APPENDIX 38
Memorandum submitted by One NorthEast
INQUIRY ON UKTI's FIVE-YEAR STRATEGY
1. One NorthEast's annual expenditure and
staffing resource on inward investment promotion is as follows;
Overseas office budget is £1,018,000, this
is divided between the following markets as follows.
| USA | £407,000
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| Japan | £232,000 |
| China | £162,000 |
| Korea | £74,000 |
| Australia | £73,000 |
| Norway | £35,000 |
| Germany | £35,000 |
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One NorthEast has 14 UK based staff and four full time overseas
staff and four part time staff, in addition there are 10 US based
staff and 1.5 Australian staff, these are part of the North of
England (NoE) and are a shared resource with the NWDA and YF.
2. One NorthEast has offices located in China, Japan,
Korea, four NoE offices shared in the USA with NWDA, Yorkshire
Forward. In addition there are also reps in Germany, Norway, and
Australia.
3. One NorthEast's inward investment promotion is carried
out directly by the agency and in conjunction with UKTI, except
the NoE in Australia which is sub-contracted to a PR agency—PPR.
4. For the market and sectors One NorthEast is particularly
focused on please see attached document.
5. The Inward investment projects won by One NorthEast
over the last three years are as follows.
Projects won over last three years:
— 2003-04—40 projects (737 new jobs, 3,274
safeguarded jobs)
— 2004-05—44 projects (1,912 new jobs, 3,999
safeguarded jobs)
— 2005-06—49 projects (2,449 new jobs, 1,524
safeguarded jobs)
6. Please see the attached document outlining successful
inward investment projects in the North East and how these have
impacted on the region.
7. One NorthEast's strategy for inward investment is
to focus on the three priority sectors outlined in the Regional
Economic Strategy. These are New and Renewable Energy, Health
care and Health Sciences and Process Technologies. In some markets
other sectors are promoted where there is strategic alignment
for instance digital media, nanotechnology, etc. The rationale
is to concentrate on the strengths of the regions economy focusing
on the supply chain and technology application to attract inward
investment to increase the regions competitiveness and productivity.
The strategy has proved very successful with One NorthEast currently
the 3rd most successful RDA in attracting inward investment despite
the fact that it is the smallest region and economy. The strategy
targets key markets and sectors that play to the regions economic
strengths (these are outlined in the attached document) and the
region continues to build its knowledge and expertise in key markets
and sectors resulting in a strengthened pipeline and a larger
number of successful foreign direct investment projects in the
North East. In conjunction with UKTI's strategy One NorthEast
will have a greater focus on R&D and technology transfer projects
in the next five years which aligns closely with One NorthEast's
existing and future inward investment strategy.
8. In terms of trade Promotion UKTI takes the lead on
this activity in the region working in close alignment with One
NorthEast.
9. UKTI take the lead on trade mission promotion in the
region again working in close alignment with One NorthEast.
ONE NORTHEAST TARGET SECTORS OVERSEAS
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| Market | Focus Sectors
|
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| China | Digital
Advanced engineering
Energy
Healthcare
Process industries
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| Europe | All
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| Hong Kong | Biotechnology
Computer gaming/animation
Product design
Automotive
Energy and environment
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| Japan | Biotechnology
Computer gaming/animation
Product design
Automotive
Energy & environment
Advanced materials
Nanotechnology
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| Korea | Computer gaming/animation
Industrial design
IT/display
Life sciences
Biotechnology
Pharmaceuticals
Energy/fuel cells
Nanotechnology
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| India | ICT
Life sciences
Automotive
Engineering
Food and drink
Chemicals
Oil and gas
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| USA | Healthcare
Renewable energy
Advanced manufacturing
ICT
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| Australia | Healthcare
Renewable energy
Advanced manufacturing
ICT
|
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INWARD INVESTMENT CASE STUDY COMPANIES
AVECIA
Avecia became Europe's largest privately owned speciality
chemical company following a £1.3 billion buyout of the former
Zeneca. Specialities business from AstraZeneca in 1999. Since
then, Avecia has been strengthening its core interests of biotechnology
and pharmaceuticals and divesting smaller non-core businesses.
Over the last three years, more than 300 new highly-skilled jobs
have been created at the company's Billingham site in the Tees
Valley, following a £70 million investment to build one of
Europe's largest contract biopharmaceutical manufacturing facilities,
including a Regional Selective Assistance grant of £6.5 million.
The Advanced Biologics Centre (ABC) provides process development
and cGMP manufacture of microbially-derived biologics for pharmaceutical
companies developing novel compounds for human healthcare products.
ITHAKA LIFE
SCIENCES
The Centre of Excellence for Life Science (CELS) and regional
development agency One NorthEast have combined to attract Cambridge-based
Ithaka Life Sciences to the region. A leading provider of consultancy
and interim management services to new and growing businesses,
Ithaka will be a major player in the region's growing life science
economy. Ithaka's North East England operation will be based at
NetPark, the region's world-class science centre, located in Sedgefield,
County Durham.
ORLA PROTEIN
TECHNOLOGIES LTD
Orla Protein Technologies Ltd is a spin-out from the University
of Newcastle upon Tyne's Institute of Cell & Molecular Biosciences.
Orla has built a solid reputation as a leader in the nano-biotechnology
sector since receiving venture capital funding from Insight Capital
in 2003. Orla is the only company to design, express and assemble
biological surfaces containing both essential components; proteins
and lipids. A patented technology platform and extensive expertise
in surface biology means that Orla can meet customer needs ranging
from simple protein immobilisation to complex bio-mimetic surfaces.
As well as serving existing customers in bio-surface design and
protein engineering the company is currently developing a revolutionary
diagnostic biochip platform.
HUNTSMAN
In 2004, Huntsman announced the go-ahead for plans to build
the world's largest low-density polyethylene (LDPE) manufacturing
facility, in the Tees Valley in the UK. The 400,000 tonnes per
year plant, Huntsman's first venture into the growing European
polyethylene market, will be built at the Wilton International
site at a cost of around £200 million. It will create over
120 permanent new jobs and also help underpin the future of the
Huntsman Cracker facility and the Aromatics business in the region.
The new facility will significantly reduce the UK's need to import
material to meet its low-density requirements, and will help turn
the country into a net exporter of the product. It is anticipated
that product from the new plant will be used primarily in packaging
applications. Huntsman has also announced that a new single UK
headquarters at Wilton is to provide support services to two of
its major businesses—European Base Chemicals and Tioxide.
SEMBCORP
UTILITIES UK
SembCorp Utilities UK employs around 600 people and is a
subsidiary of SembCorp Industries who employ 11,000 worldwide.
The company is an industrial utilities and services business supplying
steam and electricity to chemical manufacturing companies at the
Wilton International site in the Tees Valley. Traditionally SembCorp
has generated its utility products from a flexible mix of fossil
fuels including coal, fuel oil and gas. Since August 2004 the
company has added a new renewable fuel source of tallow to burn
on an existing boiler to gain experience in renewables markets.
Long-term plans are to spend £60 million on building a new
30 MW boiler specifically to burn wood. The new power station
will require around 300,000 tonnes of wood per year and will comprise
specially grown energy crops, wood from conventional forestry,
sawmill chips and recycled timber. SembCorp has been working with
farmers groups since the end of 2003 to encourage them to grow
the coppice element. The new power plant has been designed to
meet all the UK and European emissions targets by applying Best
Available Technology (BAT).
OC5
OC5 is an outsource contact centre and fulfillment solutions
provider located within the Wilton Site in the Tees Valley in
North East England. OC5 is a division of SembCorp Utilities UK
Limited (www.sembutilities.co.uk), which is a subsidiary of SembCorp
Industries who employ about 11,000 people worldwide. The five
core services offered by OC5 are: Contact Management, Storage,
Stock Management, Distribution and Estates Management. The success
of OC5's operation has been recognised through several awards
including from the Call Centre. Managers Association Awards: 2003
AND 2004 WINNER—Call Centre Support Manager of the Year;
2004 RUNNER UP—Training Manager of the Year; 2003
AND 2004 FINALIST - Call Centre Manager of the Year. SembCorp's
expansion into Europe represented a major milestone for both SembUtilities
and SembCorp Industries and offers the prospect of future growth
in the UK and Europe. OC5 benefits from SembCorp's strategic vision
and can thus offer its clients supreme levels of support, infrastructure
and financial backing.
NISAI
Nisai provides live interactive teaching through a Virtual
Academy and has invested £1.7 million moving the educational
technology part of the business from India to Middlesbrough. The
move will create 30 jobs initially and is forecast to create 150
over the next three years. This is the largest ever investment
in North East England by a company operating in this high-tech
field driven by the desire to establish a skilled and stable workforce.
Since locating in the region in 2005, Nisai have outsourced over
£100,000 of contracts to the Graduate Business Unit (GBU)
at the University of Teesside. There are also negotiations for
joint research with the University of Sunderland and by the end
of 2005 they will have relocated their research division to the
region.
NISSAN
Nissan established its manufacturing plant at Sunderland
in North East England in 1984. As the flagship of North East automotives
manufacturing Nissan is the largest volume passenger car manufacturer
in the UK and has been Europe's most efficient car plant for the
last seven years. In September 2004 Nissan announced it is to
build a fifth model at its Sunderland plant. Approximate size
of this investment will be £124 million with a SFI award
of £10 million. Nissan announced in February 2005 that its
new compact-crossover vehicle would be built at Sunderland from
December 2006. The new car is codenamed the P32L and takes the
total Sunderland investment from Nissan to £2.1 billion.
One NorthEast has worked closely with Nissan, the city council
and the automotive supply chain over many months and years.
APPLIED NEURODIAGNOSTICS
LTD
Applied Neurodiagnostics Ltd (ANL) has developed a piece
of research equipment for measuring pupil dilation in response
to specific stimuli. ANL are working with Northumbria University's
Centre for Design Research and the Microelectronics Industrial
Centre to develop and manufacture the commercial version of the
technology for sale into the UK Healthcare sector and then the
European marketplace. They are currently refitting a factory in
Cramlington to produce the intended new product. The Centre for
Design Research is assisting ANL with all the industrial and interaction
design aspects of the project including selection and management
of the new product's manufacture. The project demonstrates the
effective collaboration of the University with One NorthEast's
Investment and Aftercare Team in helping establish new knowledge-based,
innovative companies in North East England.
ONISOFT UK LTD
Onisoft UK Ltd was created by three visionary Canadians who
wanted to create an innovative games company. They were given
an opportunity to do this in North East England by the University
of Teesside, who awarded them a fellowship. They have worked hard
to establish themselves in the games industry and became members
of GameHorizon to plug into contacts and provide assistance to
trade delegations such as E3 and GDCE. Onisoft have been given
advice from Business Link, Codeworks, Digital City and mentors
based at the University of Teesside. Onisoft also received funding
through the Nstar Proof of Concept fund. The region's support
organizations have worked together to offer a package of assistance
that has (along with Onisoft's own hard work and sheer determination)
created a viable and innovative business.
GENESIS GENOMICS
Genesis Genomics, a business specialising in pioneering cancer
and sun-damaged skin testing, has established a base in North
East England to continue its world-leading research. Canada-based
Genesis Genomics (GGUK), a cutting-edge biotech research corporation,
is currently developing an early warning system to aid the effective
treatment of cancer and skin damaged by sunburn. It plans to use
its new base at the University of Newcastle upon Tyne to push
the commercial development of its world first skinphysical(tm)
test—using information gleaned from new advances in DNA
research into sun-damaged cells. A collaboration between One NorthEast's
Strategy for Success, Inward Investment and Research and Development
teams, working alongside the University of Newcastle upon Tyne
and CELS, helped attract GGUK to North East England.
QUAND MEDICAL
Quand Medical, a Canadian company, develops groundbreaking
medication compliance alert systems using cutting-edge mobile
technologies—a lucrative market in the assistive technology
for the ageing sector. According to the US National Pharmaceutical
Council, medication non-compliance costs the US $100 billion annually
and is responsible for 125,000 hospitalisations and 7,000 deaths
every year. Quand Medical Ltd decided to move to the UK in July
2005 to access the advanced nature of mobile technology development
and usage across Europe. They chose the North East for its links
with Codeworks ATL, clinical trials expertise at the University
of Newcastle and access to finance through the North East Proof
of Concept Fund.
GE CONSUMER FINANCE
Covering 46% of the North East working population—the
highest in the UK—employment in the contact centre sector
is forecast to grow by 14% between 2004 and 2007. GE Consumer
Finance, one of the UK's leading personal finance providers, is
one of the major contributors to this growth. Rebranding as GE
Money, it will be launching a range of new products, including
loans and credit cards to new customers. Story continues To meet
the increased demand these new products will create, it has recently
opened a state of the art contact centre in Cobalt Park, North
Tyneside, and launched a major recruitment campaign to fill the
new positions on offer. More than 200 employees have already started
work since the doors opened in May. The company is actively working
to bring that number up to 500—which will make it one of
the biggest inward investment success stories in the region this
year. Helping GE Money establish its North East base has been
a multi-agency partnership. As part of its on-going support for
companies creating jobs in the area, One NorthEast has awarded
GE Consumer Finance a Selective Finance for Investment grant.
Along with Tyne and Wear Development Company, local authorities
in the area and Job Centre Plus, the agency is also assisting
GE Money with the recruitment, jointly hosting recruitment open
days and raising awareness about the positions available.
BERCO
Italian manufacturer Berco is opening its first UK facility
in the North East to supply one of its biggest customers—Komatsu.
Berco, which manufactures tracked vehicle undercarriage components
and systems for earth-moving equipment, expects to create more
than 40 jobs over the next three years at its £4.5 million
site in Middlesbrough. The facility will initially employ about
12 people and act as a distribution centre to supply components
manufactured in Italy to Komatsu, in Birtley, County Durham, and
JCB, in Staffordshire. By the end of the year, the site will have
assembly lines fitted and employ about 20 people, and by 2008
the plant will be Berco's only manufacturing site outside Italy,
employing more than 40 people. Berco has worked with Tees Valley
Regeneration to secure the site and received a £210,000 grant
from development agency One NorthEast (One). Giovanni Micheletto,
Berco UK's general manager, said: "The opening of this new
facility will strengthen our presence on the UK market and bring
us nearer to our main customers, thus improving the service we
provide, reducing costs and expanding our business in Britain.
"Middlesbrough is the ideal position for us, the excellent
location and transport links allow us to supply products to our
customers' assembly lines on a `just-in-time' basis." Berco
has also received a SFI grant of £210,000 from One NorthEast
to help towards their £4.5 million capital expenditure and
creation of jobs. Mr Micheletto added: "Tees Valley Regeneration
has given us a lot of guidance and even provided us with a temporary
base in its own office whilst the deal was finalised. Assistance
from both Tees Valley Regeneration and One NorthEast made our
choice of Middlesbrough the obvious location for our UK base."
Berco employs 3,200 people worldwide and has a turnover of 510
million Euros (£358 million).
MAERSK
Danish shipping company Maersk is moving its ship management
division from London's Canary Wharf to Newcastle Quayside. Regional
development agency One NorthEast has given the company £1.8
million through the Selective Finance for Investment (SFI) to
fund the move, which will see 40 staff move to the region. Margaret
Fay, chairman of One NorthEast, said the move has enormous potential
for the region. "It will bring highly-skilled and well-paid
jobs and further strengthen our bid to be the number one business
location of choice," she said. "It is important to recognise
the continued importance of the sector to the region's economy."
The team transferring from London to Newcastle is responsible
for the crewing and technical management of more than 40 UK vessels
operating around the world. The division, in Newcastle's Pandon
Street, is expected to open in 2006 and Maersk plans to expand
its operations over the next two years, to include a design team
and a technology support unit, and create 100 jobs. Alan Clarke,
One NorthEast chief executive, said the deal was a major coup
for the region. "The majority of Maersk's UK operations are
being relocated elsewhere in London, so for us to secure the shipping
management division is fantastic news. "This agency's aim
is to make the North-East the location of choice for leading national
and international firms, and this multi-million pound deal is
yet another indicator that we are heading in the right direction
to achieve this." Mark Malone, managing director of the Maersk's
shipping division, said: "Tyneside's history has been shaped
by engineering, especially marine engineering. To date, it remains
a centre of excellence, with a high concentration of marine engineering
resources and experienced shipping professionals."
PHOENIX ENTERPRISES
A Team of ex-pat Tyneside shipyard workers who crossed the
Atlantic in search of work two decades ago have returned to North
East England to provide a major jobs boost. Former Swan Hunters
workers Norman Richardson, Peter Hansen, and John Shaw left the
region in the 1980s for Canada. In Canada, along with native Canadians
Dave Wardell and Mike Reading, they helped establish the hazardous
materials removal company, Phoenix Enterprises Ltd, based in British
Columbia, as a world leader in the removal of asbestos and other
hazardous material—performing numerous large-scale, complex,
and highly sensitive projects within the industry. The three `Geordies'
have now returned with colleague Mickey Cleeter to set up Phoenix
Hazmat Ltd, the latest company to set up at the Dabble Duck Industrial
Estate at Shildon, County Durham. A Selective Finance for Investment
Grant of £113,000 from the Agency is helping Phoenix Hazmat
create 27 new jobs at their Shildon base—a figure that could
rise to 50 in the coming years. Phoenix Hazmat Managing Director,
Norman Richardson, 50, said: "It is absolutely fantastic
to return to the North East and base our operations in County
Durham. It is unbelievable to see the amount of change in the
region—it is now so cosmopolitan, vibrant and clean—I
can remember that in my time here the Quaysides of Newcastle and
Gateshead were places you didn't want to go anywhere near, but
now it's stunning and a centre of attraction for both visitors
and locals. It's truly great to be back! It really would not have
been possible without the help of One NorthEast. The Agency has
helped put us in touch with potential clients, assisted greatly
in the move, and also provided the grant, which has assisted us
in our goal of employing 27 people at our new base." With
assistance from County Durham Development Company (CDDC) and advice
from Sedgefield Borough Business Service, Phoenix Hazmat has been
established in response to recent legislation that places a responsibility
on owners and operators of buildings to produce a management plan
for the safe handling of any asbestos content and ultimately remove
the dangerous material.
IT CAMPUS
A German high-tech company is aiming to help secure North
East call centre jobs as part of its ambitious expansion plans
in the region. Leipzig-based itCampus is on the verge of signing
a deal to open its new international headquarters in North Tyneside,
where it will market its new telecoms software package providing
IT solutions for the UK call centre industry. The company claims
its predictive dialling technology will allow call centre staff
to double their working capacity by dealing with more customers,
driving more business and ultimately staving off the threat of
off-shoring UK call centre jobs to low cost economies. itCampus
UK Ltd is expanding out of its current base in the European Business
Centre, which is housed in the Atmel building in North Tyneside.
The company has ambitious plans within the next three years to
generate a £5m annual turnover and employ up to 25 people.
Staff have assessed the potential of the North East and UK markets
and are confident of signing two major deals with UK call centres
to take their software—which is marketed under the brand
name `Elsbeth'—a virtual call centre agent. Andreas Lassmann,
itCampus Managing Director, said: "In the UK at the moment,
offshoring is such a big issue with operational staff being relocated
in countries such as India. Our system will double the efficiency
of a call centre agent, so they can work much more cost effectively
and directly fight the threat of offshoring." One NorthEast
and Tyne and Wear Development Company have jointly funded the
European Business Centre. The regional development agency's Investment
and Aftercare Team has played a key role in establishing the centre
and attracting itCampus to set up temporary home there. The centre
gave itCampus UK Ltd an office and full support services for no
cost, with centre manager Manuela Wendler helping establish vital
business contacts. Three senior staff are relocating from Germany
to the North East to kick-start the new operation with three additional
UK employees to be recruited in due course. itCampus is a university
spin-out company employing 60 people at its Leipzig headquarters.
Dr Simon Goon
Head of Business Ddevleopment and International Relations
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