Medium and Smaller Sized Enterprises
21. Small and medium size enterprises account for
the majority of manufacturing in Wales and we saw a wide diversity
in that sector during our inquiry. We took evidence from a diverse
group of manufacturers including:
Anglesey Aluminium, an aluminium producer, which
employs 570 staff and approximately 80 contractors; [44]
Ethnic Cuisine a food manufacturer based in Swansea
which employs 400 people in the production of ready meals for
one of the major high street supermarkets;[45]
and
General Dynamics, a defence contractor that specialises
in the Information Technology Field and employs nearly 400 people
at its facility at Oakdale.[46]
22. We also visited a number of medium and small
enterprises during our visits in Wales. In North Wales we held
meetings with Cambrian Caledonian, which manufactures wind towers
for wind farms, and Diagnostic Products Company (DPC), which manufactures
immunodiagnostics tests and instrumentation for medical testing.[47]
In West Wales we held meetings with Mono equipment, which designs
and manufactures specialist equipment to the food industry and
with Swansea Industrial Components which manufactures cable assemblies
for a wide variety of electrical devices.[48]
We also held meetings with Cogent, in East Wales, which provides
integrated secure communication solutions for defence, peace keeping
and high intensity policing operations as well as for civil organisations.[49]
23. The transition from traditional manufacturing
in Wales was a difficult journey and not without pain. Our inquiry
has shown us that while some traditional manufacturing survives,
Wales has managed to diversify its manufacturing base, and in
some areas now leads the field. We welcome that diversity and
look forward to further success in the future.
24. Despite the success of that diversity we were
reminded that not all companies can survive in Wales. On Wednesday
21 April 2004 we took evidence from Outokumpu Steel. Towards the
end of 2003 there had been much speculation in the press as to
the future of Outokumpu's operations in Wales. In October 2003,
Outokumpu announced that it would be closing its operations in
Wales, and steel was produced at that plant for the last time
on 12 March 2004.[50]
Jamie Allen, a Senior Vice President, told us that the decision
to close the Panteg plant was not taken lightly and that attempts
were made to retain the site as an aluminium rolling plant. Unfortunately,
Outokumpu came to the conclusion that it was no longer economically
viable to keep the Panteg site open.[51]
25. Although the global market for steel was the
driving factor in that decision, we questioned our witnesses on
the availability of Governmental support. Outokumpu explained
that there was little that the UK or Welsh Assembly Governments
could have done because no direct Government intervention was
allowed in steel manufacturing under the European steel and coal
directives[52] a point
that was echoed by Corus.[53]
Both believed that those restrictions would only serve to harm
future steel manufacture in the future.[54]
Outokumpu also highlighted the difficulties attached to the Kyoto
protocol. It argued that the UK's desire to go beyond the Kyoto
protocol terms in relations to emissions was a laudable ambition
but put companies such as itself at a disadvantage in the global
market place.[55]
26. A major concern about the closure was the fate
of Outokumpu's work force. Jamie Allan explained that Outokumpu
put great effort into addressing that concern and had used both
the Steel Partnership Training Ltd and the Educational Learning
Skills Council to assist in the retraining of its workforce.[56]
The result was that over 60% of its workforce were no longer looking
for alternative employment.[57]
27. The decision of Outokumpu to close its operations
at Panteg is to be regretted. It is a timely reminder that industry
in Wales cannot rest on its laurels in the global market place.
We welcome the announcement that the majority of its workforce
are no longer looking for alternative employment but remain concerned
at this further diminution of the steel sector in Wales.
6 
