BQ SCOTLAND Issue 2

www.bq-magazine.co.uk

ISSUE TWO: WINTER 2010

rocket man Heading for space on board Virgin Galactic Keiller instinct From engineer to oil services to global influence bull’s eye Gold medal winner gives everything back on the boyle Delivering deals in white-hot conditions

GO WEST go!

Creating ripples in Glasgow’s beer – or how to expolit an opportunity. Petra Wetzel and a glass half-full ISSUE TWO: WINTER 2010: SCOTLAND EDITION

BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

SCOTLAND EDITION

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BUSINESS QUARTER: WINTER 10: issue TWO A VAT hike in January, the RBS Six Nations rugby in February and March, the John Smith’s Grand National and a Royal Wedding in April, the Scottish parliamentary elections and the UEFA Champion’s League Final at Wembley in May; sleet and rain at the Royal Highland Show in June, T in the Park in July, and the Edinburgh Festival in August. These are the reassuringly predictable events for 2011.

But the world remains a volatile and disruptive place. It’s the stuff we can’t predict that causes us most concern in business. And there is a lucrative risk industry out there gazing into crystal balls trying to fathom the “unknowables” that might knock us off course. Every year there is something new – who would have thought that volcanic ash clouds would ground most of Europe’s airlines?

2011 is likely to be just as challenging, exciting, demoralising, exasperating and risky.

If you’re in business, you need to take your chances and assess every opportunity that comes along. And against this backdrop of uncertainty, Scotland’s businesses are being implored to become more global, seeking new international markets for their products and services beyond the British Isles.

If Ireland’s unfortunate economic trauma has taught us one thing it is that smaller developed nations have no God-given right to continued growth and prosperity; it has to be earned through work hard, determination and application.

Ernst & Young’s respected Item Club economic analysis predicts that Scotland’s economic growth rate will be a respectable 2.2% in 2011. This is based on general UK recovery and continued growth in world trade. It also predicts that firms are loosening their purse strings to increase investment. This is heartening stuff. But there are real fears about more job losses in Scotland, especially in the public and local authorities sector, and the depressed housing and construction industries.

And the Item Club warns it will be 2014 before consumer expenditure returns to 2008 levels.

There’s a lot to get right. But BQ Scotland will continue to look at success stories across the nation. In this edition we’ve looked at how exporting will play its part in ensuring that the new year brings a sustainable level of wealth to our nation.

This is our second issue of Business Quarter Scotland. If you missed the first edition, a belated welcome to you. To others, thank you for all your good wishes. We’ve had “aye-it’s-nae-bad” Scottish feedback with some folks suggesting the first edition was a “bit fluffy”, like a steamed latte perhaps. So we’ll be trying harder to give triple-espresso business shots for those who need an extra boost. We also appreciate that some people are watching to see how we get on. Please don’t wait too long to join us though; come and support us!

As we said on day one, BQ Scotland is about entrepreneurs, successful business people and advisers and their in-depth stories. We aim to give a few surprises along the way and we remain committed to great writing and brilliant photography and design. So please keep pestering us about everything and enjoy a prosperous 2011.

Kenny Kemp Editor, BQ Scotland.

CONTACTS room501 ltd Christopher March Managing Director e: chris@room501.co.uk George Cheung Director e: george@room501.co.uk Euan Underwood Director e: euan@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk EditorIAL Kenny Kemp Editor e: editor@bq-scotland.co.uk Alastair Gilmour Sub-editor Jane Bradley Editorial Design & production room501 e: studio@room501.co.uk Photography KG Photography e: info@kgphotography.co.uk advertising For advertising call Alistair Fleming on 07818 411195 / 0191 537 5731 or email sales@bq-magazine.co.uk

room501 Contract Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2010 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, December 2010.

THE LIFE AND SOUL OF BUSINESS SCOTTISH EDITION

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BQ Magazine is published quarterly by room501 Ltd.

BUSINESS QUARTER |WINTER 10

CONTE BUSINESS QUARTER: WINTER 10 rocket man

36 rocket man

Features

Heading for space on Virgin Galactic with Will Whitehorn in the driving seat

62 the keiller instinct The engineer who created a Scottish oil services company that’s going global

66 bull’s eye jackson

36 business lunch

A gold medal-winning businesswoman giving it all back to Scottish sport

20 go west go!

The German brewery boss creating ripples in Glasgow’s beer glasses

34 as i see it The benefits of belonging to social media groups are too many to ignore

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72 on the boyle First-hand experience is vital for entrepreneurs’ deal delivery

76 angel treading The risks, the rewards and the returns, according to Nelson Gray

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42

TENTS SCOTLAND EDITION

bull’s eye

42 BUSINESS LUNCH

Regulars

With the high-flying executive whose feet are firmly on the Tarmac

46 WHISKY Three styles, three women, one room, lots of banter, several opinions

48 fASHION 6 ON THE RECORD Involved with the positives in business

10 NEWS Who’s doing what, when and where

26 COMMERCIAL PROPERTY The landmark developments creating our industrial landscape

66 angel treading

Barbour jackets – still keeping us cool

54 Equipment Riding shotgun with Chris Porter

59 motoring So impressed, our reviewer orders a Jag

80 JoCK YULER Gripping gossip from our backroom boy

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77 BUSINESS QUARTER | WINTER 10

ON THE RECORD

WINTER 10

>> More medicine to take The tough measures introduced to help the economy recover will bite hard in 2011 The 12 months ahead will be a defining stabilise, this may start to rise again in 2011 one for Scotland and for its business as the fiscal consolidation reduces public community. With a new Scottish Parliament in sector employment.

May and the UK set to grant more devolved The Employment Department’s statistics for powers to Scotland, 2011 could well be as September 2010 show a decrease in the significant a year as 1979, the year of the first unemployment total in Scotland to 134,500, Scottish referendum on devolution, and 1999, which is 4.8% of the workforce. What is the year of the creation of the Parliament. alarming is the number of younger men – and But the backdrop is how will Scotland – with those in the 17-25 category – who remain its large public service sector and its flagship without work in Scotland.

National Health Service – be able to respond to Linda Urquhart, chairman of CBI Scotland, wide-scale budget cuts which will begin to said: “We know there is concern about job have deeper impact. losses as a result of reduction in public Scotland’s economic situation is fragile, spending but our September economic although its GDP rebounded strongly in first forecast suggests that private sector growth half of 2010 with growth of 1.3%, the fastest will cushion these and avoid a huge number quarterly growth since Q2 2006. This was of net job losses. reflected in positive growth in production, “A significant event will be the services and rapid growth in the Holyrood election. CBI Scotland is construction sector which expanded by calling for all of the political 10.4% over Q2 2010. However, parties to put public sector revisions to the GDP data suggest that reform and the needs of the recovery in Scottish output was Scotland’s economy at the top of weaker than previously estimated, with their priorities.” a modest decline in GDP in Q1 The UK Budget is on Wednesday 2010. In the last quarter of March 23 2011 and 2010, the inclement Chancellor George Osborne weather conditions which is expected to dish out brought massive travel and some more tough business disruption, medicine to help the especially in the preUK recover from its Christmas retail boom, will worst recession have a detrimental impact. since the 1930s.

The jobs market remains The coalition challenging as Government set up unemployment continued the UK Banking to increase in the third Commission inquiry quarter of 2010. which is expected to Although a spate of job report no later than announcements – in financial August 2011. The report services and in renewable must come out before the Prioritise: Linda Urquhart, energy projects – suggests that Government sells its bank CBI Scotland unemployment may soon shares, worth a total of

BUSINESS QUARTER | WINTER 10

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about £60bn, in Lloyds Banking Group and RBS. Meanwhile, the failed tripartite system – where responsibility for the UK’s financial system was diluted across the Bank of England, the FSA and the Treasury – is to be abandoned, confirmed financial secretary to the Treasury, Mark Hoban MP. The Government is now creating a single macro-prudential supervisor called the Financial Policy Committee – who will sit in the Bank of England and have responsibility for maintaining financial stability – while the Prudential Regulatory Authority, an independent subsidiary of the Bank, will have responsibility for prudential regulation of individual deposit takers and insurers.

Now a new Consumer Protection and Markets Authority is to be created as a champion for the consumer, while the Financial Services Compensation Scheme limit is planned to rise from £50,000 to £85,000 from December 31.

The global recovery is expected to continue into 2011, with growth driven by emerging and developing economies, which is good news for Scottish companies looking at international expansion.

Bill O’Neill, chief investment officer for Europe, Middle East and Africa at Merrill Lynch Wealth Management, says: “Global economic growth is likely to slow to 4% in 2011, from 4.8% in 2010. Recovery in the US and continental Europe is likely to disappoint but strong domestic consumption should ensure a soft landing for China.”

A weaker euro is expected to continue in 2011 but the dollar will get some respite, The Chinese economy is expected to grow by 9% and India by 8.2%. However, strong emerging market equity performance in 2010 was focused on smaller markets such as Thailand, Turkey and Indonesia, and this trend is expected to continue in 2011.

UK equities and large European companies offer the best equity investment opportunities, and among the sectors, energy, including oil and natural gas, is seen as very attractive, together with telecoms. In 2011, investors should start to focus on dividends – historically the main driver of returns – rather than capital growth.

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ON THE RECORD

>> Clean green pleasant land Benjamin Baker’s famous picture from the 1880s demonstrates the principles of the cantilever bridge and how the Forth Bridge, Scotland’s most famous structure, would be built. It features a young Japanese engineer, Kaichi Watanabe, working then with Harrison, Barlow, Fowler and Baker, the British bridge designers, sitting on a plank.

Watanabe studied under Henry Dyer, the Scottish engineer associated with technical education in Japan, and he studied at the University of Glasgow from 1885, graduating with a BSc in civil engineering, then worked as a construction foreman on the Forth Bridge.

Japan’s investment came full circle when Mitsubishi Heavy Industries – through its subsidiary Mitsubishi Power Systems Europe – selected Scotland as the location for its UK research and development centre.

This is great news for Scotland and a further strengthening of ties between two nations with strong engineering heritages.

The aim is to develop a world-leading offshore wind turbine and it represents an investment of up to £100m over five years.

This project is intended to reinforce Scotland’s position as a place for lowcarbon technology investment.

The announcement includes the acquisition of Edinburgh University spin-off Artemis Intelligent Power (AIP), along with a commitment to establish the MPSE Centre for Advanced Technology near Edinburgh.

The deal means MPSE acquires a 100% shareholding in AIP, which is based in Loanhead.

AIP will continue as an independent technology company and senior engineers will be retained to continue the development of hydraulic transmission systems.

The UK Government has provided up to £30m to support MPSE’s investment. MPSE will work with AIP to deliver the unique hydraulic technology in a large offshore wind turbine.

MPSE is committed to the 25 jobs at AIP, and wants to create around 30 more in 2011.

MPSE chief executive officer Akio Fukui paid tribute to the connections between Scotland and Japan.

Three for Forth: Cantilever principles explained by rudimentary methods in the 1880s

The project is intended to reinforce Scotland’s position as a place for lowcarbon technology He said: “This exciting project squares the circle of Scottish-Japanese industrial history dating back to when Thomas Glover assisted in the creation of MHI in the 1800s.

The first Japanese naval vessel was built in Scotland in the late 19th century, and now the first game changing offshore wind turbine will be built here too.

“This builds on our existing partnership with Scottish & Southern Energy on low-carbon energy developments, including offshore wind, and we are very pleased to be working with the UK and Scottish Governments to turn this vision into a heavy engineering reality.”

Dr Win Rampen, managing director of AIP, said: “We look forward to accelerating our

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R&D work with a view to our technology being used in turbines in UK and European waters by 2015.”

Colin Hood, SSE chief operating officer, added that the announcement is another step forward for Scotland’s aim of being the destination of choice for global investment in renewable technology and project delivery.

He said: “It builds on SSE’s strategic partnership with Mitsubishi and is a very positive signal that our common goals of delivering low-carbon jobs and economic development are being transformed into reality.”

Scotland’s First Minister Alex Salmond was absolutely delighted, too.

“Scotland is a leader in the development of clean, green energy and boasts a world-class research and development base that is pioneering technologies that will have a global impact on combating climate change,” he said.

“Mitsubishi’s decision to invest in Scotland demonstrates how Scotland’s renewable revolution is gathering pace and that we have the quality infrastructure and skilled workforce to deliver success in this rapidlygrowing industry.”

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ON THE RECORD

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>> Bolting down the basics Jack Sharp anticipates a tightening up of paperwork when it comes to defining the terms of work in 2011 Scotland’s contracted service firms – which operate across Scotland from the North Sea to cleaning our streets – can expect a sea change in their ways of working in 2011. The clue is in the word: Contract.

The fall-out from BP’s disaster in the Gulf of Mexico will start filtering through to ensure that there is a new reality about how contractors undertake their work. And with BP still working in partnership alongside many Scottish-based contractors around the globe, there will be tighter guidelines to ensure projects are kept on schedule and comprehensive health and safety standards are in place across the contractors.

Nearer to home, the debacle over the Edinburgh Trams project and the acrimonious dispute between TIE and German company Bilfinger Berger will mean a more acute look at how larger capital projects are properly prepared, scoped out and executed. So far, the obvious beneficiaries from these protracted disputes have been the corporate lawyers.

Now a new breed of project manager is likely to emerge who can smooth the way by ensuring that contracts run smoothly on a day-to-day level.

This comes as Scotland’s public sector is being shorn because of budgetary constraints, with significant reductions in jobs now imminent.

More private companies are rubbing their hands at the prospect of securing public sector outsourcing contracts.

“There is a fundamental rethink about cutting public sector staff and then relying on private contractors to do the work to the same degree,” one council chief executive told BQ Scotland.

“The golden rule for organisations working with contractors must be: Show me you can do the job properly.”

New rule books related to the management of contractors will become de rigueur in many corporate organisations. This will be viewed increasingly as a vital part of running a larger

BUSINESS QUARTER | WINTER 10

New rules: A contractor working on cobble setts for the Edinburgh Trams project

organisation, while it will no longer be acceptable simply to sign a contract and leave the contractor to get on with the job.

Scotland’s energy industry relies on contractors to undertake multi-million projects, but where does the liability lie if there are any major problems?

“There is a new reality about being aware of a contractor’s capabilities, not just believing what they say, and what they say they can do,” said one oil industry observer.

There has been an admission among some senior engineering operators that risks have been severely under-estimated in some spheres. This will have a knock-on impact in oil and gas industry, where large offshore engineering and fabrication companies have specialist skills that is difficult to purchase elsewhere.

“There’s been a period of learning but this will be apparent with new contracts in the New Year,” said the oil man. “Contractors will have to step up their own work on cost control management and health and safety.”

This will filter down the chain to local authorities and government outsourcing services, seeking to ensure that they get value

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for public money. But chief executives considering outsourcing are also aware that private sector does not always to it better or more effectively than empowered and well-motivated public servants.

Judith Hackitt, chairman of the Health and Safety Executive, has warned of the dangers of allowing another cycle of decaying commitment to maintaining the integrity of offshore facilities, and this will have repercussions for contracts.

Speaking to senior executives and trades associations of North Sea Offshore Authorities Forum, Ms Hackitt stressed the importance of continuity and leadership.

Discussing health and safety standards in the UK offshore industry, she said: “The commitment must be sustained in the long term and it must be spread more broadly if we are to ensure that we don’t see history repeat itself with another cycle where improved short-term performance leads to complacency and reduced investment.

“But we, as regulators, also have a role to play in ensuring that this cyclical ‘decay’ does not happen. The more we can work together to develop consistency, learn from one another, and promote the sharing of good practice – particularly after Deepwater Horizon – the more effective we will be as leaders and as regulators.

“The UK Government is clear about the need to adopt new approaches to energy generation. The offshore oil and gas industry has the experience, skills and expertise to make a significant contribution to achieving this, especially in the areas of carbon capture and storage and offshore wind farms. But this will require us to all think about new operational practices in the North Sea.” She said life extension and new uses for old equipment is possible provided the equipment is properly maintained and that design integrity is not compromised by new requirements or applications.

WINTER 10

ON THE RECORD

>> Scotland’s entrepreneurs honoured in Glasgow Two brothers who own the famous Trespass sportwear brand inducted into the Entrepreneurial Exchange’s Hall of Fame in Glasgow A door-to-door salesman carrying his wares in two heavy suitcases was the inspirational figure singled out at the Entrepreneurial Exchange’s annual awards dinner in Glasgow.

He was Mohammad Khushi, the Indian-born father of Afzal and Akmal Khushi, the co-owners and directors of Jacobs & Turner International – better known as the international sportswear brand Trespass – who were both inducted into the Exchange’s Hall of Fame.

Mohammad migrated to Pakistan in 1947 but came to Glasgow in 1951 to join a relative then bought a grocery store in 1965. He bought Jacobs & Turner for £1,000 – then an ailing local clothing company – which now employs 1,200 with a turnover of £60m a year. Mohammad Khushi died in 2007.

Afzal said: “There are thousands of people we’d like to thank and they have all worked for us over the past 25 years with a passion and a pride. But it would be remiss of me not to mention my penniless father who came to Scotland as a door-to-door salesman. He instilled in us the magical gift of hard work.

We have continued as a second-generation company inspired by him.”

Both admitted they were private individuals who spurned the limelight and that they were not members of the Exchange, something chief executive John Anderson was quickly planning to remedy.

The brothers created the Trespass brand in Glasgow in 1984 with the help of Clydesdale

Bank, who were, by coincidence, the sponsors of the awards event. The story was told of how Clydesdale Bank boss David Thorburn – who now signs the bank notes – went to meet the brothers after reading a Dunn & Bradstreet business report. The brothers, then operating in an upstairs room on Argyle Street, requested a loan of £100,000 to expand their business and to launch their clothing brand.

David Thorburn contacted his boss Don Donnelly who agreed to the support and since then Trespass has grown to become one of the bank’s biggest customers, operating from an eight-acre site at Kinning Park.

Thanking the bank was a theme continued by Keith Rogers, managing director of Goals Soccer Centres, was who named Entrepreneur of the Year at the event. In Keith’s case he singled out Bank of Scotland.

The awards, sponsored by Deloitte, also saw Lucinda Bruce-Gardyne, founder of Genius Foods and the cover story of our first edition of BQ Scotland, named Emerging Entrepreneur of the Year following the unprecedented success of her gluten-free bread range.

Keith Rogers started his business career with a fleet of ice cream vans while at university, before finding his niche in the five-a-side football business. He established the successful Pitz brand before selling the company and starting up Goals Soccer Centres.

“I believe every one of us desires success, whether in our career or in other facets of life,” he said. “Goals Soccer Centres has come a long way in the past few years, however, we still see huge potential for our business both in the UK and abroad.

“Our success is the result of the combined efforts of an amazing group of individuals with a shared vision. Winning this prestigious award will provide recognition of our success and inspire us to achieve even greater things.”

John Anderson, chief executive of the Entrepreneurial Exchange and chairman of the judging panel, said: “All of the finalists were outstanding in their own way, but Keith and Lucinda are definitely worthy recipients of their

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accolades. Entrepreneurs are the driving force behind business and the Entrepreneurial Exchange nurtures the spirit of entrepreneurship for the good of Scotland.”

Other finalists were: Emerging Entrepreneur runners-up: Sharon Munro, Barrhead Travel and Ben Hounsell, TenBu Technologies.

Entrepreneur of the Year runners-up were: John Innes, Amor Group, and Michael Tracey, William Tracey Group.

Winner: Afzal and Akmal Khushi collect their awards

I believe every one of us desires success whether it’s our career or in other facets of life

Winner: Lucinda BruceGardyne with husband Hew

BUSINESS QUARTER |WINTER 10

NEWS

WINTER 10

What’s happening from the North Sea to Tiree and the Caribbean, by way of private banking, television programming, shoe design, wind power, Glasgow’s tourism, and what to do with an old brewery Sea to meet European Union sanctions on Iran.

The field is a 50-50 joint venture with the Iranian Oil Company.

Tiree roots: Chris Hall and Micheal Holliday

>> Design Roots are traditional success Scottish-based architects Micheal Holliday, 25, from Tiree, and Chris Hall, 32, originally from Hampshire, of Roots Design Workshop which provides green architectural design, were runners-up for the Shell LiveWIRE Young Entrepreneur of the Year 2010.

Roots Design Workshop has been involved in the conversion of traditional Scottish cottages and crofts on the windswept island of Tiree to meet modern carbon-neutral specification.

“We’ve got projects to take us through for the first part of 2011 and we hope to be expanding onto the Isle of Mull, the Uists and we’re involved in a Shetland design competition,” Chris Hall told BQ Scotland. “Nobody is sitting waiting for us. We’ve learned we have to make this happen.

Originally we went out and found jobs by organising community meetings and listening to what people wanted. It’s up to us keep doing that.”

Jessica Grosvenor, a 25-year-old entrepreneur from Wolverhampton, won the national title. She runs a freelance training and consultancy, which provides bespoke training packages to college students, teachers and nurses.

>> BP wins North Sea mandates BP has been awarded licence interests in seven offshore exploration blocks in the UK’s 26th Seaward Licensing Round. The awards together represent the largest licence award BP has received in the UK for more than a decade.

“These licence awards are a significant success for BP and a further boost to the long-term future of our North Sea business,” said Trevor Garlick, regional president for BP in the North Sea. “With six major projects currently under way in the UK and Norwegian sectors, BP is

BUSINESS QUARTER | WINTER 10

investing strongly in the North Sea to develop today’s resource base.”

The awards, made by the UK Department of Energy and Climate Change, support BP’s focused programme of exploration and appraisal in the North Sea. The strategy is based on developing new fields which can be tied in to existing infrastructure. The blocks awarded are: Kinnoull area, ETAP area, Culzean area (operated by Maersk), Kessog area – all in the central North Sea – and two West Sole SNS area blocks in the southern North Sea. The awards came as BP suspended production from the Rhum gas field in the central North

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These licence awards are a further boost to the long-term future of our North Sea business >> Bloxx is top of the Scots Four Scottish-based firms have made into the Deloitte 2010 Technology Fast 500 for Europe, the Middle East and Africa (EMEA). They are Bloxx, (ranked at 122), Skyscanner (166), Clintec International (244) and Gael Ltd (316). Mobile Interactive Group, based in London, secured top spot producing a five-year fiscal growth rate of over 26,000%.

>> Par five for Barclays Wealth team Former Scottish amateur golf internationalist Jonathan “Ace” King is among five senior appointments joining Barclays Wealth in Scotland. Jonathan and Simon Lewis are joining as private bankers; Ryan McDonald takes on the role of financial planning regional director, while Martyn Padden, based in Aberdeen, and Richard Peacock have been made private bank executives.

Mark Little, managing director of Barclays Wealth Scotland, said: “Business growth over the past 12 months has led us to expand the team in order to meet demand.”

Barclays Wealth employs more than 1,800 staff in Scotland.

WINTER 10

NEWS

>> AEGON UK’s makes the changes

>> SSE is a bankable dividend Perth-based Scottish & Southern Energy is one of only six FTSE 100 companies to have delivered inflation-busting dividend growth every year since 1999.

The company’s priorities for 2011 are ensuring work is carried out in a safe and responsible manner; delivering a high standard of performance in electricity generation, with power stations generating reliable electricity during the winter; maintaining supplies and restoring them quickly if they are lost during the extreme winter weather conditions; achieving a high levels of customer service; and continuing with the investment programme in generation, electricity networks and gas storage.

Lord Smith of Kelvin, chairman of SSE, said: “SSE’s key financial objective is dividend growth, and we are on course to meet our target of a 2% real increase for the full year 2010/11, while maintaining a dividend cover in line with our established range. Our ability to sustain above-inflation dividend increases for what would be the twelfth successive year illustrates yet again the resilience in SSE.” SSE has also awarded a multi-million pound contract to provide project management services for its capital investment programme over the next five years to KBR, based in Houston.

SSE has appointed KBR to help maintain the processes, systems and skills needed to deliver large capital projects.

KBR will complement SSE’s team which has been expanded to increase its capacity to manage major projects.

Meanwhile, SSE has agreed to invest a further £2.7m in the wave energy developer Aquamarine Power, taking its investment in the On course: Lord Smith of Kelvin is company over the last three years to £19.8m confident about dividends and giving it a 45% stake.

AEGON UK’s restructuring will reduce costs by 25% by the end of 2011. As a result, AEGON cut 42 roles within employee benefits while nine roles in the finance department will no longer be required. The total reduction as a result of the announced programme is 242.

Chief operating officer Adrian Grace said: “We are on track with our restructuring programme, with a number of important decisions made and plans implemented over the past few months. The programme will continue during 2011 and we expect updates on progress in the early part of the year. The changes are essential to ensure the long-term success of AEGON in the UK.”

>> Still not enough for a rainy day The myth of the frugal Scot now seems to be laid firmly to bed. An HSBC research reveals that 28% of Scottish people have less than £249 set aside as a financial safety net. A survey reveals 20% of Scots have no savings and 8% have less than £249 set aside as a financial safety net, the equivalent of just five days average take-home pay. Those aged between 25 and 34 are the least prepared; 41% have less than £249 in savings, with a quarter (25%) saying they have nothing set aside at all. Women are far less prepared than men; 20% admit they have no savings. continued on page 12

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NEWS

AUTUMN 10

Richard Brown, Head of Savings for HSBC, said: “These findings demonstrate a worrying lack of preparation among people in Scotland. With the current climate of uncertainty, it is of utmost importance that people are setting aside a realistic sum of money to be used in emergencies.”

>> Creative media players forge co-operative future Two leading players in the new media and television have set up a “consortium co-operative” to produce content for clients.

Yellow Brick House Media was advised by Co-operative Development Scotland after Dougal Perman and Roger Dubar met at a networking event at STV’s headquarters in Glasgow.

CDS set up a consortium co-operative, which would allow them to pool skills and resources, while retaining their individual brands and independence.

Dubar said: “The consortium gives us scale, which improves our market presence and access to larger contracts. It’s also very low risk because there are no overheads, no extra staff and we can build up trust as a brand gradually.”

Perman and Tom Lousada pioneered internet radio station Radio Magnetic in 2001 while Dubar, a media lawyer, works alongside producer Eric Coulter, famous for Rebus and Taggart. The businesses have joined with Ryan Addams, a web and graphic designer, and Don MacLellan, a web and database specialist.

supply. He told a business group meeting at the Scottish Parliament that: “In Scotland we cannot ignore the realities of what is possible in engineering and financial terms.

“If we persist in thinking only about 2030 (the date set for low-carbon targets), we will be in deep trouble in pretty short order…

“I urge policymakers in Scotland to do more on the question of how Scotland is going to respond to the fact that the National Grid will lose 30% of its generating capacity by 2018.”

>> Power companies invest, divest and acquire National Semiconductor – which has been a centre of excellence in Scotland since 1970 – is investing £20m in its chip-making and design facility in Greenock and will increase the size of the permanent workforce in 2011. Much of the investment will go into new machinery and technology to reduce the size of the semiconductor wafers they manufacture which will offer 20% cost and productivity improvements.

Meanwhile, Fife fabricators are blowing hot with a Welsh wind deal. Burntisland Fabrications (BiFab) has won a £12m contract

Caribbean calling: Emily Lamb, shoe designer

>> Aggreko wins Bangladeshi deal Aggreko, Scotland’s PLC of the Year, secured a £114m deal with Bangladesh Temporary Power Development Board to provide 150 megawatts of gas-powered plant in Bangladesh. Glasgow-based Aggreko won the three-year contract following the breakdown of a large gas turbine in Bangladesh.

Meanwhile Rupert Soames, Aggreko’s chief executive, warned MSPs to take urgent action to ensure Scotland’s future energy

BUSINESS QUARTER | WINTER 10

>> An emerging rival for Jimmy Choo Exclusive shoe designer Emily Lamb – who set up her business with the help of the Prince’s Scottish Youth Business Trust – has launched her spring and summer collection for 2011. And she has landed a contract to stock the upmarket Eden Rock Hotel in the Caribbean island of St Barths.

Emily, 23, who studied at Cordwainers with London College of Fashion, and returned to Glasgow after graduation, said: “I’m thrilled to sign up my first stockist – and as surprised that my shoes will be available in the Caribbean before my native Glasgow.”

Emily Lamb’s shoes are handmade with Italian leather by experienced UK craftsmen. Her collection comprises 11 styles.

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WINTER 10

Much of National Semiconductor’s £20m investment will go into new machinery and wafer technology

to design and build two foundation structures for substations for one of the largest offshore wind farms in the world.

Bifab signed the contract with RWE npower

renewables for its Gwynt y Môr Offshore Wind Farm off Wales. The £2bn wind farm will have 160 wind turbines 10 miles off the north Wales coast, near Colwyn Bay and Llandudno.

Iomart, the Scottish cloud-computing, web-hosting and data storage company chaired by Ian Ritchie has made its second acquisition in 18 months with the purchase of Essex-based Titan Internet. AIM-listed Iomart, bought the computing firm for £4.2m. The company, founded by Angus MacSween, who is CEO, announced half-yearly profits of £1m, with revenues of £11.4m.

Nick Horler, chief executive of Scottish Power, has resigned from his post. The reasons for Horler’s departure has not been divulged by the energy giant or parent company Iberdrola.

Insiders said his decision was taken for personal reasons and that he told executives after a board meeting in Glasgow.

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NEWS

He remains an adviser to Ignacio Galán, head of Iberdrola, and chairman of Scottish Power, Britain’s third biggest electricity generator and the leading UK wind-power generator. A successor has yet to be named.

>> Atos Origin named as best business Atos Origin, an international IT services company with a major presence in Livingston, has been named as best business at West Business Excellence Awards, organised by West Lothian Chamber of Commerce. The evening, in association with Network Rail, celebrated West Lothian’s business achievements at the Macdonald Houstoun House Hotel and was attended by more than 220 guests.

News continued on page 14

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NEWS

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>> Radio frequency player gets £6.1m backing Elonics, the burgeoning semiconductor company, has secured £6.1m in an investment round led by Scottish Equity Partners and supported by Octopus Ventures.

The investment will allow Elonics to accelerate the expansion of the overseas sales team in Taiwan and China. The company has embarked on a major recruitment drive aimed at bolstering its engineering team at its Livingston base. Elonics has achieved a breakthrough in RF tuner technology with its radio frequency architecture called DigitalTune.

David Srodzinski, Elonics’ chief executive officer, said “This investment allows us to pursue our growth strategy, targeting the global television and radio market with our world-leading CMOS RF tuner technology.”

>> Housing set to remain in doldrums in 2011 The outlook for house prices in 2011 remains gloomy in much of the UK with a further fall of 5% in some valuations expected, according to Carter Jonas, one of the UK’s leading property management firms.

This is combined with Scottish Government housing statistics which show a 20% reduction in the number of new homes built over the last four quarters and the Council of Mortgage Lenders’ report that the mortgage market in Scotland will remain constrained for some time.

“The figures reinforce the seriousness of the position facing Scotland’s housing sector,” said Homes For Scotland chief executive Jonathan Fair. “Scotland must help itself to avoid a worsening housing crisis.

“If our politicians take the lead to facilitate 10% annual growth in private new homes over the lifetime of the next Scottish Parliament, we could deliver 46,000 new homes and create 38,000 jobs and making a real impact on climate change targets.”

Catherine Penman, head of research at Carter Jonas, said: “The stalling economic situation reinforced by the Comprehensive Spending Review, a weak outlook for mortgage demand and public sector cutbacks collectively imply a further weakening of demand in residential property over the year to come.”

House prices have only fallen by less than 2% in 2010 across the UK as a whole, but this disguises a huge regional variation as London continues to maintain high demand.

“Negative pressure is expected to continue with an estimated 5% decline in house prices across the UK expected in 2011 as job losses intensify,“ said Ms Penman.

“Central London will continue to lead the pack in terms of recovery during 2011 due to its reliance upon the high earning financial and business services sector and a strong international investor profile.”

“Elsewhere, best-in-class stock is currently achieving in excess of 2007 prices, although potential purchasers remain very price sensitive and there is a widening price differentiation between the best and the rest. Pricing will become increasingly sensitive as we move into the seasonally busy spring market and we anticipate London house prices to increase circa 5% during 2011.

“UK house prices are expected to fall further in the short term. Inevitably, isolated bubbles of activity will buck the trend although overall, we predict a fall in values of circa 3% in 2012.”

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>> Derelict brewery site to get £1bn facelift An ambitious £1bn plan for the former Scottish & Newcastle brewery site – backed by Lloyds Banking Group – has been submitted to Edinburgh City Council.

The application, on the site at Fountainbridge, is for a 13-acre canal district community with 900 student flats, 760 houses or flats for non-students, a 250 bedroom hotel, offices, shops, food and drink outlets and sport and leisure facilities.

Students from Edinburgh’s Napier University will use the city centre facility.

An initial plan by HBOS was shelved because of the banking crisis but Lloyds has linked up for the proposals with Allan Murray, the architects who designed the Hotel Missoni on George IV Bridge, and master planners for the new St James Quarter. The project will be called Fountainside with CB Richard Ellis as project managers.

Paul Baker, Lloyds Group property director, said the company would “work closely with Edinburgh City Council to help it move the project forward”. The site was bought from Scottish & Newcastle in 2008 for an estimated £100m before the banking collapse. Tom Buchanan,

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Edinburgh City Council’s economic development chief, said: “This is another important step towards bringing this valuable space back into use for the city and, of course, to the regeneration of Fountainbridge.

“The creation of a new canal quarter has been on this council’s agenda for some time and we look forward to seeing more detailed plans.”

>> Thomson takes on top spot Property and construction consultancy Robinson Low Francis has promoted David Thomson, who leads the firm’s Scottish practice, to managing partner. He will succeed current senior partner Steven Barker (who becomes chairman) on June 1 2011.

Thomson will lead the next stage of development of one of the UK’s leading property and construction consultancies involved in projects in the UK and abroad with a value well in excess of £1bn.

>> Rally brilliant Tourism, major events and conferences last year boosted Glasgow’s economy by almost £760m. The Strategic Major Events Forum, a group of the city’s main public bodies working to boost tourism, has already lined up a number of major events for the next couple of years which include the Monte Carlo Rally in January and London Olympics football in 2012.

Scott Taylor, Forum chairman and chief executive of Glasgow City Marketing Bureau, said: “Events create a profile for Glasgow on a global stage which is incredibly valuable because people then see Glasgow as a major event city.”

>> Experience counts Standard Life Investments, the Edinburghbased fund manager, has appointed John Paynter and Jonathan Dawson as nonexecutive directors.

John Paynter has assumed non-executive director roles at Standard Chartered and Jardine Lloyd Thompson Group since leaving JP

Morgan Cazenove after nearly 30 years. He has also been involved at the NSPCC and is a senior adviser at Greenhill & Co. International.

Jonathan Dawson is a founding partner of Penfida Partners following a 20-year career with Lazard. He is a director of Next and a non-executive director of National Australia Group Europe. He also a non-executive director of the London Philharmonic Orchestra.

NEWS

be willing to open a savings account with a new player.

A YouGov survey for Deloitte showed that almost one in three consumers in Scotland (30%) wished there were more banks to choose from on the high street. However, new entrants will need to position themselves carefully to overcome concerns about security of accounts. The findings show that 18% of Scots have become more concerned about bank safety than they were a year ago. With regard to service, 62% said they would prefer to save with a large established high street bank, due to the belief that they are safer (52%), have wider branch networks (43%) and provide better services (24%).

>> Accounting for concerns New banking entrants – such as Virgin Bank, Tesco Bank and Metro Bank in London – could capitalise on consumers’ desire for more choice in the retail banking sector in Scotland. A survey showed that 28% would

>> McMillan backs Scotland Bill proposals CBI Scotland – representing major businesses in Scotland – has welcomed the publication of the new Scotland Bill by the UK Government.

“The Scotland Bill will significantly increase the powers of the devolved Parliament, which already has substantial influence over Scotland’s economy through its control of areas such as education, skills, infrastructure investment, economic development, planning and local taxes,” said Iain McMillan, CBI Scotland’s director.

The Scotland Bill follows on from the Calman Commission’s review of devolution, which said that Scotland should be allowed to raise half of its own income tax. Once the legislation is passed, the Scottish Parliament will be able to set a Scottish income tax rate each year from 2015, but there will be a 35% reduction in the Treasury’s Scottish budget

sent from London. This is around £30bn a year.

McMillan said CBI Scotland is pleased that the principal business taxes that affect its members, such as corporation tax, together with matters such as employment law, health and safety and company law, will remain with Westminster.

The Scottish Parliament will be able to set a Scottish income tax rate each year from 2015

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Increased powers: Iain McMillan, CBI Scotland

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INTERNATIONAL TRADE

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Become an export expert in 2011 You’ll need a good reason and a note from your parents if you don’t grab the opportunity of finding out how you can sell more of your goods and services abroad in the coming year. Kenny Kemp explains

Beware of the Scottish ex-pat market. That’s a sound piece of advice from a seasoned Scottish exporter with battle scars and a full set of exporting medals.

It’s nothing to do with ignoring the Scottish diaspora, who are passionate about their homeland and dewy-eyed about the creature comforts of their upbringing, it is just sound business sense.

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There are plenty of pitfalls and traps for Scottish firms bidding to expand by doing business abroad – and 2011 is a year when more businesses will be encouraged to be Smart Exporters, the £7.6m programme designed to increase Scotland’s export skills and knowledge.

“You must always remember that it is horses for courses,” says Alan Burnett, the export sales manager of Tunnock’s, the purveyors of the Caramel Wafer, the Teacake, the Snowball, and the Caramel Log. But Alan says novice Scottish businesses going international often get into a rut when they start supplying Scots now living in foreign parts.

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“There are lots of ex-pats around the world who will buy Scottish products and that’s great,” he says. “But to survive long-term, you need to ensure that you break into the indigenous foreign market and find new customers.”

For Tunnocks, which has been selling chocolate caramel wafers to the Saudis for 40 years, it is about the fact that many Middle Eastern folks have a sweet tooth, whereas the confection the company sells in Japan is different. There they prefer the mainlyexported wafer cream, a product that does well because Oriental taste doesn’t like the chewy texture of caramel.

“But, a word of warning, you can’t afford to get trapped in the ex-pat market,” says Burnett. “You might get someone from the South of France saying they would love a Caramel Wafer, but it does not make commercial sense to send loaded pallets of produce to places where there’s little prospect of local growth.”

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For the Uddingstonbased firm, Trinidad and Mexico are among the favourite places for the Scottish-made products, while breaking into Australia is about gaining a presence in the mainstream supermarket chains, rather than relying on the speciality store.

There are lots of tricks of the trade to learn and this is why Scottish Development International (SDI) and Scottish Chambers International (SCI) joined forces in September to launch its new service aimed at helping up to 8,000 Scottish companies to target new international markets. The project is an add-on to the “internationalisation” programmes available from SDI and SCI, and the idea is to widen the availability of export services, specifically by helping overcome barriers.

The three-year project, part-funded by the European Social Fund, is focusing on providing Scottish companies with the technical skills required to target international markets and help them prepare for export.

The value of world merchandised trade was 18% higher in the third quarter of 2010 than in the same period of 2009, according to the World Trade Organisation quarterly figures, working out at 13.5% for 2010, which is likely to be a similar figure in 2011.

INTERNATIONAL TRADE

Lena Wilson, Scottish Enterprise’s chief executive, told BQ Scotland: “We’ve all experienced tough economic conditions, but we are now moving into a phase of economic recovery and international trade and development is without a doubt one of the biggest factors that can accelerate that recovery.

“In economic terms, it is evident that if we want to migrate to a higher growth and higher productivity economy, we have to commit to developing an international mindset which raises our international aspirations for Scottish businesses and industry. It is vital that they develop a more global perspective if they want to become more productive and grow.”

She maintains “internationalisation” remains a priority for Scottish Enterprise and Smart Exporter is helping deliver more training and support to companies, helping them to target new markets.

SDI reckons only 5,500 of Scottish companies are currently involved in international activity – around 5% of the UK total.

“We want ambitious companies to realise that it’s not about the size of your company or the number of languages you can speak – with the right support and ambition, you can achieve export success,” says Lena Wilson.

There are plenty of great examples of firms in Scotland which are exporting to the world.

One such example is engineering company Howden Compressors Ltd, part of the Howden group, which recently received a multi-million pound order to manufacture and supply compressors for a major coal,

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methane and liquefied natural gas project in Queensland, Australia. This contract involves large capacity Howden screw compressors being installed for BG Group plc’s Queensland Curtis LNG project.

Jim Fairbairn, managing director of Howden Compressors, speaking from its factory in Craigton, Glasgow, said: “This order is a major success for us and will contribute significantly to our ambitious strategy for growth in supplying our products and services to major mature and developing markets throughout the world.

“This is a much deserved reward due to the efforts and expertise of our employees, and together with the continued support and investment from Howden and parent company Charter International plc, will reinforce our Craigton facility as a global centre of excellence for screw compressor design and manufacturing.”

So if you’re a budding Tunnock’s or a Howden, Smart Exporter support is available to Scottish companies considering international markets.

The programme includes a comprehensive range of support which will be delivered to companies in a variety of ways, including self-help online tools, roadshows, workshops, specialist training and skills development support, in-house technical support, market awareness support and a specialist national international trade helpline.

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INTERNATIONAL TRADE

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SUCCESS IS SWEET Exporting should be approached with more than a suck-it-and-see attitude. A strategic review of sales and distribution is essential Shortbread and oatcakes are Scotland’s edible emblems with international market potential.

Shortbread is one of our national icons and Paterson’s shortbread is among the most famous of all brands.

The company, Paterson Arran, is a wellestablished firm founded in Rutherglen, near Glasgow, in 1895 when John Paterson and his wife sold their products from a horse-drawn van. Now the Livingston-based business is a modern, well-managed operation with a number of brands, including Arran Fine Foods, a range of mustards, preserves and salad dressings, and Bronte, a premium biscuit and cake range which is sold to hotel groups and conference venues.

Alan Hardie, Paterson Arran’s managing director, said: “Paterson’s have been exporting for nearly 40 years. It’s not a huge part of our business, around 10%, but it is important to us.”

Over the last few years Paterson Arran has been working with Scottish Development International (SDI), a specialist division of Scottish Enterprise and Highlands & Islands Enterprise, on its export programme. More recently, it has taken part in SDI’s Smart Exporter initiative.

“SDI has a very good strategy programme and we asked them to look at our export strategy,” said Alan Hardie. “The Smart Exporter scheme is there to support Scotland’s SMEs in assessing their export markets and potential.”

The outcome of SDI’s review was clear for Paterson Arran. The firm was advised to focus on three areas: North America, including Canada; Europe, and the Asia Pacific region.

For Paterson’s there were certain countries that were doing well, while others were being a drain.

Hardie says: “In some areas you require a lot of resource. We were saying that we sold our products to 40 countries around the world,

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but we never made a cent. But with SDI’s help we’ve become more focused and that means increasing profitability in the markets that matter for us.”

The result: a 60% increase in exports over the last year. The shortbread and cookie range is popular with international airlines which use the products in their premium travel areas.

Companies such as Delta, Air Canada and Emirates are customers supplied by Paterson Arran.

“So far, it has been a most successful approach,” said Hardie. “Spending time to work out which markets we should be chasing, and those that were not going to deliver growth has been a valuable lesson for us.”

Paterson Arran has continued to promote the quality of its products, which stand comparison with the very best in global markets.

“Our master bakers continue to draw on

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traditional methods combined with today’s technology and resources to make our products,” said Hardie. “Our success is built on a simple formula; good quality food from clean, sustainable ingredients and a continuous stream of innovative and new ideas.

“Prior to our review, the company worked with a range of distributors around the world and a few recognised multinational customers.

Distributor sales were typically small time-consuming orders and customer service was poor. The review resulted in a complete restructuring of the product portfolio, a rethink of the minimum order and the elimination of most of the distributors.

“Resources were refocused onto a limited number of key markets and customers with the result that sales in all markets have risen steadily and the export business is now profitable.”

Asked if he thought other established SME already exporting should consider the Smart Exporter programme, he said. “I would strongly recommend that all businesses conduct a strategic review before entering export. Even those who have been exporting for years would find it a worthwhile exercise.”

For more information please call 0800 917 9534 or visit: www.sdi.co.uk or www.smartexporter.co.uk

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ENTREPRENEUR

How the WEST was won

With her father’s cash, Petra Wetzel set up a bold Bavarian brewing company in Glasgow that hit the buffers. Now she’s rebuilding the business with a renewed sense of purpose and vision. Kenny Kemp met her over a pint of St Mungo’s

Dad is special. Dad as an active investor in his daughter’s brewery, that’s a special brew. But Dad coming to the rescue when the brewing venture collapses, that’s liquid gold.

Glasgow belongs to Petra Wetzel. She is one of those wonderful hybrid Glaswegian; she loves the Glasgow Boys, the spires of Gilmorehill, the honest denizens of Dennistoun, the glasshouses of the Peoples’ Palace, her semi in Bearsden and the Glasgow patter. But she was born in Bavaria and her mentor and greatest business supporter – her father Herbert, now 65 – still lives in Germany.

Petra Wetzel, 36, has created a corner of Bavaria in the unlikely setting of the old Templeton’s Carpet factory beside Glasgow Green. Her wunderbar WEST brewery, with its expansive, kids and dog-friendly eaterie, makes unique beer and she and her team have aspirations to build WEST as a major drinks brand in the UK. “I didn’t drink a pint of beer before I started WEST,” she says, sipping a glass of St Mungo.

“Not one. I had tried, but I’d never had a pint of lager.”

WEST’s signature beer, a Munich-style lager brewed with Bavarian Bamberg malt, Perle & Tettnang hops, is named after Glasgow’s patron saint. Its brothers, WEST Hefeweizen, and WEST Munich Red, are carbon copies of the strict German method of brewing, and all

made in Wetzel’s brewery. The only ingredients allowed by law are water, malted barley, yeast and hops with the flavour created by the brewing process. If a word sums up what she is trying to do it is the German adjective “echt”, which is not a place in Aberdeenshire.

Echt means genuine, pure and authentic.

WEST is trying to achieve these qualities with its beer. But, after a false start when WEST hit the buffers, this effervescent blonde German has regrouped, brought in some heavyweight

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help, and sees immense opportunity for her brewing brand.

She is now in advanced discussions to build a new £6.6m production brewery in Glasgow, creating more than 20 news jobs at Maryhill, where there will be a Dutch canal barge as café and restaurant and a visitors’ centre.

And, on the sidelines, Scotland’s major brewers are watching with heightened interest how Wetzel and her team manage that difficult phase of growth from a micro-brewery to an established beer brand selling across the on-trade and off-trade. There is certainly a buzz about WEST. Yet thirtysomething Petra isn’t a natural bevy-merchant; she doesn’t have a degree in microbiology or even a masters in brand marketing. Born in Erlangen, she went to school in Ebermannstadt, a beautiful rural Bavarian town in the forest lands in Upper Franconia. The nearest city is Nuremberg, twinned with Glasgow.

At 12, Petra Wetzel came to Balfron on a school exchange and “absolutely fell in love with Scotland.” She remembers the bagpiper at Stirling Castle when the coach arrived and she was introduced to her host family, the McRaes from Kippen, in Stirlingshire. Their daughter, Eilidh “was like a sister to me and we stayed in touch for all those years.”

“I come from Franconia which is the >>

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ENTREPRENEUR

I’m really glad we didn’t divest because we didn’t need the money.

We wanted a mentor who could catapult the business on to the next level

northern part of Bavaria and it has the highest density of breweries in the world,” she says.

“Every little village, no matter how small, has a brewery,” she explains, saying the taste comes from “lagering” or laying down the beer in wooden kegs for three weeks before drinking.

“I think that the Bavarian and Scottish accents are very familiar. And Germans love all things Scottish. There are 50,000 German-born people living in Scotland, so out of a population of around five million, that’s a lot of people.”

Encouraged by her penpal, Wetzel arrived in

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1994 to study politics, history of art and management at Glasgow University. She then won a scholarship to a French business school where she polished her obvious linguistic talents. But the lure of Glasgow was too much and she returned to the city in 1998, completing her degree, and gaining a first. Her dad Herbert and mum Brigitte flew over to visit their successful daughter.

“My dad and I were sitting in the Ubiquitous Chip in the West End and he asked what the Glasgow lager was like,” she says. “I said, ‘It’s Tennents.’”

He ordered a half-pint and it was duly delivered. He took one sip and cringed.

“It’s one of these things,” she says. “You don’t want to slag another brewery, but really the reason WEST exists is because of that moment.”

Not everyone agrees with this assessment of Scotland’s most popular lager – which has recently taken to marketing itself as originally from Bavaria – but Herbert Wetzel obviously has a particular Bavarian palate.

“Is this the only stuff they produce in this country?” he asked.

At the time it was. While brewing giants S&N, now Heineken UK, and InBev manufactured their mass market products, there were no other distinctive “Bavarianstyle” lager breweries in Scotland. This was a market opportunity.

In her final year at university, Wetzel met Gordon, her future husband; they got married and bought a house in Bearsden. She began working for the Glasgow Tourist Board, now the Glasgow City Marketing Board. She was responsible for marketing conferences alongside Eddie Friel and the current chief executive Scott Taylor.

“This was my first ever job,” she says. “The reason I think I was good at the job was that I wasn’t from Glasgow. I had fallen in love with Glasgow and was a real fan of the city. I could have made my home anywhere in the world, but I picked Glasgow. I became an ‘ambassador’ for Scotland everywhere I went to the trade fairs across Europe.”

Wetzel then met Michael Dean, a partner at Maclay Murray & Spens, the law firm, through the German-British Chamber of Commerce, who encouraged her to become a lawyer. As a

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pre-diploma trainee, she studied law with the Law Society of Scotland from January 2001.

She says: “I didn’t even have a law degree. I was a trainee in the competition law department and a major client was raided the day I started. They had companies in France and Germany and, because I was fluent in all these languages, I was useful.”

She remained with the law firm for five years.

But her father’s encouragement to create a Bavarian beerhall in Glasgow was too tempting. With investment from her father, she and her husband looked for a suitable site, invited a German brewery company to help them build the brewhouse, and they set up West Brewing Company.

“My dad’s an entrepreneur,” she says, “and I basically sold the idea to my dad. My dad funded my (now) ex-husband and his friend through brewing school for three months.”

Wetzel would rather airbrush her former husband out of the story at this stage. Suffice to say that he took on responsibility for the brewery project. It ran into acute trouble. He departed, and Herbert Wetzel returned to help resuscitate the brewing dream, with his daughter at the helm. Before then, in November 2004, she appeared on the very first episode of Dragons’ Den, when she was six weeks’ pregnant – although she didn’t realise she was expecting a baby and put her queasiness down to nerves. The dragons didn’t give them the money but Wetzel wasn’t too bothered.

“I wouldn’t have taken any money from any of them,’ she says. “In my opinion, they didn’t have the least interest in supporting an up-coming business. All they were interested in was their own PR. In the end I’m really happy that we didn’t divest because we didn’t need the money.

“We wanted a mentor, someone who could catapult the business on to the next level.”

Her son Noah was born in July 2005, with the brewery opening in March 2006, and Wetzel went back to work part-time with the law firm, while her husband was in charge of day-to-day business.

In October 2006, the couple separated and her estranged husband was running the business completely independently while she concentrated on being Noah’s mum. In late

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ENTREPRENEUR

Beer today: WEST’s beers are produced in accordance with the Reinheitsgebot, the strict German brewing purity law 2007, things went awry and an awful picture began to unfold. Wetzel was shocked by what was happening.

“My dad ran a business and he knew about profit and loss and he hadn’t been given proper information,” she says. “Now, rightly so, he wanted to know what was going on.

He had invested a lot and he wanted to know what was happening.”

For Wetzel, this was a moment of truth. “I wanted to do my dad justice. I started to find out what was actually happening and if we owed money. We owed a lot.”

The situation was so bad that the West Brewing Company ended up in administration.

“There was no way this was going to fly,” she recalls. But she was determined; she stepped back into the fray with the help of Kenny Craig, Tenon’s head of corporate recovery.

“I have to say that without Kenny, I would not have done this,” she says. “He was an absolute superstar. He used to say to me, “You just need to take stock and see where you stand.’”

Craig challenged Wetzel by asking her if she wanted to try this again.

“He told me it had failed miserably and did I want to put more money into it,” she says.

She visited her father for a business heart-toheart. Despite all the angst and stress, Dad still wanted to help his daughter. He would let her

buy the business back from the administrators.

In February 2008, her lawyer, Adrian Bell of Morton Fraser, phoned up and told her she was now able to take back the assets of West Brewing Company.

“Who is actually buying it?” he asked.

“What’s it called?”

By now, the most important male in Wetzel’s life was her son.

“The light of my life is Noah,” she says. “We produce beer, so it became Noah Beers Limited. This is the company, not the brand.”

The business was bought back as a going concern with all the brewing equipment in place, now Wetzel would be a full-time managing director devoting herself to making it work.

She says: “I wouldn’t have done it if I had to close the front door for one day.”

What she now needed was insider experience to help her take the business forward. From brewing once a week, this is now a five-daysa-week operation, making between 200,000 and 400,000 litres a year and bottling at Williams Bros Brewing Company in Alloa.

“I had to go back to basics,” she says. “The reason the brewery started was that my father and I had friends in Germany in the brewing industry. Uwe Kraus, the brewmaster from Mahr brewery, came back to set things on course again.”

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What was apparent was that the brewhouse was underfinanced.

“We spent 12 months improving the place and fixing things to increase our output significantly,” she says. “My dad was a superhero, I wanted to prove a point here. He put his faith in the venture and somebody else failed him; I wanted to prove that this was still a good idea. This time, he put his trust in me.”

The WEST vision required strategic business people on board. Petra Wetzel was joined by consultant Hilary Jones who worked with former S&N man Stephen Glancey – now head of operations with C&C Group, owners of Magners cider and the aforementioned Tennents Lager. She was technical director and head of quality operations for S&N before it was sold to Heineken. She is a Fellow of the Institute of Brewing and Distilling and now a mentor and investor.

“I met her because she was the President of the European Brewery Convention,” says Wetzel. “She came on a site visit because the EBC convention is being hosted in Glasgow in May 2011, which is fantastic for the city.”

Hilary Jones wanted to become involved with WEST, saying it was one of the most exciting new things in UK brewing. She bought a minority stake in Noah Beers, with Petra Wetzel and her father retaining 85%.

“It’s one of the best things we’ve done: >>

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ENTREPRENEUR

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Teutonic spirit: Through sheer determination, Petra Wetzel has managed to introduce German brewing expertise to the Scottish palate bringing another woman on board who has real knowledge of the international beer industry,” says Wetzel. “She is passionate about WEST beers.”

Jones is now responsible for logistics and brewing, mentoring the half-German, half-Scottish brewing team in Glasgow. On the finance side is Gillian Hastings, a consultant to numerous Scottish businesses and formerly an Ernst & Young partner; Richard McLelland, the recently arrived sales director who came via BrewDog and Red Bull, and Gemma Leisegang, formerly of Waverley TBS working on trade sales for the UK. WEST’s beerhall and restaurant, leased from Credential Holdings, is looked after by Liam Bedwell, and under his management, events, conferences and

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weddings, have thrived. Although her team has affectionately dubbed her The Kaiser, she acknowledges she couldn’t have turned around the business – and now making profits – without the help of her WEST family.

Increasingly, WEST beer is brewed for off-site customers, starting with the award-winning Firebird café and restaurant in Glasgow, and since then many others have followed suit.

WEST is the house lager in Peter Taylor’s fantastic six-star Blythswood Hotel, a tremendous accolade.

“The hotel doesn’t have any other beer on draught, so they are big fans of what we do,” says Wetzel. Waitrose is also selling WEST’s St Mungo lager beer in more than 200 stores, but it will take time to win significant market

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share from the big boys who have marketing budgets ten times WEST’s £1m turnover.

Wetzel speaks almost daily to her dad on the phone; on Sunday morning they have a family catch-up, and he remains an enthusiast bubbling with ideas.

“He’s the best quality control person you can have,” she says. “He loves his lager. When he comes over he sits at the bar and talks about how the brewing is going. If he likes it, it gets a tick, if he doesn’t then it doesn’t.

In essence, Herbert Wetzel is still at the heart of the business. And Petra Wetzel, now with nearly 40 staff on board, wants to build her premium lager brand based in Bridgeton. The year 2011 will be massive for her – and for Noah Beers. n

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WHEN CLOTHES SPEAK LOUDER THAN WORDS

INTERVIEW

A U T U M N / W I N T E R C O L L E C T I O N S ‘10 PA L

Z ILER I

PA U L

S MIT H

W I L L IA M

H U GO

H UNT

B OS S

G I O R G IO

A R MA N I

H O L L A ND

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BUSINESS QUARTER |WINTER 10

COMMERCIAL PROPERTY

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Golf projects set the pace for development in Scotland but there is enough going on to raise hopes of a sustained recovery in the market with various projects in Glasgow, Aberdeen, Edinburgh and Fife >> VAT cut could bring one million empty homes back into use Cutting VAT on domestic repair and maintenance work would help bring the one million empty properties across the UK back into use, says the Federation of Master Builders (FMB).

Turning empty properties into homes would help tackle the growing housing crisis with five million people on social housing waiting lists as well as the 90,000 people living in temporary accommodation. Brian Berry, director of external affairs at the FMB, said: “Recent research commissioned by the FMB from the London School of Economics reveals that there is capacity within existing towns and cities to create all the new homes the UK needs and that reusing empty properties is one of the instruments to help fulfill this aim.

However, he argues that the current rate of

VAT is acting as a disincentive for owners of unused properties to bring them back into use.

Often, it is cheaper to simply demolish and rebuild – since new build is VAT exempt.

“With house building at its lowest level since 1924, bringing empty homes back into use is a sensible way to help meet housing needs of every community around the UK and cutting VAT on domestic maintenance and repairs would make sure that this happens.”

There is capacity within existing towns and cities to create all the new homes the UK needs

>> Irvine Bay ready to start £200m facelift Construction is poised to begin on a £70m regeneration scheme on Ardrossan’s North Shore.

Driven by Irvine Bay Regeneration company, the project will clean up an eyesore Shell Oil refinery site bringing it back into use for office, retail, leisure and residential uses.

Plans for the transformation of the 30-acre site include the creation of 4,000 sq metres of office space, 400 new homes, 165 new berths at the town’s marina, a restaurant and a care home. The development programme will take around 10 years, with the decontamination work beginning this year. The project is expected to create the equivalent of 414 new jobs.

The Ardrossan North Shore Joint Venture was agreed between Peel Holdings and Irvine Bay Regeneration Company to redevelop the former refinery site. The contract to carry out land remediation works has been awarded by Ardrossan North Shore LLP to clean-up specialists ERS. Patrick Wiggins, chief executive of Irvine Bay Regeneration company, said: “Already, we have signed partnership agreements with three developers for schemes totalling some £200m. And that’s only the major schemes, many smaller town centre improvements, retail refurbishments, site preparation and infrastructure works are preparing the ground for even more development.”

Charged with the task of regenerating the five Ayrshire towns of Ardrossan, Saltcoats, Stevenston, Kilwinning and Irvine, Irvine Bay’s other major projects include urban regeneration specialist Urban Splash’s proposals for a £70m, mixed-use residential and commercial development at Irvine’s historic harbourside. The planning consent includes more than 300 new homes, as well as shops, offices, a hotel and improvements to the quayside. A third large-scale scheme is The Ayrshire, a £60m golf and hotel project by The Ayrshire Golf Company, located on 170 acres of rolling Ayrshire links with views over the Clyde.

BUSINESS QUARTER | WINTER 10

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>> Angus golf course is give green light Angus Council has given the green light to a £55m golf, hotel and upmarket residential development, proposed by local businessman Mike Forbes.

In giving the scheme outline consent by 15 votes to seven, the council estimated that, when complete, the resort could pump up to £10m a year into the Angus economy and create up to 200 jobs. To be called The Angus, the scheme will be located adjacent to the Forbes of Kingennie Country Resort.

Developer Mike Forbes said: “This is a hugely positive decision for the community. Delivering the first five-star hotel and a championship golf facility which will complement the famous Carnoustie links, bringing with it a massive cash injection for the local economy, was my focus when we first proposed this development.”

“Golf continues to grow as a major draw for people worldwide and there is a real appetite to create world-class developments which will maintain Scotland’s position as the home of the sport.”

>> Campaign against Swinney’s rates hike on large-scale retail properties That high-pitched noise emitting from supermarkets and retail parks isn’t the sound of tills ringing, it’s the sound of the pips squeaking as the Scottish Government goes shopping for higher business rates.

The announcement by finance minister John Swinney MSP, that the SNP administration will use its powers to increase the non-domestic rates paid by the largest retail properties, including supermarkets and out-of-town retail parks, has sparked major concern in the commercial property sector.

Peter Muir, director and head of rating with Colliers in Scotland, said:

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“Our clients are greatly concerned about the potential impact a rate increase will have on Scottish businesses and we are committed to lobbying on behalf of all our Scottish retail clients.The impact of a rate increase will be far-reaching and could affect the retail landscape in Scotland for decades. It is also bad news for customers, as retailers are likely to pass on such an increase.”

>> Good morning Camper in Buchanan Street Spanish shoe retailer Camper has followed hot on the heels of Nike by opening a new store in Glasgow’s Buchanan Street. Camper is aiming to launch before the spring opening of Nike’s 28,000 sq ft flagship store opposite House of Fraser.

“Camper will be a fantastic addition to an already impressive retailer line up in Buchanan Street. Glasgow is unquestionably one of the top locations for international retailers to be represented outside London,” said Stuart Moncur, head of retail for Cushman & Wakefield in Scotland.

Glasgow has been a magnet for aspirational brands in recent years with Hollister, the cult American clothing brand of Abercrombie & Fitch opening outlets. Camper Shoes has signed a new 10-year lease at a commencing rent of £100,000 per annum exclusive of VAT. The tenant will benefit from nine months’ rent

COMMERCIAL PROPERTY

free and a break option after year five. The new store, at 160 Buchanan Street, covers 1,851 sq ft over two levels.

>> It’s a deal at £24 per sq ft on West Regent Street In a sign that a dire shortage of Grade A space in Glasgow city centre is keeping a floor under office rents, a serviced office provider has paid £24.30 per sq ft at a new office development at 2 West Regent Street. At their pre-crash peak, top Glasgow rents stood at around £30 per sq ft.

Milton Keynes-based i2 Office has taken 15,900 sq ft on a 15-year lease at the City Site Estates development. The building was completed at the end of last year and provides 79,000 sq ft of Grade A offices.

Jim McCain, City Site Estates’ development director, said: “This is great news for 2 West Regent Street and for Glasgow. i2’s selection of Glasgow as a new location underpins our belief in the city’s diverse economy and prospects for business growth.”

>> £30m Fort Kinnaird plans go on display Proposals for a £30m transformation of the popular Fort Kinnaird shopping park in Edinburgh are now under consideration. If approved, the proposals will increase the retail space available. Following consultation with the local community, the Gibraltar Partnership, a joint venture between Hercules Unit Trust and the Crown Estate, hopes finalise its proposals and to submit a formal planning application in early 2011. Up to 500 jobs could be created if the development goes ahead.

>> Students are a degree of success In a blighted property development market one of the few glimmers of hope comes from an unusual sector – student accommodation. Despite the row over student fees, demand for residences is

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at an all-time high and private sector developers have moved into the sector in a big way.

In the latest move planning consent has been granted for a £15m student residence to be located just off the Royal Mile in Edinburgh’s Old Town. To be called Sugarhouse Close, the 300-bed scheme will retain existing historic buildings on the site.

>> Forth Energy proposes biomass energy plant at Rosyth Forth Energy has submitted plans directly to the Scottish Government for a multi-million biomass power plant at its Rosyth dock. When complete, the facility could provide more than 40% of Fife’s electricity, according to the proposers.

The planning proposal coincides with growing unrest among MSPs about the Scottish Government’s proposals for four biomass plants to cost an estimated total of £1bn.

Shirley-Anne Somerville, a nationalist MSP, has won cross-party support for a bid to scupper four large-scale biomass plants at Dundee, Leith, Rosyth and Grangemouth.

>> West End pearls Glasgow’s West End Retail Park has been bought by Ignis Real Estate in a £31.75m deal, a yield of 5.25%. The seller was Peel Investments. The 77,000 sq ft shopping centre is anchored by Sainsbury’s and is one of the city’s few retail parks with an unrestricted Open Class 1 (A1) consent.

George Shaw, investment director at Ignis, said: “West End Retail Park is one of the best in Glasgow and the acquisition fits well with our strategy of buying prime product off-market.”

King Sturge advised Ignis Real Estate in the deal, while Smith Cole Wright represented Peel Investments. Chris Macfarlane of King Sturge in Scotland said: “This acquisition is proof that there still exists an appetite in the Scottish market for quality well-let product.”

BUSINESS QUARTER |WINTER 10

COMPANY PROFILE

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Efficiency has never been more important to Scottish businesses, but leading nondomestic water supplier Business Stream says overlooking water consumption is a wasted opportunity to cut costs. Chief executive Mark Powles tells BQ why cutting water can make a financial splash.

TAPPING INTO YOUR FIRM’S LIQUID ASSETS smaller businesses have enough to do and as a result don’t often have water issues at the forefront of their minds, but a little attention can provide substantial cost and water efficiency savings Business Stream chief executive Mark Powles says water can impact on bottom line

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t will come as no surprise that many small and medium-sized enterprises are currently looking across their business to find savings. However, one area they often fail to look at is water and waste water efficiency.

Over the past two years, Business Stream has helped customers in Scotland implement water and waste water efficiency measures, which have resulted in savings of more than £10 million.

It’s the small things which count; basic water efficiency measures often require little or no investment but can deliver significant cost and water savings. Even repairing a dripping tap can save up to a bath full of water every day and up to £900 per year.

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Undetected leaks in pipework can also lead to water and money seeping from a business; Business Stream’s engineers can help find leaks and stop customers from flushing money down the drain.

Mark Powles, chief executive at Business Stream, said: “Smaller businesses have enough to do and as a result don’t often have water issues at the forefront of their minds, but a little attention can provide substantial cost and water efficiency savings.”

Business Stream is offering businesses a free water efficiency pack, which can be claimed by logging on to www.business-stream.co.uk and completing a water usage questionnaire. The

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pack includes a water saving device called a hippo that reduces water used in each flush by up to a third and a tap water aerator that can halve water consumption.

Other cost-reducing tips include: n Making sure taps are always turned off n Keeping staff informed about water efficiency n Appointing a water monitor to check where water could be saved n Washing business vehicles by hand, or a hose with a shut-off valve n Checking new equipment for water efficiency ratings n Installing automatic flushes and spray taps to sinks n Considering alternative water sources n Fitting smart meters

Last winter 25 per cent of calls to Business Stream’s call centre were about burst pipes. To avoid flooding and costly repairs, follow this advice: n n

n

n

n

n

Leave heating on at a low temperature Make sure heaters are well-maintained and working properly Check loft insulation is in place, is thick and in good condition Have any minor leaks at taps or valves repaired Fit draught excluders to doors and windows Insulate pipes so they don’t burst after a cold spell

I can stop your company wasting water and cash.

Let me show you what I’m made of.

Hi, I’m Howie from Business Stream.

Did you know that we’ve already saved businesses £10million by working with them to save water? And we won’t rest until we’ve helped your business cut the amount of water it’s using. That’s why people call us the water experts.

Saving water is good for the planet and it’s even better for your bottom line. Whether you’re a local hairdressers or a giant chemical plant, we can help you save cash too. Why not challenge us today?

Challenge the team at business-stream.co.uk

COMMERCIAL PROPERTY

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>> Could a Scotland’s regeneration start with a TIF? With commercial development flat on its back in Scotland, developers and local authorities are scanning for new ideas. One glimmer comes via tax increment financing (TIF) – borrowing against expected future increases in business rates. Iain Macniven examines whether TIFs could kick-start key projects The potential use of tax increment financing (TIF) to kick-start regeneration projects will remain on the agenda in 2011, partly assisted by the British Property Federation. The initiative has been given impetus by the coalition Government’s decision to consider the role of TIF-supported projects through the Comprehensive Spending Review’s white paper, Local Growth: Realising Every Place’s potential.

The scope of TIF is well known to interested parties in the property sector. It involves ring-fencing development areas with a view to funding by borrowing against future increases in tax receipts from the ring-fenced area at primarily business rates. While in theory, other taxes, such as Stamp Duty Land Tax could be included, in reality, this is less likely.

The concept was developed in California but recently associated with Chicago. However, the American model is different to the focus of debate in the UK, as it tends to relate to localised private development.

A TIF schemes could be introduced in Scotland without the need for primary legislation.

Under the current proposals, the process amounts to a re-distribution of business rates via the Scottish Government, which is within the scope of the devolved administration.

In England and Wales, primary legislation is required, which has now spurred the coalition Government into action. Spearheaded by its White Paper, which is seeking input from stakeholders, the view appears to be that interested parties will be asked to “bid” for possible TIF-supported projects, with funding allocated according to rules that are yet to be published.

There remains scepticism and the extent to which it can be utilised. TIF is not seen as the answer to everything but a useful tool in the

BUSINESS QUARTER | WINTER 10

The TIF initiative could kick-start regeneration

redevelopment armoury, a view shared by the Scottish Futures Trust.

The catchphrase “but for” financing is relevant here: TIF is to be used to fund developments which would not happen “but for” that funding. The concern is that schemes which would have happened anyway by other means get TIF funded.

The current focus is on public sector-led TIF projects, with funding coming via use of prudential borrowing by local authorities, rather than bond-backed funding. Commonly in the United States, funding is provided by the developer for infrastructure, with the state reimbursing via business rates income.

However, this does not currently appear to be on the Government’s agenda.

In the meantime, Scottish schemes being considered are Glasgow’s Buchanan Galleries, Ravenscraig and notably Leith Harbour, where the actual TIF process has kicked off, following approval by John Swinney. The Leith project

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involves borrowing from the Public Works Loan Board.

However, there are issues to be resolved. While such borrowing is relatively straightforward and inexpensive, the associated debt has to be serviced during the life of the loan, which could cause initial funding difficulties as the interest cannot be rolled up. Laying off some of the risk to private developers and/or central Government is, therefore, something interested parties may be considering in other projects.

Ultimately, TIFs financed by bond issues would be an interesting prospect, with the coupon determined by the allocation of risk that business rate receipts fall short of projections.

As tax is a reserved matter, this would require primary legislation from Westminster, if tax breaks were to be offered to investors as an incentive.

Iain Macniven is a property partner at lawyer at Maclay Murray & Spens

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>> The banks are back – and this time they’re leasing Demand for office space in Edinburgh is poised for an upward surge in 2011, according to property consultants Savills.

The real estate adviser’s latest research says that recent growth in demand from the banking and financial services sector boosted take-up in the last quarter of 2010 – and will take top spot in terms of take-up in 2011.

Current active accommodation requirements include Virgin Money and Baillie Gifford.

Keith Dobson, director at Savills, said: “Businesses throughout the banking and financial sectors are now net-recruiters and in most cases are reporting better than average profitability. Edinburgh remains one of the UK’s major financial centres and we expect to see this optimism translate into some new acquisitions in the city, which will compensate for the muted demand expected from the public sector.”

Savills’ research notes that take-up in Edinburgh for the first three quarters of 2010 stands at 456,000 sq ft (42,362 sq m), and is expected to significantly exceed the 2009 full

COMMERCIAL PROPERTY

year total of 492,000 sq ft (45,706 sq m), by the end of Q4.

This predicted improvement in demand, combined with a limited development pipeline, is also expected to generate a gradual increase in net-effective rents for good quality space by mid-late 2011 as landlords regain some power in negotiations. Savills anticipates that headline rents will also follow this upward trend in the most sought-after locations in and around the city. Headline rents in Edinburgh city centre have remained stable over the last nine months at £27.50 per sq ft (£296 per sq m).

When assessing the capital’s office investment market, Savills’ research found that prime yields have stabilised at 6% over the last six months – for the best and most secure lot sizes. However, there has been a softening in secondary yields across the city over the last quarter, which is expected to continue.

Nick Penny, investment director at Savills, said: “Throughout 2010 Edinburgh has seen a combination of cautious buyers and limited sellers. While investors have not lost interest in the city, the widespread acceptance that

>> Vertex moves into Atlantic Quay Glasgow’s International Financial Services District has been given a welcome boost with Vertex becoming a tenant at 4 Atlantic Quay. The company has signed a lease on 7,414 sq ft of space on a 10-year lease ahead of the commencement of a new client contract with Tesco Bank in the summer 2011.

The agreement will see Vertex, an outsourcing company, hire an estimated 200 staff during the next two years to deliver customer service and sales for Tesco Bank’s mortgage business. Vertex joins the building’s tenants who include BDO Stoy Hayward and Balfour Beatty WorkPlace.

There is 41,014 sq ft available for occupation at 4 Atlantic Quay with open floorplates from 6,426 to 8,704 sq ft currently to let. Cushman & Wakefield represented the landlord Credit Suisse Euroreal, in completing the transaction.

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distressed sales at discounted prices are unlikely to occur has led them to examine more closely the relationship between rental growth expectation and current yields.”

>> Naish sets out stall for property federation The new chairman of the Scottish Property Federation faces a busy 12 months as the organisation seeks the best legislative environment to allow the Scottish commercial property sector to regain its strength.

Malcolm Naish, global head of property at Scottish Widows Investment Partnership, has succeeded Phil Miller, who has recently retired from the Miller Group, as chairman.

More than 100 different companies including owners, developers, investors and their professional advisers are members of the federation.

“Our industry’s property markets remain fragile,” he said. “We are also seeing an increasingly polarised market between London and the rest of the UK. It is important for Scotland that we encourage investment and development where it is appropriate and as it emerges, or else we risk losing what has become a shrinking pot of opportunity for sustaining jobs and prosperity.”

Meanwhile, the federation has welcomed new revenue-raising powers for the Scottish Parliament contained in the Scotland Bill. The bill will hand control of some taxes and powers from Westminster to the Scottish Parliament. Included within this will be the ability to control Stamp Duty Land Tax, worth some £250m a year.

The SPF argued that a reform of SDLT could bring millions of pounds of investment in the Scottish economy by encouraging institutions such as pension funds to invest in the private rented sector.

Malcolm Naish said: “Control of stamp duty must be used wisely and with a view to simplifying and improving the current tax system which has become excessively complicated for commercial transactions and with some serious distortions. Above all, the Scottish Government must be guided by the need to ensure Scotland is viewed as an attractive place to invest and SDLT facilitates rather than impedes economic activity.”

BUSINESS QUARTER |WINTER 10

COMMERCIAL PROPERTY Malcolm Naish’s tenure began in midNovember after a reception addressed by Jim Mackinnon, the Scottish Government’s chief planner for Scotland and attended by 150 delegates from across the public sector and property industry.

Naish joined SWIP in 2007 and is responsible for overseeing SWIP’s portfolio of commercial property assets across the UK, Europe and North America. He has more than 35 years of experience working in the real estate industry.

He was director and head of DTZ Investment Management, and a founding partner of Jones Land Wotton Fund Management, and UK managing director of LaSalle Investment Management. In 2002, he co-founded Fountain Capital Partners, a pan-European real estate investment manager and adviser.

He said: “Working for a Scottish financial institution, it is a pleasure to become chairman of the Scottish Property Federation and to follow the success of Phil Miller who has strongly led the property industry’s interests with key stakeholders these past 12 months.”

>> Two new residential sites for Granite City Aberdeen’s residential housing remains buoyant with two new development sites being marketed by Knight Frank. The first is situated in the heart of Aberdeen’s city centre, on the south side of Nelson Street, and has planning permission for 30 new apartments with on-site car parking spaces. The development, known as Silver Mews, has consent for 22, two-bedroom apartments and eight, one-bedroom apartments with an average floor area of 638 sq ft.

The site is well located for access to Aberdeen University campus at Old Aberdeen as well as Aberdeen College and Robert Gordon University.

Knight Frank has also been appointed to market 124 North Deeside Road in Peterculter, a former police station with redevelopment potential. The plot is approximately 0.35 acres and includes a semi-detached, two-storey, granite-built property. In addition, there are four single

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garages to the rear and parking for 12 vehicles to the front of the premises.

An application for the creation of 12 units with a mix of one, two and three-bedroom apartments has recently been lodged with Aberdeen City Council but is yet to be determined.

>> HBJ expands in Manchester Scottish law firm HBJ Gateley Wareing, which has offices in Edinburgh and Glasgow, has opened a new Manchester office. The firm has taken over 31,000 sq ft over four floors at Ship Canal House on King Street in the city’s commercial district. The new office houses over 200 lawyers and staff. HBJ Gateley Wareing operates from eight offices across the UK and Dubai. It projects a turnover for the year ending April 2011 of £65m. The move follows 40 former partners of the Halliwells Manchester office joining the law firm in July 2010.

Malcolm McPherson, senior partner at HBJ Gateley Wareing, said: “We are delighted at the opening of our new office which marks a major investment for the firm, further highlighting the spread and depth of experience across the UK.”

>> Blank canvas Singers Corporate Asset Finance Limited, part of the Singers Asset Finance Group, has relocated to 8 Nelson Mandela Place in the heart of Glasgow city centre.

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The company, which funds a wide range of business critical assets for UK businesses, has moved from St Vincent Street to an open-plan floor suite in the listed building. It has taken 4,396 sq ft with three parking spaces on a five-year lease.

Ann Downie, operations director at Singers, explained: “The expansion of our business in the North of England and Scotland and increasing IT and support infrastructure needs made the new open-plan layout at Nelson Mandela Place the ideal ‘blank canvas’. We have the space and resources to grow our existing operations, and the facilities to provide a first-class working environment.”

Singers headquarters are in Dorking, Surrey with further offices across the UK. The company plans to fit-out the suite with a number of offices, a new board room, break out area and an IT communications room.

>> Wind returns are blowing thin The offshore wind industry is a maturing industry but securing funding and low returns on investment over a long term are still major issues.

Over three quarters of respondents to a report to Offshore Wind in Europe 2010, commissioned by KPMG, ranked debt refinancing for the assets as the key issue for the sector, demonstrating how the economic crisis has had an impact on the sector since 2007.

As a result of the economic crisis, 76% of respondents felt that the risk premium for offshore wind projects were high or significant and had considerably restricted the financing options available to companies, making recovery in the financial markets vital if investors are to move forward on projects.

However, 38% of respondents are not expecting a return to normal financial markets until at 2012.

Despite that, the UK is leading the pack with the largest expansion in the offshore wind market, followed by Denmark, Germany and the Netherlands.

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COMPANY PROFILE

With profound changes in business improvement ahead, Business & Enterprise UK looks to the future and discusses how the nation’s businesses can best capitalise on the opportunities that sustainable economic growth will bring.

Stimulating private sector growth

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ver the next 18 months there will be some profound changes in business improvement. There will be some considerable challenges ahead, but these will be counterbalanced by a wide range of substantial opportunities for businesses in Scotland.

Here, Alastair MacColl, Chief Executive at Business & Enterprise UK (BE-UK) – a leading specialist in business improvement, enterprise and economic development - discusses what this means for the Scottish economy and what his company is doing to stimulate private sector growth.

“Supporting economic recovery and increasing sustainable economic growth is the Scottish Government’s strategic priority – and we share this focus. Our aim is to work with partners across Scotland to ensure businesses continue to have the support and resources they need to take advantage of all the opportunities on offer, impacting private sector growth across Scotland.

“October’s Comprehensive Spending Review confirmed that the Scottish Budget will be cut by £1.3 billion next year, compared to the 2010 budget – demonstrating that there will certainly be challenges ahead. However I’m confident that there will be many new opportunities for businesses over the next 18 months – and we need to ensure that the nation’s businesses are able to capitalise on them.

“To achieve growth within Scotland we need to ensure that public and private sector organisations continue to work together to create the best possible environment for business and make sure that Scotland is one of the best places in the UK and Europe in which to start and grow a business.

“I’m also confident of sustainable economic growth. And the latest assessments are extremely positive, revealing that the Scottish economy grew by 1.3 per cent in the second quarter of 2010 – stronger than the UK and EU averages.

“The Finance and Sustainable Growth portfolio will also work towards achieving an increase in

Alastair MacColl, chief executive of Business & Enterprise UK

to achieve growth within scotland we need to ensure that public and private sector organisations continue to work together revenue for the private sector, enabling Scottish businesses to grow and diversify over the next year. With specific support for investment, innovation, high growth companies, priority sectors and international trade, this will also encourage more businesses to relocate to the nation and strengthen business communities.

“It is also important that continued support is available for key sectors with high growth potential. Industries including energy, tourism, life sciences and the creative sector will form a key part in the economic recovery for Scotland.

Business & Enterprise UK has vast experience working within these sectors and understands the potential impact they can have on local economies.

“And we believe Business & Enterprise UK has a lot to offer in terms of business improvement and as

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part of our national expansion plan we are looking at how we can support the Scottish market.

“A number of our substantial contracts are based in the North East of England – and we have a proven track record for success and more importantly impact. We feel it’s a natural progression to move into the Scottish market place and our experience, skills and 21st century approach to business improvement will ensure we are able to help more businesses start, succeed and grow.

“Each year we work with thousands of businesses, offering services including Business Link, the Investment Centre (the country’s only central public sector business investment service) and the Regional International Trade Office in the North East of England on behalf of UKTI. “Our comprehensive and integrated portfolio offers a range of services to ensure support is accessible to all our customers. Over the past three years in North East England alone we worked with over 93,000 businesses, supported 12,500 new businesses and helped to create over 14,900 jobs. A recent independent evaluation report also revealed that for every £1 of public funding invested in Business & Enterprise UK in the North East, £8.04 of additional GVA is generated.

“Despite the changes to business improvement in the future, we will continue to deliver consistent levels of support and guidance – and the business community and private sector growth will remain at the centre of everything that we do.”

For further information on Business & Enterprise UK visit www.business-enterprise.net or call 0191 426 6100.

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AS I SEE IT

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check in or be checked Strategic thinking into reaping the benefits of social media is no longer on a business wish-list, it has moved on to the ‘must do’ department, as David Shaw reports

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If you’re in business in Scotland you simply don’t have a choice: you must have a social media strategy in 2011. Put it on your to-do list now. Otherwise you’ll be listening to your customers through the same stale methods and channels.

If you’re sceptical about the impact social media is having in the UK there is an avalanche of statistics avaiable. Research suggests that 25% of search results for the world’s top 20 brands are links to user-

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generated content. There are estimated to be around 200 million blogs in existence and 34% of bloggers post content directly relating to products and brands. Connect that with the rise of smartphone penetration and things get interesting: 50% of all mobile traffic in the UK is reported to be on Facebook with applications such as Twitter also promoting mobile delivery of instant opinions about customer experience. You can be sure there is an opinion – good or bad – out there about your business.

So how switched on is your business? The good, the bad and the ugly of social media is the lightning pace at which new things keep happening. Ideas are spawned and they are the next buzz for the social media glitterati to faun over. Social media investment gurus speculate over the next Google or Facebook buyout, the next big idea for social media agencies to sell into companies obsessed by brand management. There’s lots of noise but the truth is that many of these are ineffective, niche or copycat innovations.

Serious developments to watch out for – Zuckerberg has delivered Facebook messaging including Facebook email addresses, a sure rise in temperature in the battle with Google.

Perhaps of equal interest, Twitter has started beta trials of its free analytics tool, meaning that we can finally get a handle on all of the Twitter activity going on, something no analytics company has managed to date.

While all of this activity is interesting – does it really matter for your business? What matters most is customer engagement.

Checking in let people know where you are and if it’s good or bad A few weeks ago I sat in a well-known sushi chain in Edinburgh Airport. I “checked in” to the restaurant using the Foursquare application on my iPhone 4, tagged a friend who was with me and left a mini review (Facebook, with more than 500 million members, has recently switched on the same capability) – a simple way of letting your friends know where you are using the location function on your smartphone.

I was letting people know I was off to London for the weekend, but what was the point?

AS I SEE IT

The good, the bad and the ugly of social media is the lightning speed at which new things keep happening. Ideas are spawned and they are the next buzz for the social media glitterati to faun over.

Social media investment gurus speculate over the next Google or Facebook buyout, the next big idea for social media agencies to sell into companies And there lies the potential opportunity and the downside with social media in one, twominute finger-tapping session.

As an early adopter, this was a novelty but ultimately this is the kind of effective recommendation that my friends will see and it will drive levels of awareness and business for the restaurant. Quantifying the benefit will be the challenge, but the gut feeling is that it’s a powerful tool.

Other businesses are thinking creatively.

There are mobile applications that now allow people to “check in” to TV shows and discuss with fellow viewers, therefore creating connected communities all acting as advocates for the product rather than standalone customers with a flat experience of the product. Volumes are rising for CBS and Virgin Media has kicked off similar activity in the UK for football fans. Clear and creative thinking to engage customers through social media.

Social scanning comparison shopping using your smartphone Applications for smartphones like Bakodo and Stickybits are delivering comparison shopping and are merging the ability for customers to scan products, read a wealth of information, compare prices with other retailers and – most importantly – see comments from fellow buyers. Now, given that 78% of consumers trust peer reviews and only 14% trust

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advertisements, this is something to seriously think about. Previous scanning applications had no link to community but now people are talking to each other.

Group buying targeted deals for customers A phenomenon led by companies such as Groupon – the concept is simple. Retailers can set up virtual storefronts with deals available through the Groupon’s website or smartphone application. Sites like Groupon’s create community around a city and then around specific retailers. Deals are recommended and the retailer and Groupon share revenue on redemption of the deal. The retailer, Gap, went with a Groupon voucher system in August this year and in two days sold 445,000 vouchers at the value of $25 each, a successful departure from their small business strategy to date.

Social media may well be the customer relationship management challenge of the moment, and many businesses have some kind of unstructured and unmanaged presence already. High time to invest in strategic thinking to reap social media insight into the voice of your customers and engage whatever the scale and type of business you are in. n David Shaw is the managing director of Social Media Analytics and Insight Consulting.

BUSINESS QUARTER |WINTER 10

INTERVIEW

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Rocket man The reality of space tourism will be a step nearer in 2011 as Virgin Galactic begins its test flying. Will Whitehorn – who has helped steer this ambitious project – believes this is the start of a new technological revolution. He tells Kenny Kemp why Scotland must be part of it Will Whitehorn is a persuasive and pioneering Scotsman. Standing inside the SEEC on a cold early winter morning, he’s able to transport his stream of consciousness from dear, dreich Glasgow to infinity and beyond.

In the next year or two, the President of Virgin Galactic will become the first space tourist from Scotland on a trip in Sir Richard Branson’s Virgin Space Ship Enterprise. Before then, in 2011, test flights will take VSS Enterprise into the inky darkness that is officially space, where the pilots will see the curvature of our fragile Earth and experience a few minutes of weightlessness.

For those who regard Virgin Galactic as purely a risky joyride for the mega-rich, Whitehorn feels there is a much greater ambition and a larger more egalitarian prize.

“Space really matters,” he says. “We have very little room left on Earth to do the things we need to do without producing more carbon.

Our entire broadband communications could be moved into space and be much more efficient. You wouldn’t need huge server farms

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that are producing more Co2 now than the aviation industry. If we could get satellites up there more cheaply we could harness solar power and microwave it down because the satellites to do that would be relatively cheap.”

Whitehorn wants more of his fellow countrymen to embrace the space revolution and he wants more investors to understand the importance of what is going on. He has been involved in Branson’s space adventure since day one, but he has had to steer the project through US senate and congressional committees, helping to define what a commercial space industry will look like.

“Access to space is the revolution that we need to have here,” he points out with a passion. “The microchip revolution has made space a place where you can do business. The problem is that we’re still trying to get into space in machines that are the equivalent of the Titanic.

“Virgin Galactic is like Charles Lindbergh flying across the Atlantic in his monoplane Spirit of

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St Louis with the floodgates that opened for commercial flying after that. The revolution now is access to space.

“I think of all the things that Sir Richard Branson has done over the years, this will be the thing he is most remembered for. It might be a long time from now, but I believe that this will happen.”

Whitehorn will become one of the first passengers in 60ft long SpaceShipTwo rocket, which is the size of a Falcon 900 private jet and has had to put up with jokes about Virgin Galactic – most famously when Virgin Galactic announced it had done a deal with Microsoft founder Paul Allen to build a spacecraft using a rocket propulsion system based on the X-Prize’s winning SpaceShipOne. Unfortunately, it was the day a new Virgin Trains Pendolino tilting train broke down on the West Coast mainline followed by the Daily Mail headline: “Euston, we have a problem.”

The jokes and the cartoons have gone. Virgin Galactic is a serious business in the United States, attracting huge interest from >>

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INTERVIEW

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INTERVIEW

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Readying for take-off: Virgin Space Ship Enterprise being constructed in the Scaled Composites production facility, Mojave, California scientists and technologists, and it is a cuttingedge industrial project at aerospace firm Scaled Composites in the Mojave desert in California and at the new Spaceport USA in New Mexico.

The man dubbed the Leonard Da Vinci of modern flight, Burt Rutan, has been the designer in chief, but the project now has major industrial muscle. James Lovelock, the environmental professor who coined the Gaia theory of our planet being a living, selfregulation organism, has even described it as the most important industrial project of the 21st century so far.

Whitehorn argues that if we are going to sort out many of the problems on Earth, then we need cheaper access to space. He is not the only Scot who thinks this. Craig Clark, the chief executive officer of Clyde Space, a satellite business set up in Maryhill, Glasgow, shares Whitehorn’s vision.

“Most people in Scotland don’t understand the significance of space to our daily lives,” says Clark. “People say to me, ‘It sounds really interesting, but life sciences or wind farms are more important to our economy’. Yet satellites are increasingly important in our daily lives.”

Clark’s company is recognised as a world leader in manufacturing nano satellites – weighing less than four kilograms – that can be positioned 600km up in space and used for thousands of everyday technological activities, including sat-nav, weather forecasting and cloud computing.

Clark says that Scottish Enterprise has been

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listening and is instrumental in helping his business. The UK Space Agency has a pilot project and Clyde Space is building the first CubeSat – a miniature satellite that will carry out cheaper research. UKube-1 will be launched in 2011.

The European Space Agency, which is supported by the UK, is encouraging more SMEs to apply for projects.

Whitehorn is delighted that companies such as Clyde Space, which is currently recruiting scientists and engineers, are reaching for the stars. In truth, there have been no fresh solutions for lifting stuff out of Earth’s gravitational pull. Even NASA’s new generation of Ares launch vehicles rockets is based on Wernher Von Braun V2 rocket of 1944 which led to the Saturn rocket that powered the Apollo mission to the Moon.

Huge Earth-launched rocket systems, including Europe’s new Vega rocket, are an expensive way to get people and technology into space.

Every Shuttle launch cost about $1bn. Because of this, space science until now has become

prohibitive. NASA can only afford seven launches throughout 2011; Virgin Galactic plans to make this seven a week by 2015.

“There has been no industrial development of the methodologies of getting technology and people into space,” says Whitehorn.

“Technology has moved on so fast that we can do so many things up in space that we couldn’t do before.

“One of the most exciting things for me of the Virgin Galactic project has been this idea – which dates back to the mid 1990s – if we could develop a cheap and effective vehicle to get people into space so they could see the planet Earth, we could develop a system that would have lots of other applications.”

His view is that if Virgin Galactic proves it is capable of taking people into space cheaply and safely, then a lot is going to follow. The Commercial Space Launch Amendment Act 2004 in the United States has taken space out of the domain of the military and classified government activities and given US-based companies the opportunity to use space for

James Lovelock, the environmental professor and Gaia theorist, has even described it as the most important industrial project of the 21st century

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private, cultural and scientific enterprise.

“The first phase is primarily as a space tourism project,” he says. “We’ve got permission to do this from the US government. This will give us the experience to quickly move into the second area; sub-orbital space science. That will require further regulatory permission. Then eventually this system is capable of launching small satellites. This will require a new vehicle and the team will work on this. This could revolutionise the cost of getting small satellites into space.”

Whitehorn says there is interest in Scotland because of the growing aerospace expertise inside our universities and with emerging firms with highly-skilled technical people.

“Clyde Space is one of the leading satellite companies and they are based in Glasgow,” he says. “They, and Surrey Satellites in England, are world leaders in small satellites and cube micro-satellites. It’s one of Britain’s most successful export industries.”

He points to 50,000 people employed in high-value space science and satellite technology in the UK. “It should be of interest to that community that new launch systems come along that allow this new generation of satellite technology to develop,” he says.

Whitehorn is a global Scot. Born in Edinburgh in 1960, he was fascinated with popular science and space in the 1960s.

“It was the dream that was presented to kids in magazines and picture books,” he says.

“There were fantastic cut-away pictures of massive Ferris wheels in space – which is still the logical way to do it. The rotating von Braun wheel housing a future space station was an iconic childhood image in comics like the Eagle.”

His father Donald was an architect but had been a Royal Artillery officer during the Second World War. He shared with Will the basic principles of ballistics and gunnery and young Whitehorn became an excellent shot.

Space remained an interest. The mythology of space in the 1960s was that everyone was going to go there in the future.

“It was where our future as human beings lay.” he says. “The Apollo missions seemed to confirm that.”

He studied history and economics at Aberdeen

INTERVIEW

Urban spaceman: Will Whitehorn has been involved with Virgin projects for two decades University and after graduation took a temporary job in the oil industry as a crewman flying Chinooks and Sikorskys, the workhorses of the North Sea. He then became a graduate trainee with travel firm Thomas Cook.

Ironically, one of his first projects was to find out if the tour company had any liability for deposits they had taken for future space flights. NASA’s Challenger accident on 28 January 1986 – which killed seven crew members – put such plans on hold.

Whitehorn moved into banking, working in financial public relations before joining Virgin in 1987. He has worked for Sir Richard Branson for over 20 years – a fierce loyalist

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who started as a press spokesman and became a confidant, friend and a foil for the highprofile entrepreneur.

He has had a hand in almost all of Virgin’s major projects over the last decade, spending five years on the Virgin Galactic project, helping to smooth the relationships between a flamboyant British entrepreneur and a sceptical US Congress.

Now he is handing over the president’s baton to George Whitesides, a former head staff at NASA. Whitesides was also chair of the Reuseable Launch Vehicle Working Group of the Federal Aviation Authority’s Commercial Space Committee. That’s how serious >>

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INTERVIEW

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people in America are now taking this business. The Virgin Galactic project is now moving into its commercial phase, after having five years of business plan building, marketing, design of the aerospace system, and preliminary ground-based testing.

Spaceport America in the boiling New Mexican desert is nearing completion in a project involving hundreds of millions of dollars and thousands of people. On October 29 2010, it was opened with much fanfare by Governor Bill Richardson, a firm supporter of the space project. Whitehorn says Virgin Galactic has had the privilege of developing its own plans.

“Part of the latest legislation is to give NASA more freedom to work with private sector companies to develop space launch systems.”

There are companies emerging – many bankrolled by wealthy internet entrepreneurs – who are developing spacecrafts. Elon Musk, the founder of PayPal, has set up SpaceX, which has a ground-based rocket to get people and supplies into space; Jeff Bezos, founder of Amazon, is backing Blue Origin in Texas, while Armadillo Aerospace, set up by computer games boffin John Carmack, has been working on a lunar lander and has signed a deal with Space Adventures, which is also bidding to take tourists into space. Even EADS, makers of the Airbus, has been doing designs for a re-usable space rocket.

“There is a burgeoning approach to getting into space,” says Whitehorn. “It’s going to happen in America to start with because only America has the legislation. I can’t think of many other places in the world where this would have happened – sadly, not Scotland or England at the moment.

“New Mexico has a population almost identical to Scotland, yet there is an attitude there that they need to have a hightechnology industrial future. The state has invested $220 million in Spaceport America with Virgin Galactic as the anchor tenant, but they are already attracting other players from the aerospace industry. Virgin Galactic is a $450m investment, with significant Middle Eastern backing, going operational within two years.”

So, Whitehorn will become a spaceman; although there isn’t a final date because it depends on the test flying phase and the

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All hands on deck: Buzz Aldrin, left, Governor Bill Richardson, centre, and Sir Richard Branson at the opening of Spaceport America

Spaceport America in the boiling New Mexican desert is nearing completion in a project involving hundreds of millions of dollars and thousands of people

Federal Aviation Authority’s licensing.

He says: “We can guarantee that we will be in space in 2011 with our test programme, and it probably won’t be the later part of the year.”

But Whitehorn has other business interests to pursue which is his reason for a flying visit to Glasgow.

“This is my last Virgin project but I will be staying on as consultant,” he says. “I’m joining the board of the SEEC as a non-executive director. The SEEC has been very successful, but it’s going into a whole new phase of development with a big infrastructure privatepublic partnership. It’s long overdue for Scotland to have an indoor facility of this scale.

It will also be part of the Commonwealth Games 2014 but, in the longer term, it will be a major asset for Glasgow and Scotland attracting the kind of global acts that the O2 has attracted to London.”

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The promoter Harvey Goldsmith told Will that an indoor arena in Glasgow seating 12,000 people can’t fail “because the climate is your biggest marketing aid”.

Add to this the chairmanship of Next 15 Communications Group, a specialist technology public relations outfit with IBM, Intel, HP and Facebook as clients – based in San Franciso but quoted on the AIM market – and his board role with Loewy Group, an industrial design firm which did the concepts for the Virgin Galactic spaceship, and Whitehorn has very little time to look after the beef cattle on his Sussex spread.

While he remains a vociferous Scotsman, proud of his local connections and heritage, he is increasingly inclined to promote the virtues of the global economy with emerging economic opportunities that are truly out of this world. n

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COMPANY VIEWPOINT

As debt markets continue to be complex and volatile, Ian Steele, Head of Corporate Finance Advisory and Practice Senior Partner for Deloitte in Scotland & Northern Ireland, gives his view on what he is seeing in the market and the implications for Scottish companies.

Accessing the debt markets

Ian Steele, Head of Corporate Finance Advisory and Practice Senior Partner for Deloitte in Scotland & Northern Ireland

T

here are currently large variations in liquidity, margin and length of debt facilities on offer, depending on the individual bank, their perception of the credit of the borrower, the sector in which the borrower operates and the source of funding sought. Currently, a significant opportunity exists for borrowers to capture lower pricing, longer facilities and improved terms, by presenting their credit to the widest possible banking audience.

Borrowers are also considering alternative funding solutions, such as the bond markets or debt private placements which can be an effective complement to the bank markets.

rather than the traditional three years.

Whilst the mid-market tends to lag the larger market, the same forces are at work. Four and even five year facilities are achievable but at an incremental cost. Even corporates who refinanced within the last twelve to eighteen months are currently seeing the benefits of refinancing again to lock into cheaper, longer term financing.

In the mid-market, banks’ typical hold levels for senior debt are in the range of £25-50m. Greater amounts will involve banks clubbing together.

Pricing for senior debt in the mid-market has widened considerably post 2007 and now typically ranges from 1% to 3.5% above Libor. Key factors driving pricing include the size of the borrower, levels of leverage, visibility on earnings and available security.

Amongst smaller borrowers, obtaining bank finance continues to be more challenging than it is for either their mid-market or larger peers.

Compelling investment cases and impressive management teams are essential to obtaining debt finance.

A further headwind for all borrowers is the scale of the pipeline of debt that is due to be refinanced between 2011 and 2013, see graph below. Given this impending peak in refinancing, we would urge borrowers to consider approaching banks earlier than they might do otherwise.

Value ($ Billions)

300 Improving Access to Corporate Loans EMEAl-grade*maturingloanvolume 250 The most recent Deloitte CFO Survey of 200 larger companies reported an increase in the 150 availability of debt at a lower cost. The resurgence 100 in M&A activity, particularly for larger corporates, 50 has also increased the level of corporate loan 0 issuance. The trends in the market are for 2010 2011 2012 2013 2014 longer facilities and lower margins, with * EMEA deals rated BBB- and above 2898A kw FS 15/03/2010 Corporate loan refinancing11:57 profile Page 3 banks pushing outreport to fourstip - fiveads_2898A_FSReport_StripAds_ year maturities

Opportunity awaits

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borrowers are also considering alternative funding solutions, such as the bond markets or debt private placements

Corporate Bonds and Private Placements There are alternatives to bank funding in the bond and private placement markets. The bond market is most suited to large repeat borrowers, where the minimum issue size of circa £150m, with a bullet maturity, can be accommodated. For many mid-sized corporates, this minimum size is too large and the requirement for formal credit ratings too great an investment. However, the benefits of the bond markets can be replicated in the private placement market without the minimum issue size restrictions or formal credit rating process.

Private placements are increasingly being used by borrowers who are attracted by longer term funding at coupons which are at all time lows. The private placement market provides a borrower with the opportunity to access funding for terms as long as 7, 10 or even 12 years, without the requirement for external credit ratings.

Additionally, much smaller funding levels of £35m upwards can be accessed.

The availability and pricing of debt is beginning to improve. Our advice to borrowers is to allow as much time as possible to consider their options, prepare their proposal and ultimately complete their debt refinancing on the most competitive terms.

BUSINESS QUARTER |WINTER 10

BUSINESS LUNCH

Leigh Wilson sleeps with her BlackBerry beside her on the pillow.

“I have it on 24-7,” she says. And the dynamic chief executive of Jet Logic gets very little sleep, answering relentless calls and text messages from demanding clients throughout the night.

“We deal with everything immediately,” explains Wilson. “A lot of our big clients want it sorted and they don’t mind where in the world they are or you are and they need to get what they want. I don’t think that level of service is given by many companies.”

And, as a fast-growing private jet business which zips some of the world’s wealthiest businessmen and women across the globe at a moment’s notice, there’s no doubt that Wilson’s BlackBerry address book would make interesting reading.

Not that Wilson is telling. She has a strict privacy policy that she – and her team of seven staff – closely adhere to.

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“They are often not people you would have heard of,” she says, coyly. “They’re very high-wealth individuals. They are really the super wealthy – the kind of people you don’t realise exist, or at least you don’t know who they are.”

The Edinburgh-based company has enjoyed a meteoric rise. Turnover for 2010 is set to hit £7m – smashing the £1m she forecast for year one, devised when she launched the company with £40,000 investment from four funders just 18 months ago.

The company is now looking to invest in other start-ups, keen to share the wealth of experience Wilson and her co-directors have picked up in their rapid rise to the success.

A chance remark from an existing customer at a party in the south of France a few weeks ago sparked six enquiries from other wealthy individuals – translating into four new customers for Jet Logic.

And that is how Wilson likes to do business.

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The majority of Jet Logic’s customers come from word of mouth. In fact, the company has spent just a paltry £800 on advertising since its launch – all of that on a single advert in a national Scottish newspaper.

But even the cache of a celebrity customer – and the potential resulting business – will not tempt Wilson, who has also worked in the world of super yachts, to reveal her client list.

She says: “I think in the private jet and the yacht industry, too many companies are too keen to talk about their clients to get more work. We want people to trust us.”

She recalls a recent incident when an American client’s picture ended up in the press after a hotel worker tipped off the paparazzi as to the celebrity’s whereabouts.

“The client trusts us and knows it wasn’t us, but your heart sinks when you see something like that,” she says. “We have great fun in the office and laugh about things that have happened, but we would never pass any of >>

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BUSINESS LUNCH

lofty ambition It’s not often you can take the description ‘high flyer in a high-flying industry’ literally, but that’s what one young Scottish businesswoman does – and where she does it. Leigh Wilson unfastens her safety belt to discuss luxury aviation over lunch with Jane Bradley

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BUSINESS LUNCH

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First-class lounge: Jet Logic’s clients travel in style, luxury and privacy

We sat down a couple of months ago and thought ‘we have to rethink the whole strategy’. It’s grown so fast. It’s meant we’ve had to rethink everything that on to family and friends. Confidentiality really is the key in our industry.”

A one-time charity fundraiser for Marie Curie Cancer Care, Wilson got her first taste for the luxury travel industry when she was introduced by a friend to a new start-up company, First Call, which provided remote medical advice to organisations worldwide from the Foreign and Commonwealth office to shipping and aviation companies. Dealing with people who took ill in unusual locations while under their watch, the promising young businesswoman was appointed as international yacht manager within three months.

“I never got to travel on a private yacht,” she remembers. “I have since stayed on one for a week, which was very exciting. But at that point I knew nothing. It was a whole different world, and so different for working for a

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charity that I have to say I did struggle with my conscience slightly at the beginning. In a charity, you see how much money people are trying to raise, then you’re in the super yacht industry and you suddenly see how many millions of pounds people spend on a yacht they might use two or three times a year.”

She later moved to another yachting company, and subsequently on to a Scottish private jet firm, Cloud9 Jets, where she spent three years learning the ropes of the industry. But following the death of her father, a former air traffic controller at Prestwick Airport, Wilson inherited some money – not enough, she is keen to stress, to have funded her entire company.

“There has been a myth going round that that’s what happened,” she says.

“But it’s not true.”

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In fact, there were four investors, including Wilson herself, and every penny of the initial outlay was paid back within 11 months of the launch. Cloud9 founder Keith Campbell – alongside a third member of staff – also defected and joined Wilson in her new venture, now holding the position of JetLogic’s managing director.

The firm, Wilson claims, is not in direct competition with her former employers which she insists is more European-focused.

“I don’t think we really see them as rivals at all,” she laughs.

Whether they feel the same is another question entirely. But, whatever its relationship with its rivals, Jet Logic – which last year opened offices in New York and Los Angeles – is firmly in profit. Quite an achievement for a firm set up at the end of one of the deepest recessions ever to hit the UK. “I didn’t think after such a short period of time we’d be in this position,” says Wilson.

“We sat down a couple of months ago and thought ‘we have to rethink the whole strategy’. It’s just grown so fast. It’s meant we’ve had to rethink everything and where we go from here.”

Despite a strong emotional attachment to the business, she does admit to having a long-term exit strategy.

“We could possibly have sold by five years time,” she muses. “I don’t know though – it would be hard to give it up. It’s very much my baby.”

She did not enter the private jet business by chance. With her father in the aviation business, Wilson had her first flying lesson as soon as she was legally old enough to do so.

But despite her love of all things flying – and a glamorous job in the jet industry – she has still only flown in a private plane once, preferring to holiday at friends’ homes in the Borders, or in countryside retreats in accessible European locations.

“I think you have to remember that it does seem very glamorous and you do get invited to some fantastic things,” she says. “But at the end of the day I can’t afford to fly my own private jets. I think the problem with some people in the industry is that they think they should be flying in private jets and having that lifestyle.”

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She pauses and admits: “Of course, if I could afford it of course I would. Purely for time issues, for not having to get your lipstick out of your bag in a queue when you go through security. I’d love to do it, but it’s not a perk of the job.”

For her clients, however, it is a major perk. And Wilson’s job is to meet whatever they need.

“Some clients have 30 bags of luggage,” she says. “And we had one client who had a full size baby cot they wanted to transport. It’s making sure you’ve got the right aircraft for that person.”

Most of these jet-setting clients are not Scottish, however, despite her Scotlandfocused advertising budget and her insistence that the business will remain headquartered in Edinburgh.

“We just decided we wanted people in Scotland to know we were based here,” she says.

“I don’t think we got a single bit of direct business from that particular advert, but it was good for Scottish people to know we were a Scottish company and what we were doing.

“There are a very limited number of people in Scotland who use a private jet and we are probably in touch with most of them already.”

She insists that her success has been in “educating” people that a private jet does not have to be extortionate. By marketing “empty legs” – spare journeys where a plane would fly back otherwise empty of passengers – Jet Logic has generated a significant amount of extra business.

With a turnover target of £10m for 2011 and an aim for world domination, Wilson will have her work cut out next year.

“I’d like to see the Jet Logic brand recognised worldwide. That would be fantastic,” she says.

For now, though, Jet Logic’s plan is to recruit a couple of more people and open a third overseas office in early January, this time in the Middle East.

“We are exhausted and all of us have very little time to do anything outside of work,” says Wilson.

“But we’ll get to the end of this year and take on some more staff.”

She pauses: “Maybe then I’ll be able to sleep through the night.” n

BUSINESS LUNCH

Sharing and sharing alike at city favourite Located on a slightly odd junction, just a few metres from Haymarket Station in Edinburgh, Chop Chop could be easily missed. And that would be a mistake.

The restaurant, which was opened in 2006, has quickly become a city institution.

Run by husband-and-wife team Jian Wang and Roy King, the authentic Chinese dumplings and canteen-style food on offer is a popular choice for both high-end diners looking for something a little different and those in need of a quick and affordable meal.

The vast menu leaves us stumped for a few minutes, despite us both being regular Chop Chop customers.

“They should do a dumpling selection for novices,” laughs Wilson. “People keep telling me it was on Gordon Ramsay, but I didn’t see it.”

In fact, Chop Chop was shortlisted as the best Chinese restaurant in the UK on Ramsay’s F-Word series. It missed out on the top prize, but chef Wang still won rare words of praise from the usually foul-mouthed star.

On arriving in the UK 13 years ago, Wang initially opened a dumpling factory, supplying her wares to Chinese stores and eventually supermarket giant Sainsbury’s, but the talented cook eventually realised a long-held dream of opening her own establishment. Now, the chain has branched out – with a second recently opened in Leith.

Like tapas, Chinese dim sum style food is meant for sharing. Leigh and I opt for a selection of dumplings – some boiled, some fried – shreds of lamb cooked with cumin and green beans cooked with plenty of hot chillis.

Leigh and I are ready to fight each other for the last beef and chilli dumpling, which is so succulent and melt-in-the mouth delicious that we regret we have not taken advantage of the restaurant’s unlimited banquet set menu, which allows you to infinitely re-order whatever dish most takes your fancy. I settle for the last of the boiled pork and chive variety and am not disappointed.

The lamb, while having a slightly bland appearance, is again fantastic, packed with cumin and deliciously juicy, while the beans were not for the faint hearted but perfectly spice up a potentially average vegetable.

Handy for Tesco Bank workers and their Haymarket Yards neighbours, Chop Chop’s set business lunch is a bargain at £7.50. But a word of warning – book in advance. This Edinburgh secret is out.

Chop Chop, 248 Morrison Street, Edinburgh, 0131 221 115576

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BUSINESS QUARTER |WINTER 10

GIRLS ON WHISKY

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in association with

Dram fine: Gaynor Turner, director of Macintyres, left; Belinda Roberts, managing director of Winning Entrepreneurs, centre, and Gill Eastgate, director of NKD Clothing, go through the preliminary ‘nosing’ exercise in whisky tasting

A Toast Tae The Lassies A trio of successful business women took time out from their busy schedules to sample three malt whiskies with different characteristics Take three entrepreneurial women and invite them along to a Scotch whisky tasting at Edinburgh’s Rutland Hotel, now a stylishly refurbished, city-centre gathering place. Is it possible to blow away preconceived ideas and have them ready to enjoy a tipple of our national drink by Burns’ Night, celebrated on Tuesday, January 25 in 2011?

The loquacious lassies – who would have given our National Bard a run for his money – are Gill Eastgate, director of NKD, a bespoke corporate clothing firm; Gaynor Turner, director of Macintyres, the talked-about wholesale jewellers in Edinburgh, and Belinda

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Roberts, the livewire networker and managing director of Winning Entrepreneurs. Their previous experiences of drinking Scotch were rather jaundiced – indeed, they were embarrassed to admit they didn’t like whisky, all preferring a long, tall Tanqueray gin instead.

So this was a challenge for Duncan McRae who is Diageo’s whisky ambassador – and no relation to that fine Scottish actor of Whisky Galore! fame. Duncan’s opening shot was to introduce the variety of whisky, explaining the best way to enjoy the drink. He introduced the Single Malt Whisky Flavour Map as a reference point for novices which shows the range of

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whisky from a scale of delicate to smoky, and from light to deep and rich.

As this was a cold night in Edinburgh, the first malt was introduced as a local Scotch. The Glenkinchie – quickly dubbed the Glen Kinky by the ladies – was a 12-year-old single malt from East Lothian, pale gold in appearance, and intended as a lighter whisky.

The lads who set up the test had a side wager that this might be the whisky the ladies would enjoy the most. After being shown how to “nose” the drink, Gill found the Glenkinchie to have a warm freshness, Gaynor enjoyed the initial tingling on her tongue, while Belinda, was surprised by how smooth it actually felt.

Next up was the Singleton of Dufftown, another 12-year-old single malt which is darker than the Glenkinchie. Gaynor said the flavour reminded her of Christmas puddings, while Gill tasted vanilla toffee, which was consistent with the maturation process in oak barrels.

After nosing their drams, then sipping neat and then adding water, they all enjoyed the changing character of the drink, from a harshness at first to a warmth and smoothness.

The third contender was Talisker 10-year-old, a single malt whisky from the Isle of Skye. This

GIRLS ON WHISKY

After nosing their drams, then sipping neat and then adding water, they all enjoyed the changing character, from a harshness at first to a warmth

was a mountain to climb with its peaty provenance. After nosing, all three declared the whisky smelled rather medicinal. Like TCP, said Belinda, while it reminded Gill of bonfires on a cold winter night.

No-one really liked the smell simply on nosing, yet there was a strange transformation once they all began sipping their Talisker. It started to come to life.

“It did smell awful, a bit like Germoline,” said Gaynor, “but the taste is actually rather nice.

Belinda agreed. Initially, she equated the smell with a hospital ward but was pleasantly surprised by the taste.

All three agreed they would be looking at whisky with new-found interest. A bottle of fine malt would even be a conclusion to some

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of their ladies-only dinner parties. And being entrepreneurs they dabbed a few spots of the amber liquid on their wrists and thought that a whisky perfume might even be a novel best-seller.

So, which whisky came out on top? For all three, surprisingly, it was the Talisker, which confounded male wisdom on women’s tastes.

So, a toast to the lassies, who now have quite a different view of the uisge beatha. n Thanks to the Rutland Hotel, Edinburgh, and to Diageo Scotland for supplying the whiskies. The whiskies are all available at good off-licences and supermarkets, at around £30 a bottle. Remember to drink responsibly.

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FASHION

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Waxing lyrical

Barbour’s famed jackets are as beloved of the fashionista as the country squire, and the North East of England-based company continues to change with the times while retaining its heritage, as Chris Porter reports There are few brands that can claim ownership of a genre: Hoover, Coca-Cola, Playstation... they are a small and exclusive club.

The fashion world is smaller still, but mention Barbour and you immediately conjure images of the definitive waxed jacket, well-heeled country folk, spaniels and black Labradors in picturesque English countryside.

Despite the company finding its origins in the decidedly catwalk-averse South Shields with a history in making outerwear for trawling and farming, it remains associated with the well-to-do thanks to the smart ad campaigns of the 1980s.

Crisp and un-dirtied, the Barbour jacket is the Range Rover of utilitarian clothing, the functionality with which it was designed not always put to the test, but no less appealing for that.

“That strong Eighties image had both its benefits and its difficulties,” concedes Gary Burnand, Barbour’s director of global

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marketing and strategy. “It gave people the perception of Barbour being part of a posher view of country life.

“It’s an association I think we’ve shaken off now, but Barbour is one of those brands that periodically gets discovered by the kind of people you’d least expect to wear it and that gives its personality a new aspect it didn’t have before.”

Barbour may have benefitted from a re-appreciation of country matters that has spun off growing environmental awareness, interest in food sources and the undoubted attractions of a slower pace of life.

Its gentle revival may also have been assisted in part by the refreshed appreciation for authenticity and heritage that has come with the recession, with long-established brands and makers of classic or long-lasting products – which is to say, those offering better value for money – especially winning new interest.

But it is no less surprising to find that its

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best-known jackets – the Beaufort and the Bedale; classics, even if they are not that old – are hot property among edgier, metropolitan 20-somethings, who team it with plaid shirts and skinny jeans.

That, as Burnand notes, is a long way from the fuddy-duddy image the brand still had just a few years ago, even if it is still also a long way from making it “the kind of product that looks best after it’s literally been dragged through the mud,” he adds.

Country life was, however, the intention for Barbour’s jackets. The Bedale, launched in 1980, was short in length, lightweight and thorn-proof and designed for equestrian wear.

It also had many of the marks that have since become brand signatures – the big bellows pockets, the corduroy collar and the brass ring-pull, two-way zip fastening.

The Beaufort, meanwhile, was developed two years later as a shooting jacket which considered the practical needs of the sport >>

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FASHION

Many Barbour fans are far from the Horse & Hound set and adoption by fashion’s leading edge is typically bestowed rather than won through effort

rather than its sartorial codes. Yet many Barbour fans are still far from the Horse & Hound set and while adoption by fashion’s leading edge is typically bestowed rather than won through effort, the company – whose turnover in 2009 (the latest published accounts) was more than £74m – has also been busy widening its appeal, and in June last year, won the prestigious Best Brand at the Profit Track 100 Awards. The runner-up was Virgin Trains.

It has seen its important country sports connections strengthened by the adoption of crack shot Lord James Percy as an ambassador and co-designer of an award-winning range, but it has also launched more contemporary, slimmed-down versions of its classics, and created a more urban spin-off collection in collaboration with Japanese menswear designer Tokihito Yoshida and British womenswear designer, Anya Hindmarch.

In September 2009 it also opened its first heritage store – just off London’s Carnaby

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Street – which consciously targeted the fashion consumer; the type of consumer, in fact, who until recently might not have considered a brand that has historically been down and dirty. This winter, Barbour’s first pop-up store opened in Spitalfields, East London, a popular area for heritage seekers.

After all, Barbour made some of the first motorcycle clothing in 1911, and most notably the International jacket launched in 1936 which celebrates its 75th anniversary in 2011.

And it created the Ursula foul-weather suit for world war two submariners (it was named after the U-class sub of the same name) and made a name for its Cowan Commando style during the Falklands conflict of 1984.

The trick, says Burnand – one which many British heritage brands are still missing – has been in giving the products wider appeal without losing the original identity. It is, in a nutshell, about making Barbour more of a lifestyle brand without putting off those whose lifestyle also includes mucking out. >>

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Now we think in terms of Barbour having wit, grit and glamour. Other companies may have one or two of those elements but they rarely have all three

“All design, technology, buying and sourcing is still done in South Shields and the area is very much part of what the brand is,” he says.

“The company grew out of supporting the growing sea trade out of South Shields and the South Shields beacon is still on our labelling.”

“Being apart from London as the fashion hub has allowed it to develop in an idiosyncratic way also, and meant it has always had to be especially entrepreneurial.”

But the original wax jackets weren’t for everyone, he admits, adding that they were heavy, they smelt and they were cut for function rather than form ... things that appealed to some men, but certainly not to many women.

“They needed to be moved on without losing the personality of the brand,” he says. “You can’t chase fashion. But even functional products need to be good looking.”

Over the last seven years, the product range has embraced more womenswear and a

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growing business in shirts, knitwear and accessories, which includes a range of functional travel bags.

It also remains a family business, allowing it to evolve at its own pace and without shareholder pressure.

Dame Margaret Barbour herself designed the Bedale and drove the Sloane Ranger image overhaul that first saw Barbour on the backs of aspirational city folk three decades ago, some no doubt impressed by its royal patronage (the Duke of Edinburgh was the first to give his Royal Warrant in 1974 followed by the Queen in 1982, and the Prince of Wales in 1987). And it was Dame Margaret, the company’s chair, who collected the aforementioned Profit Track Award.

“There’s good and bad in any long heritage a company may have”, says Gary Burnand,” but now we think in terms of Barbour having wit, grit and glamour. Other companies may have one or two of those elements. But they rarely have all three.” n

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rifling the past Shooting is hip. It’s not just about firing a gun but handling a brand that has been hand-crafted for almost 200 years, as Chris Porter discovers

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“It’s true that shotgun licences are in decline,” concedes Richard Purdey. “The generation that used to keep one loaded by the back door has passed on. But interest in shooting is seeing a steady increase. There’s more access to it – and it’s become a popular corporate event.

However, the fact is that most people given a chance to try it instantly become hooked. It’s very addictive seeing that little black disc disappear in a puff of smoke.”

Purdey, perhaps more than most, should know. In the London underworld, his surname is even slang for a shotgun, which is some back-handed accolade. A sixth-generation member of the family that established what is one of the most famous names in gun-making and director of the company which, since 1994, has been owned by the luxury goods giant Richemont, Richard Purdey learned to shoot young, even if much of his career has been spent in the premium cider industry.

“They’re materially very different,” he says.

“With guns you’re working with metal and wood, and of course you don’t get pissed shooting. But the process of creating a respected brand is much the same; it’s about quality and integrity.”

Perhaps this is why, although cashing in on country sport’s new-found popularity might have been tempting, and given that competitors the likes of Holland and Holland and Beretta have relaunched themselves as much as lifestyle brands as makers of elite shooters, Purdey has stuck to its guns. This is the same ethos of specialism espoused by founder James Purdey who completed his seven-year apprenticeship in gun-making in 1805 and established his own business nine years later, winning Queen Victoria’s reputation-making custom in 1838.

Although Purdey now has a growing clothing line – and it is considered necessary that the brand supplies shooting enthusiasts with all they need to enjoy the sport to the same functional and quality standards as the guns themselves – two-thirds of the business remains in making what Purdey calls its “raison d’etre, the guns, these works of art.”

Not that the skills cannot be applied to things other than guns. One of Purdey’s latest products is a high-precision mechanical belt buckle, designed and made in a >>

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EQUIPMENT

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EQUIPMENT

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collaboration between Purdey’s gunmakers and inventor Roland Iten. It is not cheap at £10,500, but then it is hand-made from steel and rose gold and inlaid with fossilised mammoth tooth.

That the skills find other application is just as well. Works of art, of course – and it is only in the last 50 years that the decorative fine rose and scroll bouquet engraving of gun parts of the kind Purdey has been practicing since the 1850s has actually become internationally recognised as an art form – have a limited customer base. That is especially the case when only around 70 are produced each year.

“Other brands may go down the lifestyle route – by virtue of the market being so small it has an exclusivity that is appealing to the lifestyle market,” says Purdey. “But I think it’s good that we stick to what we’re good at.”

That, however, has not meant the company has been devoid of innovation or unconscious of the risks of resting on its reputation. Indeed, as Richard Purdey notes, companies that do not move forwards do not stand still, but tend to go backwards.

Purdey has consequently launched two new styles of gun over the last year. One is the entry-level Sporter; machine-made but hand-finished, a method made possible by the advanced CNC machinery Purdey has invested in – comparable, Richard Purdey says, to Bentley launching its Continental GT while providing a means to aspire to the bespoke products and a means of funding their skills and labour-intensive creation.

The company’s second new launch is a world first – the Damascus, a 20-bore over-andunder made from high-tensile steel. It was three years in development and comes with an asking price of £100,000-plus and made possible only by the recent advent of an ultra high-tech “powder metallurgy method” of steelmaking developed by Swedish steelmakers Damasteel.

“It’s a flight of fancy really,” explains Purdey, “but one that shows that we’re not frightened of working with new materials or combining art with the latest technology. From a purely financial point of view everything about the project was screaming ‘don’t do it’. But it is all the more important for a very traditional brand to express the idea that we are forward- >>

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A high-precision mechanical belt buckle is not cheap at £10,500, but then it is hand-made from steel and rose gold and inlaid with fossilised mammoth tooth

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looking. It invites comment, but it’s also inspiring to our craftsmen, who have to work out how to do it.

“After all, there are not many artefacts still in demand that have not changed much materially since about 1880. We need to look for new ways of doing things.”

Fortunately, Purdey adds, Richemont has taken a hands-off approach to its ownership of the business that has allowed such advances to be made at its own pace and in line with market demands. It has even cherished its history.

Richard Purdey may be quick in his response to just why he was headhunted to join what was once the family business, but it all plays to what remains an esteemed heritage.

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“Well, Richemont wouldn’t have asked me to come on board as chairman if my name had been Joe Bloggs,” he says with a chuckle.

“And the Purdey name has always been there

– I didn’t change it by deed poll. But of course I grew up shooting and first joined the company as an 18-year-old. Being back has felt a bit like coming home.” n

Other brands may go down the lifestyle route – it has an exclusivity that is appealing – but I think it’s good that we stick to what we’re good at

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MOTORING

Jag’s supporter

Sometimes a car’s looks and performance are so overwhelming that it exceeds all expectations. Steve Langmead takes a Jaguar XJ Portfolio 3.0 V6 for a test drive – and immediately considers ordering one >>

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The only thing that was missing were the tea, coffee and chocolate muffins. There was probably a button for those somewhere in the Jag but I didn’t manage to find it I’ve been fortunate enough to do a lot of interesting things in my business career, but when BQ asked me to become a budding Clarkson, I couldn’t pass it up. Not when they offered me a brand-new Jaguar XJ to take out on the open road.

The car was jet black with a sumptuous leather interior that was a pleasure to sit in. On driving it both on the motorways and in the centre of Edinburgh, what struck me was just how smooth and quiet it was, even on acceleration.

I felt at home straight away. My usual drive is a five-year-old Mercedes e320, which was at the cutting edge of technology when I bought it.

Heading up a leading IT Services company –

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Atos Origin in Scotland – this is something that is important to me.

I was pleasantly surprised how far things have progressed when it comes to gadgets. My eight-year old son Scott was impressed too. It was right up his street with all the mod cons – from the massaging, heated seats to the TV screen, he absolutely loved it. For a Dad, it’s important to have a youngster’s approval. But then to his disappointment on returning home from Cubs and finding the shiny XJ in the driveway, the initial assumption that this was my new car wasn’t the case.

I drive about 12,000 miles every year on business and could envisage me easily

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MOTORING

Managing time: Steve Langmead like the Jaguar XJ so much he decided to hold a business meeting in it travelling to and from meetings in this XJ. Our customers range from private sector and public sector clients such as NHS Scotland, Skills Development Scotland, FirstGroup and Aberdeen City Council, covering the length and breadth of the country, so the high levels of comfort the car delivers allow me to arrive feeling prepared.

I had a meeting scheduled with a supplier when the Jag was dropped off so decided to hold the meeting in the car. Well, time management is an essential skill. Driving around West Lothian, the only thing that was missing were the tea, coffee and chocolate muffins. There was probably a button for those somewhere in the Jag but I didn’t manage to find it.

The XJ takes a sustainable approach to motoring, with a more stringent approach than standalone measures like fuel consumption or CO2 emissions focusing on the “lifecycle” of the vehicle. These credentials

fit well with Atos Origin’s environmental approach, encouraging green practices across the business where we can.

Although I wouldn’t describe myself as a car buff, I do enjoy Formula One (watching, not racing) and I rarely miss an episode of Top Gear. My dad was a mechanic so I’ve always had an interest in cars. Growing up, I was never interested in a Jaguar – but that was then. I am considering buying one and waiting to see who can do me the best deal.

The only real downside for me was the slight lack of leg room in the back. I don’t think my boys would be too happy after I’d pushed my own seat back, I’m six foot three. But, all in all, a great car, a modern classic, understated, stylish, stacked with technology, and a pleasure to drive. n Car Supplied by Taggarts Jaguar, Motherwell, 0844 659 9066, www.taggarts.co.uk/jaguar/

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Facts CAR: Jaguar XJ Portfolio 3.0 V6 Diesel PRICE: £67,400 OTR INSURANCE GROUP: 49 CO2 EMISSIONS: 189g/km POWER/TORQUE: 275bhp @ 4,000rpm and 600lb ft @ 2,000rpm PERFORMANCE: 0-60mph 6.0s/ Max Speed 155mph FUEL CONSUMPTION: (combined) 39.2mpg STANDARD SAFETY FEATURES: Emergency brake assist, airbags front and side, side curtain, rear parking aid (includes touch-screen visual indicator), pedestrian contact sensing, front seats whiplash protection system.

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ENTREPRENEUR

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The Keiller instinct Bob Keiller is an engineer to his core. But as an entrepreneurial businessman he has been able to create one of Scotland’s most exciting oil services companies with an eye on a wealth of future global opportunities.

Kenny Kemp caught up with him in Aberdeen

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Bob Keiller achieved the unthinkable. In May 2006, he and colleague Duncan Skinner sealed a management buyout from a famous US engineering and services corporation to create PSN. Today PSN – it stands for Production Services Network – is one of Scotland’s brightest global hopes with a footprint in over 20 countries.

The creation of this independent oil and gas services firm remains a high watermark for Scotland. It involved a raft of Scottish advisers and financiers in a $400m (£257m) deal that would be difficult to repeat in these more straitened times.

But Keiller’s boldness and his sustained focus has forged this Aberdeen-based company, helping it secure new long-term contracts, including significant decommissioning services work for Shell’s ageing Brent Delta oilfield operations off the North East coast. This is a ten-year project that will require painstaking planning and execution, plus new ways of working that will eventually be exportable to other oil and gas regions.

Coupled with this, PSN has 14 other offshore customers in the North Sea. Last summer it secured a BP Focus partnership contract.

“This year they’ve had probably the biggest year of summer shutdown activity for many years,” says Keiller. “Hundreds of people have been recruited and trained and used in that business. At PSN, we’ll see a lot of work over the next four or five years under this contract to help BP make all the improvements and adjustments that they need to their existing assets.

“The health of the oil and gas business in the UK is strong. There is a lot of investment coming into the area in terms of capital and operational investment. We’re keen to encourage everybody to continue to invest in the North Sea because that investment means activity; this leads to projects and this means jobs. Then we can hire graduates and apprentices and give Scottish kids a great

career for the future, not just in Scotland but the potential to work internationally.”

But the North Sea is not the whole picture.

From its headquarters adjacent to Dyce airport which once belonged to Brown & Root, and with helicopters hovering close about the rooftops as they head out to the North Sea platforms, PSN now employs more than 8,500 worldwide, from Azerbaijan to Egypt, to Mexico and Cameroon.

Bob Keiller, now 46, is an exceptionally busy commander, travelling extensively to all of PSN’s outposts, but he has found time to take on the chairmanship of the Entrepreneurial Exchange. While he has applied the same level of verve and determination in refocusing the Exchange’s modus operandi, he doesn’t see himself as a typical entrepreneur.

“The term entrepreneur is one that is used pretty freely nowadays,” he says. “For me, I like to be ‘entrepreneurial’, I like to be innovative. That’s means I’m challenging and sometimes a real pain to the teams I work with. But the key for me is building teams and giving them the space, freedom, the energy and the permission to do really good things.

“This is where I am ‘entrepreneurial’ as opposed to an out-and-out entrepreneur who comes up with new ideas and businesses.”

The opportunistic way in which Bob Keiller took over PSN from KBR (Kellogg Brown & Root) is a snapshot of the art of the possible when conditions are all favourable. Since then, PSN has continued to create a values-led business based its principles of integrity and “doing the right thing.” In the wake of BP’s debacle in the Gulf of Mexico and near terminal damage done to its external reputation, it has become clear that PSN seeks to be a contractor prepared to forfeit quick-win bottom line profit to ensure it maintains the highest levels of health and safety and contracts that are sustainable.

“I’m all about taking what we’ve got and making it better,” says Keiller. “We’ve set out

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what kind of business we want to be – and what’s important to us. How we do things, how we want to behave, how we capture this and remain true to this in the future, this is important for us. We realised that we were creating a new Scottish business and this was a great opportunity to set out our values.”

Keiller’s entry into engineering was accidental.

A rugby-mad Jedburgh Grammar schoolboy with an interest in electronics and computers, he toyed with the idea of going to art college.

His friend Jim Steel – who was later the Falkirk Wheel’s project manager– was at Paisley Tech and persuaded Bob to have a proper trade as a fall-back position, so he headed off to Heriot-Watt University from fifth year at school. He undertook a Masters degree in electronic engineering, including nine months in industry, and joined BP in 1986. It was a brilliant grounding which led to him becoming a chartered engineer.

“It was a little bit of design, a bit of maintenance, a bit of operations,” he says.

“And production support, both onshore and offshore.”

In 1992 he moved to Amerada Hess joining the Scott Project, which was a massive platform in a North Sea oil field that was being commissioned. He was a loss prevention supervisor, a jack-of-all trades based offshore dealing with an assortment of cooks and cleaners, through to engineers and project managers. His job was to get all the pipework and wiring going on this engineering leviathan, so it could produce oil.

He says: “I realised the key to getting things done was people; you needed to have the ability to listen and understand people. The job was about motivating and persuasion and this was a key learning situation for me.”

After this, Keiller was given onshore responsibilities with Amerada Hess, where the company was introducing a SAP accounting system.

“They had it in the US but wanted it in >>

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ENTREPRENEUR place in their European operations,” he says.

“I was asked to head this up with a small team in Houston, Aberdeen, London and Copenhagen. It was my job to co-ordinate the teams to change the business practices.”

When Keiller made the move back onshore, he took a cut in pay, as the allowances and perks associated with weeks on- and off-shore disappeared. He decided that he might need to take a step back in his career to take two more forward, and he also wanted to ensure that his young family were not disrupted with their education in Aberdeen.

“Things were tight financially for two or three years,” he says, “so I cycled the six miles to work every day because we couldn’t afford two cars and my wife needed the car with the car seats because we had two toddlers at the time. I knew it was the right thing. Had I stayed offshore, I would have remained as a supervisor.”

Several years on, senior colleagues suggested he would have to go and work in New York or else move out of the oil industry altogether to further his career. With a son now about to start senior school, Bob decided to leave Amerada Hess and joined Halliburton in January 2002.

Halliburton is a big ticket American corporation – whose former chairman and CEO Dick Cheney came to prominence as defence secretary in President Bush’s Iraq war cabinet – divided into two divisions, the energy services group and engineering and construction under the banner of KBR (Kellogg Brown & Root).

Bob Keiller started in the energy services group but after three months was asked to take over as managing director of KBR’s UK division, which operated out of Aberdeen.

He says: “I would characterise the KBR culture as focused on large projects and some fantastic people and great processes and some really good ways of working, but mostly geared towards selling multi-million and billion-dollar projects. The nature of the business that I was involved with in Aberdeen was about providing services. As a result, the fit wasn’t natural. There was nothing wrong with KBR’s offer than they were focused on other stuff than we were doing.”

In 2004, Keiller was promoted to run the

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whole KBR Production Services business, which meant taking on global responsibilities outside the UK. It was then that he gained a much wider appreciation of how the firm operated and the priorities. Within months, he and his colleague Duncan Skinner formulated their cunning plan.

“This business could be potentially more successful if it was spun-out and run in a less-constrained way using the principles we’d learned by being part of the Halliburton Group,” he says.

In early 2005, the pair went to meet chief financial officer Cris Gaut at Halliburton’s HQ in Houston to suggest a proposition.

“I didn’t want to regret something I didn’t do,” he says. “I’d much rather regret something I tried to do. We felt that we had to make the pitch, but it was pretty scary.”

There were obvious problems to surmount; the business wasn’t for sale, Keiller and Skinner didn’t have several hundred million dollars tucked away, and they had no idea how much the company was worth, even if they could raise the money. They also had to explain to Gaut why it was in Halliburton’s best interests to sell the business.

“We didn’t know where to get the money – or how much it would be,” he says. “There was a fair chance we might even get fired.”

But Halliburton has a history of divestments and acquisitions, so it wasn’t such an out-of-the-blue request for the experienced chief financial officer, although for Keiller and Skinner it was nerve-wracking experience.

“We knew that Halliburton had plans to spin-out KBR as a separate division,” says Keiller. “We felt there was more likelihood of them spinning off PSN separately from KBR. The proceeds would oil the wheels of the larger deal but it wouldn’t detract from the KBR proposition.

“We said, ‘If you sell it to us we would have the best chance of being able to retain customers and staff and therefore the best chance of being able to retain value in the business, which means you will get a better price than you would if you were selling it in an auction.’”

It was a point well-made; and wisely heeded

by Cris Gaut who later agreed that the management buyout would help ensure

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continuity for PSN customers. Gaut and his directors instructed Keiller to firm up the thinking and come back with a proper offer.

The Scottish pair had now crossed their Rubicon, there was no going back.

They returned to Aberdeen and while it was business as usual running the company, there was a period of intense activity which lasted 15 months.

“We thought there was a good chance of us being fired, so it was relatively daunting throughout the whole thing,” says Keiller.

The pair set up an off-the-shelf company with two £1 shares and engaged Simmons & Co International in Aberdeen, working with Colin Welsh, the former RMD energy adviser, and Mike Beveridge and their team. They helped with introductions to potential financiers, setting up the contacts, assessing the valuation and raising hundreds of millions of dollars. A significant introduction was made to the Bank of Scotland’s Integrated Finance team, and Alasdair Gardner, now managing director of Lloyds Banking Group’s Corporate Markets division in Scotland.

“Alasdair came in and a couple of days later Graham Shanklands came up from Edinburgh,” says Keiller. “We took them through what the proposition was and very quickly Graham was able to consult with Peter Cummings (BoS’s head of corporate) and they came back saying, ‘Yes, this is the type of business we’re happy to support.’”

So, in February 2005, the bank provided a letter of support to Halliburton saying that the pair were serious about buying the business. A lead lawyer at Dundas & Wilson remarked: “It’s not the biggest deal in financial terms we’ve ever been involved with, but it’s been the Mother of All Deals.”

Ernst & Young’s seasoned energy expert Alex Carstairs and Bob Rudiman and his team from McGrigors, which was part of Ledingham & Chalmers, also made up Keiller’s team.

It was certainly a complicated deal. It wasn’t a straight share sale, there was no single legal entity but a number of stand-alone business units across more than 20 countries.

“It was like surgery on 20 pairs of conjoined twins simultaneously across all these countries, with all the issues of pensions, competition and trade unions,” recalls Keiller.

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There was a juggling act to be done; winning over colleagues, persuading others that it was a valid concept, speaking quietly to suppliers and customers and treading a tightrope to keep the business motoring along and winning new contracts, all at the same time.

“During that period, we didn’t take our foot off the gas,” says Keiller. “We kept moving forward and growth in the business continued throughout that period. It was about mindset.

“When we came back from that first meeting in Houston we realised there was no going back. We were definitely going to do something or life was going to change in some other ways.”

Nothing is ever done until it is signed and sealed.

Keiller says: “It felt so fragile to me. Given that my background was in projects and project management, I like things that are clear – schedules, deadlines, commitments and scopes that are all tied down and don’t change. I’m told by those involved with the deal that it wasn’t particularly unusual but that it was complex. There were lots of false deadlines.”

It was educational and there were difficulties keeping the team motivated, telling them that it was worth all the effort.

“You’ve got to have faith that this is worth doing. It’s worth all the effort,” says Keiller.

His key managers were offered a stake in the new entity but he was blunt, telling them: “These shares today are worth nothing, because we have a business that has more debt than value, but these shares at some point in the future could be worth a substantial amount of money, if we all get stuck in and do a really good job.”

For an engineer, Bob Keiller is an A-star communicator. He’s a charismatic personality with a great sense of humour and loves lobbing in a few jokes – with his recent chairing of the Entrepreneurial Exchange dinner showing that he can give funnyman Fred MacAulay a run for his money.

He used these skills to great effect, ensuring everyone that the energy services company was fundamentally a great business and that it would continue to be a great business.

“We were paranoid at times about any speculation about things that were happening,” he says. “We were very tight

ENTREPRENEUR

It was educational and there were difficulties keeping the team motivated and worth the effort about who we could and couldn’t tell. But, eventually, there was so many people involved, it became relatively common knowledge about what was under way.”

Keiller reckons the whole 15 months worked in his favour because it gave people time to come to terms with the new state of affairs.

Even more reassuring was that not a single customer ditched their contracts when the new entity emerged.

“Our customers recognised that what we were trying to do was potentially risky, but that the relationships we had with them were strong, and they were willing to support us,” he says.

The deal was concluded in split signings. The key documents were signed on March 15 2006 but final completion was on April 30

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2006. The deadline was May 1 and the completion – with sighs of relief – was done at ten minutes to midnight at McGrigor’s office in Aberdeen. The announcement was made the following morning.

“I was told it was always like this but I was still anxious that the whole thing might unravel at the last minute,” says Keiller.

Then the gravity sank in. There was an electronic transferral of $280m and on top of this PSN needed additional funding for on-going activities, with revolving credit facilities for working capital. In all, a funding parcel of $400m was agreed. HBOS helped with all of this, providing debt and equity.

Once this was in place they syndicated the debt down to other banks and investment houses with 17.5% passed onto West Coast Capital which was one of the investment vehicles for Sir Tom Hunter.

But this story is part of the wider banking crisis. The collapse of Bank of Scotland, and the subsequent merger of Bank of Scotland and Lloyds TSB to create the Lloyds Banking Group, has meant drastic changes. For PSN, it has been relatively clear-cut. Today 42.5% is owned by the management, mainly the seven key managers, plus others who were involved at the time; 40% is owned by Caird Capital, which is a joint venture between Lloyds Banking Group and Coller Investment, set up to look after the major assets of HBOS Corporate, and the remaining 17.5% is owned by a variety of third party and external investors.

Throughout the summer of 2006, Bob Keiller spent time selling the sizzle around the new business while his management team had a lot to do.

“We didn’t have time to draw breath,” he says, recalling that 6,000 employees worldwide needed to hear from the new boss.

Keiller went on the road to meet staff and customers from Sakhalin Island, Kazakhstan, Azerbaijan and Africa to Egypt.

There is a large debt to service, but with a stream of contracts in the pipeline, there is little need for nervousness. And, PSN’s core values are the drivers for the business.

“It’s about doing it right and winning as a consequence of that. Integrity matters to all of us at PSN,” says Bob Keiller. n

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INTERVIEW

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A bull’s eye for business

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Sport and business are interlocked, as Kenny Kemp discovers from Commonwealth Games gold medallist Susan Jackson The boardrooms of Scotland are festooned with leaders who have savoured success in sport, often representing their country. From rugby internationalists, through to golfers, tennis aces, runners, cyclists, and even lawn bowlers, companies benefit from the unique competitive input of sportspeople who have battled with success and failure.

Susan Jackson is one of this elite group. She is a record-holding markswoman with the full collection of Commonwealth Games bronze, silver and gold medals on her mantelpiece.

She is also a qualified chartered accountant and a former assistant director in corporate finance with one of the Big Four accountancy firms. But she was attracted by the increasing possibilities of business and sport working together to enhance our society, so she joined Winning Scotland Foundation, where she is now its senior director.

Scotland has some unfortunate personal bests.

We’re in the European Champions League for obesity, the Premier League for heart disease, and climbing the division on diabetes – fuelled by sugar-rich diets and lack of exercise – and we’re table-toppers in the field of alcohol and drug abuse. Vast improvement in our national health and well-being require joint action on concerted fronts, with business, sport and Government now more engaged than ever before in working in partnership to overcome some of these chronic hurdles. Winning Scotland Foundation, based near Haymarket Station in Edinburgh, is committed to raising the bar in Scotland and encouraging everyone to become more positive by embracing sport and activity so they can achieve something more with their lives.

Susan Jackson is the full-time executive director with a number of pilot projects under her wing. The core programmes she oversees are Champions In Schools, where Scotland’s top athletes deliver workshops on nutrition, activity, achievement and attitude to schoolchildren; Positive Coaching Scotland, a cultural change initiative which champions

respect and effort as the key principles underlying all youth sport; and more recently, Work Out For Sport, backed by Deloitte, which aims to place professionally qualified business people into sporting organisations as volunteers. She is a woman who understands the power of sport to transform people’s lives.

While Winning Scotland is the original brainchild of Sir Bill Gammell, the head of Cairn Energy and a former Scottish rugby internationalist who set aside several hundred thousand pounds to establish the charitable organisation, it is now evolving into something beyond a single figurehead. Increasingly, Winning Scotland Foundation is invited to sit at the top table with policy makers, health officials and civil servants, tapping into its connection between business and sport.

Alongside some sporting figures, such as Olympian Shirley Robertson and tennis coach Judy Murray, its advisory board is a who’s who of senior Scottish business figures, among them Dr Ali Afshar, the founder of property company AMA Developments; Angus Cockburn, the finance director of Aggreko; Richard Emanuel, of Interactive Telecoms Solutions, and Colin Grassie, chief executive of Deutsche Bank in the UK. The management board includes Andrew Pert, founder of Search recruitment consultancy; Simon Thomson, head of legal at Cairn Energy; Mark Little, who heads up Barclays Wealth in Scotland; Lindsay Whitelaw, a director of fund management house Artemis; Professor Alistair Gray, former director of pmp Genesis consulting, and Celia Tennent, head of funds at Inspiring Scotland.

So this is an organisation with more business

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clout on hand than almost any other in Scotland. Expectations are high. The pressure is on Susan Jackson and her team, which includes Scotland’s rugby attack coach Gregor Townsend, to deliver fresh thinking.

Jackson, 37, is well used to pressure; she thrives on the stuff when it comes to competition. As a Scottish chartered accountant – she was ICAS’s top student in 1998 – she undertook a year in audit before moving into transaction services for Deloitte & Touche. Although based in Edinburgh, she had an international roving role with the London office, undertaking the vendor due diligence on dozens of deals. She was seconded to Abbey National when it was selling its vehicle leasing division; worked on an oil refinery sale for AkzoNobel in the Netherlands, and spent time on projects in Houston and Rio De Janerio, eventually becoming an assistant director in the corporate finance team which was expanding rapidly.

Business is riddled with sporting metaphor, so we could say that Jackson is a woman of exceptional calibre. With London’s 2012 Olympics just 18 months away and Glasgow 2014 now firmly on the horizon, Jackson sees Winning Scotland playing a central role in helping deliver a legacy for all the physical and sporting investment that has been made.

She feels business people are uniquely qualified to help.

“What has become apparent is that business people in Scotland can put a great deal back by applying their professional knowledge to help sport,” she says, “and therefore to encourage a younger generation of people to become involved and take part.

She is sitting in the foundation’s board room with the slogan: “Everyone’s got it in them to be someone” etched in lettering on the wall.

She was in Delhi during the Commonwealth Games on the Achieve 2014 programme, >>

What has become apparent is that business people in Scotland can apply their knowledge to help sport

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Dedicated: Susan Jackson is one of Scotland’s most accomplished athletes which allows young Scottish athletes and coaches with potential to sample the atmosphere of an international multi-sport event. Jackson was a mentor for the shooters and the weight-lifters. Scotland’s shooters won four golds and three silvers, making them one of the nation’s most successful disciplines.

“It was interesting to see the media scrum, the cheering and the noise around a home nation winner. (Gold medal shooter Abinav Bindra – also an Olympic champion – from Punjab was India’s nation hero). I said, ‘Watch this, because come Glasgow, when you guys win

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your gold medals, that’s what’s going to happen.’”

For many years, Scotland’s educational thinkers and teachers shied away from the idea of young people competing against one another in the school environment. However, it is now recognised that this was a one-way trip to collective mediocrity and a lack of personal fulfilment for many. And while Generation X Factor appears to thrive on watching popular entertainment as faux competition, the reality is that young Scots need to understand how to deal with the competitive world of work

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and business and the impact this has on everyday life.

What they need is proper mentoring and coaching, to gain an understanding of their own strengths, and then find ways of reaching their own individual personal bests, which is actually where Winning Scotland Foundation is situated.

Jackson knows what it is like to compete at the extremes. Her event is smallbore rifle shooting, where a competitor has 60 .22 bullets to fire at a target 50 metres away in 75 minutes. Hitting the bulleye secures 10 points: so 600 is the maximum score. In the prone individual smallbore, Jacksonn’s personal best is 594 – a British record at the time. It requires a meticulous approach to fire a projectile at an electronic target in the open air when there are wind factors to consider.

To reach the pinnacle you need superb concentration skills, poise and body control.

And, because it is a repetitive sport, snap-in and snap-out focus. Firing, says Jackson, is a subconscious, mildly hypnotic, state where you gently squeeze the trigger when the sights are aligned.

Susan Jackson has always been a keen sportswoman, but her passion was for skiing and she spent every winter weekend on the bitingly cold slopes of the Cairngorms, where she was a member of the ski club.

Born in Edinburgh, her family lived in Dunfermline, and both of her parents were skiers. She and her brother Peter, who is three years older, were competitive racers from 12 until her twenties. Her dad, Pete, was also a member of Dunfermline Rifle Club and when he took along her brother it sparked a bit of sibling rivalry which encouraged her to go too.

“My philosophy was that anything my brother could do, I could do better,” says Jackson.

“My interest in shooting definitely stems from the Dunfermline club.”

At 13, she attended Dollar Academy, with its strong cadet force heritage, and was able to join the shooting club at 14, trying out smallbore and fullbore rifle. In 1991, at Edinburgh University, Jackson skied competitively, gaining a blue, but the lure of the shooting range in the basement of the Pleasance, familiar to Festival Fringe goers, was far greater.

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“I was the first woman captain,” she says.

“There was a group of us who were very keen competitively.

“Then I joined a very strong graduate club, EU Alumni Rifle Club which had an outstanding number of international sportspeople, including some of Scotland’s finest shots; Shirley McIntosh, Donald McIntosh, Bill Murray, Gordon Winch and Cliff Ogle, who has represented GB and Northern Ireland.”

In 1994, Shirley McIntosh and Tricia Littlechild returned from the Commonwealth Games in Victoria with silver medals in the prone pairs, with McIntosh winning the individual prone gold.

“It was the first time that women’s shooting was separate,” says Jackson. “Previously it was a mixed sport and this was the first time the events had been split. Right in front of me were two winners with medals – it was hugely inspiring for me.”

Jackson, then Susan Bell, was encouraged by Shirley McIntosh to take part in international shooting, aiming for the GB squad. She began to show real promise and won the Scottish trials for the 1997 Commonwealth Championships in Malaysia, setting a new Scottish record. Shirley McIntosh was her partner in the pairs and the following year they headed to the 1998 Games, where they won a bronze. Success continued with a silver medal with Sheena Sharp in the 2002 Manchester Games, which was “a fantastic experience in front of a home UK crowd – and one of my proudest moments.”

“We came extremely close to winning the gold medal in Manchester – we were one point off,” she says. “I knew there was more in me. I had this feeling that I would only stop my shooting when the time was right for me, not for other circumstances. I wanted time to shoot and also to do my work.”

In 1999, Scotland’s Institute of Sport was formed and National Lottery funding was spilling through, Jackson was invited to join the institute as one of the early athletes. Then in May 2005, she was invited by the Institute to go full-time, taking a 12-month sabbatical from Deloitte. Her aim was to win that elusive gold medal.

“I trained as a full-time athlete and it was the most amazing experience for me,” she says. “I

was able to immerse myself totally in my training and gain access to so many more services from the Scottish Institute of Sport because I had the time. So I had strength and condition and nutrition support, which helped my core strength for a steady firing position.”

This allowed her to focus full-time on winning a medal. By the time she went to Melbourne in 2006 she was in prime physical and mental condition.

“Again I partnered with Sheena and we achieved the gold medal in the pairs,” she says. “You also shoot in the individual events, and in all three Games I aimed for a medal, but I was gutted to come fourth in the individual event in Melbourne.”

It’s an experience that still hurts to this day – and has been catalyst for learning about winning and nearly missing.

“I might have a gold medal but I never quite achieved what I could have done as an individual,” she says. “It’s pretty hideous to come fourth three times in the individual event. I’m obviously pleased to have a medal from each of the Games that I attended but there was always more.”

“My husband Angus, who is also a shooter, supported me fantastically through the full three cycles of the Commonwealth Games.

Family support is so critical,” she points out.

After Melbourne, Jackson returned to the pressure-cooker of Deloitte’s transaction services team, where diligence on acquisitions was often a rush job involving all-night sessions to deliver reports on time. With her first child on the way, and never-ending international travel, the work front was becoming more arduous. So when she read in a newspaper about Bill Gammell’s vision and his fledgling Foundation, she became interested in offering her help.

“From my point of view it was a huge leap of faith because the Foundation was small with

INTERVIEW

only a few people then and the job spec was pretty vague at the time,” she says.

“I spoke to Angus and we made the lifestyle decision to leave my well-paid job behind and work for a charity. It combined my skillsets of corporate business and, because sport was a big part of my life, I had this passion to work in sport.”

The departure of the CEO brought an opportunity for Jackson to take the lead.

Her full-time arrival at Winning Scotland meant a cut in her corporate salary, but she felt it was the right time to be able to put something back.

“It was a unique opportunity and when Bill and the board asked me to take over as director I didn’t have to think twice,” she says.

Winning Scotland Foundation is all about working with partners and using its leverage to make change happen. With the Foundation’s goal of developing young people in Scotland using sport as the mechanism, Susan Jackson and her team have their eye on the legacy from the Olympics and the Glasgow Commonwealth Games. Its projects are aligned to making a difference to tens of thousands of young people across Scotland.

“We can add value where others cannot,” she says. “We have a business approach and background, and we are able to bring partners to the table that others simply can’t. We’ve gained massive support at a senior government level.

“If you look across our board, our advisory board and our management board we can bring a lot of accumulated wisdom and knowledge to the table. If leading business can provide their time to coach or mentor future winners in Scotland, this is an outstanding achievement. If our schools and sports clubs can become better, by bringing in best international business practice, I think we’re on to something radical and life-enhancing.” n

Jackson knows what it is like to compete at the extremes. A competitor has 60 .22 bullets to fire at a target 50 metres away

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COMPANY PROFILE

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It is not just your banking partner that must be fit for purpose; their finance products must be too. So how do you choose the right finance for your unique ambitions and business requirements?

Choosing the right kind of finance

T

here are few things more important in business than choosing the right kind of finance from a bank who understands your business, the industry you’re in and where you want to be. The right bank will be there for you throughout the economic cycle of your business.

We know that the key to the country’s economic recovery is held by its thousands of small and medium-sized businesses, and having an open and honest dialogue with your bank can help ensure the right financial solutions are in place to help your company flourish.

With businesses increasingly focusing on risk, it is crucial to choose finance that is fit for purpose.

To ensure that this happens and to gain the confidence of your lender/investor, the following steps are essential: • The first step in understanding whether the finance model meets the business’ needs and in securing the appropriate finance is to plan.

A robust business plan with detailed forecasts, including contingencies, is fundamental.

• Secondly, seek guidance. Your bank’s relationship manager can be a good first point of contact as they will have an understanding of your business and a view of what financial products could be of benefit.

Accountants and Financial Advisors are also a good source of advice.

• Thirdly consider the options. Informed by your business plan and fortified by tailored advice and guidance consider which financing options will meet the business’ needs in the short-, medium- and long-term.

As businesses meet the day to day demands placed upon them, having the security and flexibility

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of working capital is paramount and short-term finance, such as securing an overdraft, is often viewed as a viable option in the first instance.

For machinery relocation specialist Haas-Tek Services, finding a bank that understood

Key Waste Management

Key Waste Management, which operates across the Borders and East Lothian, has recently changed its financing structure.

The company previously operated its vehicles on a contract hire basis, but has recently undertaken a hire purchase agreement to purchase an additional two vehicles, saving the business a considerable sum.

Alongside the company’s factoring facility, which allows it to realise payment upon service completion, the refinancing has freed up cash, enabling Key Waste Management to pursue its longer-term plans. Co-director, Kate Lynn, is confident that the business can achieve the 10% increase in turnover planned for the current year: “Purchasing vehicles rather than leasing them provides a huge cost saving for the company, and provides a great platform for the growth of the firm in 2011.”

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its working capital needs allowed it to grab opportunities thrown up by the downturn. With cashflow the company’s major challenge, Bank of Scotland’s individual approach really came into its own. Finance Director, Stephen Salt, agrees: “We have a very capital intensive business.

When we buy equipment there’s no credit; anything we buy has to be paid for straight away. Nor can we delay purchasing if cashflow is tight, we have to buy immediately or lose the opportunity. Fortunately, Bank of Scotland was able to extend our overdraft facility.”

For Haas-Tek, an overdraft facility supported its business model of upfront payment outflow and later cash inflow (see case study, top right).

An alternative, which also helps improve cashflow, is factoring. By bridging the gap between supplying services and receiving payment, factoring can provide businesses with a cash injection to make the most of new opportunities, whilst also mitigating the risk of default. It can be a huge boost to a company’s trading position (see case study, left).

But sometimes, particularly in periods of intense economic swings, businesses need to consider longer-term options. Whether it’s to capitalise on an upturn, or restructure to survive a downturn, term loans are a more structured borrowing method. Security over a company’s asset (whether equipment or stock) or some form of guarantee also characterise this financing method, making it suitable for the purchase or refurbishment of premises or other fixed assets. And, because the loan is backed by tangible security, the pricing often reflects the lower risk profile.

For restaurant owner Tony Crolla, securing a sixfigure term loan from Bank of Scotland to fund

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the right funding and guidance can liberate your business and allow it to capitalise on opportunities as they arise. the key is to match your financing to your business purpose the refurbishment of his Vittoria Restaurant chain, was key to his strategy to maintain a fresh and up to date brand (see case study, below right).

Higher risk businesses, including business start-ups or unproven technological development, may be better considering equity investors, prepared to accept increased risk for the chance of greater returns. Business Angels or Venture Capitalists will consider equity investment, when the debt path is deemed too precarious or costly.

The right funding and guidance can liberate your business and allow it to capitalise on opportunities as they arise. The key is to match your financing to your business purpose. Bank of Scotland is committed to understanding the requirements of your business and providing you with the right funding to make your business plans a reality.

COMPANY PROFILE

Haas-Tek Services

Haas-Tek Services bucked the trend during the downturn – demand for relocating factories, equipment and large machinery was high.

By diversifying into Europe and moving from

purchasing equipment to securing whole factories and auctioning equipment in situ, the business successfully navigated the economic challenges, supported by long-term banking partner, Bank of Scotland. Finance Director, Stephen Salt, describes the flexibility of approach he values: “By understanding the business so well, the Bank was open to extending our overdraft, meaning we could secure a number of deals we would otherwise have missed.”

The flexibility of the overdraft facility exactly matched Haas-Tek’s business needs.

Vittoria Restaurants Tony Crolla’s businesses have grown with Bank of Scotland over the years and the company has accessed a range of finance methods to help with the expansion and meet its various needs. Beginning with buy-to-let funding introduced by an IFA, the business has recently secured a six-figure term loan from the Bank towards the refurbishment of Crolla’s latest business venture, Divino.

“I have a very friendly and open relationship with the banking team – they call a spade a spade,” Tony says of his years with Bank of Scotland. “They appreciate my experience and I plan carefully – this is a family business, which I hope to pass on to my sons. I wouldn’t do anything to jeopardise that.”

For more information ABOUT how Bank of Scotland can work with you and your business, please contact YOUR NEAREST AREA DIRECTOR: Ian Collins East of Scotland Area Director, Commercial 07764 287926 ian.collins@lloydstsb.co.uk Craig McNaughton West of Scotland Area Director, Commercial 07970 586261 craig_mcnaughton@bankofscotland.co.uk Graham Blair North of Scotland Area Director, Commercial 07887 821138 grahamblair@bankofscotland.co.uk

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 status and we will need your permission to carry out a credit check on you and your business.

You should not apply for an amount that you cannot comfortably afford to repay now and in the future to avoid the possibility of legal action.

Please remember we cannot guarantee the security of messages sent by email.

Bank of Scotland plc. Registered in Scotland number SC327000. Registered office: The Mound, Edinburgh EH1 1YZ. Authorised and regulated by the Financial Services Authority under number 169628.

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 www.lendingstandardsboard.org.uk Lloyds TSB Bank plc Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 020 7626 1500.

Lloyds TSB Scotland plc Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. SC95237.

Telephone: 0131 225 4555.

Factoring, Invoice Discounting, Hire Purchase and Leasing facilities are provided by Lloyds TSB Commercial Finance Scotland. When using these products and services your agreement will be with a Lloyds Banking Group company whose terms and conditions will apply.

Lloyds TSB Commercial Finance Scotland is a trading name of Lloyds TSB Commercial Finance Scotland Ltd. Lloyds TSB Commercial Finance (Scotland) Ltd. Registered Office: 110 St Vincent St, Glasgow, G2 5ER. Registered in Scotland No 93252.

Part of the Lloyds Banking Group. The Lloyds Banking Group includes Bank of Scotland plc and a number of other companies using brands including Lloyds TSB, Halifax and Bank of Scotland, and their associated companies.

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Bringing business to the boil BUSINESS QUARTER | WINTER 10

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INTERVIEW

Scotland’s emerging entrepreneurs require a vital combination of investment, nurture and rock-solid advice. Jim Boyle of Deloitte tells Kenny Kemp that first-hand experience in the white heat of a deal is worth its weight in gold Jim Boyle admits he’s been a lucky guy in business. He has had a ringside seat at some of the most important business transactions involving Scottish firms over the past 20 years.

And, despite the temporary trauma of being one of the refugees when Arthur Andersen collapsed after the Enron scandal, he’s had a very interesting career for someone still under 40.

Glasgow-born Boyle studied accountancy and economics at Strathclyde University, qualified as an accountant and then joined high-flying Arthur Andersen before the lights went out. It is interesting to remember that the accounting giant was broken up in 2002 after being found guilty of obstructing the course of justice in the United States – a conviction subsequently quashed by the US Supreme Court in 2005.

He then segued across to former rivals Deloitte & Touche with a range of other Andersen’s confederates who morphed easily into the new culture. But it was an early period as an Andersen’s auditor that threw fresh-faced Boyle in at the deep end.

“Throughout most of the 1990s I was exceptionally lucky in that my main audit clients were Stagecoach, Kwik-Fit, Johnston Press and DX Communications,” he recalls.

He worked on Stagecoach’s flotations and their early acquisitions including Kenya and Malawi; the purchase of Porterbrook, the rail leasing business, and Stagecoach’s expansion into the North-East of America with Coach USA. At Kwik-Fit he was involved when it was bought out by Ford, while at Johnston Press, he worked when Freddie Johnston was handing over the reins as the Edinburghbased company continued to expand its UK local newspaper empire. On top of this, he was there when Richard Emanuel and Chris Gorman sold DX Communications to BT Cellnet for £42m.

“I probably didn’t realise it at the time but

I was totally spoiled by working alongside some of the country’s most pre-eminent entrepreneurs,” says Boyle. “These were ambitious, growing Scottish companies. I was a wee laddie in my early twenties having a chat in the corridor with Tom Farmer and sitting at meetings in London with Brian Souter. You can’t help but learn from that kind of experience.”

Jim believes that sitting in the white heat of this kind of business crucible, and watching how deals are carved out, is vital inside knowledge that can be passed on to aspirational businesses. But along with the high octane, there are more “mundane” activities that are equally essential.

“Being an auditor is a great way of getting under the bonnet of a business and understanding what the key issues around the boardroom are in terms of strategy,” he says.

“The type of work has changed dramatically and it is not about blindly going away and ticking boxes. It is about understanding what the big management decisions are in any given company.”

So what did a Glaswegian auditor recognise as the attributes of the successful business people he was shadowing?

He says: “I could see they all had focus and commitment. At Stagecoach, it was absolute attention to detail and having the eye on the ball all the time. Brian Souter is exceptionally shrewd and very much into the detail. He will know which of the bus or train routes are performing and which require his management’s close attention.”

Jim Boyle agrees that Stagecoach experienced turbulence when it moved into buying up mom-‘n’-pop American bus companies, and says this might have been a case of stretching too fast or too far, and the prevailing market conditions. This was also a time when the bold Mr Souter stepped back for a while before returning to the helm. Boyle says the

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successful return shows the exceptional stature of the Perth-based transport entrepreneur.

Was it a time of milk and honey and easy-toget money?

“Availability of finance was not exactly unlimited, but it was certainly a different era from now,” he says. “It was easy to be seduced by acquisitions when the money was on the table. Maybe, with hindsight, everyone realises that perhaps many businesses had become over-leveraged.”

For two and half years, Jim Boyle has been head of Deloitte’s Entrepreneurial Business Team in Scotland.

“Today, there’s nothing I enjoy more than meeting growing businesses and getting on board with them,” he says. “It’s a real learning curve for both of us.”

He has a number of current entrepreneurial clients, including 3D Diagnostic Imaging, which announced its initial public offering on AIM, raising £2.7m – and is a spinout from Dundee University – and Clintec International, founded and headed by Dr Rabinder Buttar, one of Scotland’s most successful businesswomen and a finalist in the Ernst & Young Entrepreneur of the Year awards in 2009. Dr Buttar, a Strathclyde University graduate, brought the business over from Germany and has been building the Finnieston-based company into an international clinical research business.

It recently sold a stake to a major Indian company.

Boyle has also been looking after more traditional retail companies, such as Scotmid, which is leveraging the co-operative and mutual model to take on the big supermarket chains.

“A lot of businesses are now starting to do things,” he says. “For 18 months we had nothing but negative news and few transactions, and these were often distressed transactions at the bank’s behest. We’re >>

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INTERVIEW

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What you should be getting from larger organisations is access to a wider skills set of advisers and a broader industry mix Man in the middle: Jim Boyle likes nothing better than getting his teeth into acquistions, capital investment and expansion now seeing more of our clients looking at acquisitions, expansion and store openings.”

“One of the big roles we have is with the Entrepreneurial Exchange, where we are a corporate member. We are the award sponsor, doing most of the legwork and analysis for the annual Entrepreneur of the Year programme (the winners are in the new section of this BQ).

“In the first instance, we do an independent assessment on behalf of the Exchange, looking at the growth story. Then there are the key questions; what is the company’s USP, where are the markets, how well do you know your competitors, and how are you incentivising and retaining key staff, what’s your succession and exit plan. And, being accountants of course, what does the cash flow look like and how’s the relationship with your bank?”

For Boyle, this has created new relationships, but it begs another question. Aren’t Scotland’s young companies reticent to pay top dollar

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for a Big Four advisory service when there are a myriad of small accountancy businesses across Scotland providing excellent services for emerging customers?

“In the last year we have taken on five or six new clients from mid-tier firms virtually with no differential on price,” says Boyle. “There is a misconception out there that a Big Four adviser is more costly. Yes, if it’s a two-partner tiny accountancy firm, but there are different levels of expertise and advice required.

“What you should be getting from a larger organisation is access to a wider skills set of advisers and a broader industry mix.”

He says that a lot of Scottish businesses look at commercial advisers as a price-based commodity and they are not looking for the value that can be added by this wider experience. He feels entrepreneurs could be missing out on the knowledge or even the market intelligence that could make

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a sea-change for the firm.

Although Scotland requires a clutch of highgrowth companies that can feed off the accumulated knowledge of advisers such as Jim Boyle, he remains heartened by Scotland’s buoyant entrepreneurial sector.

He says: “My team thoroughly enjoyed meeting this year’s candidates for the Entrepreneur of the Year Awards and I personally enjoyed interviewing the six finalists as well as a number of the other candidates.

“After a few years when caution was the buzzword for many, it’s fantastic to hear so many tales of branch openings, strategic acquisitions, significant capital investment, fund-raising, new product launches, overseas expansion and growing headcount. All in all, a real cause for optimism.“ That’s the judge’s verdict, so let’s hope Scotland sees many more emerging businesses in 2011. n

ENTREPRENEUR

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Where business angels tread What a great wheeze. Take one of Scotland’s most prominent business angels to his nearby church and have him pictured looking up at the ornate cherubim carved in the 16th century stonework. Cliched?

Cheesy?

Well, not when the local place of worship is the stunning Rosslyn Chapel, which opens its new visitors’ centre in 2011, and the person in question is Nelson Gray who was named European Business Angel of the Year in 2008 by the European Business Angel Network in recognition of his work in developing the

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angel investing community across developing nations.

Last year 130,000 visitors made the trip – or pilgrimage – to Rosslyn Chapel, many inspired

by Dan Brown’s blockbuster The Da Vinci Code which reaches its hard-to-believe dramatic denouement near the beauty spot. The chapel, founded by the St Clair family, and its strange and wonderful story, remains a major tourist attraction for Scotland and the sleepy Midlothian village of Roslin.

But Nelson Gray, a large-framed individual in his early fifties, is a less obvious attraction, although from his home at Firth House, you can see the rooftop – with the temporary roofing now gone – of the historic chapel. Yet tea at Gray’s home in Roslin Glen is a port of call for many fledgling spin-out business people seeking sage advice on commercialising their ideas or innovation.

Here, alongside his bonhomie, Nelson dispenses a wealth of knowledge about Scotland’s angel investment community and how important it is to our success. He sees the future actions of an economic development agency intrinsically linked with continuing to foster and develop ties with the angel network.

As the former fund manager for both East of Scotland Investments, Strathclyde Investment Fund and an executive director of LINC Scotland, the Scottish Angel Capital Association, he is well placed to comment on the need to encourage more investors to step up to the plate. Angel investing is a welltrodden path for Scotland’s successful

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entrepreneurs looking to use a proportion of their cash to help create businesses for tomorrow. LINC has played a significant part since 1993. Scottish Enterprise stated recently that since 2003 more than £400m of risk capital has been leveraged to help young companies, with £138m from ERDF (European Regional Development Fund) and Scottish Government and a further £280m through private sector partners, much of this angel investment.

“There are risks involved – no doubt about that,” says Gray. “Angels must be prepared to lose all of their initial investment if a company goes pear-shaped, but the rewards on success are two-fold; a significant return on investment, and fantastic satisfaction from supporting Scotland’s new entrepreneurs.”

BQ Scotland managed to persuade Gray to make the early morning trip to the chapel for its photo-shoot. After a quick tour, Gray’s conversation turns quickly to the news that two growing Scottish technology companies have recently been sold. Edinburgh-based Mobiqa, experts in mobile ticketing run by Nick Rankin and Ronnie Forbes, has been bought by NCR, while Mpathy Medical, founded by Dr James Browning and backed by Archangels and Scottish Enterprise, has been sold for £22m to a Danish company.

“The point is, it is not selling off,” says Gray.

“It’s allowing the companies to go to another stage of their development. So if you look at something like Mobiqa, it’s been a start-up and an R&D company that has developed great intellectual property. It’s now been >>

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ENTREPRENEUR

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ENTREPRENEUR bought by NCR. I don’t see that as a loss to Scotland – or a sell out. What we’ve established is a new R&D presence in Scotland for a global company, and they will continue to develop that and provide more jobs and access to a global market. I think that’s a good thing and it shouldn’t be seen as a negative in any way.

“Money goes back into the angel network and into Scottish Co-Investment Fund that then gets put back into the next series of start-ups.

I think Mpathy Medical is the same. You have a company which angels put in something like £5m and Scottish Enterprise has put in a bunch of cash. They have doubled their money. The Archangels are getting back £11.8m and Scottish Enterprise £4.2m. That money will get recycled, both out of the angel community and the Co-Investment Fund.

“We need companies going through that cycle, both to provide the money for the next generation of new companies to build our entrepreneurial experience, to inspire new entrepreneurs to have a go, and to encourage more people to become investors.

“I think the R&D base and the jobs will stay here in Scotland but the link to another international company accelerates the growth far faster than any amount of cash would have. You need that global reach.”

Nelson Gray has been involved in a large number of SMEs at senior level including roles as owner manager, non-executive director, mentor and investor, both privately and on behalf of regulated funds.

He says: “I started Gap Fund Managers in an empty room with no telephones and built a staff of 12, based in two offices, who with funds of £15m, invested in 53 companies across the central belt of Scotland over a four-year period.”

These funds were the first in Europe to receive ERDF support and set a new precedent for the use of structural funds to support early stage equity funding.

“The EU refers to these types of program as ‘financial engineering’, which may sound a bit dodgy,” he says, “but has eventually lead to the hugely successful Scottish Co Investment Fund, a model now being copied around the world.”

Since 1996, Nelson Gray has invested

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The customer has to understand the commercial benefit. It’s what it does that’s important, not how it does it

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personally in 21 companies. He’s the first to admit that not all have been winners.

“Some have been horrendous, all have been learning experiences, a few have been sufficiently profitable to make me stay in the game,” he says.

Nelson Gray’s father set up a debt recovery and sheriff officer’s business in 1948. He worked in the family business from an early age, usually during his holidays, although didn’t join full-time, studying instead at Strathclyde University before qualifying as a chartered accountant in 1981.

“My initial role as a partner was to modernise the central administration, finances and technology to move it into a modern service industry,” he says. “And I had to break down many preconceptions about the business, hiring quality management in the areas of finance and computer technology.”

Gray set up separate service companies to attract the appropriate staff and over the next decade develop a computer network linking the 12 offices. The company built its own bespoke software solutions to handle high volume transactions. By 1992 the business employed more than 350 people with annual profits of £2.5m. He sold the enforcement business in a management buyout, but retained the debt recovery side which continued to grow. From Edinburgh, he developed a national service covering the UK. This business was sold to Otto Versand, based in Hamburg and the largest mail-order company in the world with a turnover of 25bn deutschmarks, which had recently acquired the British mail-order firms Grattan and Freemans. Gray remained as managing director for two years but resisted a proposed move to Warrington and was given the Alan Sugar treatment. After being fired, he decided he wanted to assist Scottish businesses.

Among the first was Optos, where the then chief executive Douglas Anderson was establishing an accounting system, recruiting his first accountant. Gray became an investor; Optos is now a leading Scottish retinal imaging company – listed on the stock market – that is preventing people from going blind.

With this under his belt, Gray worked alongside investment teams at Scottish Enterprise (subsequently Scottish Equity

ENTREPRENEUR

Partners) and became involved with Excell Biotech Ltd, a biotechnology manufacturing company based in Livingston.

“We rescued it out of receivership,” he says. “I organised the initial funding, the partnering agreement with the Moredun Research Institute, and initially acted as managing director. I saw my job as keeping one of the founders locked in the laboratory manufacturing product and the other founder locked out of the office selling it.”

Excell was acquired by QBiogene Inc of Canada and eventually built a state-of-the-art manufacturing plant for stage three clinical trial product in Livingston.

Today Gray maintains his interest in life sciences through his involvement with Antoxis, a drug development company.

He says: “Initially my appointment was to be a non-executive director and represent a group of business angel investors, but I was appointed chairman.”

The roll-call of companies tapping into Nelson Gray’s expertise is as long as your arm. He worked at board level with Obvious Solutions, a recruitment firm providing enhanced selection by employing video-based interviewing – eventually sold to Stepstone, a Norwegian-listed company. He was on the board of Clydebank-based Clyde Broadcast for four years as they built radio stations for the BBC and commercial radio broadcasters such as Virgin.

He advised Edinburgh-based Allander Print Company which has been in existence for ten years and had a turnover of £3m, and the buy-out team for McGowan’s toffee, the iconic confectionery brand set up in 1902 which had changed hands several times.

He was a board member of the Entrepreneurial Exchange for seven years, helping to shape its corporate governance structures which have allowed it to continue to grow and adapt to the changing needs of its members.

Meanwhile Gray’s advisory work has taken him all over the globe, delivering seminars in 14 countries, including Russia – all the way to Vladivostok – Chile, India and the United States. He delivered a set-piece speech on angel investing to a United Nations Economic Commission for Europe (UNECE), he has spoken at the Inter America Development

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Bank in Washington, the Organisation for Economic Co-operation and Development (OECD) in Paris, and helped former Soviet weapons scientists find ways of commercialising their research in the civilian market. But at heart he loves helping companies see the wood from the trees.

“I was involved with the board of Memex Ltd, based in East Kilbride, after securing its initial funding,” he says. “The company provides software-based intelligence systems, primarily for police and security services. Turnover was around £7m a year. It has an international customer base and applies great technical complexity in many of the systems.”

David Carrick, Memex’s chief executive, says Gray’s strength is that he asks the simple questions that were often difficult to answer, and does not accept the first answer.

Gray says: “I often say that a company’s technology might be world-beating but the customer has to be able to understand its commercial benefit. It’s what it does that’s important when pitching, not how it does it.

“Throughout my business life, I have tended to look at things from a slightly different point of view from the others around the boardroom table. Following the sale of my own business, I became an angel investor, mentor and fund manager and my over-riding belief for each business is that it must thrive by selling products in the right markets at the right price.”

“I have never been afraid to ask any question, however simplistic, and I keep asking for things to be put in the simplest of terms. I have sat on the board of some outstanding Scottish-based businesses with world-leading technology but, as a nonscientist, I expect matters to be explained in plain commercial language, getting away from the jargon.

“Ultimately, this helps define the strategic direction of any businesses with the key questions: ‘What are we here for? And what’s the business that we are in?’ These remain the constant backdrop for each and every one of the businesses and organisations that I have been involved with.”

And, as an angel, Nelson Gray still has a lot of work to do in helping Scottish companies reach for the stars. n

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which he did without complaint. He was then ordered by the official to stand up and told he must come out. The good lord was fearful that he was heading for extradition from India. Instead of being carted off, he was led down to the sports field and requested to present the Games medals to the smiling winners.

enlightened the mixed audience about a trip to LA where he passed up on the “live” strip bars and ended up in his motel room watching movies. Instead of purchasing the adult films he told us how he saved his money. At £5k a pop, surely you can get some half-decent material for such a prestigious event.

>> Confused? We are >> Cream on the screen

with Jock Yuler >> Rudy takes out his clubs To Glass Cow, as Rudy Giuliani, the former mayor of New York, called our Shopping Capital on his recent golf trip. To earn his green fees, he was guest of the SCDI, Scotland’s International Awards, at the Thistle Hotel, which had an impressive turnout, including First Minister Alex Salmond. Now, Republican Rudy was pretty blunt in his messages to Scotland and might have caused a few dicky-bowtied socialist attendees to choke on their baked Crannachan cheesecake.

He said turning New York around from a crime capital where welfare was the biggest industry to a vibrant “Capital of the World” was about getting tough on crime, corruption and getting people back to work. It was about giving them jobs and hope, weaning them off welfare and it was about belligerent leadership for the city. Rudy said cities need a vision, so there was a challenge to both beleaguered Edinburgh and Glasgow councils struggling with their own budgetary issues. Tough talk, but perhaps he should have left his clubs at home?

>> A medal muddle Note to Glasgow 2014: How not to handle medal presentations. When Lord Smith of Kelvin, chairman of the organising committee for Glasgow’s Commonwealth Games, was out in Delhi he was sitting quietly watching some events and was approached by an angry-looking security man. He was ordered to show his pass,

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Are you a film buff and a trencherman? Let me recommend the Kingussie Food On Film winter festival which is a delightful confection, directed by Helen Graham, from February 4-6.

A highlight is the UK premiere of No Ordinary Trifle, written by James Hacking and starring Dougray Scott and F-Word’s Gordon Ramsay.

Sounds like there will a few extras ‘fs’ to add to food, film and frolics. The film, part of the weekend goodies, is at Talla Nan Ros at 5pm, check out www.kingussiefoodonfilm.co.uk

>> New Year’s resolution Congratulations to John Sturrock, leading legal light, proponent of all kinds of alternative dispute resolution, especially mediation, and closet prog rock fan. Prof Sturrock gave up a stable career as an advocate and law lecturer to set up his entrepreneurial business, Core Solutions, ten years ago. In January he celebrates a decade in the ring, bringing two bruising sides together and getting them to shake hands. He and a band of other mediators remain committed to seeing mediation evolve to become a major force in the land. Core’s get-together includes a master class with William Ury – author of The Third Side – at the Hub, on Thursday January 20.

>> Comedy man is Fred bare Funnyman Fred MacAulay is normally sparklingly witty. And, like so many of his BBC colleagues, he does make a good deal of extra pocket money as a regular host at business awards. But, come on Fred, you were scraping the barrel at the Entrepreneurial Exchange annual awards in Glasgow. He

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It’s unbelievable that A Simples Life, the autobiography of the meerkat, is top of the Sunday Times’ non-fiction bestsellers list. It has sold nearly 40,000 in hardback, and shows how silliness still sells. It’s doing better business than Stephen “Twitter” Fry and Alan “You’re Fired” Sugar, both with massive BBC franchises. There’s lessons for business too in how to use something different to build a consumer brand. Price comparisons websites have had a good year with Go Compare, Money Supermarket.com, Compare The Market and Confused.com, so it is tough that Peopleschampion.com, Scotland’s price comparison site and a front runner, has disappeared into the basement of Scottish Television, like a black and white edition of Thingummyjig. Peopleschampion.com’s talking zebras, giraffes and tortoises had great visibility and brand awareness. The Post Office obviously liked the idea, because it started rebranding itself the People’s Post Office. Perhaps we’ll see the re-emergence of Peopleschampion.com in a fresh guise in 2011! That would put a smile on BQ Scotland editor’s phizog – he was one of the investors bought out by SMG.

>> And a parting shot on ... history as defined by the victors “England is the home of football.

Whatever changes there may have been in the political, international and sporting sphere over the last hundred years, that is a historical fact which cannot be challenged.”

Chapter one, first sentence, The Football Association’s official World Cup Report in 1966.

EVENTS

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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: editor@bq-scotland.co.uk

January

3rd Textile Trend: A presentation of textiles, fashion, knitwear and interiors for 2012. The Lighthouse, Mitchell Lane, Glasgow. Contact Scottish Enterprise textile team. 0141 248 2700

11th SCDI Annual Lecture, Marcliffe Hotel, Aberdeen.

Contact vince.mckeown@scdi.or.uk 12th Scottish Borders Chamber of Commerce ‘CAP 2013 - How does this effect you?’ Ednam House Hotel, Kelso. Contact: sally.scottaiton@borderschamber.org.uk.

13th Ayrshire Chamber of Commerce ‘Exporting for Beginners with guest speaker Charlie Sweeny’. Ayrshire Chamber Board Room, 9.30am. Contact Anne Reid: members@ayrshire-chamber.org.

14th Insider 500 Business Breakfast with guest speaker Dr Eamonn Butler.

Sheraton Hotel, Edinburgh. Contact Mairi Cotter on 0141 309 1452 mairi.cotter@insider.co.uk.

18th Edinburgh Chamber of Commerce ‘Make more of your membership-Growing your Business.’ Apex Waterloo Place Hotel, Edinburgh 8.30am. Contact Edinburgh Chamber of Commerce: 0844 736 2992 18th Glasgow Chamber of Commerce ‘Networking Lunch: Winning Lunch with Social Enterprise’. 1 St Andrews Square, Glasgow, 12pm. Contact Glasgow Chamber of Commerce: 0141 204 2121 19th Scottish Business in the Community ‘Awards for Excellence Workshop’. John Lewis, Aberdeen, 12pm. Contact: clairehowe@sbcscot.com 19th Edinburgh Chamber of Commerce ‘After Hours - Networking in the New Year’. Le Monde, George Street, Edinburgh, 5.30pm. Contact Edinburgh Chamber of Commerce: 0844 736 2992 20th Heriot-Watt University Industry Day: ‘Risk - Challenges & Solutions’, Edinburgh Conference Centre. Contact: industryday@hw.ac.uk 20th Aberdeen & Grampian Chamber of Commerce ‘It’s a Funny Business, Business Breakfast’. Aberdeen Exhibition & Conference Centre, Bridge of Don, Aberdeen, 7am. Contact Clare Henry: events@agcc.co.uk 23rd ETAG Conference: tourism group on market intelligence, collaborative relationships, and new technology. John McIntyre Conference Centre, Pollock Halls, Holyrood Park Road, Edinburgh 25th Edinburgh Chamber of Commerce ‘Breakfast Connections’. The Hub, Royal Mile, Edinburgh, 8.30am. Contact Edinburgh Chamber of Commerce: 0844 736 2992 26th AngelsDen SpeedFunding event Glasgow. Harper MacLeod, The Cadoro Building, Glasgow, 3pm. Contact: cameron@angelsden.co.uk

3rd-6th Food On Film: Kingussie’s annual winter festival brings the big screen to the Highlands in a unique way. www.kingussiefoodonfilm.co.uk 3rd Network Scotland 2011 Edinburgh Event. Capital Hotel, Clermiston Road, Edinburgh, 8.30am. Contact Network Scotland: 01383 852931 4th Crafting the Perfect Media Release. Two-hour, afternoon training from allmediascotland.com in Inverness. Contact info@allmediascotland.com 9th Edinburgh Chamber of Commerce ‘Beyond Facebook - How to make your website social’. Members’ Hub, Capital House, Edinburgh, 5.30pm. Contact Edinburgh Chamber of Commerce: 0844 736 2992 10th Legal Business Awards 2011. Grosvenor House Hotel, Park Lane, London.

Contact: flora.simpson@legalease.co.uk 22nd AngelsDen Event: ‘Pitch individually to a selection of Angels’, Harper MacLeod, The Cadoro Building, Glasgow, 4pm. Contact: cameron@angelsden.co.uk 23rd SCDI annual dinner in London. Contact vincemckeown@scdi.or.uk 24th AngelsDen Event: ‘Pitch individually to a selection of Angels’, Harper MacLeod, 8 Melville Street, Edinburgh, 4pm. Contact: cameron@angelsden.co.uk 24th Women Into Business: Funding. Newmachar Business Centre, Newmachar, Aberdeenshire, 6pm. Contact Business Gateway: 0845 609 6611

March 1st Networking Skills. Business Gateway, Apex House, 99 Haymarket Terrace, Edinburgh, 9am. Contact Business Gateway: 0845 609 6611 2nd Franchise Awareness Raising Workshop. George House, North Hanover Street, Glasgow, 9.30am. Contact Business Gateway: 0845 609 6611 3rd The Business Show Lanarkshire. Business and Conference Centre, Cumbernauld College, Cumbernauld, 8am. Contact: joan@eventsforbusiness.co.uk 4th Ayrshire Chamber of Commerce Annual Dinner 2011 with guest speaker Fred MacAulay. Ayrshire Suite, Ayr Racecourse, 6.45pm. Contact Yvonne Munro: members@ayrshire-chamber.org

26th Scottish Business in the Community ‘Awards for Excellence Workshop’. John Lewis, Glasgow, 9am. Contact: clairehowe@sbcscot.com

8th Introduction to Social Media. George House, North Hanover Street, Glasgow, 9.30am. Contact Business Gateway: 0845 609 6611

27th Aberdeen & Grampian Chamber of Commerce Speed Networking Event.

Simpsons Hotel, Queens Road, Aberdeen, 11.45am. Contact Clare Henry: events@agcc.co.uk

22nd Women Into Business: Marketing. Enterprise Business Centre, Admiral Court, Aberdeen, 6pm. Contact Business Gateway: 0845 609 6611

27th Renfrewshire Chamber of Commerce ‘Burns Networking Lunch’. Mar Hall, Bishopton, Renfrewshire. Contact lconnor@renfrewshirechamber.com

23nd-24th Scottish Renewables Annual Conference & Exhibition. Scottish Exhibition and Conference Centre, Glasgow. Contact Scottish Renewables: 0141 353 4989

February

24th Edinburgh Chamber of Commerce ‘Working Lunch - The Hunt’. Apex Waterloo Place Hotel, Edinburgh, 12pm. Contact Edinburgh Chamber of Commerce: 0844 736 2992

1st Aberdeen & Grampian Chamber of Commerce Offshore Wind Business Breakfast. Aberdeen Exhibition & Conference Centre, Bridge of Don, Aberdeen, 7am. Contact Clare Henry: events@agcc.co.uk 1st Get Real Results From Your Website. Carnegie Conference Centre, Dunfermline, 2pm. Contact Business Gateway: 0845 609 6611 1st-2nd. Offshore Wind 2011, Conference and Exhibition at the Aberdeen Conference Centre. Contact Scottish Renewables: 0141 353 4989

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24-25th SCDI Annual Forum, a key policy event for Scotland. Venue to be confirmed. Contact nicola.seeley@scdi.org.uk 0141 352 8548 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.

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