Liebfraumilch. With this reservation in mind, I embarked on sampling what turned out to be a French pinot blanc – a Cattin Pinot Blanc at £20.50 a bottle. I do seem to remember from O Grade history that Alsace, from where this wine originates, was once annexed by Germany and was a region of regular dispute – hence the German influence on the bottle I assume! The wine itself was quite a deep golden colour and certainly had a fruity fragrance. The tasting notes said it was “light and delicate with stewed apple fruits and a lovely racy minerality and the perfect aperitif”. Alas for Alsace, although the wine was quite dry I found that it was not the most enjoyable white.
I would recommend that it is drunk very cold indeed. While I wouldn’t say it was a dog, this was an Alsatian without a bite. However, if the white wine was a debit, the Santa Ema Reserve Merlot, Chilean Merlot, at £26.95 a bottle, was definitely a credit. The notes told me: “This lush, rich merlot is both big and beautiful with loads of ripe blackcurrant fruits, liquorice, coffee and vanilla. Perfect with spicy tex-mex food.” This was altogether a much more enjoyable experience. It had a deep lush ruby colour. It was very fruity in fragrance and one could almost taste cocoa through its smooth well-bodied texture. The Chilean wine won me over, certainly a tipple I can recommend to Robert and the others at French Duncan when we get around to entertaining our clients. Graeme Finnie, 41, is the new managing partner of French Duncan. He took over from Robert Kerr, managing partner for the last 11 years, who becomes chairman. Graeme, a University of Glasgow law graduate, who qualified as a chartered accountant with Coopers & Lybrand, has been a partner for six years and leads its
corporate finance advisory team. He plans to make French Duncan the adviser of choice among owner-managers of businesses in the £5m to £30m turnover range. He wants French Duncan to break the £10m annual turnover barrier – and within five years. He worked in a number of corporate finance advisory roles at Clydesdale Bank and two further Big Four firms before becoming managing director of Fender Sturrock, a credit card sales company where he oversaw a 60% rise in turnover which returned the business to profitability. He then joined a loss-making pension administration company which, over a two-year period, he returned to profitability before joining French Duncan. As head of the firm’s corporate finance advisory team he was Runner-Up in the Dealmaker of the Year category of the Deals and Dealmakers Awards in 2006 and saw his department named Team to Watch at the Lloyds TSB Scottish Accountancy Awards in 2008. n Special thanks to Michelle at the Corinthian Club, now fully refurbished and restored to its immaculate condition. Corinthian Club, 191 Ingram Street, Glasgow, G1 1DA. Tel: 0141 552 1101 www.thecorinthianclub.co.uk
BUSINESS QUARTER |SUMMER 11
BUSINESS QUARTER | SUMMER 11
A drive into the top corner Mercedes are in the European Champions League of car makers. Fraser Wishart, chief executive of the PFA Scotland, the footballers’ organisation, says the CLS 350 is well worth a handsome transfer fee
The first thing I noticed when sitting inside was how quiet it was and how safe I felt. The engine itself has that quiet, low pitch growl
Footballers and their flash motors are often inseparable in the eyes of many sports fans. We’re used to seeing photos of the English Premier League stars driving in their top-ofthe-range cars. In Scotland there is nowhere near the same level of salary for players but we are no different from anyone else; it is nice to drive a prestige car. Mercedes has always been seen as a top prestige brand and I am delighted to have agreed a Business Partnership between Mercedes and the Professional Footballers’Association (PFA) Scotland. I was asked to test-drive the new Mercedes CLS 350 CDI. I must confess at this point to having little knowledge of cars, so I will write this from a lay person’s perspective and leave the jargon like “torque” and horsepower to the experts. I am however a sucker for all the gadgets and this has enough to keep my small mind happy. I simply want to talk about what a beautiful car this is to look at and to drive. My idea of Mercedes was of a trustworthy and practical top range car and I have to admit I was pleasantly surprised by the CLS 350 CDI. It has all those attributes and much more.
At first glance, I was struck by exterior styling; my car was a striking cream colour. It has a modern, sleek look about it with flowing lines and an aerodynamic design. This is a big car; far longer than I expected. The long bonnet, large side windows, and sloping roof all give the slick look of a coupé. I particularly liked the front grill with the unmistakable Mercedes symbol inserted, rather than sitting on the bonnet. The 71-bulb LED headlights give powerful beams which are directional and futuristic. It seems as if the lights have a mind of their own as they turn towards a corner almost before you do, giving better visibility ahead. Sensors at both front and back make parking much easier and a sensor in the wing mirror detects any car in your blind spot. I chose a weekend where I would combine city driving along with a good run on the motorway and winding country roads. The 350 CDI was capable in every situation. The first thing I noticed when sitting inside was how quiet it was and how safe I felt. With the engine on it was still difficult to hear outside. The engine itself has that quiet, low pitch >>
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growl signifying that there is a lot of power under the bonnet. Although I drove an automatic, the acceleration proved that to be the case. On a quiet Sunday morning on the M8 as I put my foot to the floor it is no exaggeration to say that I was thrown slightly back in my seat as the car powered forward. The cruise control is essential to avoid speeding as it ticked over at just over 1,000 revs doing 70mph. The steering is sharp and precise. It cornered smoothly on the back roads of Fife on the way to St Andrews; again the acceleration gives a feeling of safety when passing slow vehicles on single track roads. The interior is beautifully finished with all mod cons to play with. My mobile phone synchronised simply with the COMMAND system and the hands-free gives a crystal clear sound. The large internal screen shows everything from the satnav to DAB radio controlled by a dial that is the version of your TV remote control; best not let the kids get a hold of it as it operates all the gadgets. Those sitting in the back found that it had plenty of leg room while being treated to the sounds. It definitely has the size of a saloon although I am sure this is not what Mercedes has in mind as its primary function. It is hard to know what not to mention. The electric seats are operated from three buttons shaped like a seat which can be saved in the memory. The next time you go in, simply press a number and the seat returns to your position. There is plenty of storage inside; even beneath the front seats and cup holders for passengers; the boot was surprisingly spacious. I am sure that I missed a lot of the
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functionality, there was simply not enough time to take it all in. The buyer of the CLS 350CDI is not looking for a sports car. When paying this kind of money the purchaser is looking for styling and this has a sporty look and feel but is a classy yet practical car. It has an elegant sophistication about it without being too sensible. It has enough toys to give the owner the feeling of having something special while having enough room to accommodate the nuclear family. The CLS 350 CDi drives exquisitely and will certainly prove irresistible to anyone who test-drives it. Perhaps my son Cameron, who is 12, summed it up best. “Dad,” he said after five minutes
in the front seat, “this is so luxurious that it’s like being in bed while driving at the same time”. Shame, I had to hand the keys back but maybe Santa will be good to me this Christmas! n Fraser Wishart is chief executive of the PFA Scotland. The Mercedes-Benz CLS 350 cdi Blue Efficency Automatic is priced at £52,993 OTR and was provided by Mercedes-Benz of Glasgow, 135 Milton Street, Glasgow G4 0DH. Tel: 0141 331 4600 www.mercedes-benzofglasgow.co.uk
Luxury hotel resort chief puts success down to Scottish lessons
y now, few will have not heard about Rockliffe Hall, the stunning luxury hotel, golf and spa resort in County Durham, which opened to great fanfare south of the border at the end of 2009. It is winning both national and international acclaim and, now fast approaching its second anniversary, is winning many plaudits. No shortage of its success has been down to an individual who admits he has a lot to thank the Scottish tourism industry for, for ensuring Rockliffe Hall applied all the right attributes when opening its own doors. Nick Holmes, Rockliffe Hall’s managing director, spent 16 hugely successful years at some of Scotland’s most high profile destinations. Holmes was an instrumental part of the management team at Gleneagles during its crucial metamorphosis in the 1980s and, after helping establish four-star Craigendarroch near Blamoral, he then became the general manager of the team which opened the five-star Cameron House on Loch Lomond in the early 90’s. The lessons learned at Scotland’s most high profile resort destinations have clearly rubbed off as Rockliffe Hall, within a year of opening under Holmes’ stewardship, was also recognised by AA inspectors with five stars. “It’s wonderful to have stunning and luxury facilities, but the hospitality industry is built on service. That service element is the memory they take away with them, so its crucial to get that right. “We had amazing staff at Cameron House and Gleneagles and that same warmth and enthusiasm is what I see in our staff here now in the North East. It’s a very special thing to have.” As well as its people, the converted 18th Century country retreat has gone to incredible lengths to ensure its guests have the best of everything. With the venue lying just two hours train journey south of Edinburgh, it’s easy to see why this location could become a perfect destination for the Scottish business community. Condé Nast, the gatekeepers of high end hotel quality, has already awarded Rockliffe Hall for its
Nick Holmes, Managing Director, Rockliffe Hall classy corporate offering. That garland was soon followed by the award from North East Tourism for the best meetings and conference facilities in the region. Outside of the corporate confines, the facilities are no less impressive. The 18-hole golf course has already won plaudits from some of the very best in the game and prompted European Tour player, Graeme Storm, to tip the venue as a future Ryder Cup venue. A 50,000 ft newly created spa, features one of the UK’s largest hydrotherapy units and, headed by Scot Liz Holmes, is again winning plaudits from the most demanding in the industry. The Good Spa Guide awarded the facility ‘five bubbles’ for its dedication to health and wellbeing. One top of that, one of the most exciting new talents in British food, Kenny Atkinson, has his name above the door that the stunning Orangery restaurant. The double Michelin star winner has just been announced Director of Food for Rockliffe Hall’s entire food output, so oversees the resorts two other restaurants at the golf Clubhouse and in the Spa.
Rockliffe Hall is fast gaining a reputation as a ‘go to’ resort for some of the most important events taking place across the UK. Within its first year, both the London Organising Committee for the Olympic Games (LOCOG) and a top level FIFA delegation earmarked running the eye over Rockliffe Hall and its next door neighbours at Middlesbrough FC’s training academy as party of England’s (ultimately failed) bid to host the 2018 World Cup. Both visits were met with glowing praise for the resort which sits just outside Darlington on the banks of the River Tees. All of these things are undoubtedly welcome in positioning Rockliffe Hall as one of the finest new venues in the UK, but Holmes’ philosophy to concentrate on the detail has borne fruit. “Looking back,” said the married father of one, “you might be lucky to experience just one of these events in the lifetime of a successful hotel. This has all happened within the last 12 to 18 months. I cannot give enough credit to the team here who do everything to make sure every single person who drives down that tree-lined road into Rockliffe Hall has an experience which leaves them in no doubt they are at a top class venue. He concludes: “If there is one thing that I feel proud of since opening, it is the number of people who have fed back to us how welcome they have felt throughout their stay. I’m just as pleased these comments come from locals enjoying their Sunday Lunch in The Clubhouse as I am from a high profile member of the Olympics.”
Rockliffe Hall, Hurworth-on-Tees, Darlington, County Durham DL2 2DU Tel: (01325) 729999 Email: firstname.lastname@example.org Web: www.rockliffehall.com
BUSINESS QUARTER | SUMMER 11
Style is the new driver Nick Faldoâ€™s diamond sweaters have given way to infinitely more elegant and practical golfwear, as Chris Porter reports
With thanks to: www.subseventy.co.uk, www.albartross.com, www.galvingreen.com, www.golfino.com
BUSINESS QUARTER | SUMMER 11
When Alex Bartholomew, ex-shoe designer for the likes of Burberry and LK Bennett, offered her shoes to the Wentworth Golf Shop early last year, they might well have been tentative. Here, in effect, was not the trainer-style golf shoe that has dominated sales over recent years, but a “proper” leather-soled style with calf leather upper and layered heel, together with anti-microbial fabrics and cleat technology. It was, in short, a more luxury golf shoe – for £350. Surely Bartholomew’s Royal Albatross label was a step too far for most casual golfers? The shop bought some anyway. And six weeks later the brand was its best-seller. “It’s a specialist item,” concedes Bartholomew. “There have been attempts to make golf shoes like this before, but the process has been cost-prohibitive. But consumers are changing – with the recession and issues of sustainability, there is less of a throw-away culture, more a readiness to invest in the stylish but long-lasting. And it’s happening in golf too – it’s getting a much more qualityminded market.” And a big one too – according to estimates by the British Golf Industry Association, the golf apparel and footwear business across Europe is only growing, worth in excess of 125m euros in Germany and 36.2m euros in France, for example, but even 5m euros in the relatively immature market of the Czech Republic and 3.5m euros in Russia – where the number of registered players has tripled in the last five years. Small wonder then, that while global brands the likes of Puma and Adidas are pushing into golfwear, with specialist labels the likes of skiing company Bogner taking a side-step into it, the sport is seeing an explosion of relatively young or new niche brands, among them the likes of Natural Born Golfers or Tattoo. Supported by golf retailers – if only because golfwear provides much higher margins than equipment – these are ready to capitalise not only on golf’s growing popularity as both a participant and spectator sport, especially due to TV coverage, but a fundamental shift that (in many, if not all countries) is seeing it evolve from an elitist, expensive, middle-aged, largely male sport to one that is more inclusive, >>
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FASHION younger and female-friendly – one BGIA estimate reckons that while 25% of registered players in Europe are women, they account for 60% of all golfwear sales. Even drastic improvements in golf course conditions, notably with drainage systems, are having an impact, reckons Mike Johnson Hill, UK managing director of Galvin Green. “People are not so worried about having to wade through muddy sections and so are prepared to put on some nice trousers,” he says. “The changing nature of the sport is changing the way golfwear looks,” argues Robert Hart, the creative director of Bunker Mentality, which launched in 2005. “Golfwear is having to become much more fashion and fit-conscious, especially since everyone now thinks of themselves as being and living in a much younger spirit too now. Its getting some of the more radical style it used to have. Remember Nick Faldo with his diamond-print shirts? We might think they look pretty bad now but they were a style revolution at the time. Golf, unlike other sports, has a history of dressing up to play and that is coming back.” Indeed, Hart stresses that the shift is really from golfwear to golf fashion – clothes are that reflect fashion trends and are wearable direct from course to pub or social gathering, a shift also reflected in the growing number of fashion brands now with strong golfwear lines, from Hugo Boss for men, through to Casall, La Perla and Escada Golf for women. “That crossover element is getting more and more important,” agrees Andy Davies, sales director for Sub70, which launched in 2004. “We meet what is the key market demand – effectively mainstream fashion you can play golf in. This is a consequence of golf being more a lifestyle sport for many players – they may take their game seriously but they also want to be the best-dressed person on the course.” Sub70’s best-sellers include its black-and-white tartan trousers and Groove shirt – a simple, fitted style in six colours with contrast piping and pocket detail, with the brand launching knitwear this summer and waterproofs in autumn – designs that have taken the >>
BUSINESS QUARTER | SUMMER 11
BUSINESS QUARTER |SUMMER 11
FASHION brand from a turnover of £30,000 to £0.5m in just six years. But Davies can see the turnover of styles increasing just as rapidly, so that golfwear keeps pace with seasonal fashion trends – Sub70 already introduces new styles every three months. “And the customer seems ready to update his golf wardrobe just as regularly as he might his off-course wardrobe,” says Davies. But what then will distinguish what is worn in civilian life as opposed to that worn in active duty on the green? The deciding factor is likely to prove the technological edge, one which, according to Johnson Hill, is set to see more traditional, all-cotton golfwear gradually fade from the market. According to Hart, tech remains a secondary issue. “We decide whether a new design looks cool, and then we think about making it in the intelligent fabrics,” he says. “Golfwear’s utility is an increasingly essential part of its proposition, especially to a younger tech-savvy consumer.” Isabelle Prchlik, spokesperson for Golfino – Europe’s largest single supplier of golf apparel and leader in golfwear for women – stresses that while a certain fashionably preppy chic may shape the look of its clothes for this summer, functional factors such as waterproofing, “moisture management”, stretch and comfort are all factors that modern golfwear design must consider. “Golfwear has to work in different climates and has to be able to give so as to not interfere with your swing,” she says. “But the important factor is that this technology is hidden – it’s there in the clothing but you wouldn’t know it – and that it does not interfere with the silhouette. Golfwear can be sporty but there is a strong demand for it to remain elegant, and doing that in technical fabrics is a challenge. We have advanced stretch micro-fibre materials for trousers, for example, that you could do gymnastics in. “The fact is that golfwear is in a period of rapid change, in much the way that the sport itself is. Golfwear is getting more sophisticated in style and substance. Keeping both factors up means that inevitably it will get more expensive. But just as many golfers want the best clubs or the latest balls, it seems that many too are more than happy to pay for the best clothing. n
BUSINESS QUARTER | SUMMER 11
HERE COMES THE SUN
From our Fancy Natural Yellow Diamond Collection
See our range of high quality jewellery and gifts at: www.ericnsmith.com Showroom: 193-201 Ayr Road, Newton Mearns, Glasgow G77 6AE Telephone: 0141 639 3344
Technology and tradition triumph at Turnberry A new computerised golf swing analysis system is about to revolutionise the world of golf. Although the game has never been slow in adapting new developments for its own needs, it’s about to benefit even further Golf has undergone a series of significant technological advances in the last couple of decades – with the advent of metal woods, graphite shafts, cavity-back irons and super-efficient balls being just a few of the developments. But a new computerised system invented by leading US equipment manufacturer
TaylorMade that uses motion capture technology to analyse every element of a golfer’s swing has really brought the game into the 21st century. Despite the big leaps forward with equipment in recent times, golf has largely remained unaltered for the past 200 years or so. The vast majority of golfers have never had a >>
Stunning: Turnberry is one of the world’s greatest golf courses
BUSINESS QUARTER | SUMMER 11
BUSINESS QUARTER |SUMMER 11
lesson and, despite having built up a good knowledge of what works best for them, probably little understand the technicalities of their game, let alone the mechanics of their swing. TaylorMade Performance Labs was created to offer golfers a state-of-the-art custom club fitting service, but in reality the revolutionary system provides so much more. Using 34 reflective sensors distributed around the body and an array of six high-speed motion-capture cameras, TaylorMade Performance Labs is able to completely deconstruct a golfer’s swing and determine the ideal club right through the golf bag, from driver to putter. What’s more, the system is so good it has become undoubtedly the best teaching aid ever. All the golfer needs to do is hit a few balls and the system breaks the swing down to clubhead path, swing and speed planes, centre of gravity, body line (shoulders, hips, knees, toes and spine), face angle, target line, ball position, head position, X-Factor – the relationship between shoulder turn and hip turn – shaft and shoulder plane, wrist cocking angle, shaft line, shaft deflection, posture lines, in/out and up/down path of the club, hand speed, clubhead speed, effective loft of the club at impact, ball speed, launch angle, back and side spin, ball trajectory and computed distance of carry and roll. It sounds amazing, and in practice, if anything, it’s more incredible than that. I attended the launch of a new TaylorMade Performance Labs facility at the stunning Turnberry Resort on Scotland’s South West coast an hour or so from Glasgow.
Turnberry is rightly renowned as one of the country’s pre-eminent courses after having staged the Open Championship no less than four times, lastly in 2009. The complex’s excellent Colin Montgomerie Links Golf Academy makes a fitting home for the new TaylorMade system. Turnberry is one of just two such facilities in the UK – and only a handful across the world – with the other being at Wentworth. Former Scotland rugby captain Gavin Hastings was guinea pig for the day and soon found himself covered in the sensors, which were Velcroed into position. Gavin was also handed a special TaylorMade driver complete with its own set of sensors. The cameras were switched on with golf pro Ian Fraser from the academy taking charge of the session. Gavin, as well as being one of the greatest full-backs rugby union has ever seen, is a very good golfer – a five handicapper and member at another first-class links, Gullane. He hit around ten shots with the driver and the computer began building up a picture of his swing. The graphics, displayed on a large screen in the roomy hi-tech teaching bay, revealed a very good swing that stood up to close scrutiny extremely well. However, the accompanying statistics showed Gavin tends to hit the ball low (as might be expected of a links golfer), has a slight tendency to send the ball right and achieves an average driving distance of 250 yards. Ian determined that a driver with a stiff shaft and a head weighted in the heel would significantly improve Gavin’s game and rapidly assembled a trial version with
I’ve never been one for technology in golf but I have to admit that I’m very impressed with this system
Sensor sensibility: The TaylorMade system in operation. Gavin Hastings, left, and Ian Fraser discuss the findings
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TaylorMade’s distinctive and hugely attractive matt white head. Gavin hit a few more balls and it was soon apparent that the driver was a big hit – he was hitting the ball around 25 yards further and much straighter, to boot. Gavin said: “I’ve never been one for technology in golf but I have to admit that I’m very impressed with this system. I was expecting to get fitted for a new driver, but it turned into an amazing teaching experience too. “It was a little bit scary to have my swing analysed to that level – every twist and turn was caught by the cameras – but I can honestly say that I have learned a lot about my game today. I’ve seen it from a totally new perspective. The new club felt great and I certainly felt that I was hitting the ball longer and straighter off the tee.”
But the system isn’t just for the biggest club in the bag, it can also design the perfect irons and, remarkably, the putter. The system has to be seen to be believed and can quite honestly be described as the greatest advance in golf technology for decades. What coaches and golf pros used to do with the naked eye can now be done in far more detail by computer. That’s not to say that the technology will make golf coaches a thing of the past as TaylorMade Performance Labs has to be used in tandem with an expert teacher such as Ian. Gavin said: “The system gives the most accurate analysis of the swing I’ve ever come across. Any serious golfer would benefit from going through the process, not least because they would get a set of clubs that have been literally tailor-made and also a much deeper understanding of their swing.
“I always knew I hit the ball fairly low and even though I’ve seen my swing many times before on TV or video, I wasn’t sure how it worked. Now I know just about everything about my swing – what I do well and maybe not so well.” And it’s not just amateur players who are taking advantage of the new system – the professionals are too. Former world number one Martin Kaymer is among a number of TaylorMade’s top tour pros to have had his swing analysed and had special clubs built. Nick Robbie of TaylorMade said: “Virtually all of our professionals have been through the system now. It’s enabled the majority of them to gain an extra 10 to 15 yards with the driver, which is quite a leap forward in technology that we have not seen for some time. “A lot of pros are also having clubs >>
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specially made for specific courses of conditions. They can use the technology to get the most from their game. “And it’s the same for amateur players too. The system allows golfers to make their average worst shot much better; it lets people be the best golfer they can be.” Turnberry, with all of its history and reputation for excellence, is the ideal setting for this technological breakthrough as it is also one of the most forward-thinking of clubs with world-class facilities and courses. It is also offering some very attractive packages to enable golfers to experience this mix of technology and tradition. For example, the £195 package gives golfers a one-hour TaylorMade Performance Lab session with individual club fitting, a 30-minute golf lesson and a round on the Kintyre course. There’s also a CD – containing all the graphics
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A lot of pros are also having clubs specially made for specific courses or conditions. They can use the technology to get the most from their game
and swing analysis statistics – to keep. Turnberry is one of Scotland’s finest hotels, of course, and is well worth a visit. Completely refurbished before the 2009 Open, the hotel now features airy public spaces, a lovely spa and pool complex, vibrant bars, top-class restaurants and beautifully appointed guestrooms, all furnished in a comfortable yet neo-minimalist contemporary style. The rooms
at the front of the distinctive long white building also boast some of the most stunning sea views imaginable with the huge granite edifice of Ailsa Craig in one direction, the brooding mountains of Arran the other and the rolling links in the foreground. n Find out more at: www.turnberryresort.co.uk
The new CLS-Class. Available from Mercedes-Benz of Glasgow.
Redefining automotive design. Newly launched, the stunning CLS is a vehicle engineered
And with 125 years’ innovation behind it, it offers much
like no other.
Every bit as refined as you’d expect it to be, it pushes
• Electro-mechanical steering for more assured,
boundaries further still, incorporating a revolutionary new design philosophy. More stylish, more contemporary, more efficient, it is a car of many firsts, equipped with features such as LED headlampsˆ used for all dynamic light functions.
agile handling • 7G-Tronic Plus 7-speed automatic transmission for improved comfort and shift quality • Direct Control suspension for a more dynamic drive • Parktronic with Active Park Assist – enabling the car to automatically steer into a space
Contact Mercedes-Benz West of Scotland Corporate Team: Jacqui Lee, Annmarie Simpson and Paul Harkins 0141 331 4600.
Mercedes-Benz of Glasgow 135 Milton Street, Glasgow G4 0DH 0141 331 4600 www.mercedes-benzofglasgow.co.uk Official government fuel consumption figures in mpg (litres per 100km) for the new CLS-Class range: urban 20.3(13.9)44.1(6.4), extra urban 37.2(7.6)-64.2(4.4), combined 28.5(9.9)-54.3(5.2). CO2 emissions: 231-135 g/km Model featured is a CLS 350 CDI BlueEFFICIENCY Sport at £52,993.00 on the road (on-the-road price includes VAT, delivery, 12 months’ road fund licence, number plates first registration fee and fuel). ˆOptional equipment, standard on the Sport line. Price correct at time of going to press (06/11).
A captain of the super yacht industry
Edinburgh-born and helmsman Stewart McIntyre has a job he adores. He is managing director of Sunseeker – one of the world’s premium boat brands. Here he talks to Kenny Kemp at their world-class manufacturing site in Poole in Dorset Sandbanks is one of the most exclusive residential spots in the world. It’s a lump of golden seaside real estate guarding the entrance to Poole harbour and a jet-ski ride from the Sunseeker factory complex and quaysides in Dorset. From here, a semi-circle of southern English waters spreads out from
BUSINESS QUARTER | SUMMER 11
Durlston Head, around Bournemouth and Christchurch Bay to the Solent, the Needles chalk stacks and to St Catherine’s Point on the Isle of Wight which is perfect for sailors and all those who love being on the water. It’s also the perfect place for Stewart McIntyre, the Edinburgh-born managing director of
Sunseeker International, Britain’s most prestigious motor yacht marque. McIntyre is a methodical, level-headed Scot, known for his calm approach, his practical applications to problems and a wry sense of humour. Even a spectacular fire on one of his brand-new multimillion pound boats as it was being prepared
for a rich customer, doesn’t ruffle his savoir-faire. As any competent sea captain knows, conditions are always changing, and you need to handle the unexpected. Stewart McIntyre is the archetypal steady hand on the helm. In the days before the fire, Sunseeker has been exhibiting at the local Sandbanks Boat Show at the Salterns Marina with its new Predator 60 as a star attraction. The new motor yacht is the ultimate in luxury, capable of 32 knots and the ability to sleep six in state-room style. There are a plenty of wealthy customers to satisfy with Sunseeker building 180 boats a year with a turnover approaching £300m. McIntyre tells BQ: “We’re heading into the busiest time of year for our boats. It is an ideal job for me as someone who loves being on boats. I’m the managing director of a pre-eminent boat brand and a brilliant world-class manufacturing business based in the UK. It’s as good as it gets.” The legend goes that Poole Power Boats had started moulding and fitting out their own boats in the early 1970s when a boat dealer from the South of France asked if they could make a motor boat in white and wide enough to take a sunbed in the stern. Sunseeker, as it soon became, complied with the customer’s request, fulfilling the requirements to the letter and setting in place its philosophy as an English boat-builder. Since then, Sunseeker’s ability to create the “wow” factor in the boats it has designed and built has made it a British icon in speed, style and grace. Its Predator series set the benchmark for luxury boating, winning over the rich and famous who want fun in the sun. In 2001, Sunseeker launched its 105 Yacht, a 105ft motor yacht with a top speed of 32 knots. This was a step-change into a new market as commercial vessels are subject to stricter regulations on crew and passenger safety. Sunseeker moved from being a boatbuilder into shipbuilding and became the first British-built boat business to win the world’s most prestigious International Superyacht Design awards. This placed the company in the top echelons of world-class ocean-going luxury yacht building. Sitting in Shipyard 4, West Quay Road, Poole, in Dorset, Stewart McIntyre overlooks the
There has been a serious reduction in bank and finance house lending for people to purchase their boats extensive manufacturing facilities, where ten boats, in various states of completion, are on the production gantries. After a refinancing and restructuring exercise and changes to the management team, McIntyre was appointed as one of only two directors operating the business in what are extremely challenging market conditions. He is seldom back in Scotland these days and his job involves regular pond-hopping around the world, to where sunshine and wealth converge at prestigious boat shows on the Med, on the Indian Ocean, the China Seas and on the Pacific coast of America.
“Our market is worldwide,” he says. “We supply all five continents in 65 countries. But we are a truly global business in that we are affected by both micro and macro economic events. There are changes to taxation and import duties. We build in sterling, so there are obviously currency fluctuations. We’re watching foreign exchange rates all the time.” McIntyre has also been keeping a beady eye on how developments in Tunisia, Libya, Lebanon and Syria, pan out – all political events which have a long-term impact on luxury boat buying. Increasingly, there are more sales in China and the Far East while interest remains strong in places such as Acapulco and Monaco. “We’re certainly seeing growth in China and Asia,” he says. “There are increasing inquiry levels in the United States. We are also seeing activity in central and South America.” One of the clouds on Sunseeker’s horizon is the drying up of financing for buying a boat. “There has been a serious reduction in bank and finance house lending for people to purchase their boats,” says McIntyre. “There is no question about that – and this is worldwide. It is somewhat less of an issue for us at Sunseeker because we are normally dealing with high net worth individuals rather than the mass affluent using asset finance to purchase their boats. We do not provide finance for boat purchases.” So what is being done at Sunseeker to keep everything afloat? “We’ve got to do as much as we can to keep our leading edge in technology and design. This means; by product design, by look, by materials, by speed. We have to be aware of what is happening in the wider market. Our flagship model is 40 metres. “We are the Rolls-Royce of motor yachting: from a 15.7metre Portofino 48, which a day-sports cruiser, through to a Predator 60 at 19metres, to our fabulous, long-distance Sunseeker 40 metre (132 feet), which takes 12 guests and seven crew. The price tags range from £250,000 to £15m. Nearly 100% of our sales are exports. “All the boats are made in Dorset and 90% of our boats are heavily tailored to our customers’ specification. That depends on the individual taste, where it’s going to be berthed in the >>
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world, how it will be used – if it’s for charter or private ownership. We tailor to our customer needs.” But Sunseeker’s success is significant in terms of the message it sends out about the UK’s manufacturing base. “We have a wide procurement operation,” says McIntyre. “We buy items from all over the world – and we employ 2,400 people in Dorset.” The Sunseeker workforce is local and extremely proud of their seafaring connections. The business is the largest private company in the area and there are longserving and skilled workers who have relatives working in the business.
The shipyard is a noisy industrial environment, where the smells of acetones, paints, and gel coats mix with the whirr of drills, the slosh-and-swish of sanding and planning. “Sunseeker is in the heartland of advance manufacturing in the UK,” says Stewart. “It’s a very competitive market and the whole ethos of this business is continued brand development and enhancement and variations. We’re looking at modern materials and latest innovation in ship design.” During the working week, Stewart lives in an apartment in one of the many nearby marina developments overlooking the coast. “I’m very much involved with all aspects of the business, so it is very handy,” he says. “I
the rebranding and the conversion to limited liability partnership status. So did Malcolm McPherson fall off his chair when you told him about your new jobs? “There were a few people surprised I was involved with this business,” he says. “It did raise a few eyebrows. It does make a change from financial services, property or professional services.” McPherson, now senior partner of HBJ Gateley, is delighted for his former colleague. He says: “While it is obviously an exciting and glamorous job, what Stewart excels at is his understanding of how a business works. He is a very talented man who rolls up his sleeves and works very hard. I’ve watched in him in
“We pull a lot of local expertise from Dorset and the surrounding area and we support a number of smaller companies through the supply chain. We support a lot of other small firms in the area,” says McIntyre. The factory has the latest kit with it’s computer-operated machinery cutting and shaping components, while the computer design fits with the manufacturing systems. Sunseeker is also proud of its Technology Centre where the helms and boat capabilities are tested. The hulls are glass reinforced plastic, moulded on site, while the marine engines are the latest high-performance. But it is the interior finish, the furnishing with its superior leather upholstery, and equipment, be that the latest Bang & Olufsen flat screen television or the audio system, that sets Sunseeker boats apart as a status symbol.
also have fewer distractions than some of the locals!” During the summer, he was steering his small cruiser down from Scotland to a mooring in Dorset. He still has a family home in Aberlady in East Lothian and his son, Russell McIntyre is an assistant golf professional at Prestonfield Golf Club in Edinburgh, working with Gavin Cook and training towards a PGA qualification. One of Stewart McIntyre’s closest friends is leading Scottish dealmaker Malcolm McPherson, the lawyer and former Hibernian football club chairman, himself an accomplished ocean-going sailor. McPherson brought in McIntyre when Henderson Boyd Jackson merged with Birmingham law firm Gateley Wareing. Stewart McIntyre was the managing director involved with the merger,
half-a-dozen businesses and what he does is find the key performance indicators of each business and apply his brain to this. He is first class with people and works to get them on his side.” The Scottish lawyer says he feels the owners were wise to select him. “From an outside observer’s point of view, Sunseeker is a fantastic business with a zest for selling premium products. What they needed was a steady hand on the tiller, in terms of finance and running the business, which is what I think Stewart will bring. Stewart helps people understand the numbers and what numbers are important. He created much more interest in this when he worked with our law firm.” Robert and John Braithwaite are brothers of the founder, and remain key to operations. “They are the combination of the corporate
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brains at Sunseeker,” assures McIntyre. “John does the designing and Robert is the visionary with the products. They have been involved in the business all of their working lives and they continue to be so.” McIntyre was brought in as part of a new shareholder base with Robert Braithwaite remaining a major shareholder. The reorganisation was viewed as necessary to keep Sunseeker ahead of a flotilla of other luxury boat makers. “I was introduced to Sunseeker through Cahal Dowds at Deloitte and I was then asked to join by Robert Braithwaite,” he says. Back in July 2009, Stewart started as interim chief operating officer and this became
involved in the spin-out of the oil and gas team and when RMD merged with Deloitte, Cahal Dowds took on the mantle of senior corporate figure in Scotland, while Colin Rutherford went on to set up Intelli Corporate Finance, with former colleagues Gordon Neilly and Robin Archibald. Stewart McIntyre came in to help with the reorganisation of this entity. His business pedigree has prepared him for the Sunseeker task. Before RMD, he was a former group finance director of WG Mitchell (Derry) Limited, and has extensive experience of the financial services, property investment and due diligence processes, he loves the challenges of manufacturing.
“I would say I’m an expert in pensions but I’ve always been closely involved in that space,” he says. “I’ve always had a personal interest in pensions and how they work.” So how would he describe his own attributes for running Sunseeker? “My basic skillset now is that I understand how a business works. I’ve spent the vast majority of my working life in multi-site, multi-services businesses. I’ve never been someone who works with making widgets. “I don’t have any fear about working in multi-site businesses. There is always a certain amount of regulation that’s specific to an industry. I’ve had a wide experience in different organisations.”
Born and bred in Edinburgh, he attended Prestonfield Primary School and then Boroughmuir secondary school. He went off to college in the early 1970s, and trained on the job as an ICCA accountant with Associated Butchers for nine years. He then went to work with Blyth + Blyth Group, a Scottish construction firm set up in 1848. He switched to Faulds Advertising, then joined United Central Bakeries in Bathgate. Stewart was also finance director of Imagine Homes and Veritas Investments, businesses that are involved in the UK buy-to-let residential and commercial property markets and active letting management. He remains a non-executive director of Intelligent Office, a UK-wide outsourcing company for the legal and financial administration, and trustee of a financial salaries scheme.
He’s also been through recession before and he’s acutely aware about the importance of keeping a handle on cost without cutting corners and compromising the quality of the product. This, he says, is something that Sunseeker customers would simply not tolerate. With most of us seeking our own sun this summer, Stewart McIntyre is making waves while the sun shines. His diary is full with trips to Cannes, Barcelona, Fort Lauderdale, then London again next January. He’s also bound for Hong Kong, Rio, Jersey and Singapore. He says with a massive smile: “There are dozens of boat shows, so we are very selective about where we go. We ensure we have representatives at the major shows, but I like to go along to explain to a buyer why our yachts are a great investment.” n
He is a very talented man who rolls up his sleeves and works very hard. He is first class with people and works to get them on his side permanent on December 14 2009. The company was refinanced from Lloyds Banking Group to a five-year syndicated package by Macquarie Bank and Haymarket Financial, set up by Tim Flynn and several Goldman Sachs executives. After this was completed, Stewart was appointed managing director on July 1 2010. Among the investors is Stagecoach founder Sir Brian Souter through the Irish private equity company FL Partners who provided around £25m of new capital, with Robert Braithwaite the secondlargest shareholder. The Deloitte connection is a significant one. Stewart McIntyre was involved with Rutherford Manson Dowds (RMD), the bright young turks of the Scottish corporate advisory world, established in 1986 and quickly becoming the white-hot dealmakers of the 1990s. He was
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the Glasgow Boy who’s Got Talent
He left school in Scotland with no certificates and became a champion dancer but now owns a fast widening group of firms bedrocked by education and job training. Still only 30, David Harper tells Brian Nicholls how it has come about His laughter fills the glass and chrome reception area even as he enters HarperCo offices apologetically telling how a traffic snarl-up has delayed him. Effusive David Harper, a Glaswegian whose cheerfulness must be cherished in these trying business times, could brighten even worst-case scenarios. He’d have been a soul-lifting MC aboard the Titanic for example – coaxing couples to last-waltz on its listing ballroom floor, former dancing champion that he is. His nimbleness is evident more in his head
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than in his toes now as he leads Tynesidebased HarperCo to £10m sales in its first decade – and maybe £100m by 2014, though he doesn’t underestimate the challenge. The workforce has just risen by 42 to 100 though, and he’s relying on a mixture of growing the existing businesses, diversifying their products, and making strategic acquisitions and partnerships. HarperCo already prospers diversely. It can hack bureaucratic procedure down from 12 weeks to one day, for example. And its skills in training and consultancy can
draw clients such as Asda, Harrods and DHL. No Titanic this, despite its motley management crew. Besides, Harper the former UK Latin American dance champion, there’s group finance director Mark Hargreaves – novelist, erstwhile male model, and chartered accountant who hates numbers but was a notable managing partner of Grant Thornton in Newcastle for some years. There’s contracts manager Graham Howard, fast-rescue and lifeboat coxswain, one time safety manager of a Norwegian cruise >>
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ENTREPRENEUR liner, and for 30 years before a marine engineer in nuclear ballistic missile submarines. There’s also contracts manager Stephen Dean, eager to meet Muhammad Ali, preferably outside the ring. But these are their experiences and idiosyncrasies, not their skill sets that Harper, himself still only 30, values in driving the business forward in training, vetting and screening, digital learning, lean production and consultancy in carbon efficiency. Harper left school himself with no paper credits. But he’s twice apprenticed, once to House of Fraser, and later through “mentoring” by other entrepreneurs. He met the first, George Hayden, in 2001 when Hayden was about to grow a national training firm, then worked with former North East of England Business Executive of the Year Chris Thompson. Harper had experience enough to take on development and sales in the training company. Talent Training, which is now lead operation for HarperCo, sold apprenticeships years ahead of Labour and Coalition Governments. By 2007, Harper had been managing director for three years, now earning half the equity. He virtually acquired 50% of the business. The firm by then was contracting directly with the Government to deliver base learning solutions in the private sector. Asda, Harrods, Argos, and the National Health Service all came in then. Growth continued for the next two years under the then government’s Train to Gain scheme. In 2009 Harper saw his “golden opportunity”. He bought Hayden out, recalling in his cleanly cut Glasgow accent: “I had visions to take it to a bigger scale again. The market was changing. “I thought some strategic acquisitions could exponentially grow our turnover and size. We had seen how the government then was procuring services. “I now had Talent Training and a chance to branch into other opportunities. I met Mark Hargreaves, an absolute gem in this company now. I asked: ‘How do I find opportunities to invest and take part in?’ He said when the business was ready people and opportunities would come anyway. Sure as hell, I was involved with one of them only yesterday.”
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Here is home HarperCo may open also in Surrey to cover the South, and in Glasgow, where it has two businesses interests and where Harper, “single and focused on business”, keeps Scottish roots through a flat overlooking Partick Thistle FC’s Firhill ground. His parents think a move from Prestwick might appeal, and his sister, a paramedic, already lives in the North East. He himself lives in Gosforth, calls himself “a real foodie” and after trying restaurants worldwide says his favourite is still Newcastle’s Café 21. “A girl there said to me last week: ‘You’re here more than me. And I work here full-time!’”
Others came in between. So HarperCo was created as an acquisition vehicle, not only to buy out a partnership but also to introduce a trading vehicle, a holding company to make investments and engage with organisations in need of growth and leverage. “I’ve effectively created new start-ups,” he explains. “We’re not a venture capital house. But my passion is finding fledgling businesses, rare opportunities and people with real talent, then working with them to grow their organisation. At HarperCo we’re good at engaging with clients and selling them services. “For example, I came across a business in Glasgow – Junction 18 – very niche, very specific. They delivered and developed e-learning solutions. I was impressed. The firm
was using computer games and technology to deliver learning because, typically, learning can be mundane – left screen, right screen, next step... you know. “They were using 3D interactive technology to make it exciting. Often small businesses have great product, great ambition, but don’t know how to take it to market. I negotiated with them and set up HarperCo Digital. “We’re growing that very successfully, taking their services to buyers of our training services. “We in turn can diversify our offering, and with the technology go with the market. Ideally, we grow a company like that to a certain size, make it attractive and one day find a potential buyer. “We either buy the company or set up a new business with it, a joint venture. Ours is a flexible model working for the other party and for us also. HarperCo Digital is a joint venture.” Harper also studied in his forte, education, the need to monitor better staff working with young people. “Applicants have to be checked against criminal records,” he says. “The system as it stood took up to 12 weeks to get a record back. I thought that unacceptable. NHS employees and supply teachers couldn’t start work till they’d been cleared. Also the services suffer. “I spent time with interesting people who’d spent 10 years developing technology that could interact with government agencies. The labour and manual process could be taken out, technology put at the heart instead. We can now deliver checks within one business day – a complete file on clients’ desks, and more cost-effectively.” HarperCo did it by acquiring the Vetting Solutions Centre in Hemel Hempstead, now rebranded as HarperCo Vetting. “Their great product has been taken to a market where they can shout about it,” he says. Businesses, having learned from past mistakes, no longer axe training and development in hard times. “They recognise that if they want to achieve more with the same staff on less they have to upskill or multi-skill,” he says. They’re also realising that apprenticeships help
find them future leaders. HarperCo, practices what it preaches and has eight apprentices. Talent Training, specialising in apprenticeships, remains the biggest activity and Hargreaves, besides being group financial director, has been running Talent Training as managing director. David Harper’s service flair surfaced as a youngster in the Maryhill district of footballmad Glasgow where one of his parents supported Rangers, the other Celtic. He remembers: “I was in the middle and thought, ‘I’m not going to follow football – too complicated.’” Instead, on match days he traded outside nearby Firhill, home of Partick Thistle – better known to Billy Connolly as Partick Thistle Nil. He offered to mind fans’ cars for a quid. “I was never one of the boys who damaged the cars of fans declining the service,” he hastily adds. The family moved to Prestwick when he was 14. By then he clearly wasn’t academic. “I never engaged with school or education then,” he says. He left before he was 16, but luckily his parents had got him involved in dancing. He says: “I started training... thought I was brilliant as teachers and trainers in Scotland told me I was of a certain standard. I came to England for a trial with a world champion then realised how bad I was. It was cut-throat. “My coach in England said, ‘Son, you can’t dance but train hard and you could be very good’. “I had an option as my mum and dad drove me back – pretend I was very good and stay in Scotland, living in that little pond, or work hard and achieve something. I trained hard and achieved international standards and national championships. That took five years, of blood, sweat and tears, training like an athlete. “It brought me to Newcastle to dance with a champion and compete in world championships. I won an international championship. “Dancing took over much of my life. Somebody asked, ‘Do you ever see yourself not dancing?’ I said ‘Never’. But you turn corners and things happen.
“Having achieved this standard I decided I had to start earning money. Dancing was costly. My mum and dad believed in me and backed me. They remortgaged their house three times to support me. They handed me £200 a week, a lot of money from two people on minimum wage.” He worked for Kentucky Fried Chicken briefly to help repay them, then for House of Fraser. But he had to move to Newcastle to train daily. So at 17 he entered a retail apprenticeship at House of Fraser in Gateshead. “I took dancing as far as I could,” he says. “The arena became quite political. You have to pay to get on. It became untenable. But passion for dancing and music will always be in my heart.” He later saw an advertisement saying: “Are you Scottish? Can you sell?” Answers of “yes” and “I think so” got him his first “proper” interview. He says: “I hadn’t a suit to wear. I went in a bright green shirt and Mickey Mouse tie. I think the guy took a punt.
“He must have seen a willingness, even a rawness, to try something new.” Thus Harper sold advertising for W and J Linney, Mansfield publishers with an office in Sunderland. “Selling space is the best training ground you could wish for to gain commercial awareness in sales,” he says. “It was high pressure, high volume, fast pace, lots of activity. “And if you can sell recruitment advertising, it’s the best training ground you can wish for. I learned key values. “The harder you work, the luckier you get. I’ve heard someone else quote that. If you made more phone calls than your colleagues you got more appointments, sold more stuff.” It also taught him business to business. Then at 21 he met George Hayden. “George offered real opportunity – an apprenticeship with mentors like him and some other phenomenally successful business people,” he says. “Surround yourself with successful people and you’ll always do all right – I’ve heard that said too. It’s true.” n
Let’s share the risk David Harper learned to spot talent and make the most of it through Chris Thompson. He must have been a listener because Thompson says of David now: “He’s a very successful entrepreneur himself with a group of his own successful businesses – a very ambitious and passionate man with a big vision, and an inspiration to other young entrepreneurs.” He feels it’s his job as chairman to deal with bad news of the day so colleagues can focus on positive developments. An admitted perfectionist, he aims to simplify, simplify, simplify. “We too often complicate business with procedures and systems. We’ve got to get back to basics daily. Plain talking. It’s about ethics also – power of the handshake, somebody’s word far greater than any legal contract.” He commonly asks new customers: “Why don’t we sign terms in which you pay when we achieve something for you? Not turn up and do something on a flip chart for a day. Or tell you what you already know. We can add value and make a difference. When we’ve done that I think it’s reasonable to ask for payment.” That way, he says, HarperCo shares the client’s risk and seeks a solution – not products, or selling things but adding value. “Today we’re all doing more for less money. So our job has to be to help an organisation achieve more with existing resources. That’s how we win big national contracts. We’ve never not been paid.“ Does it impress, though? Glen Boyce, an executive of logistics group Schenker, thinks HarperCo is probably the most exciting people development project he’s been involved with during his 24 years in an industry. Councillor Michael Clare, South Tyneside’s lead member on jobs, enterprise and regeneration, says the council was delighted to welcome so dynamic and forward thinking a company when HarperCo relocated to a business park there.
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BIT OF A CHAT
>> Richard is off the rails
with Jock Yuler >> Good God, It’s the Google Guy It’s as if the Messiah is returning. Eric Schmidt, the chairman of Google, is heading to Edinburgh for the MacTaggart lecture on Friday August 26. But the hallowed one has been to the capital before. When he was head priest of Novell, he flew in on his Lear private jet for a meeting in the old Co-op building in Davidson’s Mains. This was the offices of the fledgling Orbital Software, makers of Organik PersonaServer, an early knowledge gathering system. The company was set up by Calum Smeaton and Kevin Dorren, two of the big hopes of Scotland in June 1999. At the time, Schmidt was mighty impressed with the young Scots and talked about our education system. Orbital was eventually taken over, but Smeaton is still in the frame running Sumerian, an excellent Scottish analytics company. Perhaps there will be an evangelical reunion with Uncle Eric?
>> Don’t call me Cupid, stupid Bill Dobbie doesn’t look like someone who fires arrows of love at people. But his creation, Cupid, the online dating service, has jumped in value from £45m to £175m, three times the value of STV. In April it announced a 202% increase in revenue to £25.7m for 2010. While £7m is being raised by Bill and Max Polyakov selling a chunk of their holdings, £5m is coming from placing new shares. He also bought the US domain flirt.com for £800,000. So we can understand why Bill loves Cupid.
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I’m genuinely perturbed that engineer Richard Jeffrey has quit as head of the Edinburgh trams company, TIE. Regular readers will recall he spoke at length to BQ in the last issue. He said: “The public sector does not always appear to have a learning culture on major projects.” There was a massive amount to read into that statement. When the proper story is told about the Edinburgh Trams fiasco – and the real HBOS story too for that matter – then we can judge who the real culprits are. Richard isn’t one of them. In the case of the Edinburgh trams, it must be those smug and anonymous superannuated civil servants who allowed such awful contracts to be set up in the first place.
>> Lucinda conquers all I took a dander up to glorious Gleneagles. It was lovely to see our first BQ Scotland cover girl Lucinda Bruce-Gardyne of Genius foods at the Entrepreneurial Exchange’s annual conference. Her story – humbly told, without fuss – went down well with the 400 delegates. Her stories of satisfied customers made the eyes water; some hadn’t had a bacon sandwich for 40 years until Lucinda’s gluten-free bread came along, while another devoured two whole loaves in a lay-by on the way home from Tesco. Great stuff, and Lucinda now hopes to conquer the United States.
>> A fat lot of good Still at Gleneagles and to Mike Balfour, whose mum and dad were from Glasgow and who floated Fitness First on the London Stock Market in 1996. He revealed he wasn’t a fitness buff and certainly not sporty. He’d been fired five times in his career (once by Lord Clive Hollick. “Once a prat, always a prat,” says Balfour), yet managed to become one of the UK’s wealthiest men. He created Living Well, sold it to Hilton, then set up Fitness First in 1992. In 1995, with five
clubs, he floated first on AIM to raise £8m for a roll-out. Soon it became a main stock market darling. A move into Asia and Australia took it to new heights. Went private in £415m MBO in 2003 and, in 2005, BC Partners acquired Fitness First for £835m. He left in 2009. With a wonderful dry sense of humour, he joked it was nice to get an honorary degree without a single essay – “It certainly pissed off the kids”. He said that a rival Australian firm advertised its gym with the slogan: “Are you fat and ugly? Why not just be ugly”. Ouch!
>> John Anderson, My Prof (with apologies) One of Scotland’s first academic institutions was the Andersonian University in Glasgow, which became the Royal College of Science and Technology. It’s now Strathclyde University and one of its new professor is John Anderson. I can just hear Eddie Reader singing a new Rabbie Burns version called John Anderson, My Prof. John is known to everyone as the chief executive of the Entrepreneurial Exchange and an amigo of BQ Scotland. He has become a visiting professor within the yooni’s Hunter Centre for Entrepreneurship. He took an MBA at Strathclyde in the mid-1990s when he focused on entrepreneurship with his Local Heroes dissertation. “I have watched entrepreneurship teaching and research at Strathclyde develop from a small elective subject area to a fully resourced and internationally renowned centre,” he says. We certainly need it!
>> And a parting shot on… banking Airdrie Savings Bank – the best capitalised institution in the UK – is to open a branch in Falkirk. The company denies rumours that it is also plans to open a new branch in Paisley, where Fred Goodwin will be the branch manager.
The UK Bribery Act comes into force on 1 July, meaning the UK will have one of the most stringent anti-corruption regulatory regimes in the world. Together with offences relating to the payment and receipt of bribes, the Act will introduce a new corporate offence of failing to prevent a bribe being paid. Grant Angus, a Director in Deloitte’s Enterprise Risk Services team, in Edinburgh, highlights the implications for UK businesses.
The UK Bribery Act: the devil is in the detail UK Bribery Act – are small bribes ok? Until recently, international anti-corruption initiatives focused almost exclusively on ‘grand bribes’ to secure contracts or obtain licences. Now small bribes or ‘facilitation payments’ connected with day-to-day operational matters such as customs clearances, visa applications and environmental inspections are rising up international legal and corporate agendas. In many overseas countries, where Scottish firms operate, facilitation payments are customary but Grant Angus, Director, Enterprise Risk Services these remain outlawed under the new Act. (ERS), Deloitte Organisations therefore need to ensure their employees, agents and subcontractors clearly understand its stance in relation to such address them specifically. The Act encapsulates payments, and what to do in circumstances where ‘associated persons’ meaning that Scottish firms requested to make them. using agents or in-country representatives to help Adequate procedures develop business, or provide export or logistics One of the Bribery Act’s most important services are potentially exposed to any acts of innovations is the requirement for companies to bribery, however small, committed by such third implement ‘adequate procedures’ to prevent parties on their behalf. bribery. However, representatives from the A starting point for many organisations is policy Ministry of Justice have acknowledged that the statements and while these are important, in adequate procedures guidance is intentionally isolation these are not sufficient. Compliance ‘high level’ and that they anticipate that further officers will need to ensure that in-house training clarification will result from prosecutions winding covers demands for small bribes as well as bribes their way through the criminal justice system. This to secure contracts. If they haven’t already, is scant comfort for corporates trying to devise organisations need to undertake a detailed risk effective internal procedures. assessment of the regions and transactions where It is essential, when devising their procedures, their companies are most exposed to demands for that organisations address the smaller as well as ‘operational bribes’ in connection with areas such larger payments. These procedures will need to as customs, visas and logistics. include a clear policy statement forbidding bribery No one should underestimate the difficulties in of all kinds and, since the term ‘facilitation cases where small bribes are in effect part of the 2898A kw FS report stip ads_2898A_FSReport_StripAds_ 15/03/2010 11:57 Page 4 payments’ is so widely used and misused, it should host country’s informal system, even if illegal.
Similarly, no one expects the problems associated with bribery and extortion to disappear overnight, and the UK and other authorities are likely to take a lenient view of well-run companies facing genuine extortion. However, if such companies are to make their case, they need to be able to show that they have taken a strategic approach to combating payment of smaller as well as larger bribes. Starting now.
Practical steps in dealing with facilitation payments: n a clear policy statement forbidding bribery of all kinds including ‘facilitation payments’; n undertake a detailed risk assessment of the regions and transactions where companies are most exposed to demands for ‘operational bribes’ in connection with customs, visas and logistics; n refuse to pay, seek to escalate to an individual’s superior, seek receipts or supporting documentation for the payment; n report such demands to local authorities, using the offices of a business association or chamber of commerce; n ensure employees clearly understand which types of payments are not permitted, ensure easy means of reporting requests for illicit payments and make employees aware of the consequences of such violations.
Wake up to a new world Deloitte recently opened its annual survey of UK entrepreneurs for its report: ‘Entrepreneurship UK: 2011/12’. The survey is open until the end of July and takes just 10 minutes to complete; simply visit: www.entrepreneurshipuk.com. The results, which will be analysed by Deloitte and the London Business School, will be published in late summer.
BUSINESS QUARTER | SUMMER 11
BQ Scotland business events diary gives you time to forward plan. If you wish to add an event, business exhibition, or a public seminar to the list, send it to: email@example.com
27th Institute of Directors Scotland, Lunch with Adam Posen, of Bank of England Monetary Policy Committee, Royal Northern and University Club, Aberdeen. 12.15pm-2pm. Contact: firstname.lastname@example.org 27th Leadership in Action, Institute of Directors in Scotland, Major-General Sir Mark Strudwick, CBE, who leads Princes Scottish Youth Business Trust. Royal Botanic Garden, Edinburgh. 6-8.30pm. Contact: email@example.com 28th Edinburgh Chamber of Commerce: When Scotland Play, We All Play: Guest speaker Gordon McKie, chief executive of SRU. Murrayfield Stadium, Edinburgh, 8.30pm. Contact: edinburghchamber.co.uk 28th Thrive for Business: Food and Drink Speakers. BaxterStorey & Caterer.com. The Corinthian Club, Ingram Street, Glasgow, 8am-10am. www.thriveforbusiness.co.uk/event 29th Business Forum Scotland Edinburgh Forum, Roxburghe Hotel, Edinburgh, 5:15pm. Presenting companies, Inquisitive Systems and Anarkik3D Ltd. 29th CBI Scotland: Finance for Growth Breakfast. Morton Fraser, Quartermile 2, Edinburgh. www.cbi.org.uk 29th Edinburgh Chamber of Commerce: Raising Bank Finance and Business Sale, Johnston Carmichael. Melville Street, Edinburgh. (12pm). Members only. 29th Midlothian & East Lothian Chamber of Commerce: B2B Roadshow. King James Hotel, Edinburgh. Time: tbc. Non members: free. Contact: http://theb2broadshow.eventbrite.com
4th IoD Summer BBQ, Ardoch Estate, Gartocharn, with Neil Drummond. 6-9pm. Contact: firstname.lastname@example.org. 5th Edinburgh Chamber of Commerce, Speed Networking Marathon. (9.30am1.30pm), The Hub, Royal Mile, Edinburgh. Contact: Edinburghchamber.co.uk 6th Thrive for Services. Brian Maul, Glasgow. 12pm-2pm. Ruth Smith, Principal, City Design, Development and Regeneration Services, Glasgow City Council, and Ronald MacInnes, head of heritage management, Historic Scotland Contact: Ola Lopatowska 0131 526 3104 email@example.com 8-10th Davis Cup 2011 Great Britain v Luxembourg at Braehead Arena. 9-12th The Tall Ships Race, from Greenock, supported by Federation of Small Business (FSB) Renfrewshire and Inverclyde Branch. 11th Thrive For Business, Working The Room. Networking Workshop. The Corinthian Club, Ingram Street, Glasgow. 5-7pm. Contact: www.thriveforbusiness.co.uk or email: firstname.lastname@example.org 13th Thrive For Property and Services: The Royal Scots Club, Edinburgh. 8.30am-10.30am. Gio Benedetti, Chairman, Benedetti International. Contact: Anna-louise Teasdale 0131 526 3104 email@example.com 14th Confidence Cocktail with Ros Taylor and Summer BBQ. IoD event. Hawke & Hunter, Picardy Place, Edinburgh. Contact: firstname.lastname@example.org 20th Thrive for Property Services, The Corinthian Club, Glasgow. 5-7pm Gillian MacDonald, executive manager, Stirling Castle, and Sean Connor, co-coordinator, EEHARF. Contact: Ola Lopatowska 0131 526 3104 email@example.com 21st Midlothian & East Lothian Chamber of Commerce, Mastering Selling Skills, Business Gateway, Dalhousie Road, Dalkeith. 1pm-4pm. Email: firstname.lastname@example.org 23rd Thrive for Food and Drink. The Corinthian Club, Glasgow. 8-10am. Craig Stevenson, Owner, Braehead Foods. Contact: Ola Lopatowska 0131 526 3104 email@example.com 25th Ayrshire Chamber of Commerce: Three-day First Aid course. Harbour Art Centre, Irvine. HSE approved. 9am-5pm. Contact: Anne Reid. Email:firstname.lastname@example.org
BUSINESS QUARTER | SUMMER 11
26th Thrive for Food and Drink, The Corinthian Club, Glasgow. 8-10am: Alan Robertson, projects director of Clydebank Rebuilt, andÂ David Cochrane, chief executive, Hospitality Industry Trust. Contact: email@example.com 27th Thrive for Services. Scotch Malt Whisky Society, Edinburgh. 12-2pm. Paul Bancks, coastal manager (Scotland), The Crown Estate firstname.lastname@example.org 28th Renfrewshire Chamber of Commerce. July Networking. Richard Paterson, master blender of Whyte & Mackay. The Nose. 12-2pm. Venue tbc. Book through: email@example.com 29th Thrive For Energy, The Marriott Dalmahoy.Â PJ Darling, CEO of Spark Energy, and Martin Gorevan, MD of Zebec Biogass. Contact: Amanda Kremer 0141 526 3104 firstname.lastname@example.org 30th The Banchory Show, celebrates its 190th year, supported by FSB Deeside Branch. 31-1 August. The two-day Turriff Show, The Show Ground, Turriff. 8.30am to 6pm. The largest annual event held in Aberdeenshire. Supported by FSB Banff and Buchan branch. Mike Duncan in attendance.
AUGUST 3rd Thrive For Services, The Corinthian Club, Glasgow. 12pm-2pm. Wayne Gardner-Young, founder and entrepreneur, WGY Group, and Paul Blair, head of HR, Aegon UK Contact: Ola Lopatowska 0131 526 3104 email@example.com 5-6th The Perth Show, South Inch Park, Perth. From 8.30am. 150 trade stands for agriculture and food and drink industry, supported by FSB Perth & Kinross Branch. Mike Duncan in attendance. 6th The Dumfries Show, The Show Field, Park Farm, Dumfries, supported by FSB Dumfries and Galloway branch. 7th The Keith Show, two-day events at Seafield Park, Keith. From 8.30am. Supported by FSB Moray & Keith branch. 11th The Islay Show, Bridgend, Islay, from 9am. Supported by FSB Argyll and Islands Branch. Stewart Farmer in attendance. 13-29 Edinburgh International Book Festival. Tickets on sale on June 26 at 8.30am. Numerous business-related events. www.edbookfest.co.uk 17th Thrive for Property Services. Blythswood Square Hotel, Glasgow, 8.30-10.30am: Gillian McNamara, principal projects and programmes officer, Barrhead Regeneration. Contact: Ola Lopatowska 0131 526 3104 firstname.lastname@example.org 18th Midlothian & East Lothian Chamber of Commerce, Negotiating Skills, Business Gateway, Dalhousie Road, Dalkeith. 1pm-4pm. Email: email@example.com 20th The Galloway Country Fair, two-days at Drumlanrig Castle, Thornhill. Supported by FSB Dumfries and Galloway Branch. 31th Midlothian & East Lothian Chamber of Commerce, The Big Summer Social, Pentland Science Park, Bush Loan, Penicuik. Email: firstname.lastname@example.org Free cider courtesy of award-winning Thistly Cross Cider.
September 7th Deal and Dealmakers Awards, Hilton Hotel, Glasgow. Contact: Jackie Malloy, events manager, Insider Events. 0141 309 3549. 22nd The Fife Business Show, Rothes Hall, Glenrothes. 10am-4pm. Supported by FSB Fife Branch. 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.
SUNSET GOLF ON THE AILSA FROM £95
What could be more perfect than a round on the legendary Ailsa in the pure, clear light of a summer evening. Enjoy great sunset rates available daily from 3.00pm at £95 per person on The Ailsa and £55 on The Kintyre, bookable any time in advance. As host venue for four Open Championships and situated on Scotland’s rugged Ayrshire coast, with fine views over sea, islands and mountains; Turnberry is an inspirational golfing experience for world class pros and enthusiastic beginners alike.
To make a reservation or for full terms and conditions please visit turnberryresort.co.uk/golf or call 0844 811 3209
LIFE IS A COLLECTION OF EXPERIENCES LET US BE YOUR GUIDE
BUSINESS QUARTER | SUMMER 11
Published on Oct 7, 2013