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Business Insight Tuesday January 29 2013

A formula that works

Professor Lesley Yellowlees on the crucial role of chemistry

Beyond the lab Why a Scottish export giant faces battle on a global scale

Tuesday January 29 2013 | the times


Business Insight


More to be heard from hidden success story

Revolution in the US

The success of shale gas in America is This latest issue of The names in chemistry, the set to be a dramatic Times Business Insight Energy Minister Fergus global game changer focuses on one of Ewing referred to it as “a Scotland’s hidden success Cinderella industry” he did that will make Europe stories — its chemical so because of its relatively a battleground for the chemicals industry industries, which, low public profile. collectively, contributed But he also reminded more last year to the us that Cinderella won he next time you drive along the M9 country’s exports than the hand of the prince past Grangemouth, ponder that the refinany other sector, including in the end, and, given ery there is a lot more than unlovely steel that other great export, the strengths, skills and spaghetti producwhisky; which it also ambition of those involved ing petrol and diesel for cars and lorries. outstrips in terms of in the industry in Scotland, Think of it instead as employment and GDP. no one doubted that this being at the heart of an industry employing directly and indirectly some 84,000 When, in the course of the was a success story of people, producing exports worth about £4 billion a year, outstripping even whisky. Times Business Forum which we are going to And ponder also that right now, whether that £4 billion is going to grow (pages 4 and 5), drawing hear a great deal more. or decline depends in large part on together some of the top whether or not a £100 million invest-

Peter Jones at large



ment is made at Grangemouth. That’s because the global chemicals industry is undergoing an American revolution. “I’ll bet my last bottom dollar that every chemical company in Europe is looking to the US,” says Gordon Grant, a director of Ineos, the company that now operates Grangemouth. “In my view, this is a global game changer, not just in the US.” He is talking about the shale gas revolution, the boom in hydraulic fracturing of, until recently, impenetrable oil- and gas-bearing shale rocks that is causing American production of oil and gas to soar. Natural gas contains ethane which firms like Ineos put through a gizmo called a cracker to produce ethylene, a gas. This winds up as polyethylene, which us non-chemists cheerfully think of as plastic, to be found in umpteen products from “plastic” bottles and bags to clothes, carpets, computer casings and car body mouldings. For 40 years or so, Grangemouth has got its feedstock gas from the North Sea, now a shrinking and expensive source. Up until mid-2010 when fracking took off, European and US gas prices were broadly similar. Now, the European gas price ranges between $10-12 per million British thermal units (mmbtu) while the US gas

Commercial report: forth valley COLLEGE

Educated approach to the future Grangemouth is key to Scotland’s petrochemicals sector, and one college is helping ensure that the know-how is translated into vital, skilled jobs


fter dark, the grid-work of lights glittering on the south shore of the Forth illuminates an area that has been a cradle of the chemical – and especially the petrochemicals – sector for almost a century, with the Grangemouth area alone representing one third of the industry’s £9 billion turnover. Its population, though, peaked in 1971 and the challenge now is to keep an industry that has decades of development ahead of it supplied with a stream of qualified chemical engineers. Joanna McGillivray, Head of Applied Science and Computing at Forth Valley College, with campuses in Alloa, Falkirk and Stirling, believes that the college is uniquely placed to deliver that sort of individual. “We have developed very close relationships with industry over the years,”

she explains. This includes alliances with bodies such as Skills Development Scotland; Cogent, the sector’s skills council; SEMTA and OPITO. Crucially, the college has strong links with companies of varying sizes in the Grangemouth complex and has developed synergies that benefit both students and industry. “We have nonadvanced programmes in computing and science and offer HNDs in applied biological sciences, applied chemistry and chemical process technology – and we have one of the largest science departments of any Scottish college. We also recently became the first learning organisation in Scotland to achieve STEM Assured Status, an industry-led quality benchmark” she says. Forth Valley College is a major provider of training for both the “upstream” or offshore element of the oil and gas sector, and also “downstream” – the production of chemicals and oil refining. “We train apprentices based offshore under the OPITO (offshore training board) scheme, one of the very few colleges to do that, and we also train apprentices working with companies in the Grangemouth complex that include Ineos, BP, Syngenta, Dow and CalaChem.” McGillivray says there is a challenge to recruitment on two demographic fronts. One is the reduction in companies taking on apprentices – something that especially affects smaller firms as the chill economic climate freezes training budgets. Smaller companies also find it

Science students at Forth Valley College are introduced to process operations central to the petrochemicals industry

difficult to retain apprentices after they qualify, as they are lured to lucrative overseas jobs by the industry majors. “The larger companies have their own recruitment schemes, and the smaller ones feel the effect of that,” she says. While on the other hand, there is a lack of experienced engineers as the older workforce leaves and is not swiftly replaced. The situation calls for flexibility, both from academia and industry. “I’m increasingly seeing companies taking on people who do not come from a petrochemical background, but perhaps from another process manufacturing type industry. We put them through a bespoke training programme that introduces them to process operations which has been

hugely popular.” Ineos has been a major participant in this. “We are now in our sixth intake with them,” says McGillivray who reports interest from other organisations for a similar programme. Experiential training is extremely important and the college has a process training rig, donated by industry that she says is “effectively a mini chemical processing plant that we use to train people from the Grangemouth complex and also offshore apprentices in a simulated working environment, giving them real scenarios that they are likely to encounter in the workplace – while a digital control system allows us to control the plant using computer software.” Health and safety is vital and “Toolbox Talks” and safety flashes from the companies the college works with helps endorse its approach to good health and safety procedures. Lessons can be learned from anything as big as the Deepwater Horizon incident to ensuring that safety equipment is properly worn. And engagement with local schools is key to the future of the industry. “We work very hard to make sure that science engagement is high on the agendas of the three local authorities we work with. My staff and our students are all STEM (Science, Technology, Engineering and Mathematics) ambassadors and the goodwill from them is tremendous. “We are overwhelmed with demand for our services because they are met with such enthusiasm – I could fill every week with science engagements if we weren’t also teaching our own students!”

the times | Tuesday January 29 2013


Business Insight

must be faced with speed and skill

price hovers between just $2-4/mmbtu. That affects the price of ethylene. In very rough terms, the ethylene price in Europe has been about $1,350/tonne, about $1,700/tonne in Asia, about $475/ tonne in the Middle East, and historically about $1,200/tonne in America. Now the American price has tumbled to about $350/tonne. Since ethylene is very difficult and expensive to transport, you can see why this is a game-changer. Big chemical firms such as Dow, which mothballed ethylene crackers in the US a decade ago and opened new ones in the Middle East, are now reopening American plants to take advantage of these ultralow gas feedstock costs. Unfortunately, that could mean a big cost disadvantage to everyone else, including the Scottish chemicals industry. “We have got to move quickly,” says Mr Grant. “We have to cut our feedstock

costs to remain competitive.” So, unwilling to wait the five years or more it could be before European shale gas deposits are tapped, Ineos has struck a 15-year deal with a US shale gas producer to buy ethane, compress it and, from 2015, to ship it to Norway. There, it is going to build a storage tank at the ethylene cracker it has at Rafnes, which also has the ability to import gas from ocean-going tankers. Grangemouth does not, unless £100 million or so is spent to build the necessary import facility. “If the feedstock we buy costs one unit at the moment, in the US it is about 0.1 or 0.2 per unit,” says Mr Grant. “Even with the costs of shipping, we can get it from the US to here at about 0.6 or 0.7 per unit, which is remarkable. So that’s what we are up to.” He cautions there are two caveats. One is that Ineos still has to raise the £100 million (-ish) funding, and

Companies such as Ineos are faced with bringing Grangemouth’s running costs down to match those of European competitors

We have almost the whole spectrum of the chemicals sector, which is a strength and a weakness

even though Ineos has the money of Petrochina alongside it as a co-owner of Grangemouth, it is not an easy task. The other is that the running costs of Grangemouth have to be brought down to be more in line with European competitors. “Having a cheap feedstock cost is great, but it doesn’t help us if other costs take that advantage away,” he says. Sandy Dobbie, chairman of Chemical Sciences Scotland, the Industry Leadership Group, hopes that Ineos gets it right for, he says, Europe is going to be a chemicals industry battleground in the next few years which will make what it went through in the 2008-09 recession seem mild. Recession caused demand to nosedive, he says, and the industry reacted globally by cutting capacity swiftly by about 15 per cent, with the result that it generally remained profitable. But the rapid growth of American capacity on the back of the shale gas glut means it will have ethane-based products looking for an export market, as will Middle East capacity which will lose its US market. Both, he says, will be looking at Europe where there will be excess capacity. “Europe is going to get hit very hard,” says Dr Dobbie. “Our view is that there is going to be a real shake out over the next few years. People are already starting to close down old, out-dated plant.” However Scotland, he thinks, is well placed to ride out the storm and come out ahead; for of the 47 ethylene crackers in Europe, only three can take the dry gas coming out of the shale gas fields. Two are in Scotland, one at Grangemouth and another at Shell’s

Mossmorran site in Fife. The third is the Ineos Norwegian plant. This should give the bulk chemicals produced at Grangemouth, the biggest chunk by value of the Scottish chemicals sector, a cost advantage. It should also give the other 200 or so chemical companies in Scotland, many of whom use the Grangemouth output, an edge too. These companies produce small volumes of high value products, either fine chemicals used in the pharmaceutical and agrochemical industry or speciality chemicals used as food additives, water treatments, pigments, and other sectors. “In Scotland, we have almost the whole spectrum of the chemicals sector, which is one of its strengths and one of its weaknesses,” says Dr Dobbie. “The diversity means you are not over-exposed in any one product which is a strength, but it also means that there is a lack of common customers and common suppliers, and a lack of cohesiveness.” It meant that companies didn’t talk much to each other which the creation of Chemical Sciences Scotland has remedied to some extent and has resulted in the firms, for example, talking more about, and focusing more on, products which help the shift towards a low carbon economy. For an industry largely based on fossil fuels this sounds unlikely but, says Dr Dobbie, it means producing polymers which might reduce the weight of car, making it more fuel efficient, or might make better insulation, so reducing carbon emissions further down the line. It is also about trying to find biological, and potentially cheaper, ways of producing chemicals currently made synthetically, an area where there are beginning to be some success stories. Increasing the pace of innovation is also critical to the industry’s future and Chemical Sciences Scotland has worked hard at linking companies into Scotland’s considerable university chemicals expertise, devising a programme in which 31 post-graduate students were selected to work on PhD projects of direct relevance to small and mediumsize companies which lacking the resource base a university can provide. Companies such as GSK, which last March announced it was investing £100 million and creating 100 jobs at its Irvine and Montrose sites, are also involved in a relatively recently-created and fast becoming globally significant research centre at Strathclyde. “It means,” says Dr Dobbie, “that when GSK is thinking about its next research or process development centre, there will be a body of opinion within GSK saying Scotland is a good place to put it. And before you go much further down the line, it will be about doing the manufacturing, the marketing, in Scotland.” Joseph Black, the Enlightenment scientist after whom the chemistry departments at Edinburgh and Glasgow universities are named, would have approved. Thanks to his financial and moral support, James Watt used Black’s theories of latent heat to develop the steam engine that powered the industrial revolution. Now similar expertise is needed for Scotland to profit from the coming chemicals revolution.

Tuesday January 29 2013 | the times


Business Insight

Business Forum

Analysis and evidence key to seizing the opportunity The first Times Business Forum of 2013 discussed some cogent reasons why the lessons of the Enlightenment might be applied to the challenges of the chemicals industry, says Kenny Kemp


or 250 years Scotland has been blessed with the essential raw materials for a chemical industry that has helped shape the modern world. In the 19th century, coal, salt, shale for paraffin oil, and an abundance of water, brought unprecedented industrial expansion, then the discovery of hydrocarbons in the North Sea in the late 20th century was able to harness this knowledge and legacy as a springboard, creating economic growth for petrochemical production with polymers and plastics and myriad products such as detergents, paints, medical supplies and textiles. Yet The Times Business Forum, chaired by Magnus Linklater, and introduced by Fergus Ewing, MSP, Scotland’s Minister for Energy, Enterprise and Tourism, heard that the chemical industry’s significance in the 21st century had become overshadowed by other sectors, and was described by the Scottish Minister as a “Cinderella” industry’ in Scotland. Since 2007, this perception has been successfully countered with vigour by Chemical Sciences Scotland, an industry-wide partnership of large and small chemical processors and manufacturers, academics and researchers, and government agencies. It has done much to galvanise the industry and restore its stature and in May 2012 CSS launched its revised Platform for Growth, with the aim of increasing Scotland’s manufactured exports from the sector by 50 per cent by 2020. The industry in Scotland now faces unique “transformational” opportunities with the prospect of cheap shale gas imported from the United States. Participants in the Business Agenda discussion at the Royal Society of Edinburgh addressed key issues.

Dr Sandy Dobbie, chairman of Chemical Sciences Scotland and a non-executive director of several chemical companies, said the Scottish government’s understanding of the economic importance and value of the chemical industry had increased significantly over the last five years. “The Scottish government now recognises this is something for the future.” Fergus Ewing said the Scottish government was now fully engaged with the industry and its need for expansion and he acknowledged Scotland’s outstanding contribution to industrial chemistry and its continuing excellence. He understood the requirement for a highly-trained workforce with excellent multi-disciplinary skills across physics, chemistry and engineering. He pointed out the reason the US economy was recovering was that energy cost were low — a fact for politicians to keep in mind and an issue for the competitiveness of Scottish companies. He added that, in this sensitive and often emotive area related to industrial chemicals, hydrocarbons and the environment, it was important to find and support innovation. “As politicians, hearing a number of different voices every day, we have to proceed on the basis of rational analysis and evidence. After all, that was the gift of the Age of Enlightenment and we shouldn’t abandon it several centuries after we gave it to the world.” Five years ago, Caroline Strain, head

Fergus Ewing stressed the need for a multi-skilled workforce

of Chemical Sciences at Scottish Enterprise, brought together the key people from Scotland’s universities, research establishments and industry to get them to work more closely. Dr Dobbie admitted that the industry tended to keep its head down, get on with its business, and hope nobody would notice, but that was no longer a viable strategy. CSS has achieved early success but now poses the question: how does the chemical sciences industry grow its size, and achieve its export aims by 2020? “The nature of this industry is that it is export-led. The Scottish market is tiny compared with the global market, so the vast majority of what we do in Scotland ends up being exported,” he said. Magnus Linklater said that he sensed: “A feeling that the industry sees potential for growth. So can a small country like Scotland, which needs to make its way in this ‘vicious’ market place, draw advantages from its size? What does Scotland need to do to take advantage of its strengths?” In summary, Scotland needs to attract more investment from existing companies with major facilities in Scotland; encourage more innovative home-grown companies to start-up; and increase the supply of qualified scientists and technicians to support the industry.

We have the ability for long-term sustainability but to achieve that we need to return shortterm competitiveness Craig Johnston, operations director of the innovation partnership group, CMAC, said he was trying to lure research and development projects from the global industry players, offering them a “centre of excellence” in Scotland. This, in turn, could lead to larger industrial high-value projects, especially in pharmaceuticals Peter Wormald, director of BASF in the UK, based in Paisley, and part of the multinational German chemical company, said the pharmaceutical chemicals market was still growing, largely unaffected by the economic downturn. “The chemical industry is a growth industry globally. It’s a huge opportunity and Scotland is in it. It’s been here for a long time and it is a success.”

the times | Tuesday January 29 2013


Business Insight

pictures: JAMES GLOSSOP for the times

Around the table The Business Forum was chaired by Magnus Linklater CBE, columnist for The Times Scotland, who was joined by: „„ Fergus Ewing, MSP, Minister for Energy, Enterprise and Tourism. „„ Dr Sandy Dobbie, chairman, Chemical Sciences Scotland „„ Craig Johnston, operations director, CMAC. „„ Peter Wormald, director, BASF, Paisley „„ Professor Bob Tooze, managing director, Sasol Technology „„ Gordon Grant, director, Ineos, Grangemouth „„ Dr Ian Archer, head of process development, at Ingenza. „„ Gillian Watson, CEO, Giltech, and Scottish Enterprise board member. „„ Prof David Gani, deputy principal of Strathclyde University and executive chairman of ScotCHEM „„ Caroline Strain, head of chemical sciences at Scottish Enterprise.

He said the world has serious challenges in sustaining population and food supply and the chemical industry is an integral part of the solution. “Whether it is climate change or feeding the world, heating our home and a quality of life, our industry is at the centre. This is why it is growing faster than the global GDP.” However, he warned that Scotland’s industry faced a competitive challenge. “We have got the ability for long-term sustainability in the industry, but to achieve that we have got to return shortterm competitiveness in a world market. It is the tension between having a vision of long-term sustainability and being able to manage and achieve short-term competitiveness, so that we can actually be there making the vision in a reality in the long-term.” Prof Bob Tooze, managing director of Sasol, echoed Peter Wormald’s view, and believed it was possible to grow the industry in Scotland, although he warned: “There is a danger that we simplify and call it an industry — in Scotland it is far from a single entity. It has many different shapes and sizes and from bulk chemicals and fertilisers to fine and speciality products, I’m clear that we need to integrate. I agree with Fergus Ewing that geography is on our side. We can integrate across sectors to grow the industry.”

Left to right: Gillian Watson, Craig Johnston, Caroline Strain, Dr Ian Archer, Fergus Ewing MSP, Magnus Linklater CBE, Professor Bob Tooze, Peter Wormald, Dr Sandy Dobbie, Professor David Gani

Gordon Grant, director of Ineos at Grangemouth, which operates Scotland’s major oil refinery and chemical complex, said that the industry has to send out a strong message to attract new young people. He chairs CSS’s Reputation and Skills Group, which is working to ensure qualifications are joined up with ethics, safety and environmental protection. “What we need to talk about is the chemical industry’s place in the challenges the world faces at the moment:

Gillian Watson believes SMES should have input into legislation

feeding, watering and heating the world’s population is a key aspect.” He said Scotland is in a unique position in Europe. “The chemical world is changing as we speak. Shale gas in America has revolutionised the chemical industry. Scotland has two of the three facilities in Europe — out of 46 — that can utilise the lighter shale gas. We can be at the forefront of that change.” Grangemouth is one of the plants, while the Fife ethylene cracker, at Mossmorran, operated by ExxonMobil, is the other. The topic of education in science and engineering was one that concerned the forum. More young Scots would be required for the industry’s future, in both graduate and modern apprentice positions, and more was needed to encourage young people before the age of 13 or 14 to select sciences that would help them with a career in chemical sciences. Ian Archer, head of process development at Ingenza, an industrial bio-tech company, outside Edinburgh employing 30 people, said he has worked hard with modern apprentices through a joint funding scheme with the government and with Forth Valley College. “From an SME’s point of view in Scotland, it is the multi-disciplinary nature of our business that has allowed us to be successful. The links, in our case between chemistry and biology, are important. We widened out into industrial bio-technology and synthetic bio-technology.” “We need to be training people in that multi-disciplinary and cross-disciplinary way. I worked at Grangemouth and the best chemists were the ones who engaged with engineers and vice versa. We have the same situation in our company and it’s making sure our eyes are open to the cross-disciplinary.” Prof David Gani, the executive chairman ScotChem, which involves the collaboration of chemistry research at Scotland’s universities with industry firms such as DuPont, AstraZeneca, and GSK, said there ought to be greater investment support for drug discoveries and an appreciation that other Scottish industries, such as food and drink, were heavily dependent on chemicals. “We have a world-class research base of chemistry and other areas of molecular sciences, including biology, and engineering, yet we are not making the best of pulling all of this together. The global competition is ferocious. While we are keeping up we are not getting the traction we need. At the high added-value end we need more companies to invest in Scotland and the UK. We are a very attractive place to invest because of structure and the way we collaborate.” “For me, it is about growth, about upping our game in the value chain and attracting inward investment — and using the inter-disciplinary scientific skills

to deliver what human kind needs from the unique position we have in Scotland.” ScotCHEM has already created a batch of PhD studentships researching challenges identified by the chemical industry. Prof Gani warned that is was dangerous to place labels on priority industries, such as life sciences, when the crossover between chemical and life sciences is often very blurred. Gillian Watson is CEO of Giltech, an SME in Ayr employing ten people and a board member of Scottish Enterprise. “We are a niche player in the speciality chemical sector,” she said. “There are lots of opportunities, even for a company as small as us, but there are lots of challenges. The biggest one for us is in the cost of implementing European Union regulations. We need to make sure that the SME voice is adequately heard, not just supported during implementation, and has an input into the design of legislation and directives.” Caroline Strain said it was the task of an economic development agency to respond to the needs of key industries. She said that working in conjunction with Scottish Development International would help attract suitable inward investment that created jobs and economic growth and added that Skills Development Scotland was important in delivering the skills. Mr Grant spoke about the importance of infrastructure, such as pipeline and storage facilities for liquefied gas. With banks unable to lend for major capital projects, it required government intervention to fill the gap. “Shale gas in America and Europe will produce vast quantities of feedstock. This gives us a huge advantage but today we don’t have shale gas in Scotland. We can import it. That gas is available to Scotland at an advantageous price but we need storage facilities to be built.” He said that if the current unit price for gas was 100p then the shale gas being sold in America is at 1p. Even with refrigerating, shipping to Scotland, and re-gassing it, it was still only 6p. “This is a huge game-changer: 18 months ago no one was taking about shale gas in Scotland — now it is here.” This new, lower-cost fuel posed a challenge for the Scottish government’s lowcarbon strategy, which is likely to make renewable energy more expensive, while there was a feeling that the opportunity of cheaper global gas supplies should not be allowed to bypass Scotland’s chemical industry. The Scottish government refers to an energy transition involving cheaper gas, while Mr Ewing said that with the right regulations and controls, they might allow shale gas extraction in Scotland. He added: “Maybe the analogy of Cinderella is unfortunate when describing Scotland’s chemical industry — but Cinderella won out in the end!”

Tuesday January 29 2013 | the times


Business Insight

Cover story

First get chemistry right

Professor Lesley Yellowlees has passionate views about the role and future of a science that is pivotal to our prosperity, writes Ginny Clark


rom the colour of your clothes to the screen on your mobile phone, from a shampoo bottle — and its contents — to the ingredients in a loaf of bread, chemical science shapes our modern world. Yet most of us are unlikely to give a second thought to an industry that, fuelled by world class research and development, plays a crucial role in Scotland’s economy, with around 200 companies here responsible for exports of more than £3 billion a year, overseas business that is topped only by the whisky industry. Particle physics may have been dominating the media headlines for some time, but shove over Higgs Boson, because chemical science will soon be hogging the limelight. Professor Lesley Yellowlees may not be the official spokesperson for this dynamic industry, but the University of Edinburgh’s vice-principal and head of the College of Science and Engineering is already doing a grand job of singing its praises. Last May, two months before she became the Royal Society of Chemistry’s first woman president, Yellowlees grabbed a few headlines herself, saying the United Kingdom was 50 years behind the USA in terms of providing opportunities for women in science. She followed that up a few days before the start of her two-year presidency in July by slamming the UK government for failing to tackle inequality, citing the macho culture of an “old boy’s club” affecting recruitment in an industry where men are six times more likely to find work than women. Just in case the Scottish government didn’t think they were in the professor’s sights, she also previewed her keynote speech at last year’s fourth annual conference of Science Scotland, by vowing: “I will never tire of telling politicians just how important our sector is to the health and wellbeing of the nation.” So important, in fact, that one of the biggest challenges it faces is ensuring we maintain a workforce that has all the skills and expertise necessary to meet the demands of this burgeoning industry. That’s another reason why Yellowlees believes its time chemical sciences gained some recognition for the role it plays in our society, and our economy. “The chemical sector is a huge income earner for Scotland, with around 70,000 jobs here directly dependent on the chemical sciences sector and generating almost £10 billion in revenue,” she says. “As an industry the chemical sector may not be glamorous, but the bottom line is it does deliver. So could we make more of a splash about that? Yes, I believe we could, and the government knows that — or at least I hope it does.

“There is some really exciting work going on, such as in the interdisciplinary health area that will impact on pharmaceuticals, designing drugs sensors (that react only to specific aspects of a condition) that will have a huge part to play in tackling disease throughout the world. Also, the material graphene (a single layer of carbon atoms) can be used in the creation of flexible screens in computing, and chemistry has a valuable role to play in renewable solar energy. Scotland’s chemistry sector is well set up to play a large part in this, and we must be more effective in communicating it and engaging with all the players.” The bar has already been set high. Last year saw the launch of the Chemical Sciences Scotland Refreshed Strategy, building on the original aims that had been set out in 2007. The main aim of the ‘Platform for Growth’ is to boost manufactured exports from the sector by 50 per cent by 2020. To achieve that, a 10-point plan sets out the determining aspects of sustainability, innovation, skills, reputation and investment. However, Yellowlees is adamant that one other aspect will be crucial to delivering on all elements of the 2020 vision, and that is quite simply the ability to keep industry and academia working together. “If the economy of Scotland is to deliver all that’s wanted, we can only do it by creating partnerships between universities and industry, and making sure they work efficiently and effectively, that’s where I see the innovation coming from,” she says. “Blue skies research of today can have a significant impact tomorrow. In chemistry, work done right now to understand a reaction can have a huge role in what’s happening in drugs created next month. That’s why we need the space, the time, and the funding, it’s all related.

W I will never tire of telling politicians how important our sector is to the wellbeing of the nation

e’re very fortunate here to have the Chemical Sciences Scotland (CSS) network, the partnership of the academic institutions with industry and government organisations, to help in delivering the opportunities. Our sector probably doesn’t deliver much in the way of headlines and we haven’t had a Higgs Boson but if we are to solve many of the global challenges, in addition to those here in Scotland, then we need chemistry to do that, and we need universities and industry working in partnership to make it happen.” The Scottish government recognises CSS as the voice of the sector in Scotland, at a time when the global chemical sector continues to flourish, with the rising demand for consumer goods, pharmaceuticals and food products. However, another vital step to making things “happen” is in the development of our future scientists. Yellowlees has also spent five years as the director at EaStCHEM, the joint chemistry research school of Edinburgh and St Andrews that is supported by the Scottish Funding Council for Further and Higher Education and the Office of Science and Technology, along with the parent universities. It is considered to be the elite research school for chemistry in Scotland and is one of the largest in the UK, with around 500 researchers. “We’ve formed a strong research collaboration between the chemistry

the times | Tuesday January 29 2013


Business Insight

and the economy follows JAMES GLOSSOP for the times

Professor Yellowlees says there are very few women at her level in the profession – and sees part of her role as helping to change that

schools and are working effectively and efficiently together,” explains Yellowlees. “It’s been very successful; we’ve punched well above our weight, and are regarded on a UK scale. Of course, there is also the equivalent situation between Glasgow and Strathclyde universities, with WestChem. Pooling arrangements give you greater strength, undoubtedly. To do big science and tackle problems, that’s expensive. No one school has all the equipment and the expertise. By pooling resources, with academic staff, technicians and students, you have more expertise and more brainpower — it just makes sense to be working together.” Yellowlees is passionate about science education, and as her comments last year revealed, she’s committed to the cause of equality and diversity. Becoming the RSC’s first woman president has been a great pleasure for Yellowlees, but she also knows this position provides her with a unique opportunity. “Oh, absolutely,” she agrees. “I have a real feeling of pride, but also of responsibility. I never set out to be a role model, but I’m told now people do look to me, and thats fine. I’m at stage in my career when I really do want to give something back, I want to spend some time helping all our promising academics realise their potential. We need more women coming through. There are very few at the level I’m at and I see helping to change this as part of my role.


t’s about engaging people in this conversation. I very much enjoy going out and speaking to young people at school, to explain how they can have a very good career in science or engineering. It’s also about engaging some of the parents, who might need reminded there is no such thing as a ‘boys job’. Chemistry has a good uptake at university, it’s about 50-50, but with engineering, I think the number of girls going in is less than 20 per cent. However, it’s not just an issue with stereotyping, and we’re not unique in Scotland with this problem, but there is a leaky pipeline from school through to university and with industry. “Some women are making it through to the top now, we’re getting there, but it’s slow ... we need changes with support for childcare, flexible working, and transparency in the pay and promotion processes. I want to do what I can, and it’s my dream to see more women make it to the top in science. I want to make sure the phone calls between women to say: ‘Why didn’t you get it?’ just don’t happen any more.” Yellowlees might be disappointed by the rate of change but equally frustrating for her is the level of understanding about science, and it’s potential for humanity, in wider society. “I would love to see everyone, from the cradle to the grave, enthused by science, and to see possibilities for it,” she says. “It’s another dream of mine: I’d like to see more people involved, and we should be engaging the public in debate. My husband, who is not a scientist, was watching a programme on television about the expense of drugs. What we have to do is to engage the public in a debate before the drugs become available; it would stop the issue becoming so emotional. Sometimes we get the debate round the wrong way. “Yet if we could have a scientifically literate society we could engage in a wider

Professor Lesley Yellowlees A BSc in Chemical Physics and PhD in Inorganic Electrochemistry took Prof Yellowlees from the University of Edinburgh to research positions in Brisbane, Australia, then back to Scotland at the University of Glasgow. In 1986 she became an academic at the university where she’d been a student, gaining a personal chair in Inorganic Electrochemistry at the University of Edinburgh in 2005. She was Head of the School of Chemistry there until 2010, becoming Vice Principal and Head of the College of Science and Engineering. Among Yellowlees’ research interests are inorganic electrochemistry and spectroelectrochemistry, epr spectroscopy, solar energy and CO2 conversion. Prof

conversation, people would understand the numbers and the risks, and we could go forward stronger together, with people understanding what we are trying to do. Unfortunately, there is little hope of that with the policy makers, as so few have a scientific background.” You can bet that will be next on the professor’s to-do list. As Yellowlees admits, her

Yellowlees was a member of the RSC’s Science and Technology Board before taking over the chair, also becoming chair of its successor the Science Policy Board from 2005 to 2009. A member of the Scottish Educational Division, she was also chair of the Chemistry World Editorial Board from 2007 to 2011. A Council member from 2005 to 2009, she serve as President until July 2014. Prof Yellowlees was awarded an MBE in 2005 for services to science, elected as a Fellow of the Royal Society of Chemistry in 2005, selected as a 2011 IUPAC distinguished woman in Chemistry/ Chemical Engineering and elected as a Fellow of the Royal Society of Edinburgh in 2012.

lifelong love of science, was first sparked by it offering her the chance to excel at school. “I loved the analytical aspect of science, I like to be able to sit down and think things through,” she says. “However, I always enjoyed science because there was a right answer, and I could get 100 per cent in an exam. I am an overachiever, I’m told.”


Deep Heat takes a cool look at itself


here’s something nicely balanced about Deep Heat coming out of a cold country like Scotland – but how many people know that? It can be a surprise to learn that this iconic product, so handy for the relief of sore muscles, is manufactured at the East Kilbride plant of Mentholatum. Other familiar pain-relief names have been rolling out of its Redwood Avenue HQ since the company moved there from England in 1995; names like Deep Freeze and Deep Relief. It also makes health and beauty products including Oxy skincare and the original Mentholatum Vapour Rub. Having such products so popular at home and abroad – exported to Europe, Africa and the Middle East – the company, founded in the US in 1889, might be forgiven for resting on long-established laurels. But nothing is further from its mind. It is constantly developing new products – such as (recently) a battery-operated, hand-held laser to zap spots and an anti-inflammatory capsule made from the green-lipped mussel. And meanwhile, it aims to refine and perfect its older product range. Colin Brown, director of research and quality development, says: “It’s easy to think about traditional, well-established products as being ‘in the bag’ but a key part of our philosophy is to mine even our existing products for more data to pursue added sophistication and longevity. “For example, Deep Heat was first formulated in 1956 and it would be inconceivable to suggest that – based on the technol-

ogy available then – the formulation and processing were optimised and every possible angle covered. “So for a product that’s so important to us, we are taking advantage of cutting-edge pioneering technology that often exists in academia.” To that end, Mentholatum is sponsoring two PhD students at Edinburgh University –involved in developing a groundbreaking medical imaging technique. “We are also working with the university’s department of physics to understand more about the building blocks of our products – the physical parts rather than the chemical parts. We have an unmet need and people in academia often need a destination for their technological advances.” Instrumental in promoting such relationships are the Life and Chemical Sciences Sector Team at Scottish Enterprise, and its related “marriage counsellor” Interface, says Mr Brown, who also expresses “real gratitude“ for the introductory work of the organisation’s Account Management Support team. He adds: “Scottish Enterprise generally has been so supportive in providing bespoke training and workshops, forums and events to bring together like minds in health or personal care, whether they represent larger companies or small start-ups, to create brand awareness and stimulate sales.”

Tuesday January 29 2013 | the times


Business Insight

Special report: the chemicals industry

Many travellers on the bridge to future growth Continued collaboration between the private and public sectors and education is central to the continuing strength of a huge and important sector, writes Rob Stokes


he undoubted strengths of Scotland’s chemical sciences industry include: a skilled workforce with mobility within the sector and between it and others; government support at levels from startup through to mature businesses; good communications links; and emerging opportunities for ‘green’ chemistry. The Scottish chemical, pharmaceutical, coke and refined petroleum products manufacturing sector employed 10,100 people in 2011 according to government figures. Chemicals manufacturing per se accounted for 6,300, pharmaceuticals manufacturing for 3,600, and producing coke and refined petroleum products only about 200. Including activities other than manufacturing raises the total to around the 14,000 direct jobs cited by the industry. R&D expenditure in chemicals and drugs was around £158 million in 2010, a whopping 25.5 per cent of total Scottish based business expenditure on R&D, with pharmaceuticals responsible for fully £149 million. Turnover in the manufacturing side was £6.1 billion in 2010 while gross valueadded (GVA) was £2.0 billion. The GVA per head for chemical sciences is around £161,000 per employee compared to £66,900 for manufacturing, thus making chemicals the second most productive Scottish sector as scored on this measure. “This is a very positive story about growth and opportunities,” said Caroline Strain, head of the chemical sciences team at Scottish Enterprise (SE), Scotland’s economic development agency. “Scotland has industrial and academic excellence in chemicals and it makes a valuable contribution to the economy, though it is not a very well understood sector. It is also important to recognise that Scottish chemicals companies and the international companies based in Scotland are competing on a global stage.” Sales to markets other than Scotland of chemicals, coke, refined petroleum products and nuclear fuel were £5.7 billion in 2010, or 8.5 per cent of Scotland’s total sales of manufactured goods to nondomestic customers. ‘Exports’ to the rest of the UK were £2.7 billion, and to the rest of the world (RoW)

£3.0 billion, 13.7 per cent of Scotland’s total exports to RoW. The sector enjoyed a substantial increase in exports to the rest of the UK between 2006 and 2010. And with a target of growing exports by 50 per cent by 2020, Royal Society of Chemistry President Professor Lesley Yellowlees says that the key to achieving this is continuing to build upon the successful partnerships between universities and industry. Unsurprisingly, chemicals, which overlap with industrial biotechnology using biological processes to manufacture chemicals, is one of the officially designated ‘key sectors’ in the Scottish Government’s economic strategy. This has been reflected in close private/public sector collaboration over the industry’s October 2007 Strategy & Action Plan, supported by SE and its international arm, Scottish Development International (SDI). The plan was ‘refreshed’ last year. “The thing that really stands out about chemicals in Scotland is that we have a very engaged community and government and a strong economic development agency, all working in alignment” said Strain.

Caroline Strain points to a positive story about growth and opportunities “It’s very satisfying that industry, government and academics are all still engaged five years down the line. We’ve seen a lot of investment in the sector, including many small, technology businesses emerging.” Since fiscal year 2008/09, Skills Development Scotland (SDS) — the national body which offers careers advice, on-thejob training and funding for learning — has supported 158 modern apprentices across the chemicals industries and those with which it overlaps: biotechnology, life sciences, chemicals manufacturing and petroleum industries, pharmacy technicians, polymer processing, and process manufacturing. “Along with SE and the Scottish Funding Council, we’re listening to employers

to find out what their skills needs are and where the blockages are in the system,” said Chris Brodie, lead manager, key industry sectors, at SDS. “We then work though the SFC to make sure colleges and universities are developing provisions to meet those needs. This year, we’ll be developing the skills investment plan for the chemicals sector.” The educational system has stepped in alongside Chemical Sciences Scotland and individual companies to encourage more interest in the general areas of science, technology, engineering and maths right through from primary school to graduate studies. Courses directly applicable to chemicals and allied industries are available at vocational qualification, HNC, HND, undergraduate and postgraduate levels. Once viewed as less ‘cool’ or rewarding than careers in oil and gas, creative industries or finance, chemical industry jobs are becoming more sought after. “CSS has been working hard to let people know what the sector does and how it’s relevant, It’s made a start in changing perspectives,” said Strain. “Chemical businesses that are recruiting are getting a lot of applications and there are also opportunities for people in Scotland to move between sectors including chemicals, and often with only minimum retraining,” she added. “We have no difficulty at all attracting people into our apprenticeships or in recruiting graduates for our Engineers of the Future programme,” said Gordon Grant, general manager at the Grangemouth refinery of Switzerland’s Ineos, an operation that exploits North Sea oil and gas feedstock and which produces around a third of the Scottish chemicals industry’s annual output. Engineers of the Future is a five-year private sector-sponsored programme developed out of a partnership between Forth Valley College in Falkirk, HeriotWatt University in Edinburgh and industry partner Ineos to produce ‘work ready’ graduates who would have industrial experience before graduating. “When it comes to technicians with a few years’ experience, we lose people to the North Sea, but we’re second to Oil & Gas in the pecking order in Scotland and find it relatively easy to recruit technicians with chemicals industry experience or to re-train them from other industries.” Companies at Scotland’s chemicals industry hub have taken on 27 apprentices in 2012 — almost a quarter more than in 2011, according to a new survey. Chemical firms based at Grangemouth, which is itself is one of the EU’s largest oil refineries and petrochemical complexes took on at least 29 modern apprentices

There are opportunities for people to move between sectors with minimal retraining

last year compared with 22 in 2011. The Midlothian-based biotechnology company Ingenza has likewise been employing modern apprentices since 2009 and currently has more undergoing HNC training across different business areas at its laboratories providing scalable bioprocesses to manufacture chemicals, biologics, pharmaceuticals and biofuels from sustainable sources. Business Insight reports in depth on page 10 on how Scotland is meeting the industry’s skills and training needs to deliver the quality which underpins its offer to customer worldwide. Scotland is also competitive on salary costs compared to other EU locations according to the Financial Times foreign direct investment benchmark. Chemicals is the second largest exporter behind whisky and has set itself a target of boosting sales abroad by 50 per cent to £4.5 billion by 2020. Working closely with the industry through CSS, both SE and SDI are supporting and promoting this drive. Already established in traditional markets, the industry is expanding its horizons to seek new opportunities for growth. SDI is putting in more resources dedicated to the sector and will this year size up Brazil and Japan, markets believed to offer scope for chemicals from Scotland. India is also in the frame.

the times | Tuesday January 29 2013


Business Insight

Green chemistry spells opportunity


HE transition to a low carbon economy is an intriguing opportunity for Scotland’s chemicals industry to stake a claim to being one of the world’s greenest — green chemistry being an expression used to describe the minimisation of environmental impacts and hazards from making and using chemical products. Greater efficiency during chemicals production, and the use of biomaterials for feedstock and fuels can reduce the sector’s own greenhouse gas (GHG) emissions while new chemical products can lower GHGs in other industries. Scottish Enterprise (SE) and Chemicals Sciences Scotland (CSS) have been working with other partners on a number of potentially transformational projects in this regard. Chemicals company Ineos has been looking at whether to convert part of its oil and gas refining operations at Grangemouth to become a biorefinery using sustainable fuels and chemical feedstocks as well as a centre of excellence in using carbon dioxide (CO2) gas as a raw material. SE is also helping to put together a bid for a biotechnology centre of excellence in the Grangemouth area to combine academic know-

Chemical sciences SMEs will be encouraged to be bolder in developing international trade with SDI support. SE and SDI are working with indigenous companies to see if and how these might grow through greater exports, what barriers there may be, and how these may be overcome. SDI and UK Trade & Investment, the United Kingdom government’s exports and inward investment agency, will also be increasing the number of trade events and conferences each attends to research opportunities in chemicals and to make contacts. The GlobalScot and Chemical Sciences Scotland networks are also being enlisted to identify opportunities and make introductions. The majority of chemicals production in Scotland goes to export, so inward investment tends automatically to stimulate export sales. Headline investments — new or additional, production or R&D — in recent times include commitments by BASF, Dupont Teijin, Piramal, Ingenza, Day International, Sigma Aldrich, Fujifilm, Ineos, Metpro, Syngenta, Dow Chemical, GSK, Sasol, Bakhu Pharma, CalaChem, and PetroChina. They have varied from large players to small companies such as Chemco International, Herboreal, Equatec (purchased by BASF), Giltech, and Surface Active

The GSK plant at Montrose, where job creation is among a raft of headline investments in the sector

Solutions, and start-ups such as Marine Biopolymer, Biogels, and Intelligent Plastics These investments underline the attractions of Scotland as a European Union location for companies seeking to address large and growing global chemicals markets. Scotland has a wide range of serviced green and brownfield sites available with good road, sea, air and rail links for chemical industry logistics and utilities availability is good — power, steam and waste treatment. There is potential to co-locate with existing chemicals industry players, among them BASF, CalaChem, Ineos and DuPont Teijin Films. CalaChem’s GMP (good manufacturing process) facility at Grangemouth offers a scale-up and development route for drugs or veterinary product manufacturers. Financial incentives can include R&D grants and assistance with training and SE and other public agencies are able to access a wide array of funds for innovation, start-up, growth and other needs. Looking ahead, SE is helping the sector to submit a bid to the Scottish Funding Council with a view to establishing a centre of excellence for industrial biotechnology. Biorefining, biochemicals, and biofuels are viewed as growth opportunities.

how with commercial R&D. Other opportunities identified in an SE report for CSS include: developing and making innovative products, processes and solutions to reduce GHG emissions over a total product life cycle and through use of industrial biotechnology; and developing CO2 as a synthetic feedstock for polycarbonates and fuels. The Rowett Institute in Aberdeen and the Midlothian based biotech company Ingenza are meanwhile looking at how microbial enzymes in the stomachs of ruminants could be used industrially to “digest” plant and tree matter to produce sustainable alternatives to petrochemical derived products such as fuel, commodity chemicals and fine chemicals. A report by leading research consultancy Optimat for SE has identified opportunities in: bio-based chemicals and fuels; speciality dyes and pigments; catalysis; fuel cell materials; industrial biotechnology; food additives; and nanoscale chemical processing.

ScotCHEM, a collaboration between seven universities — Aberdeen, Dundee, Edinburgh, Glasgow, Heriot-Watt, Strathclyde, and St Andrew’s — pools academic expertise in chemistry, biosciences and engineering and is the main point of contact with industry, making it easier for companies to access relevant R&D and know-how. Similarly, the Continuous Manufacturing and Crystallisation Centre at Strathclyde University (see page 12) is a partnership of universities, companies and the public sector. Industry-led, it is dedicated to speeding the adoption of continuous processes for producing highvalue chemical products, particularly pharmaceuticals. And, as reported on page 13, the establishment of a Scottish Chemicals Regulatory Forum has been a deliberate tactic to improve Scotland’s competitiveness by encouraging earlier cooperative links between industry and statutory regulatory bodies. Co-locating can also help inward investors to meet regulatory requirements such as Control of Major Accident Hazards (COMAH) as existing chemicals firms’ sites are either COMAH certified or have protocols to make locating there as easy as possible. Assistance with planning permission is also offered by public authorities.


Scottish soap that’s cleaned up the world


NE of the best examples of biotechnology in daily action has to be the soap industry – and no one knows that better than Billy Wilson, managing director of Scottish Fine Soaps, which is very particular about the natural quality of its bought-in vegetablebased raw materials.

“We deal only in grade one sources, whether in solid or liquid form,” he says, “and we’re also aiming to have all-natural raw materials for colours and fragrances too.” None of which is hardly surprising, as the company’s range of sophisticated products – from moisturising milk soap through body butter to bathing milk – are unapologetically high-end, and have been independently so under their own brand name for 16 years. “Before that we were contract suppliers to names like Revlon and Body Shop, but having been in the business since 1974, we knew it pretty well and realised our brand had a lot going for it – especially with ‘Scottish’ in its title. That has special appeal across the world, as it conjures up quality and a nice image of a clean-air environment.” Indeed, the company – part of Alexander Ross Holdings – works consciously to that Scottish strength, sourcing those raw materials domestically, employing 94 local people at its Falkirk headquarters, and manufacturing 97 per cent of its products on-site. Exports have grown accordingly, and now Scottish Fine Soaps can be found in over 40 countries, from the US and Australia to Japan and Russia. And if that’s not a measure of the company’s success, its current turnover of £5.2million must be. Billy Wilson is quick to acknowledge the key role played by Scottish Development International (SDI) in these ever-rising fortunes. “It has really helped us spread our wings not just with practical services like backing for exploratory trips, exhibitions abroad, and sourcing agents and distributors on the ground in various countries; but also by showing a unique understanding of our products and markets they appeal to.” He explains that such niche markets are not instantly identifiable, “as they must fit with our upmarket, boutique-style image where a typical customer is a lady of 35 who has some disposable income and likes to pamper herself with a premium product”. So where are they headed now? “India is our next big target, and we are restructuring to refocus on the US – where a big longstanding customer is doing particularly well and putting a lot of new business our way.”

Tuesday January 29 2013 | the times


Business Insight

Training and development Primary school pupils at the Grangemouth Science Fair are suitably impressed by the combustible properties of petrochemicals

The wow factor that will ensure a new workforce With demand high for qualified young people, there is a major imperative to attract new chemical engineers for the future, writes Rob Stokes


kills Development Scotland (SDS) is developing a plan for public investment to ensure the chemicals industry can recruit the apprentices, technicians and engineers that it needs. “We are working toward having the skills investment plan in place this year,” said Chris Brodie, who heads the SDS team focused on skills for key sectors. The national skills development body consults closely with industry and has a 2011 Sector Skills Assessment carried out by UK analysts Cogent SSC. In the chemicals industry, Cogent SSC found: chemicals demand high skill levels from operators, technicians and professional and managerial staff; technical and professional occupations are hardest to fill; there is a need for a reliable supply of science and engineering skills; emerging

technologies such as biotechnology could drive needs towards higher skills with more emphasis on interdisciplinary skills and more bioscience. In the drugs industry, Cogent reported: large demand for professionals, managers and operators; high demand for technical up-skilling but competition from low-wage economies; large demand for science, technology, engineering and mathematics (STEM) graduates, especially those with the highest skills in chemical and biological sciences; and the transfer of new technologies into the drugs industry can be rapid and will be a big driver of skills. So what stands in the way? Perceptions of the chemicals industry for one thing: until maybe a decade ago, it was seen as unglamorous and “dirty” Lack of awareness about the industry has been another challenge. “Many young people probably couldn’t tell you what a chemical company does and in Scotland that’s maybe to do with the fact that you don’t necessarily see many end products in the way that you can with, say a wind turbine,” said Caroline Strain, head of the chemical sciences team at development agency Scottish Enterprise. Attitudes are changing though, a trend

due at least in part to efforts by the Chemical Sciences Scotland (CSS) partnership between the public and private sectors and academics. “CSS has shown this is a growth industry,” said Chris Brodie. Many chemical companies in Scotland are SMEs, so their capacity to take on graduate placements or modern appren-

Chris Brodie is looking at ways to help SMEs to take on graduates or apprentices tices is limited. “We’re looking at ways to increase that ability,” said Brodie. “SDS now has an employer engagement team that can work with individual companies to understand their skills issues.” This team will also manage access to training support from funding streams including modern apprenticeships, low carbon skills, and flexible training, he said. On the educational side, Forth Valley College (FVC) is an exemplar for engage-

ment with engineering industries’ needs and the promotion of STEM skills from school through to college and university studies. It has campuses in Falkirk, Stirling and Alloa close to the concentration of chemicals firms in and around the Grangemouth refinery. FVC is the first college in Scotland to be STEM-assured through the New Engineering Foundation, a UK think-tank. FVC introduces youngsters to the chemical industry, the jobs that are available and the career paths. Pupils and teachers spend a day ‘on the job’ at a mini processing plant used to teach the college’s students. Visiting schools to teach ‘forensic science’ is another popular way to encourage interest. The college runs apprenticeship, HND and Engineers of the Future programmes. Apprenticeships for chemical and other companies in the Grangemouth complex and throughout Scotland cover petrochemicals and fine chemicals and encompass mechanical, electrical, instrumentation, processing and other qualifications. Electrical and mechanical apprentices for the offshore oil and gas industry also attend FVC, where they receive an introduction to hydrocarbons and processing training. Software simulating the working of a real oil refinery is among teaching facilities. “Most of our staff delivering training are also hugely experienced in industry,” said Joanna McGillivray, Head of Applied Science and Computing at FVC. “Collectively, they have spent 130 years working in oil refining or chemicals production. So students are learning from people with relevant and recent industrial experience. We also embed health and safety (H&S) behaviour which we see as extremely important.” H&S training includes real-life safety

the times | Tuesday January 29 2013


Business Insight

bulletins from companies, allowing students to see how the firms responded to issues and to discuss solutions and prevention. Many HND students in FVC’s engineering disciplines progress on to an MA degree in Chemical Engineering at Heriot-Watt University in Edinburgh. Offering first and second year university maths within the HND syllabus allows students to go straight into third year at university. Engineers of the Future is a five-year programme with a job at the end: two years at FVC (for HND and vocational and industry qualifications) and three at Heriot-Watt. This partnership between academia and chemicals company Ineos is now in its fifth year. The partners jointly recruit students and place heavy emphasis on graduates being ‘work ready’ instead of needing another 18 months to develop the manual dexterity to work in the Ineos refinery at Grangemouth. Some training is on site and projects are based on real challenges that graduates will encounter at work. “Students on the programme are also employees and are expected to conduct themselves as such, turn up on time, leave at the end of a full working day, and so on,” McGillivray said. “These are model students and they are raising the bar among their peers when they join other groups at university.” Heriot-Watt will expand the Engineers of the Future intake for the next academic year, which will also see the launch of a similar, five-year Chemical Engineering programme run by FVC and the university but without employer sponsorship.

Apprentices at companies such as Ineos are often introduced to the industry through school level ambassadors

“The skills that these students are being equipped with are important to the global economy and are highly transferrable,” McGillivray said. “I believe we’re making great inroads towards Scotland producing the best engineers in the world.” Hundreds of applicants bear out her enthusiasm. “We have no difficulty at all attracting people to Engineers of the Future and to our apprenticeships,” said Gordon Grant, general manager at Ineos Grangemouth. It is a tougher finding seasoned technicians, said Grant. One reason is the lure of well-paid oil and gas jobs, though better payers such as Ineos attract experienced staff from within the industry. “The problem is finding people with ten years’ experience for roles such as instrument, electrical or control engineer. There is global shortage of these people,” Grant said. Engineers of the Future is a medium term, home grown response to this.“We invest up front but it’s a good investment when you get work-ready people and they commit to stay with the company for a period of time. We’re big enough to run this ourselves but people are now starting to talk about the need for an industry scheme that smaller companies can put, say, one graduate or a couple of apprentices through,” Grant explained. A shorter term solution is to take apprentices who have reached technical supervisory or planning grades and improve their professional qualifications so they can work alongside engineers. “So we’re sponsoring some ex-techni-

cians who’ve reached HNC/HND levels to spend a couple of years getting a university degree,” said Grant. Ineos also works on the industry’s appeal to youngsters. Its Grangemouth Science Fair in March is a day for getting a feel for science and is attended by every local pupil in the last few months of primary school education. “It’s important because within a year of going to secondary school in Scotland they will be making choices that, if they go one way, could pretty well guarantee that they will not work in our industry,” Grant said. “They need three science based Scottish highers to move on towards apprenticeships or graduate entry in our industry.” Ineos is among chemical companies that provide ‘ambassadors’ for STEMNET, a government funded initiative that contracts companies to run STEM clubs and a STEM ambassadors programme fostering links between industry, pupils and teachers to enthuse the latter two about science, technology, engineering and maths. “We’ve recruited a good few people from the petrochemical industry to act as ambassadors,” said Frank McKeever, manager of Global Science, the Falkirk based company contracted to deliver STEMNET programmes in East of Scotland, where it visits more than 90 high schools. Apart from Ineos, STEMNET ‘chemicals’ ambassadors in the area include Swiss owned Syngenta at Grangemouth, drugs firm Macfarlan Smith in Edinburgh, and US owned FMC Technologies, a North Sea engineering company

with a subsea business at Dunfermline but which has a chemicals dimension to its activities. Conversations with local youngsters led Global Science to introduce ‘speed networking’ events under the banner Routes Into Employment at which STEMNET ambassadors met senior pupils in groups of no more than three at a time to spend 10 to 15 minutes talking about how they had wound up in their industries and the jobs they do. “Some of the evaluations of these events have been stunning,” said McKeever, who himself spent 30 years in petrochemicals with BP. “Young people have said they are far better than traditional careers fairs where they are handed company pamphlets.” McKeever sees a change in attitudes to STEM subjects. “They’ve swung back generally throughout the East of Scotland. I think young people have realised that if they have chemistry, physics or biology skills they will find it easier to get jobs than if they were working in finance where we’ve seen big companies laying people off, for example.” McKeever reports teachers saying that it is becoming more difficult to arrange site visits to companies in general, perhaps because of reduced staffing. “Companies need to realise this could be the first interface with future employees,” he said. “One part of the new Curriculum for Excellence in Scotland is that schools should develop closer links with industry.” One early platform to address these issues will be a STEM Ambassadors roadshow in Edinburgh in March.

CommErCial rEport: CoNVErGE CHallENGE

Challenge accepted – entrepreneurial winners in 2012


rom all corners of Scotland’s universities and research institutes they came – bright ideas formed from years of research and study, with an identifiable industry need and clear market potential. The Converge Challenge attracted the widest range of applicants so far, ranging from final-year undergraduates to experienced professors, and after a rigorous selection procedure ArxBio was named 2012 winner at an awards ceremony last September. The prize was awarded for its development of a platform technology for the creation of new, efficacious vaccines for bacterial disease of animals and humans, and the company is planning to exemplify the technology by developing a number of products for use against veterinary pathogens. ArxBio, founded by Michael Fontaine and Richard Mole from the Moredun Research Institute, secured £25,000 to spin out their business, plus £25,000 in business support. Congratulating ArxBio at the ceremony for its “genuinely innovative project”, Mike Russell MSP, Cabinet Secretary for Education and Lifelong Learning, said the Converge Challenge programme “can help catapult the most promising fledgling entrepreneurs towards commercial success and ensures the Scottish economy benefits from the innovative work carried out in higher education institutions across Scotland”. Accepting the award, Dr Fontaine said: “We are delighted and honoured to win this award and have learned much from the experience of taking part in Converge Challenge. The training and

interaction with the other participants has really helped us to develop our business idea.” In second place was Dr Ekaterina McKenna from the University of Glasgow with her proposed spin-out, Dynamic Bioarrayand, and third was Heriot-Watt’s Professor Derryck Reid and Chromaticity.


For the first time the Converge Challenge, in collaboration with Edinburgh City Council and Open Innovation, became a European competition in 2012. Converge Challenge Open Innovation aims to find the best examples of entrepreneurs successfully adopting Open Innovation principles and techniques to develop their business plans. It was an opportunity for partners in England, France, Germany, Ireland and here in Scotland to come together and exchange best practices in innovation and entrepreneurship, and gain an understanding of new businesses on a continental scale. Winners from business competitions in Partner’s countries were invited to Heriot-Watt to pitch their ideas to a panel of international judges, aiming for the title of either Best Open Innovation Business or Best Open Innovation Idea. Competition was fierce but the winners of Best Open Innovation Idea were Ruben Jubeh and Ilija Vukorep of Kassel University, with their assistance robot SQUID. Taking Best Open Innovation Business was ArxBio – confirming that Converge Challenge identifies the best spin-out ideas not only in Scotland but also in Europe.

The Open Innovation Project is ERDF-funded through the Interreg IVB NWE programme – working with business, academia and communities from Belgium, England, France, Germany, Ireland and Scotland to promote collaborative approaches to innovation.

mike russell, mSp presents the Converge Challenge trophy to michael Fontaine

Who are our future entrepreneurs? Considers mervyn Jones Who are our future entrepreneurs? For some it is instinctive and they just get on with it – seeing opportunities, creating interest and starting companies. Our undergraduate population should be a great source of this capability. But there are more. Many in our academic community, who, with time and the guidance of mentors, are well placed to take the lead in developing their own commercial opportunities. This is why Converge Challenge is so important to the future of Scotland’s economy. In 2012, I chaired the final judging panel which decided the winners of the most recent competition. I was struck by the passion and talent that people had for their ideas. It was the realisation, in some cases, of years of hard work and detailed research to develop and sharpen a proposal to the point where it would be ready to spin out. In many ways, it felt as though they had done all the hard work getting here, and now it was up to us, the judges and mentors, to take them forward and guide them through the notoriously difficult waters of launching a new company.

And now we stand ready to embark on Converge Challenge 2013, inviting Scotland’s entrepreneurial researchers to come forward and take part in what will be another tough yet rewarding experience. This year Aberdeen, Dundee, Edinburgh, Glasgow, Heriot-Watt, St Anmervyn Jones, drews, Stirling and Strathclyde Chairman Universities will encourage Converge potential academic entrepreneurs to engage with and Challenge enter Converge Challenge and the support to entrepreneurship and business creation that comes with it. As the reputation of Converge Challenge grows as a beacon for academic entrepreneurs, so does the capacity to support academic lead company creation, and so does Scotland’s knowledge-based economy. Mervyn Jones has created a number of programmes to support young businesses and has been a director of young companies in various sectors. He chairs the Converge Challenge Steering Group

Tuesday January 29 2013 | the times


Business Insight


More hands make less work CMAC is effectively demonstrating how academic and industry partnership can transform the growth curve, says Ginny Clark

We’re now looking at how we can work on a global scale and recently visited Singapore and the US


ioneering research project CMAC — Continuous Manufacturing and Crystallisation — is not only working to transform the manufacture of high-value pharmaceuticals and chemicals, it is also creating a remarkable model of academic and industry partnership in an 18-month trajectory that has already taken the vision from seed funding to the global stage. With its hub at the University of Strathclyde, the aim is to create a worldclass partnership with industry, academia and public bodies, all working in precompetitive collaboration. Drugs and other high value chemical products are currently manufactured in traditional ways, often taking more than a year’s lead time and using processes that can be inefficient, while ‘continuous manufacture’ offers more control, less waste, and the opportunity to access new products. CMAC also involves six other academic institutions and it is this unique relationship that is key to the project’s strength. With colleagues at Glasgow, Heriot-Watt, Edinburgh, Cambridge, Loughborough and Bath Universities all contributing skills and expertise in chemistry, analysis, chemical engineering, crystallisation, pharmaceutical sciences, manufacturing and operations management, the result is an exceptional multi-disciplinary academic team. The CMAC vision was born out of Chemical Sciences Scotland discussions, a pilot study with GSK, Nitech and the University of Glasgow, and with seed funding from the Scottish Funding Council, more than £32 million has been raised in just 18 months. With AstraZeneca, GlaxoSmithKline (GSK) and Novartis the founding industrial tier 1 members, the CMAC board chair is Dr Clive Badman OBE, the vice president of investigative medicines at GSK, and Craig Johnston is operations director, with the crucial role of engaging the industry base. Johnston, a Fellow of the Institute of Chemical Engineers and currently chair of the Chemical Sciences Scotland Innovation Group, has previously worked for ICI, Zeneca, Avecia and Fujifilm, and was also a board director with industry/academic consortium Britest Ltd. He stresses just how vital industry relevance is to the CMAC vision, an evolving project that has always been demand led. “Before we started out, we had a number of workshops with the major companies to define the research challenges,” explains Johnston. “We’re a UK national centre and continue to benefit

from senior industry support and commitment. We must ensure CMAC’s industry relevance, and are working closely with companies to maintain that, from multi-nationals down to micro SMEs, such as specialty pharmaceutical, chemical and technological companies accessing CMAC’s facilities. At our first open day last autumn we had more than 30 different companies with a world-wide footprint all keen to progress research in Scotland. Scottish Development International have really helped international engagement.” Professor Alastair Florence leads the key research platform, the Engineering and Physical Sciences Research Council (EPSRC) National Centre for Innovative Manufacturing in Continuous Manufacturing and Crystallisation, led from the University of Strathclyde. Last October 2012 an EPSRC doctoral training centre started, which provides a further 45 PhD students across the CMAC network — in addition to the 13 professors and more than 50 students and researchers working across the portfolio of activities. Essentially, the project is focused on the manufacture of crystals and powders — which are important in producing a range of materials such as drugs, inks, pigments, paints, and even computer screens. It is the structure and properties of these crystal and powder particles that determine the ease of manufacture, and also the function and performance, of the final product. Complex crystal formation processes means their size, shape and structure can vary, and that can affect quality and lead to variations in the way the material performs during manufacture. This could ultimately improve a medicine’s performance, for example. The EPSRC Centre plans to revolutionise the current processes by delivering new continuous manufacturing technologies with improved quality and flexibility. This is cutting-edge research, exploring new continuous methods of crystal formation, particle and powder production, and preserving their optimised properties

through isolation, drying, formulation and final product manufacture stages. Achieving that will not only make development and production quicker and cheaper, but also provide cleaner and greener manufacturing processes. In 2014 the Centre will expand into the new Technology and Innovation Centre, which is supported by Strathclyde University, Scottish Funding Council and Scottish Enterprise, marking another landmark step for CMAC. “The vision, scope and programme have been developed through close collaboration with industry and in particular our founding strategic partners GSK, AstraZeneca and Novartis who have provided significant input and support throughout the last year,” says Florence, EPSRC centre director. “With the Centre now established and the flagship research projects and platform activities underway, a key focus in the coming year is the delivery of the research programme and infrastructure supporting our forward plans. Designs for the new continuous manufacturing research facility in the Technology and Innovation Centre at Strathclyde are well advanced, and from 2014 will house world-class facilities for collaborative research. These are exciting times for the Centre and our partners and

The EPSRC Centre plans to expand into the new Technology and Innovation Centre in Glasgow next year

Professor Alastair Florence of CMAC

Oasis of varied expertise Next year CMAC will move into the University of Strathclyde’s £90 million Technology and Innovation Centre, a state-of-the-art building in the heart of Glasgow that has been developed with, and for, industry. Researchers, engineers and project managers from academia and industry will work on projects vital to economic regeneration in Scotland and further afield. SSE, the Weir Group and ScottishPower are among the major partners, with the centre also keen to

attract small and medium sized partners in innovation. Dr Steve Graham, executive director of the Technology and Innovation Centre, says new centre will enable industry to rapidly develop research and technology, and access worldleading academics, research, facilities and graduates. “We’re bringing together expertise from every area of the University — business, science, engineering and social science,” he says.

we look forward to continue to develop our relationships with the wider national community concerned with Continuous Manufacturing and Crystallisation.” It’s an exciting time for everyone involved with CMAC, a project — a concept — that continues to evolve, and to grow. “We’re now looking at how we can work on global scale, and have recently visited Singapore and the US to explore the opportunities,” said Johnston. “We’ve raised £32 million in 18 months, so we’re now a global player, and what we’ve already achieved is significant. Companies that historically worked on their own are now collaborating, and manufacturing is returning to Europe, and being competitive. The UK government through the Technology Strategy Board is very supportive. I think we’ve definitely captured the zeitgeist.” The CMAC model of an academic institution and industry working together is clearly not unique; however, the interdisciplinary aspect brings an exciting dynamic to the project, and one that offers benefits to both the institutions and the businesses involved. “These collaborative centres are the way forward, and the Scottish Funding Council recognises that,” says Johnston. “We’re certainly benefiting from the strong industry support and leadership we’ve had, but the attitude of the researchers and professors has been crucial. It’s that mindset, of working across disciplines from chemistry and chemical engineering to manufacturing systems, where in the past they’d be operating in isolation. We’ve also had strong support from the University of Strathclyde, from the very top, and with funding for the 45 PhDs, we’re involved in providing the scientists of tomorrow, and giving these students the exciting opportunity of spending time in each of the seven different universities.” Going forward, CMAC is keen to broaden engagement with the whole supply chainand it is also looking at the potential for production of high value, low volume products, some of which are not commercially developed because they are considered to have limited opportunities for profitability. “This has been a very encouraging start in understanding and designing the supply chain of the future,” says Dr Badman, Chair of the CMAC Board. “I’ve been impressed by the way Alastair, Craig and the team across the universities have worked with GSK, AZ, Novartis and the other partners to progress innovative research against a well defined, user-led scope. In addition to the on-going core focus on continuous crystallisation, I look forward to the development of continuous processing research in the interface areas.”

the times | Tuesday January 29 2013


Business Insight

Legislation and compliance

Surviving in the complex web of the law There is help at hand for companies struggling to deal with new legislation emerging from the European Union, says Barry McDonald


the chemical sector is among Europe’s largest and most dynamic but is also, understandably, one of the most regulated industries. A raft of EU directives and legislation keep the industry firmly under the microscope and understanding that legislation is key to the future success of the sector. As recently as 2007, chemicals sales in the EU amounted to over €500 billion (£423 million), about 30 per cent of global chemicals sales. Regulation can have a significant impact on the chemicals industry, including those companies based in Scotland. Although all regulation and legislation on the chemical sector is handed down from Europe, the implementation of the rules come from both the UK and Scottish governments. And it’s far from straightforward — which is where the expertise of Chemical Sciences Scotland (CSS) can help. Caroline Strain, head of chemical sciences at Scottish Enterprise explains: “Legislation is interpreted and administered by what is termed a ‘Competent Authority’. In Scotland this can either be the Health and Safety Executive (HSE), which is a UK-based authority and also the Scottish Environment Protection Agency (SEPA). Although Scotland has devolved powers around environment protection it does not have devolved powers on Health and Safety. Therefore the sector can be dealing with EU legislation as well as both the UK and Scottish governments.” Keeping abreast of constantly evolving legislation and regulation, implementing the legislation and then demonstrating compliance is already a major task for larger chemical firms, so for SMEs in the sector it represents and serious challenge. “Chemical companies understand the need for strict regulation,” says Caroline Strain, “but the cost of compliance and the length of time it takes a business and the regulator to implement the compliance could be improved. We are aware the legislation needs to be there but we have to ensure it’s workable legislation. Chemical Sciences Scotland seeks to work with government to help streamline regulation and legislation to offer a competitive advantage to the Scottish business base.

“The cost of compliance is also challenging, particularly for the SME base: 85 per cent of chemical businesses in Scotland are SMEs and I know of at least one of our bigger companies in Grangemouth which has 2.5 Full Time Equivalents employed solely to ensure they are in full compliance with existing legislation. This level of resource might be available to a bigger business but not to the wider SME base. Gillian Watson is CEO of Giltech, an SME in Ayr employing 10 people. The challenge for an SME, she says, is having your voice heard among the major players in the sector. Therefore the support from organisations like CSS is vital. “In Scotland we have Chemical Sciences Scotland, and Scotland Europa who do a very good job of trying to scoop up the SMEs voice,” she says. New EU legislation emerges all the time and a sector such as chemical sciences can be placed in the situation that not only do you have to comply with existing legislation, but you keep abreast of new and emerging legislation which is going to affect you in the months and years to come. The businesses constantly highlight that if legislation is to be introduced it has to be workable, to make it easier for businesses to comply and also to ensure that the ends and objectives of the legislation are achieved. “One recent success was working as part of a larger group across the EU, to convince the EU that a regulation rather than a directive was a better implementation route for proposed Biocide legislation.” It’s not the only success story. Strain points to Chemical Sciences Scotland work with the Scottish Governments Regulatory Review Group (RRG) recently established by the Scottish government under the direction of Fergus Ewing MSP, the Scottish Government’s Minister for Energy, Enterprise and Tourism. The group, chaired by Professor Russell Griggs, aims to streamline the regulation process. “CSS invited Professor Griggs and Fergus Ewing to attend a Grangemouth forum to understand from the businesses direct the challenges and barriers to growth that complicated regulation was producing,” adds Caroline Strain. Mr Ewing committed to supporting the development of a multilateral approach to streamlining this legislation, always on the provison of offering businesses in Scotland a competitive advantage. Professor Griggs required and then obtained a mandate across three ministerial portfolios: Enterprise, Planning and Environment. In the past 10 months the RRG has made great strides in developing a multi lateral approach and solution in the challenging areas of flood protection and the industrial emissions directive. “This shows the Scottish government is listening to important sectors such as chemical sciences, and engaging collaboratively to seek solutions to difficult issues.” The next piece of legislation the RRG will tackle is land use planning and haz-

The bigger companies at Grangemouth have the resource to employ people to deal with compliance; smaller firms do not

ardous substance consent. “If this can be streamlined, says Strain, then Scotland will have a competitive advantage enabling businesses manufacturing or developing product in Scotland will be able to ‘plug in and go’.” The remaining challenge will be ‘line of sight’ for new legislation and to be able to work in partnership with the EU and UK governments to ensure workable legislation coming forward.

Chemical Sciences Scotland as an Industry Leadership group has sought and achieved influence where required in this important operating area. To have businesses and regulators working together for the betterment of the economic prosperity of the existing business base and the economy is a strength that Scotland should play strongly, and might even attract new investment to these shores.


Where the chemistry is right for young apprentices


IG refineries and chemical companies make their presence felt in no small way in Scotland, but smaller companies often punch well above their weight – and one such is Ingenza, which – apart from reaching up to be a world leader in the application of industrial biotechnology and synthetic biology – is making pioneering strides in the recruitment of young scientists. This it does through enthusiastic participation in the Scottish Modern Apprenticeships Scheme – at whose 2011 award ceremony it won the title Small Employer of the Year. Though founded only a decade ago as a spin-out from Edinburgh University, the company is led by a team with a 25-year history in applied bioscience and the development and commercialisation of biotechnology and bioproducts. Based in Roslin near the capital, Ingenza and its 30-strong staff focus on producing robust, economical and scalable industrial bioprocesses tailored on a client-specific basis within a broad customer base in chemicals, pharmaceuticals, food, feed and fuel where it applies its proprietary synthetic biology to the manufacture of industrial products. But do you have to be a universityeducated graduate to master such a range of scientific disciplines? “No,” says head of process development Ian Archer. “I want people to view modern apprenticeships as being on a par with degrees.” In support of that philosophy, he praises Chemical Sciences Scotland (CSS) “which has provided a really good mouthpiece as an

influencing body for the industry in Scotland and been very open-minded in how it has listened Ingenza’s apprentice team to smaller (L-R) - Ross Hepplewhite, Jack companies Kay and Jonathan Selfridge like ours and shown a real understanding of the importance of industrial biotechnology”. He is appreciative of how CSS helped Scottish Enterprise and Skills Development Scotland put together the Modern Apprenticeships Scheme, from which the company has benefited with some impressively talented college-educated students – to the extent that such a background for such apprentices has become an accepted intake route. “We were initially approached by Forth Valley College, who were the first to people to implement this scheme, and the government agencies were very clever in putting together a two-for-one deal in which we had to pay for only one of them. Which was obviously quite an incentive for us.” On that continuing basis, Ingenza has been hosting four teenage so-called MAs – two of whom have already been taken on and, like their university-educated colleagues, should progress along an accepted career path through research assistant to fully-fledged scientist. “There’s no doubt we’ll make them all permanent employees because we put a lot of work into training them and they’re really good,” says Mr Archer.

Tuesday January 29 2013 | the times


Business Insight

Green agenda Scotland’s scientists are mounting a two-pronged fight for a sustainable global bio-economy, reports Rick Wilson


n the days when ooze from the India rubber tree was first transformed into tyres for early motor cars, it was not yet called industrial biotechnology; but that’s what it was, and that type of process — making practical products, materials, chemicals and energy out of raw biological sources — is now being promoted as one of two plant-based legs on which Scotland should stand firm in the face of a coming tsunami of natural challenges. The other is sustainable cultivation: the breeding of plants to maximise food potential and survive changes in earthly climates and conditions; and growth, in all its senses, is the common word for both. Indeed, since Scotland’s chemical sciences pooled their vision for the industry under the umbrella banner of Chemical Sciences Scotland (CSS) six years ago, “great strides” have been made — according to Energy Minister Fergus Ewing — in pushing for the sector’s growth alongside rising export levels. But that’s only the start. Increased adoption of industrial biotechnology is expected soon to play a key part in UK competitiveness in global markets, where a new societal awareness is showing a clear preference for bio-based manufacturing with a reduced carbon footprint and improved sustainability. And the yield is predicted to reach up to £12 billion by 2025. How much of that will come Scotland’s way? It’s early days yet, but in the tartan corner Scottish Enterprise is already raising awareness, stimulating new export-oriented thinking, innovation and enterprise, inward investment and supply chain projects; and in her modern city-centre eyrie near Dundee’s Tay shore, Sarah Petrie, project manager industrial biotechnology development and strategy, is firmly focused on an ambitious economic goal. “We want to see a significant rise in revenues being generated,” she says, “so that our current figure of £189 million grows to £900 million.” To achieve this through enhanced connectivity and technology development alongside a favourable research and policy environment, the agency is working hand-in-hand with Scottish government, business, academia and industry representatives. All of which needs a hub, she believes: “an Industrial Biotechnology Innovation Centre, where companies and academics can connect, engage, raise their profile, drive innovation, get into networking”. To that end, a task team plans to submit a bid to the Scottish Funding Council, and it does not necessarily imply physical premises. “It can be a virtual exercise,” says Sarah Petrie, “so long as it is clearly meeting industry demands. The input of universities will be highly valued, of course, but the project should be managed by a commercially savvy business director.” Such a centre would allow businesses to access equipment and expertise otherwise out of reach, as well as conducting its own in-house research and development. It would also lower barriers to innovation and help businesses access new funding streams and point them towards the potential of industrial biotechnologies.

Are we doomed? The answer lies in the soil The challenge is to convince industry bosses that myriad benefits, including cost-saving and marketing advantages, would result from implementation of biobased routes in their businesses. Such as? Biofuels drawn from the waste of plants previously used solely for food; plantderived flavours, fragrances and natural colours for food or the cosmetics industry; and the use of enzymes as catalysts to dramatically reduce operating temperatures and pressures — and thus required energy. In this way, a firm’s new, greener credentials can deliver competitive advantage among consumers seeking naturally sourced and environment-friendly products and processes. “There’s a strongly growing demand for processes that use feedstocks other than diminishing and climate-altering petrochemical resources,” says Dr Petrie, a trained scientist herself who believes that, apart from domestic, commercial and economic considerations, a change of humankind’s current mindset is imperative to mitigate a looming “perfect

The input of universities will be valued but it should be managed by a commercially savvy director

storm of global population rise and huge demand being placed on raw materials”. So is the answer, as they used to say, in the soil? “And the way we use it,” says Dr Petrie, “with a particular emphasis on biotechnology and sustainability — which means minimal wastage and maximal productivity through crop-breeding to improve yield.” Such convictions allow her to enjoy a close proximity, philosophically as well as geographically, with an army of experts all enlisted for the forthcoming battle. Tucked up in about 20 utilitarian labs, offices and glasshouses on a hillside near Invergowrie village just six miles westward along the Tay shore, are the 300-plus biochemical warriors who could hold the secrets of plant sustainability — and so global survivability – in their earthy hands. They represent the southern outpost of the James Hutton Institute, formed less than two years ago — and named after Edinburgh’s 18th-century “father of modern geology” — with the merger of the

Macaulay Land Use Research Institute and the Scottish Crop Research Institute. The move has tightened the biochemists’ focus on the challenges, as both institute branches — another 300-plus staff are quartered near Aberdeen — bring together existing expertise in crop research, soils and land use, and a re-energised commitment to enhancing Scotland’s international reputation for excellence in scientific and research expertise. Its research themes are listed as: safeguarding natural capital; enhancing crop productivity; controlling weeds and pests; managing catchments and coasts; nurturing low carbon communities; realising the land’s potential; and delivering sustainable production systems. And all the themes are backed up by practical applications. Attached to the Invergowrie complex are a score of differently-lit and heated glasshouses and a working tractor-dotted farm with a significant difference – Balruddery is home to the Centre for Sustainable Cropping where, across 42ha, the effects of sustain-

the times | Tuesday January 29 2013


Business Insight

Technology treads boldly onward


n innovative Scottish company has developed a unique way to recycle tyres without any environmental impact, allowing the material to re-enter the materials chain. The Recyclatech Group was established in 2007 after researchers at Edinburgh’s Napier University discovered a means of devulcanising rubber using bacteria. In the process — not unlike brewing — the bacteria are used to remove sulphur added during vulcanisation.

able versus conventional management are rigorously tested using a split-field design over a six-course rotation. Any advances the Hutton people make can offer at least three positive returns: Scotland’s own agriculture must benefit from increased sustainability; profit can be made though the plant variety rights “patent” system from other lands drawing on developed plant varieties that might be, say, drought- or flood-tolerant; and last but not least, the general good of humankind can be well served. For the institute – under the leadership of chief executive Professor Iain Gordon – also pledges altruistically “to deliver the highest quality, innovative research with the aim of meeting global demands on finite natural resources”. Project leader Dr Mark Taylor cites the doomsday scenario highlighted by the UK government’s chief scientist, Professor Sir John Beddington, who warns Dr Sarah Petrie says there is a need for an Industrial Biotechnoly Innovation Centre

of a surge in demand for food, water and energy over the next two decades, when governments must also tackle climate change. “If we don’t address this, we can expect major destabilisation, more rioting, and significant problems with international migration, as people move out to avoid food and water shortages. Our food reserves are at a 50-year low, but by 2030 we need to be producing 50 per cent more food. At the same time, we will need 50 per cent more energy, and 30 per cent more fresh water.” Professor Derek Stewart, head of enhancing crop productivity and utilisation at the institute, says the pressures have all increased the need for a second “green revolution” to improve the yield, stability, quality and nutritional value of our crops. “Achieving this will require the manipulation of multiple crop traits. By capitalising on the most recent advances in genomics, genetics, natural product chemistry, pathology and their related disciplines, our research aims to do just that — ultimately enhancing and diversifying the crop-based products of tomorrow.”

The enzyme process takes place in tanks held at 30 degrees Celsius, so high levels of energy input are not required. Used tyres thus become safely recycled rubber — economically, profitable and with no environmental effect — that can be used with significant cost-savings over virgin material in products that currently require new rubber. Typically, devulcanised rubber granulate will be produced at a state-of-the-art plant whose facilities include rubber crumb

reception, control of the patented biotechnological process in stainless steel reactors and downstream processing of the devulcanised product. Additionally, Recyclatech Group will continue its research to develop a range of novel treatment processes for gaseous and solid waste materials. Recyclatech Group will supply samples to all companies interested in using the product or technology. Company CEO Bill Findlay said: “This is a truly green technology, a first in commercial devulcanisation providing at least two product streams and zero waste.” The company is planning to expand the business through licensing the technology to interested parties in Europe and beyond.

If all this sounds to the layman suspiciously like genetic modification, or GM as it’s more commonly called, the Hutton experts respond with: “That’s a part of it, yes.” For there is no doubt GM’s bad press has faded, with even its most vociferous Greenpeace opponent, Mark Lynas, telling a recent farming conference in Oxford: “I apologise for having spent several years ripping up GM crops. I am also sorry that I helped to start the antiGM movement back in the mid 1990s, and that I thereby assisted in demonising an important technological option which can be used to benefit the environment. I now regret it completely. What made me change my mind? I discovered science.” Even the sales side can stand back and appreciate the bigger picture. Jonathan Snape, commercial director of Mylnefield Research Services based at the Invergowrie centre, says: “The overall story from our point of view is that the way we do things in the world has got to change – and pretty quickly — or the consequences are going to be catastrophic. “We might be tempted to say climate change is not going to affect us; but if we have to buy from countries that can’t feed their own people, they’re not going to sell to us. “So to address all those issues, we have to look to plants as the core of it. Whichever way you go — looking for energy, food, water, economic growth — they all come back to plants, the knowledge we have of them; and how they interact with the environment. “On the plus side we now have huge amounts of knowledge and tools available that we didn’t have five years ago. We have got everything in place to address all these issues. GM is one of many tools. We’re not dependent on it. But it will enable us to get to an end-result more quickly than we would get there anyway.” Professor Stewart chips in: “We have got to change our behaviour to keep up with, and adapt to, changing circumstances. If we were to just continue doing what we’ve always done, a la HMV, the inevitable result would be collapse.” “So,” sums up, Sarah Petrie, “looking at a sustainable bio-economy is really the only way to go.” And aptly, she clearly has faith in the kind of Scottish enterprise that can pull it off.

We have got to change our behaviour to keep up with, and adapt to, changing circumstances Professor Derek Stewart

commercial report: lo Salt

How a Scottish product became ‘salt of the earth’


T virtually put the salt into Saltire – the Scottish company that developed a healthier alternative to table salt in 1983 and now, 30 years later, sees it available in over 20 countries. And LoSalt is still making serious inroads into new international markets. It’s the brainchild of Klinge Foods Ltd, an offshoot of Klinge Chemicals Ltd, which since the late 1970s had been manufacturing potassium chloride, one of the key ingredients in bloodpressure medications. Tapping into a growing awareness that excess sodium consumption was linked to high blood pressure, the company began developing this blend of two natural mineral salts that delivers 66 per cent less sodium than regular table, sea and rock salts. “We realised that by blending potassium chloride with small amount of sodium chloride, we could offer a far healthier salt alternative very close in flavour to regular salt but contained only onethird of the sodium,” says business development manager Mike Lloyd. Once the company was satisfied it had achieved the optimal formula for LoSalt, the product was launched into enduring dominance in the UK marketplace – “though exporting has always been key to our growth”. With help from Scottish Enterprise and its international arm, Scottish Development International (SDI) Klinge started exploring export opportunities in 1986 by attending international food exhibitions and conducting national and international market research. It began developing contacts and a distribution network that eventually covered most of Europe, Ireland, the Middle and Far East, Africa and Australasia. “The big break” came in 2008. SDI was hosting two buyers from Whole Foods, who were exploring new products in markets around the world. SDI introduced the buyers to the LoSalt product, and over the next 18 months worked with Klinge to help agree a supply deal. By the time the company attended the 2011 Expo West Exposition, America’s biggest natural foods exhibition, its product was available in 250 Whole Foods stores as well as a series of other supermarket chains and natural food stores across the US. “LoSalt now has distribution in over 4,000 retailers in the US,” says Mr Lloyd. Meeting the buyers from Whole Foods opened so many other doors for us. It was definitely

our first step into major growth within the States.” Continued collaboration with Scottish Enterprise and SDI has led Klinge to further fruitful new markets across Europe. LoSalt is now available in Slovenia and Germany to add to existing distribution in most of Continental Europe, Ireland, Middle and Far East, Africa and Australasian markets. SDI support has led to entry into the German markets and is tackling the Russian market; and access to the GlobalScot network is helping establish a wider presence in Middle Eastern countries. “Klinge Foods is a prime example of the kind of company we’re here to support,” says Lena Wilson, Chief Executive of Scottish Enterprise. “They’re determined, hardworking, focused and capable. They want growth and have the ability to achieve it. Our job is simply to help them streamline the process by offering business advice and financial support where it’s likely to be of most benefit. “The impressive growth the company has achieved over the last three years shows just how effective we can be working together. It’s great to see Klinge doing so well, and we’ll keep working with them into the future to continue helping them meet their growth and export ambitions.” Klinge has in fact already developed the product for use in the food service industries – sachets for use in self-service restaurants and bulk supplies for catering, for example – and plans to make sure the business continues to grow in the food manufacturing sector. “The next step is to build strong consumer awareness of the company and the product in US,” says Mr Lloyd. “We’re looking at our digital presence and developing our social media activities; and we’re building on our US contacts to develop demand among a wider range of consumers and expand into more retail outlets. “The support we’ve received has helped us in key ways: getting an initial foothold, increasing our virtual and actual presence in world marketplaces, appointing the right people to continue growing the brand. Without that support it would have taken us far longer to achieve our aims.”

Tuesday January 29 2013 | the times


Business Insight commercial report: GraNGemoUtH

the partnership that’s vital in realising chemical sciences’ potential for Grangemouth


rangemouth rangemouth lies lies in in the the Forth Forth Valley Valley adjacent adjacent to to Falkirk Falkirk and and between between Scotland’s Scotland’s two two main main citcities, ies, Edinburgh Edinburgh and and Glasgow. Glasgow. With With its its refinery, refinery, port port and and chemicals chemicals hub hub key key generators generators of of resources, resources, jobs jobs and and prosperity, prosperity, the the area’s area’s economy economy is is aa critical critical contributor contributor to to the the Scottish Scottish economy, economy, generating generating over over £3billion £3billion annually. annually. Maintaining Maintaining this this economic economic success success and and realising realising its its potential potential relies relies on on aa close close partnership partnership of of business business and and government. government. Scotland’s Scotland’s Chemical Chemical Sciences Sciences sector sector has has made made Grangemouth Grangemouth its its home home and, and, as as its its second second largest largest export export industry, industry, has has brought brought much much prosperity. prosperity. Flying Flying in in the the face face of of much much of of the the UK UK economy economy at at this this time, time, the the industry industry in in Grangemouth Grangemouth is is aa massive massive success success story. story. Its Its contribution contribution means means the the Falkirk Falkirk area area ranks ranks as as fourth fourth highest highest contributor contributor of of Gross Gross Value Value Added Added (GVA) (GVA) per per capita capita for for the the economy economy in in Scotland Scotland after after Glasgow, Glasgow, Edinburgh Edinburgh and and Aberdeen. Aberdeen. The The area area is is aa manufacturing manufacturing hub; hub; 43 43 per per cent cent of of this this GVA GVA comes comes from from the the manufacturing manufacturing sector sector alone, alone, and and this this compares compares with with aa national national average average of of 17 17 per per cent. cent. The The Chemical Chemical Sciences Sciences sector sector is is also also aa significant significant local local employer employer – – aa third third of of the the 8,300 8,300 manufacturing manufacturing jobs jobs in in the the Falkirk Falkirk area area are are based based in in this this sector sector and and each each job job in in the the sector sector is is acknowledged acknowledged to to sustain sustain another another seven seven in in support support industries. industries. However, However, despite despite the the success success the the region region has has already already experienced experienced – – the the area area has has seen seen aa 70 70 per per cent¹ cent¹ increase increase in in productivity productivity in in 10 10 years years –– it it has has massive massive potential potential to to generate generate even even more more income. income. Falkirk Falkirk Council Council is is working working hard hard to to ensure ensure the the region region maintains maintains its its position position as as one one of of Europe’s Europe’s leading leading centres centres of of Chemical Chemical Science, Science, but but is is also also making making strides strides to to play play its its part part in in contributing contributing to to the the Government’s Government’s ambitious ambitious growth growth plans. plans. Councillor Councillor Dennis Dennis Goldie, Goldie, Convener Convener of of Falkirk Falkirk Council’s Council’s Economic Economic Strategy Strategy & & DevelopDevelopment ment Committee, Committee, comments: comments: “We “We are are doing doing our our utmost utmost to to facilitate facilitate growth growth in in the the region. region. We We are are aware aware of of the the Government’s Government’s ambitious ambitious plans plans for for growth; growth; and and we we start start from from aa favourable favourable position, position, given given our our economic economic success success due due to to the the presence presence of of the the Chemical Chemical Sciences Sciences industry. industry. Our Our strategy strategy is is to to build build on on this this success success through through facilitating facilitating significant significant investment investment in in the the region, region, helping helping businesses businesses to to become become established established and and grow; grow; and and ensuring ensuring our our local local workforce workforce is is ready ready and and able able to to respond respond to to the the rise rise in in demand demand for for skilled skilled staff.” staff.” Grangemouth’s Grangemouth’s refinery, refinery, the the chemicals chemicals complex complex and and port port are are all all key key to to the the council’s council’s long-term long-term investment investment plans plans for for the the area, area, the the finance finance for for which which is is being being established established through through the the Scottish Scottish Government’s Government’s Tax Tax Incremental Incremental Financing Financing (TIF) (TIF) scheme. scheme. The The council council is is finalising finalising its its business business case case to to commit commit funding funding of of £67million £67million towards towards aa £176million £176million infrastructure infrastructure project. project. This This will will overcome overcome current current infrastructure infrastructure limitations limitations and and constraints constraints to to future future growth. growth. The The proposed proposed infrastructure infrastructure changes changes will will make make Falkirk, Falkirk, GranGrangemouth gemouth and and the the surrounding surrounding areas areas even even more more attractive attractive for for inward inward investment investment and and business business relocation. relocation. The The importance importance of of the the port port at at Grangemouth Grangemouth cannot cannot be be underestimated. underestimated. It It is is Scotland’s Scotland’s second second largest, largest, generating generating over over 400 400 HGV HGV movements movements aa day day and and handling handling 10 10 per per cent cent of of Scotland’s Scotland’s

aerial aerial view view of of Grangemouth Grangemouth showing showing the the refinery, refinery, chemicals chemicals complex complex and and port port Gross Gross Domestic Domestic Product Product (GDP). (GDP). Key Key infrastructure infrastructure changes, changes, implemented implemented through through the the TIF TIF funding, funding, will will be be of of fundamental fundamental importance importance to to Scotland’s Scotland’s economic economic growth, growth, boostboosting ing exports, exports, and and enabling enabling development development in in the the highhighvalue councillor value chemicals chemicals sector sector and and councillor Dennis Dennis its Goldie, its supply supply chain. chain. Goldie, convener convener Once Once necessary necessary TIF TIF apapof of Falkirk Falkirk council’s council’s provals provals are are secured, secured, initial initial economic Strategy economic Strategy work work will will include include improveimproveand Development and Development ments to motorway links and ments to motorway links and committee committee road road upgrades. upgrades. A A key key part part of the TIF funding will also of the TIF funding will also contribute contribute towards towards delivery delivery of of flood flood defences defences for for Grangemouth, Grangemouth, which which are are estimated estimated at at aa capital capital cost cost of of over over £10million. £10million. This This will will provide provide aa critical critical element element of of nationally nationally significant significant infrainfrastructure, structure, ensuring ensuring Grangemouth Grangemouth remains remains an an ecoeconomic nomic powerhouse powerhouse while while enabling enabling it it to to achieve achieve resilience resilience for for the the Scottish Scottish fuel fuel supply supply chain. chain. The The TIF TIF project, project, entitled entitled ‘Make ‘Make It. It. Falkirk’, Falkirk’, will will take take over over 25 25 years years to to complete complete but but is is forecast forecast to to create create over over 8,300 8,300 local local jobs jobs in in sectors sectors includincluding ing chemical chemical science, science, manufacturing manufacturing and and distridistribution. bution. It It is is anticipated anticipated the the TIF TIF will will also also generate generate £415million £415million of of additional additional value value to to the the Scottish Scottish economy economy as as sites sites in in Falkirk Falkirk and and Grangemouth Grangemouth are are developed. developed. Assisting Assisting these these plans, plans, the the Grangemouth Grangemouth Regulatory Regulatory Review Review Group Group examines examines the the complex complex

regulatory regulatory issues issues arising arising in in the the area. area. Its Its work work forms forms part part of of aa national national initiative initiative which which aims aims to to create create aa culture culture and and environment environment where where business business and and government government collaborate collaborate to to create create better better regulation regulation for for all. all. In In so so doing, doing, it it intends intends that that Scotland Scotland is is recognised recognised as as the the leading leading country country in in Europe Europe regarding regarding better better regulation. regulation. Falkirk Falkirk Council Council is is an an active active group group participant, participant, alongside other other organisations organisations including including the the alongside Chemicals Sciences Sciences industry, industry, SEPA SEPA and and HSE. HSE. Chemicals This partnership partnership approach approach is is helping helping to This to develop develop regulatory framework framework for for the the area, area, discuss discuss and aa regulatory and resolve regulatory regulatory changes, changes, including including flood flood risk, risk, resolve industrial emissions emissions and and land land use use planning planning issues. industrial issues. A key key part part of of its its role role is is to to facilitate facilitate aa construcA constructive partnership partnership that that helps helps bring bring forward forward projects tive projects instrumental to to the the region’s region’s future future success. success. instrumental The The Falkirk Falkirk area area has has aa high high economic economic activity activity rate in in the the working working age age population population and and aa lower lower rate proportion of of residents residents have have no no qualifications qualifications proportion compared to to the the national national average. average. There There is compared is wealth of of talent, talent, availability availability and and eagerness eagerness aa wealth to work work amongst amongst people people living living in in and and around to around Falkirk which which the the council council hopes hopes will will help Falkirk help attract attract more companies companies to to the the area area looking looking for for aa skilled more skilled workforce. Job Job creation creation is is therefore therefore aa key key aim aim of of workforce. ‘Make It. It. Falkirk’. Falkirk’. ‘Make But But Falkirk Falkirk has has not not been been immune immune to to the the imimpacts of of the the recession. recession. Many Many of of its its young young people people pacts struggle to to find find work. work. Backing Backing Falkirk’s Falkirk’s Future struggle Future is an an initiative initiative set set up up by by Falkirk Falkirk Council Council to to help help is such people people into into the the workplace. workplace. Run Run by by aa local local such employability partnership, partnership, it it targets targets business, business, employability public and and voluntary voluntary sector sector organisations organisations to to help help public

them them gain gain the the skills skills and and experience experience to to compete compete in in the the labour labour market. market. The The council council is is working working hard hard through through Backing Backing Falkirk’s Falkirk’s Future Future to to develop develop opportunities opportunities in in the the Chemical Chemical Sciences Sciences industry. industry. One One Backing Backing Falkirk’s Falkirk’s Future Future success success story story is is that that of of Kristopher Kristopher Pow Pow –– who who was was recruited recruited by by Chemical Chemical Sciences Sciences firm firm Syngenta Syngenta in in 2011 2011 after after he he started started on on the the council’s council’s Employment Employment & & Training Training Unit’s Unit’s Engineering Engineering pre-apprenticeship pre-apprenticeship programme. programme. Through Through aa direct direct application application to to SynSyngenta genta he he was was successful successful in in achieving achieving aa modern modern apprenticeship apprenticeship in in Engineering Engineering Instrumentation Instrumentation and and Control. Control. Councillor Councillor Goldie Goldie said: said: “We “We have have every every reason reason to to be be positive positive about about the the future. future. We We have have aa sucsuccessful cessful Chemical Chemical Sciences Sciences industry industry that that concontributes tributes significantly significantly to to the the economic economic prosperity prosperity of of Scotland. Scotland. The The TIF TIF initiative, initiative, once once secured, secured, will will begin begin aa journey journey of of great great improvement improvement to to Falkirk’s Falkirk’s infrastructure. infrastructure. This This will will create create numerous numerous opportunities opportunities for for our our area area to to flourish flourish by by encouragencouraging ing inward inward investment, investment, helping helping business business to to grow grow and and highlighting highlighting Falkirk Falkirk and and Grangemouth Grangemouth as as an an area area for for highly highly skilled skilled people. people. The The funding funding will will also also help help it it become become recognised recognised at at an an internainternational tional level level as as aa centre centre of of excellence excellence for for research, research, development development and and production production excellence excellence within within the the Chemical Chemical Science Science industry. industry. “We “We are are aware aware that that for for our our young young people people there there is is so so much much potential potential to to become become extremely extremely successful successful within within an an industry industry which which sits sits on on their their doorstep.” doorstep.” ¹Slims ¹Slims Consulting Consulting Economic Economic Statement Statement 2011. 2011.


Business Insight Scotland, published 29th January 2013

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