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scotty the brave How an iconic brand has freshened up the food industry a legend returns Why oil industry veteran Algy Cluff is back in familiar waters city slicker The dynamic force behind Edinburgh’s five-year strategy halo effect Business heavyweight reaffirms his angelic intentions

Gold Rush

Chris Sangster takes us into the heart of the beautiful Scottish hills which are now home to Britain’s newest gold mine ISSUE NINE: AUTUMN 2012: SCOTLAND EDITION



Business Quarter Magazine


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SEE HOW THE ARTS CAN HELP YOUR BUSINESS Arts & Business Scotland has 25 years’ experience of brokering effective creative engagements that use the arts to fulfil key business objectives, including branding, CSR, stakeholder engagement, staff development and training. To find out more, visit

Creative Scotland is the national agency for the arts, screen and creative industries, investing in individuals and organisations throughout the country. For more information, visit Damian Moppet, The Brollachan, created as part of the Glenfiddich Artists in Residence programme Photo: John Paul Photography


BUSINESS QUARTER: AUTUMN 12: issue NINE Welcome to BQ Scotland. This is our ninth issue and we hope you are getting into the swing of what we’re all about. Our aim is to write about entrepreneurial and other business successes in Scotland. There are still lots of amazing people hiding their skills, talent and hard work under a bushel. And what is truly heartening is that fresh entrepreneurial faces are emerging all the time. We’re anxious to unearth more gems, which is why we’ve covered the people behind Scotland’s gold mine at Tyndrum in this issue. Elsewhere we’ve got exclusive interviews with Algy Cluff, the oil industry veteran, who struck it rich in the North Sea back in the 1970s, and is still going strong; Sue Bruce, chief executive of City of Edinburgh Council, and a major employer in Scotland; and Paul McLaughlin, who is reviving the famous Scotty food brand. We’ve also interviewed Gerald Michaluk, the marketing guru behind the expanding Isle of Arran Brewery who has strong views on the craft beer industry. Meanwhile, Polly Purvis, director of ScotlandIS, makes a plea for Scotland to work harder to develop the next generation of computer software professionals – or else face falling behind. And there is plenty more to savour. With Britain’s glorious Olympic and Paralympic summer over, and Andy Murray’s scintillating Grand Slam win in New York, the issue of the Scottish Referendum is starting to make the front page news again. The opinion polls suggest that 30% of Scots want an independent Scotland, while 30% want to remain within a union with the rest of the United Kingdom, so the 40% of floating voters who haven’t made up their minds yet are the key battleground. Many of these are business people with companies and employees in Scotland. The pro-independence ‘Yes’ campaign must woo them over. Here the debate becomes much more subtle. The SNP are increasingly talking about an independent ‘lite’ Scotland, with the Queen as the sovereign [not the Scottish Republic much vaunted by older nationalists], within a looser union with the rest of the UK, yet with sterling as the

currency, and shared services with the rest of the UK. This is unlikely to persuade those who say it sounds like giving up on any kind of influence or input in London and its UK institutions which impact of Scotland. That’s a questionable benefit for Scotland. Most Scottish business people fall into two camps: those that want independence and wish to get on with it and give it a go, such as industrial entrepreneur Jim McColl, and those who say that Scotland and England need each other, that our common markets are too important and, while we might have cultural and national differences, in economic terms we need to stick together. A Yes vote for independence will pitch both Scotland and England into the unknown - and unknowable - and that’s something that businesses generally don’t like. But the referendum focus obscures other matters that businesses want resolved in Scotland. The Scottish Government already has a raft of powers at its disposal. It needs to rebuild our economy and help businesses through the current difficult economic climate. Has it been doing enough? The answer is a qualified maybe, and only to a limited extent. There are still too many areas of government action that fall short of what business needs. The Scottish Government needs to do better. The flagship legislative item for the Scottish Government in this parliamentary session is the referendum proposals. While details have still to be agreed, and while it is the electorate who will decide, business has a real stake in this debate. We need to settle this issue, so there should be a single question on whether Scotland stays in the United Kingdom or not. A second question risks producing a confused and unclear result. With a single question we can move the debate on and propel Scotland towards an enterprising future. After all, it has an impact on all of our futures.

CONTACTS room501 ltd Christopher March Managing Director e: Bryan Hoare Director e: George Cheung e: Euan Underwood e: EditorIAL Kenny Kemp Editor e: Andrew Mernin Sub-editor e: Gillian Law Editorial Karen Peattie Editorial Design & production room501 e: Photography KG Photography e: advertising For advertising call 0191 537 5720 or email

room501 Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ 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 © 2012 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, September 2012. room501 publishing Ltd is part of Business & Enterprise Group, the UK’s market leading business improvement specialist.

Kenny Kemp Editor, BQ Scotland




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CONTE BUSINESS QUARTER: AUTUMN 12 life in the old dog yet


Features 24 gold rush Scotgold’s founder Chris Sangster on striking it rich in the hills of Cononish

30 scotty the brave The inside track on the iconic brand that’s freshened up the food market

36 a legend returns Oil industry veteran Algy Cluff on why he’s back on his old stomping ground


46 city slicker The dynamic force behind Edinburgh’s five-year strategy for growth

70 isle of inspiration Gerald Michaluk on how he built a locaton brand on the Isle of Arran

76 halo effect Sir Brian Souter reaffirms his angelic intentions in business


the jammy man of arbroath



43 commercial property

The landmark developments creating our industrial and commercial landscape

52 business lunch Bonnie bites in the Balmoral with jam and marmalade man Paul Grant


56 wine The Italian red that’s game, set and perfect match for Dan Macdonald

making the most of island life


58 motoring 08 on the record Tackling red tape and finding a solution to bank lending problems

12 news Who’s doing what, when, where and why, here in Scotland

The super-smooth Bentley Continental GT convertible

62 fashion Shaking up the established order of Savile Row

66 equipment Keeping robots in their place

22 as i see it Mind the gap or we fail the IT test, warns Polly Purvis

souter’s angelic ambitions

80 bit of chat Gripping gossip from our backroom boy





>> Bank lending solution hangs in the balance Behind bank bashing and public promises from lenders to help SMEs, is a complex riddle that will take time to solve, writes Kenny Kemp Our politicians are still angry with the banks. On all sides, Scotland’s elected representatives have expressed their exasperation with the continuing antics of bankers and banking. This reflects the genuine public and business dismay about how we’ve been battered by the banking crisis. Scottish Labour’s Shadow Secretary of State for Scotland, Margaret Curran, has called for a public inquiry in light of the LIBOR-rigging scandal, and said: "Many Scottish businesses are right to complain that the banks are simply not lending to them; and now we find that in certain circumstances when some banks were lending, they were also ripping them off.” While her colleague Ken Macintosh, the Scottish Labour Finance spokesperson, said: "Scottish banks need to set an example for others to follow. The best way for the banks to rebuild the trust and confidence they have so badly damaged is by simply meeting the needs of their own customers.” He said Scottish businesses and small businesses in particular are being squeezed dry by the very institutions who lent to them and extended overdrafts when the economy was stronger. “Instead of withdrawing those overdrafts and demanding the repayment of aggressively marketed loans, the banks could go a long way to restoring public trust by demonstrating they understand the pressures facing their customers in these difficult economic times.” Liberal Democrats and Conservatives are equally perturbed while SNP’s leaders have been highly critical of the greed of the bankers and their behaviour after being bailed-out by the taxpayers. Yet a report from KPMG says it is simply impossible for banks to satisfy the conflicting requirements to strengthen capital ratios to satisfy regulators, while simultaneously increasing lending to businesses to stimulate economic growth. KPMG warns that while banks have made real


progress in strengthening balance sheets and capital reserves, significant challenges lie ahead as the broader banking industry, including regulators and Government, struggles to articulate exactly what the sector should look like and what its role in the economy should be. The UK Banks: half year performance benchmarking report, which analyses the interim results of the five major banks, Barclays, HSBC, Lloyds Banking Group, RBS and Standard Chartered, shows that statutory profits increased 20% relative to the first half of 2011 but were down 17% compared with the second half of last year. Overall the big five banks made combined pre-tax statutory profits of £9.5bn in the first six months of 2012, compared with £7.9bn in the first half of last year and £11.4bn in the second. Catherine Burnet, head of financial services at KPMG in Scotland, said: “While there were some bright spots, notably in underlying retail and commercial banking performance, a key challenge for banks is to plot a route back to strong and sustainable profitability. “Individual bank’s results were mixed, reflecting their legacy positions and geographic and business focus. Retail and commercial businesses enjoyed a modest recovery in contrast to investment banking divisions which were hit hard. “Banks face a number of conundrums. Firstly, while it has become increasingly clear that it is not good for the economy if banks continue

to reduce lending; the role that banks can play in the broader UK growth agenda remains undefined. Secondly, banks continue to be impacted by a major regulatory agenda which is difficult to implement whilst operating in an unstable market. The other key challenge for banks is around return on equity and investment. Banks are increasingly being treated as regulated utilities; yet when compared with other utility companies such as telecoms and energy businesses, their returns, and subsequent appeal to investors, are currently significantly lower. “The banking sector has been plagued by a number of exceptional events and issues since the crisis which are making it difficult to predict what the ‘new normal’ looks like. The latest series of incidents and failures has further eroded customers’ trust in banks and may possibly lead to a new wave of regulation. The ongoing cost cutting exercises that have been implemented across most organisations, have not generated the required improvement to cost income ratios, which have remained flat. If the business climate does not improve markedly in the near term, more severe restructuring programmes may be necessary.” Catherine Burnet continued: “The remediation of PPI mis-selling has taken a painful toll on bank profitability over the past 18 months. Banks are now very conscious of the major financial and reputational threat that misconduct poses to their business and are

Banking has been plagued by a number of exceptional events and issues since the crisis, making it difficult to predict what the ‘new normal’ looks like



actively trying to future-proof their products and sales approach. This is not without risk because customers, more than ever, need access to savings products that will generate long-term returns. If banks increasingly ‘play it safe’ by concentrating on lower risk products to avoid future accusations of mis-selling, investors


may find it harder to meet their aspirations from long-term savings.” She said investment banking divisions remain under intense pressure, damaged by tough market conditions as the Eurozone crisis drags on and the long-term regulatory environment looks hostile. “As such, banks continue to shrink their

activity and trading capacity by winding down or divesting business units while trying to leverage opportunities in targeted growth markets,” she reports. So it is not easy simply to thrash the banks but to understand that their behaviour has placed the economy in a very precarious position that will need some time to fix. n

>> Time to tackle unwanted red tape SMEs are playing their part in making Scotland a better place to do business

There is still time to air your views about unnecessary red tape for businesses in Scotland. Close to 300 business owners from across Scotland converged on RBS’s headquarters in Edinburgh at the start of the autumn when the Federation of Small Businesses in Scotland held its second annual Scottish Business Convention in conjunction with the Scottish Council for Development and Industry. Among the keynote speakers, Minister for Enterprise Fergus Ewing encouraged Scottish businesses to make an effort to respond to the measures proposed in the Scottish Government’s Better Regulations Bill. It is certainly something that will help companies, encourage contracts for smaller firms, and create a more level playing-field

in understanding regulations. For example, one complaint is that there are 32 different licensing departments across Scotland’s councils and they all interpret the rules for bar, restaurants and the sale of tobacco and alcohol in a different way. There should really be more consistency across the whole of Scotland, says the FSB. Better regulation is crucial to delivering sustainable economic growth. The Scottish Government is bringing forward a Better Regulation Bill to address these concerns about regulatory inconsistency. The consultation process will ensure that this bill is fit for purpose before it is passed through parliament. CBI Scotland’s Director, Iain McMillan said: “CBI Scotland welcomes many of the ideas


contained within the Bill to make regulation more streamlined and consistent for business and looks forward to studying the proposals in more detail.” This consultation document sets out proposals for the potential elements of the Bill and seeks views and evidence. They include: defining and implementing national standards and systems; duty to promote economic and business growth in regulatory activity; reviews and sunsetting; prompt payment; common commencement dates; mobile food businesses, a transferable certificate of compliance; linking planning application fees to the performance of planning authorities; and extending statutory review mechanisms to challenges against Scottish Ministers’ decisions in infrastructure projects. There have been a number of awareness sessions to help understand the proposals and options available. The next session is on Thursday 4 October 2012 from 10 - 11.30am, at Scottish Government, 5 Atlantic Quay,150 Broomielaw, Glasgow. Andy Willox, the federation’s Scottish policy convenor, said: “Our second convention exceeded expectations with FSB members in attendance reporting that they found the heady mix of practical advice and public policy discussion both stimulating and rewarding.” Dr Lesley Sawers, SCDI chief executive said: “Small businesses are key to the success of the Scottish economy. This event brings together businesses of all sizes from a range of sectors to share experiences and knowledge to help them succeed.” n




>> The Hydro As Glasgow prepares to welcome the world’s sporting stars, Kenny Kemp reports on a stunning new venue in the city The phenomenal success of the London Olympics and Paralympics has been the best news in a rather lacklustre, rainy summer. On all fronts, the organisation, its attention to detail and the friendly experiences for sports people, volunteers, and spectators has been a triumph. The feel good factor as Team GB secured a haul of gold, silver and bronze medals has been palpable in Scotland, thought to be sceptical about the Games. Now this places Scotland under pressure to ensure that the Commonwealth Games in Glasgow 2014 go off with similar style and panache. The official opening in July 2014 is not far off. London 2012 gives everyone involved something to aim for - although Glasgow will not need to emulate the elaborate pageant of the opening and closing ceremonies. Among a number of new sporting locations is The Hydro, which is part of the Scottish Exhibition and Conference Centre, and is certain to be a major venue for business events and brand launches after the Games. The Hydro, a 12,500 seat venue, now officially opening in September 2013, will play host to the gymnastics and netball (finals) competitions. The Clyde Auditorium, opened in 1997, will showcase the weightlifting/ powerlifting competitions, while the main exhibition halls of the SECC will host judo, netball (preliminaries) and wrestling. The halls will also serve as a hub for broadcasters and press. The SECC made the smart move of hiring Tom Doyle, who joined last October as project director for The Hydro and the wider projects. He came from London 2012, where he worked for the Olympic Delivery Authority’s delivery partner, CLM, on a number of venues


Centre stage: The Hydro will host major business events as well as world class sport including the Olympic Stadium. He leads the Glasgow project team working with construction firm Lend Lease and worldrenowned architects, Foster + Partners. Meanwhile the SECC has announced its financial results, taking into consideration its capital investment in The Hydro. During that period it reported a trading profit of £400,000, which is £200,000 ahead of expectations with EBITDA of £1.9m, in line with the previous year. It also delivered car park development gains of £6m and made early provision for an impairment charge in respect of The Hydro of £36.1m to be matched with future development receipts. Despite a difficult economic climate, all sectors of its business have performed in line with expectations. John Sharkey, SECC’s chief executive, says: “These are encouraging results when you consider the fine balancing act of running a trading business while building a new arena. The main item which has affected the company’s results this year is the impairment charge recognised at this time in relation to The Hydro project. When it was originally conceived in 2002, the SECC expected to incur an arena impairment charge – this would be loss of revenue from building disruption and major bands and events bypassing the arena - which would be covered by the development gains. The QD2 project comprising The Hydro, a car park, a heliport relocation and the mixed residential west development site are connected in that the


car park and heliport relocation is needed to release land to fund The Hydro. “I am pleased that our original impairment estimation has been significantly reduced and this is largely as a result of better than anticipated business plan projections for The Hydro,” he says. “This year, the SECC became a commercial developer in relation to the disposal and construction contract for a new 1,600 space car park. We secured an operator, contractor and forward sold the development retaining a management interest in the contract. Once completed, it will contribute over £7m to the SECC in terms of profit with £6m included in the results, and more importantly a funding receipt for the QD2 project.” Funding for the Hydro arena is now fully secured and SECC also reported that it has succeeded in attracting key commercial sponsorships in excess of eight times its original target. Partnerships have been finalised with naming rights sponsors SSE (Scottish Hydro) and soft drinks company Coca Cola. Sharkey continued: “We have a healthy calendar of dates held for Hydro concert and events which will be announced over the coming months. “The progress that has been made with The Hydro has been outstanding. The entire project team including staff at the SECC should be congratulated for their efforts involved in taking The Hydro on its journey to completion and ready for business.” n



Scotland’s manufacturing sector may be facing unprecedented challenges but there are opportunities to be had to grow your business.

Manufacturing – Weathering the storm


espite the understandable caution being expressed in the media and by leading industry bodies Scotland’s manufacturing sector, it seems, is made of stronger stuff. We are seeing a sector that is emerging leaner and meaner from the recession and looking for opportunities to grow and develop. The good news is that these opportunities do exist and forward-thinking companies are taking advantage.

increasingly by their banks, to review their costing methods as one set of accounts prepared on the standard costing method is showing profits while the overdraft is increasing at an alarming rate. While standard costing is still relevant, other costing methods should be considered by companies seeking to modernise their businesses.

A tailored service The traditional ‘one size fits all’ approach is now being replaced by a tailored manufacturing service aimed at providing a client with a bespoke solution configured to their specific requirements but often based on a standard model. This adaptability needs to be supported by appropriate changes in internal structures and effective communication. Campbell McLundie International markets Many Scottish manufacturers are already engaging in international trade, but with major market shifts as a result of the ongoing economic turmoil, many more need to seriously consider the benefits the emerging markets in particular could bring. While the prospect may be initially daunting, there is a wealth of support available from the likes of Scottish Development International, banks and professional advisers, many of whom have an international network of offices available to assist with research, local administration and, most importantly, getting paid. Costing In these volatile times, it is critical that manufacturers have a clear understanding of the costs in delivering their service. Many traditional

now is the time to make targeted investment.... based on a clear business case and an understanding of the benefits which are to be delivered as a result

costing methods, such as the use of a standard cost, are frequently used without sufficient attention being paid to the analysis of key variances which explain why the costs accumulated through standard costs differ from those being paid through the bank. Too often we are being asked by companies, or


Targeted investment Now is the time to make targeted investment in either new systems or additional training for staff to make better use of existing systems. However such investment must be based on a clear business case and an understanding of the business benefits which are to be delivered as a result. With an ageing workforce, investment should also be considered in the next generation of workforce. With support, such as the Modern Apprenticeship, young people can be introduced to a company at limited cost but provided with the opportunity to learn and receive the collective wisdom held within the company. While there are many challenges to be faced, Scottish manufacturing is more than capable of weathering the current storm and emerging as a key player in Scotland’s economic recovery.

Campbell McLundie is a partner specialising in management consultancy at Scott-Moncrieff, with particular experience of working with manufacturing and distribution companies.




Turbine scheme gets spinning, capital gains in research stakes, sunny outlook for solar firm, life begins at 60 for skills academy, and transport group accelerates its green drive >> Turbine scheme spins out Leith-based Nova Innovation has awarded a contract to fabricate its first tidal turbine for a community-owned scheme to Steel Engineering, based in Renfrew. Nova plans to launch the device later this year, with commissioning in early 2013, making it the first community-owned tidal scheme. The Nova-30 (30kW) device will be laid in the Bluemull Sound in Shetland, with the Crown Estate sea-bed lease and planning permission secured. The 30kW demonstrator will be connected to the grid and power a local ice-plant and industrial estate, as well as providing income for the local community, helping to re-generate the economy of the North Yell area.

>> Edinburgh top for research funds The University of Edinburgh has strengthened its position as Scotland’s leading research institution by attracting record levels of investment for its pioneering work. The university was awarded a record £250m to fund its research in 2011/12, 37% more than the £183m received in 2010/11. The largest award was £12.6m by the Engineering and Physical Sciences Research Council to the UK Carbon Capture and Storage Research Centre. In 2011/12, staff or students created 35 new companies, the same as in 2010/11. The firms include EoSurgical, a medical student start-up company that designs and manufactures training tools for surgeons. Edinburgh filed 62 patents to protect inventions by research staff, and a total of 51 licence agreements to allow commercial use of technologies developed on campus.

>> Queen’s approval Energy industry supplier Downhole Products, based at Porthlethen, has been presented with a Queen’s Award for Enterprise for the second time – the UK’s highest accolade for business success. Lord Lieutenant of Kincardineshire Carol Kinghorn presented Downhole Products managing director Ian Kirk with glassware to mark the award. It recognises the company’s achievement in overseas trade which has seen revenue grow 134% in the last three years, surpassing the performance which led to Downhole Products’ previous Queen’s Award.


>> BiFab secures £145m deal for oil platform Burntisland Fabrications has signed a contract with Premier Oil and Chrysaor, a joint venture, developing the Solan Oilfield Development, off the west of the Shetlands, for the construction of an oil and gas platform worth £145m. The contract is for the procurement and construction of 3,500 tonne topside and 8,000 tonne jacket. It will involve BiFab’s manufacturing facility at Methil, Burntisland and Arnish. It expected that the workforce will double to 350. It will be floated out from Methil in April 2014. The ceremony in Fife was overseen by Prime Minister David Cameron and Scottish Secretary Michael Moore. John Robertson, the


managing director of BiFab said: “We are thankful innovative companies like Premier Oil are developing these deep water projects off West of Shetland, and they are keeping an open mind on where the work goes. We have won the contracts, not only because of a commercially attractive bid, but also due to the ability and experience of BiFab’s management and workforce to deliver a quality product, on schedule and with a good safety culture.”

>> Scotland shrinks Scottish GDP figures confirm that Scotland has followed the rest of the UK into a technical recession. The Scottish economy contracted by 0.1% in both Q4 2011 and Q1 2012 and while the economy is shrinking, it is doing so at a slower pace than in the UK


as a whole. It is also worth noting that the services and production sectors grew in Q1, by 0.2% and 1.2% consecutively, and the fall in GDP was caused by a large dip in output for the construction sector (-6.9%). The unemployment rate for the three months to May was 8% in Scotland compared with 8.1% for the UK, again indicating that the Scottish economy is faring slightly better than the UK in general. Unemployment is now at its lowest level in Scotland since September 2011, having peaked at 8.7% at the beginning of 2012.

>> Why equality pays Recent figures from HM Courts and Tribunal Service underpin the need for more companies to consider equal pay and avoid reputational damage, says Lorna

Ashworth, managing director of Ashworth Black, a Scottish consultancy. Over one third of all Scottish cases referred to the Employment Tribunal are in relation to equal pay. Some 27,900 cases in Scotland were referred with 10,000 of those claims in relation to equal pay. Lorna Ashworth said: “These figures show that Scottish companies and employers still have some way to go to ensure parity across their employees.”

>> Solid results follow SEP’s clean-tech fund launch Scottish Equity Partners, the equity and venture capital investor, has reported a solid performance by its portfolio companies, which also saw significant fundraising success for the firm.


SEP closed two new funds during the year, raising £200m for its new primary investment vehicle, SEP IV, and launching a £95m clean-tech fund, the Energy and Environmental Technologies Fund (EET). SEP IV, one of the largest raised in Europe has attracted strong support from financial institutions, despite the tough climate for private equity. EET was established by SEP in partnership with SSE plc, with the fund acquiring a portfolio of clean-tech assets from the FTSE 100 utilities company. The secondary fund was raised from four institutional investors, headed by Lexington Partners, managers of secondary private equity and co-investment funds. SEP’s companies have aggregate revenues of £500m and employ almost 3,000 people. Scottish portfolio companies include Skyscanner, the fast growing flight search company, big data analytics company, >>

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Sumerian, and Daysoft, the online contact lens company. Skyscanner was named as the British Venture Capital Association’s Management Team of the Year Awards. Approximately 30% of SEP’s portfolio is based in Scotland.

>> Life sciences support Gael Ltd, chaired by Jim Mather, the former Enterprise Minister, is sponsoring the Edinburgh BioQuarter Regenerative Medicine Conference 2012, on Tuesday, 25 September and Wednesday, 26 September. The event is designed to offer fresh perspectives on the challenges faced in developing therapies for regenerative medicine and historically attracts some of the leading names in the sector. More than 200 life science organisations worldwide - including Astra Zeneca, Reckitt Benckiser, Reading Scientific Services (RSSL) and Roslin Cells - rely on Gael to help and support them in demonstrating compliance to auditors, customers, regulators and third party organisations.

>> Fish farm jobs boost Over £1.3m has been invested in a new fish farm site in Eday, north of Orkney, by Scottish Sea Farms. The site has created six jobs. With a local population of only 150, this number of new jobs has been welcomed by the local community. Eday is located in the northern isles of Orkney, 15 miles from mainland Orkney.

>> Key contract wins Smart Metering Systems, the Glasgowbased gas meter technology specialist, have secured a number of key contract wins which increased profits to £2.9m in the six months to June, compared with £1.5m last year. Run by Scottish engineers, Steve Timoney and Alan Foy, who netted a total of £17m after the flotation in July last year, the AIM-listed company has benefited from increased investment in gas meters by the main suppliers, who


>> Life in the fast lane High-speed fibre broadband is available to the first homes and businesses in Edinburgh’s Waverley exchange area. More than 9,200 local householders and firms in the city centre are joining the high-speed revolution. This latest development will help take the number of premises in Edinburgh with access to fibre broadband to around 57,500, rising to more than 141,000 next year. BT’s local network business, Openreach, aims to make the high-speed technology available to around two-thirds of UK homes and businesses by the end of 2014. Brendan Dick, BT Scotland director, said: “The advent of fibre broadband in the heart of Edinburgh is good news for city centre businesses and households. It will enrich people’s lives and bring a much-needed boost to businesses in these economically challenging times. They’re joining ten million UK premises which are now passed by one of the world’s fastest growing fibre networks.”

are preparing for regulatory changes which require the mass roll-out of smart meters from 2014.

>> Solar firm’s sunny outlook Renewable energy company Solar Electricity Systems has reached a deal on thermodynamic panels with one of Europe’s most innovative green manufacturers. The fast-growing Glasgow based company has been selected as UK distributor and sole Scottish distributor by thermodynamic panel manufacturer Energie, based in Portugal. The deal means that the company is


projecting sales of £18m to June next year, up from £10.5m this year. Founded in 2009, Solar Electricity Systems has had to undertake a three fold increase in the size of its Glasgow Business Park premises to accommodate growth.

>> Strength in numbers Around 1,600 companies that Scottish Enterprise works with have generated a record combined turnover growth of £1.2bn in the last year. This year’s figures also represent an increase of more than 50% compared to the £790m turnover growth reported the previous year. When compared to



Diamond Jubilee fever sees boost for Britannia Following this year’s Diamond Jubilee, The Royal Yacht Britannia is riding high on a wave of success.


ritannia, a five-star visitor attraction and prestigious evening events venue in Edinburgh, has seen a significant boost in business over the last 18 months, with a 14% increase in visitors and a 28% increase in retail and catering spend. Corporate events business is also booming, and, over the summer, Britannia played host to two notable events showcasing Scotland to influential players in the global meetings and incentives sector: the Professional Convention Management Association Summit, and Trailblazers, a networking programme co-hosted by the National Tourist Offices of five countries. To find out about hosting your own event of a lifetime, visit or

call 0131 555 8800. For the ultimate corporate event or business dinner, Britannia truly is a cut above the rest. The Royal Yacht Britannia Ocean Drive, Leith EH6 6JJ

NEWS the UK business landscape, these Scottishbased companies grew their turnover in both 2010/11 and 2011/12, while UK firms as a whole experienced a fall in turnover in 2010. Companies in the food and drink, oil and gas sectors, as well as those operating in less traditional sectors such as automotive and services companies, have achieved significant increases in turnover. Nine of the top 10 growth companies are manufacturing or engineering businesses.

>> Subsea support A new subsea business has secured £60,000 in public sector funding to support its business growth and expansion overseas. Scottish Enterprise and Scottish Development International will help ROVOP, based in Westhill, Aberdeenshire, to explore international growth and allow the hiring of a manager for international business opportunities. Finance minister John Swinney announced an investment from the Scottish Loan Fund of £1.6m to the company, with an option to drawdown up to £5m. ROVOP has also secured £3m of other funding, >>

Crossing the pond: The Saltire Foundation Fellowship programme

>> Saltire Fellows head for Boston One of the Scotland’s most famous bagpipers, a British army officer, an award winning female leadership expert, a highly regarded scientist and a former Saltire Foundation Scholar are among the 20 men and women taking the firsts step in enhancing their entrepreneurial and business skills with the Saltire Foundation Fellowship programme. Backed by Scottish Enterprise and the GlobalScot network, the Fellowship programme seeks to create a global and entrepreneurial mindset in Scotland’s future business leaders. The programme is a blended learning experience delivered over an intensive eight-month period. After a week at RBS Business School in Edinburgh, the Fellows departed for Boston for 15 weeks to study at Babson College and participate in a range of high impact business projects. The Fellows will be spending one week in China at the Babson Executive Education Campus to expand upon their learning experience. It is hoped that many will be the leaders of Scotland’s future.





including significant support from RBS. The total of £8m of finance allows the company to deliver on the first stage of its growth plan.

>> Strong performance in tough conditions Standard Life, the Edinburgh-based life, pensions and savings giant, has delivered strong half-yearly results in what remain tough market conditions, with assets of over £204bn. The company has long-term savings new business sales of £10.1bn and savings net inflows of £1.6bn with operating profit increasing by 15% to £302m. The interim dividend is up 6.5% to 4.90p Standard Life’s chief executive David Nish said: “These results show that Standard Life is performing well. We have delivered increased profits, cash flow and dividends and we are achieving on-going improvements in operational and financial performance. The UK results, where profits benefited from higher income and significantly lower costs, demonstrate the strength and scalability of our propositions and our brand.” He also said the industry continues to undergo a period of significant change with RDR and that this brings fresh opportunity. “We are well prepared for the regulatory and market changes on the horizon, and have invested to make sure we are even better placed to meet the needs of our customers and their advisers. “The market environment is challenging and those conditions look set to continue, however, our business model, leading market positions and strong balance sheet, will allow us to continue to deliver improvements in value for customers and shareholders,” he added.

>> Sports brand transfer listed Metis Partners, the Glasgow-based intellectual property specialist, has been asked to take Man of the Match - one of sport’s most famous recognisable trademarks - to market. The name is being put up for sale


by OFS Group, the Mayfair and South Carolina-based trademark and IP dealer, which has raised revenue by licensing Man of the Match to KP Nuts and McCoy’s crisps, as well as extensively during the 2007 Rugby World Cup.The Man of the Match award, originally used in cricket, is now of one the most iconic phrases - in sports ranging from football, rugby, American football, hockey, basketball and Australian Rules football. The deal follows the work Metis Partners carried out in marketing the IP assets of electronics firm Elonics at a global auction in San Francisco in July.

of Century and confirmation by the Financial Services Authority, is expected to be effective from 1 February 2013. The enlarged society will retain the name Scottish Building Society and will remain an independent, Scottish, mutual organisation, owned by its members. The Century office in Edinburgh will be closed.

>> Awards countdown There’s just about time to enter this year’s Growing Business Awards, in association with Lloyds Bank. Created in 1999 by Real Business and the CBI, the Growing Business Awards are peer recognition for UK independent and entrepreneurial businesses. The deadline for nominations is 21 September.

>> Bus group’s green drive

>> Life begins at 60 A renewable energy skills training academy will provide training for 60 modern apprentices in its first year. The Renewable Energy Skills Training Academy opened by Scotland’s First Minister, Alex Salmond and Youth Employment Minister Angela Constance in Westway, Renfrew. It is dedicated to the renewable energy sector in the UK, and operated by the west of Scotland’s largest steel fabricator, Steel Engineering.

>> Building bridges Scottish Building Society and Century Building Society have agreed to merge. The merger, subject to approval by the members

First Aberdeen, part of First Group, has set a new recycling record - 86% of its entire waste is now recycled. The engineering team recycles batteries, mixed alloys, glass, steel, plastics, fluorescent light tubes and cardboard in addition to waste oils and fluids. At the same time, the ‘Bus Presentation Team’ recycles the waste which is left behind by customers, such as papers, magazines, cans and plastic bottles. “There is a real focus at First Aberdeen to improve our recycling arrangements,” said Jon Eardley, First Aberdeen’s engineering director. “As part of our ongoing depot transformation programme, we implemented a new strategy in November 2011 enabling our engineering and bus presentation teams to recycle waste effortlessly.” Meanwhile Morningside furniture firm James Erskine Interiors, a family-run business, has won recognition for its environmental efforts and was presented, along with 35 other winners with a National Green Apple Award, supported by the Royal Environmental Health Institute of Scotland at Edinburgh Castle.

ONLINE: For the latest breaking business news from Scotland and the wider UK visit BQ’s website




As Turcan Connell turns 15, we are very much the ambitious teenager, and just like any other youngster, we are living in exciting times with countless opportunities on the horizon.

Turcan Connell celebrates 15th Anniversary with expansion into Glasgow


urcan Connell recently celebrated its 15th Anniversary by expanding accessibility to its unique blend of integrated legal, wealth management and tax advice by opening an office in Glasgow. Recently recognised as one of the top 25 private client firms in the UK, Turcan Connell is heralded for the breadth and depth of knowledge among its formidable group of lawyers, tax specialists, investment managers and financial planners. Despite difficult conditions for many, Turcan Connell continues to see significant growth in demand for its services. The new office at Sutherland House, 149 St Vincent Street, will offer exactly the same range of legal, wealth management and tax services that are available at its existing offices in Edinburgh, London and Guernsey. According to Bob Hair, Head of Financial Planning and Executive Director of the firm’s wealth management business, Turcan Connell Asset Management, the firm’s continued growth is down to “tenacity, talent and trust”. “Ultimately, whether dealing with legal issues such as estate planning, property-related matters, and divorce; taking advice on investments, pensions, tax-efficient wealth structuring and financial matters; or tax advice and planning, most of the people we work with are after the same thing – for their advisors to understand fully what they are trying to achieve and simply to sit on the same side of the table as they do. “The appeal of a firm like Turcan Connell is not in what we say we will do, but what we actually do for people every day of the week – in effect acting as

Bob Hair, Head of Financial Planning

the appeal of a firm like turcan connell is not in what we say we will do, but what we actually do for people every day of the week their trusted counsel on everything that matters.” With partners and staff of almost 300 providing that “trusted counsel” on wills, estate planning and succession; land and property; tax advice and compliance; employment matters; charities;


trusts; international advice; divorce and family; dispute resolution; family business matters; investment management and financial planning, Turcan Connell has thrived where many have failed. When many other law firms are facing difficult times, and with unprecedented levels of merger activity, why now, and why Glasgow? Joint Senior Partner Douglas Connell: “The firm is 15 years old this year and we are something of an ambitious teenager. “We did some research with clients and some key influencers, which involved speaking to several hundred people. There was quite a positive demand we should be making our services directly available in the west of Scotland. “We reflected on that and concluded we had to respond, as everything we do is ultimately client led. One of the consequences of the financial crisis is that people are looking for seasoned advice and a safe pair of hands with their investments and financial affairs – all of which we are uniquely placed to provide.”

For further information contact Bob Hair at: Sutherland House, 149 St Vincent Street, Glasgow G2 5NW Telephone: 0141 441 2111 Email:




>> Well heeled and ready for business Shoe designer Emily Lamb, a founding member of Design Collective Scotland, has launched her latest collection in the venue that inspired it. The Corinthian Collection has been launched in The Boutique Bar in the up-market Glasgow club. Emily is a founding member of Design Collective Scotland, promoting contemporary Scottish fashion design and a platform for nurturing fashion creatives in Scotland. Design Collective Scotland has opened its first outlet with an in-store training academy at 86 Dumbarton Road, Glasgow.

>> Watching closely from afar The forthcoming United States presidential elections – with healthcare provision a dividing line between the two candidates - is being watched closely by Craneware chief executive Keith Neilson and his team. The Edinburgh-based firm, with a leading position in automated software solutions for healthcare finances, announced an increase in profits to £25.8m up 8% from £23.9m, for the year ending on 30 June. The proposed final dividend is 5.7p per share, giving a total of 10.5p. Craneware, with offices in Atlanta, Arizona, Massachusetts and Tennnesse, employing 200 people, has extended its market in the United States through two significant customer deals, one providing the Federal and State Healthcare market with critical software. “The dramatic upheaval taking place in the US healthcare market continues to present


a significant long-term opportunity for Craneware. Our vision is to be the partner that healthcare providers rely on to improve and sustain strong financial performance through revenue integrity. With approximately a quarter of US hospitals using one or more of our solutions and many of the largest suppliers to the market seeking to add our software to their offering, we believe we are well place to capitalise on this significant opportunity.”

>> Six month step up Cairn Energy, the Edinburgh-based energy exploration company, has returned £2.2bn of cash to shareholders, agreed a joint venture deal with Statoil in the Pitu exploration block in Greenland and bought two companies in the North Sea that ensure long-term cash flow. The


deals for privately-owned Agora Oil & Gas and, in August, the AIM listed Nautical Petroleum plc provide Cairn with ‘a platform for growth.’ Simon Thomson, the chief executive, said: “The first six months of 2012 have been incredibly active for Cairn. We’ve given back US$3.5bn to our shareholder and acquired two companies in the North Sea. We’ve enhanced our transformational exploration potential in the acquisitions in Morocco, and the applications in Spain and Cyprus, and the absolute focus on Greenland. Greenland remains a very important part of our portfolio. We’re happy to have Statoil as partners.” The company has also been working on new basin initiatives and is to farm-in as operator (50%) to Foum Draa blocks 1-3 offshore Morocco. At the half-year stage, the company’s net cash position was £582m and it received £233m net proceeds from the sale of a 3.5% Cairn India Limited stake in July and it completed the Nautical acquisition in August for a £351m. At year end, the cash position is expected to be over £310m and the company’s 18.3% shareholding in Cairn India has a market value of £1.38bn on the Indian Stock Exchange.

>> Hunter helps out Entrepreneurial Spark, set up by Jim Duffy, has been given its own vital start with backing by Sir Tom Hunter for a parallel facility at his head office at the Olympic Business Park in Ayrshire. Sir Tom Hunter and Sir Willie Haughey came together to support Jim Duffy’s first facility in Glasgow. Sir Tom’s commitment over an initial five years will enable Entrepreneurial Spark - a not for profit enterprise - to support 25 to 30 start-up or nascent businesses every six months.

>> Duncan goes west The sixth and final Type 45 destroyer, built by BAE Systems at the Scotstoun shipyard on the Clyde, has embarked on her first stage of sea trials off the west coast of Scotland. Over the last 20 years, the Royal Navy orders have secured hundreds of skilled engineering jobs on the Clyde, now there is some


uncertainty about future contracts after defence cutbacks. Duncan, named after Admiral Adam Duncan, has been undertaking trials that will include testing of her power and propulsion systems, as well as auxiliary and domestic services. It is one of the most technologically sophisticated fighting ships on the seas. Paul Rafferty, Type 45 programme director

at BAE Systems, said: “This is the sixth Type 45 destroyer to embark on sea trials, but there will be no complacency in the rigour with which we will put her through her paces and prove her outstanding capabilities. Every stage in the delivery of the Type 45 destroyers brings an enormous amount of pride to those who have worked on the programme and there’s a special significance attached now that all


six ships have sailed the seas.” Duncan’s Royal Navy commander, Phil Game, said: “Putting to sea for the first time is a significant milestone in the early life of the ship and a tribute to the teamwork between BAE Systems, MOD and Royal Navy personnel to get to this point.” The ship is on track to be handed over to the UK Royal Navy in the first half of next year.

>> BQ people on the move Ewan Brown is the new chairman of Scottish Financial Enterprise taking over from Mark Tennant, who is retiring. Ewan is an extremely well-known figure in the financial services industry and in the wider business world in Scotland. He was an executive director of Noble Grossart merchant bank for 35 years and is now a non-executive director of Noble Grossart Holdings. He was chairman of Lloyds TSB Scotland from 1999 to 2008 and has held board appointments in a number of Scottish financial services. He is a non-executive director of Stagecoach Group, governor of the University of St Andrews, deputy chair of the Edinburgh International Festival and Treasurer of the Royal Society of Edinburgh. Accountancy firm French Duncan has appointed Andrew Ford, formerly a manager at Deloitte’s private client team, as tax director. Newcastle-born Andrew, who was raised in the United States and lived in Switzerland, started his professional life as a lawyer before shifting to tax work in 1994. He came to Scotland 12 years ago to join PwC in Glasgow, prior to his appointment as head of tax at law firm Murray Beith Murray in Edinburgh, before joining Deloitte in Glasgow eight years ago. Ben Powell has been recruited by Tods Murray and takes up the position of partner in the projects team, joining partners Stephen Colliston and Nigel Sievwright. Ben has acted on a number of education and schools, healthcare, social housing and infrastructure projects and helped conclude the £240m

South Coast street lighting project - the first joint procurement project in the UK involving three different local authorities. Denise Laverty has been appointed an associate specialising in family law, within the private client team of Anderson Strathern in Glasgow. Denise joins from McArthur Stanton, where she had been a member of their court department for eight years. Property consultant CBRE has announced a number of promotions in Aberdeen and has relocated to new premises. Derren McRae has been promoted to managing director and head of the Aberdeen office. Michael Armstrong, who relocated from CBRE’s London office, has been promoted to director. Iain Landsman has been promoted to senior surveyor. CBRE has also relocated to No.1 St Swithin Row in Aberdeen’s West End. CBRE also announced three new appointments to its Property and Asset Management team in Scotland. John McLaughlin joins as associate director in Glasgow from Stockland Developments, Katie Pirie as a senior surveyor in Glasgow comes from Colliers International, while James Lynch joins as a senior surveyor in Edinburgh from CBRE Vishal Chopra has been appointed as a tax director with Grant Thornton. He brings more than 10 years’ experience advising on corporate and personal tax matters to private businesses and their owners, including M&A, restructuring and international tax aspects.

Roselle a Scottish events firm based in Aberdeen has made two key appointments to the company. With a £3m turnover, has appointed Charlotte McIntosh, as managing director, while Amanda Kirk, former sales manager at Perth Racecourse, is head of sales. SWIP has strengthened its global rates team with the appointment of Alan Bridges as investment director, UK Rates. Alan will be responsible for all aspects of the management of gilt and index linked bond funds including the development of the investment process. Alan will report to Graeme Caughey, global head of rates at SWIP. Law firm Gillespie Macandrew has announced Tom Murray as new chairman and the appointment of Kirsty Macpherson, who leads the firm’s energy & natural resources group, to the firm’s board. After 15 years in the post, Simon Leslie, the firm’s current chairman is stepping down to focus on his private client and landed estate practice. Rural property specialist Baird Lumsden has appointed Donald Yellowley as a director from associate in the firm’s Bridge of Allan office. Meanwhile DM Hall has appointed two new directors from within the firm. David Cree in the Glasgow South branch and Steven Buist in Kirkcaldy Deborah Green has been appointed director of sales for the Apex Hotels group.

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Later this year a major conference in Scotland will give SMEs the chance to unearth lucrative new opportunities in the defence, security, marine, space and aerospace sectors. BQ meets the driving force behind the event – Dave Townsley, head of industry organisation NDI – to find out more.

Conference brings £25bn of supply chain opportunities to Scotland


HEN membership organisation NDI was conceived over ten years ago, it started life with the aim of providing business support and development predominantly within the defence sector. Today, although the organisation remains heavily involved in helping SMEs gain access to defence contracts, it is also now charged with opening up exciting international projects in the aerospace, nuclear, space, marine and security sectors – markets that are collectively worth over £25bn to supply chain firms. Having identified these new and emerging sectors of growth in the global market and set its sights on unlocking future opportunities for SMEs, the organisation is now heading to Glasgow to help Scottish businesses take full advantage. In November the organisation will bring a host of expert speakers, representing some of the world’s largest industrial firms, to the Glasgow Hilton for a landmark event which will present numerous opportunities to SMEs. The event comes as NDI looks to build on its experience of working on projects such as the upgrade of the MoD’s fleet of Warrior vehicles and expand on its already impressive portfolio of contacts to open up a world of new opportunities for its members. “The world is changing and NDI has to change with it,” says the organisation’s recently appointed executive director, Dave Townsley. “Over the last 10 years NDI has predominantly operated in the defence market and in that time has generated around £420m worth of business for its members. “But defence spending is shrinking and the MoD is


currently undergoing major reforms. While there remains a significant spend in the defence sector, we have to move with the times if we want to have another 10 successful years.” As well as updating delegates on the latest developments in the defence, security, space and aerospace industries, the NDI Opportunities Conference: Building for Growth event will provide SMEs with a unique platform for marketplace engagement and knowledge development among the business community. Alongside the 25 big-name buyers who will be in attendance on Wednesday 28th November, speakers from industry and government will also be on hand to share their expertise on the key sectors represented by NDI. “This is a fantastic chance for businesses to potentially procure new contracts and find out more about prime contractors in terms of what they need and what they are looking for,” says Townsley. “We have experts in the field of all the key sectors we operate in to address the 150+ businesses we are expecting to attend, so it should be extremely valuable for any SME operating within these fields,” he adds. Attendees will be able to hear directly from Boeing, Bombardier, BAE Systems, Selex, Thales and several other tier one suppliers about forthcoming business opportunities. They will also have the option of taking part in face-to-face meetings with buyers with real purchasing requirements. NDI’s decision in recent years to branch out into dynamic new areas of global spending means it can now provide a bridge between its members and key international contracts currently on the horizon in


David Townsley, Executive Director of NDI

a fantastic chance for businesses to potentially procure new contracts and find out more about prime contractors in terms of what they need and what they are looking for

the emerging space, aerospace and security markets. The organisation is also working with its members to ensure UK businesses can take advantage of international opportunities in markets such as India, China, Brazil, Saudi Arabia and Europe. And this international focus and expertise will certainly be reflected at NDI’s Scottish conference, with headline speakers giving an insight into global, as well as UK-based, opportunities. Stephen Cowan, general manager of supply chain at Bombardier will kick the event off by sharing


invaluable information on opportunities within the firm’s supply chain and how to tap into them. Senior procurement figures from SAAB Bofors Dynamics, meanwhile, will reveal how Saab put together the team that won a £400m+ contract with the British and Swedish MoDs, which is regarded in the defence industry as a real victory for UK SMEs. Also taking to the stage will be Alan Cox from the International Space Innovation Centre (ISIC), who will explain how businesses can reap the rewards of the rapidly growing space industry through the ISIC. Boeing’s industrial participation specialist Tim Wheeler will also be in attendance to set out exactly how best to win business within Boeing’s vast supply chain. Supply chain opportunities will also be the focus of a session from BAE Systems, with the organisation’s Gary McCloskey explaining how SMEs can get involved in the Type 26 Global Combat Ship Programme.

Event in focus The NDI Opportunities Conference is a unique opportunity to meet key contacts in the aerospace, defence, marine, space, security and related industries. The event, on Wednesday 28th November gives delegates the chance to hear directly from Boeing, Bombardier, BAE Systems, Salex, Thales and other prime tier one suppliers about forthcoming business opportunities. SMEs in attendance will also have the opportunity to win new business through face-to-face meetings with buyers with real purchasing requirements. Headline speakers will also offer valuable insight into the inner workings of the procurement process around the lucrative supply chain work available in NDI’s key sectors. The event is delivered with the support of Scottish Enterprise and Scottish Development International. Tickets are available now from £245 +VAT. Book online at or email


C Mantis Unmanned Aerial Vehicle (UAV), copyright© 2010 BAE Systems Dave Townsley will also take time to encourage more UK SMEs to target untapped opportunities in the emerging aerospace, space and security markets as well as urging more UK firms to take advantage of NDI membership. He says: “We very much want to offer our services across the whole of the UK in order to satisfy the needs of the global markets. “The conference will have key buyers from some of the prime contractors but also have buyers there from various supply chains, so it’s a great opportunity to forge relationships and potentially, contracts.” Townsley, who has a prolific track record in helping SMEs access new contracts through his work with supply chain development service Compete North East, working in close partnership with Olympic bodies LOCOG and ODA, also believes the conference could help many Scottish firms land the new business they need to return to growth. The director, who is also a serial entrepreneur with a diverse portfolio of successful businesses, says: “Ultimately the conference is all about growth and getting access to new business opportunities. The bottom line for businesses who join us is that they get access to genuine opportunities and in everything we do, it comes back to the same thing – and that’s how we can get more contracts for our members.” With expertise in a wide range of specialist areas, NDI’s expansion into new sectors of global growth looks certain to propel UK-based SMEs into the international arena.


“We want to go beyond being an opportunity and contract facilitation service and provide a full suite of initiatives and products that help our members become more competitive and be in the strongest position possible to secure new business,” says Townsley. “Our services include a central capability database, one-to-one consultancy support and an extensive calendar of events providing members with opportunities to meet with potential buyers to promote their businesses,” he adds. Having laid bare its vision for the future in global defence, aerospace, space and security projects, NDI is determined to stay at the top of its game and is urging you to join them. Providing a comprehensive membership package, the organisation can facilitate introductions to core contractors working on a multitude of major multi-million pound projects.

NDI Opportunities Conference: Building for Growth takes place on Wednesday 28th November at the Hilton Glasgow hotel. To book your place call 0191 426 6333, email or visit




Mind the Gap or we fail the IT test Polly Purvis, director of ScotlandIS, the trade body for the ICT industry, warns that more has to be done to get young Scots into the computer industries of the future

Fifty years ago people knew what different jobs encompassed; a miner, a bank clerk, an engineer, a shipbuilder – you knew what they did. But work has changed and increasingly people don’t know what roles involve – what is a geophysicist, or a business consultant? What does working in a contact centre or an intensive care unit involve? What for that matter is software or digital media? And if we don’t know, how much more difficult is it for our young people and their teachers and advisers, to keep up with the changing workforce opportunities? Take the IT industry, which encompasses software and digital media, as a case in point, whilst recent economic reports make for grim reading, the IT industry worth £4bn to the Scottish economy annually, continues to expand. A key driver of economic growth, it’s creating thousands of new job opportunities every year. Over the next five years the IT workforce is expected to grow four times as fast as the average Scottish workforce. Technology is now an integral part of virtually every business in Scotland, from social media to cloud technology, and so technology skills are likely to be in even greater demand. The sector already employs over 100,000 people in Scotland. People work for well known companies such as BT, Amazon, HP,

Virgin and Microsoft as well as lesser known but growing businesses such as Bloxx, Craneware, Kotikan, Pulsion and CIVIC. They also work in specialist technology departments throughout financial services, medicine, energy and engineering, and the public sector. A highly paid, highly skilled industry offering attractive working conditions including flexible working and the opportunity to work all over the world, you’d have thought it would be easy to attract new employees, but the IT sector currently faces a growing skills shortage. This is partly because the industry has a low profile, but perhaps more importantly because young people in particular have no concept of what working in the industry involves, and which skills are in demand. I suspect this is an issue very many businesses face, particularly in fast paced industries where there is constant change. We can’t rely on hard-pushed careers advisers being able to keep up with these changes. Those of us in business need to help address the issues, too. At ScotlandIS, as the trade body for the IT industry, we are working in partnership with Skills Development Scotland, Scottish Funding Council, our sector skills council, and others to tackle these problems. We very much welcome initiatives that are starting to deal with some of the challenges

How much more difficult is it for our young people and their teachers and advisers to keep up with the changing workforce opportunities?



– such as the new “World of Work’ website developed by Skills Development Scotland to provide up to date careers advice, and the BigAmbitionScotland portal aimed at informing youngsters and teachers about careers in our industry. We’ve been a partner in developing, e-Placement Scotland, an industry specific placement programme for college and university students to give them real paid work experience before they make their career choices. Not only does it improve their employability but it also helps open their eyes to the wealth of opportunities available to them. There is still more to be done before the general public really understands what working in the IT industry today entails, but these are steps in the right direction. We’ve found the partnership working very effectively and would recommend it as a model for others in the business community. The technology sector skills gap is a real issue and not one that will be solved overnight. We need to ensure the message is understood at all levels, by school pupils, teachers, and parents right through to careers advisers, colleges and universities, and the wider business community. There is a lot that we can be doing to attract new people to the industry - investing in up to date careers advice, engaging with schools, practical placements and demystifying the work the industry engages in. Ensuring that young people understand the opportunities and gain the skills required will help to provide enough skilled workers to keep the nation’s technology industry competitive. This will benefit not just the individuals and companies directly involved, but also our whole economy. n







Going for Highland gold

The beautiful hills of Cononish, above Tyndrum, are the site of Britain’s newest gold mine. Gillian Law met Chris Sangster, the founder and chief executive of mining company ScotGold, looking to strike it rich in the heart of Scotland Some of the romance has definitely gone from gold mining. There’s no more simply staking a claim in the hills, no more panning the streams... and when you go underground mechanical diggers have replaced the pick axes and wagons on rails. But even in these days of detailed planning permission and chemical processing, the end result is still the beautiful gleam of a bar of pure gold. Add in the notion of that being Scottish gold, from the green Cononish hills above Tyndrum, and maybe the romance really isn’t dead at all.


There’s been talk of gold in the hills at Cononish for decades and many have seen the potential but never quite managed to make a go of it – not least because of fluctuating gold prices. This time, however, ScotGold co-founder and CEO Chris Sangster is confident his plans are coming together – the price of gold has risen and seems stable, and by this time next year there should be shimmering bars of pure Scottish gold ready for sale on the world market. Sangster has been working on the project to extract Scottish gold from the Cononish mine


since 1996, and co-founded ScotGold in 2007. The Australia based company was granted planning permission in Scotland’s national park region for a new mining operation in October 2011, after an initial attempt had failed on environmental grounds. In July 2012, ScotGold announced it had secured an initial £1.2m in funding from RMB resources, the merchant banking business of South African financial services group FirstRand. That’s effectively a “bridging loan”, says Sangster, “to take us through to a position where the bank is satisfied that we’re >>



ENTREPRENEUR going to do what we say what we’re going to do.” If all goes well, work will begin at Cononish in March 2013, with the first gold produced within eight months. Sitting in his office in the quaint, wooden building at Upper Tyndrum station, hidden in the trees above the village, Sangster admits it’s been a long and frustrating process getting here. “But mining is typically a fairly long gestation period – five to ten years is normal.” The process from taking initial drill samples to gaining permission and to finally producing is inevitably drawn out and expensive, he says. The Cononish mine is a fairly shallow one, following a narrow slice of rock running vertically through the hillside. The area is around 600 metres long, and between 150 to 200 metres high, and is estimated to contain between 140,000 and 150,000 ounces of gold, as well as considerable amounts of silver. Getting it out of there isn’t a straightforward process. Unlike coal, miners can’t simply chip out lumps of gold from the mine wall – it takes serious blasting, grinding and chemical treatment to separate the gold and silver from the other minerals they are attached to. Rock will be removed by hydraulic blasting equipment and diesel-powered loaders, placed into ten-tonne trucks and taken to ScotGold’s processing plant just down the hill from the mine entrance. Once there, the football-sized lumps of rock are broken down in a series of crushers and mills to produce smaller and smaller pieces. The eventual fine powder – each piece of rock reduced to a diameter of 0.1 to 0.2 millimetres  - is then ‘panned’ in a gravity concentrator, a more advanced method of the gold panning we’ve all seen used in films. The high specific gravity of gold allows it to be separated from the surrounding rock. However, those old prospectors were clearly missing a trick, as only about 25% of the gold can be separated this way – the majority remains ‘stuck’ to the other minerals around it. It takes a chemical process called flotation to get at the rest of the gold and silver, activating and skimming off the other minerals, followed by a final smelting process before the precious metals are freed. The ‘tailings’ also have to be dealt with, the leftover, treated rock still has to be managed



An old adage in mining says that the best place to look for a new mine is in the shadow of an old one

and put somewhere. A tailings management facility is therefore being established near the mine to dispose of the remainder of the rock – expected to total about 400,000 tonnes over the seven planned years of the project. It seems a lot of work for a small amount of shiny stuff – one tonne of rock is likely to contain about 10 grams of gold. But when you realise that 10 grams is worth £300, it


starts to be clear why it’s worth the effort. Mining and processing a tonne of rock costs about £100, Sangster says, leaving a margin of £200. “Then you’ve obviously got to pay back the capital. This deposit is relatively small, so that puts a fair dent in your profits. And obviously it depends on the price of gold, which at the moment is about £1,000 an ounce,” >>




Sangster says. With 140,000 to 150,000 ounces to extract, the figures still add up well. “That’s £140m or £150m. Capital is about £22m, and for operating costs you’ve got to knock off another £40m – so there’s potential for £70m or £80m profit over a seven-year life. That’s not bad.” The Cononish mine is likely to employ around 50 people once up and running, many of them from the local area. ScotGold is prepared to train workers, and stresses that many of the skills needed are transferrable ones, which will help workers find future jobs outside of the mine too. ScotGold has also been working with many students interested in the minerals industry, hosting MSc students, giving work experience to undergraduates and is currently sponsoring a PhD student. That student’s work could prove vital to the future of ScotGold, as she is focusing on any potential ‘genetic link’ between areas



of gold found around Cononish. That involves looking at the different occurrences of gold in the area and establishing whether they were formed at the same time, or through the same process. By characterising the gold in this way, the hope is that the team can improve their chances of drilling in the right area, and potentially finding new and lucrative ‘veins’ of the quartz that contains the gold without wasting too much money in looking for it. While the initial ScotGold project is expected to last seven to eight years, Sangster says “there’s an old adage in mining that the best place to look for a new mine is in the shadow of an old one,” and he hopes that the exploration work may find new areas to mine in future. Talk of genetics brings us back to the ‘Scottishness’ of the Cononish gold resource. Is it distinctive, or particularly Scottish in any sense? Sangster quashes any dreams of McGold with common sense. “From a chemical perspective, gold is gold,” he says.


“The value in Scottish gold is its rarity – this is the only commercial gold mine and there’s very little Scottish gold. Unless we find another one!” And then Sangster relents a little, explaining that gold is in fact affected to some degree by its environment and the other minerals around it, with trace elements that can give specific characteristics - so there may be some distinctive note to the Cononish gold after all. Sangster has been a mining engineer throughout his working career, spending much of his time in South Arica and Zambia. He is well and truly settled in Scotland now, though, and clearly excited about finally getting started on the project that has taken up so much of his life over the past few years. The office will move from its current peaceful setting up into the noisy processing plant, and the staff of seven will turn into a bustling fifty. But at least he’ll be on the spot when that first gold bar is produced – a beautiful pay-off for years of hard work. n



How an Australian firm took a shine to Cononish gold It certainly takes patience to invest in gold mining. There has been serious interest in the Cononish mine since the 1970s, by a variety of companies who have tried and failed to strike gold. Scotgold Resources itself was established back in 2007, and has yet to report a profit or pay a dividend. The company was founded in Western Australia, where it raised AU$A4.9m through an IPO before listing on the Australian Securities Exchange (ASX) in January 2008. Two years later, in February 2010, the company’s shares were also admitted to trading on Alternative Investment Market (AIM). At the time of going to press, the company’s shares were worth AUD$0.060 and 4.375p. In the financial year to 2010/2011, Scotgold reported a consolidated loss after income tax of AU$910,466, and cash reserves of $950,668, the fourth consecutive year of reported losses. But things could finally be about to turn the corner: with substantial funding secured in July 2012, and mining due to begin in earnest in 2013, the company hopes be reporting healthier results soon. Chris Sangster, director and chief executive, says that this latest funding - £1.18m from RMB Resources, an arm of South African financial services company First Rand – was vital. It will let the company continue its work at Cononish and prove it is heading in the right direction, in order to get the further loans it needs. In its quarterly market update issued in July, Scotgold projected that investment payback would be seen within 18 months of the start of production, if current gold prices of $1,100 an ounce continue. The wealth of mining talent on Scotgold’s board helps too, in reassuring investors that this is a worthwhile way to spend their money. Sangster is supported by non-executive chairman John Bentley, and non-executive directors Phillip Jackson and Shane Beatty Sadleir. Bentley has over 40 years’ experience in the natural resources business, and currently serves on the boards of several resource companies, including as chairman of Faroe Petroleum, deputy chairman of Wentworth Resources and non-executive director of Resaca Exploitation, Kea Petroleum and SacOil Holdings. Sadleir is a soil scientist and geologist with over 30 years’ experience in exploration, mining and environmental aspects of the mining industry, while Jackson bring legal expertise to the board – a barrister and solicitor, he has over 25 years legal and international corporate experience, especially in the areas of commercial and contract law, mining law and corporate structuring.





Scotty the Brave

A once familiar food brand - founded in 1948 - was relaunched two years ago after years missing from the supermarket shelves. Managing director Paul McLaughlin tells Karen Peattie about the amazing response to the return of Scotty with its iconic doggie logo and its commitment to fresh vegetable produce from across Scotland




Sitting in his airy Bellshill office on a rare sunny summer afternoon, Paul McLaughlin is in wind-down mode, looking forward to a trip to London to take in the Olympics. Over the next few weeks Team GB would go on to win 29 gold medals, our athletes thrilling the nation and making us proud to be British – pride that the managing director of fresh food producer, Scotty Brand, can identify with. Lanarkshire-based Scotty Brand, a wholly owned subsidiary of Albert Bartlett, the UK’s leading grower and packer of potatoes, has experienced its own winning streak this year, landing the healthy eating award in the Scotland Food & Drink Excellence Awards and also marketing campaign of the year in the prestigious Re:fresh awards for the fresh food industry in London. The company has also been riding high on the back of its high-profile tie-in with Disney/ Pixar’s much-acclaimed film, Brave. Softly spoken and unassuming, McLaughlin says: “We’ve had an incredible year. Scotty Brand is really making its mark on the industry and we’ve seen our sales more than double this summer alone. “That’s really something when you consider the awful weather our growers have had to contend with so our success is a real testament to their commitment. “We’ve invested over £1m in the Brave campaign which saw us make our UK television debut and it’s a lot of money for a company that’s still very much in its infancy. But that’s what brands have to do – you have to act and behave like a brand and that means investment in above-the-line activity. “In this case, the real bonus is that the film’s been fantastically well received and really struck a chord with people so we’re looking forward to the second tranche of the promotion around the DVD launch in September, October and November.” The Brave campaign, suggests McLaughlin, has worked so well because there is a prize for everyone. A reward features on every pack of Scotty Brand potatoes and carrots as well as its seasonal Ayrshire new potatoes and soft fruit, available in Morrisons, Tesco, Whole Foods Market and Asda. It engages with consumers who have to enter the unique code on each pack on the Scotty


Brand website, where the film’s heroine, the feisty Merida, fires her arrow at a target to reveal a reward. “Brave ties in so well with our own family values – we’re a family company, our growers are families and our produce is fresh and natural and healthy,” says McLaughlin. “The film shows Scotland at its glorious best and the great thing is that every pack’s a winner, be that one of the six family adventure holidays to Gleneagles Resort in Perthshire, private screenings of Brave, or other Brave and Scotty Brand goodies.” Interestingly, it was the film-makers who approached Scotty Brand about the campaign. Albert Bartlett had previously linked up with Disney/Pixar and Toy Story 3 to run an on-pack promotion on its Rooster potatoes.

“We already had a history with them and they were keen to link in with a healthy product for Brave so it was a perfect partnership and an unbelievable opportunity for us,” he says. “It underpins our brand values of freshness and provenance and sends out the message that produce from Scotland is natural and offers a guarantee of quality,” he adds. “You don’t have to emblazon your brand with Saltires or thistles to get the provenance message across.” McLaughlin may not show it outwardly but he is hugely passionate about the food and drink industry, and behind his quiet demeanour lies a steely grit and determination that has played a pivotal role not just in Scotty Brand’s remarkable growth but in raising the profile of the wider industry. >>

You don’t have to emblazon your brand with Saltires or thistles to get the provenance message across



SUCCESS STORY He was chief executive of industry organisation Scotland Food & Drink prior to joining Scotty Brand and his credentials include 15-plus years at The Coca-Cola Company where he was responsible for the commercialisation of marketing initiatives in Great Britain, Ireland, France, Holland and Belgium. His decision last year to join Scotty Brand after three-and-a-half years at the helm of Scotland Food & Drink came as a surprise to many industry watchers yet McLaughlin describes the move as “an opportunity and challenge that I simply couldn’t turn down”. “I’m aware that there were a few raised eyebrows at the time but I felt I’d made a big impact at Scotland Food & Drink and very much set the scene for its future,” he explains. “It was a brand new organisation when I joined it back in 2007 so it was very much about engaging with food and drink companies, key industry players, politicians and other industry organisations, setting targets and convincing people that collaboration is the best way to achieve and sustain growth. “The Scotty Brand opportunity came along when I was considering my future and while I had mixed feelings to a certain extent it was perfect timing, really, because I was able to leave when all our targets to date had been met, there was a great team in place and we weren’t in the middle of any key projects. I’d secured the financial stability of Scotland Food & Drink so it was a good point in the business cycle to move on.” Shoppers who frequent the major multiple supermarkets are becoming more familiar with Scotty Brand as it achieves more listings not just in Scottish stores but south of the Border, too. As well as potatoes, carrots and prepared vegetables, there are strawberries, raspberries and three varieties of lettuce. And, of course, all produce is grown in Scotland and is seasonal. Meanwhile, consumers who want to learn more about where the produce comes from can read all about the Scotty Brand “family” on the company’s website. Potatoes are grown in Ayrshire, Perthshire, Angus, Fife, Aberdeenshire and Ross-shire, carrots are grown in Aberdeenshire, berries in Perthshire and lettuce in Fife. What’s more, there is



information on where to buy Scotty Brand and what’s available seasonally, plus recipes. Scotty Brand itself, instantly recognisable thanks to its dog logo, is by no means a new brand. It was founded back in 1948 and relaunched only two years ago after a long absence. With all the excitement surrounding Brave, however, many consumers have been introduced to it for the first time and McLaughlin points to “amazing feedback” in recent months. “It’s one of the really gratifying things, when people actually bother to send an email or put pen to paper to tell you how much they like your brand,” says McLaughlin. “People are always quick to tell you when there’s a problem or if something’s not right. To have them picking up the phone and wanting to speak to us is something I never would have expected – it’s a great feeling. “We’ve also embraced social media and the internet because it’s how so many people of all ages communicate now,” he continues. “Of course, we have to be aware that not everyone is part of the online revolution and we will continue to promote Scotty Brand via above and below-the-line activity.” An engineering graduate from the University of Glasgow, McLaughlin can boast a wealth of commercial experience and an intimate knowledge of the Scottish food and drink industry – and that’s why Albert Bartlett’s managing director, Ronnie Bartlett, wanted him to drive Scotty Brand. With the backing of Bartlett, one of the Scottish food and drink industry’s senior statesmen, McLaughlin has big plans for Scotty Brand. “When I met with Ronnie Bartlett and heard his vision for the brand, I was blown away,” says McLaughlin. “He spoke about premium, provenance and health – all of the things I was pushing at Scotland Food & Drink. We were very much singing off the same hymn sheet.” While the company is focused on fresh produce, McLaughlin’s ambitions are to see Scotty Brand in every aisle of the supermarket with premium-quality Scotch beef, salmon, biscuits and shortbread, cereals and oils among a number of product categories he is currently exploring. “I’m speaking to a lot of potential partners


and it’s all looking extremely positive,” McLaughlin confirms. “It isn’t going to happen overnight and we certainly won’t be rushing into anything because we have to make sure the product quality is right and we don’t want to do business with people who don’t share our passion and commitment. “Scotty Brand’s values will always be centred on premium, provenance and health and, where fresh produce is concerned, seasonality. We won’t allow anything to compromise that. In a nutshell, we’re looking to take the best Scottish products under a brand umbrella that represents quality, health and provenance. It’s really quite a simple concept but one that has huge scope to develop with the right partners and help Scotty Brand make inroads into overseas markets.” At times, McLaughlin appears not to fully appreciate just how far Scotty Brand has come in a relatively short time. This time last year the brand was valued at just over £600,000. It’s now a £3m brand. “Heading towards December we will be a brand worth £5m,” he says in his typically unassuming manner. “In terms of growth we are very much on track and I would go as far as to say we are one of the fastest-growing food businesses in Scotland.” Pressed on Scotty Brand’s rapid and impressive growth, McLaughlin smiles. “Yes, we’ve done well,” he concedes. “We’re a very small team and while we operate as an independent business from an operations perspective we still rely on Albert Bartlett for our back office services including finance, IT and so on. However, as we grow as a business we will eventually take all of these functions in-house. “We’ve had a great year and much of that can be attributed to Brave. The campaign has exposed Scotty Brand to new consumers and given us more confidence, and I’m delighted to say that most retailers absolutely get the premise of Scotty Brand and what it’s all about. We have a bit more work to do on this south of the Border but we are already demonstrating that the brand does sell on the basis that it is the source of good, quality food – in season – from Scotland.” McLaughlin accepts that his aspirations for the company and its unique brand are ambitious. “The first product outwith the fresh food >>







Box fresh: Despite a challenging economic backdrop, Scotty Brand has emerged as one of the fastest growing food businesses in Scotland sector will be critical for us – we have to get it absolutely right,” he says. “I can’t yet say what that product will be but we will be making a lot of noise about it when the time comes. “We’ve done a lot of research and it tells us that consumers want to eat more seasonal produce and more quality Scottish produce and what we are very, very clear on is that when a produce is out of season in Scotland, we don’t sell it. “What I envisage is consumers looking forward to the new season of strawberries appearing in the supermarket – I want them to be thinking, ‘I can’t wait for the first Scotty Brand strawberries of the season to appear’. “There’s no doubt that demand for Scottish produce is on the rise – people care about the provenance of their food and Scotland is seen as a guarantee of quality across a large number of categories. Scotty Brand is very


much seen as an innovation in the market because there are very few fresh produce brands at the moment. It gives us that all-important point of difference and makes us stand out.” Discussing the wider Scottish food and drink industry, McLaughlin admits that “it’s a tough place to be” given the current economic climate although he points to encouraging export figures in sectors such as whisky. It has been widely reported in the trade press that the big multiple retailers are increasingly pushing suppliers to the limit when it comes to negotiating deals but McLaughlin describes them as “supportive”. “Working with retailers will always be challenging for everyone but we’ve experienced some terrific support, particularly from Asda, Morrisons and Tesco,” he points out. “It’s a difficult business environment and


there can be problems when a buyer you’ve forged a good relationship with over time moves on – it’s back to square one because you have to get to know the new buyer and build a relationship again. “With fresh, seasonal produce it’s a slightly different ball game because you’re delivering a premium product and you have to get it there on time in perfect condition,” McLaughlin explains. “This is something we are very good at and we work very closely with our growers in this area. If we can get our product into stores quickly, consumers notice the difference in terms of quality and are prepared to pay a little bit extra.” The next chapter in the story of Scotty Brand may not be as exciting as Brave but it certainly promises to make its mark in the history of the Scottish food and drink industry with Paul McLaughlin in the starring role. n

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Algy returns to stake his claim

He is an oil industry legend. Now Algy Cluff is back scouring for assets in the North Sea after making his mark in the Buchan Field in the 1970s. Here the colourful explorer talks to Kenny Kemp about why he is returning to his old stomping ground

Algy Cluff is described as the exotic oilman, often dubbed ‘The Man with the Midas touch’. Certainly his life story would make a lavish Technicolor biopic tracking the twists and turns of this veteran entrepreneur. He is still admired in Aberdeen for his gumption in discovering gushers of oil in the North Sea, but it was his quest for gold in Tanzania and his mining exploits across Africa which made him front-page news. Early this year, having turned 72, he turned his back on Cluff Gold and set up Cluff Natural Resources, his fifth company to be listed on an internationally recognised stock market – and he is looking again at the North Sea, to see if he can repeat his jackpot of the 1970s. Two years ago, he created Cluff Geothermal, with managing director George Percy, in the North


East of England, which is conducting geo-scientific sampling at Shiremoor, North Tyneside, and Eastgate in County Durham. He might be older, wiser and with a lot more wispy grey hair, but he still displays the flair of a maverick entrepreneur who has been able to beguile the most cynical investors in his quests for oil and for gold. “I am an entrepreneur, not a manager. I like building businesses up and then I get bored to death when it comes too procedural rather than entrepreneurial things. I judged, as I have done several times before when I have been taken over, so the decision has been forced upon me. I judged my task was done at Cluff Gold. So I said ‘Sorry, I’m off and I want to start a new operation’,” he explains. Despite the gruff exterior, and his refusal to smile for our camera, Algy Cluff is an engaging character who doesn’t take life too seriously, poking fun at the contradictions of business life and the hypocrisies of global politics and economics. “With Global Natural Resources, I am gradually re-assembling some of my old team and this is primarily an oil and natural gas company. And we are looking all over the world. We are hoping to do a deal in the North Sea but I won’t just do a deal because

people expect me to do a deal. I will not pay through the nose for it. One has to be extremely careful about value,” he explains sitting in his book-lined board room in the Sanctuary, beside Westminster Cathedral. “My inclination in a way has always been to grow by discovery and not acquisition.” However, there is clearly an incentive for the septuagenarian to get a deal done. Algy’s remuneration stands at £120,000 a year but jumps to £200,000 once the first acquisition is in the bag. In the event that he doesn’t make an acquisition in the first six months, his fees are reduced to £80,000.
“Having looked at one or two North Sea deals, I am getting more inclined to start building up a portfolio of exploration interests and putting them into the ground rather than line other people’s pockets,” he says.

“With a lot of the deals these days basically you are paying someone else’s bills. They can’t raise the money themselves and there is going to be a torrent of fundraising in September onwards. There are so many companies which can’t meet their cash calls in whatever business they are in,” he adds.
“The banks are not helping at all and the fund managers are on strike, in the sense that they are exasperated by the big companies and their lack of a dividend >>

The entrepreneurial explorer: Cluff is a firm believer in growing businesses through discovery rather than acquisition, while he says managerial matters bore him to death



ENTREPRENEUR policy. And they are fed up with being told lies or the sheer incompetence of a lot of smaller companies. Very unusually will they back pure exploration and you have to have cash flow or imminent cash flow to attract their attention or their support. I am keeping my powder dry. We have just rejected a deal but we have enough firepower for the right one, when it comes along at a good price. Some people are too greedy and we just decided to leave it alone,” he says.

On the morning BQ visited Algy Cluff, he was preparing to welcome two companies: one from onshore Egypt and the other from the Caribbean. But he refused to be drawn on the company names, preferring to keep things close to his chest. “I am not being complacent, but we are in the fortunate position of doing things on our terms rather than somebody else’s.” But his undying love of Scotland – he has his Highland estate with its baronial mansion at Gruinard on Strathcarron –  was born in the glory days of Cluff Oil in the 1970s, when he decided to take an immense gamble. “I remember most vividly the paralysis which affected the early executives in BP and Shell,” he says. “Not one single individual left BP, Shell or Burmah to go to the City of London, and no doubt Edinburgh and Glasgow, and say ‘We want to start a new oil company, will you back us?’”
The merchant banks were waiting for an avalanche of risk-taking executives, which never transpired.
“It happened every day in the United States. Adventurous people with expertise and knowledge leaving Texaco and ConocoPhillips and starting up oil businesses. That’s why there are 30,000 oil companies in America,” he says. “Here, notwithstanding the evidence on our doorstep that there was going to be a huge oil boom in the North Sea, no-one left to start an entrepreneurial oil company in the UK. I was staggered by that. “Then I thought, this is an opportunity.” John Gordon Cluff was born in April 1940, educated at Stowe School before joining the Grenadier Guards, becoming a captain serving in Cyprus, West Africa and Malaysia, where he first saw some entrepreneurial opportunities in rubber plantations. “I had done something serious, because I made some money while serving in the British



Army, which you are not supposed to do,” he says with a raucous laugh.
While serving in emerging Malaysia, he bumped into Charles Letts in a bar in Singapore. Now aged 96 and one of the Scottish diary dynasty, Letts was the owner of rubber plantations, which were owned by Scottish and English companies at this time.
“He said to me, ‘You guys in London don’t realise that these companies you value on the stock market on the basis of their earnings - and they make £100,000 a year -  are actually property companies’. So they were all worth a fortune as the cities were expanding and getting into gear. The only way a young and enterprising country like Malaysia could expand was through building new homes on the plantations.” Algy wrote to Harold, his father, from his jungle base, tipping him off. His father bought a pile of shares in the plantations which were then bought as Kuala Lumpur and other cities expanded rapidly.
“My father made a ton of money out of it, and when I left the army, he gave me the profits so I didn’t need a job.” He went off to America and worked as a political speechwriter for a Congressman in New York. It wasn’t a success because the politician lost his seat and Algy returned to London looking for something to do. It was then that the UK oil industry beckoned. The fourth round of awards for blocks in the North Sea was being advertised. [In 2012, it is the 27th round].
 “I realised there were no British companies showing any interest apart from the big players such as BP and Shell, and they were getting whatever they wanted. Of course, they found oil with every hole they drilled in the early days. I put this consortium together with my friends and we put in an application for 20 block licences in the hope that we might get one. We got the whole lot. We were absolutely staggered, after the euphoria there was a lot of panic about how we were going to fund it,” he says with another trademark laugh.
Algy formed CCP North Sea Associates, with Cluff Oil Ltd managing the exploration, and approached Barings Bank. The bank was delighted to help raise the money saying they had been waiting for UK nationals to come to them but he was the first.  “The money for the first hole was raised:


Block 21.1 in August 1974 and cost £650,000. We thought we were being ripped off royally. It would cost £65m today. And we discovered oil with our first hole in the Buchan Field, and everyone made a lot of money. Except me.”

The Buchan Field is 120 miles north-east of Aberdeen and was only the 14th commercial oil field in the North Sea, and is still producing oil today, and Cluff became an overnight hero in Aberdeen. His associates all sold out, the company was bought by TriCentral, which was taken out by BP. “So it eventually ended up with BP. It was exciting times. I was on the rig when they discovered the oil. I came back with a tiny sample of oil in a Colman’s mustard pot, which I still have.” Now Algy Cluff is returning to the North Sea, sparked by Round 27, which closed for applications on 1 May 2012. It has been a record-breaking round in terms of applications, with 224 submitted for the 418 blocks of the UK Continental Shelf, the largest number since offshore licensing began in 1964. “I would like to go back into the North Sea in the gas sector. The gas sector is very complementary to the small companies. This is in shallower water and a much better fiscal regime. The heavy oil out in the Minches, off the Hebrides, is for the big boys. They can offset their exploration losses against big profits,” he says. “That’s too much for me.

Cluff Oil’s North Sea windfall led to a disastrous move into China, which cost him a fortune. He was invited by the Chinese government, who lacked the technical know-how to drill offshore, to explore the South China Seas. In 1980, Cluff Resources began the search for the massive untapped oil fields but, in the event, there were no geological formations to seal commercial quantities of hydrocarbon. “I remember meeting Sir Murray MacLehose, the Governor of Hong Kong, who was another Scotsman and a tall chap with a hawk nose. I was introduced as ‘Algy Cluff, who is looking for oil off the coast of China.’ He replied bluntly: ‘There’s no oil off the coast of China’. I thought he was a stupid idiot, however he was absolutely right. There was not a drop, we should have listened,” he says roaring again with laughter.
It was the biggest waste


of expenditure in the history of the oil industry, with nothing to show for all the effort. “It was a very interesting episode for a young man. We were very proud because we were the only independent oil company that was given an operational role in China. It was all BP and Shell. I learned a lot,” he says. While he didn’t find oil, he discovered money with the Hong Kong & Shanghai Bank, again with its Scottish connections, which allowed him to raise funds for the next phases of his entrepreneurial journey, taking him to dusty Africa and the gold mines of Tanzania. HSBC owned 33% of Cluff Resources, although at one presentation in Beijing it was reported that Cluff Resources owned a third of the major bank, “I didn’t disabuse the Chinese of this error!” Cluff Resources set up major mines in Zimbabwe, including the Freda Rebecca Mine, then the Ayanfuri Mine in Ghana, and the Geita mine in Tanzania in 1995 [The biggest gold discovery in Africa since the Second World War]. The company was taken over the following year by Ashanti Goldfields of Ghana for £80m. “If we hadn’t been taken over, we would have been a very big company but that’s capitalism for you. I do regret this in some way. I had a very good relationship with the workforce in the mines. We set up workers’ committees and made sure the conditions were good and as safe as they could be. I felt guilty that we had delivered them to a big company where they paid production bonuses and ripped the heart out of these things, while we were simply ambling along.” During his time in Zimbabwe, he became a friend of the now-despised Robert Mugabe, the country’s president. “I formed a very favourable impression of him in the early days. He was pre-Mandela and full of reconciliation in the beginning. He protected the white farmers at first, but they never met him half-way. There were 5,000 farmers and they could have given half their land. The indigenous Africans had fought a bitter civil war and won it and now they wanted what was promised by the London agreement. After a while, he gave up.” The Lancaster House agreement in 1979 promised US$35m compensation which was


He was pre-Mandela and full of reconcilliation in the beginning. He protected the white farmers at first but they never met him half-way not handed over by the UK government to the farmers. He says Prime Minister Tony Blair and Clare Short, the Secretary of State for International Development, aggravated the situation, rather than solving it. He felt they did not handle the situation well in Zimbabwe. In 1980, Algy Cluff bought the ailing Spectator, set up by Dundonian Robert Rintoul in 1828, which opened the door into a rarefied political and cultural world, where he rubbed shoulders with senior political figures, agenda-setters and journalists. “It was great fun. It was a very difficult distraction. It was losing money hand over fist. I had to keep it going and it was costing me £1m a year. “I took my eye off the ball but in the end we got it right with successive editors: Alexander Chancellor, Charles Moore, Dominic Lawson and then Boris Johnson, in their different


ways helped the magazine’s renaissance.” The secretive Barclay Brothers bought it out when they took over the Telegraph Group and Cluff, who was chairman, was asked to step down after 25 years. By this time, it was making £500,000 a year. “We had a tough job keeping it going. It was a tribute to the management side because Luis Dominguez and James Knox, who is now managing director of The Art Newspaper, and lives in Ayrshire, did a great job. We had immense difficulty getting money out of the banks and I could have closed it down many times. But we battled on.” From 1996 until 2003, Cluff was the co-founder and chairman of Cluff Mining Limited, renamed Ridge Mining which was bought by Aquarius Platinum in 2009. Then in 2003, he set up Cluff Gold, which was listed on AIM, with market capital of £107m. >>


ENTREPRENEUR The company concentrated on Africa with mines in Burkina Faso, the Cote d’Ivoire, and Sierra Leone, and Algy was chairman until April this year. The Cluff diaspora has spread into dozens of other international companies, and has created a number of multi-millionaires along the way. The recent riots and deaths of 34 people at Lonmin’s platinum mine at Marikana has turned the spotlight on conditions for workers in South African mines. Algy Cluff knows only too well about the volatilities in the mining sector when global prices fluctuate. “Every time I turned up at the mines they thought they were getting a pay rise, so it was better to stay away! My finance director would say ‘Don’t go!’” he says. Closer to home, he is excited about geothermal energy in the North East of England, with deep bore-holes on the edge of a radio-thermal Weardale granite, which might provide vast amounts of heat and power for thousands of homes on Tyneside. The managing director is George Percy, who has a geography degree from Edinburgh University, and an expert in early-stage sustainable and renewable energy projects in the UK. “There’s sodden wind farms all over the place yet nobody has ever drilled down three kilometres into granite rock to see if there is a huge source of heat that we can exploit. Newcastle University has drilled a hole as a proof of concept, but it’s a complex commercial process in the UK with approvals and planning permission. It drives the Australians and South African back to where they come from,” he says. He still has remarkable energy, getting up early and enjoying his three young children. He is married to Blondel Cluff, born in England to Anguillan parents, who spent 18 years practising in the City and was a special adviser to the Bank of England. She sits on the board of Cluff Geothermal and the West India Committee, founded in 1735, which is working to provide welfare – and re-instate Scottish Highland Games to Jamaica. Something that Usain Bolt might be interested in pursuing. Algy Cluff is an original. An entrepreneur who has made a mark of life, but he still loves the thrill of the chase. Let’s hope he strikes it lucky in the North Sea once again. n



Cluff takes aim for the investment trail Cluff Natural Resources began trading on AIM in May 2012 after placing 75 million shares at 5p each. This gives the company a market value of £4.35m with the management holding a 14.5% stake. According to the admission document, the company expects its investing policy to be implemented within 18 months. Cluff has its eye on two companies, one in Europe and another in Africa. At the time of writing, no deal had been concluded. The board comprises Algy Cluff, as executive chairman and chief executive officer; Nicholas Berry, controlling shareholder and chairman of Stancroft Trust, founder of Mintel International and board member of Daily Mail and General Trust; non-executive deputy chairman, Peter Cowley, a geologist and previously group technical director of Cluff Resources; with non-executive directors Dr Bobby Danchin, a geologist and former chief executive of Anglo American’s exploration division, the Earl De La Warr, a corporate broker who worked with Shore Capital; and Brian Fitzgerald, a banker with Hambros, Standard Chartered and then chief executive of Janson Green. The placing document said: “The directors believe that the continuing strong interest among global majors in these licensing rounds indicates that the UK North Sea is still capable of drawing exploration, appraisal and investment interest. Upstream investment in the UK North Sea as a whole is also on the rise, hitting a record £7.5bn in 2011, according to data from Wood Mackenzie. Total investment is expected to rise further in 2012 due to investment in a number of flagship projects in the West of Shetland area funded by international oil companies such as BP and Total. The Budget Report, published on 21 March 2012, announced supportive changes to the UK fiscal regime covering the UK North Sea that will: introduce a package of oil and gas measures providing long-term certainty on decommissioning relief; extend the amount and scope of the existing small field allowance; introduce a new field allowance targeted at the West of Shetland area; and introduce primary legislation to allow the potential introduction of measures to support investment in brown fields. Algy Cluff has 11.5% of the shares, JM Finn has 7.2%, Guinness Asset Management, 6.9%, Fleming Mercantile Investment Trust, 5.7%. while JIM, Pershing and Brewin Dolphin, all have around 4%. Shore Capital are the brokers for Cluff Natural Resources.


Stimulating economic growth in the west of Scotland through provision of gap funding loans to start up and growing businesses. Find out more‌



Retail and leisure firms braced for price hike, Aberdeen stands out from the crowd, police property on the market, tempting offer to Mull over, and CBI calls for more urgency >> Northern star leads the way Aberdeen has been the shining star in Scotland’s property market in an otherwise slow first half of 2012, according to a Cushman & Wakefield review. Sales of commercial buildings are down on 2011 with 83 transactions recorded in the first half of 2012 representing only 39% of the 215 transactions recorded for the whole of 2011. John Hamilton, partner at Cushman & Wakefield, said: “While the number of transactions is down, the value of the transactions for the first six months of 2012 at £540m is somewhat better being 42.5% of the full 2011 figure of £1.27bn. Indeed, given the normal tendency for transactions to spike in the last quarter of the financial year, it could be that we will yet see a similar result to that of 2011’’. While yields for prime investments have slipped during the first six months of the year, those for secondary have weakened dramatically. The review points out that the 2011 figure was the lowest since the recession began in 2008. The largest transactions in the first half of 2012 included: Property Type


Price £m


Shopping centre

Ocean Terminal, Edinburgh



Retail park

Burghmuir Retail Park, Stirling



>> Planning fees threat

High street

72/92 Argyle Street, Glasgow



Planning fees in Scotland could more than double for retail and leisure developments under plans currently being drawn up by the Scottish Government. Local Government and Planning Minister Derek Mackay announced in March that the Scottish Government intends to overhaul and increase planning application fees, but only in exchange for an ‘inextricable link’ to an improved service from local planning authorities. While the Scottish Property Federation supports the link between planning fees and performance it warned that the new fees in Scotland will in some cases exceed those charged south of the Border. For retail and leisure developers fees will increase from £319/100m2 to £500 and then up to £800/100m2 for developments larger than 2500m2. Overall the planning fees are increasing from a cap of £15,950 to £100,000. Research by the SPF shows that an 80,000 sq ft retail development would attract £23,000 in


Bridge View / Consort House, Aberdeen




Amazon, Sandpiper Drive, Dunfermline




George Hotel, 21 George Street, Edinburgh



Hike fear: David Melhuish


planning fees in England but the Scottish proposals would see the developer fork out £53,000. David Melhuish, director of the Scottish Property Federation, said: “You do have to question how the benefit of improvements in the planning service will be measured and achieved for the increased fees. There has been a huge drop in the number of major planning applications yet ‘service’ as measured by timeliness has dropped in the same period. “Consequently there remains considerable uncertainty about how the sanction of reducing fees for underperforming councils will work in practice and the business community will want to see much greater clarification in this key area of the planning reform agenda.”


>> Negative picture Most Scottish architects are still gloomy about the future and predict no immediate improvement in their workload. The results from the Royal Institute of British Architects’ Future Trends Survey illustrate the mixed fortunes in different UK locations and sectors. Architects in London are the most optimistic about their future workload, while Scotland and Northern Ireland remain the most pessimistic. In July 26% of respondents report that they had personally been under-employed in the previous month. RIBA’s Adrian Dobson said: “Members continue to report intense fee competition and a lack of project financing. “Although none of the Future Trends >>


Survey’s individual sector forecasts are predicting growth in workloads over the next quarter, the high-end private residential market remains resilient in terms of work in progress, sustained by low interest rates and inward investment.”

>> Cop shop sale A former police station in St Andrews is for sale for £1m. Located on the south side of North Street, the building is in a busy and attractive location adjacent to St Andrews University campus and a number of residential and commercial properties. The mid terraced 5600 sq ft three storey building comprises a cellular layout of offices with former police flats on the top floor.


Street and is another example of a company moving from Leith to the city centre as prime office accommodation within the city centre has become more affordable in recent years”.

>> Full house for Holyrood Holyrood Park House is now fully occupied following the letting of the last remaining suite to Universities Scotland. Holyrood Park House is a landmark development which provides high quality office accommodation and is situated in one of the most impressive locations in Edinburgh. Universities Scotland, the representative body of Scotland’s nineteen universities and higher education colleges, has taken the rear ground floor suite, comprising 4,454 sq ft, on a ten

year lease and joins CitiGroup, Intersystems, ESRI and the Royal Pharmaceutical Society as occupiers in the building. Holyrood is an established city centre business location with major occupiers including the Scottish Parliament, The Scotsman, the BBC and The University of Edinburgh.

>> Falcon swoops for Altens Buccleuch Property has sold its investment in Blackness Industrial Estate, Altens, for £2.95m to CBRE Investors for the Falcon Property Trust. The industrial estate on Blackness Road three miles from Aberdeen city centre and is one of the principal employment parks to the south of the city. The area is home to a number of global oil and gas companies, including Oil States >>

>> Guildhall gets revamp

>> Market bolstered by industrial strength

Redevco has awarded a £1.05m new contract to AKP to refurbish the first floor of The Guildhall, one of Glasgow’s most centrally located offices, as part of an overall £1.2m package of improvements. AKP, with their headquarters in East Kilbride, will revamp the first floor of the historic building in Queen Street, which was Scotland’s first ever atrium office scheme. The building features 145,000sq ft of modern office accommodation, with shops and restaurants on the ground floor and car parking in the basement. Work is expected to be complete in October 2012 and the new look floor will be available for lease at £16.50 per sq ft.

The industrial sector enjoyed quarterly total returns of 0.5%, making it the best performing sector in Scotland in Q2 2012 for the third consecutive quarter, according to the Scottish Property Quarterly from CBRE. On an annual basis, industrial was the only sector to outperform the UK as a whole in Q2 2012, with total returns of 7.7% compared with 6.7% for the UK. Q2 2012 saw total returns for all property in Scotland falling to -0.1% from 0.1% in Q1; moving into negative territory for the first time since Q2 2009. However, on an annual basis, total returns in Scotland remain positive, at 1.8%, below the total UK figure of 4.4%. Much of the cause of the disparity between Scotland and UK total returns is the performance of the Scottish office market, where quarterly total returns were -0.5%, compared with the UK as a whole where quarterly total returns were 0.9%. Quarterly total returns for UK offices excluding the South East and London was -0.8% meaning that Scottish offices are performing well compared to most other UK regions. The largest transaction was the £22.4m purchase of a distribution warehouse at Renfrew Road, Glasgow let to TDG until 2027 by Gatehouse Bank, representing a yield of 7%. Retail performed worst in Scotland in Q2 2012 with total returns at -0.5%, representing the second consecutive quarter of declining returns. Aileen Knox, senior director of CBRE (Scotland), said: “Investor demand is strongest within industrials, leading to a positive result for the sector, the most actively transacted of Q2 2012. Looking at the Scottish regions, Aberdeen is still flourishing and benefiting from an ever-buoyant oil market and demand for office space in Edinburgh and Glasgow is outpacing all other comparable regional centres.”

>> Lottery lease People’s Postcode Lottery has taken a new lease at 76 George Street, Edinburgh from CCLA. The office space extends to 8,192 sq ft (761.00 sq m) and has been let for five years at a rental of £155,000 per annum. Neil McConnachie of Eric Young and Co said: “76 George Street provided People’s Postcode Lottery with a unique opportunity to acquire an entire townhouse on George

Investor demand is strongest within industrials, leading to a positive result for the sector



COMMERCIAL PROPERTY Industries UK, LABTECH Services and Midcontinent Ltd. Meanwhile, acting on the instructions of Aberdeen City Council, Shepherd Chartered Surveyors is offering an industrial unit with yard in Dyce to let with offers of in the region of £25,000pa. The 3,140 sq ft property, has a 360 sq ft storage yard, and is situated on the south side of Wellheads Road within the Farburn Industrial Estate. James Morrison, surveyor at Shepherd’s Aberdeen office, said: “Given its location in the northern suburb of Dyce, eight miles north of Aberdeen city centre where a significant volume of the city’s commercial estates are situated along with Aberdeen airport, we anticipate that this property will appeal to tenants across a variety of industrial sectors.”

>> Branching out Handelsbanken, a relationship bank, is due to open a branch in Perth next month. Cowiesburn Asset Management acted on behalf of a private Scottish commercial property investor to secure a 10-year lease with the global banking group. Handelsbanken has taken a suite in the historic Old Academy building in Perth’s Rose Terrace. The Grade A-listed Old Academy was designed by renowned Scottish architect Robert Reid and was built in 1807.

>> Speed up system, says CBI CBI Scotland has welcomed Scotland’s improvement in planning performance but says greater urgency is required. Statistics on the performance of the planning system in Scotland show a slight improvement in the number of ‘major applications’ submitted by business and industry that were decided by planning authorities within the target four month period, compared to the same period last year. The Scottish Government statistics show that 38% of major industrial and business planning applications were dealt with within the four months target period during 2011/12,



>> A tempting offer to Mull over The opportunity to create your own ecological idyll on the Isle of Mull is on offer for £395,000. Ardachy House, just two miles from the village of Bunessan, is for sale. Knight Frank’s Partner David Reid is handling the sale on behalf of Cathy Jones and Margaret Walker who have owned Ardachy for over ten years. “Cathy and Margaret have run Ardachy House successfully as a small hotel only trading part of the year and to suit their own needs. With eight letting rooms and 4/5 bedrooms owners accommodation and 1 bedroom self catering apartment, Ardachy House has traded profitably as a small hotel/B&B but due to the fantastic location it also makes a wonderful large family home”. Ardachy House faces south, overlooking the beautiful deserted sands of Ardalanish Bay and beyond to the Hebridean Islands of Jura, Colonsay and Islay. This spectacular view really has to be seen to be fully appreciated. Located only a short walk from the beach, Ardachy offers a truly rural lifestyle with all the comfort and convenience of modern living.

compared to 35.4% the year before. 28.6% of major industry applications were dealt with within the four month target period in the first 3 months of 2012, compared to just 13% in the same period last year. CBI Scotland’s assistant director, David Lonsdale, said: “It is encouraging that the performance of planning authorities on deciding major commercial and industrial applications within the target four month period has improved. However, fewer than half of all major business and industry planning applications are being dealt with within the target period, which is why CBI

members still report that the cycle of frustration, uncertainty and delay in Scotland’s planning system has yet to be broken. “A new sense of urgency is required if the planning system is to become better at facilitating economic activity. More weight needs to be given to the needs of the economy when considering applications, with a greater presumption in favour of development built in. A new scheme is in place to better financially incentivise local authorities to support economic development, but monies generated should be ring-fenced for investing in the local economy.”

ONLINE: More commercial property stories are available on BQ’s website


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Bright Light in the Big City Edinburgh has just launched its ambitious five-year business strategy for the city. Kenny Kemp spoke to the council’s dynamic chief executive Sue Bruce to see what lies behind such bold measures for the capital

Sue Bruce runs a powerful and all-pervasive organisation. While the elected politicians make the decisions, and the Lord Provost undertakes the ceremonial formalities, Sue Bruce, as the chief executive of City of Edinburgh Council, and her executive colleagues, carry out their wishes, delivering services to an urban area beyond the immediate city boundaries to over 700,000 souls. If cities are the dynamos of Scotland’s future wealth, then Edinburgh’s council is turning a massive crankshaft to create the vital economic energy that is required in Scotland. But Scotland’s capital faces some acute challenges, particularly in tackling the business start-up rate and the rising unemployment among its young and excluded who exist in some of the poorest housing schemes in Europe. While the elegant Georgian New Town and the High Street teem with camera-clicking tourists, you don’t need to look far to see tell-tale signs of the homeless sitting forlornly on the pavement with their ubiquitous mongrels. Edinburgh’s council has taken a lot of punches in recent years, particularly over the debacle


of the Edinburgh trams and a scandal over statutory roof repairs for the city’s sandstone tenements. Senior officials have been suspended pending investigation. Some of these blows have been justified but others unfairly aimed when you consider the council is navigating the city through a terrible recession, exacerbated by the collapse of two of the city’s biggest institutions, RBS and Bank of Scotland. Sue Bruce’s arrival was hailed as an inspirational development. She had been the hero of the hour, reshaping a bashed and battered oil-rich Aberdeen where the hapless council got itself into some serious debt problems. Sue Bruce is recognised as a fire-fighter and fixer. Now she has turned her gimlet-eyed attention on Edinburgh. The council is a big beast with revenues of £1.4bn a year, and 17,000 people on the payroll, with over 14,000 full-time equivalents, from teachers, social workers, street cleaners to planners, gardeners and traffic wardens. “This is a massive business in anybody’s terms. And although the dividends we deliver to the city are shown in terms of social and economic


outcomes, we have to run it like a business,” she says. It also has a role in local business development, a task handed back to Scotland’s local authorities from Scottish Enterprise. “We have a statutory duty in terms of economic development, including Edinburgh Business Gateway. Edinburgh exercises that role well,” she says. The capital’s council has just unveiled a £12m programme of business support as part of an ambitious five-year strategy. Sue Bruce has made a strong impression, particularly with the business community, getting out, pressing the flesh, at first listening and then explaining that the council and its elected politicians are committed to making Scotland’s capital truly tick. Meeting her in a sun-drenched, open-plan office in the modern Waverley Court complex, as Edinburgh’s numerous festivals are in full flow, you might be lulled into thinking everything in the capital’s garden is rosy. Yet there are serious issues to tackle in terms of getting young people into work, supporting more start-ups and creating a low-carbon, sustainable business environment. Edinburgh Council has also taken steps to deal with the acute shortage of Grade A premium office space in the city, with a speculative building called the Atria that has defied the banking collapse. Brewin Dolphin is the first business to move into the seven-storey Atria One, a feather in the cap for the council’s foresight. Sue Bruce, bespectacled and dressed in dark business suit and sipping her herbal tea at the end of a day of back-to-back meetings and >>




Capital gains: Fire-fighter, fixer and dynamic leader Sue Bruce has turned her attention to Edinburgh and the challenges facing the city




presentations, is relishing the task before her. “This job is fantastic. There is plenty to do and it’s a fantastic city to work in. “It’s a brilliant place.” Edinburgh now has a Labour and SNP political coalition which signed a memorandum of understanding about where the city wants to go. This pledge by the 20 Labour and 18 SNP councillors out of the Edinburgh’s 58 elected representatives has ensured a more consensual approach. For Sue Bruce, the memo of understanding demonstrates the clear political leadership and pragmatism in terms of the administration’s aspirations. “There are all the big social and economic drivers to consider in Edinburgh. We’re

working on a governance review to make sure our arrangements are crisp and neat. It’s a great opportunity to be here in this stage of the life of the council, working with the elected members to developing and delivering policy,” she says. How does she see her role as chief executive? “There are some technical descriptions: one is head of paid services. Anything to do with management falls within my bailiwick and the job of chief executive is as a non-political chief adviser to the council. Clearly, I don’t do that single-handedly, there is team of extremely capable professional officers.” Sue Bruce insists there is a great deal of intellectual capacity in the council, between

What is Edinburgh’s new economic strategy? The new five-year economic ‘strategy for jobs’ aims to deliver sustainable economic growth through investment in jobs and has just been launched at a conference in Edinburgh with a keynote address from Deputy First Minister Nicola Sturgeon. Key targets are supporting the creation and safeguarding of 20,000 jobs; supporting £1.3bn of infrastructure investment and helping 10,000 people into work or learning. The strategy responds to a growing jobs gap - by 2018 there could be up to 37,000 more jobseekers in the city than jobs - and sets out four programmes of activities to address this. The Business Support programme is expected to cost around £2.5m a year, support at least 2,200 jobs a year and engaging more than 6,000 businesses, including 150 high-growth firms. A front desk for business customers has opened in Waverley Court headquarters, housing the Business Gateway hub (the council is the lead local authority for the partnership delivery of Business Gateway across Edinburgh and the Lothians). Other elements include: • A project to identify 100 potential high-growth companies and support their growth and investment plans, leading to the creation of 250 jobs. • The Edinburgh Entrepreneurship Development to develop the skills of at least 30 people a year.  • Working with Edinburgh Science Triangle – a partnership of seven science and technology parks across Edinburgh and the Lothians – to support the growth of at least 50 SMEs a year.  • Supporting the development of Creative Edinburgh, the council-backed not-for-profit membership organisation for creative professionals and businesses. • Providing loans of between £2,500 and £50,000 to at least 14 companies a year through the East of Scotland Loan Fund, a consortium of nine East of Scotland local authorities. • Working with Scottish Development International, SDI and others including Smart Exporter to introduce 100 companies a year to new international trade and provide at least one overseas trade mission a year. An inward investment programme is also being launched to attract companies such as Amazon, Spanish wind farm manufacturer Gamesa and Avaloq, the Swiss banking software group, who have already moved to Scotland. The new Green Investment bank is also a plank for the future growth. The council is collaborating with partners including Scottish Enterprise, SDI, Edinburgh Chamber of Commerce, the Federation of Small Businesses, local colleges and universities.



elected members and officers. Does she feel this is under-estimated by the ordinary council taxpayer who wants the streets clean, social care ensured, bins emptied and schools working properly? “Absolutely, there’s a huge amount in running a modern city that the public doesn’t see, our jobs, as officers, is to provide professional advice. That advice will reflect the political direction of the elected members. It is about providing visible managerial leadership and working hand-in-glove with the leaders and elected members and the Lord Provost on the civic side. They have a right to reject our professional advice, but we weigh up the risks. Our locally-elected politicians are utterly entitled to do something different if they think it is the right thing to do, they then hand it back to us to implement. But we still work together and they scrutinise our delivery.” She says it seems straight-forward when you’ve been at the helm for a number of years. How is she qualified to run such a major enterprise? Sue Bruce has been in local government for 36 years. If she was one of the numerous Edinburgh citizenry now besotted with body art, she would have ‘public service’ tattooed on her forearm. “I started my career in youth work and community development in Johnstone in the West of Scotland,” she says. It was the mid-1970s and the UK was in a recession that resulted in the four-day week, trouble and union strife and power cuts across the nation. “There were no jobs around after I graduated from Jordanhill College of Education in Glasgow in 1976 with a diploma in community education. My first job was in a job creation scheme in Strathclyde Region,” she recalls. And here she has an emotional affinity to Scotland’s young people in a similar position 36 years later. [She has also just taken on the position as chair of Young Scot]. “Edinburgh council area was not performing particularly well in Scottish terms as a positive destination for school-leavers. I found this surprising and alarming given Edinburgh’s obvious pulling power. It was bottom in local authority terms for supporting young school leavers into work.” The council saw reversing this dismal statistic


as a priority and, after consultation with business organisations, it created the Edinburgh Guarantee, an initiative to encourage businesses in the capital to take on young people to give them work experience, placements, mentoring, internships and a real job. “We all agreed if everyone made a reasonable effort we had a good chance of turning this around,” she says. These are jobs on top of the normal commercial quota, giving young people – and there are 3,500 leavers from the state sector alone every summer - a taste of the work place. Companies such as John Lewis, Standard Life, Scottish Widows, BT, Bank of New York Mellon, Nairn Oatcakes, Bright Purple, Royal London Group and Capital Solutions have signed up to help the cause. “As far as possible, the Edinburgh Guarantee should be a real job with at least the minimum wage for internships. “What young people said to us was, ‘We don’t want months of training then nothing, we’d rather have a real job and prove our worth,” says Sue. At the end of 2011, Edinburgh began to improve its position proving it had the capacity to make a difference through partnership with business. “I think when you are young and unemployed, when you get your first break, you never actually forget it. It is meaningful to you and this is what happened to me.” She understands this intimately. She worked in economic and social regeneration in the uncompromising neighbourhood of Ferguslie Park, in Paisley, with its multiple issues of unemployment, deprivations and drug addiction. “It was a great job and I loved it. It was about making a difference to people’s lives. Then I moved to Nitshill and the Gorbals as a middle manager and then there was a big reorganisation of the education of Strathclyde.” “I remember the Rootes car plant at Linwood closing and there was mass unemployment. In the 1970s, when I was a student, the shipyards were going through their difficulties and I first became aware of Jimmy Reid’s movement at Upper Clyde Shipbuilders Work-In. The values he espoused about individuals and their place in society, is something I use as a reference point.”

All this battling for better conditions developed her sense of resolve and fairness. She advanced in community education, moving to become an officer in mainstream education. Sue Bruce was asked to step into an interim executive position and given an opportunity to see the world from a different angle, moving to principal officer in Lanark division of Strathclyde, then into Renfrew division. This was her first directorate job at 35. She was witnessing the consequences of Scotland’s urban decline first hand and why deep-rooted social problems had been created. She also began to understand that budget restraint meant tough choices. Now she points to the demographic challenge for councils and their social care with many more people living into their 80s and 90s. “One of the challenges for public service is to try and keep pace with that and understand the needs of people as they get older. But this places pressure on resources too,” she admits. Increasingly, Scotland’s 32 councils require higher levels of modern IT to meet the expectations of citizens.



“Often public authorities can be challenged when taking major leaps into business technologies of the 21st century. Somehow, as public authorities we are expected to be behind the pace, but we’ve introduced iPad technology for the elected members and already we’re generating savings. Most of our committee meetings are in paperless forms. So do we go the whole way into cloud technology? But it all helps us to be most agile and serve the public.” Sue Bruce believes strongly in the transformational power of continuing education. She has earned further university degrees, an MPhil and an LLB, which she has funded herself, often through part-time learning. After local government reorganisation in 1996, she was deputy director of education for East Ayrshire, remaining there until 2000, when she went to East Dunbartonshire as director of education, social work and cultural services. “There was a big change programme going on which has been kicked off by the chief executive Vicki Nash [who joined Ofcom in >>




2004]. It brought about a substantial change to the way the council was run. She had the idea of merging services together and I had the great job of starting with that directorate. There were a lot of bold moves and Vicki had great vision.” In 2004, Sue took over from Vicki as chief executive, and continued with the same processes, before moving to Aberdeen in 2008, where she revived a council administration that had lost its way, facing massive cuts. “That was a great job, then I came to Edinburgh in 2011.” The council is taking a leadership position in launching its new economic strategy. “Jobs growth is not going to come from the public sector – it’s going to come from the private sector – so we need to ensure we’re doing everything we can to help businesses identify opportunities for growth and employment,” she says. She admits that councils are often seen as putting barriers in the way of doing business. “I want Edinburgh to be a place where it is easy to do business, where companies can find all the services they need in one place. We’re bringing every department in the council together to provide this ‘one-door’ approach to business services for the first time.”  “Without a growing business base, there can be no growth in job opportunities, so our call to action is for everyone to step up and work with us on this – delivery partners, council departments and businesses themselves. There are opportunities but sometimes the risks are inhibiting people from taking action. “We can help by making it easy for businesses to interact with us and by supporting their plans to create and retain jobs, increase turnover and develop new products or markets.” Sue Bruce singled out the Atria, beside the Edinburgh International Conference Centre, which is also being refurbished with additional hydraulic floor space which makes it more versatile for conferences, conventions or exhibitions, as an example of the council making a difference, although she admits the decision to undertake this was before she joined. “There had been a slowdown in speculative development in Edinburgh, which is understandable given the recession. The council is the only developer of Grade A office


Sure there has been mess and noise but it all represents huge investment in the city and its future

space with the Atria, which has achieved BREEAM environmental assessment status. I think it was a really bold move and all credit to the people who went with it. “It was prior to my time but there was a full risk assessment around the borrowing and letting a speculative development, but it showed that the public sector can lead the way. What we have is a really big asset in the centre of Edinburgh,” she says. Sue Bruce sees this kind of development as a message to the market place that Edinburgh still wants to attract world-leading companies or inward investors keen to have a base in what might well be the capital of an independent nation. You can’t possibly interview Edinburgh’s chief executive without asking about the troubled Tram project and the disruption caused by the digging up of roads and re-routing of traffic. Sue Bruce is credited with getting the whole


project back on track after the messy disputes. “The trams project has been disruptive but we are beginning to see the end now. The Mound and Princess Street are re-opened and looking very good. “The trams will definitely be running by the summer of 2014. Old cities do take a lot of money to run and that has not been in great supply. There has been a massive replacement of the ageing gas pipe network. Sure, there has been mess and noise, but it all represents huge investment in the city and its future.” Sue Bruce is a cool breath of fresh air in Edinburgh. Looking at her CV, she rarely stays more than four years in a job before moving onwards. The question is will she stay a little bit longer in her current job and get a chance to savour the fruits of her undoubted civic talents? Let’s hope she’s still in charge and taking a ride out to the airport on the first trams. n

Ayrshire electronics firm set for major growth with new premises

Business case study All information correct as at September 2012

A Prestwick firm providing specialist electronic machinery to firms across Europe creates up to 14 new jobs after moving to brand new premises, using funding from Bank of Scotland. Etek Europe provides and services a broad range of machinery such as fume extraction, x-ray inspection and solder recovery devices. It services top UK and global names in the aerospace sectors. Previously based in Knoweside, South Ayrshire, the company has opened a new purpose-built site on the Technology Centre in nearby Prestwick, increasing its floor space from 2,000 sq ft to 12,000 sq ft, vastly boosting its capacity with a new warehouse and more office space. The new site is also located next to the international airport, improving access for overseas customers. The move is part of the business’ wider expansion plans, which will see it double its turnover of £2.8 million in the current year and take on an extra 14 members of staff over the coming 24 months. The firm is also opening a new training centre in the building, enabling it to offer further instructional and educational support to large multinational corporations. Etek Europe was founded in 2007 by Managing Director, Mike Nelson, who had worked in the electronics industry for around 25 years before starting his own business. In order to finance the construction of the new building, the company approached Bank of Scotland to provide the funds necessary for the project. Mike said, “The new site is a leap forward for Etek Europe, enabling us to offer a much

Etek Europe expects to take on an extra 14 members of staff over the coming 24 months as part of its expansion plans

wider range of services to our customers as well as helping us to gain the necessary “The proximity of our size to take full advantage of the business opportunities available on a global scale, new premises to Glasgow securing our position in the sector. Prestwick airport is a “The support from Bank of Scotland has major advantage, as it been instrumental in completing this project, gives us easy access to and the guidance from our Relationship Manager has been a key part in driving our international markets in long-term growth.” which we’re looking to Derek Macgarvie, Senior Manager for expand further.” Bank of Scotland, said, “Electronics firms are vitally important to the Scottish economy, Mike Nelson, Managing Director helping to drive growth in a number of of Etek associated sectors, and it’s encouraging to see that Etek Europe is continuing to grow and thrive in what remain challenging economic conditions. “When Mike approached the Bank with his plans for the new site we recognised that it represented a great opportunity for To find out how we can work the company and the next logical step in its with your business, please visit expansion plans.”

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.

All lending is subject to a satisfactory credit assessment Bank of Scotland plc Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Telephone: 0870 600 5000. Licensed under the Consumer Credit Act 1974 under registration number 0593292. We subscribe to The Lending Code; copies of the Code can be obtained from



Bonnie bites in the Balmoral Over the past 17 years, Paul Grant has built up the Mackays jam and marmalade business, based in Arbroath, with a sleevesrolled up approach and the help of some old-fashioned Scottish recipes. Gillian Law enjoyed lunch with the Jammy Man

Bearing fruit: Paul Grant’s risky leap into the jam-making market 17 years ago is finally paying off The Jammy Man – that’s the local nickname for Paul Grant, chairman of Arbroath-based marmalade and jam manufacturer, Mackays. It’s a name that suits his sunny, bright personality as well as it does his choice of business. But there have been times when Grant must have felt decidedly far from ‘jammy’ – putting all your hopes and dreams into a business only to be told you’ve moved into a dying market sector is an undoubtedly tough wake-up call. Grant bought Mackays 17 years ago, in 1995, after a highly successful corporate career with United Biscuits. Starting as a management trainee from school, he had worked his way through a wide range of roles and business areas. “I was always more interested in risky, challenging opportunities. “Never once in my 27 years at United Biscuits did I move to the next ‘comfortable’ promotion – I always moved to a different division, or a different function.” After working all over the country, in increasingly senior roles, Grant found himself in London as the human resources director of McVitie’s. In his late 40s, he was on the board


and in a very influential position within United Biscuits. But the entrepreneurial urge was beginning to bite – and he could see the ideal opportunity in a little jam-making factory that United Biscuits owned in Angus. As jam was a non-core activity, he knew the company would be interested in selling it, at the right price and to the right buyer. Here was the chance to do it for himself – to put all the knowledge and experience he had gathered over the past 27 years and put them to use in his own business. It took three years from that first interest to taking over the keys to the factory. Keen to leave on the best possible terms, Grant worked hard to develop and hand over to his successor within United Biscuits, while also quietly taking over functional responsibility for the jam business. Finally, the day came when he moved up to Scotland with his wife and three children, and walked into the factory as owner and boss. “At the time, the factory had 19 people working there. I’d come from a head office with hundreds of people, to that small environment where I had to be ready to get my hands dirty, to contribute at any level. And I was the boss, the owner – it was daunting.”




BUSINESS LUNCH He also had to take responsibility for financial matters that had been a bit remote to him before. “In the corporate world you do talk about cash management, and reducing debtors and all these classic things – but there are other people dedicated to actually doing it. When you’re right there, it’s your money – and you need to pay the wages, pay the suppliers … you quite quickly get into the sharp end and [see] what you’ve let yourself in for!” Having staked his house and future on this business, Grant knew he had to make it work. He had a contract to supply the jam for United Biscuits biscuit filling for two years, but was aware that he would lose half of his turnover when that deal came to an end. So it didn’t help when buyers shook their heads and asked if he knew what he was doing. “I went round doing my early research and for three of four years buyers said ‘What are you doing? There are already too many suppliers, we’re reducing shelf space and the last thing we want is a new supplier. We love the story, love the taste of the product but you’ve misjudged the opportunity and the competitive situation.’” Hardly encouraging. But Grant clung to the fact that people did like the taste of the product. He had stuck to the old fashioned, open-boiling method that had always been used in the factory, and it really did create a better ‘home made’ flavour to the jam and marmalade. He also discovered among his new staff, a ‘Mr Marmalade’ – an employee who had come from the now-closed James Keiller & Sons marmalade factory, home of the famous Dundee marmalade. “He had come to Mackays as the general manager and he had brought his knowledge of the Keiller recipe with him. So when I arrived, although Mackays was just a bulk manufacturer for United Biscuits, he had got bored making jam and had gone and done his own thing. And he had entered competitions and won, for the best marmalade!” Knowing that the company had such good quality products gave Grant the confidence to carry on. “I knew we had something there that was a bit special.” The question was, how to make the world >>



recognise how good the products were? Two things turned the situation around. The first was the development of a new, transparent labelling system, which made Mackays products stand out on the shelves and finally got supermarket buyers excited, and the second was Grant’s determination to take Mackays into export markets. He had watched Walkers take its shortbread worldwide, and saw no reason why a high-quality, Scottish marmalade and jam business could not follow suit. “Walkers had created this significant exporting business with an easy to transport, good shelf-life product, and they had led the way. “I said to myself – I’ve got heritage product, I’ve got a history, I’ve got traditional methods – and I can endorse it with a bit of tartan! As I’ve learned, if you don’t put tartan on a product that you’re exporting, that’s a fundamental error – the UK market might be different, but if you’re an exporter then no tartan on your packaging is a disaster.” Mackays now sells to over 50 countries internationally. Marmalade is the leading product, popular across the globe in any market that appreciates British heritage and ‘Western’ ways of eating. Even in Asian countries where people are more inclined to eat rice, people are increasingly choosing



I genuinely thought I’d done a great deal with United Biscuits and within a few years would be wealthy and successful - but that was a dream bakery products for weekend treat breakfasts – and where there are scones, pancakes or bread, there’s a need for preserves. International sales received a boost from an unexpected source back in 2004, when Mackays won the Queen’s Award for Enterprise. “When we won, we were pleased, obviously, but we didn’t realise the significance of it. But as we discovered, it gave so much confidence and belief to our overseas customers. The moment we won the Queen’s Award we just became a different level of partner,” Grant says. Mackays won the award again this year, for sustainable exporting. Mackays also bought the Mrs Bridges preserves brand from Hudson’s International in 2000, giving it a new market in the independent trade, away from supermarkets. With increased supermarket sales, Mrs Bridges and the international business, Mackays is


doing well, but it’s been a long, hard slog, Grant said. He had a real wake-up call when he moved from a large company to running his own. “When I started I thought, genuinely, that I’d done a great deal with United Biscuits and within three to four years I would be quite wealthy and successful! But that was a dream – that was coming from a corporate understanding of running a business. “The reality is, seventeen years on, we’ve created a business with potential. We have some great brands, great people, great customers, but we haven’t paid a dividend yet. I think we will soon – but we haven’t yet, because at the end of the day we’ve been investing back into the business.” That investment included building an expensive new factory in 2008 – needed if the company was to grow, but a massive financial hit at the time. Costs overran, to 25% higher


than expected. However, the company now has a modern, efficient factory (albeit one with traditional copper and steel open pans) and will be able to add shifts and expand production as necessary. It was a “challenging” period, Grant says, laughing ruefully. “But sitting here today we have a magnificent factory, and in years to come it will prove to have been a very wise decision. As long as the business continues to grow!” Grant is in the process of handing over control of the business to his son Martin, who has been working his way up through the company for eight years. Although the family has sold some equity to raise necessary funds, it still owns just over 80 % of the business and Mackays remains very much a Grant family concern. One of Martin’s sisters, Nicola, is business development manager for Mrs Bridges.


The handover is going well – a little too well, laughs Grant. “He’s picked it up very quickly, and is quite keen to get on and make it his own. Which I don’t have any problem with, but it just means I’m having to come to terms with it a bit quicker then I might have thought!” Whatever happens, Mackays will continue making its traditional marmalade and jams in the old-fashioned style, ensuring the taste stays as close to home-made as possible, Grant says. That taste has seen its success to date, and brought a recent, dramatic extension of Mackays listing with Tesco and Sainsbury’s across the UK. “Which is brilliant. All the work of creating the brand, building the factory with extra capacity has now come together. Martin will read this and claim he got the business, and its true – it was his initiative that led to this. But it’s a great conclusion to my era, I say!” n


Hadrian’s Brasserie The Balmoral Hotel perches dramatically above Edinburgh’s Waverley Station, on the corner of Princes Street and North Bridge. Its 190-foot clock tower is one of the iconic sights of the city, and has been ever since the hotel – formerly the North British Hotel – was opened in 1902 to serve railway passengers. Now the Balmoral is a flagship of Rocco Forte’s grand hotels group, which has 13 individual grand hotels dotted across Europe. Hadrian’s is the Balmoral’s brasserie, looking out on North Bridge. The interior is gently Art Deco in style, full of dark wood with pale green furnishings, while the food shows off some of the finest modern Scottish cooking. The brasserie’s executive chef is well-known television cook, Jeff Bland, while the head chef is the acclaimed Simon Lannon. Paul chose some tuna carpaccio to start – beautiful slices of fish served with an ‘oriental salad’ and sesame and coriander dressing, while my home-cured whisky and honey salmon with fennel salad was the tenderest I’ve ever tasted. I do like my seafood, so I plumped for seared West coast scallops for a main – tender and sweet, they came with fresh peas cooked ‘a la francaise’ with lettuce, and little chunks of chorizo that added a deep meaty note. Meanwhile Paul tucked into a chunky chargrilled Blairgowrie rib-eye steak, medium-rare, with Bearnaise sauce and chips – and joked that he’d be in trouble when this feature comes out, for eating so unhealthily. We skipped dessert, though that was more because we were too full than from any health reasons. Instead, we finished with coffees and some petit fours – and then headed off into the sunshine, agreeing that we both want to return. Hadrian’s Brasserie, The Balmoral, 1 Princes Street, Edinburgh, EH2 2EQ. For reservations call 0131 557 5000




Game, set and perfect match A wonderful Italian red is the ideal partner for some succulent Highland venison. Dan Macdonald savours a fine wine which then makes a surprise topping for dessert



Victor Contini is a fine fellow and a connoisseur of the best Italian wine. The director of Centotre, my favourite lunch-time eaterie in George Street in Edinburgh, where the food is always fresh, simple and tasty, selected two bottles from his directly-imported selection for me to sample on behalf of BQ. What a refreshingly pleasant task for me in such hard-going times for the commercial property industry. Victor chose Edizione - Cinque Autoctoni, Vino Ross. Interestingly, the winemaker Filippo Baccalora has blended five vines - Montepulciano, Primitivo, Sangiovese, Negroamaro and Malvasia Nera in different amounts to produce this wine. The grapes thus originate from the two regions of Puglia and Abruzzo, with the named derived from the cinque vintages taken to make it up.
I took a bottle to the family


house at Dornoch, where I thought it might complement a main course of venison. The opened bottle stood in anticipation near the Rayburn, as the marinated venison slowly simmered towards its final succulence in the big green casserole dish. On first sniff, after withdrawing the cork, I felt as though we had a light spicy form of Montepulciano, but I thought, let’s wait, and in an hour I’m sure it will match its deep beetrooty colour, and surprise us with robust, smoothness characteristic of some of those north Italians we have savoured in the past.
We waited ... and the hour passed slowly over a small 12-year old Auchentoshan. The dark red, now in two decanters, sat on the old oak dining room table, as we awaited the venison. Then came the time to taste... The smoothness of the mellow blend is unbelievably well matched to the equal succulence of the venison. The wine is unusual and unique in offering at first a bouquet of exquisite dry ripe red fruits, bursting with the expectation and excitement of more, and then the surprise of a burst, and a very long lasting aftertaste that moves from gentle fruitiness towards robust scented deep red rose perfume before eventually petering slowly towards a long slow type finish that reminds you of the best of Italy. Mellow chewy fruitiness reflecting the very core of the surprise of flavour reflected in a visit to one of those ancient Italian vineyard establishments that is steeped in the history, expertise and strong smells around the culture


I have long believed that good strong reds go well with chocolate. This may be controversial but, believe me, try it and see for yourself of the creation of the very best. It’s certainly a wine to be savoured, with a flavour of many descriptions around the table, all of them complimentary. It’s also a wine of certain excellence and unusual maturity that can accompany all-meat, poultry and game dishes, but particularly the Highland venison of this evening. And as the decanter goes down, and the evening light shades, relaxation takes over with the wine central to all. V is surely for Victor and venison.
But there’s more. We savoured the wine with such sparing delicacy that enough remained for all to continue a glass over the sweet. Guess what? The Edizione is an exquisite accompaniment to the light chocolate tart and home-made ice cream that was served up, now some three and a half hours from the decant. I have long believed that good strong reds go well with chocolate. I don’t know if this is controversial or not, but believe me, try it and see for yourself. Victor’s other selection was a Pieropan Soave, 2012, from La Rocca vineyard. This was enjoyed on another evening. Certainly extremely interesting and for a white

it is complicated. It has an enjoyable slight metallic taste, fresh but not too light. Body gives it lasting voluptuous satisfying vanilla essence with just enough fruitiness to blend its flavour with light flowery hints. A deep flavour almost suggesting heather honey - where’d those bees come from in Italy? - followed by delicious addictive wet pollen of an evening shower on sweet William of September in the Scottish Highlands. This wine fills the mouth with a mixture of flavours that mature as you swill it, begging the retention that which will qualify it for even more consideration and further description.
Nosing it again, there is a faint smooth peppery hint and as the nostril builds up the expectation of something fresh and probably elegant. Then the tongue confirms with delight that this is an Italian worthy of the accompaniment of many dishes, not just fish but light bean casseroles in summer and even light poultry or game with summer salad. A good alternative to a light red in many circumstances, particularly in August. n

Dan Macdonald is chief executive of Macdonald Estates Group plc, a Scottish-based property and development company established in 1998. Thanks to Victor Contini and Centotre, 103 George Street, Edinburgh, EH2 3ES, for the wines for this selection. The Pieropan Viticoctori in Soave and the Edizione Cinque Aucoctoni are both £50 a bottle.





The super-smooth Bentley Continental GT convertible is deceptively agile in East Lothian’s winding lanes and was a hit with the young Carolans who tested it with their dad, Andy





Sometimes you require the company of some bright young minds to remind you of the pure pleasure of driving. I picked up the Bentley Continental GT convertible from Craig McQueen at Bentley Newcraighall, in


Edinburgh, and it was a delight. Once the photographs were done, I was able to drive this beautiful beast into town for my lunch appointment at the Sheraton Grand. None of the usual glass or two of Chateau Lyonnat >>

does iT 59




In a spin: Andy Carolan was blown away by his borrowed Bentley’s “unbelievable” power rouge today, purely sparkling water, because I had an interesting motoring assignment for BQ Scotland. I was asked to take the Bentley out on the highways and byways of East Lothian, Scotland’s answer to the Hamptons, for a jaunt around the narrow bends amid the summer hedgerows. Pretty much everything about this car is statistically impressive: 4-litre V8, 500 horsepower , 0-60 in under five seconds, top speed 188 mph (in a car

weighing 2.5 tons and not recommended around Drem!) and a price tag of £147,000. Beyond the raw numbers, the car is awesome. In terms of comfort, build quality, finish and handling, it’s quite unbelievable. The exhaust is tuned to sound like a growl at tick over, then builds to a Hampden roar. I confess to being a crazed car-nut because I drove around the multi-storey car park at the Sheraton with all the windows down, simply

The exhaust is tuned to sound like a growl at tick over, then builds to a Hampden roar



to enjoy the purr of the engine. Yes, it’s rather environmentally unsound, but I defy any petrol head to do otherwise, given half a chance. As a keen driver, having previously owned several Mercedes Sports, BMWs and Porsches, including a 911 Carrera 4S, I've been lucky enough to drive a few fast cars, yet nothing compares with the sheer power of the Bentley. It’s so deceptive. The size and comfort initially makes you think the car cannot possibly handle like a sports car, but despite the weight and size, it really is impressive, especially in this tight East Lothian bends. Did I hold back? Yes, I didn't want to push it too hard; the thought of losing control of a car of that weight (and price) was always at the back of my mind. I reckon if you did happen to have the suicidal tendency to try to get the back sliding out and then lost control,



it would take many fences, walls, fields and solid oak trees before finally coming to a full stop. I live in Gullane and am fortunate enough to have one of the best driving roads in Scotland as part of my commute - the A198 from Edinburgh to North Berwick. Driving home on a sunny Friday afternoon was a delight, and I picked up the family to enjoy an open-top cruise to North Berwick. My boys, Mark, aged six, and Conor, aged four, hugely enjoyed the experience initially but, after a few miles, the reality of an East Lothian summer which doesn’t have the Hamptons quotient of sunshine, as compared to the Corniche, became apparent. Sadly, the roof had to go back up before frostbite set in. Their verdicts were illuminating. Conor noted ‘the roof goes down and up’ - factual, but not particularly debatable, while Mark perhaps summed up my feelings perfectly – ‘Bentley is the best.’ Would I buy one if I had £147,000 to spend on a car? Tough decision, when you think of the competition at this end of the grown-up toys range (Aston Martin, Ferrari, big Mercs: also cabin cruisers and light aircraft I reckon). My choice would probably be for the Bentley GT Coupe hardtop. More room in the back and boot (100 more litres due to the roof not folding down), even better handling, and a saving of nearly £13,000 on the convertible. Plus, no need for balaclavas for the kids. Perhaps that very nice man Craig McQueen could sort that one out for another weekend test drive? n

I’ve been lucky enough to drive a few fast cars, yet nothing compares with the sheer power of the Bentley


Andy Carolan is part of Business Forum Scotland’s expert panel of business figures. He was chief executive officer of Evans Hunt Scott Euro before setting up Navigator Response Advertising in 1993. He led the MBO of Faulds Group and sold to Cello plc in 2005. Bentley Continental GTC 6.0 Litre W12, Recommended Retail Price £152,000 Bentley Edinburgh, Fort Kinnaird, Edinburgh EH15 3HR Tel 0131 475 2100




ruffling the old guard’s feathers BUSINESS QUARTER | AUTUMN 12




Changes are afoot in Savile Row, that most established corner of fashionable London, with the rise of a new wave of menswear mavericks, as Josh Sims reports Maybe it takes an engineer’s eye to see how even the most traditional of structures - a Savile Row suit, for example - might be moved on. Indeed, when Patrick Grant grew tired of the industry for which he was trained and

spotted a small ad in a paper to buy a respected but tired tailoring company, he underwent an image overhaul as distinct as that to which he gave the company he bought - Norton & Sons and the one it owned,


E. Tautz, a 19th century tailoring house that dressed the young Winston Churchill. But the changes he has since brought in have been no simple re-branding exercise: the revived E.Tautz is now a top-flight >>




ready-to-wear line with a tailoring heart, mixing equal parts 50s elan, British fogeyness and, above all, a look distinctive enough to be recognisable to those outside of naval-gazing tailoring circles. This alone might not give pause for thought to the great names of the British tailoring establishment, were it not for the fact that E. Tautz is not alone. Other new tailoring companies, both bespoke and ready-to-wear, have recently launched around the Row, with other dormant names also undergoing re-birth. If Savile Row’s last great shake up was the so-called first wave of nouveau tailors of the 1990s - the likes of Timothy Everest and Richard James - then here, some suggest, is the second wave. And with this second wave has come a


younger attitude again,” argues Luke Sweeney, ex-head of made-to-measure at Timothy Everest and, with partner Thom Whiddett, ex-head cutter at Everest, behind new Mayfair tailors Thom Sweeney, with a house style blending the English cut with a softer construction. “The first generation still appealed to an older age group, even if a more diverse one. But what’s really changing now is the nature of the tailoring customer, with the media in part having encouraged a new idea of bespoke tailoring that does not assume it is for older men, while the younger ones all go to Gucci and Prada. The new tailors are also younger themselves,” he adds. “They are more fashion-forward in their thinking, more trend-aware and, crucially,


more open-minded - the old established houses still appear reluctant to accommodate the younger market. It’s their way or the high way.” Thom Sweeney is joined by the likes of Rake, a tailoring-oriented ready-to-wear line also based in Mayfair, and by the new tailoring brand A.Sauvage. One-time Soho tailor Tony Lutwyche has re-launched his business with its first ready-to-wear line and combined with the Lodger shoe brand in a bid to create a British luxury group. Hardy Amies and Douglas Hayward - esteemed bespoke names from the mid 20th century, the former whose couturier-founder was one-time dressmaker to Queen Elizabeth II and designed the costumes for ‘2001: A Space Odyssey’, the latter who dressed the London


It’s providing the confidence to do something new in tailoring, or for a shake down in some of the older houses

All images Thom Sweeney scene of the 60s, including the likes of Peter Sellers, Terence Stamp of Michael Caine, in person and on screen - have both now re-launched with a more contemporary touch too. “The fact is that the consumer now has a stronger expectation of how he wants to dress and is looking for brands, even those in traditional tailoring, to respond to that,” says Hardy Amies’ CEO Tony Yusuf. “The very traditional tailors aren’t making the necessary changes from ‘country pursuits’ to more ‘modern’ tailoring, a need which has encouraged other brands to re-create themselves.” Patrick Grant reckons that the gusto to do so has also been born of a cyclical move away from the Italian dominance of menswear, strong for three decades or more, towards a more British look and emphasis on

substance over gloss, one underscored by a renewed regard for provenance (tailoring, of course, being especially able to capitalise on the idea of being ‘Made in England’). “It’s providing the confidence to do something new in tailoring, or for a shake down in some of the older houses,” he says. “And there’s enough of a groundswell of interest that they can have some real weight behind what they do. “The impact of ‘dress-down’ and the casualisation of the workplace has meant the suit is also no longer associated with stiff jobs, which has actually increased tailoring’s appeal,” argues Lutwyche. “Men are also realising that they always look elegant in tailoring in a way that is hard to pull off with more casual clothing, however



acceptable that may be. Now they wear a suit when they don’t have to.” Removed from the context of work and its sartorial expectations, that has meant tailoring, ready-to-wear and bespoke alike, has become more a site for both comfort and selfexpression. Rake, for example, has focused on half-lined, super-light, crease-resistant tailoring in stark contrast to the bulletproof, fullychested style of the historic Row offer. This more Continental sensibility is perhaps a reflection of increased travel, both in terms of the need for practicality as much as a national cross-fertilisation of style ideas. Rake does not even focus on suits, following a shift in menswear to the womenswear philosophy of wearing ‘separates’. Arguably the new wave is creating a gentle divide in the Savile Row community, between mavericks and stalwarts, as Grant characterises it; akin even, reckons Ritchie Charlton, ex of Savile Row big gun Kilgour and now at Douglas Hayward, to that prompted by the arrival in Row environs of Michael Fish in 1966 and of Nutter’s in 1969, both ground-breaking takes on what bespoke could be when wrestled away from the strictures of the old guard. “We’re seeing that mood again,” says Charlton. “Some older tailors are being re-discovered and newer, smaller ones are getting onto the radar. What they have in common is something distinctive to say about tailoring - a take on classic clothes that is more style-aware than radical.” Indeed, while this latest generation of tailoring brands is upping the ante on fashionability though ‘fashion’ is over-stating it - might establishment companies re-trench in hardcore traditionalism, some having experimented in more directional styling? Or might they follow the ethos behind the Magrittian tag-line of A. Sauvage’s promotional campaign - ‘this is not a suit’ - in its suggestion that all that it is to wear the grey office uniform has moved on, in style as much as in meaning? The full scope of change has yet to be measured. But, according to Richard Fuller, Kilgour’s retail manager, “there are two schools of thought now - emphatically classic bespoke and design bespoke.” And that means Savile Row has, at last, become a whole lot more interesting. n




keeping robots in their place You can only automate so far when business is a spiritual home, writes Josh Sims




There is an unexpected room in Breitling’s factory in Le Chaux de Fonds, the spiritual home of the Swiss watch industry. Rather than rows of watchmakers, silently putting together timepieces with tweezers, are fully automated machines, drilling, positioning, screwing, assembling. The craft with which the industry so prides itself seems to have gone AWOL. But Jean-Paul Girardin, the brand’s vice president, sees it another way. “When we can introduce technology, we do it,” he says. “We still need the watchmaker’s knowledge and a hand-made capacity to make the watches we do. But we’re also pragmatic in pursuit of efficiency. If sometimes having robots to do certain things is convenient, and the hands of the watchmaker can add nothing to the process, then we have it.” It’s a suitably progressive attitude for Breitling right now. The family-owned independent company - one of the few remaining - is going through an overhaul. There are the flagship stores opening - New York last year, Paris this, London next, with another seven or so to follow, as well as some 20 new Breitling-only independent stores. There is the expansion to the manufacturing base, which means it is now in the position to double production from its current 150-200,000 pieces per annum, half of which are mechanical chronographs. And, perhaps most strikingly, there was the launch this year of the Transocean Chronograph Unitime, with a new Caliber 5 movement that re-invents the world timer mechanism by equipping it with an adjustment system that, unlike so many similar watches, is actually dead easy to use. But, perhaps just as strikingly, for a brand that has built itself on the very instrument-like, almost macho style and functionality of its watches - which sees its Chronomat of 1984 still its best-seller, and its famed Navitimer still the oldest mechanical chronograph in continuous production - the Unitimer is also rather dressy. “It’s the most classic, elegant watch we’ve done for a long time,” Girardin concedes. “But to go too much down that route would be to lose the ethos that Breitling is known for - even if that means losing sales. The fact is that a functional chronograph, for instance, needs to be a certain size and have a certain look - and we’d rather stay true to

that ethos than dilute it to sell more.” The ethos has, after all, been long in the building, one that has made Breitling the serious aviator’s brand of choice. Leon Breitling opened a workshop specialising in chronographs - then more for industrial and scientific purposes - back in 1884, moving to Le Chaux de Fonds 120 years ago this year. His son Gaston took over the family firm in 1914 and, a year later, introduced the first


years later ernest Schneider, watch manufacturer and - surely no coincidence keen pilot, took over the brand from Willy. All the same, the Unitime and several new designs in the pipeline perhaps point to Breitling’s continued step up the prestige ladder. In 1999 the company decided that all of its mechanical watches would, henceforth, be certified chronometers. This year saw the warranty extended from two

The fact is that a functional chronograph, for instance, needs to be a certain size and have a certain look and we’d rather stay true to that ethos than dilute it to sell more

wristwatch chronograph. In 1923 Breitling created the first independent chronograph push-piece - the buttons separate to the crown and still a distinctive characteristic of any chronograph today. And in 1934, Gaston’s son Willy developed the second return-to-zero pushpiece, giving the wristwatch chronograph its definitive form. In 1969 it designed the first self-winding chronograph movement. Ten


to five years, “which is a very clear message about the increase in quality,” the vice president says. Crucially, Breitling is also making its own product. When in 2002 the Swatch Group/ETA contacted Breitling, among others, to say that it could no longer give guarantees on the delivery of movement blanks - the basis for the mechanical parts within a watch - Girardin was quick to take >>




the decision to develop their own movements. “Fans had long asked why the leader in mechanical chronographs didn’t have its own movement, and the idea was in the air but we never really did anything seriously to address it,” he adds. “But we simply couldn’t be in a situation where we could be waiting to receive parts. It was an industrial rather than a brand strategy, for all that it has proven a big turning point for the company. It has allowed us to innovate and develop new products, rather than rely on suppliers. But you have to keep moving forward.” Albeit at no breakneck pace. Developing two movements every three years is enough of a


challenge, he says, without the growing industry expectation to produce one to show off every year; “and I don’t want us to set off to try to design the most complicated watch ever, because it’s another kind of business that likes to develop extremely complicated movements, for another kind of customer,” Girardin adds. “We want to finesse the idea of watches as instruments.” Or, in other words, build on its reputation as a specialist. “After all, the watch industry is akin to the car industry now,” Girardin adds, “in that the latter originally offered just the Model T Ford - and in any colour as long as it was black - but is now increasingly segmented,


with different brands specialising in different kinds of vehicle.” That will mean that, while Girardin does not want to become a brand dependent on raiding the archives - for all that the Unitime and, another recent classy piece from the brand, the Super Ocean Heritage are precisely based on past successes - and while through the years it has proven it can be original - with the likes of the Chronospace, Airwolf and Emergency models, for instance - nor should anyone expect anything too radically bold from the brand. “But that is a product of functionality really,” Girardin argues again, keeping true to the



For decades the industry has been talking about putting the latest technology on the wrist but that isn’t easy, and it’s not clear yet what people are ready to wear anyway


brand’s form-follows-function thinking. “For decades the industry has been talking about putting the latest technology on the wrist but it isn’t that easy - and it’s not clear yet what people are really ready to wear on their wrist anyway. “The fact is that, while designers are open to ideas, and there is some need to look different and strong, you still need hands and dials and a system to tell the time in the most legible manner - and that, more than with many other brands, is what Breitling is about. Yes, functionality is limiting in design terms. But it also helps define the company. It’s what Breitling is all about.” n


An island of inspiration Gerald Michaluk was ready to retire to Spain but ended up buying a struggling brewery on the Isle of Arran instead. Kenny Kemp meets an entrepreneur with ambitions to build a location brand in Scotland




What could be finer than owning your own micro-brewery in the shadow of the majestic beauty of Goat Fell, with its mountain streams supplying the clear water for your beer? Gerald Michaluk was contemplating retirement to Spain and ended up buying a struggling brewery on the Isle of Arran instead. At first glance it might seem a romantic tale – but behind any future success there is a great deal of hard graft and fundraising. The brewery is set to raise £10m to move it up the league to become one of Scotland’s leading independent brewing businesses. Gerald Michaluk, with a background as a marketing guru, is determined to turn Isle of Arran Brewery, on the Firth of Clyde, into the perfect case study of business success. His interest in decent wines and beers has even been extended by his decision to buy the glossy magazine, Beers of the World. [“We want to educate people about good craft beer,” he says.] It seems the fire of a true entrepreneur is never extinguished. There is always a fresh opportunity around the corner, over the next hill, even on a picturesque Scottish island. Why has he decided to take on such a challenge “If you’ve been very busy all of your life and you’re active and enjoy business, meeting people and doing deals, then it is difficult to give this up,” says a youthful looking Gerald Michaluk, with a tightly-trimmed grey beard and a welcoming face. His Polish father, Jaroslaw Michaluk, was the gritty inspiration which led him to pursue a path of learning. Jaroslaw had escaped from the unbearable trauma of a Nazi slave labour camp in Germany during the Second World War, managed to reach Britain and joined the Free Polish Army, fighting in the bloodbath of Monte Cassino. Living in Scotland as a bowling-green keeper after the war, he encouraged Gerald to aim for university. Gerald became an academic in the sphere of marketing, then broke free to become an entrepreneur setting up a global marketing consultancy with a raft of high-tech customers based in Silicon Valley. With the profits, he was able to build a Glasgow property company, buying listed office blocks and city centre car parks. In recent years, he bought an Aberdeen-based aviation business with a


flying school, and heliport at Peterculter. When he hit 50, he became disgruntled with the way things were being run in Scotland and his Spanish wife, Teresa, encouraged him do something rather than be a ‘grumpy old man’. He stood for election. In terms of lost causes, standing as Conservative MSP in Glasgow Pollok seems one of the greatest, yet he increased the vote. He ran for the Tories in the European elections, and then in the General Election of 2010, for Ochil and South Perthshire, where he came third to Labour and SNP, managing a respectable 20.5% of the vote. He was driving to Perthshire when he heard about the brewery. “In 2008, on my way to one of the

execution and marketing is excellent,” he concedes. But the administrators insisted on selling the brewery and the production equipment in Brodick too. Gerald had never been to Arran before and took the ferry from Ardrossan to Brodick, meeting the head brewer, who turned out to be part of a rival consortium. “I looked at the brewery and heard all the horror stories. I was only wanting to buy the brand, but was told it was all or nothing. In the back of my mind I thought, well I have a brewer, an accountant and a sales person. This might work. What I did not know was I had inherited a brewer that could not brew, a sales person that could not sell and an accountant that could not count," he says.

constituency meetings, I heard on the radio news that the Arran brewery had gone into administration. I remember that brand because one of the projects I had done many years before was with Lyons-Tetley. Our job was to look around the world and find beers for the UK market. During this exercise I had come across micro-breweries and Isle of Arran beer, which was making a noise at the time.” He planned to bid for the brand and he had been examining other craft beer business models. “I liked the Innis & Gunn model particularly: why own a brewery when you can get someone else to brew your beer? Their

It was a complete disaster. He lost about £360,000 in the first year. "Everything that could happen, did happen.” He even discovered that beer was being sold in some outlets that had no official connection with the brewery. “There was more beer going out the back door, than out the front door,” he says. “What I've learned is that as a consultant you simply advise people what to do and as they are paying thousands for the advice they generally follow it.” He says the level of difficulty in running a business is inversely proportionate to the >>



ENTREPRENEUR staff numbers above five. The larger the number of staff the easier it is to run. “The real killer is running a small business of over five staff. You end up working for them and not them for you. But it is great fun". The Isle of Arran brewery is heading for a £800,000 turnover in 2012, making about 10% net profit. “We’ve turned it round and it has been a lot slower than I would have liked,” says the managing director. “We are now about to expand rapidly. Our plans are well set out and the fundraising will be going on in the next few months,” he says. The UK government has a 50% exemption on alcohol duty rule to encourage craft and micro-breweries producing up to 5,000 hectolitres a year. Gerald says this is one of


to pay a different rate of duty on production. Not on the one hectolitre, but the total. You can’t make incremental improvements in growing this kind of business. Any increase is eaten up by the increase in duty. The only way to make it work is to go from 5,000 to the big time, so that your economies of scale bring the cost of your production down well below the full duty.” The company has to jump from its current production capacity of 16,000 hectolitres – although it doesn't produce more than 5,000 – raising the money to build a brewery with a 165,000 hectolitre capacity. “We will have to scale up. But we’re not exporting at the moment and we only have one UK wide account. Certainly, we have

We have ambitious targets and are looking for rapid growth. There is all the world to play for

the few government policies that have actually worked. Full duty is on 60,000 hectolitres and is tapered to this point. But there is a Catch 22 for micro-breweries wanting to expand. “If I even forecast 5,001 hectolitres, I will have


ambitious targets. We are looking for rapid growth. There is all the world to play for,” he says. While all the brewing is done in Arran, the head office is in Glasgow, the nerve centre of Gerald’s other operations. His MD’s office in


Wellington Street would make a fine period setting for an Inspector Poirot murder mystery. His room resembles an academic’s study, festooned with marketing tomes, a thank you note from the First Minister for helping with dealing with the terrorist attack at Glasgow Airport, a picture taken with Prime Minister David Cameron and another with Her Majesty the Queen. Born in Broxburn, his family moved to Edinburgh and he graduated in chemistry from Heriot-Watt University in 1983 [a handy degree when it comes to understanding beer-making]. Employment was hard to find, so he undertook an MSc in management and ended up lecturing in communications at Borders College in Hawick. Gerry’s entrepreneurial story emerged before graduation when he joined the British Red Cross as a volunteer First Aider and then ended up setting up and organising the first private ambulance service in Scotland, Castle Ambulance Services which began serving the private hospitals. “This was my first taste of running a company as the finance director. We were all friends in the Red Cross and private hospitals were just opening and needed an ambulance service. So we formed one,” he says. He has been an active community volunteer working for over 30 years with the British Red Cross and also served in the Territorial Army. He continued his teaching and won a Chartered Institute of Marketing scholarship for the best project in 1985 with the prize a trip to America to see the strategic marketing of educational institutions and universities. Prof Michael Baker, the founding professor of marketing and former dean of the Strathclyde Business School, from the University of Strathclyde, was at the awards ceremony and poached him to Glasgow where he became a lecturer. The university was undertaking strategic marketing work for a number of UK government agencies and Gerald was increasingly involved, including work with Department of Trade and Industry. But he soon realised the pay differentials between teaching and consultancy was so vast that he decided to set up his own business, Marketing Management Services, which became a specialist in market research. >>





Island life: Gerald Michaluk’s Arran brewery is set for rapid growth in the coming years The team, including Prof Bill Donaldson who went on to Robert Gordon University in Aberdeen, undertook a great deal of work looking at sales management developing their own bespoke tools.


“It became very successful and we ended up doing a lot of strategic marketing planning. I did over 100 companies from marine doors, aviation parks and hotels. We won several Scottish marketing awards.”


The work just kept coming, with Compaq, Hewlett-Packard, Lucent Technologies, Tandem Computers, all based in California, looking with admiration at the MMSI’s mode of operations, called GMAS of Global Marketing Advantage System. The system is able to identify new market areas or products that are often off the radar screen or tangential to the customer. It was picked up by the US military and security services and it brought in work for 100 researchers with offices across the United States. “GMAS is based on a study of 150 companies in 26 countries and it offers a powerful insight into strategic planning. It has been very successful for us.” Gerry’s company, MMSI, was heading for a flotation with markets in computing, telecommunications and defence. But the dotcom bubble burst with two sectors dying a painful death. He said at the time in his book Riding the Storm: “I found myself caught up in a major change process instead of the simple change of name and a few more accountancy reporting requirements I had imagined the process would involve. Inadvertently, because of the new legal reporting requirements, I was upsetting the style and structure of the company and this had knock-on effects in the skills required, staff attitudes, systems and produced a major misalignment in shared values within the company almost overnight. This resulted in staff changes and loyalty being tested to the limit.” It meant scaling back the business and returning to his core marketing consultancy work, and building a commercial property company based in Glasgow. He had become a sought-after speaker, and the author of several academic books on strategic marketing. And while beer and wine have always been an interest, now the beer business is all-consuming. He also appreciates the value of the Isle of Arran Brewery as a wonderful location. “Everyone truly believes in the product so when you talk to the brewers about changing the products, there are some heated discussions. We have strong feelings about what we make,” he says. “We’re all about quality. There is nothing that


shouldn’t be in the beer. We don’t want any chemicals or additives, particularly those which give you a hangover!” Beer and lager consumption across Europe has been declining, yet the micro-brewing or craft ales sector has actually increased, and there is a little nudge of rivalry between BrewDog and Arran. BrewDog, who have become the darling of the Scottish media with its Punk approach to beer sales, brought out a beer, using whisky cases from the Isle of Arran distillery, and called it Isle of Arran Paradox. This encouraged Arran to bring out Brewery Dug in a jokey response. “There are lots of BrewDog-type microbreweries in the United States. Everything they are doing has been done: even their styles of beer and their cloud flotation. The first one was done in New York in March 1995, when Spring Street Brewing Company, a microbrewer, successfully used the internet to raise $1.6m from 3,500 investors in a direct IPO. They sold over 870,000 shares at $1.85. Spring Street paved the way for other small companies that attempted to raise capital directly via the internet,” says Gerald. “It all looks original to us, but it’s been done before. It’s not been done in Britain, yet the risk factors are greatly reduced.” Subject to financial service approvals, Arran Brew Ltd will be undertaking its fund-raising in early October. There have been approaches to high net-worth individuals, who can apply for EIS relief, and then a cloud flotation. It is a non-prospectus fund-raising, which is allowed under the European regulation up to €5m, and it is unregulated. Then the cloud level will be from £200 per person from the ‘beer-loving’ investor, who will get discounts and benefits. This will be able to bring in £10m. Gerald Michaluk also wants to invest in Isle of Arran’s own estate of pubs and bars which will allow it to make a bigger margin on its beer sales. “A lot of our investment will be in rescuing bars. We’re looking at bars in communities where the tied pub to the big chain has been forced to close. “The larger brewing companies are divesting and want bigger units and some areas have been decimated.” He has enormous respect for the big brewing


operators, such as Tennents and Heineken UK, and does not under-estimate their influence and capabilities. He says no-one really cared about micro-brewers but this is changing. The micro-brewing industry has over 5% in volume terms, and 7% in value of the United States beer market.

Marketing according to Micheluk “Marketing is about making selling superfluous. It is getting the right product in the right place at the right price and right time. “So it’s a no-brainer to buy it. Selling is the last part of the process. It is the vital part and should never be under-estimated. It is the last part of the process and if everything else is done properly people will buy the product, because it is what they want. “The chief executive has to spend time wooing the investors, and we should help that process by designing a system that ensures that the investors get reliable access to the information they need in order to develop trust in the chief executive. All this allows the chief executive to do his or her job and that is to manage the company to its full potential and therefore, to the shareholders’ benefit.”


“When a small group of players in a market go above a 5% market share they get noticed. In whatever market you are in, it starts to hurt the big boys. I think it is naïve of microbrewers to think that big brewers don’t know how to make good beer. They do. Up until now there has been no incentive for them to do so, but now there is. I don’t see the competition being the other 800 microbreweries in the UK. I see it being the global giants as they defend and seek to enter this growing segment. It costs more to make beer with flavour and real ingredients but they will if they have to.” The brewery at Cladach, in Brodick, employing four brewers, is now producing 12 different categories, including a stout, brown ale, amber ale, some seasonal, with Arran Blonde the core brand. The company is using dry whole hops which produced a hazy beer, and Gerald Michaluk believes strongly that not all beer has to be clear. “You can clarify a hop haze if you use silicates but it gives you one heck of a hangover if you put silicates anywhere near beer. We’d rather explain why it is cloudy. The hops are more expensive and awkward but we want to concentrate on a quality taste,” he says. His daughter, Veronica, a graduate of University of Glasgow, took over the administration at the brewery. But she showed an aptitude for the business and was sent to the VLB, Versuchs Und Lehranstalt fur Brauerei, the leading brewing school in Berlin, returning after graduation to run the brewery. The bulk beer, is taken by 30,000 litre tankers, on the Caledonian MacBrayne ferry, to a state-of-art, high-speed bottling plant in Burton-on-Trent, although there is a small bottling facility in Arran for specialist runs and local consumption. The company also bought a guest house in Whiting Bay, which is now used for staff, although it still has rooms for Arran’s holiday-makers. “Arran still attracts a fair number of tourists. 50,000 a year come to the island and a fair number visit the brewery and drink our beers. We are selling beer, yes, but we’re also selling memories. It’s a location brand and it’s important for us to emphasise the location.” n




Halo effect for Scotland’s trailblazing business angels With Sir Brian Souter moving up to chair Stagecoach next year, he will have more time to devote to his portfolio of other business interests. Kenny Kemp talked to the archentrepreneur about his involvement as a private investor stretching back over 20 years

While Sir Brian Souter is celebrated for his entrepreneurial zeal in building up Stagecoach – and saving it from oblivion ten years ago his support as an angel and equity investor in established companies is not so well recognised. Yet the Perth-based entrepreneur is a dark-horse figure in the remarkable story of Archangel Informal Investment syndicate, set up by Mike Rutterford and Barry Sealey, which celebrates its 20th anniversary in the coming weeks. Over the Olympic and Paralympic summer, two Archangel successes - Optos and Touch Bionics - have been showcased in London in the Make It In Great Britain exhibition at the Science Museum, in Kensington, celebrating the importance and success of British manufacturing. Touch Bionics, based in Livingston but with a major market in the United States, even featured in the foyer of the Department of Business Innovation and Skills in Victoria Street. This kind of success story has delighted Sir Brian Souter, who has announced his decision to step up to chairman of Stagecoach in May 2013, making room as chief executive for the



much-admired Martin Griffiths, the current finance director, who will undertake the day-to-day running of the listed transport giant. This will allow Sir Brian extra time to consider the work of Souter Investments, a portfolio of businesses that is relatively little-known in Scotland. While Stagecoach Group is the bedrock of this portfolio, Souter Investments has no role in the management of Stagecoach. When BQ Scotland went to meet Sir Brian in his Dunkeld Road headquarters, he had just heard the shock news that Virgin Rail had lost the West Coast Mainline franchise. With Stagecoach holding a 49% stake, in this rail joint venture, he appeared resigned to the loss of the franchise. While Sir Richard Branson has been seeking recourse through a judicial review of the Department for Transport’s decision, Sir Brian expressed a view that FirstGroup, who landed the franchise, was at least a viable UK business rather than another state-funded European competitor or a transport group likely to go bust. Although he expressed some amazement at the decision-making, considering Virgin Rail had inherited the worst rail franchise in 1997 and done a great deal to ensure better and safer trains on the route, with the arrival of Pendolino tilting trains. FirstGroup’s winning bid assumes 10% growth, while Virgin forecasts were only 8%. Sir Brian also spoke of his recent coach deals in the US, where a decade ago Stagecoach wrote off £640m. He has been able to buy back from administrators some of the ‘jewels amid the dogs’ that he had been forced to sell in 2003. “We had to package it up and sell it out to get rid of it, this time what Martin (Griffiths) and I were able to do was cherry-pick the good companies and the ones that geographically made sense.” But the reason for the visit was to hear about Sir Brian and sister Ann Gloag’s support for the Archangels, the trailblazing business angel group based in Edinburgh. Their backing stemmed from their relationship with Barry Sealey, the veteran business figure who was chief executive of Christian Salvesen plc, and who retired in 1992, aged 55. While Barry joined Stagecoach as a non-executive director, he also teamed up with Mike Rutterford, who

had sold out his estate agency Stuart Wyse Ogilvie, for £14m. Barry and Mike shared an interest in supporting young Scottish companies, and brought in Sir Gerald Elliot, the former Salvesen chairman, Eric Young, Peter Shakeshaft, and later Gavin Gemmell to develop the syndicate. Over the intervening 20 years, the Archangels syndicate has evolved into a world-leading ‘Scottish model’ of angel investing, supporting over 80 Scottish companies, and raising £200m, of which £62m came from the pockets of the angel investors. A staggering amount. “I can hardly believe it is over 20 years ago that Barry explained to me about his intention of supporting Scottish businesses that were often no more than a glimmer in the eye. He had joined the board of Stagecoach as a non-executive with a wealth of experience and common sense about business,“ says Sir Brian. He admires Barry Sealey who has been a staunch advocate of angel investing, rather than pure venture capital. The Archangels, working with LINC Scotland, were also instrumental in the creation of the Scottish Co-Investment fund, backed by the Scottish Investment Bank, which is supporting high-growth firms in Scotland. “Barry had already asked me to support a couple of companies, which we did, but when he told Ann and I that he and Mike Rutterford were planning to do something more for young companies in Scotland, I said we would be happy to help.” His involvement was purely as a financial supporter, backing Mike and Barry’s judgements, whereas the other investors operated within the businesses providing help and advice. “I didn’t take on any non-executive roles or chairmanship, I was busy running Stagecoach and happy just to be in the background.” Today the Archangels syndicate, is run by a professional executive team in Edinburgh, led by former Noble Grossart director, John Waddell, and has a syndicate of over 100 privately-wealthy individuals willing to support Scottish companies. The recent successful exits have been Mpathy, Lab901, Vitrology, while they have invested in Touch Bionics, Reactec and many others. >>

SUCCESS STORY Sir Brian and Ann Gloag’s early involvement was in supporting Optos, which was the first of the Archangel investments. It moved from being a brilliant idea of Douglas Anderson, whose son had sadly lost an eye, into a publicly listed Scottish business with a world-class optical laser machine. The company needed many rounds of funding before being listed in February 2006, and was supported all the way from conception through until flotation by Sir Brian and Ann Gloag, who was a non-executive director on the Optos board. “Barry and Mike never waste an opportunity. It wasn’t long after this that we were invited to put money into a laser eye testing machine, which was then a brilliant concept from Douglas Anderson. We knew it would be high risk – and that all the money might be lost. Nevertheless, we helped with funding for the first prototype. We knew if Barry, Mike and Sir Gerald Elliot were prepared to back it, then we would put some money in too. Eventually, after many rounds of investment, Optos turned out to be a winner for Archangels and for Scotland.” After the Optos flotation, Souter Investments was launched in December 2006 with the larger vision to create a wide-ranging portfolio, supporting well-established companies growing to a combined turnover of £1.2bn. Andy Macfie, who has spent 20 years working in private equity, was appointed to run the portfolio. “Andy Macfie and his investment team of Calum Cusiter and John Berthinussen have been doing a brilliant job. They are worth a profile in anyone’s book,“ says Brian. “It has been a very busy year for Souter Investments, we’ve been bedding down the investments that were made in 2011. I’m very happy with the way our portfolio is developing,” Sir Brian told BQ. Its brands and people have won a string of top awards over the last 12 months, including Colin Robertson, of Falkirk-based Alexander Dennis Ltd, named Scottish Entrepreneur of the Year in July. Souter Investments’ largest deal was the acquisition of Istanbul Deniz Otobusleri (IDO), the world’s biggest municipal ferry operator, from the Municipality of Istanbul. Souter co-led the deal with three



Scotland needs people who want to make a difference and are prepared to take a calculated risk to build new companies

Turkish partners. IDO operates 52 vessels and carries more than 50 million passengers a year. In Poland, Souter Investments launched, an innovative inter-city express coach service offering great value fares, free on-board Wi-Fi and high standards of customer service. Since launch in June 2011, has carried over 450,000 passengers to 17 cities in Poland as well as four European capitals. Souter Investments also invested in Pure, a health and fitness chain based in Warsaw and


founded by ex-Fitness First founder Mike Balfour, and the management buy-out of EMCAS, a claims management business based in Devon. The portfolio also acquired a minority shareholding in a new Latin American mobile virtual network operation, trading under the brand Virgin Mobile Latin America. Sir Brian was also part of the syndicate which supported the management buy-out of esure by the entrepreneur Peter Wood, and they also have a stake in, one of the top price comparison websites. They have also backed Sunseeker, the leading luxury motor yacht brand, and we featured an interview with its managing director Stewart McIntyre last year in BQ Scotland. Sir Brian is particularly delighted with the success of Alexander Dennis Ltd, Britain’s largest bus and coach manufacturer, which has been winning huge business in the United States and overseas with its environmentallyadvanced buses. Employing 1,850 people and producing 1,750 vehicles a year, it is one of Scotland’s brightest engineering gems. “Colin Robertson has been recognised for the great job he has been doing at Alexander Dennis. We’re proud that Souter Investments have been able to help in the expansion,” he says. He also says that Argent energy, largest biodiesel plan in the UK, using animal and cooking fat, is also suitable for the next generation of green buses. But Brian Souter has always been keen to support emerging Scottish companies, working closely with Archangels. The sale of Mpathy to Coloplast for £22m in 2010, an Archangel supported business, has meant a return for Brian Souter, while there are investments in CXR Biosciences, a Dundeebased bio-tech business. “Scotland desperately needs people like the Archangels to support enterprise, initiative and hard work. And it needs people who want to make a difference, are prepared to take a calculated risk to build new companies in Scotland and make a bit of money in return,“ he says. n The full tale is told in a forthcoming book out in the new year called: Archangels: Scotland’s Bleeding Edge Investors. Order from

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with Jock Yuler >> Going to ground What is with this abseiling malarkey? First it was Prince Andrew pushing his not inconsiderable frame off the Shard, London’s tallest new building. Some nasty commentators described it was as lump of lard off the Shard. Now Graham Birse, the chief executive of Edinburgh Chamber of Commerce, is launching himself off the Forth Bridge. I’ve been at the top of the 360ft tower on a gorgeous summer’s day and it is still windy and deeply scary. The obviously mildly-deranged Mr Birse’s challenge is on October 21 to raise money for ThePlace2Be, a charity which does great work in local schools supporting kids from chaotic or dysfunctional backgrounds and giving them support, confidence and life chances. If you fancy supporting Team GB, its ThePlace2BeChamberCommandos

>> The tippler’s tome A bit early for Christmas presents. But every smart-drinking Scot should take a look at the Whisky Opus (DK, £30), which says it is the definitive 21st Century reference guide to the world’s greatest distilleries and their whiskies. Written by Gavin Smith, Dominic Roskrow, with contributions from David de Kergommeaux and Jurgen Deibel. How often are you expected to advise a Japanese or America business client about whisky? Then simply muttered, ‘A Macallan 12-year-old is very good’. This seems the ideal way to gen



yourself up about what’s really happening in Banffshire and Islay. It also has 500 tasting notes to save you the time of drinking along the whole gantry in the Malt Whisky Society. But such is the changing nature of the whisky business, the Opus is unlikely to have covered Ardbeg Galileo, the world’s first whisky experiment in space. A Soyuz rocket with Ardbeg molecules called ‘terpenes’ was blasted up to the international space station to test the effects of near zero gravity on the maturation process. To mark the experiment, Ardbeg has produced a 12-year old malt called Ardbeg Galileo, at £70 a bottle. Perhaps they are planning to send manned flight to Mars in a whiskyfuelled spacecraft. Now that would be a great follow-up to Rockets Galore!

>> Let battle commence It’s a competition, yes, but the aim is not to beat Sir Tom Hunter at arm wrestling. Micro Tyco is the brainchild of Mick Jackson, one of our most admirable Scottish entrepreneurs who runs his Wildhearts in Action charity. Micro Tyco pitches young people in schools, youth clubs and Brownie groups against business people in organisations like Deloitte and Wood Group. Mike has long been passionate about

encouraging young Scots to think about enterprise. He’s brought in Sir Tom Hunter to launch the lastest Micro Tyco investment competition which begins in November. It started as a schools competition in 2010, and following a successful pilot last year, Sir Tom has thrown his muscle behind Micro Tyco and joined schools in calling for all Scottish businesses to enter a team and compete in the competition. The initiative, organised by the Wildhearts in Action charity which is one of Deloitte’s new Social Innovation Pioneers, challenges teams to generate as much money as possible throughout November starting with just £1 in seed funding. All profits are used to fund micro-loans in the developing world and provide entrepreneurship and leadership training in the UK. To date participating teams have raised over £120,000 in investment capital, funding micro-loans in 24 countries on four continents, helping people to work their own way out of poverty. Mick Jackson said: “I believe passionately that our country can lead the world in the evolution of entrepreneurial thinking. Micro Tyco unites everyone in our community, from our children to our corporate executives with that vision; that business can and must be a force for good. By associating business success with compassion we will inspire the leaders our world deserves.” So the challenge is out there. Can you take it?

>> And a Parting Shot from…. Sir Chris Hoy, Scotland’s greatest Olympian

I am not a huge fan of reality TV, although it does seem to have become part of British culture. Real life is not about instant gratification or overnight fame. There are no guarantees in life and I can assure you that even the most talented athletes in the world have dedicated thousands of hours to developing that natural talent. Without that hard work, there can be no lasting reward.

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BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to and please put ‘BQ events page’ in the subject heading


20 Power Lunch Club, with guest speaker Mark Beaumont, Adventurer, author, documentary maker and motivational speaker. HSBC Corporate Banking Centre. First Floor 141, Bothwell Street, Glasgow G2 7EQS. 12-2pm. Contact: 25 Thrive for Hospitality, Coca-Cola Enterprise, The Corinthian Club, Glasgow, 8.30am. Alex Berman on 0131 526 3105. 26 Business Forum Scotland, Ghillie Dhu, Rutland Place, Edinburgh EH1 2BN. 5.30-8pm. Chief executives of Final Fling and Inquisitive Systems speak on the challenges they face


2 Federation of Small Businesses, Glasgow Branch annual meeting, 6pm–9pm – Grand Central Hotel, Glasgow. Contact: 2 Thrive for Services Breakfast, Highlander Ltd, 8-10am, Royal Scots Club, Edinburgh 3 FSB Dumfries & Galloway branch annual meeting, 7-10pm, Cairndale Hotel, Dumfries. Contact: 4 Power Lunch Club, with guest speaker Geoff Leask, Director of Prince’s Scottish Youth Business Trust. HSBC Corporate, Hanover Street, Edinburgh, EH2 1EL. 12-2pm. Contact: 4 Glasgow Business Awards 2012, Thistle Glasgow Hotel. Organised by Glasgow Chamber of Commerce. 8 Glasgow for Business Week: Numerous events in the city. 11 WeDo Scotland, the entrepreneurial networking group’s annual conference, 9am-5.30pm. Point Hotel, Edinburgh. For booking or details: or 11 Northern Star Business Awards, Boyd Orr Hall, Aberdeen Exhibition and Conference Centre, organised by Aberdeen and Grampian Chamber of Commerce. 01224 343901 17 Thrive for Services Lunch, Jet Logic, Scotch Whisky Society, Edinburgh. 12-2pm. 18 Power Lunch Club, with guest speaker John Ferguson, Director of Development & Programmes at The Scottish Council for Voluntary Organisations. HSBC Corporate Banking Centre. 141 Bothwell Street Glasgow G2 7EQS. 12-2PM. Contact: 18 FSB Scottish Borders Branch annual meeting, St Boswells. Contact:

1 Power Lunch Club, with guest speaker Ian Ritchie, Chairman of Iomart. HSBC Corporate, Hanover Street, Edinburgh, EH2 1EL. 12-2pm. Contact: 1 Thrive Directors’ Dinner, Corinthian Club, Glasgow, 5-8pm 6 FSB Lanarkshire branch annual meeting, Hamilton. Contact: 7 Federation of Small Businesses – East of Scotland annual dinner, Caledonian Hilton, Edinburgh with Alastair Darling MP. 15-16 New Start Scotland, at the SECC, Glasgow. 10-4pm. The one-stop show for everyone wanting to start a new business. 15 Power Lunch Club, with guest speaker Maurice Taylor, Chief Executive of The Chardon Group. HSBC Corporate Banking Centre. 141 Bothwell Street Glasgow G2 7EQS. 12-2pm. Contact: 16 Federation of Small Businesses, North East Scotland annual meeting and dinner with guest speaker Finance Secretary John Swinney MSP, Dundee. Contact: 23 WeDo Scotland, the entrepreneurial networking group, awards dinner and ceremony, 7pm. Venue to be confirmed. Call 08708 759793 or email support@ for more information. Open to members and non-members. 28 Thrive Directors’ Dinner, 5-8pm. Royal College of Physicians, Edinburgh, Contact: Amanda Kremer, 0131 526 3104. 28 NDI Opportunities Conference: ‘Building for Growth’ – Scotland. 8.30am – 6.00pm, Hilton Glasgow, 1 William Street, G3 8HT, Glasgow. To book your place call 0191 426 6333, email or visit 29 CBI Scotland North East Dinner, Marcliffe Hotel, Aberdeen. Contact: 29 Entrepreneurial Exchange annual dinner and awards. Glittering night for Scotland’s leading entrepreneurs and business leaders. Glasgow Hilton. 7pm. 30 West Lothian Chamber of Commerce’s Business Excellence Awards. Guest speaker Martin Stepek, of the Family Business Association, 6-10pm, Macdonald Houstoun House Hotel, Uphall, EH52 6JS.


6 Power Lunch Club, with guest speaker, Dr Simon Gage, Director of Edinburgh International Science Festival. HSBC Corporate, Hanover Street, Edinburgh, EH2 1EL. 12-2pm. Contact: 20 Power Lunch Club, with guest speaker Ivor Tiefenbrun MBE, Chairman of Linn Records. HSBC Corporate Banking Centre, 141 Bothwell Street Glasgow G2 7EQS. 12-2pm. Contact:

18 Thrive Network Conference, Clyde Union Pumps & Malcolm Group, 1.30-5.30pm. Trades Hall, Glasgow. Contact: Amanda Kremer 0131 526 3104. 18 Media Breakfast- Social Media Winners. WeDo Scotland. 8am -9.30am at Tigerlily, George Street. Book on Open to non-members. 24 FSB Fife branch annual meeting, Kirkcaldy. Contact: 30 CBI Scotland Westminster Reception, 1-4pm. Scotland House, Dover House, Whitehall, London. Contact:



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.

The diary is updated daily online at


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BQ Scotland Issue 9