BQ North East Issue 04 by We Are UMi

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ISSUE FOUR: JANUARY 2009

SUITS YOU Want to clinch the deal? Get the right suit ON YOUR MARKS Galvanising the region’s business for London 2012’s multi-million pound payday

COOKING ON GAS The bakery boss who honed his skills serving sarnies to the Queen

GRAND SLAM Ian Baggett on serving aces in a cut-throat property industry

MASTERMIND Chris Thompson... engineering a hotbed of opportunity for North East entrepreneurship

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

ISSUE FOUR: JANUARY 2009

SPRING 09 COLLECTIONS

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BUSINESS QUARTER: JANUARY 09: ISSUE FOUR In these dark economic days, we’re only at home here at BQ to the guys and gals who drive North East business forward, and we’ve got a bunch of them in this edition who not only talk the talk, but deliver the goods; flying the flag for a region that’s jam packed with smart entrepreneurs for whom the word recession simply presents a whole new set of opportunities. Two of our headline interviewees, Chris Thompson and Ian Baggett, are awardwinning entrepreneurs who possess that essential flexibility in business to keep driving forward, taking others of like mind with them, when the going gets tough. They’re are hard wired to spot the smartest opportunities and run with them, providing inspiration to the rest of us along the way. If you could bottle that X Factor, you’d have it made. Meanwhile, the rest of us should be grateful we’ve got people like them generating business for all of us. The region’s universities and colleges play a key role in providing not only our potential entrepreneurs and a first class workforce for the future, but also access to leading edge research, development and training facilities to support business. The focus of this forms the subject for our first BQ Special Report issued with this edition of BQ Magazine. Each of these future quarterly reports will focus on a sector of the region’s economy. Talking of which, remember please that we’re available both in print and on the web, so if someone nicks your precious copy of BQ, or indeed your special report just visit us at www.bq-magazine.co.uk Remember also to keep an eye on our other website, www.nebusinessguide.co.uk

for our daily news and events update. We’ve had some sparkling emails over the last couple of months, such as this from Geoff Ford from Ford Component Manufacturing in South Shields: “At a time when we’re all facing an uncertain future, the sheer volume of practical advice covered is very impressive. May you go from strength to strength.” Colin Robertson from Blumilk, Newcastle, wrote: “I have not been able to put your magazine down since picking it up earlier today. It’s interesting, informative and very nicely designed. Thankyou; you have rejuvenated my faith in regional business publications.” Thanks to many others for their kind words, we really do appreciate the feedback and, for their efforts, Geoff and Colin each get a fabulous Montegrappa pen. Send your contributions, ideas and pearls of wisdom to editor@bq-magazine.co.uk and, if you see us out and about, tell us what you’re doing; you may just find yourself in print.

CONTACTS ADVERTISING e: sales@room501.co.uk t: 0191 419 3221 EDITORIAL Brian Nicholls e: b.g.nicholls@btinternet.com Jane Pikett e: jane@thecreationgroup.co.uk DESIGN & PRODUCTION Room501 Ltd e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk George Cheung Director e: george@room501.co.uk Euan Underwood Director e: euan@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk Mark Anderson Business Development e: mark@room501.co.uk

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THE LIFE AND SOUL OF BUSINESS

Room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2009 Room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, January 2009.

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BUSINESS QUARTER |JANUARY 09

CONTE BUSINESS QUARTER: JANUARY 09 42 ON YOUR MARKS

Get set for a multi-million pound pay day courtesy of London 2012

46 SMART MOVES Julian Blades makes a stylish case for beating the recession via your wardrobe

Features

72 LUCKY 13 Happily unsuperstitious - Durham’s new Radisson SAS hotel GM Debrorah Haines

TOMORROW’S WORLD

78 PRECIOUS ONYX 18 COOKING ON GAS The hot new team making a great deal more than a baker’s dozen

Neil Stephenson of IT giant Onyx on good deals and sound acquisitions

SMART MOVES

82 THE HEAT IS ON Renewable energy, the Austrian way

29 TOMORROW’S WORLD Chris Thompson - engineering a brighter future for North East business

38 TRANSPORT 2011 North East expertise gets Edinburgh’s new tram network running

BUSINESS QUARTER | JANUARY 09

88 SMALL IS BEAUTIFUL Kim Wong’s nano vision

92 CARRY YOUR BAG SIR Port of Tyne boss Andrew Moffat’s journey from porter to ports boss

TENTS 34 AS I SEE IT

MOONEY ON WINE

Douglas Kell’s A1 call to arms

52 WINE Pam Mooney’s happy New Year

55 BUSINESS LUNCH

Regulars

Adderstone Group MD Ian Baggett serves up a few aces

62 EQUIPMENT Baubles for guys with style

ON THE RECORD Who’s making the news in Q1/09

10 NEWS Who’s doing what, when, where and why, here in the North East

22 COMMERCIAL PROPERTY The landmark developments building the region’s industrial landscape

65 FASHION Geox footwear ... no sweat

52 GRAND SLAM

70 MOTORING Jonathan Wells releases his inner petrol head with the Lexus IS-F

96 FRANK TOCK Gripping gossip from our backroom boy

98 EVENTS The best events this coming quarter

55 BUSINESS QUARTER | JANUARY 09

ON THE RECORD

JANUARY 09

A host of awards head to the North East, Go Ahead and Vertu buck the downturn, high street stalwart Collectables diversifies and much more. Say what you like about the economy, this region’s working >> Eastern for Oslo Eastern Airways, the most punctual airline at Newcastle Airport, now connects the North East with Oslo. The independent regional airline now provides a daily weekday connecting service via Aberdeen aimed at business travellers, tourists and winter sports enthusiasts. Flights leave Newcastle at 7.10am, arriving in Oslo at 1.05pm. Departures from Oslo are at 1.45pm, reaching Newcastle at 5.10pm. Eastern director Graeme Ross says: “Over the years, our frequent service to Aberdeen from Newcastle has provided businesses in the energy sector and beyond with a vital transport link. “In addition to this, and our first Norwegian link to Stavanger, we now offer a connecting service to the country’s largest city.” Domestic services from Newcastle have been provided by Norwich-based Eastern Airways since 2003, with flights to Aberdeen, Birmingham, Cardiff, Southampton and the Isle of Man. The airline employs 50 people at Newcastle. Figures from the Civil Aviation Authority show that between January and September 2008, Eastern operated nearly 6,500 flights from Newcastle and proved the top scheduled airline with 89% of flights leaving Newcastle within 15 minutes of schedule. Any delays were on average six and a half minutes. Its fleet of 30 regional aircraft serves 17 European and UK destinations, with more than 800 flights a week in the UK and Europe.

>> 21’s latest distinction Newcastle’s Café 21, run by Terry Laybourne, is in Restaurant magazine’s Top 100 list of best UK eating venues. The Trinity Gardens restaurant ranks 60th according to readers, chefs, restaurateurs and food critics. It is lead restaurant in Laybourne’s 21

BUSINESS QUARTER | JANUARY 09

Hospitality Group. This includes the Italian-style Caffé Vivo on Newcastle’s Quayside, Café 21 at Fenwick in Newcastle, Jesmond Dene House Hotel and Bistro 21 in Durham. The original Cafe 21, at 21 Queen Street in Newcastle, gained the region’s first Michelin star before relocating to Trinity Gardens. The old 21 Queen Street site is now Pan Haggerty, which puts on hearty British dishes.

>> Yuill MBO Hartlepool-based house builder Yuill Homes was bought out by its management team as its parent company Taggart Holdings entered administration. The firm, employing 150 in Hartlepool and working on 12 sites throughout the region, has been a name in North East business for more than 80 years. It passed out of the Yuill family when then-chairman Philip Yuill sold to Taggart Holdings of Northern Ireland in 2006. Now it is owned by Newbridge Enterprises, alias directors of Yuill Homes and the Bank of Scotland (Ireland). Managing director David Mullins, 45, is a former civil engineer from Hartlepool.

>> Progress a Vertu The North East’s new kid on the dealership block, Vertu, is defying the general downturn in car sales, reporting pre-tax profits 328% up (£3m) on sales 46% up (£423.5m) for its latest year of trading. Though most of the gain is down to acquisitions, organic growth was 26% up too. The results were announced 18 months after a purchase of Bristol Street Motors. The management includes executives who had been with Vardy plc before its takeover.

Diversifying: Collectables’ head of retail, John Marlor

>> Collectables moves the furniture At a time when many independent retailers are disappearing from the high street, comes a positive story from giftware and fashion accessories chain Collectables. The family business is defying the gloom with the development of retail furniture business Mandale Fine Furniture, an independent family-owned Stockton outlet that traded for more than 40 years until its owners retired towards the end of 2008. Collectables has not only breathed new life into Mandale - which is next door to the Collectables store at Portrack Lane - but had a bumper start to this year. Collectables has nine stores in Alnwick, Newcastle, the MetroCentre (three Collectables and one Collections store), Sunderland, Stockton and Harrogate. John Marlor, the chain’s head of retail, says: “We’ve become well know for our innovation and diversity and we were glad to welcome the brand into the Collectables family.” “It’s not an easy time to come into this market, or to be in any quality retail business for that matter, but we’re comfortable with what we do, and we’re excited about the challenges.“ Collectables, which last year launched an accessories boutique, Collections, at the MetroCentre, is now planning a range of innovative ideas to develop Mandale Fine Furniture as a leading quality furniture outlet.

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ON THE RECORD >> Bannatyne and Trapp Unlimited Entrepreneurs Tony Trapp and Duncan Bannatyne have been winning plaudits. Dr Trapp, 63-year-old managing director of the IHC Engineering Business, has been named North East Business Executive of the Year, and Duncan Bannatyne has been named Britain’s celebrity champion of charity. Dr Trapp’s firm, manufacturing on Tyne and Tees for offshore clients and based at Riding Mill in the Tyne Valley, expects its £40m turnover to be £100m within four years. Duncan Bannatyne, owner of hotels and fitness clubs, has been acclaimed by chief executives of charities worldwide for the aid given through his charitable trust. He has funded two hospitals in Colombia and Romania and helps feed 16,000 children daily through the Mary’s Meals charity. The star of BBC TV’s Dragons’ Den also raises funds for Unicef.

JANUARY 09

almost unnoticed. Custody will be an option for most health and safety offences, whether heard in Magistrates’ or Crown Courts. Magistrates can give sentences of up to 12 months, Crown Courts up to two years. Even for lesser offences, firms could be hit hard financially. The maximum fine by magistrates has gone up fourfold from £5,000 to £20,000. James Thompson, a partner at Ward Hadaway, says: “This major change is likely to affect a whole raft of different businesses. “The new legislation allows the courts to send someone to prison, not just over fatal or serious accidents, but in almost any prosecutable accident or dangerous situation.”

>> Jail threat for company bosses New laws covering accidents at work could put company directors and managers behind bars. Since January 16, individuals convicted of various health and safety offences could be jailed for up to two years under a radical but little heralded overhaul of health and safety legislation. Lawyers at Ward Hadaway say that while changes to the law on corporate manslaughter have been well publicised, the introduction of the Health and Safety (Offences) Act 2008 has slipped by

BUSINESS QUARTER | JANUARY 09

>> Fees freeze The North East Chamber of Commerce (NECC), which represents 4,500 businesses, has frozen membership fees for 2009 to help fight recession.

>> Age of the train Go-Ahead transport group is seeing double digit growth in its rail services as more commuters leave their cars at home. It now accounts for 30% of all UK rail journeys, including London commuter services.

>> Project team A key project team of 12 brought into the Marine Design Centre in Newcastle could eventually rise to a complement of 50 over five years. The initial 12 from Bibby Offshore are working on offshore contracts for BP and Talisman.

sensors and access control systems show sales rises of 29.9% (to £7.22m) in 12 months. Partnership with the NHS – Neural Pathways (UK), giving specialist rehabilitation to people with complex neurodisabilities. Business Start-up – ReInnervate whose technologies enhance cell and tissue growth for research, drug development and regenerative medicine. Two products will enter the market shortly. BioNEt Award – Professor Colin Jahoda, marking his research at Durham University.

Winning Pathway: Vicki Gillman (left) receives an award for Neural Pathways from Claire Riley of the North East Strategic Health Authority

>> In fine health Six firms and individuals have won awards for achievement in the North East’s health care industry. Presentations made before 300-plus guests at the Centre for Life Sciences (Cels) event in Gateshead were: Export Achievement – IDS for its 88% exports leap in a year, £18.66m turnover and a product range entering South America and Eastern Europe. Innovation – Avecia Biologics in Tees Valley for “pAVEway”, a combination of novel promoters, DNA operator sequences and repressor proteins to exploit DNA concepts. Outstanding Growth – Tynetec, whose design and manufacture of social alarms, telecare

>> Redhall buys Chieftan The thriving Chieftain engineering group of Newcastle and Middlesbrough is now Yorkshire owned, having been sold to Wakefield company Redhall for £18.6m. Redhall, whose £80m sales are almost double Chieftain’s, hopes the combined operation will make even greater strides in energy and defence. Chieftain, founded in 1979, is also active in the process, nuclear and security fields. Orders are being sought from SeaDragon Offshore of Billingham, which has a role in the £300m development of three oil rigs for the Gulf of Mexico. It also hopes to be in on Barrow’s end of building the Royal Navy’s two new aircraft carriers.

>> Cheers Brulines, the Stockton beer meter maker, has bought the Sunderland fuel-monitoring business Edensure for £220,000.

JANUARY 09

COMPANY PROFILE

Innovative youth enterprise programme offers opportunities for business

YOUNG CHAMBER’S JUST THE BUSINESS

HE region’s most enterprising young people are being given their own highly effective role in delivering enterprise activities in their schools, thanks to the Young Chamber Network and Education Business Partnerships in the region. Input from business is crucial to the success of the new initiative, which will support students in 18 schools across Newcastle, Sunderland, Stockton and North and South Tyneside in creating, organising and delivering business enterprise activities in their schools every term. The benefits of the initiative are mutual, the businesses involved benefiting from the opportunity to expose tomorrow’s workforce to opportunities in their own industries in order to plug skills gaps. Partner businesses can also benefit from associated PR and fulfil social responsibility and staff development objectives. Each school will enjoy the support of a dedicated member of staff from Newcastle EBP, North Tyneside EBP or Blue Venture, the EBP for South Tyneside to support its Young Chamber, which will be made up of young representatives from every year group and receive Government funding either via Newcastle EBP or Young Chamber North East. “Young Chamber members will learn many skills, including how to manage budgets, disseminate information, create and deliver enterprise events and liaise effectively with local businesses,” says Gillian Bulman, chief executive of Newcastle EBP and Blue Venture, the EBP for South Tyneside. “That includes taking part in commercial activities with local businesses, with obvious benefits to both parties. This is a real opportunity for businesses to be fully involved in highly effective school partnerships and we want to talk to businesses to explore the most beneficial level of involvement for them.” Young Chambers are tasked with at least three enterprise challenges each term. These are designed to strengthen business awareness and skills development, enhancing young people’s credentials once they begin work. Tasks will typically involve working with local

Newcastle EBP chief exec Gillian Bulman, delivering the Young Chamber programme

THESE YOUNG PEOPLE OFFER IDEAS AND SOLUTIONS THAT BUSINESSES REALLY BENEFIT FROM companies to run and manage events, carrying out research relevant to both students and local business needs, and undertaking problem-solving challenges and business simulations. With support from teachers, EBP support staff and local business, students will manage much of the process themselves, ensuring they have an effective voice about issues that affect their local economic environment. Employers will also support teachers by providing specialist business advice on topics such as employability and enterprise skills, entrepreneurialism and human resources. Young Chamber is seeking to provide a powerful line of communication between schools and the business community and businesses can be involved in a variety of ways, from mentoring and careers advice through to work placements and networking events. Moira Shaftoe, regional co-ordinator for Young

Chamber North East, says: “This represents a fantastic opportunity for businesses to illustrate routes into industry young people may never have thought of. The links we are creating with business are sustainable, creating long-term partnerships that definitely benefit both parties. “One of the most exciting things is how these young people think outside box, offering business ideas and solutions that partner businesses can really benefit from. The benefits are definitely two-way.” •In addition to their support for Young Chamber North East initiatives, Newcastle EBP and Blue Venture, the EBP for South Tyneside, work in partnership with schools, colleges and businesses to give students a taste of the world of work, helping them to develop employability skills and give practical thought to potential careers. They rely on businesses to volunteer staff time, offer work placements or participate in inspirational skills sessions and challenges. In turn, businesses have the opportunity to influence the curriculum, shape the future workforce and create professional development opportunities for their staff.

For more information about Young Chamber North East, please contact Moira Shaftoe, tel 0191 489 2573 For more information about how your business can benefit from supporting Newcastle and South Tyneside EBP programmes, please contact chief exec Gillian Bulman, tel 0191 277 4444 or see www.newcastle-ebp.org.uk

BUSINESS QUARTER |JANUARY 09

NEWS

JANUARY 09

A new rum to fire the North East’s business spirit, a delegation in China, an expanding care home firm and a lift for one company’s international aspirations; it’s all happening in the region this quarter

Cheers: Ian Linsley (left) of the Alnwick Rum Company, and Alex Shiel of Ward Hadaway, celebrate the approval of the Spirit of Northumberland trademark

>> Spirit of Northumberland An historic North East rum recipe has been revived from a family’s past to fire the spirit of the region’s enterprise. Alnwick Rum, a blend of Guyana and Jamaica rum, dates back to the First World War and was produced by the family-run Alnwick Brewery Company, which was founded in the 1860s and closed in 1986. But when Ian Linsley found the original recipe among his late father’s papers in 2001, he was inspired and, two years later, he re-registered the company and revived the drink. Now the Alnwick Rum Company, of which Ian is managing director, has registered Spirit of Northumberland as a trademark for all its drinks in the UK. These include Alnwick IPA, which was re-introduced in 2007; 50 years after its last brewing. “It’s a real milestone for the business,” says Ian. “The Spirit of Northumberland trademark covers not just the fact that we make spirits, but also that our products have an affinity with Northumberland and a place in its history.” Alnwick Rum enthusiasts now include wine expert Oz Clarke and Alnwick IPA is sold in Tesco, Sainsbury’s, Asda, Morrisons, Fenwick and the Co-op. Alnwick Rum may be taken up too, and a range of soft drinks is also being planned. Alex Shiel, partner and head of intellectual property at Ward Hadaway, says: “Being a broad trademark, it offers scope for product expansion. It will hopefully spread the word both about the Alnwick Rum Company, and about Northumberland.” For stockist details, see www.alnwickrum.com

>> Did you know? North East England has the highest number of digital media and animation start ups outside London.

BUSINESS QUARTER | JANUARY 09

>> Millions for digital sector Efforts to draw more top talent to the North East’s digital sector are being intensified with a £2.66m project to create and safeguard 80 jobs and assist some 120 businesses.

Codeworks, the regional centre for digital innovation, has secured the funding for a programme that brings together suitable small and medium sized firms from local universities. The Digital Placement and Knowledge Transfer, supported with a £733,000 investment from the European Regional Development Fund 2007-13, will encourage graduate expertise. Since 2004, the initiative has placed more than 350 students and graduates, with 85% kept on by their host company or securing permanent work elsewhere in the region’s digital sector. Codeworks expects industry and the universities to get closer, tapping into graduate knowledge and advanced research to help SMEs collaborate with the region’s five universities to the good of the region’s digital industry cluster. Games firms are among those expected to benefit. Herb Kim, chief executive of Codeworks, says: “The fact that so many students and graduates have gone on to work permanently in the sector over the past four years is testament both to the effectiveness of initiatives like this, and to the high calibre of the graduates who are now emerging from our region’s universities.” Regional gross value added could rise by £4.8m through jobs created and safeguarded alone, according to Lesley Calder, head of European and skills strategy at One North East. This programme in total is bringing more than £250m to the support of the North East.

>> Tynesiders in China A delegation from South Tyneside businesses has been chasing trade in China. Ten firms from the area were among 80 European firms whose representatives met with 200 Chinese business people and visited factories. The trip was organised by four bodies -

JANUARY 09

UK Trade and Investment (UKTI), South Tyneside Means Business, and Enterprise Europe Network, and Tedco which was funded by UKTI. The South Tyneside Business Network, which was founded in 1992, has more than quadrupled in size now, with membership up to around 60 businesses, with support from Tedco.

>> Digital thinkers head North A quayside in North East England isn’t where you might expect to stumble upon the leading figures from the fields of technology, science, media and culture. But, in May this year, that’s exactly where they’ll be. The Thinking Digital conference describes itself as an event “where 25 of the world’s greatest minds and innovators gather to inspire, to 1 120x180 22/1/09 15:14 Page entertain, and to discuss the latest ideas”.

It was launched in the North East last year and saw 400 people head to The Sage Gateshead to hear an eclectic mix of talks on a range of topics about technology, ideas and our future. Now the conference is preparing to return to the region for a second year, and conference director Herbert Kim believes the 2009 event – on 14-15 May, again at The Sage – will be even better than before. “I’m really excited about it,” says Herb. “We have some really big names from the worlds of new media and technology, including Alex Hunter, the head of online marketing at Virgin, Darius Pocha, the head of top digital agency Enable Interactive, and Matt Mason, an expert on piracy who Business Week recently named their ‘Best Pirate of 2008.” “Then we have those who are a little more left-field, including Hans Rosling, whose Trendanalyzer software makes statistics interesting – and Johnny Chung Lee, an

NEWS

academic who also works for Microsoft. Johnny has the number one technologyrelated video on YouTube, in which he shows how a £25 Nintendo Wii remote control into a smartboard that would normally set you back a few thousand.” And, although the word ‘digital’ features prominently in the name, Herb is keen to point out Thinking Digital isn’t an event focused purely on technology. “The most interesting ideas often come when you mash up a lot of different influences and cultures, and especially where there’s a shared platform of people broad enough in thinking to keep it all interesting. And keeping things interesting is what Thinking Digital’s all about” BQ readers interested in attending Thinking Digital, on 14-15 May at The Sage Gateshead, can claim a discount of over 50% by using the code TDCN_BQJan when they book at www.thinkingdigital.co.uk

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BUSINESS QUARTER |JANUARY 09

ONE North east

Fiona Hall North East England MEP, Liberal Democrats, Northumberland “I feel very fortunate to represent North East England in the European Parliament because this region has a real sense of identity and place. Some English regions are just administrative units, but the North East is a region where people feel pride. It’s a region of great contrasts - from wild countryside to chic cities and industry both traditional and innovative. But from Seal Sands in the south to the Cheviots in the north there is a sense of coherence, of belonging.“

BUSINESS QUARTER | JANUARY 09

January 09

The ‘Passionate people. Passionate places’ campaign is helping to raise the profile of North East England as a choice location to work, build a career, establish a business and invest in. Tori Clayton, Ambassador Programme Manager for the Regional Image Campaign explains the benefits to your business of getting involved “The purpose of the Regional Image Campaign is to promote the region and in doing so benefit businesses and individuals here. We have got great businesses here in the North East, which in the current economic climate and in an increasingly competitive national and international market place, we need to be championing more than ever. “We are trying to encourage positive perceptions of North East England to change

the out of date opinions about the region that some people still hold, so that when companies are bidding for work or trying to recruit staff or attract investment to this region, it’s seen as an attractive place to live and work. “The newly launched ambassador programme is a key part of the Regional Image Campaign and offers people in the North East the chance to get more involved in promoting the region.

January 09

“The feedback we have received from the hundreds of people that have signed up to the ambassador campaign is that they are keen to be involved and that the new business focus of the campaign makes it much easier to do so. “The ambassador programme pivots around an online toolkit, at www.northeastengland. co.uk/ambassadors which means that whether they are in the region or visiting clients, businesses can access facts and figures and up to date information to use in presentations, speeches and in copy for their websites. It’s there 24 hours a day to access and use whenever they need to. “Over the past three months since the toolkit launched, we’ve seen increasing numbers of people accessing the site and downloading information. People are using the facts sheets on our key sectors, images, DVDs, sample speeches and visitor itineraries. What is really encouraging is that we have noticed people are downloading more than one thing at a time, so they’re obviously finding what is on there useful. “The facts about our key sectors are also proving helpful to firms pitching for new business while for those speaking at events, the information available helps people highlight their own story in the context of what else is happening in the region. “The great thing is people are starting to share the information on the ambassador toolkit with their friends and colleagues and it is all helping to spread the word about business in North East England. “I believe the toolkit has got something for everyone, whether it is information about where we live, quality of life, transport or industry ‘wow’ facts that will help them define and sell their business and the sector in which they operate. If we can build a reputation as a good business location it has benefits for everyone.” n Tori Clayton is the Regional Image Campaign Ambassador Programme Manager. Find out more about accessing the online toolkit and becoming an official ambassador for the region at www.northeastengland.co.uk/ambassadors or e-mail tori.clayton@onenortheast.co.uk

ONE North east

Simon Pearson Chairman, Pearsons Digital, Middlesbrough Simon Pearson, started Pearsons Digital, Recruitment and Marketing Agency in Middlesbrough 22 years ago. It now employs over 60 people with offices in Newcastle, Middlesbrough and Leeds. “Perceptions are changing but we still need to do more to convince people about the

fantastic opportunities to be had here. “I’m a Middlesbrough lad born and bred and now when I talk about the region, I can talk about successful UK plcs, cutting edge biotech firms, a world-class process sector and more. “Increasingly when I talk about the region, people are starting to say that they hear a lot about the great things happening up here. The toolkit makes it even easier for us all to highlight what the region has to offer.”

Richard Ord Owner, Colmans Fish and Chip Restaurant, South Shields Colmans Fish and Chip Restaurant owner Richard Ord is an enthusiastic supporter of the ‘Passionate people. Passionate places’ campaign: “The produce we have in this region is outstanding. The fish in the North East is amongst the best in the world.

“It is the wording ‘Passionate people. Passionate places’ which just about sums us up in the North East whether it is football or cooking, and that’s why I think the campaign is becoming more popular as time goes on. “We were visited by a film crew when we where named UKTV Food Heroes 2008 who were blown away by how lovely the place is. Once people come here they are pleasantly surprised by what they find.”

John Broadbent Sales & Marketing Manager, Thermacore Europe, Ashington, Northumberland Thermacore Europe supply electronics cooling technology to many market sectors. You have almost certainly used their technology if you have a mobile phone or computer. Thermal solutions designed and manufactured by Thermacore for the automotive, medical, military and telecommunications sectors will in some way have had an impact in your daily life. “We are a leader in our industry in the number of patents registered and owned.

We invest heavily in R&D and run a PhD program with local universities to nurture talent here in the region and I don’t think you could find better universities from which to extract talent than those here in the North East. “The North East is becoming a magnet for technology companies and this is reflected in the universities, the courses they offer and in the competitive salaries being offered by businesses in the region.” “The Ambassador Toolkit will help businesses to re-educate people outside of the region about the strength of the business offer and the quality of life here in the North East.”

BUSINESS QUARTER |JANUARY 09

NEWS

JANUARY 09

Green for go: Ed Holmes meets demand on his firm’s own doorstep

>> No beating about the bush Tynedale’s Trees Please nursery has clipped UK-wide competition on a deal to supply 56,000 trees and hedging to gird the new £24.7m Haydon Bridge bypass opening soon. All the greenery is being grown at the firm’s 90-acre plantation which lies between Hexham and Corbridge. Planting for screening purposes on the 2.9km stretch of the A69 between Newcastle and Carlisle is being done by scheme contractors Lowther Forestry. Trees Please supplies around 2.5m trees yearly to commercial customers across the UK. Operations manager Ed Holmes says: “This is our highest profile contract won in Northumberland.”

>> Protection against scams New legislation to cover all aspects of buying - including product information, contract terms, delivery, repairs, refunds, guarantees and cancellations – is being introduced to protect consumers and traders across the EU. A recent survey showed 80% of retailers who do not currently sell to consumers in other countries would consider it if standard regulations came in. A petitions committee of the European Parliament, acting as a guardian of small business, is backing a report urging the

>> Did you know? A recent MORI poll named North East England as the UK’s most favoured location for the chemical industry.

BUSINESS QUARTER | JANUARY 09

European Commission (EC) to build a blacklist of misleading advertising practices linked to the unethical behaviour of some publishers of business directories. Simon Busuttil, the MEP in charge of the report, says not only businesses but also schools, libraries and community clubs suffered “significant financial losses” after signing contracts not what they first appeared. For more on the internet moves, see http://ec.europa.eu/news/ environment/081008_1_en.htm Details of the proposed legislation are at http://ec.europa.eu/consumers/strategy/ index_en.htm For more about the Eurobarmoneters survey, see http://ec.europa.eu/consumers/ strategy/facts_eurobar_en.htm For more about directory advertising, see http://www.europeanvoice.com/ article/2008/11/business-directoriesadvertising-rapped/62995.aspx

>> Care group extends Ladhar Group has enlarged its care homes business with a purchase of six new sites, creating a new network in South Yorkshire for the Newcastle-based company. More than 600 new beds in all will be provided, and more than 250 jobs could be created. The group already has five purpose-built homes in Tyne and Wear and chief executive Baldev Ladhar says the new sites should be up and running within 12 to 18 months. He is looking for further sites in Yorkshire, the North West - and the North East.

>> Bio, boy A bio-business which is now the UK’s leading supplier of products for solid organ and bone marrow transplants has enjoyed an 81% leap in profits in one year. VH Bio of Gateshead, which has been in business for 16 years and employs 19 staff, enjoyed pre-tax gains of £733,000 on turnover which is 25% up.

Motivator: David Cooke of the Me Group, Hexham

>> New developments UK-leading professional development experts are collaborating on a series of innovative programmes developed by Hexham’s Me Group (Managing Excellence). TV presenter and best-selling motivational author Tony Wrighton, Harley Street voice coach Laura Spicer, and communications expert Michele Paradise are all working with The Me Group on its 2009 programmes, which include a Master Practitioner course in the success psychology of NLP (Neuro Linguistic Programming). The Me Group is run by former Nissan executive David Cooke - an international consultant to the automotive and manufacturing industries, specialising in Lean processes, interim management and business coaching - and award-winning entrepreneur Kay Cooke, who is also currently working with NSA-M (the National Skills Academy for Manufacturing) delivering its national training trainers programme. • For info, see www.the-me-group.com

>>Signpost to success Business is booming for Gateshead signmaker Saltwell Signs almost a year after its acquisition by new owner Jason Hathaway in a management buyout. Jason had worked at the firm for nearly six of its 37 years when the MBO took place with support from accountants and business advisors at North East-based RMT. Jason says: “Saltwell Signs has now moved into a new factory and turnover is £3.1m up compared with this time last year. Staffing has also increased.” Saltwell Signs operates across the UK and Ireland. Its clients include Sky, William Hill and Newcastle United.

Newcastle Newcastle

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BHP Law is the trading name of Blackett Hart & Pratt LLP.

NEWS

JANUARY 09

>> Moving materials gets a lift A Teesside manufacturer is taking a materials loading system to new markets around the world. Xena Systems of Middlesbrough has developed the LoadSwift, which can increase productivity by at least 75% and save money for construction firms building multi-storey structures. The system is being used on sites in London, Glasgow and Chicago – and now, through a newly-created division, LoadSwift International, Xena is chasing customers in India, the USA, the United Arab Emirates and central Europe. Xena’s overseas bid is backed by a £500,000 investment from regional fund management firm NEL Fund Managers Ltd. Xena Systems, set up in 2004, employs 11. Chief executive John Fuller says: “Moving materials in construction usually requires a tower crane or slow moving elevator type equipment. Not so with LoadSwift, and so our loading process is about 80% more time efficient and about quarter the cost of using a tower crane.”

Paul’s appointment ensures continuity on the board in guiding the agency and the region through the present downturn. A former Northern e-business Entrepreneur of the Year and Entrepreneur of the Year, he is a founder director of the Entrepreneurs’ Forum, chairs RTC North, is deputy chairman of Sunderland University and was the fourth David Goldman Visiting Professor of Business Innovation at Newcastle University. He established Leighton, the Sunderlandbased technology and communications group, and was co-founder of domainnames.com in 1997, helping it to grow into one of Europe’s largest domain name registrars before it was bought by VeriSign in 2000. He chaired Business Link Tyne Wear from 2003 until 2006 and in July 2006 took on the chair of Business Link North East.

>> Benefits extended

>> Paul moves up Entrepreneur Paul Callaghan is now deputy chairman (designate) at regional development agency One North East. Paul, chairman of Sunderland-based Leighton Group, has served on the board of the regional development agency since December 2006. He now works alongside the current deputy chairman Chris Thompson, of Express Group. This comes after it was announced that Margaret Fay will stay on as chairman of One North East for an extra year until December 2010, along six other RDA chairs who were due to step down.

>> Did you know? North East England is playing a key role in helping the UK to achieve its renewable energy targets.

BUSINESS QUARTER | JANUARY 09

request to study to become a legal executive and she completed her first year by correspondence. She then worked four days and attended college one day a week and qualified after four years. She gained Fellow status of the Institute of Legal Executives two years after qualifying, before she decided to take the next step, studying at Northumbria University part-time for four years, swotting at home daily before the rest of the family got up, and spending most weekends at her laptop. Last year, she completed modules in finance and business and now has been formally admitted as a solicitor. She says: “I’ll always be grateful to the firm for opportunities and financial support, and my family have been brilliant - my husband and two daughters accepting the time I spent studying without question and my mum and dad helping out in ways too numerous to mention. My qualifying has been one of our proudest moments.”

Role model: Julie Fish

>> Room at the top Secretaries can break through glass ceilings, and Julie Fish has proved it some 30 years after starting work at Newcastle-based law firm Sinton & Co by qualifying as a solicitor. Julie started at Sintons aged 18 following a year-long secretarial course and six months on a government-sponsored Youth Opportunity Programme. She recalls: “I began work as a floating secretary and four months later successfully applied to be a partner’s secretary. I thoroughly enjoyed it, it was interesting and challenging. I did it for 10 years, but knew I wanted to progress further.” Her boss, David Dobbin, supported her

Millions of women across Europe will be entitled to longer and better maternity leave under EC proposals. These will improve the position of selfemployed women in small businesses especially, by giving them equivalent access to maternity leave on a voluntary basis. The initiative is included in a package of measures to improve work-life balance for men and women across Europe. The proposals will give women working for family businesses, such as farms or doctors’ practices, access to social security benefits on par with formally self-employed workers.

>> Designs on success A former apprentice is to lead a re-branding of the training company that helped him into work. Access at Team Valley, Gateshead, got Philip Lowery his first job as a junior designer in 1993. Now, as owner manager of brand consultancy Projector, he is developing a new image for his former mentors.

JANUARY 09

>> Motivation reaps results

“It gives mentors from the business Teenagers at Newcastle schools have community the chance to develop their won praise for exceeding expectations in professional skills and make a real contribution their GCSEs after graduating from a unique to building our future workforce,” said business-backed motivational programme. Newcastle EBP chief executive Gillian Bulman. Newly released results for the Operation 608 programme, run by Newcastle Education >> Regional development Business Partnership (EBP) and supported by under review mentors from the business community, reveal A European project has been launched that 60% of the participants gained five A*-C to improve the effectiveness of regional GCSE grades. development. The pupils on the programme, which has Peer Reviews for Sustainable Ecosuccessfully supported more than 500 GCSE regions via Europe (Preserve) will focus pupils since its launch in 2002, were from on landscape and cultural heritage in Walbottle Campus Technology College and All economic development. Saints College in Newcastle. Altogether, 13 partner regions from 11 The project’s success was underpinned by countries are involved in the three-year business mentors who volunteered their project. For further information, see www. time to share experience, encourage the participants andAd oversee preparation and Half page 15/01/09 15/1/09 12:14 aer.eu/en/news/2008/2008110601.html Page 1 performance during set challenges.

NEWS

>> Pandora centres on Hebburn Danish jewellery firm Pandora has set up a UK centre at Monkton Business Park in Hebburn, creating 34 jobs. It had been back under control of the parent company in Denmark since January 1, having previously been run by a North East distributor.

>> Centre pulls in business A £6m arts and business centre, The Place at Sunniside in Sunderland, has opened and is already attracting business from film and photography companies, architects and a college. Designed by Newcastle architects Reid Jubb Brown Partnership, it won best office development ward in the North East’s Landmark Awards.

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BUSINESS QUARTER |JANUARY 09

ENTREPRENEUR

JANUARY 09

Quality ingredients: Greg Phillips and Stephen Silvester are cooking up a tasty high street presence

COOKING ON GAS ...

Mix a Young Business Person of the Year, an award-winning master baker and a former member of the Royal Household, says Brian Nicholls, and you have a heady preparation to take a young bakery business upwards fast

BUSINESS QUARTER | JANUARY 09

There’s new heat in North East bakery circles. It’s fuelled by the synergy of an award-winning young businessman, a similarly award-winning master baker and a newcomer to this growing venture, whose experience ranges from service with the Royal Family to turning round a once-faltering motorway catering chain. Much has been recorded about Greg Phillips, the 29-year-old graduate of Newcastle University, since he was recently named North East Young Business Person of the Year; about his fellow director Andrew Cotterell too, whose patisserie talents, and whose connections, knowledge and experience make him (in the words of the bakery website) “the cornerstone of the business.” But the third member of the trading triumvirate, the one raising temperatures from steady to full, is a dynamic individual whose peripatetic career has kept him largely out of North East headlines though his home has been in Whitburn, near Sunderland, for 25 years. Stephen Silvester became the Queen’s footman through studying hotel management at Thanet College in Kent. He explains: “The

JANUARY 09

Royal Household often uses temporary staff to cover major occasions, partly through hotel management and catering colleges.” He was among final year students at Thanet who assisted on such occasions before he was summoned by the Master of the Royal Household. “I thought it akin to being sent to the headmaster’s study and I was bloody terrified,” he admits, chuckling. He was told, however, he had been observed to do very well, and would he like to work for the Royal Household permanently? “There’s only one answer to that and it’s not No,” he says, and for two years he served and lived with the monarchy. It doesn’t breach his signing of the Official Secrets Act to say he was involved in all state occasions and major events during that time, including the wedding of the Princess Royal and the late Queen Mother’s 85th birthday celebrations. “You lived and worked with the royal family seven days a week,” he says. He worked and stayed in all the royal residences, travelled the country on the royal train and sailed on the royal yacht Britannia. “I learned attention to detail, quality standards and life experience. It was fantastic,” he says. But having learned all he could about the highest quality food and service, he wanted to develop in management. He went to John Lewis’s flagship Oxford Street store as restaurant manager and rapid promotions led to his inclusion in a team sent to Nottingham to launch a new 250,000sq ft store. Within a year he was food service controller. In 1982 he joined Grand Metropolitan and was invited, from GM’s then cast of 100,000, to become operations manager for the North East, based in Darlington. This, and a subsequent spell in sales, broadened his management experience at a time when the management, led by Gerry Robinson, bought out the business in what was then the UK’s largest MBO ever. The newly named Compass Group grew sales from £165m to £12bn over a decade and Stephen became sales director for Eurest, a division serving business and industry. Two years later, he was promoted to director of corporate development for Compass Group and in 1993, he was made MD of Compass’s Government Services business. “With more

ENTREPRENEUR

I learned attention to detail, quality standards and attention to detail. It was fantastic

than 500 fixed-price operations and 2,500 unionised staff, this was a challenging time for private contractors and their MDs,” he admits. Three years on, he was appointed MD of ESS, Compass Group’s facilities management company, in support of the British armed forces. He was responsible for operations in Northern Ireland, Bosnia, Germany, Cyprus, the Ascension Islands and the Falklands. “I travelled the world learning what managing from arms’ length meant,” he laughs. In 1999 Stephen, who hails from Surrey, decided it was time to spend more time at home in the North East with his wife Karen, daughter Hannah and son Alex, now 17 and 14. For 18 months he provided management consultancy in developing two food brands, and became a director of a food service design firm. Then, in 2001, he took up a Japanese venture capitalist’s proposal to re-establish the UK’s failing Roadchef Motorways - 31 locations, 2,500 staff, 65m customers a year, and sales topping £300m. He recalls: “I quickly realised that everything I feared was true - very expensive prices for very poor products and services, delivered largely by a poorly managed workforce.”

Stephen changed the management at almost every location and replaced 150 staff who lacked commitment. Roadchef, he knew, needed a point of difference and market research told him a decent cup of coffee on a motorway was as elusive as an English rose in the Sahara. So, he signed an exclusive deal to install Costa coffee at all the stops. Within two years, coffee sales exceeded £20m a year. “Over the next three years, every motorway operator tried to copy, but they didn’t have the leading brand,” he says. Agreements were also reached to re-brand 15 hotels under the Premier Travel Inn name, and for fast food to be delivered through the Wimpey brand. A capital investment of £30m saw every location upgraded. In 2004, Stephen designed, built and opened a motorway service area at Norton Caines on the M6 toll road, the UK’s first toll motorway. Its success beat forecasts. Soon after, as with venture capitalism often, the business was successfully sold. Venture capitalism, he says, was valuable to his education. “I learned a lot about the benefits of almost a forensic understanding of numbers. It sounds a mouthful, but such people investigate numbers, and while that can often be challenging, it has a value. They allowed us to run the business, so in that respect it worked well.” After another six months’ break at home in Whitburn, Stephen joined the Irish Agricultural Wholesale Society (IAWS), one of Ireland’s largest plcs, as UK MD leading five operations in bakery and food retail. The largest was Delice de France. First day in was a challenge; the London head office and 250,000sq ft of warehousing and distribution centre burned down, with 7,500 wholesale customers expecting to be supplied daily. His first task, then, was to chair a disaster recovery committee. Within a month, the business was stabilised, the previous customer service levels almost immediately exceeded. A new facility was designed, built and commissioned. A brand review then saw Delice de France relaunched as the premium retail bakery brand in the UK. The other operations were also reviewed: Cuisine de France, La Brea Bakery, Heistand

BUSINESS QUARTER |JANUARY 09

ENTREPRENEUR

It became obvious that he couldn’t be a better mentor in knowledge and experience

JANUARY 09

Forum. The aforementioned Greg Phillip’s other distinction last year, besides the young business award, was to be named one of the region’s faces of entrepreneurship in a Forum event. This entitled him to mentoring, and Stephen turned out to be the mentor. Greg says: “Steve came to the bakery and said, ‘come back to me with the sort of things you’d like to talk about and we’ll arrange to talk again’. We did that. It became obvious to me he couldn’t have been a better mentor in knowledge and experience. “Not only that, we clicked. I got a real buzz from things he said. If I could have chosen anyone to work with, it would have been Stephen. Steve said to me after the second or third time we met, ‘I’m lying awake at night thinking about North East Bakery’. His passion for the business was shining through, and he helped me early on with a particular problem. “I thought how great it would be if Steve could become more involved because he

obviously saw potential in the business.” Six months after their first meeting, Stephen invested in the business to support its development and he has now taken up his executive role. Stephen says: “I was amazed by the quality of the bakery’s products. It was enlightening. I had seen quite a few bakeries of this type and what struck me here was the capability, the experience, the skill that existed. “Greg and I, though we are from different generations, get on really well. I enjoy his forthrightness, his enthusiasm, his intellect and his willingness to listen and take on board ideas and opportunities. “My motivation in business is developing and helping people. I’ve built a career around that wherever I’ve been. That’s my buzz. If I can help take this business onto another level, that’s the legacy that will give me greatest satisfaction of all.” The plans, it seems, are already cooking. ■

Baking plans and Gilsons. All UK bakery manufacturing was restructured. Turnover and operating profit improved. Stephen became chief executive. In 2007, he was made a Fellow of The Institute of Hospitality for his contribution to the UK hospitality industry. That year also, he again felt it was time to be back in the North East. The family home had been there for 25 years, yet he had spent a lot of this time living and working away. Was it time to develop a business of his own? After a chance meeting with an ex-colleague, he recently bought the decade-old P&A Catering in Darlington. Seeing the need for a quality, cost-effective, contract catering company in the North East, he and Edward Naylor, as owners and co-directors, have established P&A Food Management Services to provide for blue-chip business and industry, in addition to colleges. “The first year has been both successful and rewarding,” he reports. “It is now positioned as market leader for quality and service.” He looks here to stay, given that he is playing league cricket for Houghton le Spring. His entry to North East Bakery as chairman has come about through the Entrepreneurs’

BUSINESS QUARTER | JANUARY 09

North East Bakery was formed in 2004 when Greg Phillips and Andrew Cotterell bought Chapel Bakery and Patisserie off Scotswood Road in Newcastle. Since university, Greg had worked in his uncle’s sandwich business, also in the city’s West End, where his innovations helped to record a £1.5m turnover. With the bakery running and business as a wholesale supplier snowballing, the pair then acquired two shops in Hexham and Corbridge, run by traditional baker Nichol and Laidlaw. Within a year North East Bakery trebled sales and invested heavily. In 2006 the chance came to buy a purpose-built 20,000sq ft bakery at Newburn. The purchase from Milligan’s Bakery included shops throughout the region. Milligan’s retains a handful of outlets in the region under its name, but its main business now is in coffee shops, with North East Bakery supplying some of the accompaniments. Altogether, there are 14 acquired shops from Hexham across to South Shields, Blyth down to Sunderland. Sales at what was Milligan’s at

Cramlington have trebled under the Nichols transformation. Now the search is on for new North East sites appropriate for Nichols. Long term, there is potential in Leeds, York, Harrogate. North East Bakery says it is ready to compete with the supermarkets’ bread, muffins, buns and cakes and with the bake-and-take Greggs’ lines. North East people understand quality, craft and culture above supermarkets, the partners say, and in that, this bakery claims superiority. They believe they can keep their pricing competitive and they are confident of their retail operation. Their biggest earners are ‘grab and go’ savouries and sandwiches. There is lots of product development going on there, with hot sandwiches promised to be positioned much differently to Greggs. Today, with five of the company’s nine vehicles operating as buffet vans, turnover is nearly £3.5m, the workforce of 120 is growing, and the bakery has capacity for further production, which it expects use. “If there isn’t a Nichols near you now,” they suggest, “there will be.”

7668 BENE Journal 180x120-Dog Col:Business Link 18/12/2008 10:38 Page 1

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JANUARY 09

A six-star hotel, multi-million pound fortunes built in North East property, a new neighbour for Nissan and much more – the North East property market has plenty to talk about New shoots: Tall Trees in Yarm is aiming for six stars

>> UK’s first six-star hotel The UK’s first six-star hotel looks set to be in the North East. Plans are taking shape for a £50m transformation of the existing Tall Trees hotel complex near Yarm. Beside a major facelift and additions to the existing hotel, 250 luxury apartments and what are billed as ‘world-class’ business and conference facilities are projected. Niven Architects of Darlington is drawing up a three-phase programme of work, starting early next year. Planning permission was given three years ago. The Majid family behind Tall Trees established the hospitality and entertainment centre in 1985. Phase one will bring a new entrance pavilion for the hotel and two new wings with 70 additional bedrooms, restaurants, bars, conference facilities and a health and leisure club. The Tall Trees Grande Hotel will also feature an atrium, fountains and improved reception areas. A swimming pool, sauna and steam rooms, three Jacuzzis and a hydropool will also feature. But it will be last dance at the long-established nightclub, which is doomed to demolition to prepare the way for an appearance instead, in phase two, of two four-storey apartment blocks, each housing 125 properties of two, three or four bedrooms. The apartments will surround a courtyard and have woodland views, balconies and spiral staircases leading to second-floor mezzanines. Phase three will bring on the spa, conference centre and penthouse apartments that will overlook the Tees. Quantity surveyor Maurice Daley will work with Niven Architects on the project. A spokesman for Tall Trees says: “We shall be able to provide outstanding new levels of luxury, opulence and splendour. The finished article will be breathtaking.” • Work is underway, meanwhile, on a new 202-bedroom hotel and adjacent office building on Hawks Road near Gateshead College. The terracota-tiled hotel will be at least six storeys high, the office block in glass and silver cladding at least four storeys high. Priority Sites is the developer there.

BUSINESS QUARTER | JANUARY 09

>> Transformation The proposed multi-million pound transformation for Newton Aycliffe’s town centre (BQ issue 2) is moving forward. Phase one, which will convert the Somerfield store building to create a Wilkinson’s store and a new service area, is now only awaiting planning permission. Plans for a radical redesign of the centre within six years were unveiled by owners Freshwater and architects Ratcliff Partnership earlier this year. The aim is to breathe new life into Newton Aycliffe’s rundown 1940s buildings and bring together the disjointed retail centre in a contemporary, phased strategy. There will be a new library, community centre, supermarket and a wider range of leisure and retail units.

>> Good health Newcastle Primary Care Trust, which has 1,500 staff working in community healthcare services and other specialist support, will open a new 35,636sq ft centre at New Croft House near the city’s Laing Art Gallery soon. Lambert Smith Hampton acted for Land Securities Trillium in assigning the remaining leasehold interest. The trust was advised by Smith Cole Wright Chartered Surveyors.

>> The way to do it North East business support group Tedco and Teesside University have had their endeavours for start-up businesses recognised in national awards. Tyneside Economic Development Company (Tedco) won an award for best new incubator of the year for its work at Berwick WorkSpace – Tedco’s first incubator venture beyond South Tyneside, where it has been encouraging new businesses for 25 years. >>

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COMMERCIAL PROPERTY Though the Berwick site had been running for only seven months, the speed of space take-up and high standard of support was enough to carry off honours in the National Incubator Awards. Tedco was also runner-up in another award. Teesside University was named the country’s business incubation champion, with 100-plus graduate companies launched on its Middlesbrough campus since 2001, creating nearly 225 jobs.

JANUARY 09

on £97m. Sir John Hall and his family, who have sold their stake in Newcastle United, are said to be worth £75m. Fifth is Hartlepool’s Philip Yuill and family with £45m. Below them come Peter Stephenson and family of Able UK with £42m, Stephen Dickinson and family of Grainger on £40m, David Harriman of Mandale Group on £40m, and Nigel Vaulkhard and family on £24m.

>> Swallows on the wing

>> Dove flies

Four former Swallow hotels in the North East have been put on the market - the Imperial at Jesmond in Newcastle, the Three Tuns in Durham City, and the Swallows at Gateshead and Stockton. The vendor is Crerar Hotels of Edinburgh, dealing through Christie & Co in Newcastle.

Builders’ merchant JT Dove, on the eve of its 140th year in business, has a new £1.6m depot at its new site in Newburn. This gives it two depots there, one serving builders and the other plumbers and heating engineers. It is part of a relocation from central Newcastle to a 1.3 acre site, where the two depots take up 24,000sq ft. The city centre site beside Newcastle Central station will continue to trade as a sales outlet until 2010.

>> Neighbour for Nissan The first unit has been let at Teal Farm Park in Washington; to be a new northern base for Expert Tooling and Automation of Coventry. Teal Farm Park is part of Pattinson Industrial Estate, home already to Nissan, Asda, Coolchain and Fowler Welch. Hellens did the building, King Sturge the letting.

>> Valued property Teesside’s Alastair and Michael Powell have been ranked the North East’s wealthiest property developers at an estimated £260m. They run Cleveland Cable Company of Middlesbrough with estimated assets of £98.6m, while a related property firm, Cable Properties and Investments, has assets of £69m. The Powells started Cleveland Cable in 1977. Just below them in a table compiled by national trade journal Estates Gazette, is William Rankin and family of Newcastle developer Hanro, with an estimated £106m and third is Stuart Monk of Jomast

BUSINESS QUARTER | JANUARY 09

>> Gateway open The first two phases of industrial units have been completed at Gateway West; one of Newcastle’s largest speculative mixed-use developments. The units, owned by fund manager CB Richard Ellis Investors, are designed to high specification BREEAM excellent-rated space. Sizes range from 10,000 sq ft to

50,000 sq ft and altogether, Caddick Developments is building 180,000sq ft of industrial space at Gateway West and 52,000sq ft of offices this year. GVA Grimley and Sanderson Weatherall are marketing the site. GVA Grimley’s Danny Cramman says: “The excellent design, generous external yard areas and emphasis on cost-effective and environmentally friendly industrial space will interest many distribution and manufacturing firms.” The remaining seven industrial units and the office space will be finished later this year.

>> New Spectrum The final phase of a County Durham business park is under way with the potential to host 3,500 jobs. Spectrum Business Park, where Dawdon Colliery in Seaham once stood, will have office and industrial space. The final phase, Admiral Point, is being built by Stockton-based Jomast Developments. This phase complements Jomast’s first scheme, which drew in firms such as Kidde Products, Orbis plc, Transmark fcx, Access Rentals and Tradesport. Units range from 2,500 to 13,000sq ft to lease as single or multiple occupancy. Completion is expected in 2010. Admiral Point sits alongside eight office blocks put up by Hillford Group. Spectrum Business Park, supported by Easington and Durham (County) Councils, is one of several regenerations in Seaham. Others include the £18m Byron Place Shopping Centre, Foxcover Enterprise Park, and the former Vane Tempest Colliery site, now East Shore Village.

>> Police station revamps Police stations across County Durham are being refurbished. The £465,000 project led by Niven Architects of Darlington is creating bigger reception areas, dropped counters for wheelchair users and fixed seating.

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>> The GVA factor

>> Turbine First Newly completed piling work marks a first for the UK renewables industry at a £30m West Durham Wind Farm scheme. The 12-turbine project, the largest of its kind in the North East, is also the UK’s first onshore scheme using tubular steel piled foundations to support some of its turbines. In this Banks Developments project, five turbines will be supported on recycled oil-well casings made from high-grade steel. They are being used to punch through the unpredictable sub-surface material and into the underlying sandstone bedrock underneath what was previously the Stonefoot Hill surface mine Banks worked in the 1980s. The other seven bases are gravity-reinforced concrete structures put directly onto sandstone at normal ground level. Situated on land beside Tow Law, and near Banks’ own offices in the town, the West Durham Wind Farm will provide enough renewable energy to power around 15,700 homes - 46% of all the homes in Derwentside. The first 100m-tall turbines are due on site in February for a completed scheme by the summer. Rob Williams, renewables projects director at Banks Developments, says: “Using recycled steel piles not only provides the extra strength of material required, but also adds another factor into the sustainable design and outcome of the project.”

>> Team Valley opening Queens Court - a £7.5m mixed use development - has opened on Team Valley in Gateshead. UK Land Estates has converted the former Dunlop factory into offices and industrial units and up to 400 jobs could be located there.

BUSINESS QUARTER | JANUARY 09

>> Pontoon, anyone? A new floating hotel to be built at Hartlepool Marina will serve as an extension to the Premier Inn already in business on the quayside. The hotel on pontoons will add 54 more bedrooms to Premier’s availability there. It is hoped the extension will be open in time for the Tall Ships Race visiting Hartlepool in August 2010.

GVA Lamb & Edge is starting 2009 with a change of trading name and will now be known as the North East office of the national brand GVA Grimley. Established in the North East marketplace for more than 130 years, Lamb & Edge merged with GVA Grimley three years ago to become one of the North’s largest commercial property firms. GVA Grimley is one of the largest property advisers in the UK with 12 offices, more than 1,200 staff and a turnover of £148m (2006/7). Since the merger, GVA Lamb & Edge’s sales in the North East have risen, and annual turnover in the region is up from around £3m to more than £5m. Staffing has risen by 20% to more than 60. And for two years running GVA Lamb and Edge has topped the league for North East sales and lettings in rankings compiled by Estates Gazette. It handled more than 312,250sq ft of space in 31 deals, more than 64,600sq ft ahead of its nearest rival between September 2007 and August 2008. Mike Cuthbertson, regional senior director, says: “Our work has expanded at every level, and our highly experienced teams are now often part of national projects.” Major development and regeneration schemes the firm is working on include the former S&N Brewery site and East Pilgrim Street in Newcastle, the former Vaux Brewery and Cherry Knowle Hospital sites in Sunderland, Middlehaven in Middlesbrough, North Shore in Stockton and Victoria Harbour in Hartlepool.

>> All your property needs The Tyne and Wear Commercial Property Show on March 19 at the Stadium of Light in Sunderland is being marketed now to the region’s leading property agents, developers, business support organisations and local authorities. Those looking to invest, approaching the end of a lease or wanting to know more about finance should see www.commercialpropertyshow.co.uk

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JANUARY 09

ENTREPRENEUR

ENGINEERING A BRIGHTER FUTURE An economy in paralysis is no reason for an entrepreneur to stand still, as Chris Thompson shows through continued investments and major contributions to the regionâ&#x20AC;&#x2122;s economic framework. He talks to Brian Nicholls >>

BUSINESS QUARTER |JANUARY 09

ENTREPRENEUR

JANUARY 09

A good investment: Uber Dartmoor, one of Matt Forster’s paintings using his ‘uberpainting’ technique in which Chris Thompson is keen to invest So what’s a buzz-a-minute serial entrepreneur to turn his mind to when the economy is in seizure? The future, as usual. Chris Thompson is one of the North East’s most prolific company creators, responsible for 40 and more start-ups during the past decade. They range from training and consultancy to highvolume automotive manufacturing. Many, he has sold on, too; part of his ethos. Some entrepreneurs launch one enterprise after another wholly for personal profit and satisfaction, but Chris also gets pleasure creating career openings for others and knowing that his own development and success enables many around him to achieve their goals. He gives time and talent unstintingly, in addition to working within the public-private sector for the good of the region he cares so much about. The words ‘Chris Thompson, engineering’ roll naturally off the tongue in this region, and have done for two decades and more, even before 1993 when he was named North East Business Executive of the Year. He is now pressing ahead with an investment of £3.5m over two years in his Express

BUSINESS QUARTER | JANUARY 09

Engineering company. This will create 40 more jobs while many other businesses hesitate as they wait to see how the financial wind blows. Chris says: “Express Group has withstood the recent pressures in manufacturing because it has majored in growth sectors - defence, oil and gas – and these appear to be holding up.” He could have added, but did not, that acumen and foresight have also played a part. Instead, he says: “We are cautiously optimistic and shall continue to invest and increase capacity. Even so, we are monitoring the situation monthly. Our plan is incremental and can be altered. That £3.5m investment represents a big commitment on our part.” The Express Group of manufacturing companies, he points out, represents a brand. It comprises his investments, but not all the component firms are necessarily under his complete ownership. He holds controlling interest, however, in a number of the specialists of process engineering, contract manufacturing, and rapid tooling activity. With the group turning over some £35m, and around 40% of its work for clients in 30 countries abroad, there are hopes the national economy will be fitter for manufacturing

purpose by the end of 2009 and early 2010. Meanwhile, Chris Thompson also invests in some unexpected areas turned up by his twin passions of fishing and sailing. He has acquired a stake in the premium fly fishing rod manufacturer, Thomas and Thomas, of Massachusetts, and in the Caribbean, where he sails, he is building an eight-bedroom boutique hotel in the Grenadines at Bequia (pronounced Beckway, meaning ‘island in the clouds’). Back home, like many investors disillusioned at present with stocks, shares and property, he has turned to fine art. Alongside some business partners, he is evaluating investments in contemporary art in the region, specifically a six-figure sum in Matt Forster, who is pioneering his Uberpainting technique from The Art Works Galleries in Newcastle. Matt explains his watercolour Uberpainting technique as: “A portrayal of stunning ideas involving the reflection of both real and super landscapes, reducing subjects to essence, and characterised by distinctive forms and an original palette.” Chris Thompson says simply: “I like his work. He is not only a talented artist, but

JANUARY 09

entrepreneurial, having sold about £1m worth of his work already,” he adds. He is also working to transform the appearance of some of the remaining stretches of industrial dereliction on the Tyne’s riverbanks. In partnership, he has designed a site for 1,000 houses where Smith’s Dock once stood in North Shields, and this has been sold to Places for People, which is one of the UK’s largest property management and development groups. Chris and associates have also been working with South Tyneside Council on a plan for the council to sell on or develop itself. He is involved principally in redeveloping 13 acres of the former Middle Docks at South Shields. This is part of a central regeneration to set up a new mixed development near the Customs House arts venue, close to where BT and South Tyneside Council are creating an advanced support facility for local authorities that could mean 1,500 new jobs. These activities enable Chris to stimulate job opportunities and fill existing vacancies. He is trying to get people back into work and he encourages others to do likewise through his activity in other capacities, such as his deputy chairmanship of the regional development agency One North East and his chairmanship of North Star Equity Investors, a venture capital firm specialising in early-stage high-growth opportunities. NorthStar handles £22m of funding through a Co-Investors Fund and £10m through a Proof of Concept Fund. The former assists high-growth technology opportunities in the North East, and will lead or participate in syndicates. The latter invests in pre-start, earlystage or more mature science and technologybased firms. Both funds were due to end in 2008, but Chris

ENTREPRENEUR

says: “We have secured funding for 2009 so are able to continue. An experienced team, largely brought in from London and the South East, decides in which companies to invest. They look for business quality rather than quantity and are helping particularly where pioneering technologies are locating gaps in the market. “North Star equity supports where there is no conventional route to funding, and we have so far been able to help more than 100 companies through the Proof of Concept Fund. We have also invested nearly £60m with co-investors in 35 of the region’s technology SMEs. One of the firms now has a public share listing.” Many entrepreneurs are in permanent standoff with the public sector and government. Chris’s closer involvement, however, gives private enterprise power through interface, a current example being his New Year meeting with Prime Minister Gordon Brown, Chancellor Alistair Darling and Secretary of State for Business Peter Mandelson. As vice-chairman of One North East, he was deputising on the occasion for the chairman, Margaret Fay, at a regional economic council gathering. He expects 2009 to be ‘both interesting and challenging’ for the agency. With its investment target of £250m a year to create 22,000 more businesses and get 70,000 more people into work by 2016, his cautious assessment is understandable. “Until the crunch came we were making great progress,” he says. “As a region, we have been improving in comparison with other parts of the country, and the region’s percentage improvement in gross domestic product has shown it.” He also chairs the North East Employer

An experienced team decides in which companies to invest. They look for business quality rather than quantity, and are helping particularly where pioneering technologies are locating gaps in the market

Coalition, which again involves an interface with non-commercial parties such as the Department for Work and Pensions, local authorities and the Learning and Skills Council to get people back into work. He has been a prime mover nationally in this objective, not least through his paper on the subject, prepared jointly while he was David Goldman visiting professor of innovation at Newcastle University’s business school. His paper highlighted the plight of families with up to three generations out of work in an economy considered prosperous, and indicated how existing systems were failing such people. “The landscape has changed in three years,”

Angel of the North Chris Thompson, 52, was born in Walker, Newcastle, and later lived in Chapel House and attended Walbottle Grammar School (now Walbottle Campus). He studied in London and trained to be a quantity surveyor. He then worked alongside his father in the family engineering business. He took over the business when his father retired and trebled sales in five years. Further successes followed as he embraced the principles of total quality, transparency and a no-blame culture, and dedicated 3% of annual turnover to training. His commitment as a champion of the North East is manifest in Express Group’s distinction of having been the first private donor towards creating the iconic Angel of the North.

BUSINESS QUARTER |JANUARY 09

ENTREPRENEUR

JANUARY 09

Centre of design Chris Thompson is driving forward, in concert with others, one of his biggest ambitions for regional industry - the establishment of a £13m Design Centre North. This is to advance engineering and other manufacturing through innovative design and product development. The centre will stand in Baltic Business Quarter, just behind The Sage Gateshead. “Engineering manufacturers in the region are very much into product innovation, and they need to get involved also in design. This is how Express Group grew,” he explains. The project, six years in the making so far and unlikely to open before summer 2010, is edging forward with plans now before Gateshead’s planning committee, and a board of business leaders appointed to develop an accompanying design network. This will be led by Sunderland-based RTC North, which already has an impressive record in helping firms to develop new products, and it will be partnered by the universities of Newcastle, Teesside and Northumbria. One North East has committed £4.4m, and final approval is being sought for £3.6m from the 2007-13 European Regional Development Fund. Developer Terrace Hill will also contribute, and one of the centre’s two wings will comprise commercial office space. The cogs of public-private partnership often grind slowly, but eight years, assuming the opening is on schedule, must seem unduly long to many for a key research and development asset serving the region. Chris must be frustrated, but he describes it, diplomatically, as ‘a long time in the making’. “There has been a lot of change in six years,” he says. “The market drivers are different now. The original intention was for the centre to encourage US corporations to look to the North East to design products for the European markets and a major part of that concept has diminished. “Good design, however, remains a great way in which to embrace skills and, now, to prepare for the eventual upturn of the economy,

BUSINESS QUARTER | JANUARY 09

Engineering manufacturers in the region are very much into product innovation, and they need to get involved also in design especially given the sharing of specialist best practice that will accompany it.” Fortunately, corporate enthusiasm has been sustained. Mike Addison, senior scientist at Procter and Gamble, says: “We firmly believe world class innovation, supported by world class design, is a key to consistent and sustainable growth. The planned design network fits very well with these aspirations.” Dianne Sharp, managing director of Mechetronics, the Bishop Auckland maker of solenoids, says: “Small and medium size enterprises in the region will now know where to go for help in developing innovation. Until now, general design and engineering support has been fragmented here. But this investment will go far in bringing together a network, attracting the right people to the region.” Speaking for engineering generally, Tony Sarginson, regional manager of the Engineering Employers Federation, says: “Facilities in this design centre are going to prove so important to our manufacturers.” And Martin Vickerman, director of Terrace Hill Group, which has to provide commercial

viability, says: “We are confident the centre will provide both a stimulus for future investment in the region’s design industry, and a focus for inspiring and promoting innovative and productive design companies in the region.” The design sector presently accounts for about 2% (£600m) of the region’s economic output. RTC North’s chief executive, Gordon Ollivere, says: “At a time when productivity quality standards are universally high, and costs have been driven downward, design and functionality are the most important factors in success or failure in the market place.” Chris Thompson himself now sees opportunity for the North East, particularly in manufacturing associated with medical advances being made in the region. Just why Chris has so much support on all sides for the design hub was made clear by Malcolm Page, deputy chief executive of One North East: “Research found the North East was not using design to generate business growth as many of its regional counterparts were. The potential development of a central and neutral facility enables us to do this.”

JANUARY 09

ENTREPRENEUR

With more responsibility passing to local authorities through government changes, and with the eventual demise of the LSC and growth of the green economy and other economic drivers, we are going to see a lot of change he says, however. “We do now have people tackling the problems. Over the next couple of years there will be new government policies, similar to those proposed in the Leitch Report.” The Report said the UK must spend significantly more on boosting skills at every level, and that employers should have much

greater say in what should be funded. This, Chris says, gave credibility to the proposals. “Now, with more responsibility passing to local authorities through government changes, and with the eventual demise of the LSC and growth of the green economy and other economic drivers, we are going to see a lot of change.”

He is scouring renewables for his own business interests beyond manufacturing, hotel building and patronage of the arts. He has invested in a training company, Trade Training Associates, which specialises in heating and ventilation in renewable energies. He has set up trade training with Fenhams, the Gosforth family firm of heating and ventilation contractors, running integrated training and qualification programmes to City & Guilds standards for work in solar panels and photovoltaics. “The solar panels can generate electricity, but you need integrated training of craftsmen with specialist plumbing, electrical and installation skills, and training until now has been disjointed,” he says. He is also into online marketing and waste recycling, through the Newcastle firm Media Works and a medical waste company in Nottingham that recycles clinical refuse from hospitals into plastic products. n

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AS I SEE IT

JANUARY 09

TOP GEAR The Government, by its continued refusal to acknowledge North East transport needs, makes a rod for its own back in the shape of unemployment and other costs to the national economy, asserts Douglas Kell, director of the Civil Engineering Contractors Association (North East)

The recent 50th anniversary of motorways in this country may soon fade from memory, but knowing that the North East is still the only region without a complete motorway system will not. The position will not be rectified for many years either, as things stand. Three recent government reports bear out that an urgent upgrade of the A1 in Northumberland, even to dual carriageway, which is justifiable both on economic and safety grounds, will require a ministerial U-turn. One of the reports, by the Department for Transport1 shows that despite all forecasts of higher road usage over the next 20 years, the Department (DfT) has still no detail, no clear

BUSINESS QUARTER | JANUARY 09

intention even, about which major projects in England will go ahead up to 2014, or exactly when. This is despite its own concession that A1 stretches not even dualled yet will still be capable of damaging the economy then. The total cost of poor transport connections for 50,000 businesses in the North East (whether on the A1, A66, A69 or indeed elsewhere) is put now at ÂŁ1bn - money down the drain. Accidents on Englandâ&#x20AC;&#x2122;s final north stretch of the A1 may be fewer than the DfT thinks vital to redress, but the casualties that do occur result from some of the most horrendous nonmotorway accidents anywhere. Since the DfT itself expects material costs to

JANUARY 09

Seven points that stress the folly The DfT’s predictions of congestion for 2025 even exclude the A1 immediately north of Tyneside from consideration for upgrades. This overlooks major issues: • More than 60% of businesses in the region report business lost through poor transport connections, and more than 90% report higher costs, in a survey by the North East Chamber of Commerce • Individual firms incur a £22,256 average bill in a year through deficient transport links. For some, the cost is put as high as £200,000 • Heavy freight traffic from Tees Valley and Darlington will soar on the A1 once Teesport, with government approval already granted, upgrades to a Northern Gateway sea terminal. This £300m transformation, welcome and needed, even so will increase the present 250,000 containers distributed from there sixfold, going on to Scotland, the North West and Yorkshire (as well as within the North East). Yet no commensurate road and rail expansion seems to be intended. The rail work there is as vital as the road improvements elsewhere • Money wasted by continually deferring

rise until at least 2012, doing work now would benefit the economy in the end, and bring social benefits - all very Keynesian and feasible. There is an important political consideration also. The A1 is one of two main routes joining England and Scotland. Westminster is concerned to preserve the United Kingdom against pressures for full independence from Scottish nationalists. And history - through the Romans, General Wade and builders of the British Empire should remind Westminster that good road communication can be a powerful deterrent

A1 dualling: £1.4m per road casualty, inflation in costs of road materials (”significant”, the DfT concedes), plus £348m which the Government, the Highways Agency and quangos have already paid consultants to avoid the necessary. Compare that in total with the £100m estimated need to dual, and even another £221m to relieve the often bottlenecked Western Bypass at Gateshead. The Government could be quids in during the credit crunch, and spurring the economy also. • Further expense on short-term improvements that cannot substitute and may even reduce safety • Cost savings in south east England helping to offset through reduced congestion and carbon footprint on major roads there, once some sea cargo is diverted to Teesport • Civils work such as required in A1 dualling is necessary if apprenticeships are to be encouraged as the Government wishes, and young people are to get practical work experience Such considerations make nonsense of the DfT’s present calculations based on road priorities, overweighted as they are on traffic flows and accident rates, against costs to the productive economy.

against ‘us and them’ thinking. Ironically, much of the Scottish end of the 410-mile road has already been upgraded. Civil engineering contractors such as those I represent can understand the pressures on a national road budget that was limited to £6bn for the next six years, and which may still be no more despite the Chancellor Alistair Darling having just advanced £3bn of work originally intended for 2010-11. We also acknowledge that widening the A1 to motorway standard between Dishforth and Barton – Dishforth to Leeming

AS I SEE IT

An additional 80 lane miles of extra capacity now likely to go ahead nationally excludes the North East

now, Leeming to Barton from 2011 – is going ahead. Surely though, a motorway from the M25 to Tyne and Wear which will result, bringing major safety benefits even on the DfT’s own admission, needs quickly to be dualled, at least further up towards the Scottish border to sustain the improved safety. Instead, an £85m dualling of eight miles from Morpeth to Felton by 2012, and dualling at Adderstone, between Alnwick and Berwick, have all been deferred - at what material and human cost, long term? Elsewhere in the region, Haydon Bridge, midway between Newcastle and Carlisle, is the last sizeable community on the A69 about to be bypassed. Even here uncertainty arises. Work begun in 2007 should finish by next spring despite the recent bad weather, the Highways Agency says. But the DfT states the bypass will open over the next three years. So is the DfT report,

BUSINESS QUARTER |JANUARY 09

AS I SEE IT

JANUARY 09

So what major schemes are approved for this region two years from now? Long silence...

We’re already doing our bit I can hear the likely riposte of Transport Secretary Geoff Hoon (in post at the time of writing) – “there’s a cash and environmental crisis, don’t you know?” Well, civil engineering contractors do know, being invariably among the first to suffer in such situations. But the North East, through Durham City’s pioneering congestion charges and Darlington’s successful part in a DfT drive towards more sustainable travel, already does a lot that is constructive. Results from Darlington show car journey times can be cut by 10%, through more walking (up 20%), bus use (up 15%) and cycling (up 30%). But not everyone has time or energy to walk or cycle along the A1 from Morpeth to Berwick! Now, also, the Government wants civils firms’ help to bring in a new educational diploma for young people, in part to encourage their training for careers in construction and built environment. The industry is already pioneering in this region a college course for apprentices, and wants to build on it. But guiding young people to total competence demands a lot of supervision in the workplace, and at this uncertain point at least 17% of jobs in small civils firms look endangered over the coming months, with nothing in the Chancellor’s pre-Budget statement looking likely to change that. So, who will mentor apprentices, and what vacancies will even exist for apprentices when their time has been served? We had hoped that when development agencies of the North East, Yorkshire and the North West linked in an additional quango called Northern Way, a vigorous new heavyweight would fight the North East’s corner. But Steer Davies Gleave, the Northern Way’s lead transport adviser, in his argument for Northern road improvements, seems more focused on motorways around Manchester and Yorkshire. While, commendably, he cites also the Western Bypass2, that is only one part of the North East’s spiralling problem. There is real cause for concern. Many North East MPs, regardless of party, should be more vociferous on this. But will they be? And should we, whose businesses are presently paying a price, demand them to be? Is CECA’s a lone voice? I hope not. 1 Roads - Delivering Choice and Reliability 2 Focus North, the magazine of the Northern Way, summer 2008

circulated with ministerial endorsement, out of touch? Or does the Government know more than it tells even the Highways Agency? Any scheme in the North East that is progressed follows advice received from the region in 2006, the Department says. So what major schemes are approved for two years from now? Long silence... An additional 80 lane miles of extra capacity now likely to go ahead nationally excludes the North East. As for the two other government reports – on regional planning and regional funding

BUSINESS QUARTER | JANUARY 09

methods – the former does not advocate A1 improvement, despite acknowledging. The latter report merely confirms that, in future, regional partners – public sector in the main – can state priorities to central Government. No commitment beyond that. The DfT does make a point of stating, in apparent self-absolution, that local authorities are responsible for about 99% of English roads. But it must know, as we do, that local authorities (which would not predominate anyway in the North East requirements cited) are virtually broke.

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INSIGHT

JANUARY 09

Transport 2011

Edinburgh is bringing back the tram, thanks in part to North East engineering expertise. Brian Nicholls explains

BUSINESS QUARTER | JANUARY 09

JANUARY 09

Edinburgh’s journey towards its new and, it has to be said, controversial tram network is long and difficult, but come 2011 (assuming the completion deadline is met) this nineyear project will end, offering the world yet another example of the engineering expertise of the North East and Tyneside’s own Parsons Brinckerhoff. The network will revolutionise the city and bring, the publicity material says, reliable, frequent transport to the population and boosting the city’s standing in international tourism and business. There has been much controversy, however, not least because of the road delays caused by the works and the £512m outlay. But the network is an inevitability, despite its detractors’ vociferous opposition, and, thanks in part to the expertise of Parsons Brinckerhoff, visitors, rugby fans and business travellers from the North East will ride the trams to Murrayfield, Princes Street, Edinburgh Airport and some 33 other stops besides within a couple of years now. The North East’s involvement dates from 2005, when Parsons Brinckerhoff (PB) was appointed for its engineering consultancy expertise alongside the sub-contractor Halcrow. The road to the final contracts was long and complex and PB’s legal advisors from Newcastle law firm Watson Burton were led by construction partner Roddy Gordon, who says: “There were some very lively and boisterous exchanges between us and other legal representatives, as you might imagine on so complicated a project. In the end, all the matters were resolved amicably.” The construction contract was signed last May, and PB transferred from the employ of Transport Initiatives Edinburgh (TIE – the project manager) to that of the contractor, Belfinger Berger Siemens; an international consortium that has worked on 30 transport schemes around the world. “We were delighted when negotiations to start construction closed successfully, and novation of PB to Belfinger Berger Siemens was also successful, enabling work to go ahead,” Roddy says. PB, founded in 1885, is one of the world’s oldest continuously operating engineering consultancies, responsible for designing the

INSIGHT

Work of art: Edinburgh’s new trams will take visitors to the iconic National Gallery of Scotland New York Subway early last century and a 285-mile high-speed railway in China some 100 years later. The group’s many light railways litter the globe. It also provides programme management, planning, engineering construction consultancy and management services for transport, power stations, and environmental projects. PB director Steve Reynolds said: “Our main challenge has been to design a system in keeping with Edinburgh’s status as a World Heritage Site, which respects fully the surrounding environment and how the tram interacts within it, and also provides a first class transport solution for Edinburgh.” He summarised Watson Burton’s advice and experience as invaluable. “Roddy’s commitment underpinned our success in reaching financial close after eight months of negotiations,” he added.

PB’s history is a proud one, enriched in 1995 with the acquisition of Tyneside engineering consultancy Merz and McLellan, creator of the world’s first electrified suburban railway in 1904. That was a 20-mile loop linking Newcastle Central Station with Tynemouth and now embraced within Tyne and Wear’s Metro system. PB’s contracts of recent years have included a Manchester light railway extension and the firm’s 13,000 staff work from 150 offices worldwide, including Newcastle. Meanwhile in Edinburgh, the work to lay the tram tracks continues to cause controversy. Property owners who refused to allow wiring on their buildings have been threatened with legal action and traders who threw an irony-heavy street party on Leith Walk to mark the first anniversary of a crater there accused officials sent to intervene of ‘thuggery’. More restrained critics doubt tram >>

There were some very lively and boisterous exchanges between us and other legal representatives, as you might imagine on so complicated a project

BUSINESS QUARTER |JANUARY 09

INSIGHT

JANUARY 09

What a difference an age makes

New arrival: An impression of how Edinburgh’s Princes Street will look with trams travel will be much faster than the existing 25-minute bus journey between the city and its airport. Others suggest costs will equate to running every bus in Edinburgh fare-free 24/7 for seven years. Roddy Gordon points out that there was lengthy research, extensive public consultation and two Acts of Parliament behind the plan. In addition, research in other UK cities with trams indicates 20% of peak hour passengers and 50% of weekend passengers previously travelled by car. In addition, with zero emissions, the trams present a very pleasing environmental alternative. Trams, they say, will encourage people to visit the city centre, providing a boost it badly needs. Dublin saw a rise of 20% - 35% in pedestrian footfall on its main shopping parade, Grafton Street, and some retailers there have reported a 25% jump in trade. House and commercial property values beside

tram routes are also expected to rise. In some cities with trams, house prices have risen by up to 15% and rents by up to 7%. If all these advantages do exist, then some may wonder why Chancellor Alistair Darling, when Transport Secretary, vetoed similar schemes for Liverpool and South Hampshire, whereas trams have been approved on what many would regard as his home patch. In the North East, we can note that Nexus, aware of Tyne and Wear Metro’s absence from the west side of Newcastle and Washington, has already looked at the possibility of connecting these areas to the Metro with trains which, as in some other places, run both on road and rail. Just 27 trams will run in Edinburgh initially, though at more than 40 metres long, they will be the biggest in the UK, capable of carrying 250 passengers at a time. Time will tell how eager the population is to travel this way. ■

Our main challenge has been to design a system in keeping with Edinburgh’s status as a World Heritage Site

BUSINESS QUARTER | JANUARY 09

The last tram in Edinburgh ran in 1956, trams having served the Scottish capital since 1871. They were horsedrawn initially, and electric from 1910. The new trams, unlike the old ones, have no upstairs and look more like elegant sprinter trains. Their routes are being created in three phases, the first one between the airport and Newhaven via Princes Street. The old trams were coloured deep red and white; the red officially described as ‘madder’. This may or may not have been because of its likeness to the maroon beloved of Hearts football supporters, which must have made arch-rival Hibs fans ‘madder’ every time one of those trams passed them. History is unlikely to be redressed; for there is no hint now of a green and white tram offering Hibs fans an equaliser. It looks as if the trams will be mainly white with a red trim. For more information, see www.tramsforedinburgh.co.uk

Constucting Excellence Annual Awards 2009 These awards are designed to showcase excellence and celebrate the achievements of organisations and projects from across the North East’s construction industry. The Categories Integration & Collaborative Working Value The Legacy Award - Sustainability Innovation Health and Safety Leadership & People Development Achiever’s Award SME Award Client of the Year Project of the Year CIBSE North East Building Services Best Practice Award 2009

Deadline for Applications: Friday 6th March 2009 Date of Awards Ceremony: Friday 8th May 2009 Venue: Newcastle Marriott Gosforth Park Hotel Tickets: £70 + VAT with tables of 10 and 12 available For this year’s awards application pack or to book your dinner tickets please contact Catriona Lingwood or Nikki Silcock at awards@constructingexcellence-ne.org.uk or call 0191 383 7436 or write to Constructing Excellence in the North East, The Rivergreen Centre, Aykley Heads, Durham DH1 5TS www.cene.org.uk

INTERVIEW

JANUARY 09

Don’t believe the pessimists who say there’s nothing in the Olympics for North East business, Lloyds TSB boss Mike Mullaney tells Brian Nicholls

As opportunities for contracts go, it’s one of the biggest free-for-alls in the UK for more than 50 years, says Sir Victor Blank, chairman of Lloyds TSB, of the 2012 Olympics. The bank was quick out of the blocks, becoming the first official partner of the London 2012 Olympic Games organisation. Now it is stressing both the business potential and the opportunity to create a lasting legacy. The bank’s area director for the North East, Mike Mullaney, says the Olympics could represent a £21bn cash boost for British business, of which £12.2bn could go to firms in the regions. The potential, he says, for the North East and North West could >>

BUSINESS QUARTER | JANUARY 09

ON YOUR MARKS

JANUARY 09

INTERVIEW

Olympic hopefuls: (l-r) Zoe Coggins and Emma Carmichael

Local heroes More than a dozen young athletes in the North East, through Lloyds TSB, are benefitting from financial support through the Local Heroes programme. The awards go to promising youngsters not yet receiving Lottery funding. Emma Carmichael, an equestrian from Longhorsley in Northumberland, and Zoe Coggins, an archer from Sunderland, recently told a business audience in Gateshead of their hopes. Emma, 16, of King Edward VI School in Morpeth, said: “Local Heroes gives me confidence and helps towards the cost of training and competition entries. Owning a horse is expensive and the grant is obviously a huge help.” Zoe, who shoots with Cleadon Archers, recently shot for England in the Home Nations section of the Junior Championships and broke two national records. She was first in her age group and was British national indoor champion in the Junior Ladies’ Compound. She is the second-ranked under-18 lady and holds a national record. She scored a new national under-16 record, with 142 out of 144.

Businesses who want to support Local Heroes can find information at www.lloydstsb.com/localheroes

BUSINESS QUARTER |JANUARY 09

INTERVIEW

JANUARY 09

We are aware of myths circulating to the effect that the games will only benefit London, and that only big contracting firms will gain. We want to dispel those myths

The detail More than 200 nations will compete in the 2012 Olympics and some 150 in the Paralympics. There will be 10,250 athletes, 70,000 volunteers and 20,000 press and media representatives. More than 9m tickets will be sold. Newcastle United’s St James’s Park will be one of the few 2012 venues outside London. It has been chosen for some of the football, preferred over a number of other stadia in part because it doesn’t carry a sponsor’s name. Of the £4.4bn expected to benefit the North from 2012 events, about £2.5bn could come to the North East via business, tourism and infrastructure. Mike Mullaney and his colleagues are working closely with One North East and Peter Reilly, chief executive of Darlington Building Society and regional chairman, Sport England, to get the best yield possible for the region. The organisers London Organising Committee for the Olympic Games (LOCOG) is preparing and staging both the 2012 Olympics and the Paralympics which follow, and will directly liaise with the International Olympic Committee (IOC). LOCOG responsibilities include raising sponsorship and marketing, ticket sales, the opening and closing ceremonies,

BUSINESS QUARTER | JANUARY 09

volunteering and the torch relay. The Olympic Delivery Authority (ODA) must ensure delivery of Olympic venues, infrastructure and the transport requirementrs for London 2012. Both these bodies report to the Olympic Board, which has one representative of each of the Games’ key stakeholders: LOCOG, the British Olympic Association (BOA), the Greater London Authority (GLA) and the Department for Culture, Media and Sport (DCMS). Prime opportunities There are 2012 business opportunities in numerous sectors, including retail, sport, transport, security, hospitality, engineering and construction, IT, marketing, tourism and many others. When the Games begin, 70,000 uniforms at least will be needed for volunteers, branded T-shirts, and hundreds of other items of merchandise; also thousands of computers, phones, televisions, and latest technology to take the games global. There will be a need for 11,500 shuttlecocks, 3,000 table tennis balls, hundreds of thousands of seats, 30,000 beds and 200,000 chairs. The athletes’ village will require some 100 tonnes of meat, 75,000 litres of milk, 25,000 loaves of bread, 350 tonnes of fruit and vegetables, 1m bottles of water and 15,000km of toilet paper.

be in excess of £4.4bn. Work has been progressing since 2006 on the main Olympic Park and related infrastructure in London. So far, 11 North East companies have won business; more than half of them in the small and medium size sector. However, though nearly half the contracts signed to date have gone to firms from outside London, only 627 firms out of 42,000 in the North East have asked to be considered to tender. “There are still many firms in our region that could be in with a strong chance of bidding success,” Mike says. “We are aware of myths circulating to the effect that the games will only benefit London and that only big contracting firms will gain. We want to dispel those myths. “Where firms in London and the South East are better located to win contracts, the opportunities for North East firms may be limited. But where firms in the North East have particular expertise and experience that is scarce locally, they will be in with a great shout. “We won’t be able to complain we didn’t get a fair share if we don’t apply. There are great opportunities there.” Companies – particularly Tier 1 suppliers with a well-established supply chain - are being advised that working on a project linked to the games will be just like any other contract. The key issue, Mike Mullaney says, is to keep up the critical long-term relationships that businesses have within their supply chains. “This will ensure you are part of the equation when contracts come through,” he explains. He says the current rundown elsewhere in the economy is raising the appeal of 2012 possibilities. “There is no doubt about this market. It is definitely going to happen. While there might be a tendency to regard it as just a one-off, that is not necessarily so. “The Commonwealth Games follow in Glasgow two years later. While these are on a smaller scale, there will definitely be opportunities there too. Once you succeed with one games tender, you are well prepared for future opportunities.” On the second Wednesday of each month, Lloyds TSB Corporate Markets now holds briefing calls for North East companies registered on its database. On the line, besides

JANUARY 09

INTERVIEW

There is no doubt about this market. It is definitely going to happen. While there might be a tendency to regard it as just a one-off, that is not necessarily so

Info hub

Mike, are four colleagues - an economist, a financial markets representative and two other area directors. These 30-minute updates include economic and treasury briefings. Listeners can question the team directly, and accompanying speaker slides to illustrate the briefings are sent out a day before. The bank is advising firms interested in tendering to set an appropriate overdraft facility, make optimum use of business loans, revolving credit facilities and commercial mortgages. With banking’s current aversion to lending, this may appear to be inappropriate, but Mike Mullaney says: “We are trying to support our customers in any new business

opportunities there are. We regard 2012 as a definite opportunity to benefit. It is not a maybe. It is a positive. “We acknowledge that some banks may have been struggling over credit. If any business, regardless of who it banks with, has had a no to any request for help in 2012 bidding, we would certainly give it consideration. “We cannot give an unqualified Yes, but we can consider each case on its business merits in the usual way. We are well placed to commit, given our increased market share here. We saw a 30% rise in our business levels in the North East last year. Throughout January we have been telling customers we are here to lend through the difficult trading cycle.” ■

For the latest information on business opportunities and to sign up for e-alerts, see: www.london2012.com/business The site also allows you to familiarise yourself with ODA and LOCOG processes and talk to Lloyds TSB about the financial implications of tendering for and winning contracts. To get North of England market update briefing calls, contact Angela Henderson, tel 0191 255 1558, email angela.henderson@lloydstsb.co.uk Businesses with turnover of £15m or less should see www.lloydstsbbusiness.com Those with turnover of £15m or more should see www.lloydstsbcorporatemarkets.com For information on One North East-led themes, email anya.gray@onenortheast.co.uk For information about Sport England -led themes email info@sportengland.org

BUSINESS QUARTER |JANUARY 09

ENTREPRENEUR

JANUARY 09

SMART MOVES Investing in your wardrobe is just as important as any other business decision, asserts the designer retailer Julian Blades. He offers Brian Nicholls some sartorial tips Julian Blades wears his philosophy on his sleeve - in his whole attire for that matter. He practises what he preaches; that in a well-tailored suit you stand differently, your posture is immediately noticed. And with a thoughtful choice of accessories you will be wearing not just something to do the job, but something which makes you stand out in the crowd. When we meet, he cuts a stylish and elegant figure in his suit of subtle brown tones teamed with blue shirt, pink and blue tie and purple dress handkerchief. It perfectly suits the co-owner (with his similarly impeccably attired wife Rhona) of Jules B, the business that has won, more than once in its 24 years, Best UK Independent Retailer. While some retailers and tailors have been victims of switched tastes and the dress down trend, Julian Blades and the 80 staff who run the company’s eight men’s and women’s designer stores in Newcastle, Yarm and Kendal continue to thrive, eschewing any concession to lower standards of appearance.

BUSINESS QUARTER | JANUARY 09

Moreover, he believes his reason will begin to prevail, particularly and paradoxically, at a time when we are otherwise tempted to cut back our spending. Certainly, stepping inside a Jules B store in these drab times is invigorating; all bright lights and cheery hellos. When recession does begin to lift, he predicts, there will be a scramble for jobs again, and a battle for contract wins to hoist turnovers and profits back onto upward curves. He believes it is the people who have paid greatest attention to their appearance who will receive letters of appointment and confirmations of orders. “This is something I feel very strongly about,” he says. “Clothes are not a luxury; they are a tool, and no more so than at work, where they are as effective as any other important piece of the business. A poorly dressed business person can give an impression, rightly or wrongly, that he or she lacks self esteem. “It’s an old saying, but true: You never get a second chance to make a first impression. >>

JANUARY 09

ENTREPRENEUR

BUSINESS QUARTER |JANUARY 09

ENTREPRENEUR

JANUARY 09

It’s amazing how often you can pick out the English among airport passengers abroad. I look at their appearance, and if I were a foreigner I would not wish to entertain them in business

Catwalk show Julian Blades is working on a major catwalk show in October with headlining models who will include footballers and businessmen. The event at Rainton Meadows is seen as a follow-up to the recent fashion show at the Stadium of Light, where Sunderland footballers modelled for charity. “We are proposing an event that will be even bigger, run in association with the Entrepreneurs’ Forum, and with a wealth of personalities involved. This will be not just fashion, but theatre, the audience seeing what dressing well is all about. “Dinners have become very predictable on the business calendar,” he says. “We’re planning to push the boundaries of business events much wider.”

BUSINESS QUARTER | JANUARY 09

A good appearance can also raise self esteem. First impressions count, and whether it’s a job or an order you’re going after, you are presenting yourself, so you need to be dressed well and appropriately co-ordinated, wearing a properly tied tie, a pocket handkerchief neatly folded, and a smart, but not necessarily expensive suit. That way, you are sending a message: “I’m well organised, disciplined.” Julian claims the confidence of a solid clientele which includes most of the leading business people of the North East, who are appreciative of the advice and service his business offers. “They know how important it is on entering a boardroom that you can convey your confidence and position through the effect of a good appearance. “You will feel good, so you perform well. And, well attired, you also put yourself across better. There is no more important a time than now to start achieving this effect. Competition you face, whether for a new job or a new contract, will be tougher than it was before.” He speaks from a family background of more

than 100 years in tailoring. “Tailoring in our family goes back to my great-great grandfather. It is bred in me. All my life I have been surrounded by people who advocate this sort of thing,” he explains. “I enjoy my identity and reflect it in my own clothes. It is not just that I feel better for this, but that it enables me to express my personal preferences in, say, the style, the lining, and even the stitching of my suits.” It is not out and out sales talk. While the Jesmond, Newcastle Jules B menswear department boasts abundant evidence of designer names on its shelves, Julian is cautious against being a slave to branding. Nor is he fazed by the wide abandonment of ties in business circles. “Not every situation requires a tie,” he says, but even the tie-less need rules. “The crown on the shirt must be deep, so that the collar stands proud and will not collapse. Neck shapes are also an important consideration to bear in mind when you choose to wear a shirt without a tie.”

JANUARY 09

Leading international designers are represented in the premises because Julian and Rhona buy for individual merits in style, quality and value for money; not simply because of the designer labels attached. “Brand obsession is for people who feel slightly insecure,” he suggests. “You need to show your own personality in what you wear. Be innovative. Be individual. Our customers, I must say, are self-assured.” The person lacking confidence who steps into a room, head drooped and wearing a drab suit, is immediately disadvantaged. Too many Brits, in his view, betray themselves to strangers by falling into this trap. ”If you can’t dress deftly and walk deftly you are not going to stand out. ”I travel a lot. It’s amazing how often you can pick out the English among airport passengers abroad. I look at their appearance, and if I were a foreigner I would not wish to entertain them in business. They should be reflecting pride in themselves, in their business and in their country. They may think appearance is trivial, but it can give them the advantage over their rivals. “Concentrate on what works best for you in style and look. Don’t be a victim of fashion. Many young people, even those who are brand conscious, don’t necessarily dress well. Choose what suits you. You must feel comfortable in what you are wearing.” Preferences need to be decided, of course, such as whether jackets should be two or three buttons and with or without side vents. “We attract the type of customer who is interested in achieving what is right for them. We have guided many of them into realising

ENTREPRENEUR

what for them will create instant effect.” There are important considerations besides button numbers and the presence or otherwise of vents. A person of pale complexion, for example, needs to avoid light cream shirts if they are to avoid looking ill; better a smart blue shirt for them. “People with healthy complexions can look even better in a grey suit. Any shirt, regardless of colour however, must be spotless, well pressed. A dress handkerchief properly folded in the breast pocket and tasteful cufflinks and tie pin can add nuances of the pride and care you should be striving for.” Julian says it is up to the tailor or retailer to offer guidance. He explains: “It is our job in that respect to read a person’s psychology before we offer what may amount to education about what they wear. “For example, it helps us to know in what circumstances the suit will be worn. If the customer’s job takes him on regular flights abroad we shall look at high performance fabrics, and judge the weight of the cloth by the climate of countries he is most likely to frequent. I would say 99.9% of our customers accept our recommendations.” If ready-made is the preference, a Boss suit might be recommended initially, with recommendations leading later to Armani and on to Pal Zileri class, which Julian considers the Aston Martin of menswear. Off the peg, the ranges are priced between £450 and £1,500. Made to measure will be £595 up to, well, the sky’s the limit. Made-to-measure suit orders alone reap the business more than £1m a year. That a whole tier of sharp dressers exists in the North East is

borne out further by Pal Zileri’s despatch of a tailor from Venice to Jules B customers twice a year for three days, during which time the visiting craftsman has appointments every half hour with customers who appreciate the benefits of a superbly cut suit. These customers gather in Newcastle from as far as Glasgow and Aberdeen. One of them, an oilman, whirls down from Aberdeen by helicopter. The service has been provided for 10 years now. “We are their biggest >>

The smart approach First impressions are especially important for women, Gail Howells of Jules B advises. Smart does not necessarily mean formal, however. “For interviews, a smart casual trouser suit and crisp white shirt should retain attention. However, there are of course some environments now where very casual is very much accepted, jeans even. So consider what will be the expected style if you get the job. “I think most women now prefer to wear a trouser suit, but it doesn’t have to be black pinstripe. I think the days when women felt they had to dress in men’s fashion to suggest they were as competent in a job are gone now.” For board meetings, where there might be a follow-on function, Gail suggests a little black dress with a jacket for later and minimal accessories. “Stud earrings and a necklace should suffice for jewellery, and if she carries a laptop, then a sophisticated bag, only slightly bigger than a laptop bag, would be practical, enabling her to carry just a few personal effects.” Gail suggests a classic court shoe, in suede or natural leather. “And if you need an overcoat, make sure it is smart and with a classic cut. Perhaps a good guide, irrespective of the season, is to keep your lines simple and create a clean-cut image.”

BUSINESS QUARTER |JANUARY 09

A4 Ne

ENTREPRENEUR

JANUARY 09

In the best possible taste: Julian Blades is renowned for his own style; immaculate, uber stylish, entirely elegant and just a little bit flamboyant customer worldwide in receipt of this service.” Julian states casually. Being smart is fine, but what does he relax in? “Living in the country, often an old sports jacket. It’s one my father [the tailor John Blades] made for me. I designed it with him.” He wears jeans too. He notices the raised eyebrow and adds: “Everything is acceptable if you know how to wear it.” He admits to a fondness for a moth-holed old V-neck cashmere pullover. “I’ve been hunting hard a long time but never have found that moth, and it always seems to get into something,” he laughs. He recommends a twice yearly visit to the tailor, once for winter wear and once for the summer wardrobe. “Many people don’t realise their clothes should differ in these two phases of the year. And don’t skimp. You need a budget in planning your wardrobe because,

BUSINESS QUARTER | JANUARY 09

It’s an old saying but true: You never get a second chance to make a first impression

remember, you are going to invest rather than purchase.” It can be a tall order if you match up an Armani shirt, Ascot tie, Oliver Sweeney shoes, Jeffery West belt and a pair of Falke cashmere socks. Expect little if any change from £550.

Then comes the suit. But of course that is the cart before the horse. You need the suit first and the co-ordinates from there. For that outlay you can definitely expect to perform better, Julian maintains. “You will be looking at something appropriate and serving you well, like a good computer because, like a good computer, it will step up your performance. Important little tricks of the trade can help you make what could be an important impression.” And if you prefer to talk hard cash, look at it this way; the new job you are going after pays more than you’re on now. If you gamble £1,000 on looking smart enough to clinch it, and the gamble pays off, then you’re going to be in pocket. It’s simple maths really, plus a little flutter and a burst of self-confidence. And there we are, back to Julian’s philosophy. n

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MOONEY ON WINE

JANUARY 09

The Italian job Pam Mooney, operations director for hotel and bar owner STR Enterprises Ltd, holidays with some very special Italian wines, courtesy of italyabroad.com

BUSINESS QUARTER | JANUARY 09

Not many people would turn their noses up at being asked to savour two bottles of fabulous Italian wine free of charge. Yet that’s how I felt late on Boxing Day, when my husband reminded me that, despite tasting many bottles over Christmas, we hadn’t yet made time for these two very special ones. After a very festive period which had seen us partake in three marathon days of food and drink, I cared not for more mistletoe and wine, and it was decided that in order to give the wine a fair tasting we would take it with us to the Lake District for New Year. So on New Year’s Eve, as we relaxed in a wonderful lodge on Lake Windermere looking over to the Langdale Pikes while the children occupied themselves with the Wii, we decided to hit the bottle. We opened the white Falanghina Del Taburno and, as the kids played their Wii boxing game, suddenly I was hit by something different. Having had countless glasses of New World Chardonnay and Sauvignon, suddenly I was struck by a punchy little Italian number verging on being Rocky Marciano-esque!

JANUARY 09

The bouquet was impressive; rich and attractive with floral aromas. On the palette, it was powerful with strong pear and apricot flavours and a lasting finish. Needless to say, like Christmas, it was soon but

MOONEY ON WINE

a memory. The bottle shone like the brightest star from my festive intake. It was an absolute delight, and why we had waited so long to try it, I will never know. It wasn’t until 2009 that we managed the red, a Nebbiolo D’Alba, again overlooking Windermere on a cold, icy day - so cold that we had spent the morning de-frosting the water supply to the lodge with a hairdryer! In fact, this was my husband’s reward for lying on his back a good part of his early New Year’s Day in order to provide the family with running water. And what a great opener for 2009. This was a deep garnet red in colour with a rose bouquet with hints of blackberry and vanilla. Dry on the palette, the biggest bonuses for me were the hints of chocolate and liquorice of this complex deep and earthly red. Both wines provided a great start to 2009 – and I’m looking forward to more of the same as the year continues. ■

The facts: The white wine Pam tasted was Falanghina Del Taburno priced £9.99 and the red was a Nebbiolo d’Alba at £10.00, both kindly provided by Andrea D’Ercole at Sunderland-based Italyabroad.com. For more beautiful wines and Italian foods, see www.italyabroad.com The North East-based online store is owned by Andrea D’Ercole, who sources fabulous Italian wines and speciality foods from his homeland. Andrea and his team search the whole of Italy and select only handcrafted products from small producers. The site, in addition to supplying a host of ingredients, is also home to traditional recipes.

Let’s do business • Meeting rooms for up to 100 delegates • Award winning cuisine • 19 luxurious bedrooms • Superb golf • Beautiful Tynedale countryside • Only 15 minutes from Newcastle city centre and airport

Close House

Business Telephone: 01661 852255 Email:events@closehouse.co.uk www.closehouse.co.uk Close House Hotel, Heddon on the Wall, Newcastle Upon Tyne NE15 0HT

BUSINESS QUARTER |JANUARY 09

JANUARY 09

BUSINESS LUNCH in association with

Grand Slam

Ian Baggett, former Entrepreneurs Forum Entrepreneur of the Year, world ranked over 35 tennis player, compulsive achiever and one of the smartest brains in the property business, discusses opportunity, motivation and inner confidence with Jane Pikett Ian Baggett has had the yips over his tennis serve. It’s caused him concern over the last couple of years, when something intangible has got in the way of what was, for years, an unconscious excellence. Having said that, he was the GB number five on the International Tennis Federation (ITF) over-35 circuit last year, reaching the quarter finals at Wimbledon and ranking among the top 50 in the World on a seniors’ circuit that also accommodates such illustrious names as

Becker, Edberg, Borg and McEnroe, though Ian is quick to add that he’s going to have to improve his game before he gets to play them. “It’s amazing how you can solve massively complex problems in business, save the Tyne Theatre [of which more later], do all those things you do in business every day,” says the MD of the Jesmond-based property development, investment and management company Adderstone Group, “and yet I can’t stop myself throwing the ball up and it landing

two metres away.” The serve, after two years’ hard labour, is improving he says, and tennis remains extremely important to him. He played professionally for a while in his 20s, though how you progress on the ITF seniors’ tour while at the same time brokering multi-million pound deals defeats me, but then Ian’s always up for a challenge. In fact, challenge is his primary motivation and Adderstone Group is one of the fastestgrowing property businesses in the North >>

BUSINESS QUARTER |JANUARY 09

BUSINESS LUNCH

JANUARY 09

Compulsive achiever: Ian Baggett has a sharp brain and a hunger for challenge that has characterised his academic, military, sporting and business careers East, with a £40m development portfolio and in excess of £200m worth of assets under its management. Its foundations were built in the relative blink of an eye, its success story to date spanning under a decade. The speed at which Baggett has driven its growth verges on the precocious, yet he is absolutely un-flashy, personable and at times self-deprecating. He’s affable, straightforward and couldn’t play the cocksure millionaire property developer if he tried. He does,though have an air of confidence about him which is almost tangible. It is a resource that has served him well to date. “I never appreciated that inner confidence thing until recently,” he says. “I just assumed everyone had it, until the last few years when I’ve stood back and thought Jesus, look how big things have got. “There’s not a single thing I’ve done that I’ve doubted, but I also think that the older you get [he’s 36], the more you start to doubt, because ultimately the chances get bigger.” So how does a property developer, one who

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has never, in his relatively short career, known really bad times, keep his antennae tuned into ever keener, smarter revenue streams in the current climate? “Well, it’s been an awful year and, touch wood, we aren’t going to fail in our current ventures,” he says, “but you wouldn’t want to go through it again. You multiply that around the country and you realise that fewer people are going to come out of this wanting to do something like build a business park. We certainly won’t be doing it again.” He is the founder, major shareholder and MD of Adderstone Group. Prior to founding the company in 2001, he had built up a residential portfolio worth more than £2m begun with a cash input of just £3,000. The business plan for this first portfolio was a dissertation he completed at Durham University which analysed the geography of student accommodation in the city. Over four years or so he built up a thriving property portfolio, completed a commission in the Royal Navy followed by a short time playing

professional tennis in France, and completed a PhD in geo politics. He has to be challenged mentally and physically, he says, or he’d be bored. The term compulsive achiever springs to mind. After a year of professional training with chartered surveyors Sanderson Weatherall, he formed Adderstone Properties Ltd with one aim in mind – to build a £10m residential investment portfolio within five years. In the event, those five years yielded a residential investment portfolio valued at £15m, plus a further £5m in commercial investments. Adderstone Group today is split into five divisions: property development, construction, property management, block management and property trading. It has an impressive portfolio of residential, commercial and mixed-use developments throughout the North East and Ian has recently unveiled plans to expand his interest in reversionary freeholds – rights to property after a lease has ended. Landmark commercial developments include the former BT exchange in Jesmond, where

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the company’s offices are now located, the Keel House on Newcastle Quayside, Quay West Business Park on the former Austin & Pickersgill shipyard site in Sunderland and Maling Court in Shieldfield, Newcastle. The company now also controls apartment buildings in several cities, collecting ground rents from apartment owners in return for delivering maintenance services. Leaseholders have to pay ground rent regardless of the health of the economy, and Ian considers this new revenue stream to be relatively recession proof. The portfolio includes the landmark Whitehall building on Leeds waterfront and Ian and his partners in UK Ground Rent Estates now also own the freehold on Walkergate and Clements Wharf in Durham, Echo24 in Sunderland, Pandongate and Rialto in Newcastle. It’s a complex niche sector, which requires considerable investment and legal knowledge. It is also considered potentially so lucrative an opportunity that Ian and his partners have acquired a £12m portfolio very rapidly. “I’ve got a positive outlook, and I notice that in successful people, not just in business, but in sport and in the forces. Then you notice it in people you hang out with and your friends. You feel more comfortable with people with a similar attitude and you recruit people with that attitude. People like that probably want to work for people who are positive. Maybe that’s the key to a successful business.” He doesn’t waste time fearing the present economic climate, though he is absolutely realistic. “My short spell in the forces [he was a Royal Naval lieutenant] was a good antidote to fear. There are guys out there now living in holes in the desert waiting for God knows what. So what do I have to fear?” Leaving the military was an easy decision. He wasn’t getting what he wanted from the Navy, and he didn’t fit, he says. His four years in uniform were another project successfully completed. “I guess a lot of people who are good at what they do are compulsive achievers and I’m still ticking the boxes,” he says. “The PhD, for example, was a massive challenge. I’d played a lot of tennis at university and not focused enough on my studies, so not making it at tennis was, I guess, a bit of a failure. But it was also a massive relief to quit the tennis,

BUSINESS LUNCH

and it was the same when I finished the PhD. “I like to finish things. I did an MA while I was training to go into the forces because I’d missed the entry that year and I couldn’t imagine taking a gap year. “I enjoyed the MA and my supervisor suggested I upgrade to a PhD. I just thought ‘okay, there’s another challenge’. I’m not that academic to be honest, but I thought I’d just go for it. Four or five years later, I was just finishing the thing off. “I was never a military person either; that was another challenge. I wasn’t your archetypal officer. I had Falklands veterans serving under me who were supposed to call me sir, which was just ridiculous. It just wasn’t me.” He was assigned to a patrol boat policing Hong Kong’s waters in 1996, in the run-up to the UK’s hand-over of the island to China in 1997. “We’d go out on the boats and it’d be me asking the lads the questions, and that was good. The forces are great for meeting so many different types of people. I draw on experiences, probably unconsciously, and it was a fantastic training ground for future leadership and management. “I don’t mind asking anyone for advice and you can do that here in the North East, even of your competitors. I’ll also ask the labourer on site; he knows more about digging holes than I do. That’s the difference between confidence and arrogance. Arrogant people think they don’t have to ask advice. I know there’s generally someone out there who knows more than I do. “The North East is a great place to do business because the networks are so small and so tight. It never ceases to amaze me how open people are, even competitors. You just need to

be confident enough to ask people.” Adderstone Group developments have ranged from the small scale to major business parks. Now, there are moves into new revenue streams. “Business-wise, we’ve had a great ten years and we’re now looking at the next ten,” he says. “It’s not building business parks, it’s cash flow businesses and ground rents. I’ve also been very interested in renewables for years now and want to do it seriously, when the finances are right. People talk a lot of crap about it, but within ten years there will be an opportunity for us to use renewables seriously in our buildings.” One of his proudest achievements to date has been his pivotal role in rescuing Newcastle’s Journal Tyne Theatre, which Adderstone Group bought in 2003. In fact, that’s what brought our interview about. I’d rung him to ask him about the theatre for a short magazine column on risky business decisions. He was on the phone for an hour, which is some indication of the lengthy and complex nature of the story. After Adderstone ploughed many thousands into maintaining it while debate raged over its long-term future, Newcastle City Council has now taken ownership of the Grade I listed building and Ian is able to look back with pride on another extremely difficult and challenging project, successfully completed. He has particular praise for the support of John Miller and Paul Rubenstein at the council and for Colin Revell from SMG, which took on a big risk by becoming the theatre’s tenant. Now Ian can begin to turn his attention to the future growth of the relatively new Adderstone Foundation, the Group’s charitable trust. It has already helped a project supporting railway children in India and >>

I’ve got a positive outloook, and I notice that in successful people, not just in business, but also in sport and in the forces. Then you notice it in people you hang out with and your friends

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BUSINESS LUNCH will now turn its attention to initiatives for young people in the region. Then there is the tennis academy he wants to develop in the region to help kids flourish in a sport which brought him so much. “I didn’t have a physical talent for tennis, but I did have a talent for learning and dedicating myself to the task,” he says. “Tennis brought me so much. I had an ordinary background, my dad was a woodwork teacher. The local school was crap and I wanted to do tennis because I wanted to be good at something. “My mother was a strong influence in that. She’d come from a council estate in South Shields and was a regional swimming champion. She wasn’t pushy, but she did encourage my sister and me. Through her, we played tennis in places like Jesmond, meeting people we’d never have met otherwise. “I played at university, I played in the Navy, I played professionally. I met most of the guys I first did business with through tennis, I met my wife through tennis. “I was aware from the start of the advantages and that was one of the motivating factors. It’s fantastic if you can get really good at one sport and the academy will help people to do that. It’s a way off yet, but it will happen. To be honest, it’s also a great way of sticking two fingers up at those people who have a stereotypical idea about property developers.” The planned academy will feed its profits straight back into tennis development, helping any kid with talent, in addition to those privileged few who are spotted by the Lawn Tennis Association. Adderstone Group is also now building associations with subsidiary companies, something which satisfies Ian’s instinct to support and mentor others. “I love to see people achieving their goals and now we are taking an interest in subsidiary companies. You give us a stake and we will pass business your way. The deal is that we add value or they get the shares back. We aren’t acquiring interests in businesses unless we feel we can add significant value. “One of them, Kelley’s Landscaping, services our freeholds. We have a 25 per cent share in that business and 25 per cent also in the building contractor Brims Construction. Brims is a real success story and turnover approached

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£12m last year. We have interests also in Morgan’s Plumbing, Mechanical Contracting and Tecal Electrical Contracting in Newcastle and Avoca Consulting in Durham. What I look for in these companies is pure personality. The work ethic is very important to me and I like to see that in others.” As for his own personal hunger for challenge, there is another round the corner in the shape of a gruelling Iron Man contest to be held in Nice in early summer. “I take on some crazy challenges because I need it,” he says. “I’m doing the Iron Man in Nice – a 2.5 mile swim,112 mile bike ride and a marathon, just because some friends wound me up to do it. It’s like I need something to focus on to keep my mind off work. “It’s a good thing, it keeps me happy. It’s not great day to day, I don’t want to go to the gym tonight, but it’s a long-term satisfaction. “I’m fascinated by the parallels in sport and business. If you fear or if you make too many conscious decisions in business, you won’t do anything. Sport’s the same. “What I’m doing now feels so right that I can’t imagine anything else. I never take it for granted how lucky I am to walk into my building and into my office and get to work every day with my team. I’m just really proud. I guess that’s why I work so hard. I don’t want to lose that. “My best decision ever was marrying my wife. My success is tied in almost precisely with when I met her almost ten years ago. She has always brought the stability I need. Now we have two young children and they help to keep it all grounded. It’s important to share the success with my wife. Yes, we’re very financially secure, but she’s totally down to earth and un-materialistic. “ And if it all goes down the pan tomorrow? “Well, you have to consider at the moment that it could all disappear. I actually considered it seriously for the first time quite recently. It would affect me of course, but I think what we would do is go and live in France, just for a year, learn French, let the kids enjoy it there, I’d play loads of tennis. “Then we’d come back and buy a nice cottage in Hexham and start again. We love it here and we’ll always be here. There’s no place like home and this is where we’ll always be.” ■

Out to lunch Jane Pikett and Ian Baggett enjoyed lunch at Brasserie Black Door at the Biscuit Factory, Newcastle. Ian raved over the succulent, zingy Thai rare beef salad starter, and the superb fish cake we both had which came with a fabulous casserole of mussels, coconut milk and coriander. My starter mozzarella, clementine and toasted almond bitter leaf salad was a revelation - multi-textured, refreshing and entirely different. Forget tomato and basil, clementines and almonds are mozzarella’s new best friends. A revitalising Sauvignon Blanc was a fitting partner to the food, though neither of us could manage one of the fantastic puddings. Shame on us. Brasserie Black Door’s modern French menus feature quality produce, creatively presented without being contrived. The art-filled space feeds your creative juices, while the exposed brick, wooden floor and leather seating add warmth and comfort. Black Door achieves a rare thing in creating imaginative dishes in a way that is completely unpretentious. The staff are warm, friendly and efficient and they made it all too easy to stay longer than we should. So we did. Well, it was Friday. And no, Ian didn’t get to the gym after all… so much for the Iron Man. Black Door Brasserie, The Biscuit Factory, Stoddart St, Newcastle, NE2 1AN, tel 0191 260 5411, www.brasserieblackdoor.co.uk

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JUST ONE MORE LITTLE BAUBLE

Would sir care for a jewel or two? Chris Porter identifies a growth in men’s adornment and an increasing affinity with the cuff-link – for both men and women Men have had an uneasy relationship with jewellery for centuries. Across Europe, even 17th and 18th Century dandies avoided much that glistered - gold or not - while by the late 19th Century the only acceptable accoutrements for the gentleman were a ring on the little finger and a chain worn on one’s pocket watch, albeit an often highlydecorative one. Even in recent times, the hairy-chested Medallion Man of the 70s is now more figure of fun than style icon, while the excessive gold of the 80s now seems representative only of

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the decade’s vulgar conspicuous consumption. Bad taste ‘bling’ has put men off jewellery and women off seeing men in it. In fact, men in jewellery have typically been part of outsider cultures - indeed, too closely associated with them. Tribal groups, from Saharan Africa warriors to Hell’s Angels and followers of the Goth and rock scenes, have always worn been adorned in heavy metal. More recently, black American street culture considers the wearing of personal diamond mines as symbolic of power in the face of racist oppression.

Perhaps only the US fraternity ring, the ID bracelet, and cufflinks - their functionality belying their flash - have escaped approbation. But attitudes are changing. “As with everything else, there is the aspiration to having better things which is pushing jewellery designers. These men don’t just want fashion jewellery, they want sophisticated, understated pieces,” says the award-winning jeweller Stephen Webster. “So many boutique jewellers have opened up all over Europe because there’s a market for what they do now.” This change has been driven in part by the

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celebrities that the likes of Webster have attracted. From David Beckham to Brad Pitt, contemporary icons of masculinity have not been afraid to don some sparkle. Accessories designer Simon Carter says: “Less may be more now in men’s jewellery, and pieces have to make more of a statement. They have to be personal and meaningful, not just ornamental. Celebrity influence has been especially important in changing men’s attitudes to jewellery from something questionable to something quite mainstream.” But what has shored up this new acceptability has been the growth in the number of niche specialist designers, including Ireland’s Slim Barrett, who has made jewellery for the likes of Colin Farrell, David Bowie and Lenny Kravitz, Spanish designer Helena Rohner and Briton Jeremy Hoyle. Such designers are creating items both graphic and minimalistic, as

well as bold and exotic without being excessive - allowing men a degree of personal expression in jewellery without feeling like the lost member of Black Sabbath. Jewellery is also being made more malefriendly through, for example, the use of materials more akin to advanced engineering than trinkets - stainless steel, Japanese steel, carbon fibre, aluminium, titanium, fibre optics and leather; materials with which men are already comfortable through their use in watch design. Throw in a good story and the idea of adornment suddenly seems positively male.

The clever cuff-link: collection from ARMREVOLUTION, www.armrevolution.com

Alongside the likes of Gucci, Givenchy and Thom Browne - each of which has recently launched men’s jewellery collections - there is the decidedly unfashiony Dunhill new to the market. Its range included limitededition pieces constructed from a panel taken from one of only 39 Ferrari GTOs ever made, or in bronze from the axle box of the historic Flying Scotsman. This is quirky, manly stuff. “Men love to have something to say about their jewellery - it makes wearing it more acceptable,” explains Carol Pierce, Dunhill’s general manager for accessories. “As recently as two or so years ago, wearing jewellery as a

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man wasn’t so acceptable. But we all travel more now and see other cultures, and jewellery is now regarded as a way for a man to personalise his dress, especially if he has to conform in other ways. It’s exactly opposite to the use of jewellery to express membership of some clan.” Of course, for those men who feel that any bracelet or ring is still too much, there are now also precious metal and bejewelled versions of tie-pins, tie-clips, button studs and the safe haven that is the cuff-link. Simon Carter, one of the UK’s biggest cuff-link brands, now offers pieces incorporating Swarovski crystals or mother of pearl, for example. Appealing to the male love of mechanics, new company ARMREVOLUTION has even invested in two years of R&D in order to overhaul the whole cuff-link mechanism. Its six styles, made from Japanese steel, all have patent-pending ways of being fastened through the shirt cuff. They include a flat bar with sections that open out to keep the cuff-link in place, an S-bend that swivels to lock into a square shape, and a twist mechanism that, rather than pulling the cuffs together,

creates a space between them, making room for a fashionably outsized watch. Owners of the new brand’s cuff-links even get to sign up to a club for invitations to exclusive events. “There’s constant innovation in watches, yet none in cuff-links - yet the way a cuff-link fastens to a French cuff is an integral part of its interest to many men,” argues Anthony Hayward, the entrepreneur behind the company. “A clever cuff-link could be a design statement.” >>

BUSINESS QUARTER | JANUARY 09

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ARMREVOLUTION is not alone in seeking to make even the humble cuff-link a little more exciting. New luxury goods brand Thomas Lyte has created cuff-links that borrow their engineering from Victorian shipping, using a studded cable link originally employed to stop anchor chains knotting. It also helps thread the cuff-link more easily. “It’s good to have a bit of Brunel on your cuff and it creates interest - otherwise a cuff-link can just seem like a bit of gloss,” says creative director Paul Brooking. “We’re all so tied to technology it’s refreshing to be reminded of the purely analogue.” Indeed, in some respects cuff-links are regarded a minor examples of clever mechanics and this perhaps explains their masculine appeal. Simon Carter has just introduced knurled finishes to the fastening mechanism of some of its designs to provide better grip - a simple if welcome evolution for an item often maddeningly fiddly to put on without the aid of one’s butler.

BUSINESS QUARTER | JANUARY 09

“Cuff-links have been around for a long time and moving them forward is like re-inventing the wheel,” says founder Simon Carter. “But there is always room for tiny improvements and innovations.” And yet, short of their mutual dependency with the French cuff, few men would honestly refute the notion that the cuff-link is less functional than it is fanciful, less design than decoration. It is, in other words, jewellery. It may remain the acceptable face of male adornment in the modern business world. But for how long will it be alone? The same suggestion of polish, status and self-expression is increasingly on offer to men through the wider world of sparkle. “We get many more requests for expensive bespoke jewellery pieces from men now,” says Stephen Einhorn, a favourite London jeweller to the likes of designer Paul Smith and musician Dave Stewart. “Men are simply less worried about whether a piece of jewellery is masculine or feminine - it’s more a question of whether it’s personal to them. They can see that, even if their clothes have to conform to some uniform for work, jewellery - whether it be a bold ring or a pair of distinctive but classy cuff-links - can still work with that, can still be a reflection of their character and theirs only in the way a suit never can be.” ■

And for the ladies … Women are buying into cuff-links, not only as an opportunity to sport more jewellery, but as the business world smartens up again and crisp blouses and sharp tailoring become the order of the working day. “We get a lot of women coming into the store, initially to buy cuff-links for their husband or boyfriend,” says Maximillian Jacobs, owner of Fox & Co, one of the City’s leading accessories retailers of accessories. “Some of these cuff-links are incredibly delicate, so they end up buying two pairs, one for the husband and one for themselves. “We have found that, in these challenging financial times, a lot of business women have abandoned the casual approach and are returning to suits and smart blouses. Cuff-links can be a great part of this look.”

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FASHION

RUBBER SOUL Chris Porter meets Italian vintner and revolutionary shoe designer Mario Moretto Polegato - a man whose desperation to get cool in the desert one day led to a multi-million pound global footwear empire >>

BUSINESS QUARTER | JANUARY 09

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When Geox wants to promote a revolution, you need to attract millions of people to your way of thinking

Inspired perspire: Mario Moretto Polegato - the man who’s made a fortune out of the sweaty foot

When winemaker Mario Moretto Polegato attended an industry conference in sweltering Nevada, USA, he wasn’t expecting to step on a goldmine, but the desert heat did inspire him to take a craft-knife to his shoes’ rubber soles to create some makeshift ventilation. It was this sweaty-footed act of desperation that spawned the development of the Italian shoe brand Geox, famed for its patented breathable membrane-based sole unit; an invention that Polegato describes as a ‘revolution’ in shoe design. This was not Polegato’s first discovery. His family business sells 30m bottles of wine every year under the Liagioisa and Villa Sandi brands and a few years ago he and his brother patented Claxa - a double-glazed wine bottle that can keep its contents cool for hours. It seems that keeping cool in the heat is a matter this man takes very seriously. “With my invention, I give the possibility for everybody to improve their life,” he says. “It was a

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revolution. I think it’s the launch of a new era. Comfort is not enough, you need hygiene too, because rubber soles make for smelly feet. That’s ridiculous when you’re spending €400 on a luxury pair of shoes, but it’s not something technology has addressed. That may be funny, but it’s also very serious.” Indeed, initially Polegato, now 55, sought to find a home for his idea rather than develop it himself. Fortunately for him, he was turned away wherever he took it. “I offered the technology to lots of big players in the footwear industry, but none of them believed in the idea,” he explains. “’Why’ is a question I get asked a lot and have certainly asked myself. Some asked me whether I had university tests to back up the idea. Others said they would be happy for me to make shoes for them, but they didn’t want to invest in

the idea themselves. Others said that they would wait and see how the market developed.” With the benefit of hindsight, those shoe companies must be kicking themselves. In just 13 years, Geox has seen phenomenal growth of some 25% year on year, every year. That has put Polegato in the top 300 of the Forbes Rich List. It has made Geox a €2.3bn business that last year made 21m pairs of shoes, that now has 30,000 employees and

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sells in 68 countries through 720 of its own stores, as well as wholesale accounts. And it plans to double the number of stores over the next three years. That makes it, Polegato says, the world’s number two manufacturer of ‘comfort shoes’, after Clark’s. ‘Comfort shoes’ may be a damning category, lacking the glamour of fashion and suggesting imminent retirement, but it is a growth market and the footwear industry has undergone a revolution following fashion’s embrace of the

sneaker. Suddenly, instantly comfortable shoes are in demand, and the boffin looks well placed to trump the stylista.“Fundamentally, I’m more of an inventor than an entrepreneur,” concedes Polegato. “Geox grew out of technology rather than fashion, but that innovation was essential. I’m not sure how easy it is to launch a new shoe brand now without that. At all levels, the market seems saturated with options.” He says that the success of Geox has completely changed his life and, aside from the money, it has put Polegato centre-stage with the world’s leading business schools as a public speaker, and with nation’s presidents as a business power. The money is set to multiply. According to Polegato, 90% of the footwear now sold

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around the world is rubber-soled. That means more sweaty feet - and more people looking for a solution. Pricing too has been key to the company’s success, given that its emphasis is first and foremost on functionality rather than fashion. That means to convert customers it must get them into the shoes - so being pitched not too expensively, but expensively enough to retain cachet and allow it to use high-grade leathers, becomes a careful balancing act. “That allows us to reach more people,” says Polegato. “When Geox wants to promote a revolution, you need to attract millions of people to your way of thinking.” In addition, the nature of any innovation is that it is emulated, and the business advantage can be eventually lost. This is why the company continues to invest 3% of annual turnover in research, and why it is now transferring a version of its breathable sole science to outerwear.

No sweat: The stylishly cool interiors of Geox’s Frankfurt boutique (left) and Los Angeles store are testament to how far the comfort shoe sector has come

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For public engagements, Polegato now wears a navy pin-stripe suit fitted with breathable panels across the shoulders. “We have the technology to reduce perspiration by 40%,” he says. “That’s another revolution.” It doesn’t look all that stylish, but it gets his message across, keeps him cool and, he argues, will appeal to an increasingly health-conscious consumer. A new technology has also been designed for sports shoes. Putting the technology in sports shoes, however, is as much about being consistent with Geox’s business strategy from the outset. Polegato concedes that for his shoe technology to pay back, it cannot be too closely linked to fashion. It needs to spread its bets, applying it to children’s shoes, evening shoes, to classic business styles as well as,

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now, footwear for the gym. “Fashion is a risky business; it’s up and down,” he says. “It helps having a unique idea, of course. That limits the competition. Technology is all about today, and that gives you the power to grow faster. But that means you have to keep developing new technology to stay ahead. “And it’s still easier than the wine business,” he adds. “Success in the wine industry is not always your decision. Wine takes time. There is the land. You may cultivate the grapes, but there is always the weather to contend with.” And that, at least, is something Geox has licked: in hot weather, your feet stay fresh, in wet weather, they still stay dry. And having a wine business too, ensures you have something with which to toast your on-going success. ■

Technology is all about today, and that gives you the power to grow faster. But that means you have to keep developing new technology to stay ahead

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JANUARY 09

Lexus entertain you Jonathan Wells loves his cars – particularly the fast ones. Who better to test the new Lexus IS-F 5.0 litre V8?

BUSINESS QUARTER | JANUARY 09

There’s no doubt about it, my first impressions are good. Despite its slightly non-descript compact four-door saloon body shape, the Lexus IS-F is a stunning car, especially in its uber-fashionable white with blue-ish tinted xenon headlights at the front, four huge exhausts at the back and 19-inch carbon grey alloys in the middle. It might not be instantly recognisable like an M3 or even a 911, but that’s the category that Lexus wants to see itself in. Inside, the story is the same; it’s way beyond the expectations typical of a Japanese four-door saloon, even one that costs in excess of £50,000. It really is beautifully finished with superbly bolstered leather seats (electrically adjusted and heated, naturally) and superb interior lighting which makes a big difference at night. It’s also fully loaded with every option imaginable, from super clear sat-nav to radar-controlled cruise control. But the real story isn’t about how this car looks, but about how it goes. Let’s start with

the facts – rear wheel drive and a 420bhp 5.0 litre V8 and an eight-speed auto gearbox with fingertip paddle change just behind the steering wheel. You’d expect these figures to make a fire-breathing monster that’s uncontrollable on corners, especially on a damp, cold day in the middle of winter. Not a bit of it. Ensure that sport mode isn’t engaged (road conditions dictated this anyway), slip it into drive and it’s just like any other modern, well-spec’d compact executive. Smooth, quick, quiet and very relaxing to drive. Gear changes are many but mainly imperceptible, and only the dashboard display gives any hint which of the eight gears the electronics have selected. On the motorway, select the automatic cruise control and it speeds up and slows down itself according to what’s in front of you. In addition, as you’d expect with a large capacity V8, even at motorway speeds, the engine rarely gets much above 2000 revs and it always stays whisper quiet. This all changes, however, when you do >>

JANUARY 098

MOTORING

Lexus IS-F photographed at the Port of Tyne

BUSINESS QUARTER | JANUARY 09

MOTORING

JANUARY 09

Our reviewer Jonathan Wells is the founder and Managing Director of Guroo Ltd. Based in the eVolve centre at Rainton Bridge Business Park in Houghton-le-Spring, Guroo is an expanding company that develops software and learning materials for schools and colleges throughout the UK. Over the last 20 years, Jonathan has racked up an astonishing half million miles and his recent car history shows definite petrol-head tendencies. He had the first V6 Alfa 156 in the North East (bright red with black leather), followed by a Saab 9000 Aero (another bright red with black leather) in which he racked up an amazing 140,000 miles in just three years commuting to London. He then had a massive Nissan Patrol before switching to Minis – the first, a red Cooper with Union Jack roof, was followed by an orange Cooper Convertible, which was delivered on launch day after Jonathan had endured 18 months on the waiting list. Today, he has three cars. The family car is a Jaguar S Type, the runabout is a little Suzuki and the weekend toy is a 1984 Mini 1000 with just 60,000 miles on the clock. It is currently resting in the garage.

BUSINESS QUARTER | JANUARY 09

two things. Slipping into manual gives complete control and lets you choose which note you’d like to have – and above 4000 revs the choice is either loud or OMG! Performance is absolutely blistering, but the handling is well controlled, as I found out at a roundabout in Ryhope when the electronics saved me from an embarrassing moment by controlling my slightly heavy right foot. Gear changes are amazing. It’s not just the speed which is impressive, but the sound the car makes as it snicks from one gear to another, and the Lexus IS-F has another great trick up its sleeve as it automatically blips the throttle when you’re higher up the rev scale and changing down. It’s addictive, and with eight gears it’s not hard to find a reason to change up or down! So I guess you could say that the car is a Jekyll and Hyde; beautifully equipped exec one minute, hard-nosed racer another. And maybe that’s its ultimate downfall, as getting to the sports car side of the Lexus IS-F requires a little bit of effort and certainly higher speeds than most of the camera controlled limits that exist these days. It’s also discreet. Yes, it looks great in white, but take away the alloys, and from the front and side, it looks pretty much like the IS220D, despite the fact that it costs almost exactly twice as much. Of course, that very discreetness is also beneficial, as the IS-F easily hides its sports car talents, and for potential purchasers, this lack of showiness could swing the deal. I loved driving it and the noise it makes when pushing on is intoxicating, though driving a car with a 5.0 litre V8 engine that uses super unleaded fuel as fast as a litre every four miles (according to the multi-function readouts) might be extreme for some. The £55,000 list price is undoubtedly very competitive when you compare the blistering outright performance against M3 and RS4 rivals and, the way prices of cars with higher emissions are dropping these days, in a couple of years, who knows? ■ The Lexus IS-F Jonathan test drove was provided by Lexus Newcastle, 22 Benton Road, Newcastle, NE7 7EG, tel 0191 215 0404, www.lexus.co.uk/newcastle

What Bob says ... Lexus introduced the IS in 1999. It was rear wheel drive, had two powerful V6 engines and was clearly aimed at the BMW 3 series. 2008 bought the new Lexus ISF, the marque’s first attempt at making a high performance car; the F being for Fuji Speedway where its development took place. The engine is from the top-range LS600 hybrid, and Yamaha’s engineers have totally revised it to run at its maximum redline of 6800rpm for extended periods. The suspension, brakes and steering are modified to accommodate the increased performance. The ISF, along with its competitor BMW M3, Audi RS4 and Mercedes C63 AMG, has a V8 engine limited to 155mph which, with unlimited capacity, would be capable of 170mph. It has a lengthened nose and aerodynamic enhancements and its lower centre of gravity improves handling. The brakes are by Brembo, which gained its experience in Formula One. The BBS alloy wheels, styled on Samurai Swords, lend an aggressive look, along with quad oval exhaust pipes. The ISF gets a full 5 star passenger rating and a 2 star rating for pedestrian protection. It averages 24.8mpg due to the 8-speed gearbox, making it technically more economical. Emissions of 270g/km put it in the highest tax band G - currently £400 and rising to £950 in 2010; the same as a Ferrari 599. It has excellent spec, with Sat Nav, heated seats and 14-speaker Mark Levinson hi fi, plus Xenon lights and keyless entry. Bob Aurora is an independent car reviewer and also owns Sachins restaurant on Forth Banks, Newcastle. bob@bq-magazine.co.uk

THE LEXUS IS 250 SR LIMITED EDITION. SAVE £6,655 AT LEXUS NEWCASTLE.

Model 35 Monthly Payments

IS 250 SR Automatic £299

Cash Price

£18,995

Customer Deposit†

£4,000

Amount Of Credit

£14,995

Guaranteed Future Value/ Optional Final Payment Total Amount Payable Excess Mileage over 30,000

£22,335 10.6p per mile

10.1% APR TYPICAL †Minimum deposit 15%

Evolved from the IS Sport and high performance IS F saloon, Lexus introduce the limited edition IS 250 SR. Outside, you’ll find a sculptured rear spoiler, deep front, side and rear skirts, plus 10-spoke 17” alloy wheels. Inside, you’re greeted with aluminium sports pedals and scuff plates. And as standard, is the exceptional ride, performance and build-quality you’d expect from Lexus. To test drive the new IS 250 SR call Lexus Newcastle on 0191 2150404. Finance offer available on a limited number of vehicles*.

£7,795

LEXUS NEWCASTLE 22 Benton Road NE7 7EG Tel 0191 2150404 www.lexus.co.uk/newcastle

Model shown is IS 250 SR manual at £25,040 OTR. The IS 250 SR prices start from £25,040 to £30,570 OTR. Prices correct at time of going to press and include VAT, delivery, number plates, full tank of fuel, one year’s road fund licence and £55 first registration fee. *Advertised Lexus Personal Contract Purchase offer available on a limited number of Lexus IS 250 SR when ordered registered and financed through Lexus Financial Services before 31st March 2009, at Lexus Newcastle. Minimum deposit 15%. £130 acceptance fee and £59 option to purchase fee included in repayments shown. Other offers are available but cannot be used in conjunction with this offer. Terms and conditions apply. Indemnities may be required. Finance subject to status to over 18s only. Lexus Financial Services, Great Burgh, Burgh Heath, Epsom, Surrey, KT18 5UZ. Subject to availability.

IS 250 SR (Manual/Automatic) fuel economy figures: extra-urban 36.7–40.4mpg (7.0–7.7L/100km), urban 20.9–22.2mpg (12.7–13.5L/100km), combined 28.8–31.0mpg (9.1–9.8L/100km), CO2 emissions 214–231g/km

INTERVIEW

JANUARY 09

LUCKY 13 Deborah Haines is not superstitious when she launches a new hotel, quite the opposite in fact, discovers Brian Nicholls It is to be hoped the number 13 is lucky for Deborah Haines, veteran of 13 different hotels as she built her career prior to arriving in Durham as inaugural general manager of the new Radission SAS Hotel on the city’s riverside. This, and for the 13 months prior to the hotel’s opening she worked in a Portakabin, where she planned its launch with the support of a 13-strong pre-management team. There is, as tradition dictates, no room 13 at the hotel, but there is a 113, 213, 313 and 413, where guests will be treated to just as warm a welcome as elsewhere in the four-star, 207-room hotel. As business is still gathering momentum following its November opening, the management prefers not to detail occupancy figures, but the hotel has already hosted two residential conferences and four dinners for

BUSINESS QUARTER | JANUARY 09

between 80 and 298 guests. It can host events and meetings for up to 600. It celebrated its first New Year with North East girl band and X Factor finalists Bad Lashes headlining a successful fundraiser for the Sir Bobby Robson Foundation for cancer, with both Sir Bobby and his wife Lady Elsie among some 250 guests. Word of the hotel seems to be spreading. “I think customers are finding the flexibility we offer particularly appealing,” Deborah says. “Our clientele to date has largely comprised of business people, and we also have footballers staying and leisure visitors on two or three-night visits.” The new four-storey building, two wings linked by a dramatic glass foyer, is angled to follow the curve of the river. Externally, locally sourced stone and slate combine with red

brick and cedar in a contemporary design which hints at the occupier’s Scandinavian associations. This sudden insertion of colour and individuality provides relief from the grey government buildings nearby and is without prejudice to the city’s World Heritage site, manifest in the hilltop cathedral and castle. Deborah, 42, leads confidently and by example, drawing on practical experience of hotel work over almost 25 years. A sense of duty is evident, and one guest checking out recently found her in the foyer at 6am on her Saturday morning off to wish bon voyage in person. She was born in Thirsk, but didn’t stay long, her father’s career with the RAF taking the family to Lincolnshire, where Deborah studied at college before heading to London to >>

JANUARY 098

INTERVIEW

We recruited for attitude, not for skills base. We looked for individuals who appeared to be hospitable, keen to please and enthusiastic

BUSINESS QUARTER | JANUARY 09

INTERVIEW

JANUARY 09

Her move to Durham heralds a welcome change of lifestyle. From the commuting frustrations of Reading, she and husband Andrew – now executive chef at The Sage Gateshead - have relocated to a country home amid fields at Burnhope in Derwentside where, among other things, they can keep a horse. “The wonderful plus for me is the travel transformation,” Deborah says. “It takes me 15 minutes to get to work now. It used to take three hours when I worked at Stansted.” While daughter Leigh, 18, studies at college in Chichester, daughter Candice, 13, attends Durham Johnston School, and is the equestrian of the family. ■

Market trends

Destination Durham: Deborah Haines is happily relocated after years in London’s commuter belt work at Trusthouse Forte’s Westbury Grosvenor House. At 18, she was a floor housekeeper. She progressed to hotels on Guernsey and Gibraltar, before moving up the ladder at Manchester’s Britannia. At 22, she went to the city’s iconic Midland Hotel to become perhaps the youngest executive housekeeper in Europe. Headhunted by Radisson, she continued to progress with posts at the company’s Manchester Airport hotel, the Radisson Edwardian SAS at Heathrow and the 500-bedroom Radisson flagship at Stansted. She had her first experience as a general manager in 2006, when she worked on the conversion into a private hotel of The Park at Hyde Park. “That was particularly interesting,” she recalls, “because I was very much into strategy. I had to position the hotel correctly from a business point of view. I was delighted when we won a hotel of the year award.” Since August 2007 Durham has been her challenge and she spent those 13 months

BUSINESS QUARTER | JANUARY 09

ensconced in her Portakabin, where the hotel now stands, presiding daily over progress. One of her interventions was to pre-empt a hanging of paintings depicting Durham Cathedral in every bedroom. “Why, when guests can look out of their bedroom window and see the cathedral in reality?” she asked. A skill required in any project launch is, of course, an ability to pick the right staff. The initial complement is 78, and all but the key executives have been recruited locally. “We recruited for attitude, not for skills base,” she says. “We looked for individuals who appeared to be hospitable, keen to please and enthusiastic. We can teach the skills of hotel business in the style we prefer. If we have the right attitude in a person we can nurture and develop it.” Already Deborah ranks the Durham Radisson with her Hyde Park days as the most satisfying experience of her career to date. “It was rewarding in a different way,” she explains. “Here, I came armed only with a mobile phone and an email address. The whole thing for me started from there.”

Deborah has agreed to chair the recently formed Durham Hotels Association; a group of 25 large hotels and venues studying market trends, sharing intelligence and providing a sounding board for the County Durham Tourism Partnership, which in turn aims to raise tourism revenue in the county beyond its present £589m, or £1.6m a day. Success here could add to the 12,000 jobs the sector already provides. As Melanie Sensicle, chief executive of the county’s tourism partnership, points out: “For the first time, the major hotels here are working together as a collective driver to position Durham as a leading UK visitor destination.” It perhaps indicates the goodwill that exists that Deborah, when not in the Portakabin during the pre-launch countdown, was given permission to work extensively on the lobby computer of the nearby Marriott Royal County. Deborah says: “Through the association, I am looking very much at a general expansion of hotel business in County Durham, growth to benefit every hotel member. Durham has enormous potential as a visitor centre, and we are working with the region to achieve this.”

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INTERVIEW

JANUARY 09

PRECIOUS ONYX Onyx Group, a leading name in IT solutions, is moving closer to a £50m target with three acquisitions in a year and a plum contract with Sage. Chief executive Neil Stephenson reveals the firm’s expansion plans to Brian Nicholls

Cautiously optimistic: Onyx Group’s Neil Stephenson is steering a steady course

BUSINESS QUARTER | JANUARY 09

JANUARY 098

Envisaging a turnover which will more than quadruple over the next five years might be called wildly optimistic in the current economic climate, but when your services are in demand from the region’s biggest law firm, the country’s biggest provider of accountancy software, and certain unnamed defence customers - among thousands of others - then Onyx Group’s reasons to be cheerful are perhaps easier to grasp. Onyx Group made three acquisitions during 2008, taking in Newcastle Computer Services and two Scottish firms, Campbell Lee plc and Dundas IT. Now Onyx meets customer needs around the UK from two offices in the North East, three Scottish bases and a London sales office. The Middlesbrough-based group describes itself essentially as a technology solutions provider and the region’s leading internet service provider - a specialist in networks, hosting and business continuity, data security and managed services. It has built its reputation over 12 years, both through acquisitions and organic growth which have empowered it to provide its extensive range of ICT-related services for organisations of any size or nature of business. Revenues have quadrupled over the past two years, partly through acquisition. The £3m of 2006 is £12m now, and could be £50m-plus come 2013, chief executive Neil Stephenson suggests, in light of a deal with software provider Sage. “Sage is a prestigious, well-respected business, which is noted for its diligence when choosing potential business partners and suppliers,” he says, as he explains that Sage plc has entrusted Onyx with ensuring that Sage’s business – and that of its 5.7m customers - would continue even if fire, flood or similar disaster were to descend on its £60m headquarters at Newcastle’s Great Park. Onyx has its own workplace recovery centre at its Team Valley, Gateshead base. It is fully equipped to provide workspace for up to 200 workers who might have to be taken in. Every desk has a computer with internet connection, phone, and use of printing, photocopying and scanning facilities. Onyx’s contract is a key element in a ‘business continuity resilience’ structure that Sage has

INTERVIEW

We are cautiously optimistic and shall continue to invest and increase capacity. Even so, we are monitoring the situation monthly. Our plan is incremental and can be altered

developed to protect its stakeholders in the event of emergency. Says Stephenson: “It’s an exciting deal for us and testament, we feel, to the expertise, experience and quality facilities we offer.” Andrew Morkot, business continuity manager at Sage, says: “At Sage, we seek to identify, assess, respond to and effectively manage any situation that could endanger our people, affect our customers, hurt our business or damage our reputation. I have been impressed by the Onyx facilities and the flexible, professional attitude of its staff. Of course, we’re also pleased to support another successful business in the North East.” Business recovery is one of four Onyx Group specialities, offering a one-stop shop solution to business, regardless of size. Neil Stephenson says: “Managed networks are perhaps what we are best known for. We have a reputation for providing businesses with

Global operation The region’s share-listed firms, companies in the process industries, top football clubs, and a spread of businesses between Aberdeen and London are all Onyx clients. Neil Stephenson says the recent Dundas deal enables Onyx to align strategically its existing virtualisation and hosting services with Dundas expertise. “Virtualisation is important in disaster recovery, and a key to reducing the carbon footprint,” he explains.

premium quality internet connectivity services.” Premium data hosting services are delivered from Onyx facilities throughout the UK, including a £5m Tier 3 facility in the heart of Newcastle. “Enterprise IT network and solutions in information system security are also one of our specialities,” he adds, “from initial advice and guidance through to needs analysis, solution design, configuration and support of enterprise-wide security systems.” Managed services for IT networks are also provided. Security support is a major consideration, given the recent rash of vanished and stolen information threatening public privacy. HMRC, Nationwide and TK Maxx have been among the victims. Onyx reckons that about 75% of UK businesses have suffered a security incident involving data loss. In response, accreditation to ISO 9001, ISO 27001 and BS7799 are Onyx guarantees of quality and information security. Online scams have to be confronted, too. These are soaring, while identity fraud also continues to grow. Tactics in the criminals’ toolbox range from stealing details left on a scrap of paper to installing key-stroke software on business and personal computers to lift personal details. Stephenson says small and medium businesses are often the worst culprits for underestimating the value of data. Firewalls, virus protection, authentication, web filtering and email security are the very least in an armoury of security steps that should be introduced, he suggests. Dundas is strong also in what he calls ‘professional services vertical (lawyers and accountants)’ – a core vertical market for >>

BUSINESS QUARTER | JANUARY 09

INTERVIEW

JANUARY 09

Onyx. The buy-up of part of Ponteland-based Newcastle Computer Services (NCS), which went into administration last June, followed the absorption of Campbell Lee in Glasgow. “The Newcastle firm had business problems and needed re-engineering. We bought a part fitting neatly into our Apple Macs. Another part was sold off elsewhere,” he explains. Onyx Group also spread to Dubai after a satisfied client who was working out there recommended the group to Dubai World, flagship of the Gulf state’s global investments. For this, Onyx has won a UKTI North East Exporter award. Altogether, the firm has 100 staff operating from Middlesbrough, Gateshead, Newcastle, Glasgow, Edinburgh, Falkirk, Dubai and its London sales office. Onyx grows its own staff (“we don’t poach,” Stephenson insists) and hires experienced talent as it becomes available, otherwise trawling the universities of the North East and Scotland to identify and recruit promising beginners. Stephenson, 36, a keen Lakeland walker, Newcastle United fan and Sunderland University graduate, has been with Onyx Group for 10 years. In 1993, he took his computer knowledge to Vaux Breweries initially, working as a marketing executive. “They were happy years where lots of opportunities were up for grabs,” he recalls. Eager for more opportunity to grow and develop a business, he looked for a smaller organisation. He went to what was then a very young Onyx Internet. From marketing manager, it was a rapid rise to operations manager, group sales and marketing director (2001) then chief executive (2007). “I have been incredibly happy from day one,” he says, “despite the very long hours we have been through over that time.” He played a prime role in the sale of the company in 1999, then in two separate management buyouts, in 2001 and 2006, as the company worked towards its present structure. He was on the team that built and launched Onyx’s data support arm Databanx, and led the acquisition of Askaris last year and Interv8 in 2006. He helps mentor many local technology businesses, supports the young Digital City start-up project at Teesside University, and is

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on the board of the New Technologies Institute working from Northumbria University. This has universities and colleges of the region pooling talents to help shape the region’s IT strategy, and to encourage skills in information and communication technology. What then, is Onyx Group’s strategy for success? “Be bold, be ambitious, invest, and accept that there is no substitute for hard

work,” Stephenson says. “And maintain a good customer focus. I make a point of getting to know all of our customers.” And what, one might add, was one of the company’s best decisions? “Joining the London Internet Exchange. It was expensive, but it connected us immediately with another 300 internet operations. That decision was worth every penny.” ■

Experience and expertise Onyx has three other heavyweight punchers on the management: Maitland Hyslop, chief operating officer; Sean Allison, Askaris managing director and Onyx Group technical director; and Alastair Waite, the director focused on acquisitions, financing and strategic development Maitland has been 15 years in IT, combining commercial and academic approaches. A former Army officer, he is a graduate, post-graduate and former tutor at Durham University, a graduate of Huddersfield University Business School and Manchester University, and also a former research fellow in telecoms resilience at the University of Northumbria at Newcastle. He is a founder member of the Dartmouth College (USA) and Purdue University (USA) critical information infrastructure team, advising the US Government on homeland security. He is also an independent adviser to the European Network Information and Security Agency. He joined Onyx Group from Ross and Cromarty Enterprise in Scotland, where he was chief executive. Previously, he was a director at the European Telecommunications Resilience and Recovery Association. He also spent four years as head of knowledge, information and ICT at One North East. He is affiliated to the disaster and development centre at Northumbria University. Sean Allison has been in IT for more than 23 years. Apprenticed at Systime Computers in Leeds in 1982, he moved three years later to Croft Computers in Newcastle, where he spent the next 11 years. In 1995, he founded an internet firm, Sapphire, providing web solutions to local businesses and gaining high profile contracts such as Vickers and Pickerings. In 1996, he sold Sapphire to Read-Holdings, staying on to manage for three years. Then he and his wife Susan co-founded the network security business Askaris at Richmond, where the client list included PSI Net and Thales. In 2006, Allison sold Askaris to Onyx Group and relocated the business to the Onyx headquarters in Middlesbrough. He still heads up Askaris affairs and is technical director of Onyx Group, advising on IT security systems and network security for all group clients. Alastair Waite trained as an accountant and was a management accountant at Safeway before moving to Bede plc, then Onyx Internet in 1999, where, with Neil Stephenson, he led the management buyout two years later. He has since steered the company’s successful launch of DataBanx and subsequent acquisitions. With the aim of floating Onyx Group on the Alternative Investment Market, Alastair has focused on acquisitions, financing and strategic development.

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INSIGHT

JANUARY 09

The heat is on Brian Nicholls travels to Austria to find a case for North East businesses to switch to renewable energy and sustainables, starting with wood heat

BUSINESS QUARTER | JANUARY 09

Ilsa Achleitner, farmerâ&#x20AC;&#x2122;s wife and businesswoman, offers an organic apple from a display box in her extraordinary market store. The apple looks so tempting that the intention to bring it back to England is abandoned. I find myself, instead, devouring it as I sit in the airport departure lounge a couple of hours

JANUARY 09

later, awaiting the plane home. Many people living in Morpeth, Rothbury, Tyne Valley and Carlisle area will recognise what Ilsa and her husband Gunter have gone through to rebuild their livelihood. They had to replan their lives and relocate their organic food distribution business after their farm buildings were damaged by the Danube breaking its banks in Austria. Fortunately, their determination leading to a new company in 2005 has brought about today’s Biohof Achleitner enterprise at Eferding, near Linz in Upper Austria. Not only is the produce organic, but the building selling it is totally sustainable and powered by renewable energy. “Yes, it has been hard work,” Ilsa says, smiling. “But also it is worthwhile. It works well for us.” The building contains, besides the indoor market, airy modern offices from which they run their wholesale business in organic fruit and vegetables, an organic cafe and a distribution warehouse. The sustainable building has a timber frame, clay plasters, straw bale sections and other natural wood. It has triple glazing to help maximise energy efficiency, and the many plants strategically placed throughout give clean air and regulate temperature and moisture. A 75kW pump provides the winter heat, underground water and summer conditioning. Solar collectors 16m2 feed into a 1,000 litre accumulator tank, and photovoltaic panels line the roof. About 80% of the heat pump’s energy is photovoltaic. Vehicles on a forecourt are fed sunflower oil for the delivery of orders to 3,000 customers from a 20km radius. Ilsa reckons the environmental features have raised the cost of their business by 15 to 20%, but subsidies and grants largely compensate. The North East of England isn’t the UK’s least active region in pressing for renewable energies, but reliable figures show that even this region, in biomass capacity, is nearly 25 years behind Upper Austria. Linz itself (population 1.38m, unemployment 3.6%) is the hotbed of revolution in renewables, widely considered to show best practice both as manufacturer and installer. This partly accounts for its remarkable contribution of 25% towards Austria’s industrial exports.

After the flood: Ilsa Achleitner and her husband Gunter survived serious flood damage on their farm and have now rebuilt their organic food business in a sustainable building The Achleitners are just two of innumerable Austrians who, as providers or consumers, benefit from their commitment to new fuels and energies, and particularly biomass – wood chips and pellets. Another farmer a few miles away, Hans Wildfellner, saw opportunities for farmers also. He was instrumental in getting Bauerliche’s bioenergy district heating system up and running, largely owned by a farmers’ co-operative. Its biggest customers today are two industrial companies. Two schools, many homes and farms are also heated with little human effort. In 1999, Hans persuaded 25 other farmers that it would be a worthwhile sideline for a €3m investment. Each farmer took a stake of up to 4%. They contacted buyers, organised fuel supplies, and the boilers were running eight months after work started in 2004. The manufacturer of one of their two boilers, Froling, has a 24% stake and a hand in the marketing, and subsidies were provided by national and local government. Their boilers are 3MW and 500kW, one for winter use, the other for summer. A 4MW boiler may be added. The heat emitted is piped via heat exchangers to customers. Because the company does not wish to supply more cheaply than gas or oil,

INSIGHT

and those fuels were relatively cheap then, customers were scarce initially. But, says Hans: “We marketed successfully soon after on the grounds that it was environmentally friendly, promoted local fuel supplies and supported local farmers.” Hans, however, is also popular locally and believes in personal contact. And with fluctuations in fossil fuels last year, demand for biomass heat has grown. The farming stakeholders own about 700 hectares of forest. Any supplier is free to try undercutting the current 50 a tonne. They burn about 10,000m2 of woodchip yearly, about half of which can be stored under cover; the boilers accept chip up to 50% moist. Amazingly, the plant is run by phone monitoring. Managing director Hans spends about one hour a day there, and one employee spends about the same time on general operation and maintenance. Alongside is a biogas plant, run by seven of the stakeholding farmers since 2006. Fuel stock here – about 12 tonnes needed daily includes maize, sorghum and flower seeds. This produces around 6MW of electricity, 6MW of heat. The stock is minus oxygen. The resulting methane is stored in a 360m3 flexible container to await entry to a generator. >>

Apprentices in demand If Gordon Brown seriously intends progress in renewable energy, many of the 35,000 apprenticeships he also proposes had better be in plumbing and heating. A college in Linz currently trains 1,500 apprentices at a time in renewable heating, electricals, plumbing and air conditioning, including photovoltaics and wind power. The apprentices work 40 weeks of the year for their employers, who also pay them during the 10-week course, which is paid for by the Government.

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INSIGHT

JANUARY 09

Can you benefit? Can you benefit Businesses in the North East will soon have an excellent chance to find out whether biomass would be cost-effective for them at Ingnition09, the UK’s first dedicated wood fuel exhibition at The Sage Gateshead on March 11 and 12. It will give firms already involved the chance to network and enter the supply chain. Displays, workshops, lectures and field trips will feature. David Clubb, project director of NEWheat, a not-for-profit initiative funded and backed by One North East and Rural Development Initiatives, says: “Ignition09 will highlight the region’s capacity as a leading UK provider of renewables, plus the environmental and economic benefits for firms switching to wood chip boilers as a main heating source. Myths will be dispelled, solid information given.” Some boilers are said to pay for themselves within two years and, besides free feasibility studies, there could be 80% grant funding towards any detailed design work necessary over and above the requirement for a fossil fuel installation. “We can advise impartially on whether savings are likely, and by how much. There is no better time for businesses to review how their energy should be best supplied,” David Clubb says. NEWheat, tel 0845 4786 300, www.newheat.org

BUSINESS QUARTER | JANUARY 09

Breakeven here will be around 10 to 12 years, but again, the plant requires only about one hour’s attention a day. Toffee noses of Vienna and Salzburg used to disparage Linz, the capital of Upper Austria. “Linz is provincial,” has long been a sardonic catchphrase in the nation’s better-known cultural centres. But Linz has delivered a one-two. It is this year’s cultural city of Europe, now an acknowledged centre not only for its traditional steelmaking, but for its renewables performance. Christine Ohlinger, an executive of the Upper Austria Energy Agency ESV, says Upper Austria has led the way because, while it has abundant forests to provide fuel, Austria has little access to oil. “Today, renewables provide more than 30% of energy in this region,” she explains. “In five years alone, energy use in new houses here was reduced by 30%. The aim is to go on reducing it by 1% year on year till 2010.” In those same five years, the regional government encouraged the start-up of 15,000 modern wood chip installations, 15 wind installations and also thermal collar collectors, hydro power from small scale plants, geothermal plants, biogas and sewage gas plants, heat pumps and photovoltaic installations. In one of these fields alone, 30 new companies will have been established by 2010, creating 1,500 jobs. Near the Achtleiners’ remarkable business centre, Genol distribution centre (headquarters, Vienna) supplies not only bulk and bagged pellets but also logs, briquettes – and oil. Its co-operative pellet distribution centre serving Upper Austria from the same spot has 1,200 farmer members. Its sales of pellets and other biomass fuels have climbed continuously over five years. Pellets sourced from Tyrol for local delivery to 1,000 customers are stored in silos for lorry delivery. About 20,000 tonnes of pellets a year go to companies and homes. Logs are imported also from the Ukraine and the Czech Republic. Another district heating system opened last year at a cost of €3m, feeding on local wood chip. What the likes of Achtleitners and >>

It has turned out to be a little costlier, but worth every euro for the reduced inconvenience in cleaning and maintenance

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JANUARY 09

Wildfellners of Austria have achieved, farmers in the North East could co-operatively achieve. There is industrial opportunity, too. Guntamatic GmbH has manufactured boilers since 1963, but with a rewarding switch from log and oil boilers to those of log chip, pellet and grain, its 180 employees produce 12,000 boilers annually now, 70% going to the likes of Germany, France and, increasingly, Britain through Treco Ltd (www.treco.co.uk). Sales top €40m. Systems range from 3 to 40MW. Measures of support by local and national government account for a lot of Austrian success, especially in promoting energy efficiency and uptake of renewable energy technologies. Their incentives include free energy advice centres, soft loans for builders

Wood you believe it… • Managed woodland has a broader range of plants and wild life and can improve the look of rural landscape. Biodiversity in woodland habitats can also be improved • Wood heat can reliably replace all other systems as a main heating source for businesses Wood fuel has lower emissions than fossil and is 96% carbon neutral. It gives lower levels of other gases and toxic materials. The little ash resulting is so clean you can scatter it on your garden • Wood from sustainable forestry will not run out. There are 100,000 hectares of woodland in the North East alone, one third of it presently unmanaged – ie unused - and one third underused. • Wood heating is the most cost-effective use of renewable energy for most sites. Schools burning wood or straw instead of oil heating could save £50,000 a year, the UK’s Carbon Trust says • Hundreds of companies in the UK already use wood fuel • Wood fuel creates rural jobs

BUSINESS QUARTER | JANUARY 09

and renovators, and grant support and tax incentives for installations. Regional parliament’s targets for 2030 include 100% electricity and heating from renewables, 41% less use of fossil fuels for transport, and 65% reduction in CO2 emissions. Unlike Britain, whose fuel future is in critical disarray and whose government already admits inability to cut carbon emissions 20% by 2010, Austria looks set to achieve carbon emissions and renewables targets for 20 years beyond. Long-term policy is credited for targets achieved and related manufacturing and service industries beneficial to the economy being launched. The green energy cluster there has 148 member firms employing 4,000 people and turning over €1,570m annually. Britain, unfortunately, is not distinguished for long-term policy achievement just now. And what of customers? Heating by renewables is now the preference for new houses. In a large family home I saw, there was a 25kW pellet heating system at work in the ground-floor workrooms and storage area. The fuel store holds up to two years’ supply. Delivery lorries peashoot the pellets into the store by pipe. Pellets enter the boiler as required. The occupier has only to empty ashes every couple of months and perhaps clean the heat exchangers. How does a businesswoman at work all day find the switch from fossil to renewables? One told me: “It has turned out to be a little bit more expensive, but worth every euro for the reduced inconvenience in cleaning and maintenance.” Solar City on the outskirts of Linz comprises 1,294 homes built over a decade by a notfor-profit organisation, whose architects included Norman Foster and Richard Rogers. The houses, which avoid overshadowing, exploit sunlight through solar energy. Half the hot water is solar sourced, and all buildings are in a heating network, fuelled 17% by biomass. Innovative drainage and waste water treatment also feature. ■ For more information, see www.linz.at/english/life/3199.asp

In five years alone, energy use in new houses here was reduced by 30%. The aim is to go on reducing it by 1% year on year till 2010

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SMALL IS BEAUTIFUL Kim Wong, senior specialist in innovation at One North East, explains why the region should warm to something as small as a nano

Developing the science of nanotechnology can impact significantly on the future growth of the North East economy and, excitingly, there’s a real opportunity for the region to establish itself as a leader in the activity. More than 400 delegates recently attended the three-day NanoMaterials08 event at the Marriott Gosforth Park Hotel in Newcastle, which gave companies regionally, nationally and from across Europe the chance to share knowledge and the contacts needed to tap into the emerging and profitable market of nanomaterials. This event, the biggest of its kind in Europe, covered the four key end uses in the industry:

BUSINESS QUARTER | JANUARY 09

• • •

Thin film and printed electronics Nanoplastics and nanocomposites Pharmaceutical, drug delivery and personal care • Coatings, inks and pigments The fact that the North East secured such a prestigious event really helps to cement our position in the field of nanotechnology and, specifically, in nanomaterials, offering the businesses there an excellent opportunity

JANUARY 09

to promote their work. At the same time, organisations like One North East and the Centre for Process Innovation had the opportunity to showcase the region’s capabilities, strengths and everything else it has to offer. The North East, like every other region in the UK, has had to face up to the growing challenge of globalisation and its implications for regional economies and businesses. One North East has turned this challenge into an opportunity to build on our world-class industrial strengths, with the aim of generating substantial new wealth and prosperity. Now, there is growing recognition that the North East has some highly distinctive technologies and key strengths and, working with our partners, we have a 10 to 15-year programme to exploit fully the potential of three key areas: • Energy and the environment • Process innovation • Health and healthcare sciences Under the umbrella of process innovation sits nanotechnology. Boosting the region’s strength in this area is a priority for One North East and was the driving force behind its support for NanoMaterials08. The event, attended by many industry leaders, was organised by NanoCentral, an arm of the CPI which was set up by the regional development agency to speed the commercialising of valueadding nanomaterials. It helps businesses across the UK to progress by forming supply chain collaborations capable of ensuring UK success in the race for global leadership in nanotechnology and nanomaterials. On a wider scale, each of the three areas mentioned above – christened the Three Pillars – has potential to generate millions of pounds’ worth of economic growth through a new generation of enterprises based on technology. We are making excellent progress in aligning the region’s resources, and are focusing these

ONE NORTH EAST

on where we can get the biggest return on investments. The Three Pillars are key areas where the North East already has world-renowned experience, jobs and business strength, with huge potential to build for the future. Two other sectors – for emerging technologies in nanoscience and the digital media industry – are part of the £200m Strategy for Success programme that is leveraging millions of pounds of additional investment from the private sector and other sources. The aim is to develop and grow, to highest international competitive standards, many new and existing businesses across a range of

sectors, so that they can contribute a further £3bn to economic growth in the North East. Overall, this targeted approach with the Three Pillars could eradicate a £9bn productivity gap between the North East and the rest of the UK. This is certainly ambitious. But we have to set and reach such a goal if we are ever truly to punch our full economic weight. ■

Nanos weren’t born yesterday By Brian Nicholls For all it’s a buzzword in the North East today, nanotechnology has been in our midst for nearly half a century. In 1959 Richard Feynman, a scientist who went on to win a Nobel Prize, told members of the American Physical Society he believed that miniaturisation would bring about increasingly smaller, powerful devices. But it was K. Eric Drexler who first used the word ‘nanotechnology’ in 1986. Nano, short for nanometer, is taken from Greek, meaning dwarf. Nanometers are too small for the eye to see – understandably, since about a million will be accommodated on the head of a pin. In the North East, Thomas Swan - an independent chemical company which provides advanced materials for nano purposes - has been active in Consett for 82 years. Managing director Harry Swan, a great grandson of the founder, has said the firm, which employs 126, is resisting industry’s relocate to China trend – good news for this region’s nano programme, especially as his firm has exclusive rights to a carbon nanotube 60 times stronger than steel. Nanotechnology, the institute for the science says succinctly, is an exciting area of scientific development that promises more for less. It can create smaller, cheaper, lighter and faster devices that will do more and cleverer things, use fewer raw materials and less energy. Better-known examples of nano progress to date include coatings that repel dirt and reduce the need for harmful cleaning agents, and protectives that prevent the spread of hospital-borne infections. Researchers at Teesside University, for example, are working on a pan-European device to pre-empt deep vein thrombosis, the most common of unexpected killers among hospital patients. New-generation hip implants, the Institute of Nanotechnology points out, can be made more ‘body friendly’, encouraging cells to accept the implant more readily. Science and business are also looking to the nano for more efficient materials with which to build aircraft, vehicles and buildings, and for new ways to fight pollution. While genetics alters DNA, nanotechnology has a potential to modify all matter, living or not. Scientific advances are usually accompanied by some complication in need of address. In the case of nanos, a theory circulates that without strict control nanos amok in the atmosphere could raise health problems akin to asbestosis. No doubt the scientists will be looking into that, too.

BUSINESS QUARTER | JANUARY 09

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INTERVIEW

Back home: Former luggage porter Andrew Moffat is now in charge at Port of Tyne

PORTER TO PORT BOSS Andrew Moffat describes a remarkable career, from carrying suitcases at a port to running it, and excelling in telecoms in between Port of Tyne may be a trust port, not a plc, but even during these testing times, commercial objectives still apply. Andrew Moffat, the port’s new chief executive, says that although there

are no dividend payouts, which enables higher profits to be ploughed back, recent investments to diversify have necessitated some borrowing. “While we’ve borrowed about £20m, our net assets are £160m, so we’re very low geared. Our lenders wanted us to borrow more,” he explains. “Like any business, we’re exposed to economic change. By diversifying, we’re gaining protection. The port is a barometer of the economic climate, but also a facilitator. We, like everyone though, shall be impacted. “We do take a broader view on some things and recognise that, as a trust, we have environmental and social responsibility. In terms of commercial responsibility, we’re like the private sector.” Andrew, 52, joined the port, strengthening its board as finance and commercial director, in

November 2007. A year later, when MD Keith Wilson retired, Andrew became chief executive. He claims no credit for the ‘diversify to fortify’ initiative, explaining: “Until the early 1990s, the port was predominantly a coal exporter. When that business dried up, the management looked at the organisation and recognised that estates was still a major asset; 300 acres on the north side of the Tyne, centring on the passenger terminal, and 300 acres on the south side, where bulk and container cargo is handled. “Through subsequent development, we now have five major activities: bulk and general conventional cargoes, ferries and cruise, estates with a base of about 60 tenants, also car terminals and a logistics business comprising container terminal, warehousing and distribution. Customers can use one or >>

BUSINESS QUARTER | JANUARY 09

INTERVIEW

JANUARY 09

The port is a barometer of economic climate, but also a facilitator proactive and reactive. We, like everyone though, shall be impacted all, and we are robustly placed.” The downturn in the motor industry, not least for Nissan, affects the port, given the normally extensive use of its car terminal. “As part of Nissan’s supply chain, we shall be impacted. Also our container business includes car components, so that will be affected.” Ferry

BUSINESS QUARTER | JANUARY 09

business has already taken a knock with last year’s ending of the Bergen service, but Andrew says: “That’s less a part of downturn as the effect of cheap air fares and high fuel costs last year. Also, the size of DFDS’s vessel meant the economics didn’t work out.”

Coal is now big business again - imported rather than exported. “Cargo will be seen to have increased to almost 4m tonnes in 2008,” Andrew says. “That’s up 1m from 2007, and that’s predominantly coal from Russia and South America. It’s mainly for Drax, Scottish and Southern, EDF; big generators looking to fuel their power stations, Alcan and Morgan Stanley too. Contracts like these are long term, seven to ten years, because the importers want to ensure consistency of supplies. “With doubts surrounding the country’s future fuel policies, any shift towards clean coal or nuclear appears to be taking longer than first expected. That, for us, is good news. So we’re talking about 35% increase in cargo year on year and about 60% in coal. On the back of those contracts we’ve been able, over the past four or five years, to invest in berths, quay and craneage and conveyor.” Capacity has thus grown to meet changing customer needs and the port is always ready to handle ships at any time, any day of the year. In cruises, longer breaks could be affected. “But last year we had 29 vessels. We already have 23 for this year and that could rise yet. We have 19 so far for the year after. So we’re established on the cruise calendar. “We’ve spent a lot to this end, enhancing the passenger terminal, and developing the Northumbrian Quay to 350 metres which enabled it to take the QE2 twice recently.” As for ferry competition, some economic distress for cut-price airlines could spell opportunity and a review of sailing routes. Andrew says: “On the Bergen route we still had between 150,000 and 160,000 people sailing yearly - quite significant. And we still have about 500,000 passengers moving between here and Amsterdam. “I don’t think people realise the magnitude of our passenger throughput – about 10% of Newcastle Airport’s. The airport is bigger and has greater variety of destinations, but passenger volumes at the port remain important to the region. A lot of gross value is added through people entering and spending money that benefits the local economy between £75m and £80m. The loss of Bergen has probably cost about £20m, but there’s still some £60m coming in. That’s substantive. “We’re working with DFDS to ensure

JANUARY 09

Amsterdam routes move in the right direction. I’m hopeful passenger holidays on that route will hold up.” Won’t the sinking pound help increase the export of goods? “Absolutely right. But lack of demand and commodity prices remain factors. Coal has fallen since July from £120 a tonne to about £50. Steel, scrap and grain prices are similarly down, some by even more. You’re looking at drops of between 50% and 80% in the prices. “That changes demand in business models. Oil prices were a major issue last year. We’ve managed that quite well. It has made things very difficult, though. The price fall is a positive for transport, but now there aren’t enough goods moving round the country. It’s a question of demand and supply.” Strolling among regular mountains of coal and scrap, and avenues of high-piled containers, Andrew is still fascinated by his career switch, from high flyer in the high tech telecoms industry to running a port of Roman ancestry with responsibility for 22 miles of the river. “Telecoms was young, easy to design and shape. Ports are old, have a wealth of experience already, lots of history and a completely different culture.” His track record in managing change was a major consideration in the port board’s decision to appoint him. “There has to be change,” he says, “but people need to know why I’m doing it. They need to be on side. I can’t do it myself.” The career switch isn’t proving difficult. “I wasn’t in manufacturing but financial strategy, and in telephone and port services, customer focus and satisfaction is a common theme.” Born in Newcastle and raised in Whitley Bay, Andrew’s childhood wish was to be a footballer or a doctor. Instead, commercial management came through an economics degree at Newcastle University, and accountancy. He’s a member of the Chartered Institute of Management Accountants. He spent 10 years with the pre-privatised Northumbrian Water, rising from trainee accountant to commercial manager of Northumbrian Natural Spring Water, whose product was gathered from Broken Scar in Darlington then bottled by Lowcocks of Middlesbrough and Villa of Sunderland.

He entered telecoms in Darlington, with a company about to link with Vodafone. When it wanted to relocate a service providers’ centre from Battersea and found no-one willing to go north, it sent Andrew and colleagues to Battersea to prepare the relocation to Darlington instead. The service was acquired in 1991 by Hutchison (later to develop Orange), and as financial controller Andrew shuttled between operations in Darlington, Bristol and Hertfordshire. Eighteen months after Orange was launched in 1994, Andrew became group financial controller, commercial manager, then strategy director. He remained for seven years, during which time the company floated. At the end of the 90s, Orange was acquired by Mannersman, which was acquired by Vodafone, which then had to sell Orange under licence restriction. Then France Telecom bought Orange – all this in less than a year. It was a world away from the usually steady business of port work. “All those changes so quickly and the big numbers – that sort of thing will never be repeated,” Andrew says. When France Telecom bought Orange it was valued at around £30bn. Around that time, Andrew had to immerse himself also in the 3G licences scramble. There were four mobile phone operators, and the Government proposed to award five 3G licences. “As a 2G operator, you needed one of them. But there’d also be one new entrant. If you didn’t get a new licence there’d be two new entrants. If all four didn’t get one you’d suddenly have a market place with nine in. You didn’t want that. Much as the marketing was aggressive, it was also a defence of market share.” After a couple of years more with France Telecom, Andrew rejoined Hutchison, which had got the fifth 3G licence. He worked for 3Italia as chief financial officer in Milan and Rome for nearly two years. “It was great, it really was. But when the opportunity came along to return to the UK as chief financial officer of 3UK, another subsidiary of Hutchison, I took it.” He remained there for nearly three years. When a projected share flotation did not come about Andrew felt the pull of home irresistible.

INTERVIEW

“Mostly while I worked away my family had remained in the North East. So I’d been doing lots of Mondays to Fridays away, and clocking up nearly 600,000 air miles.” Andrew and his wife Gillian have three >>

Through a porthole... Awards: Port Operator of the Year 2008 in Lloyds List London Awards. European Port of the Year 2008 for the second year running in the Institute of Managements Awards. Joint runner-up to Venice as world’s finest cruise port in SeatradeInsider Cruise Awards. Throughput: 12% rise in total tonnage from 5.4m to 6m tonnes (2007). A 45% rise in containers handled in 2007. Car business doubled from 300,000 to 600,000 in five years from 2002, making it one of Europe’s major car handlers, and one of the UK’s five busiest vehicle terminals (handling Nissan, Audi, Volkswagen, Seat, Skoda and Komatsu). Financial performance: Turnover up 9% (£3m) to £37.4m. Projected turnover for 2008: about £50m. Traffic: Fewer but bigger ships figuring in the 5,500 shipping movements a year Passenger numbers: One of Europe’s fastest growing cruise ports with a 62% leap in passenger numbers. Logistics: High security container handling facilities with a vehicle turnaround of 20 minutes. Distribution performing to 98.8% on time delivery. Warehousing customer base which grew by 32% in 2007. Facilities: Riverside Quay in Tyne Dock capable of accommodating panamax-class vessels. One of only five UK ports with cruise berthing of up to 325 metres at Northumbrian Quay and an International Passenger Terminal for cruise and ferry passengers. More than 53,000 pallet spaces available in high tech, high secure buildings.

BUSINESS QUARTER | JANUARY 09

INTERVIEW

JANUARY 09

children – Emma, 14, James, 12, and Matthew, five. “I wasn’t seeing enough of them. It gets harder to work away as children grow. As the business wasn’t doing what we’d hoped within a time frame I decided in December 2006 to come home. Redeveloping a property we had bought in Gosforth about 20 years earlier kept me busy.” Then in mid-2007 Andrew was headhunted for his first appointment with Port of Tyne, requiring that cultural leap from cellnets to shipping movements. “I think the cocktail of previous experience and my passion for the North East helped when I joined as financial and commercial director. I now have a great opportunity to apply a lot of my experience, both commercially and culturally. “The great thing for me and for the port, I think, is that I’m local. It’s in my bones. But I’ve seen a bit of the world, different environments and had many challenges. I was appointed

BUSINESS QUARTER | JANUARY 09

Like any business now, we must change more quickly than perhaps we have done in the past

chief executive in November.” At Whitley Bay Andrew attended Valley Gardens and Whitley Bay High schools, and at 15 he got a Saturday job trundling baggage for passengers at Port of Tyne for a year and a half. “It was interesting. There were more ships then because they were smaller. I still

have pictures of vessels I worked on. I’ve gone full circle now.” Sir Ian Wrigglesworth, the port chairman, has described him as an astute strategist and an invaluable member of the team. Andrew says that whatever lies ahead, the port’s people will remain a key asset. It employs 450 and gives work indirectly to maybe 8,000 more. Change “for the right reasons” will include helping people to develop. “Like any business now, we must change quicker than perhaps we have done in the past.” The port’s 2008 development aims have been achieved: £10m of investment. So now? “We need more land. We’ve been evaluating an infilling of the Tyne Dock, about 12 acres of water which, if retrieved, could enable us to bring in more bulk cargoes, and more containers. We’re also looking to acquire any contiguous parcels of land.” n

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1849

BIT OF A CHAT

with Frank Tock >> Star of wonder, Star of Light The Morning Star isn’t my usual read, but I happened to find it on the Metro; often a good cache when I’m desperate for something to read. I once came across a good John Grisham novel that way. I was surprised to read that it is now 38 years since the Equal Pay Act was passed, supposedly to guarantee equal reward for work of equal value. Yet a survey finds that women, on average, still get 17% less than their male counterparts. Steps to rectify this have been taken in the public sector, but not in the private arena where, apparently, the bias is even more evident and where, as in the public sector, pensions are also downgraded as a result. Women have recently gained the chance to redress the pension position by making a lump payment for up to 12 years of National Insurance contributions, but many women who will eventually be in greatest need of a basic pension will not be able to afford this. While the Government has a case to answer, many companies do, too. Or are they waiting to be horsewhipped into action?

>> In a pickle My wish for 2009? That some descendant of the Ross family, not far down the line, will resuscitate their famous, but sadly deceased pickled onions. I tried various brands of pickled onions with the Stilton and port over Christmas,

BUSINESS QUARTER | JANUARY 09

JANUARY 09

but none of them matched the Ross pickles I remember. The family-owned James Ross and Son went into administration in 2007, felled by the slings and arrows of rising material costs and tough supermarket pricing. Recalling how the founder James Robertson Ross and his wife Bessie started out working on the kitchen table of their Byker home in 1918, delivering round the pubs by horse and cart, one begins to wonder if an operation with just the original recipe could be mounted. You’ll remember from our October issue how Eldon Robson, great grandson of the founder of Fentimans’ Drinks, revived an old family recipe with which to begin to rebuild the-then defunct company in 1994. Fentimans is now an international business of around £4m turnover. As his firm operates at Hexham, which is just a few miles from Newburn where the Ross operation closed for the last time, perhaps he could be persuaded to pop along and mentor a revived Ross business? There is a snag. Ross was bought from administration by Yorkshire rival Greencore, with rights to the Ross brand. Eldon Robson had no such problem with Fentimans. But is that situation really insurmountable? Ask any IP lawyer.

>> Lucky for some There may be some non-executive directors generally, as well as the shareholders of Bellway specifically, whose eyes popped on seeing the bonuses awarded to the housebuilder’s executives recently. Non-execs received lower pay rises (15.6%) last year than in previous years as fees become increasingly aligned with the scope and responsibilities of the role, according to the PricewaterhouseCoopers LLP annual guide Non-Executive Director Practice and Fees. Formal review of corporate governance and board effectiveness is becoming increasingly prevalent in UK companies, with 84% of respondents conducting annual performance reviews of their board. In addition, the average non exec’s time commitment has risen from 15 days in 2003 to 21 days in 2008.

>> Captain’s choice Merchant seamen in the making don’t spring to mind as likeliest stalwarts of Dragon’s Den-type competitions, but they came up with an innovative idea in branded hoodies that the last-ever captain of the QE2 favoured when he recently judged an enterprise event. Capt Ian McNaught, who gave 21 years’ service aboard the QE2 before she became a floating hotel in Dubai last November, paid a return visit to his former college in South Tyneside to judge a business contest. The winning idea came from a group of HND marine students who proposed to sell trendy hoodies for a healthy 47% profit each. Advance orders for the items, branded with both Merchant Navy and South Tyneside College logos, are encouraging. And having scooped the £1,000 prize, the group is moving into production. Event organiser Jerry Gilmour says: “The competition was a great way to get our students thinking about enterprise and working as a team.”

>> Bottle of export, please If we’re so good in business, how come Germany, with a population only 25% bigger than Britain’s, exports three times as much as we do?

>> Thought for spring “Running a business is like sailing a ship. The prudent captain studies his charts before setting sail, then sets a course for his chosen destination. Knowing where he wants to be at any point in time, he checks his position and takes corrective action if he is off course. “The weather may be unpredictable, the seas uncharted, but with simple instruments even the smallest boat can come through the most severe conditions. Only the foolhardy set to sea without instruments and any idea of where they are going.” – Doug Kinsey, director of Kinsey Jones Chartered Accountants, Newcastle.

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EVENTS DIARY

JANUARY 09

BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to: editor@bq-magazine.co.uk. The diary is updated online daily at www.nebusinessguide.co.uk

FEBRUARY

21 MARCH

5 FEBRUARY

CECA (NE), Tees Valley Regeneration presentation (current activities), Durham County Cricket Club, Chester-le-Street (9am) Vicki Munro, tel: 0191 228 0900. kellceca@aol.com

9 FEBRUARY

ICE (NE) lecture, The Art of Robert Stephenson (inc images), Stephenson Works, Newcastle (5.45pm). graham.yates@aone.uk.com

10 FEBRUARY

ICE (NE), Joe Docherty on The Changing Face of Tees Valley, Innovation Lecture Theatre, Teesside University (5.45pm). les.orange@scottwilson.com.

11 FEBRUARY

Essentials of Supervision, Acas seminar, Newcastle (9.30am). Tel: 08457 383 736. events@acas.org.uk.

19 FEBRUARY

Managing Discipline and Grievance, Acas seminar, Newcastle (9.30am). Tel: 08457 383 736. events@acas.org.uk.

24 FEBRUARY

CECA(NE)/Watson Burton, Subcontracting (full day training), Watson Burton, Newcastle. Vicki Munro, tel: 0191 228 0900. kellceca@aol.com Hay & Kilner’s Long Term Wealth Planning seminar, St James’ Park, 3.00pm / 6.00pm. To reserve your free place email a reply to roya.babadi@hay-kilner.co.uk or telephone her on 0191 232 8345.

MARCH

North East Business Awards, Tees Valley final. www.nebusinessawards.co.uk

26,27 MARCH

NDI Annual Conference 2009, Marriott Hotel, Gosforth Park. Defence procurement for the next five years - involving SMEs.

30 MARCH

NSCA’s spring Audit and Accounting Update, Ramside Hall Hotel, Durham (9.30am). Also Spring Tax Update including Budget Issues (2pm, same venue). marie.rice@icaew.com

6 APRIL

ICE (NE) lecture, Railway Civil Engineering in the 21st Century, Central Square, Newcastle (5.45pm). graham.yates@aone.uk.com

24 APRIL

10 MARCH

Hay & Kilner’s Employment Law Update Seminar, St James’ Park, 3.45pm - 6.00pm. To reserve your place at this free seminar please phone Jenny Simon on 0191 232 8345 or Email jenny.simon@hay-kilner.co.uk with your details.

11,12 MARCH

Expo Ignition 09, NEWheat, a not-for-profit initiative backed by One North East and Rural Development Initiative to encourage businesses onto wood heat – giving free advice - hosts the UK’s first dedicated wood fuel exhibition at the Sage, Gateshead. Tel: 01670 790 444. North East Business Awards, Durham and Wearside final. www.nebusinessawards. co.uk

BUSINESS QUARTER | JANUARY 09

26 MARCH

Adding Value to Your Business, start of a series of breakfast seminars hosted by South Tyneside College, South Shields (8am). Maxine Downey, tel: 0191 427 3679. Maxine.downey@stc.ac.uk.

Managing Stress and Wellbeing in the Workplace, Acas seminar, Newcastle (9.30am). Tel: 08457 383 736. events@acas.org.uk.

North East Business Awards, Tyneside, Northumberland final. www.nebusinessawards.co.uk

NECC South Networking Lunch, The Manor House, West Auckland (11am). information@necc.co.uk

16 APRIL

6 MARCH

19 MARCH

25 MARCH

ICE (NE) lecture, Lt Col Stephen Metcalfe, Rebuilding Iraq, Constantine Lecture Theatre, Teesside University (5.45pm).steve.metcalfe@scottwilson.com

ICE (NE) talk, A19 DBFO-Black Swan Overbridge, Innovation Lecture Theatre, Teesside University (5.45pm). jessica.anderson@imp.co.uk

ICE (NE) talk, Jonathon Portlock (Arup) on Haymarket Metro Station, Central Square, Newcastle (5.45pm). peter.white@arup.com

CECA(NE)/Acas seminar, Resolving Disputes in the Workplace, Durham County Cricket Club, Chester le Street (8am). Vicki Munro, tel: 0191 228 0900. kellceca@ aol.com

7 APRIL

3 MARCH

18 MARCH

24 MARCH

APRIL

25 FEBRUARY

12 MARCH

Graduation Ceremony of Northern chartered accountancy students, Kings Hall, Newcastle University (time tba). marie.rice@icaew.com

RICS North East Renaissance Awards 2009, Civic Centre, Newcastle. Sue Doberman, tel 0191 221 0359. Sdoberman

30 APRIL

North East Business Awards, regional final. www.nebusinessawards.co.uk

30 APRIL

NSCA Accounts and Audit Update, Ramside Hall Hotel, Durham (1.30pm). marie. rice@icaew.com Please check with the contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above e-mail address of any changes or cancellations as soon as they know of them.

KEY:

Acas: Advisory Conciliation and Arbitration Service, CECA (NE): Civil Engineering Contractors Association (North East), HMRC: Her Majesty’s Revenue and Customs, ICE: Institution of Civil Engineers, NSCA: Northern Society of Chartered Accountants, FSB: Federation of Small Business, Tbc: to be confirmed.

Inspired web.

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