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12 Feb 1997 : Column 294

Vale of Glamorgan (Inward Investment)

12.29 pm

Mr. Walter Sweeney (Vale of Glamorgan): For nearly five years, I have had the privilege to represent one of the most beautiful constituencies in Wales, with Cosmeston lakes on the boundary with Cardiff, South and Penarth to the east, St. Donat's castle to the west, Barry Island and Porthkerry park in Barry, the attractive market towns of Cowbridge and Llantwit Major, and several miles of coastline. We also have countless lovely villages and some very pretty countryside.

Any visitor to the Vale can readily appreciate the tourist attraction that it represents and the general prosperity of the people. Closer inspection would reveal some of the sources of that prosperity and why unemployment in my constituency has fallen from 8.7 per cent. five years ago to 7 per cent. last month. If the Daily Mirror is to be believed, the figure is even better today.

There has been well over £1 billion of inward investment in the Vale in the past five years. I should like to give the House some examples of the successes achieved there, to draw attention to the likely causes and to express some hopes for the future. One of the most exciting developments in Wales is known as the Waterfront Barry, where Associated British Ports, in partnership with the Welsh Development Agency, is engaged in the regeneration of a 190-acre site.

The principal components of that £25 million project are 65 acres of residential development, comprising more than 1,000 homes for all sectors of the community, including luxury waterside apartments and affordable family homes with gardens; a 12.5-acre retail park with 120,000 sq ft of retail space, to revitalise the town centre and restore Barry's reputation as one of the major shopping centres in south Wales; eight acres of commercial development, with new offices, restaurants and smaller businesses; and about 40 acres of leisure and recreational development adjacent to the waterside, creating amenities, space, jobs and environmental improvement.

I had the pleasure of visiting that development last Friday and I had a bit of fun driving a digger on the site; I hope that I did not damage it. It was an interesting visit. The first phase of the contract for the Waterfront development, due to be completed on St. Valentine's day, is virtually complete. The former graving dock has been completely lined, filled with low-level waste and covered with earth that is being levelled in readiness for the construction phase.

The first tranche of new retail development and family homes should be ready in the first quarter of 1998. The project will create many new jobs, both during the 10-year construction period and in the finished development.

The port of Barry has also received a major boost, with the signing of a 25-year contract with Dow Corning. That is associated with the new £150 million Genesis plant, and from 1999 onwards it will substantially increase shipping traffic at the port. That is important to Barry and reflects ABP's continuing core activity as a company that runs ports.

I should also mention the Van Ommeren tank terminal in Barry, which took over the Powell Duffryn terminals last November. Van Ommeren is negotiating with Dow

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Corning and ABP to build a new storage facility near the chemical complex by Hayes road in Barry. The first phase will allow the 24-hour transfer of feedstock and finished products between the production plant and storage facility by dedicated pipelines, and from the storage facility to two berths in No. 2 dock, Barry, to meet the worldwide sales and demands for silicones.

Cost estimates for the first phase are £11 million, and construction should commence at the end of this year or the beginning of next year, and last for about 18 months. Jobs will be involved during the construction period, and eventually the existing staff at the old tank terminal will transfer to the new tank facility. The main benefit of the development is the guarantee of existing jobs into the next century and the continuance of silicone production in Barry at the Dow Corning site.

Historically, British Petroleum was the major player on the chemical complex site near Hayes road, but over recent years much of the land has been transferred to other companies. Despite that, BP invested £26 million in 1992 to build a new phenolic resins plant, and in doing so created one of the most modern manufacturing facilities in Europe. BP employs 125 people in Barry and currently has 12 modern apprentices. Given the size of the work force, that number of apprentices represents a considerable investment in the future.

Dow Corning is one of the biggest investors in the Vale. The company, founded in the United States in 1943, began to manufacture silicones at Barry in 1952. Since then, it has invested more than £100 million in the site and developed thousands of new products. It is currently in the middle of a major expansion of capacity at Barry that will create about 150 new jobs, so Dow Corning will employ more than 600 people there.

The project will generate up to 500 additional jobs during the construction phase. Silicones are used every day, without people realising it. The work force at Dow Corning are indirectly helping to protect tiny diodes, to make babies' teats, to seal windows and even to make sure that stockings stay up. The people of the Vale can be proud of that forward-looking, high-investing company.

Another important investor in Barry, next door to Dow Corning, is Cabot Carbon, which built a plant for $62 million in 1991--note the dollars, as this is American investment in Wales--of which $6 million was grant. Since then, $1 million was spent on a dispersion plant in 1995 and a further $5 million on plant expansion last year. This year, a further $1 million is being spent on the treatment plant and $2.5 million on plant expansion. In addition, $1 million is spent each year on improvements. Cabot employs 67 people in Barry, plus 10 contractors, and expects to take on four extra staff this year.

On the same important site, Dow Chemical Co. employs 32 people and has six contractors permanently on site. The number of employees has diminished over the years, but two teenagers are working there under a work experience scheme organised by Barry training and enterprise council. Over the past five years, Dow has invested approximately £5 million in its facilities and it is planning a long-term future in Barry. It hopes to recruit one or two new employees in the coming year.

Zeon Chemicals is another Barry success story. Between 1988 and 1995, production increased by 50 per cent., but acrylonitrile and butadiene emissions were reduced by 90 per cent. Last year, substantial further

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investments were made to expand production while further reducing emission levels. Zeon and all the companies on the chemical complex in Barry co-operate closely with one another to protect the environment, to comply with statutory requirements and to keep the public informed through regular consultation.

The last company on the chemical site that I must mention is European Vinyls, a company that has its UK headquarters at Runcorn and is the largest PVC producer in Europe. It employs 100 people in Barry in a plant built by BP for £42 million in 1981. In the past three years, EVC has spent £4.5 million on improving the plant.

On the western edge of my constituency, Ford Bridgend produces the Zetec engines for the Escort and other Ford models and I understand that production is likely to continue, whatever happens at Halewood. Of particular interest to me, as a Jaguar fan, was seeing the production line for the new Jaguar V8 engine, which was gradually stepping up production in July last year, ready for the introduction of the fabulous new Jaguar sports car in the autumn. That certainly bodes well for the future of that plant, as I have no doubt that the demand for that model will help to protect the well-paid jobs at the Ford plant.

Moving to the northern boundary of my constituency, I must refer the House to the success of the Robert Bosch plant, which was opened in January 1991. Last year, when I visited the factory, it was producing 15,000 alternators a day and easily out-performing its rival parent plant in Stuttgart. In 1995, it produced its 10 millionth alternator. Bosch had 27 apprentices at the time of my visit and was using sophisticated methods, such as just-in-time working. There was high pay for the workers, giving the lie to the allegation so often made by Labour Members that Wales is a cheap-labour economy. The plant provides excellent working conditions and good retraining facilities. In case anyone from Cardiff international airport is listening, I should perhaps mention that Bosch would very much like a direct air link between Cardiff and Stuttgart.

I visited Robert Bosch in Stuttgart in 1995 and asked Mr. Gerhard Turner, who is now commercial director of the K2 division, why the company had come to Wales. He said that, first, it provided easy access to the large United Kingdom domestic market. Secondly, he mentioned the lack of red tape in Wales and the fact that it took half the time to build the plant and get it up and running there as it would have taken in Germany. The third reason was the flexible work force: if an order is received on Friday to supply goods the following Monday, the company does not have to engage in lengthy negotiations with work force representatives--they simply change the shifts and get on with it.

Fourthly, the company has no problems with moving goods by road at weekends in Wales: in Germany, there are restrictions on lorry movements at weekends. Fifthly, and a very important factor, there are the lower social costs that are added on to wages, which make a huge difference to the net cost of employing people in Wales compared with Stuttgart. Finally, there are good road and rail communications. Mr. Turner might also have mentioned that the Vale is an extremely attractive place for Bosch workers to live.

RAF St. Athan is the biggest employer in my constituency. It has been pursuing an active civilianisation programme for the past four years and 1,190 new jobs are being created over a three-year period. In the process,

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about 350 personnel are being trained. The annual cash budget for RAF St. Athan is around £115 million, or about £250 million for the full cost budget, with spares and overheads. About £50 million of that finds its way into the local economy. RAF St. Athan is subject to market tests and open competition and is due to submit its in-house bid on 19 February. Whatever the outcome, prospects look good.

Also, Blue Circle Aberthaw is investing nearly £2 million this year and is planning to invest another £5 million by the millennium.

Finally, there is Cardiff international airport, which in some ways is the jewel in the crown. The airport, which was run by three local authorities, was bought by TBI plc and has since gone from strength to strength. Two Ministers have recently visited RAF St. Athan and my right hon. Friend the Secretary of State for Wales has visited Cardiff international airport; they could see for themselves the huge strides that have been made since privatisation.

I have a special plea for my hon. Friend the Under-Secretary of State for Wales on behalf of the airport. I ask him most sincerely to continue to plan to fund the new road to connect Cardiff docks with the airport. My hon. Friend has already approved some £800,000 of initial spending to cover the design stage of the road and I emphasise the tremendous importance of the road, not only to the potential £40 million development in the vicinity of the airport but to the whole of Barry, including the chemical complex that I described.

I also hope that we shall see the opening of the existing freight railway line between Barry and Rhoose for passengers, preferably with a spur serving the airport and, ideally, the line continuing to Llantwit Major. I appreciate that there are cost problems for that major investment in upgrading the line, but with the substantial housing development in Rhoose and Llantwit Major and the increasing traffic at the airport it may well become a viable proposition.

I must put in a special plea on behalf of residents in the Dinas Powys area of my constituency, who would appreciate some help from the Government. I realise that, as the highway authority, the Vale of Glamorgan council is responsible, but we very much want a new bypass around Dinas Powys; it would not only improve the quality of life for people living there but make transport between Cardiff, Barry and the rest of the Vale very much better.

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