BQ North East Issue 05 by We Are UMi

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ISSUE FIVE: APRIL 2009

MITTEN’S ARCTIC Michael Mitten’s Polar challenge HALT THE NOSE DIVE Airports boss Hugh Lang on the need for Government action now

LIVE LONG & PROSPER Minister for the North East Nick Brown’s frank appraisal of the region’s economic landscape

OPENING BAT Durham CCC chief executive David Harker -

bringing world-class innings to the new Riverside

ISSUE FIVE: APRIL 2009: NORTH EAST EDITION

PROBING QUESTIONS

Global market research entrepreneur Lisa Hart - why it’s time to bring the banks to their customers’ account BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

NORTH EAST EDITION

Business Quarter Magazine

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WELCOME

BUSINESS QUARTER: APRIL 09: ISSUE FIVE It’s not often that a Government minister will devote a good couple of hours of his time to a journalist, and it’s a measure both of Minister for the North East Nick Brown’s commitment to the region, and of our own Brian Nicholls’ professional reputation, that the two shared a lengthy and frank interview at Nick’s Westminster office recently. As one of Newcastle’s long-serving MPs and a dogged campaigner for the region, Nick’s appraisal of the North East’s economic landscape is refreshingly forthright, devoid of political spin, and absolutely realistic without being downbeat. He is working hard to support North East business and drive prosperity, while the added influence of the title of Labour Chief Whip allows him in Westminster, ensures his colleagues in Parliament tend to respond when he calls; an advantage, certainly, when he is lobbying on behalf of the region’s business and industry. Nick is one of several strongly driven personalities profiled in this issue of BQ. These include David Harker, chief executive of Durham County Cricket Club; a man committed to securing the Riverside ground’s place as one of the world’s top-flight test match venues. The development the ground requires to achieve this goal is now approved, which is fantastic news for the future propsperity of the North East. Products and expertise that compete on the world stage are crucial also to the commercial creative industries, asserts Tom Harvey - our business lunch partner this month and chief executive of Northern Film and Media. His views are frank, while his commitment to re-building our once-thriving broadcast industry is deeply held. There are many more strong characters profiled on these pages, not least our cover star Lisa Hart, an award-winning market research entrepreneur whose company Acritas

is also competing worldwide. Lisa is also a forthright speaker, and she has more than a thing or two to say about the banks’ relationships with their customers. Meanwhile, we also profile Simon Pearson, a veteran of online business who generously shares the experience of his years at the helm of his eponymous company. There is also a BQ Special Report issued with this edition, which focuses on renewables and the environment and makes fascinating reading for anyone who believes in a greener future for industry. Remember please that we’re available both in print and on the web, so if someone nabs your precious copy of BQ 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, so please keep your feedback coming, along with your ideas for content, which is much appreciated. 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 up to; 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 Debi Coldwell Senior Sales e: debi@room501.co.uk room501 Contract Publishing Ltd, 10 Baird Close, Stephenson Ind Est, Washington, Tyne & Wear NE37 3HL www.room501.co.uk

THE LIFE AND SOUL OF BUSINESS

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BUSINESS QUARTER |APRIL 09

CONTE BUSINESS QUARTER: APRIL 09 INQUIRING MIND

46 EXORCISE THE DEVIL Minister for the NE Nick Brown: driving the prosperity of the region

50 SIMON SAYS...

Features

Simon Pearson on why turnover isn’t the sole indicator of business success

76 BATTING FOR SUCCESS Durham CCC chief exec David Harker on Riverside’s new world-class innings

16 AN INQUIRING MIND Global market research entrepreneur Lisa Hart on why it’s time to bring the banks to their customers’ account

28 HALTING A NOSE DIVE Airport boss Hugh Lang calls the Government to action for airports

36 MITTEN’S ARCTIC Entrepreneur Michael Mitten on leaving his desk in favour of a Polar trek

BUSINESS QUARTER | APRIL 09

82 ON MESSAGE Nigel Vickers; designing displays for some of the UK’s biggest businesses

86 TOMORROW’S WORLD Durham’s new council chief on the county’s brave new world

92 COMFORT FOOD The N Yorks farmer’s ice cream company that grew to be the UK’s biggest

16 BATTING FOR SUCCESS

TENTS 32 AS I SEE IT

Julia Frater: building tourism on Teesside

TUNED IN

54 BUSINESS LUNCH Tom Harvey, CEO of Northern Film and Media, promotes a global outlook

58 WINE Jamie Martin’s teatime tipples

Regulars 6

ON THE RECORD Who’s making the news in Q2/09

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

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

60 FASHION Hugo Boss - uber fashion with that Teutonic touch

66 EQUIPMENT Travelling bags with style and function

54 MARTIN ON WINE

70 MOTORING ‘Hungary‘ for speed, we take Ferrarri’s 599 GTB from London to Budapest

96 EVENTS The best events this coming quarter

98 FRANK TOCK Gripping gossip from our backroom boy

58 BUSINESS QUARTER | APRIL 09

ON THE RECORD

APRIL 09

Marion Bernard the big name in equity investment, Bellway reporting a lift in the new homes market, businesses saving millions on energy waste, and a £2m boost for the digi sector

Cabinate order: Henry Williamson is £4.5m better off

environment by almost 25,800 tonnes. For information, contact Business Link, tel 0845 600 9006, or see www.businesslink.gov.uk/northeast

>> Remould for plastics firm

>> Marion breaks into Top 50

>> Motorway millions for Darlington firm Engineers Henry Williamson of Darlington have won a £4.5m contract with the Highways Agency as part of a major project to ease motorway congestion in the UK. The firm will supply secure cabinets to house sensitive roadside electronic equipment. Its cabinets of aluminium are a key element of the Highways Agency’s Active Traffic Management scheme, being piloted on the M42 in the West Midlands, where they help regulate use of the hard shoulder by vehicles during busy periods and improve traffic flow. The order will help to secure work for 106 workers and could lead to more being taken on.

Marion Bernard, chief executive of venture capital firm NorthStar Equity Investors (NSEI), has been recognised as one of the top 50 key players on the growth company scene. The only choice from the North East, she is also one of just five women listed in the Power Top 50 compiled annually by Business XL to suggest the most influential movers and shakers in private equity.

BUSINESS QUARTER |APRIL 09

>> Green shoots on the rooftops Bellway, the nation’s third largest housebuilder, has been one of the first in its sector to signal a pick-up in reservations, suggesting a possible revival in homebuying.

Sweet talk: Joanne Urwin and Sinead Moloney with cakes they handed out to tempt visitors to their stand

>> Energy savings Companies in the North East have saved £3.7m in two years through advice given by a pioneering team of lean green energy specialists. During recession and at a time of rising energy costs, MAS-NEPA Energy has helped 240 firms through advice on avoiding energy waste from manufacturing processes and guidance on energy costs and bills. They have also, by selective energy procurement, helped slash the amount of potentially harmful CO2 emissions being released into the

Durham-based Hillside Plastics, an injection moulding firm that went into administration with the loss of 45 jobs, has been bought out by its management. It will employ 27 and operate from Meadowfield Industrial Estate as JKL Mouldings Ltd.

>> A fair time for North East business The recent North East Regional Business Fair was so successful that Business Link intends to make it an annual event. More than 2,000 participants were involved in what Alastair MacColl, chief executive of Business Link, called ‘the biggest and best event of its kind’. In all, more than 140 buyers from across the UK and 2,000 businesses from the region came together and generated a lot of business. Joanna Urwin and Sinead Moloney of The Procurement Centre, which helps firms in South East Northumberland with public sector tenders, called the event ‘a great success’. “Most impressive was the scale of it, and the many visitors determined to develop relationships and generate genuine business opportunities,” said Joanna.

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ON THE RECORD >> RDAs check positive England’s nine regional development agencies, including One North East, are giving value for money, a report for the Government by PricewaterhouseCoopers concludes. It estimates that on present performance, the agencies, which have spent £15bn since 1999, could deliver £4.50 in regional economies for every £1 of public money spent. The Business Secretary, Lord Mandelson, says the findings prove that RDAs work effectively. The Conservatives, however, have pledged to scrap them and hand over some of their responsibilities to local authorities.

APRIL 09

private company sell their equity at a premium to the market value. NRG announced it would buy back shares at a cost of £2.72m and the deal went ahead. Wayham Moran, NRG’s finance director, says: “It’s not a good time for small cap companies on the Stock Exchange. Many remain there because they can’t afford to delist. “NRG’s balance sheet is strong. However, using this method enabled us to offer a decent premium to selling shareholders, but still left us as a private company with strong cash balances.”

BUSINESS QUARTER | APRIL 09

The North East’s digital cluster has received £2m more funding which will be distributed through Codeworks Connect, the digital trade association, and Codeworks GameHorizon, the network of video games firms.This allocation from One North East is to grow membership, open trading opportunities and support more than 500 businesses by 2011. GameHorizon hopes the region’s games industry will grow by 30%, developing £5m of business leads, opening up network links with the USA, Europe and Asia, and building on success of its annual GameHorizon conference.

>> Between a rock and a soft place

>> NRG delists with a difference Northern Recruitment Group (NRG), the North East’s largest company of its kind, delisted from the London Stock Exchange after 11 years, using a plc team from law firm Ward Hadaway to save time and money with a different approach. Consultant Emma Sewell says: “This type of transaction is not for everyone, but it fitted NRG’s company profile and shareholder structure very well.” Delisting traditionally, shareholders agree for the company to come off the market then continue to hold their shares in a private company. Or the delisting can go through via a public to private (P2P) transaction. A P2P involves a new company launching a formal offer to buy all equity of the listed company. On completion, the company delists. It needs committed funding, usually from banks or venture capital firms, to finance the offer early on. This, coupled with the numbers of advisers and extent of the application of the Takeover Code, can make deal costs for traditional P2Ps run into millions. In NRG’s case, Ward Hadaway and Charles Stanley Securities used a structure dubbed P2P Lite, in which the company buys shares back from shareholders at a premium to the market then delists. Shareholders no longer wishing shares in a

>> Boost for digital cluster

Two’s company: Photographer Gary Walsh with Jonathan Wright, who helped him win an award

>> Triple triumph Gary Walsh is a triply triumphant photographer of the year. He has pipped hundreds of other UK competitors to take first, second and third places in the Fujifilm Envisage Photography Awards. Gary, 42, who has had a studio in Norton, Stockton, for 10 years, already has more than 50 other top industry awards. “I’ve been told this is the first time ever that a photographer has claimed all three top spots,” he says. A prize of £1,000 also went to Jonathan Wright, who features in the winning image. Jonathan, 17, of Stockton, a student at the local sixth form college, says: “The photograph was part of a silver wedding anniversary present for my parents.” He’s sharing the cash with his sister, who booked the photo shoot.

Paper made from rock instead of wood is likely to be manufactured at Hartlepool by Duraflex, adding three more jobs to the existing workforce of four. Duraflex, set up two years ago, has a customer base of around 50 and expects sales to top £3m this year.

>> More support for bigger companies A £2.4m pilot grant scheme to help more companies has been announced. Regional development agency One North East is testing the Large Company Research and Development Grant to benefit large firms doing commercially-driven research and development into new products and processes with notable business potential. The scheme will complement support already in place for SMEs. Contact Business Link, tel 0845 600 9006, www.businesslink.gov.uk/northeast

>> Two take to the chair Electric van builder Tanfield Group, while shedding jobs at Washington in Tyne and Wear, is jointly setting up a £13.6m transatlantic joint venture to speed its advance in the USA. The new firm will be SEV US (Smith Electric Vehicles US).

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NEWS

APRIL 09

Villa Soft Drinks continues to fizz, Dorin wins an ISO 14001 after two intensive audits, Tyneside’s new eco-park will be up and running by autumn and Kromek is fighting terrorists - it’s all in the news ... >> Rescued pop firm expects sales fizz One of the region’s best-known soft drinks firms has averted closure with investment from regional development agency One North East. Villa Soft Drinks, a quencher of thirsts across the North East for more than 120 years, has been bought from administration by a new company led by Malcolm Slatcher. Villa’s famous name will be retained. An agency investment grant of £132,000 enabled the new owner to buy the Sunderland site and machinery from administrators BDO Stoy Hayward, safeguarding 25 jobs and creating nine more. Ian Williams, director of business and industry at ONE, says: “Villa is well equipped to weather the recession and continue its long history of providing quality soft drinks.” Founded on a fizz, it developed further in 1990 when a borehole sunk in Sunderland helped create the Hadrian brand of bottled water, one of the first companies to produce flavoured water.

>> Kromek’s war on terror A Durham firm’s innovative scanner, upskilling airport security and helping to battle global terrorism and drug smuggling, is netting export orders following launches in the USA and the Middle East. Kromek, whose digital colour imaging is also used in x-rays, demonstrated its new liquid detection bottle scanner at events in Washington - where former Prime Minister Tony Blair was guest speaker - and in Dubai. The scanner identifies and categorises bottled liquids in less than 20 seconds, including liquid explosives. It screens for alcohol and dissolved narcotics in other liquids – all without opening

BUSINESS QUARTER | APRIL 09

bottles or sampling liquids. Kromek has identified key markets via Passport which, through UK Trade & Investment, offers a tailor-made package of support. Nigel Day, Kromek’s commercial director, says: “The scanner will help ease passenger frustration at airports, since it could enable current restrictions on carrying liquids on board to be relaxed. “The system can also be used at sports arenas to detect threat or restricted items and can help border control officers to fight drug smuggling and counterfeit products.”

>> Motoring into the future Despite the current economic downturn, development company Circle Red Properties has bucked the trend and secured a pre-let on its prime North Tyneside car showroom. North East car retailer Alexandra Cars will be bringing a flagship Subaru, Daihatsu and Isuzu dealership to the Billy Mill Roundabout showroom after securing a 10-year lease. The prominent site, close to the Silverlink Retail Park, has recently been refurbished and can accommodate 45 cars. Comprising a showroom, workshop and office facilities, it has been owned by Circle Red for five years and has previously been occupied by Peugeot and Honda.

>> Cambridge pulls ahead Production is climbing at Billingham-based Cambridge Research Biochemicals (CRB) with the purchase of a new chemical synthesiser. CRB, a custom manufacturer of peptides and antibodies for medical research, is spending £100,000 to expand production. A £34,000 grant came from One North East. The company, which supplies both the pharma industry and academic research into disease,

has among its customers Pfizer, GlaxoSmithKline and AstraZeneca. Some 46% of its sales are made overseas. CRB started up in 1980 and nine years later was bought by ICI and relocated north to Teesside and Cheshire. A management buy-out in 2000 brought in the current ownership by commercial director Emily Humphrys and operations director Alison White.

All aboard: Crew of the Port of Tyne’s new pilot cutter Collingwood, whose windows are now protected

>> On the crest of a wave Solar Solve Marine needed no pilot cutter to guide them to an order for five of their anti-glare roller sunscreens – but the South Tyneside firm ended up on one anyway, as the screens were for the wheelhouse of Port of Tyne’s new pilot boat Collingwood. Collingwood was christened earlier by Mrs Collingwood-Cameron, a direct descendent of Lord Admiral Collingwood, heroic son of a Newcastle merchant who became Lord Nelson’s second in charge, taking command at the victorious Battle of Trafalgar on Nelson’s death. Collingwood’s statue, on the riverbank at Tynemouth, now looks down on its namesake. The new 16m aluminium cutter is the UK’s first example of a mainstream aluminium pilot boat. It was designed and built by Mustang Marine at Pembroke Dock in Wales.

APRIL 09

NEWS

>> King Cobra addresses entrepreneurs The peer who gave Britain’s curry eaters Cobra beer will be among the speakers at the sixth annual conference of the Entrepreneurs Forum on May 21. Lord Karan Bilimoria, founder and chairman of Cobra Beer, established the drink 20 years ago. Today, Cobra is drunk in more than 50 countries. The launch of General Bilimoria Wines in 1999 and the later founding of Tandoori Magazine took Karan into other markets, leading to a Fast Track 200 listing. He became a cross-bench life peer in 2006, and the first Parsi in the House of Lords. Also addressing the conference at the Hilton Hotel, Gateshead, will be Martin Lightbody, CEO of Finsbury Food Group and Scottish Entrepreneur of the Year, financial and internet entrepreneur Julie Meyer, CEO of Ariadne Capital and founder of First Tuesday, and serial entrepreneur Matthew Riley, CEO of Daisy Communications.

>> Googled on the rug The Moorland Rug Company at Stanhope in Weardale wins orders all over the country over the internet and now, the Durham-based online marketing specialist Virtuoso, which does the job for Moorland, has been awarded a Google Advertising Professional Qualification; the first company in the county to be so honoured. Virtuoso’s founder and director, Maureen Storey, has previously worked on contract for Business Link as an e-commerce advisor. Moorland Rugs’ Judith Sales says: “Our bespoke design service has proved to be our niche in a highly competitive online market.”

>> Dorin awarded ISO 14001 A family-run construction company has achieved the highest international standard in environmental practices. Following two intensive audits, Kingston Park-based Dorin Construction, which employs 150 people, has become one of the first construction contractors of its size in the

Growing entrepreneurs: (l-r) Simon Scotchbrook of Q Net Group Holdings, Joo-Lee Stock of Lindy Jazz, Jonathan Wells of Guroo, and Derek Curtis of Bond Solutions

>> Finance Tree provides know-how An IT expert, a business software specialist, an online educator and a dance teacher are among the latest graduates of Finance Tree’s Growth Programme. The course, supported by One North East, aims to double sales for high fliers in 12 months. Peter Hiscocks, director and co-founder of Finance Tree, says: “Many businesses start with a flurry of enthusiasm then seem to hit the glass ceiling. Going beyond is difficult, but this programme helps business owners to do just that.” The latest Growth graduates are: Joo-Lee Stock of Durham-based dance company Lindy Jazz. It helps businesses, schools and individuals to express creativity and boost confidence through dance and music. Jonathan Wells, of Guroo in Houghton-le-Spring. Guroo supports learning providers with online teaching resources for students aged 14-19 studying functional skills and diplomas. Derek Curtis of Sunderland business software firm Bond Solutions, to help clients achieve more sales, retain customers and gain efficiency. Simon Scotchbrook, of Q Net Group Holdings, an IT company in Stockton already serving customers across the UK. Contact Marie Potts, tel 0191 230 6370, www.financeandbusiness.biz

region to achieve the ISO 14001 award. The company - which specialises in care homes, rehabilitation centres, school and hospital refurbishments, social housing and commercial developments - has implemented an environmental management system involving every aspect of the company’s activities which impact the environment. It comes as clients are increasingly requiring companies to demonstrate, when tendering for new projects and during the implementation of schemes, their commitment to sustainable practices. Contracts and environmental manager Paul O’Brien said: “It took a real team effort to gain accreditation. It required significant investment in respect of management and staff time,

together with a substantial financial investment, to achieve the standard. “Many clients, such as local authorities and health authorities, are demanding that we now have an environmental qualification that means you have policies in place to safeguard the environment. This is the highest you can achieve.” In his report on Dorin, ISO 14001 assessor Steve Burt said: “A very well implemented system has been assessed. It has been particularly well designed, with excellent evidence of implementation and understanding of requirements at site level. “The site managers who were assessed, and in particular the management representative, are to be commended.”

BUSINESS QUARTER |APRIL 09

NEWS

APRIL 09

>> Small businesses fight for just dues

The Federation of Small Businesses (FSB) is working on the Bill in an effort to introduce in England what is already automatic in Wales.

Businesses in the North East want tax relief they are eligible for to be made automatic – potentially saving them >> New trees of life in millions each year. timber trade More than half of small businesses miss New trees of life are springing up in the out on claiming back up to £1,200 from North East’s timber sector, with recruitment their business rates because they are flourishing for one firm while seeds planted by unaware they are entitled to do so. another take effect. Now they want the region’s MPs to support A&J Scott, one of the UK’s largest homea Private Member’s Bill which would see grown sawmills, has 15 new employees and business rate relief granted automatically more may be taken on with rising orders at for small businesses. Wooperton, Northumberland. Business rates are the third largest cost to And at Jarrow, MH Southern has bought small firms in the region, after salaries and rival Robert Duncan Timber from rent. Yet many businesses remain unaware administration, saving 44 jobs and creating a of relief entitlement because many local potential £16m turnover. authorities, they say, do not publicise it. 7668 BENE Journal 180x120-Dog Col:Business Link 09/03/2009 15:18 1 with help A&J Scott is hacking back Page wastage

from experts at the regional manufacturing task force MAS-Nepa. Set-up time on one of the saws has been reduced from over 700 seconds to 140 seconds to suggest savings of more than £39,000 a year. Further efficiencies may be achieved on machines across the shopfloor. Established in 1960, A&J Scott employs more than 100 people. It is one of the country’s leading softwood saw-millers and hardwood round timber merchants. Finance director Rosemary Bertram says: “We are extending hours of work and employees have embraced lean manufacturing practices.” Meanwhile, MH Southern has used credit from Lloyds TSB to buy Robert Duncan Timber of Gateshead, noted for its supply of wood used to build The Alnwick Garden treehouse. MH Southern, established in 1913, is a fourth generation family firm which, besides its Jarrow head office, has a site at Berwick.

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BUSINESS QUARTER | APRIL 09

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APRIL 09

running as the firm nears its global launch of a revolutionary low-energy light bulb. The bulb could last 30 times longer than conventional bulbs, is expected to cut UK energy usage by 8% and eventually to end the requirement for up to 40 power stations. Thorn’s new factory can accommodate 700 workers – 300 more than before - a lighting academy for training, and, at NETPark, research and programme facilities. The company, owned by Zumtobel Group of Austria, has been in Spennymoor since lightbulb manufacturer Jules Thorn founded it in 1952. It has committed to the region for 21 years more.

Bronze Age boost: Geoff Simpson and Jane Siddle, investment executive at Evolve Finance

>> Bronze Age revisited A new architectural design for a farm building without walls is enabling a building and materials supply firm to diversify. Simpson & Allinson (S&A) of Barnard Castle is selling its Roundhouse buildings across the country, and interest is growing in Germany and Denmark. Theabsence of wall ensures stress-free movement for animals beneath, and air flows easily through. The 30-year-old firm is using £150,000 of investment from Evolve Finance, an arm of NEL Fund Managers. The Roundhouse, built of galvanised steel to reduce maintenance and preserve it, has a weatherproof roof fashioned from a single piece of PVC-coated polyester, supported by a central steel kingpin with roof trusses and supports. S&A worked with engineers Arup and Newcastle University to create a model in 2006. But managing director Geoff Simpson says: “The concept dates back to the Bronze Age.”

>> Accountant Andrew tries his best Andrew Fenby, from Newcastle office of PricewaterhouseCoopers LLP (PwC) achieved the stuff of dreams when he sprinted over the line during his Newcastle Falcons debut, and helped them to an invaluable bonus point victory away at Sale Sharks in rugby’s Guinness Premiership. Andrew’s had it harder than most to get on in the professional game. He explains: “After university, it took me a year to pass exams and become a fully chartered accountant. And taking the exams as well as working restricted my time for rugby. Luckily, PwC are amazing about letting me fit in my rugby training.” He hopes to turn professional for Falcons next season, still keeping at least one foot in accountancy. He’s discussing a career break

BUSINESS QUARTER | APRIL 09

with PwC, which is supportive. Paul Woolston, senior partner at Newcastle, explains: “Everyone at the firm is delighted by Andrew’s stellar rise in rugby. He’s a well grounded young man, a great ambassador for the firm, and a great example of how PwC supports its staff in achieving their ambitions outside and inside work.” Once Andrew’s playing days are over, he’d like to resume full-time accountancy and try for an overseas secondment with his firm.

>> £28m boost helps Thorn see the light Thorn Lighting’s new £28m site development at Spennymoor and NETPark in Sedgefield is now up and

>> Hello, it’s Executel here – and Bluebell Against fierce competition within the region, Gateshead-based Executel has won an £85,000 contract to provide telephony, data networks, lines and calls at the new East Durham College. The £85m college – previously run on two campuses in Peterlee and a third near Durham City centre – has most of its operations now centralised at Peterlee. Executel, founded in 1997, has 43 staff. Meanwhile, in a separate development, the Newcastle-based Bluebell Telecom is building on an initial £650,000 investment. It got this from regional fund management firm NEL Fund Managers, as part of a £2m investment package and acquired two rival telecoms firms in Yorkshire and Scotland. Bluebell, having dovetailed these into its operations, is now benefiting from a second £200,000 investment to support job creation.

>> High-tech pitch for investors Nine high-tech firms among 30 hope for a share of up to £9m on offer at a North East investment conference. Venture capitalists from around the country will be at the Secure Futures Investment Conference in Sedgefield to see pitches from North East firms producing

APRIL 09

answers to pressing security problems. Connect North East, which is running the conference through the Bridge Club at Hardwick Hall Hotel on April 28, has invited 30 firms to pitch for between £250,000 and £1m of funding each. Nine are being selected to go before the investors on the day. Caroline Theobald of the Bridge Club says: “There may be a recession, but there is always the money around to invest in bright ideas.”

>> More girls take up arms More girls are planning careers in uniformed services such as the military forces, the police, the fire service and the security sector. City of Sunderland College, where students aged over 16 can earn a BTEC national

Bill Heaney Car Body Centre

diploma in preparation for uniformed public services, says more girls are keen to learn about the services to join up full-time. Dave Newby, course team leader, says: “It reflects the changing make-up of the uniformed services.”

Voice power: Laura Spicer

>> In fine voice Voice expert Laura Spicer - coach to international business leaders, TV and sports personalities including Olympic

‘‘

Our team is highly professional and very experienced and with a new home like this, customers can be more confident than ever about the quality service they will receive.

’’

Ron Gladstone, Director Bill Heaney Car Body Centre

Gold medallist James Cracknell - is set to inject a powerful weapon into the regional economy as she magnifies voices within the business community. The Harley Street guru works with TV presenters, actors, speakers, blue chip companies including NatWest, KPMG and business leaders interested in raising their vocal game. Laura, whose mother was born and brought up in Whitley Bay, is also no stranger to the nuances of the regional dialect. Laura’s work boosts business performance and she recently worked with one company whose share price rose after she trained its CEO and FD. She is in the North East in July to present one-day Voice Power training on behalf of the Northumberland-based Managing Excellence Group. See www.the-me-group.com

Bill Heaney has moved! A one acre site in a prime North Tyneside location will become the new home in February 2009 for the 35 year old North East family business - Bill Heaney Car Body Centre. This establishes them as the longest serving company in the Porsche Approved Body Repairer Network. Following a total investment of £1.5 million in the move, the centre, also approved by BMW, will include a handover bay, drive through spray booths and will allow for more efficient systems for their specialist trained staff, all unique to the North East. Most importantly, customers have a legal right to choose their vehicle repairer, despite Insurance Company recommendations. Bill Heaney have a brand new exclusive consultation area where they can offer personalised vehicle estimates and insurance claim assistance.

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NEWS

BUSINESS QUARTER |APRIL 09

ENTREPRENEUR

APRIL 09

BANKING ON A MIRROR IMAGE

Lawyers and accountants like to know how they are seen by their clients, but what about the banks? Lisa Hart, chief executive of market researcher Acritas and an award-winning entrepreneurial talent, tells Brian Nicholls they might benefit from some detailed customer feedback

Brand perception may not, even now, top our harassed bankers’ agendas. Maybe it should. Which do we see as deserving our custom these days, and which need to prove their house is in order? The present banking debacle probably has many retail customers in a fog. Even in business, there is confusion over which banks are providing a proper service, rather than merely lip service. Lisa Hart, at 35 the North East’s Emerging Talent of the Year – a title bestowed by fellow entrepreneurs in the region – is planning through her company Acritas a study of stakeholders’ attitudes to their banks. Some banks are spending, lavishly, money we understood was scarce, to convince us they are now genies and we the Aladdins – be it a mortgage, a release of capital for retirement, or even an engagement ring that’s the rub. Isn’t that a ‘horse bolts, stable door closes’ syndrome, or at least a case of putting the cart first? Shouldn’t they listen to what we actually need now? What about, for example, a few bob to buy shoes for the kids? Lisa Hart’s Acritas is a market research specialist with prominent clients in law (which is its main revenue stream), property, investment management, insurance and other financial services. "We talk to people of influence and challenge their assumptions,” she explains, “not from our experience, but from talking to others who can advise and analyse.”

BUSINESS QUARTER | APRIL 09

Just what banks need, surely? “I think on the consumer side they are probably finding out public attitudes and reactions already,” Lisa says. “In business to business, however, they tend to be slower at getting feedback. “Yet it’s a moving feast every week just now, the way the market perceives their brands, because there’s something different happening every week. So we’re looking to develop ongoing tracking to let them see the changing perceptions and different reactions to their various campaigns. “Now’s the first time in most of our working histories that everything has changed. The way people buy has changed. The emphasis is on different criteria. And what people think about major institutions has changed dramatically. A lot of trust has now gone. This is a time, more than ever before, in which banks need to know what their stakeholders think, and to react accordingly.” Acritas is a young firm based in Jesmond, Newcastle, with activities in London and New York. It acknowledges about 10 major rivals, some of them in the US, which include both big research companies and other specialists like itself. In its seven years, it has worked with 100 of the world’s largest companies in law, accountancy and financial services. These include Lloyd’s of London, from which significant revenue comes; BDO Stoy Hayward, the world’s fifth largest accountancy network with more than 1,000 offices in 100 >>

Lisa Hart in person Birthplace: Newcastle. Education: Ponteland High School (eight GCSEs and five A-levels), the University of Manchester Institute of Science and Technology, 1991-1994 (BSc mathematics and management science). Career: 1994: Market analyst for small market research agency in Buckinghamshire, working for large blue chip accounts. Later research manager at the same agency. 1998: Business analysis manager for London law firm Denton Wilde Sapte, implementing a research-based business planning framework. 2001: Set up Gracechurch Consulting and Research in partnership. 2002: Set up Acritas. She also spent some time as a business analyst with Sage Group on her return to the North East from London. Personal: Lisa’s partner, Charles Shepherd, is in the Shepherd Offshore family business - “never a dull moment between us... always lots of stress flying around at home!” They have a four-year-old daughter, Annabel, and another daughter expected in June.

APRIL 09

ENTREPRENEUR

BUSINESS QUARTER |APRIL 09

ENTREPRENEUR countries; and national insurer Hiscox, whose motto is “If there’s a hoop we’ll jump through it ...” Since its start-up, Acritas staff, which now number 30, have interviewed about 30,000 business leaders, 10,000 of them in the past 18 months. Why so quickly its move into

Stress? Risk? You get used to it Lisa was steeped in the family business before striking out for herself. Her parents and brother run Hart Door Systems, a Newcastle maker of industrial doors which was formerly her grandfather’s business. “You’d think a family influence like that would put me off wanting to be an entrepreneur,” she says, “but I think if you grow up in that atmosphere you become used to it. You’re used to living in stressful environment. You get drive, energy and ambition within you from the start. You don’t have to do your own thing, but once you’re used to handling risks day to day, the challenge to go it alone is strong.” The BMW with personalised number plates stands outside the office now, so what follows? “I think I’ll always want to work. Perhaps at some point, to achieve our goal for Acritas and give it that reach across the world, we may have to become part of a big organisation, but we are also happy going along as we are on our own.” A US organisation made an approach last year. “But as we progressed talks a financial meltdown came, so we put that one on hold. Obviously, valuations of companies in the present economic climate have reduced dramatically.” So what advice for other young people hankering for their own business? “Be prepared for it to take over your life. Never do it simply for lifestyle because it won’t work. Be realistic about returns and how long it will take to achieve the ultimate figure. And expect lots of pain!”

BUSINESS QUARTER | APRIL 09

APRIL 09

London and New York? “In professional financial services, it’s our vision to be the world-leading agency, and to do that we must work for the world’s best organisations. London and New York tend to be their main bases. We’ve always had London clients.” Acritas (‘sharpness’ in Latin) has relatively few wholly North East clients, though it does serve investment managers and bankers Brewin Dolphin and law firm Dickinson Dees. Judges who chose Lisa for her award from the Entrepreneurs Forum did so after learning that although all sales are sealed in London, most of the work comes to the North East and is exported from here. Lisa says: “Many marketing services-type agencies tend to thrive on public sector work and that type of thing. We’ve gone out of the region to be very much international. It’s easier to do that when you specialise as we do.” Under Lisa as chief executive, Acritas makes two broad offerings. There is a bespoke service for clients wanting specific research for action, and a second, product approach; Acritas completing major research programmes of its own within specific sectors and selling the results on to relevant organisations. One of these products is Sharp Legal Brands, a major study for law firms now in its third year, and involving 3,000 interviews annually. “Firms need information, self-protection, to know where to be active and in what sectors to survive,” Lisa has said previously. Bankers might take note: “There has been quite a transformation this year in how legal buyers are going about their procurement. Under immense cost pressure, they want more value, so they’re cutting budgets, reducing the number of law firms they work with, trying to get better deals; generally seeking more added value and being more demanding. They can do these things because there isn’t as much work around.” Banks may also have to upgrade their customer service to win or retain loyalties. This is supposition, however; it may require Acritas to indicate the true picture, and one benefit to the banks of a sector study is that the cost involved would be shared. “It wouldn’t meet every individual need because they haven’t designed it individually, but it would give a lot of value for less cost,”

says Lisa. “So we may do our own analysis for the banking market then sell it to them.” Would bankers blanch at the findings; does that happen with clients? “Often, we have to tell them what they don’t want to hear,” she says. “But better to know than not. At least they can do something about it.” Why do firms with bright staff need outsiders to analyse what others think about them? “Because their skills lie in their own profession. To do market research effectively you need an independent party capable of doing it properly. It’s our research, our expertise, and our ability to extract views which they are buying. Also, we have the deep understanding of their sectors necessary. Many firms in a sector can be very similar. You have to understand the nuances of each, know how they differ and the issues they face. “Our value lies in us being used to dealing with highly placed stakeholders. We interview chief executives, finance directors and seniors who must be handled very differently from the way in which you would question the consumer on the street. “You need a very different type of interviewer, and you need to prep very differently. Business to business isn’t quite as easy as working in consumer goods. That has very standard methodologies. When relationships take over, it gets cloudier.” Acritas interviews with high-value stakeholders can comprise 60 minutes of face-to-face input. “You build a rapport and trust with that person, resulting in views which are very difficult to get over the phone or by email,” Lisa explains. “It’s hard persuading people to give an hour, though it’s generally okay if they are a client of our client as they have an interest in delivering feedback because it will affect them directly.” What’s the most common misapprehension firms have about their brands? “Often, that they’re better known than they actually are, particularly if they are in a mature and crowded market.” Anything can come out of the studies, Lisa points out; human resource issues, finance, systems, IT, the general culture, and Acritas can identify partners for clients to come in and help address the issues. And with maybe 500 interviews required for one client, how does

APRIL 09

everyone stay motivated? “People attracted to research are quite inquisitive types, so it’s interesting for them, especially as they’re working with different clients. “You learn from every programme. I don’t think there has ever been a project where we haven’t learnt something. It’s an attractive occupation if you like asking questions and working with numbers.” US operations, after two good years, slowed last year because economic pressures hit the markets there sooner. “But it is starting to pick up again, so I’m hoping that side will grow,” she says. “Our whole sector has been under a lot of pressure.” She has set up a business in Maidenhead with a business partner, covering the consumer side. It is run by the partner, and Lisa takes a non-executive role. There will not be a move into consumer marketing at Acritas, where the ultimate goal is to be a leader

ENTREPRENEUR

Our value lies in us being used to dealing with highly placed stakeholders. We interview chief executives, finance directors and seniors who must be handled very differently from how you question the consumer on the street worldwide in the professional and financial fields. “I think we’re nearly there on the legal side,” she says. “On the product side, we’re now in 17 countries, having just done the UAE, Qatar, Saudi Arabia, Bahrain and Oman, so we’re expanding to more countries and more industry sectors every year. We started with the legal programme, looking for

law firms worldwide. Now we’re looking at two more sectors.” Research, she maintains, is at its most powerful in helping to shape and define business strategies and in inspiring confidence that the correct decisions are being made using intelligent extraction, analysis and interpretation of the questions asked. n

Are you leading in a changing world? We cannot predict the future, but we can plan for it. At PricewaterhouseCoopers we provide leadership in the business community and public sector; leading the debates that shape both business and society. 89 Sandyford Road Newcastle upon Tyne NE1 8HW 0191 232 8493 pwc.co.uk/newcastle

© 2009 PricewaterhouseCoopers LLP. All rights reserved. ‘PricewaterhouseCoopers’ refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

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BUSINESS QUARTER |APRIL 09

COMMERCIAL PROPERTY

APRIL 09

The region’s commercial property sector remains vibrant, with news this quarter including a £180m office development for Newcastle and further regeneration for Gateshead >> Green looks bright for buildings The development of environmentally friendly new buildings has slowed during the credit crunch, but is predicted to return long term. David Jackson, Teesside agency director for property consultants Sanderson Weatherall believes properties with green facilities including rain water harvesting, low energy offices and showers to encourage people to cycle or walk to work - are beyond the financial reach of many businesses just now. However, he said: “I don’t think it’s a permanent step down. Once the economy picks up, which it will do, the strong environmental focus that has been a factor in estate for some years now will return – probably even stronger.” But he thinks major new legislation will be needed beyond the Government’s commitment to an 80% reduction on 1990 levels of greenhouse gas emission by 2050. The take-up of industrial and distribution space of all kinds across the North East rose by 128% last year. Large deals included EDS’s acquisition of 302,027sq ft at Wynyard and 130,000sq ft by Cumbrian Seafoods at Foxcover Industrial Estate, Seaham. National property consultants Lambert Smith Hampton expect demand to be down this year. Find out more at www.lsh.co.uk

>> £180m offices will go ahead More than £180m is being invested in England’s biggest office development, despite the hostile economy. The developer of Quorum Business Park in Newcastle has pledged to complete the 1m sq ft scheme by early 2012. Work is now underway on the new phase, Quorum Development Partners having

BUSINESS QUARTER | APRIL 09

secured the necessary funding just before the banking crisis hit. With funding for the entire development secured, Quorum will be bringing eight new high quality buildings - totalling 450,000 sq ft - out of the ground in the next three years. Enterprise Zone benefits available including five years rent free - mean the level of financial incentives there go far beyond what’s available elsewhere in the UK.

>> Facelifts planned for Gateshead Ian Darby Partnership (IDP) is to deliver plans for redevelopment of a major brownfield site in Gateshead. The nine hectare former freight depot site, derelict for some 20 years, is one of 19 sites chosen for commercial and housing development under a multi-million pound regeneration.

>> Taste of Italy for Whitley Bay The New Royal Hotel in Whitley Bay has re-opened having been refurbished by its new owner Tavistock Leisure. Tavistock, which runs four other sites across the North East, bought the venue at East Parade after it fell into administration earlier this year. Now more than £1m has gone into modernising the hotel, including its bar and restaurant, Tavistock Italia, which will have 80 covers. Around £100,000 has been spent to transform the hotel’s former nightclub into one of Tavistock’s signature Pearl Bars, which already feature in Newcastle and Hartlepool. Facilities exist to provide pool tables, sports

on a big screen and regular live music including band performances and DJ sets. The 40 bedrooms are being upgraded to the same standard as Tavistock-owned hotels in Sunderland, Middlesbrough and Hartlepool. Phil Crowe, marketing manager at Tavistock Leisure, says: “We are maximising the hotel’s potential for visitors and the town’s residents. “The New Royal will hopefully become a Best Western hotel, like our Roker Hotel in Sunderland, The Grand in Hartlepool and The Best Western Middlesbrough.”

Short distance information: Not Memphis, Tennessee, but Memphis, Darlington

>> Hat trick for Memphis Merits of the Memphis building at Darlington business park Lingfield Point have been recognised with a hat-trick of award nominations. Home to the Student Loans Company, it has been shortlisted in the British Council for Offices (BCO) refurbished/recycled workplace category. Memphis also gained a double nomination in the RICS Renaissance Awards, in both the commercial and regeneration categories. It is a low-energy office building with full-height glazed façade. It was originally the ‘balling department’ of wool manufacturer Paton and Baldwins. Wool was wound there at the end of the production process. Lingfield Point owner Marchday has, over 10 years, invested more than £35m to bring about the business park.

APRIL 09

COMPANY PROFILE

Growing indications that household energy prices are set to soar have been met with a declaration by one North East businessman that he can lower rural homeowners’ bills by up to 70%

DESIGN INITIATIVE HELPS BUSINESS TO FIND THE NATURAL SOLUTION It was while running a traditional central heating business, which continues to thrive, that Natural Warmth MD Steve Heslop noticed an increase in enquiries for low-carbon heating and decided to set up Natural Warmth; a new company dedicated to sourcing environmentally friendly alternative heating methods in rural communities. “This type of heating uses less of our dwindling energy resources and we guarantee that customers can expect to see a 50-70% decrease in their bills,” says Steve, who, as part of the development of Natural Warmth, embarked on a Generate

project - part of Designing Demand; a national Design Council initiative to support businesses in using design to improve performance. “Designing Demand is unlike any business initiative I have come across in more than 10 years,” says Steve. “It helped me to define my business, and as a direct result of the project we received £120,000-worth of orders in our first six weeks.” Working with an experienced design associate from a Design Council-approved roster, the Generate project has enabled Steve to establish his company brand and look at how the services

provided could set the business apart from competitors. He is now looking towards a £1m turnover and recruiting four new staff during Natural Warmth’s first year. He has also acquired new business premises which house a working carbon heat pump. “The pump is the best explanation of what we do, and will actively demonstrate to our customers how carbon heating operates. It will bring the customer to us in the first instance rather than vice versa, and give them a real insight into the services we provide,” he says.

“Designing Demand not only helped us heat homes, but also dealt with the hot topic of renewable energy. “It has really helped us to define our business, and as a direct result of the project we received £120,000 worth of orders in the first six weeks after launching.” Steve Heslop, Natural Warmth – Darlington

To find out more about Designing Demand or to register simply call: Sarah Belton on

0191 244 4008 or email: s.belton@entrust.co.uk or visit: www.designingdemand.org.uk

BUSINESS QUARTER |APRIL 09

COMMERCIAL PROPERTY

APRIL 09

>> Gateshead’s loss, Sunderland’s gain Npower is relocating its 900 staff in Newcastle to unoccupied £60m offices that were to have housed a major Northern Rock operation. The decision was taken after developer Terrace Hill postponed work on a £300m office development at Gateshead until market conditions improve. Npower had been planning to switch the staff to the Gateshead location at the Baltic Business Quarter. The energy provider’s move instead to Rainton Bridge, near Sunderland, represents the region’s biggest office deal for more than a decade - and the biggest office deal in the UK for 18 months. Npower is vacating Carliol House in Newcastle, where its lease expires next year. Carliol House, which is architecturually listed, is widely expected to be converted into a top-name department store. Terrace Hill, which is partnering Gateshead Council on the 50-acre Baltic development, says it is confident of the 10-year project’s eventual success. The quarter is already home to Gateshead College and the Open University, and planning permission has been given for the £13m Design Centre North there.

Warm reception: Drummond Central managing director Julie Drummond in the reception of their premises at Number 70

>> Business park changes hands Watermark and Metro Riverside Business Park near the MetroCentre at Gateshead has changed hands for £20.25m. Norfolk-based Morston Assets, backed by Kwik Fit founder Sir Tom Farmer, has bought the office and industrial location from Aviva Investors’ Property Trust.

>> Creative spirit prevails A listed Victorian property is being turned into flexible incubator units for creative businesses in Newcastle. Advertising agency Drummond Central is converting all four floors of a 2,800sq ft former terraced house at 68 Jesmond Road West. Businesses can take the space on now or have it created on their behalf. The company recently renovated and moved its 14-strong team into doublefronted offices next door. Managing director Julie Drummond says: “We want to encourage relationships between businesses and provide an inspirational working environment.”

>> The relocating process The National Skills Academy for Process Industries, launched last year, has chosen Morton Palms Business Park in Darlington for its head office after outgrowing its incubator space at Teesside University.

BUSINESS QUARTER | APRIL 09

Mandale Group, for which LSH is acting as property consultant, is developing both parks. Commercial manager Stephen Rose says: “Belmont is a flagship project for our company.” Other Mandale instructions LSH has secured include the old JT Dove premises in Stockton (40,000sq ft), Mandale’s own headquarters in Stockton (13,273sq ft) and a cafe at Hartlepool Marina. Stewart Thomson, head of agency at LSH’s Newcastle office, adds: “LSH is delighted to have been awarded these significant instructions and believe they reflect our collective experience in the office and industrial lettings arena across the North East commercial property market.”

>> Flexible lets for young entrepreneurs New business space is available at Derwentside with the opening of Tanfield Lea Business Centre. The £6m centre offers 40,000sq ft of office and workshops in a three-storey building near Stanley. Flexible letting there is expected to attract young entrepreneurs.

>> Two business parks in the eye Despite the current challenging economic climate, a string of new instructions involving more than 940,000 sq ft - are reported across the North East in defiance of the challenging economy. Lambert Smith Hampton (LSH) is marketing two of the region’s newest business parks Portrack Interchange in Stockton and Mandale in Durham. These offer almost 900,000sq ft of business space and will support up to 9,000 jobs. Mandale, on Belmont Industrial Estate, offers 350,000sq ft of flexible office space, with bespoke units from 220sq ft upwards. The site is near the A1(M) and Durham City. Prominently placed by the A19, Portrack Interchange is a 34-acre site, offering 300,000sq ft of offices and 240,000sq ft of warehousing. The first office premises now available, Cheltenham House, offers about 13,300sq ft of Grade A accommodation.

Up beat: Co-op supermarkets can bang on about their Drum

>> New centre for supermarkets Co-op supermarkets have a new £14m distribution centre at Drum Industrial Estate in Chester-le-Street The 271,000sq ft unit by Gladman Developments of Cheshire has been described as the region’s largest industrial pre-let for 10 years.

A4 single page landscape © 2009 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.

Be better informed In these turbulent times, how solid is your business? Say a main supplier collapses. Or a major client. Are your eyes open to every eventuality? Are you prepared for the unexpected? KPMG is here to help you do this – with the experience to understand the potential risks your business faces, and the specialist skills to help you prepare for them. To find out more, visit kpmg.com/succeeding Mick Thompson Office Senior Partner Mick.r.thompson@kpmg.co.uk 0191 401 3765

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COMMERCIAL PROPERTY >> Hilton likes the look of Wearside Hilton Hotels is to open a hotel in the upper storeys of Joplings department store in Sunderland city centre. There is space for a 120-bedroom operation above the ground-floor retail space now run by Vergo Retail of Liverpool. Sunderland Turton of Blackburn owns the property, which was once a large department store. Meanwhile, Vision Development Group of Gateshead has planning permission for a 60-bedroom hotel, apartment and shopping block on High Street West in Sunderland. Reid Jubb Brown Architects are designing the five-storey building to replace a furniture business there. In Newcastle, plans are also going ahead for a boutique hotel in a Grade II listed building behind Newcastle Central Station. The four-star, 10-suite hotel will be in the 18th Century Friar House in Clavering Place. A new company, S2 Hotels, is behind the £2.5m development in which solicitors Watson Burton are advisers.

>> Hotel to care home The former Springfield Hotel in Low Fell, Gateshead is set to become a Helen McArdle care home, subject to planning approval. Standard Way Properties made the purchase and the home could be running next year. The 61-room hotel went into receivership last October and was put on the market in January.

>> Metro prepares for its upgrade Tyne and Wear Metro has appointed GVA Grimley and solicitors Mincoff Jacksons to advise on property and planning for the next three years. This is the first time Metro, which is owned and managed by Nexus, has chosen two separate teams for this major contract. The appointees will advise on new leases and lease renewals, confidentiality agreements, surrenders, car park licences, and other specific matters.

BUSINESS QUARTER | APRIL 09

APRIL 09

Looking ahead: How a business development beside the Scotch Corner Hotel might look

>> Business influx planned for Scotch Corner Artists have been at work to show how Scotch Corner could look with a £20m-plus influx of business development being proposed. Buccleuch Properties, in reflecting its intention, says the development would bear out its wish to tastefully integrate the local countryside with the quality of design. The site is beside the landmark Scotch Corner Hotel on the junction of the A1 and the A66, south of Darlington. And the aim, in an area long designated for development, is to provide a business park and logistics zone. Plans are likely to go before a planning committee in June. Richmondshire District Council has already passed plans, approved by the Highways Agency, for a new road layout to allow access. Key features include: • 28 new office units for local business. • A new local road system and infrastructure system. • Better access to broadband and communications infrastructure. • A logistics unit which could encourage spin-off businesses. Sandy Smith, development director at Buccleuch, says: “The country may be in recession, but we are ready to invest to open up the site and bring business and job opportunities to this area. “We truly believe we can create something to be proud of and really make a difference to the area. We have a history of stewardship of sensitive environmental sites, and solid experience in managing the countryside.” Board members of the Edinburgh-based group include the Duke and Duchess of Buccleuch and Queensberry. The plan, if it goes ahead, will also offer construction jobs.

The contract also includes general property and planning advice. Andrew Lynch from Metro said: “This an exciting time for the Metro. The property and planning contract runs until 2012 during which time phase two of Nexus’s £300m Metro reinvigoration project will get underway, to upgrade and improve infrastructure and rolling stock.”

>> Glory be, an opportunity A former Salvation Army church is on the market in Newcastle. The building at 146 Westgate Road dates back to the 1880s and agent Sanderson Weatherall says it offers versatile space for an occupier, or a development opportunity in the city.

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COMPANY PROFILE

APRIL 09

Newcastle University provides practical help for North East organisations

BUSINESS OF ENGAGEMENT

N May 2008, Professor Paul Younger was appointed to the newly created position of Pro-Vice-Chancellor for Engagement at Newcastle University. The creation of this post signals that the University is serious in its intentions to interact, lead and support businesses, organisations and communities in the region and beyond. Professor Younger acknowledges that historically civic need gave rise to universities in the UK, yet somewhere in their development, they became dissociated from society in general and the cities in which they were based. Paul sees his portfolio of responsibility as one that will fundamentally change this. His goal is for Newcastle University to emulate universities in Latin America, where Paul believes some of the most inspiring examples of strategic institutional engagement can be found. He explains: “There are major engagement projects in most Latin American countries. Universities go to communities in need and help them develop economically, socially and culturally: the sort of inclusivity agenda that this country has only just woken up to in the last decade.” Paul is quick to acknowledge that there is much greater absolute poverty in Latin America than here, however as he points out: “The key point about aspiration raising is as relevant here as it is there, especially in this region where we have the lowest aspirations for higher education in the UK.” Does this approach to education mean he sees his portfolio of responsibility driving the University to participate more fully in and across society? He comments: “My view of the University is that it is a learning community and I’d like to blur the boundaries between the University and society and see just how far you can extend this concept of a learning community outwards”. And Professor Younger is serious in his intentions to offer practical support. In January 2009, the University launched a ten-step plan to help the region’s businesses deal with economic uncertainty. Part of this plan includes a voucher

BUSINESS QUARTER | APRIL 09

Enhancing personal effectiveness and resilience for managers, directors and owners Managing people through redundancy The Dos and Don’ts of HRM in an Economic Downturn Marketing and communications strategies for growth and improvement Increasing efficiency through effective performance management Coping with stress in the current climate Building high performance teams Building productive teams Keeping the workforce motivated

Professor Paul Younger, Pro-Vice-Chancellor for Engagement at Newcastle University

UNIVERSITIES GO TO COMMUNITIES IN NEED AND HELP THEM DEVELOP ECONOMICALLY, SOCIALLY AND CULTURALLY scheme where small to medium-sized businesses in the North East can apply for a voucher up to the value of £5,000 to use against training or specialist advice from the University. As part of this agenda, Newcastle University Business School is hosting an event on the 28th April for all SMEs (in the region), to find out how they can best benefit from the voucher scheme. It is an opportunity for regional employers to engage in a range of services including postgraduate study, executive education, tailored consultancy and knowledge transfer partnership (KTP). Examples of the types of activity that an organisation might find particularly beneficial particularly in the current challenging economic climate - include: Coping strategies for ‘Weathering the Storm’ Leading and managing change

To find out how the business vouchers scheme can benefit your organisation and to learn more about the work of Newcastle University Business School, come along to our evening event on Tuesday 28th April from 5:45-8:00pm at Newcastle University Business School, Citygate. To register your interest and to reserve a place, please contact Juli Campey on juli.campey@ncl.ac.uk or by phone on 0191 243 0824 For an informal conversation about the University’s Business Voucher Scheme and your organisation’s eligibility, contact Kate Morris, Business Development Manager, Faculty of Humanities and Social Sciences at Newcastle University, tel 0191 222 5823 or email k.morris@ncl.ac.uk. All general enquiries about the University’s engagement activities are also most welcome.

Are you a regional SME? Do you want to know more about Newcastle Universityâ&#x20AC;&#x2122;s ÂŁ5,000 Business Voucher Scheme? To find out how you and your organisation can benefit come along to our evening event on: Date: Tuesday 28th April Time: 5:45 - 8:00pm Venue: Newcastle University Business School, Citygate The session will provide an opportunity to understand how best to access the scheme, the tailored business solutions which are available from the University and to hear from other businesses who have already benefitted.

To register your interest and to find out more, please contact Juli Campey (MBA and Executive Programmes Manager) on juli.campey@ncl.ac.uk or by phone on 0191 243 0824

www.ncl.ac.uk/nubs

INSIGHT

APRIL 09

HALT THE NOSE DIVE Prompt government action is needed if the crisis in regional airline services is not to damage seriously the North East economy, Peel Airports executive Hugh Lang tells Brian Nicholls No hint of despondency is expressed in Hugh Lang’s rich Scottish timbre, but there’s a determined glint in his eye as he sketches a graph indicating recent erratic passenger patterns in air travel. Each trough on the page shows travellers’ forebodings: the low point of a rumoured millennium calamity when aircraft might fall out of the sky (though they never did); fears of another 9/11; the Iraq war; a period of soaring fuel prices. Every plunge in ticket purchases precedes a rise, but the trend underlying the graph’s mini-mountain caps is increasingly upward. Hugh, as group airports director of Peel Airports Durham Tees Valley Airport’s 75% majority shareholder - has no doubt the the present industry-wide fall-off will be reversed. He is concerned though, that misgivings expressed about DTV Airport’s plight,

BUSINESS QUARTER | APRIL 09

however well intended, might suggest the airport’s position is parlous. Its current adversity, he points out, is by no means unique, but it does challenge the wellbeing of the entire North East economy, and the region’s ability to attract and retain vital inward investment. While DTV in 2008 remained the UK’s 25th busiest airport, despite passenger numbers falling 12%, Newcastle’s 11% drop took it three places down to 13th in the national throughput table. Humberside and Doncaster/Sheffield fell 9% and 10% respectively, and even Manchester dropped 4%. Falls higher than DTV’s were evident at Norwich, Blackpool and Coventry, and only five regional airports out of 26 showed a plus as passenger numbers using UK airports fell five million to 236 million. The declining value of the pound, a slump in the ownership of overseas property and previous airline failures have all taken their toll. Now, as the price is paid for banking misadventures, it is lack of spending money and plummeting turnovers in leisure and

INSIGHT

APRIL 09

20%

COVENTRY

HOW UK AIRPORTS ARE BEING HIT Percentage change of passenger throughput 2008 v 2007

10% 0%

BLACKPOOL

NORWICH

DURHAM TEES VALLEY

NEWCASTLE

DONCASTER SHEFFIELD

HUMBERSIDE

GLASGOW

EXETER

STANSTED

CARDIFF WALES

INVERNESS

MANCHESTER

ABERDEEN

GATWICK

LIVERPOOL

-30%

HEATHROW

SOUTHAMPTON

EDINBURGH

BOURNEMOUTH

BELFAST INTERNATIONAL

PRESTWICK

LEEDS & BRADFORD

LUTON

EAST MIDLANDS

BIRMINGHAM

BRISTOL

-20%

LONDON CITY

-10%

BELFAST CITY

business travel, respectively, that hit air bookings further. Amid this decline, three airlines have recently pulled out of DTV: Ryanair (which flew to Dublin), Flyglobespan and, most seriously, British Midland through its Bmi activity, ending its three flights daily to Heathrow and aborting its near 40-year link from Teesside to London. However, the airport serving Leeds, the nation’s third biggest financial centre, has lost four flights a day to London. Forgive the irony, but DTV is in good company. In his cabined office away from the main terminal, Hugh pores over statistics with all the concentration there must have been in the wartime ops room when Goosepool, an RAF station, stood where DTV stands now. The documents stack about five inches deep. “Take the short-term view and you say, ‘what’s going on here?’ Take the long-term view and what’s going on is market correction. Aviation, like a barometer, reacts very quickly to change, or rather people using it do. They stop booking. Numbers go down quickly, but also come back up quickly. Everyone’s asking, ‘when do you hit bottom?’ He has no doubt economic recovery will come, what perplexes him is that DTV isn’t only an airport issue, but an issue of government regional policy. He describes the curtailment of links between Heathrow and the regions as a creeping cancer. “Leeds/Bradford, a key destination for finance services, has lost its air link not only with Heathrow, but beyond. Newcastle could lose services. Even Manchester and Aberdeen have been cut.” His particular concern is how the global competitiveness of Tees Valley and the North East could suffer unless corrective action is taken. He chairs Tees Valley Unlimited - a partnership of public, private and voluntary bodies preparing a case to have Tees Valley recognised as one of the two pilot city regions

-40% Source: CAA Official Passenger Data 2008.

-50%

proposed by the Government. The permanent loss of a Heathrow service would result in serious setbacks, including: • The cost to passengers and the business community (and therefore the regional economy): about £3.7m a year. • The UK’s largest integrated complex in process industries (expected investment over the next five years, £4bn): logistically deprived. • Major petrochemical firms (including what will be the world’s largest low-density polyethylene plant): foreign-owned multinationals needing London and Amsterdam connectivity. • The world’s largest biodiesel and bioethanol plants: require connectivity, as does Wilton Centre, Europe’s largest private-sector non-military research centre. • 26 multinational firms on the former ICI site, world-class engineering firms (K Home Engineering, Whessoe, Amec, Kvaerner and Cleveland Bridge): require fast links to international markets. • Almost a quarter of the 88,000 DTV passengers going to Heathrow in 2007: business travellers going abroad via Heathrow.

We’re all paying the price for lack of investment; while we face this, Schiphol has been building six runways. Another European airport has developed four

• Heathrow is the only UK airport with connections worldwide: flights to alternative London airports or departures from Manchester, Leeds/Bradford or Newcastle would not suffice. • Alternative travel by rail takes up to four hours because of crossing London to Heathrow: no prospect of a high-speed rail service to London for at least 12 years. • Relying wholly on DTV’s remaining Schiphol connection: reduces connectivity to Asia and North America considerably, to the Middle East by almost half and Australasia totally. • Approved plans for Skylink International Business Park at DTV Airport, planned to host 2,000 jobs: jeopardised. This is not simply a problem of one airline withdrawing a Heathrow service; it’s a complex confluence of limitations that involve many parties and factors, including these: The Government - for higher duty on air travel, making tickets dearer and deterring sales by subsidising rail travel. BAA Airports - for a 75% leap in landing charges for Heathrow over five years and a 6.4% increase for DTV flights against 0.8% for Middle East ones. Other hub airports base landing charges on aircraft take-off weight (smaller aircraft serve the regions), but Heathrow landings are less differentiated (£512 for 244 seats, £461 for 49 seats). BAA, eager to maximise gains from Heathrow shops, prefers large aircraft (more shoppers). Department for Transport - its 2003 White Paper said the Government was prepared >>

BUSINESS QUARTER |APRIL 09

INSIGHT

APRIL 09

to ringfence slots for inland routes under a Public Service Obligation that works well on mainland Europe. But it has only been imposed so far at Glasgow and Edinburgh. Airlines - faced with above-inflation cost rises and flat charges for landings, are inclined to utilise an Open Skies policy. Previously, only a few airlines were allowed transatlantic routes; now any airline can apply if it has the landing slots (which are consequently more valuable), so regional landing slots can be converted to more profitable long-haul. All these points are being put to the Government as it prepares a Future of UK Airports consultation with the industry. Hugh says: “We’ve tweaked our submissions to tie in with what’s happening at Heathrow. Is there enough capacity for the future, and how will it be delivered?” A memorandum has been composed by Tees Valley Joint Strategy Unit, which is funded by local authorities and acts as a secretariat to Tees Valley Unlimited, as its sub-regional private sector partner. Hugh asserts: “We have a Government saying let’s reduce the economic gap in gross value added between the North and the South; let’s promote economic development in the regions. But at the same time, let’s cut off domestic feeder services from the regions to London, let them go to Schiphol. Is that right?” Not only regional economies but the national economy would suffer; on Teesside, Heathrow and Britain’s loss becomes Schiphol and Holland’s gain. The Competition Commission’s recent instruction to BAA to dispose of Gatwick, Stansted and a Scottish airport, in theory offered an alternative. But Gatwick is not a hub and has only one runway. “We’re all paying the price for lack of investment,” Hugh says. “While we face this, Schiphol has been building six runways. Another European airport has developed four. Our planning procedures take so long that UK plc has been left behind.” The Government does believe Heathrow should be a proper hub with domestic feeder services. “Yet it has left it to the commercial side, BAA and the airlines, to sort things out and all they’re doing is chasing the buck,” Hugh says. ■

BUSINESS QUARTER | APRIL 09

Yes, minister, but when? Prime Minister Gordon Brown’s recent assertion that rescuing the HeathrowDTV link is ‘incredibly important’ to the North East economy has been encouraging. Since then, Hugh and a delegation of supportive MPs from the region - including Nick Brown, the regional minister - have met with aviation minister Jim Fitzpatrick. He, tying in with the consultation, has said a review of economic regulation for air travel is proposed, and because of the strength of North East arguments it should also include the impact on regional economies caused by the withdrawal of some regional services to Heathrow. But there’s a big snag. Both BAA and the Government say that once Heathrow’s third runway is in place – no problem, plenty of slots. That presumes that environmental opponents won’t win ongoing campaigns against a third runway, and that the Tories, who are similarly opposed, won’t win the next general election. Even if the third runway went ahead as the Government intends, it would not be usable for eight or 10 years yet. Says Hugh, with a hint of exasperation: “Tying this into the economic development argument, what are regions supposed to do? Put everything on hold and tell the chemical industries, ‘look, I know you can’t fly into this region just now, but you’ll get here in eight years’ time’. “It would be crazy. If the argument for the third runway is that it will ensure a hub, by the time it’s ready we’ll be going instead not only to Schiphol but to Charles de Gaulle and Frankfurt. I don’t want to change the world, just to see an interim solution.” However, the acknowledgement by the Government that an issue exists and requires quick attention in government terms heartens him. Financially, he says, the loss of one service to a destination, even Heathrow, isn’t a big blow to DTV. The bigger argument is the blow to the region. At the airport itself, employing 650 people directly and indirectly, Peel Airports has invested £20m in less than seven years. its Skylink park, planned with One North East and Homes and Communities Agency (formerly English Partnerships) could create maybe 5,000 jobs more, for this is one of the five biggest developments expected under Tees Valley’s regeneration. There are planning approvals for three hotels nearby too. The airport company, whose shareholders also include local authorities, is entitled to expect a return on investment. “We are a commercial company,” Hugh agrees, “but we’re long-term players and understand the Government has to have long-term strategies. However, there’s a disconnect between the commercial needs of this region and the Government’s longer term strategy.” The Government has talked about coming back before the summer recess, and as airlines work in seasons the earliest the London service could be restored would be October. Hugh says: “We’re not prepared at Tees Valley to wait eight years, but we may be prepared to wait for 12 months while the Government reviews the situation properly. “There’s no short-term political fix, such as ordering BAA to drop its charges, and we haven’t told the Government we are really unhappy about losing our service. We have said we are really unhappy at losing our service, here are the reasons why and here’s how we think it can be resolved now. “We would hope a 12-month wait would take in everything, including the regional strategy. Airports are well known drivers of the economy and job creation.” Leaving the airport, you can enjoy the drive along a new road that John Prescott, when regional supremo, insisted the airport needed - even though the Government had to meet most of the £14.4m cost. While it has suffered other costly humiliations, such as unfit-for-purpose national computers, it is hard to believe now that, having spent that much on a short stretch of highway like that, the Government would want to see weeds spring up on it.

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AS I SEE IT

APRIL 09

TEESSIDE FOR TOURISM It was an iconic moment in Margaret Thatcher’s premiership and her Walk in the Wilderness, as it became known, paved the way for rebirth on Teesside. Julia Frater, head of visitTeesvalley - the area’s Tourism Partnership – explains how Teesside has become a holiday spot

BUSINESS QUARTER | APRIL 09

I believe that the moment Mrs Thatcher took her Walk in the Wilderness, Tees Valley began to change forever. Where she stood more than 20 years ago, there is now the Tees Barrage, a world-class water sports facility that will be a training facility for the 2012 Olympics. From urban decay, a new prospect arose. Steadily, the image of Tees Valley has changed. The unprecedented investment that followed the Iron Lady’s visit continues to this day, in addition to a lot of hard work. In those dark days of factory closures, any talk of making Teesside a visitor and holiday destination would have been laughable, but now, you only need look at the figures to see Tees Valley’s image has been transformed. More and more people are coming here; in fact, we get more visitors than Northumberland - 3.8m visitors a year here compared to 2.5m in Northumberland. Overnight visitor numbers have risen by almost a third over five years, which is well above the national average. That means more money coming into the region. At the last count that was around £542m a year. That money helps support 11,000 jobs. These are significant figures; tourism is vital to the area. You can understand the growth in popularity. Look at mima - Middlesbrough Institute of Modern Art. More than £15m has been invested in this amazing building. It has National Gallery status and some of the most exciting art outside London. Then there’s the RSPB reserve at Saltholme near Port Clarence, which opened in January. This £7m project has seen 1,000 acres of former

APRIL 09

industrial land turned into a wonderful wildlife experience. I think the new Tees Valley is best exemplified by Hartlepool. Here was a town whose heavy industry had been devastated; a town which had lost its way in a sense. Yet Hartlepool has now remodelled itself into an international tourist destination. Where a decaying area of dockside once was, there is now a brilliant Maritime Experience. With the wonderful HMS Trincomalee at its heart, you have an attraction to rival anything in Britain. Hartlepool’s renaissance is also bringing the Tall Ships Races to the region. In August 2010 more than a million people will be there to see the spectacle of more than 100 tall ships putting in from all over the world. Hartlepool on the international map will be a great visitor opportunity, not just for Hartlepool but for the North East. Events like the Tall Ships Races help to transform the image of Tees Valley in the minds of people all over Britain and abroad. visitTeesvalley, the five local authorities, plus the private sector with whom we are in partnership, have worked extremely hard and shaken off a lot of misconceptions. I think that’s been one of the exciting things about this job. We had a blank canvas on which to work. We’ve now forged our own identity as an events-led visitor destination. There is always something to do on Teesside. And that’s what people like about Tees Valley, It’s happening … as we say here. It has been extremely challenging though. Tourism simply wasn’t part of the DNA. It was done on an ad hoc basis bit by bit. Some people did it extremely well, but there was no overarching strategy. I think that’s what

visitTeesvalley and the local authorities have done; we’ve pulled it all together. And I think we’ve managed to ingrain the tourism mentality here. When I worked in the South East of England, with partners such as EuroTunnel and the ferry operators, tourism was second nature. We are learning, and learning fast. We’ve had to. After all, with Northumberland and the Lake District right next door, we’ve had to be on our game. But that is a challenge I really relish. As a result, we’ve had huge success with our events. Middlesbrough hosted the Last Night of the Proms as part of Proms in the Park. Thousands flocked to the town’s Centre Square for an unforgettable night. We also have Stockton’s International Riverside Festival, which is Europe’s largest free open-air festival. Last year it drew a quarter of a million visitors to the region. Not everything has to be on that scale. An event can be anything from a weekend of mountain biking or white water rafting to having a meal in a new restaurant. It can be as varied as that. We just have to ensure that those facilities are available and the public know about them. That’s imperative now that we’re in a recession. In fact, despite the doom and gloom, life does go on. And yes, people will still go on holiday. It looks like more and more of us are thinking of holidaying in the UK. The weak pound presents an additional opportunity for us. We are seeing a rise in the number of people coming to the North East from Scandinavia now.

AS I SEE IT

Those in tourism talk about the ‘Staycation’ – a US import, but a growing phenomenon, even so. People may have less money to spend so they’re staying at home and planning trips away. Tees Valley is a perfect spot geographically for this, and we’re already capitalising on it. In these difficult times, we have found working together pays dividends. We’ve created a series of forums enabling those within specific tourism sectors to meet regularly and share information, expertise and advice. These forums are working, and working well. It shows, I think, what can be achieved now when we put our heads together for the greater good of Tees Valley. ■

BUSINESS QUARTER |APRIL 09

COMPANY PROFILE

APRIL 09

North East accountants and business advisers RMT is warning local businesses to be prepared for the new powers which HM Revenue & Customs (HMRC) have introduced from April 1 2009

RMT ADVISES BUSINESSES TO BE PREPARED FOR NEW HMRC POWERS IF YOU ARE CONTACTED BY HMRC FOR A BUSINESS INSPECTION, IT IS ESSENTIAL TO SEEK IMMEDIATE PROFESSIONAL ADVICE

Above: John Richards, Managing Partner RMT

CHEDULE 36 of the Finance Act 2008 is extending existing information powers and introducing a new power for HMRC to be able to inspect business premises and records relevant to all direct taxes - not just PAYE and VAT. Inspections may also take place at short notice of seven calendar days, or no notice where the inspection is either by an authorised officer, pre-approved or where the taxpayer agrees to an immediate inspection. John Richards, tax partner at RMT, said: “The April changes give HMRC the authority to request ‘information’ or an explanation, in addition to documents. HMRC can also inspect business premises, business assets and business documents on the premises. The inspection powers are of

BUSINESS QUARTER | APRIL 09

particular concern as taxpayers or the staff left in charge when the business owner is absent may unwittingly agree to an inspection at no notice without their tax advisor being present. “Businesses should be aware that the power to inspect business premises does not include the power to force entry, although if the inspection is either by an authorised officer or pre-approved, taxpayers may face a penalty of £300 plus £60 per day for refusing HMRC access. “If you are contacted by HMRC for a business inspection, it is essential to seek immediate professional advice. This is a significant change, likely to lead to increased business premises inspections and it is essential that businesses are prepared.”

John Richards is tax partner and managing partner at RMT. He has over 20 years of experience in handling serious fraud investigations by HMRC’s Civil Investigation of Fraud Teams and HMRC’s Special Civil Investigations. For confidential advice, please contact John Richards on 0191 2569500. For more information about RMT visit www.r-m-t.co.uk

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INTERVIEW

APRIL 09

mitten’s for the frozen wastes Even business rivals are moved to sponsor Michael Mitten on his fundraising adventure to the North Pole. He tells Brian Nicholls how he’s juggled life at the head of a major business with gruelling preparations for a Polar expedition What sort of boss, in extreme times like these, flees in-trays and workforce to scuffle, ski and drag a 50kg sled in temperatures of -90C at the North Pole? In this case a far-sighted one, who has had to ensure his business is top order before clumping onto the Arctic snows in a climate even more frigid than the economic bleach-out here. Michael Mitten’s True North challenge, which he completed two days ahead of schedule saw him ski for six days from a floating ice station in the Arctic Circle to the Geographic North Pole. He skied for up to ten hours a day, pulling a 50kg sled. Temperatures of -50C were compounded to -90C with the wind chill factored in. It could hardly be described as a holiday, and he has been fully cognisant from the outset that he had to meticulously plan both the expedition and his £3m-turnover business to ensure it could withstand his absence. That he considered his charity mission for Macmillan Cancer Support at all has rested on the blood, sweat and tears he has poured into Newcastle-based Houghton International over the last three and a half years. Michael has an easy manner and talks with the wisdom of someone two decades older than his 30 years. His energy and enthusiasm were crucial in pulling the business successfully through a financial crisis as potentially

BUSINESS QUARTER | APRIL 09

de-stabilising as any Arctic blizzard. It occurred when 9/11 devastated the market and Enron, representing half the firm’s business, collapsed. The loss of a second major customer drained revenues a further 15%, but the company pulled round, and if grit is what walking on top of the world calls for, then grit he has. He succeeded his father Ron in the family business at 27 and became the main shareholder. Sadly, Ron was diagnosed with cancer a year later. “My dad put up the bravest of fights,” he says. “He was still golfing after four bouts of chemotherapy that would have floored many people. On the day he died, I decided to do something extraordinary to mark his life and to raise money for Macmillan, who had helped my dad and our family throughout.” Meanwhile, Michael was working to ensure that Houghton International was renowned among specialists in electric motor and alternator repair. Be it small automation motors or power-station sized alternators, the company can respond to emergencies. It serves on and offshore, and imparts knowledge and expertise in 10 countries. Because its four divisions embrace 10 sectors, Michael believes any further difficulties can also be faced with confidence. “I can go on this expedition because we work across the piece like this,” he says. ”Presently, we are being hit terribly by the automotive downturn - our general industrial

motor repairs at Nissan, Komatsu and Caterpillar and their suppliers, for example. But we are seeing massive growth in the rail industry, power generation and oil and gas.” The business works also in wind power, industrial, water, new and reconditioned motors, marine, mining and coil manufacturing. Twelve new appointments have increased the workforce to 66, with two more to come as the company looks for additional workspace close to its Walker base. Another reason for Michael’s confidence in leaving the business to take on the challenge is the development path he has taken management and staff along. His lieutenants now lead day to day, enabling Michael to concentrate on longer-term strategy. “I am handing over production in phases. I felt a need to do that anyway, and as I had to spend so much time training and fundraising, I knew if I also continued to try to make all the business decisions the service and quality levels would drop. That’s no good for anyone.” Major investment has gone into development for managers and supervisory staff through the Institute of Leadership and Management. “Within the firm, confidence has grown, so we have grown as a business. A management team underpins our success now.” And Michael practises what he preaches. “Besides coaching and guiding the team, I’ve also spent a lot to develop myself. I’ve had a mentor and coach for six years. I’m part of >>

APRIL 09

INTERVIEW

I spend so much time training and fundraising, I knew if I also continued to try to make all the business decisions the service and quality levels would drop. Thatâ&#x20AC;&#x2122;s no good for anyone

Michael left Newcastle on March 30 and completed his challenge between April 2 and 8. He flew from Newcastle to Oslo, then to Longyearbyen in Svalbaad island group and up onto the Borneo floating ice station in the Arctic Circle, from where the True North challenge began. You can view Michaelâ&#x20AC;&#x2122;s story on www.truenorth2009.blogspot.com To sponsor Michael, see www.justgiving.com/truenorth

BUSINESS QUARTER |APRIL 09

INTERVIEW

APRIL 09

Vistige, a chief executive organisation that exposes me to new ideas and thinking.” The company was set up by his mother, Christine, whom he describes as ‘an amazing woman’. “In 1984, she started with one customer - my dad. We were in Nigeria. Dad had been seconded there to set up a company doing what we do here in motor repairs, but for the massive Blue Circle cement plant. “My dad grew that shop into the biggest of its kind in West Africa. After a fall out with his employers, customers urged him to set up a business. My mother jumped on a flight home, set up Houghton International Services and shipped equipment out to my dad. “They ran that for years, did quite well, then decided to set up a repair company here, and also a manufacturing side.” Michael, born in Guisborough and now living in Heaton, Newcastle, was head boy of Houghton le Spring’s comprehensive school, leaving at 15 to be an apprentice in the business. He studied on day release at college and entered university with an ONC. At Salford University he read business economics unhappily, but emerged from the University of Central Lancashire with a degree in journalism. “That taught me a lot – more than anything, how to communicate effectively and how to listen. I learned how to question people. If I didn’t think something was right, I would always ask why. Those journalistic skills stood me in great stead for business and will help when I write a book about the expedition. “During university holidays I was always back at the factory learning skills and doing night shift, or whatever - to pay for term-time drinking! I got a rounded and broad education, and skills to pull on.” At 22, he persuaded his father to let him join a trade mission to Hong Kong. “I’ve always loved travel. When dad was a tax exile our holidays were spent globetrotting. I was incredibly fortunate. “I had been as a kid to Hong Kong, where an uncle lived for 25 years. I fancied going back. When I came back from the mission with orders for £60,000, dad said, ‘right, where are you going next?’ I became the firm’s de facto salesman.” He brought business from the USA, Asia and

BUSINESS QUARTER | APRIL 09

Critical timing To complete the True North challenge, Michael skied for six days, dragging his 50kg sled behind him, from a floating ice station in the Arctic Circle to the Geographic North Pole. Michael’s moneyraiser is no mere impulse. He had the opportunity to tackle the South Pole some time ago, but felt the timing was wrong in terms of the management restructure at work. Last November, however, the geographic North Pole became a possibility, and training began in earnest. “I was very clear, and had thought a lot about it beforehand. Now the expedition has coincided with the company’s move onto its next level.” The furthest north Michael has been before was Iceland – on a coach tour. He has done the Great North Run three times (best time 1hr 59mins) and he has also skydived and bungee jumped for charity. His sole companion for the challenge is Doug Stoup, an expedition leader who had made the gruelling journey eight times before and is an expert camper in exacting conditions. “The journey is 80 miles as the crow flies, but far longer actually, since you may have to walk round or paddle through splitting ice and climb or ski around snow ridges up to 40ft high,” he says. “There are different kinds of ice and snow you must know how to approach. It’s not like pulling a sledge on an ice rink.” He had the support of both the women in his life, his fiancée Dorcas and his mum, Christine. “She, like my dad, has been a real inspiration. She has suffered from multiple sclerosis for 12 years and almost died from it. “She was confined to a wheelchair, but she pulled herself round and can now walk three miles or more through sheer bloody will power. She has raised more than £30,000 heading up activities in the Sunderland area for the MS Society.” Besides spending 10 hours each week fundraising and publicising the trip in recent months, Michael had got into shape with up to 12 hours a week training, arriving at the gym at 7am and visiting twice a day sometimes, and doing lots of endurance walking. At weekends, to the curiosity of onlookers on the North East’s beaches, he dragged a mock sled made from an old conveyor belt along the sands. At 25kg, it was half the weight of the one he took on the trip and which bore a canoe, his tent, food and supplies on this journey of a lifetime. Up in the Cheviots on the Sunday before this interview, he clambered through 5ft deep snow – “It was really good training … I was knackered!” On the following Sunday, it was a five-mile run between Beadnell and Craster, then a 15-mile hike to the top of Cheviot. He planned a long weekend in Chamonix for final cold weather training, getting used to pulling the sled while on skis. And what did he think about on the march? “A nice hot bath!”

Europe. “I had a knack for forming good relations. I learned from other people, agents particularly, to be customer-focused and flexible. It’s alright going out to sell something, but if they don’t want to buy that exactly, you have to tailor it to what they do want.” There are some cheques in support of Michael’s expedition on his desk the day we meet, including one for £1,000 from one of his main business competitors. It is one of two large donations cheques from sector rivals.

“These are people we compete with day to day. Things like that have blown me away,” Michael says, with high hopes that as sponserships continue to come in he will secure for Macmillan Cancer Support a sum beyond the £15,000 that awaited him on his return. What do his employees think? “Well, a couple raised an eyebrow as if to say, ‘oh God, what’s he doing now?’, but when I explained what it was about, and why, they were really supportive of me.” ■

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ONE NORTH EAST

APRIL 09

THERE IS A PORT IN THE STORM Relief is on the way as measures coming in offer companies instant help to combat effects of the global downturn. Ian Williams, Director of Business and Industry at One North East, explains the helpful steps the regional development agency is putting in place No doubt about it – 2009, unfortunately, will be a tough year for a lot of businesses. But ensuring that North East companies are in the best possible shape to get through the economic downturn is one of the key goals of the Real help for business & people now campaign which they can benefit from. The campaign’s aim is to highlight all the funds available to businesses and people hit by the recession - and to provide a simple and straightforward way for them to get that support. Five support organisations - One North East, Business Link, Jobcentre Plus, the Learning and Skills Council and Government Office for the North East - are all targeting and co-ordinating their efforts to ensure more support can be made available to firms at this challenging

BUSINESS QUARTER | APRIL 09

time. One North East alone will channel an extra £46m into tackling effects of the recession over the next two years. That’s all in addition to its normal activities in business support. The initiative signposts firms to Business Link as a single access point to get help from during the downturn. And look: In the first fortnight of the campaign there was a 20% leap in the numbers of new visitors to the Business Link websites - and almost 3,500 people calling its helpline. Over recent months the Business Link service has also delivered health checks to more than 1,500 businesses - helping them identify issues and opportunities to help them survive. Around 400 companies have attended the Business Link Weather the Storm free

APRIL 09

breakfast seminars that have been giving firms advice on everything from tax issues to budgeting and cashflow. Four workshops have been held across the region to cover issues such as employment law, legal advice and human resource issues – with more events to come. These are funded by One North East, which has also targeted additional money for the Grants for Business Investment (formerly SFI) programme. This awards grants to companies for capital investment in projects that either create new jobs or safeguard existing ones. On the bright side too there are sectors performing well and firms that see chances to expand. That’s why we are putting more money into our Access to Finance schemes, to make sure growing firms aren’t constrained by a lack of credit. The Horizon’s Project being developed by One North East and UKTI is designed to help firms looking to take advantage of the exchange rate to develop their export activities into new markets. While 2009 will be difficult, things have to be put into context: The region’s economy is in a better shape going into this recession than it was in the 80s and 90s, our broader and deeper business base makes the regional economy less susceptible to vagaries of global economic volatility. Let us not lose sight of the fact, either, that some North East businesses are still thriving in these tough conditions. The region’s digital sector, for example, has some real success stories to shout about with world-leading companies in areas ranging from computer games through to Sage. Combined with other areas like tourism, the region’s economy now tops £40bn and is better placed than in any previous recession to emerge ready and able to seize the opportunities that will return as the global economy recovers. Meanwhile, making sure help and advice is not only available but clearly signposted will be our priority as we aim to give North East firms the best chance of surviving the downturn. n www.realhelpnortheast.co.uk

ONE North east

Our shoulders are broader now With its booming exports and an increasingly skilled workforce, the North East is strongly placed to weather any economic storm. The region has a broader economic base than previously, having created more VAT registered businesses than the national average over the past six years. And key sectors of the North East economy are also getting a boost from export sales. Paul Mooney, chief economist at regional development agency One North East, says: “We are one of the few net exporters of goods in the UK - and even up until last September our increase in exports was about double that of the rest of the country.’’ Despite problems in markets around the world it is expected that the devaluation of the pound in recent months will make the region’s goods even more competitive for overseas buyers. The region is also better placed than other parts of the UK, where unemployment is rising faster, where the house prices were more dangerously inflated and where local economies are tightening more significantly. “We are going into this recession with much stronger unemployment numbers than in the past, massively below what they were, and that will help enormously,’’ Mr Mooney says. “We also have a much more flexible workforce and a constructive engagement between employers and unions.’’ The North East is also investing heavily in workforce skills. More than 40,000 employees in the region having started learning through the Train to Gain service, since it was launched in April 2006. The service has engaged with more than 6,500 employers and the North East is one of the best performing regions in the country in terms of learner achievements. More than 75% of people who start learning gain a formal qualification. More people than ever are also starting apprenticeships. New figures show the North East is the joint top performing region in the country in terms of apprenticeship achievements rates, rising from 59% to 66% between 2006/7 and 2007/8. The North East also shows great strength in emerging industries. These include renewable energy which, despite a recent decline in energy prices, will be an increasingly important sector in coming decades. Here the region is exploiting its hard-earned skills in shipbuilding and heavy engineering to position itself effectively for the 21st Century economy. It is also up front and pioneering in life sciences and nanotechnology, creating a broad based knowledge economy which will be well placed for the eventual economic upturn. Also in the North East we have a strong record of co-operation, among various local authorities, development agencies and business organisations. They are all working together on job creation and business development. This has enabled One North East, in partnership with other agencies, to react swiftly in recession by launching the Real help for business now drive, bringing considerable support available to firms. One North East will channel an extra £46m into tackling the effects of the recession over the next two years. Margaret Fay, chairman of One North East, says: “There is no room for complacency, for not acknowledging there are tough times ahead. But there is also nothing to be gained by not recognising that we are well equipped to come through. If we work together, as we always have done in the past, we shall emerge stronger.’’

BUSINESS QUARTER |APRIL 09

ONE North east

APRIL 09

DNA of an investment success The region’s leading paternity testing company is creating more jobs and strengthening its services through investment in new sectorleading technology which is forming part of an ambitious expansion. Complement Genomics Ltd (CGL) provides molecular and bioanalytical services for the UK’s biotechnology sector. These services include Genome Wide Association Studies (for the study of complex diseases), genotyping, DNA sequencing, forensic testing and toxicology and drug analysis protocols. The company, which operates from Sunderland’s Business and Innovation Centre, has secured a £48,000 Grant for Business Investment (GBI) from One North East to help it to buy two new pieces of machinery which are designed to raise productivity, capacity and the capability of its DNA analysis services, including the company’s accredited parentage testing service, dadcheck®. It is hoped the new additions will help the firm

Louise Allcroft, Complement Genomics, shows Ken Samson, One North East, how to test DNA with the company’s new high-sample genetic analysing machine secure its presence in the growing forensic industry, creating up to three new graduate

R&D grant gets Innocore ahead of the game

Jonathan Hendry of Innocore, Gary Roe One North East R&D Specialist, Edward Price Innocore Managing Director An electronics firm at the forefront of gaming technology is gaining further rewards from a decision taken to invest in research and development. Innocore Gaming of Silverlink, North Tyneside,

BUSINESS QUARTER | APRIL 09

developed a circuit board to control all elements of video display gaming machines, thanks to the help of a Research and Development grant of £84,000 from One North East.

jobs in the laboratory and safeguarding the existing five-strong team. Louise Allcroft, chief executive of Complement Genomics, said: “We are delighted to have received this investment from One North East, which continues to show unwavering support for research intensive companies in the region. “Adding these new pieces of equipment to our facilities will allow us not only to increase our competitiveness and bid for larger contracts, but also improve upon the level of service we already offer our existing clients by giving them access to better technology and an even faster turnaround of results.” One of only eight UK providers approved by the Ministry of Justice to carry out parentage tests, Complement Genomics was also one of the first companies in the UK to launch internet-based paternity testing. It was recently accredited to ISO/ IEC 17025, one of the highest and best international quality standards for testing laboratories. n The agency investment formed part of a £210,000 project by Innocore to develop its groundbreaking DPX-S410 circuit board and complementary software. The successful outcome? The product sold £545,000 worth of units in its first quarter on the market. The DPX-S410 controls all elements of new high-tech gaming machines, including advanced art graphics, improved security to foil cheats, boost reliability, and control the level of payouts by each machine. Innocore’s managing director, Edward Price, says: “This product is a new design, has new features and new enhancements to meet specific needs of the gaming industry. That means improved security, reliability, graphics and general gaming experience for a machine that will be in use 24 hours a day, seven days a week in 100,000 machines in casinos in 27 countries. “About 99% of our sales to the industry are exports, but thanks to the backing of One North East, the DPX-S410 has been completely designed in the region, and its success has made a significant impact on the company. n

APRIL 09

ONE NORTH EAST

TEAMWORK WILL RAISE THE REGION’S GAME

Alastair MacColl, chief executive of Business and Enterprise North East, tells how the North East can survive and even thrive through the challenge of official recession

In these tough times for North East England’s businesses, it is crucial, yet again, to draw on the resilience the region is renowned for, and to pull together to ride out the economic storm. There have been, and will continue to be, casualties of this downturn. That is much regretted. But it is fundamentally vital for everyone to work together, both to secure the future of as many North East businesses as we can, and to safeguard as many jobs as possible. Businesses across the region must therefore stay positive in face of the adversity, and also support one another through, what admittedly will be, a tough year of trading. Firms that are feeling the impact critically will find support in abundance is available. They should actively seek this out to be assured firstly that they are fit for purpose. Through services like Business Link companies can have a beneficial “health check” to feel assured they are fighting fit and ready to meet the extraordinary challenges. Business and Enterprise North East delivers the Business Link service, offering a wide range of support for start-ups and established businesses. Business Link itself is the primary entry point for all publicly funded business support in the region. It is the channel through which firms reach invaluable back-up such as the North East England Investment Centre (NEEIC) and the North East England Service Provider Register (NEESPR). For businesses already caught up in challenges Business Link is a resource not to be ignored. The service is streamlined, simple and effective. So it can deliver efficient, tailored support for companies across the region. Look at the facts. In recent months, some 16,000 businesses in the North East have engaged in some way with Business and Enterprise North East. Ambition and confidence still plentiful in the region is reflected in the fact that we continue to

receive many calls from people looking to start new businesses - proof surely that the North East’s entrepreneurial spirit is still very much alive and well. Besides giving individual support, we are running workshops in the region, offering businesses practical advice on how to meet the challenges. We hope these will equip firms to get through the difficult trading and stand stronger when the upturn arrives. I strongly urge businesses to take advantage of support available. The team at Business Link is waiting, ready to offer help that could make all the difference between a business surviving and failing. Businesses seeking advice and support should contact Business Link’s substantial team of expert brokers, who operate across the region in local access points and on a mobile basis. ■ Further information at www.businesslink.gov.uk/northeast or call 0845 600 9006

We must work it through Nick Brown, Minister for the North East, says: “During the last two decades, no English region has done more to help itself than the North East. We must continue to build on this record to get the region through the economic downturn. This campaign explains the support available to businesses and people, and shows how to take advantage of it. Our region can work its way through and Government agencies must play a full part in helping achieve this.”

BUSINESS QUARTER |APRIL 09

ONE North east

APRIL 09

Key support helps firms square up to the downturn

The scale and speed of this economic downturn is as never before. So it calls for equally unprecedented levels of support and action by those well placed to assist - the agencies tasked with helping business. But the very raft of recent funding

announcements and initiatives launched to help firms survive and thrive through turbulent times can also give a complex picture of what’s available and how to access it. That’s not what we want. So the Real help for business & people now campaign highlights the funds and finance being made available by One North East and its partners - and also highlights businesses that have already benefited. With the UK economy now officially in recession for the first time in nearly two decades, it’s easy to overlook how some North East businesses are still thriving amid the tough economic times. As stated elsewhere here, the underlying strength and diversity of the region’s economy (now topping £40bn) means the region is better placed than in any other recession

Real help for business & people

now

BUSINESS QUARTER | APRIL 09

to emerge ready and fit to take up the opportunities that will return as the global economy recovers. We all have our part to play at this time being realistic about challenges the North East faces but also taking every chance to talk up our region and celebrate those people and businesses who make up the new North East economy. We want to highlight those who are blazing a path to recovery while giving those who may need help to overcome problems every possible opportunity to do so. Be sure of one thing: the North East is still fertile ground for business. And the Real help for business & people now campaign will ensure this continues to be the case. n Margaret Fay, Chairman, One North East

Business advice and support.

0845 600 9 006

www.businesslink.gov.uk/northeast

Getting back to work.

0845 606 0234 www.direct.gov.uk

Changing jobs. Updating skills.

0800 027 7944

www.nextstepnortheast.org.uk Supported by:

www.realhelpnortheast.co.uk

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INTERVIEW

APRIL 09

‘I’ll exorcise the devil’

Nick Brown tells Brian Nicholls why the concerns of the North East’s private sector top his agenda as minister for the region

Big Ben strikes lunchtime. Nick Brown, officed off the Central Lobby - the crossroads of Parliament - calls for another black coffee between appointments. This isn’t one of his frequent 14-hour days. Well, not exactly, but the indefatigable portfolio carrier – Government Chief Whip and also now Minister for the North East - will have to catch an evening train to Newcastle for a weekend’s work in the region. Close to home, he’ll phone his customary request to Sachins Indian restaurant to keep its kitchens behind Newcastle Central Station open, as he’ll be in shortly for the curry that sets him up for the weekend. He will then come face to face not only with his constituents in Wallsend and East Newcastle, but also anyone, in theory, among the North East populace who has something to say. He will certainly butter toast with big private sector interests at business breakfasts. The breakfasts are invaluable, the affable parliamentarian says. “Exchanging letters or phone calls wouldn’t be the same. Nor would seminars or lectures. Here, you have the opporunity to talk the problem through, get a clear understanding and see what we can do to make things easier. “I am well supported by other MPs and local

BUSINESS QUARTER | APRIL 09

authority leaders in this, and I don’t just mean the Labour ones.” So his backing for the region’s private sector goes far beyond his published messages of support for the North East’s self-driven Real help for businesses now endeavour. He says: “I’m putting more time into helping North East business than any other thing at present, apart from getting the Government’s legislative programme through the Commons which,” he grins, “is a sort of day and night job. “The private sector is having the toughest time for reasons we all understand. The devil in all these things is in the detail. It’s taking up detailed points that have all been raised with me, and all the things raised nationally – such as the availability of credit and its terms, and things like the payment of bills. “The Government is aiming for 10 days on payments to business. That helps firms’ cash flow, and it’s right to work with local government and the health authorities to try to persuade them to do the same thing. “People say there has been a vast improvement on this, though people also say there are instances where they have their disappointments, as well as the things that are going well. There is huge willingness to help in our region though.”

So how fares the region, where Northern Rock forewarned the nation of a crisis? The minister is optimistic. “We’re much more like the economy of the rest of the UK than one and two generations ago, but we have a long way to go. When I was appointed Minister for the North East I said my ambition was to drive up the region’s prosperity, my method to engage right across the piece - particularly with the private sector. There was no ideological motive, says the MP whose career began in advertising with Procter and Gamble. “It’s entirely to do with the structure of the North East’s economy. We’ve done a tremendous job transforming from the old employment base to the new, but we could still do more in the service sectors – hospitality, tourism, retailing and all the private sector services which make our economy more like the nation’s economy. “It’s not right that the nation’s prosperity should be in London and the South East and that hard-working people in our region should be paid less.” Reasons to be cheerful? “Until the credit crunch, we had the fastest growing growth rates of any English region – we were getting there. My job now is to do everything I can as regional minister to get us through.”

APRIL 09

INTERVIEW

Optimistic: Minister for the North East Nick Brown has high hopes for the future of the region Hence, he’ll stick to his guns about driving up prosperity. “That’s not wrong just because recessionary forces are at work,” he says. “As the labour market loosens, I’m determined to do all I can to tighten it again. I don’t think something as straightforward as that would work nationally., but our region’s population is – what? - 3.5% of the national population. We are small, and although our economy trades within the UK, we are also a strong exporter. So we can do a lot within the region. “There’s a list of projects, mostly private sector, which if they come on will provide new jobs. The proportion of employees in manufacturing in the North East is higher than the national average, and we have great strengths. “All sectors are affected by the downturn – but some far more than others. The processing sector for example, very strong on Teesside, also provides more than 20% of all private sector jobs in the region.” In a recent meeting with representatives in Redcar to go through specific problems, he found the underlying business case for most of the firms very strong. “They were clear about what they wanted. Some of it is very specific, some commercially confidential. All of it I can take away and do. “I’m lucky. My relationship with my colleagues in government is pretty good. I can get to see them. Being Chief Whip is not a disadvantage. They do listen. Nobody has turned me down. Mind you, some things they can do, some they

can’t. The decisions have to be for them. But I do get our region’s point of view through to the very heart of government. A Labour government has a huge affection for the North East and wants to help.” On the aircraft carriers controversy, and a less than expected share likely for the North East, the minister momentarily drops his usual equanimity. “I think this is a red herring,” he declares. “We were after the carrier programme when Swan Hunter stopped building ships years ago. If we are able to get some fabrication work now on the back of it, that’s a bonus. But it is not reasonable for A&P ship repair yard on the Tyne to say suddenly that they are defence contractors and build warships. Just tell me when they last built a warship. “If they can secure sub-contract work from the main players, good for them. But we can’t claim it’s our core work. Tyne yards now have fabrication and ship repair facilities - McNulty fabrication, A&P ship repair. “Far more exciting is getting into the offshore wind farm game in the old Neptune yard, and the North of the Tyne A&P yard - plus the 450 jobs which were just created in the old Hadrian yard, the old Amec yard, fabricating two topsides, one for the North Sea and one for the Mediterranean. “This is fabrication work we have done before and are well used to – it was Amec’s core business in the yard.” >>

Nick Brown in person Age: 58. Birthplace: Hawkhurst, Kent. Education: Swatenden Secondary Modern School, Tonbridge Wells Technical High, Manchester University (BA). Earlier careers: Procter and Gamble (advertising); trade union officer, GMWU Northern Region (1973-83); member, Newcastle City Council (80-84). Political: Opposition Front Bench spokesman, legal affairs (84-87); Treasury affairs (87-94); Health (94-95); deputy chief opposition whip (95-97); Chief Whip and parliamentary secretary to HM Treasury (97-98); Minister, Agriculture, Fisheries and Food (98-01); Minister of Work, Department for Work and Pensions (200103); deputy chief whip and Minister for the North East (2007); Chief Whip and Minister for the North East (2008). Clubs: Shieldfield Workingmen’s, West Walker Social, Newcastle Labour, Lindisfarne (Walker). Real Help for Businesses Now: see page 40

BUSINESS QUARTER |APRIL 09

INTERVIEW

APRIL 09

What of possibilities that at least one of two SeaDragon drilling rigs, originally to be built on the Tees but now likely to be switched to the Far East, might be saved for the region? “I have intervened,” the minister says. “Peter Mandelson (the Business Secretary) has been trying very hard to help to find a solution in keeping the work on Teesside, and is dealing with it personally which, given everything else he has to do, is pretty good. He remembers his links to Hartlepool, which he represented, and to Teesside.” But SeaDragon, he points out, is a commercial arrangement between private sector partners. “There isn’t a public sector solution,” he admits. “But we are trying hard.” (Since this interview, the £300m platform project offering work for up to 1,000 has been switched to Singapore, a key bank having declined to support a North East build). Finally, offshore - how strong are North East chances of getting the £150m European proposal for a North Sea renewables energy grid to serve the Continent? “This is quite a complicated set of discussions, but yes, we have a credible bid and are really interested.” Asked why only 5% of the 17,000 civil service jobs being regionalised have come to the North East, the minister replies: “We have just won the new national Marine Management Organisation. We won because we presented a case for the region, showing what was available in all of the region. “We let the customer - the people coming say what they wanted and preferred, rather than us saying ‘you’ve got to have this one and the one next door’s rubbish’ - you know, fighting among ourselves. “We didn’t do that so we got a positive result. Strong competition? That’s an understatement. But the decision was made on merits. When it was re-checked to ensure fairness, our case was found to be even stronger.” Here the minister gives credit to Alan Campbell, the MP for Tynemouth, John Harrison, the Mayor of North Tyneside, and One North East. On public sector jobs, he observes that 32% of North East employees already work in that sector, against 28% nationally. “In public expenditure per head, the difference between England and Scotland is always pointed out.

BUSINESS QUARTER | APRIL 09

Into the detail The opera-loving minister sings the praises of the ability and willingness among North East leaders - of the strategic local authorities, regional development agency One North East and the Government Office of the Region - to discuss things together, knowing each other well as they do. A new collaboration between One North East and the Association of North East Councils is structurally right for the region, he believes, and seems to be working well. What’s his message then, to North East business? “My job is to work with the private sector to get us through downtime and grow the region’s prosperity – for companies and the people who work for them. Our answer to recessionary forces must be to work our way through. “Often the devil will be in the detail. I don’t mind rolling up my sleeves and getting stuck into the detail. We handle a very heavy case load in my little department here. But we do it rigorously and, I think, pretty well.” He is optimistic and, as Chief Whip, strongly agrees with Prime Minister Gordon Brown’s response to the economic challenges. Northern Rock? “It was a disgrace it got into the state it did, a tragedy that this sort of shallow adventurism happened to an institution which had a really good reputation, and which the region did rather take to its heart – indeed, whose philanthropy and corporate citizenship was a beacon for the private sector. “Its Foundation is easily the most generous donor to voluntary organisations in the North East. Once the Government owned the Rock and could set parameters, I made representations to the Government. This led the Chancellor to double the amount put into its Foundation. Though still a fallback from before, it was more than it was going to have. It made a big difference. “I think management of the Rock’s problem has been really well done. Gary Hoffman, the chief executive, has done a good job with a successful regime. I am also pleased Northern Rock is now able to lend again without yet having repaid all the money it owes. A substantial repayment has already been made, though. It proves the Government was right to say core assets were sound.” Northern Rock, he suggests, contrasts with the greed of the City. “It had this philanthropic thing and was a good lender,” he goes on. “People in our region remember the miners’ strike. Northern Rock stayed its hand then, rather than foreclose on people in desperate circumstances. It took a longer view, let people re-mortgage and put the debt onto the back of the mortgage. Not everyone did that.”

The North East’s profile is much more like Scotland’s than the rest of England’s. So we want to be a bit careful with that argument!” Instead, he suggests: “We’d be better concentrating on things we really need - like a stronger private sector. Playing to our strengths in manufacturing is a big part of that. The hospitality industry, too, at its best in our region is very good.” On the prospect of the new generation of East Coast Main Line trains being assembled in the North East, the minister says he is making representations and Gateshead is bidding strongly. Shouldn’t Darlington, with its railway manufacturing tradition, be a candidate? “Again, we should take it as a case for the

region, although Mick Henry and Gateshead Council’s leadership generally are very capable in putting up a first-rate bid. We should all get together behind them to help. “Gateshead has the sites – that’s the important part. Again, it’s not for us to tell people. The new way is to say, ‘we’ve all these things in the region. Come and see. What are you interested in?’ We get behind what the customer wants, rather than trying to tell them what they’ve got to have. “We’re a great region with many diverse things to offer. People who are already here like being here. It’s a great place to live. Discretionary income goes a lot further in the North East.” ■

0845 05 05 054 www.uktradeinvest.gov.uk/ukti/north_east

ENTREPRENEUR

APRIL 09

SIMON SAYS…

Keeping the turnover ever upwards needn’t be an obsession in these difficult times, says Simon Pearson. He explains to Brian Nicholls how he has successfully engineered sales at his company

Benefit of experience: Simon Pearson knows that turnover is not the only indicator of business success

By his own admission, Simon Pearson talks for England, even if no-one’s listening. But, he says: “I’m talkative in small groups, but I get stage fright among bigger numbers. My daughter said, ‘how can you get stage fright? You never stop talking’. I said, ‘I know, but only the dog listens to me at home’.

BUSINESS QUARTER | APRIL 09

“I was talking the other day and everyone just wandered off from the kitchen and only the dog was left. I said, ‘listen, when I speak only the dog listens’, and my wife Catherine said, ‘no, he just wants his food’.” Readers who are nervous about the havoc the banking debacle might create for their

company’s turnover might find that listening to Simon pays, however. After the many business hoops this titan of online business has jumped through, he can vouch for the fact that there are better indicators than rising turnover on which businesses can be judged. He speaks from the experience of losing a

APRIL 09

third of his business six months after starting it in 1986, of withstanding further loss in a market place devastated by the 1990s recession and, more recently, of having to restructure to face market pressures in the media maelstrom in which he works. Pearsons specialises in public sector recruitment and attracts job applications globally, working closely with government agencies, local authorities, the health service and other public bodies. Despite a flat January, this year’s turnover could match last year’s £16m, something hundreds of other people running media operations can only wish for. Its 62 staff in Middlesbrough, Newcastle and Leeds provide e-com solutions, website development, online strategies for recruitment and marketing, and HR services. It used to be a simple advertising agency. Someone once told him: “Turnover – vanity, profit – sanity, cash – reality,” and Simon swears by this. Pearsons’ turnover in the last two and a half years has been engineered down £9m from £25m, but profit margins have almost trebled. “We’re beyond the vanity of turnover,” Simon says. “We could go down to £14m with profit margins fully trebled. By managing costs effectively and maintaining client loyalty we’re far more profitable than we ever could have been at £25m.” Pearsons entered the new millennium with all but 5% of the firm’s commissions for recruitment advertisements coming via newsprint. But the firm became an early entrant to digital, launching its online jobs board www.sector1.net in September 2000. Now the newsprint share of commissions is below 70%, with online diversity fostering a more integrated approach. In 2004, business advisers KPMG undertook a consultancy which is still in effect today. “They fine-tuned us, made us sharper, leaner, meaner and more focused while maintaining the Pearsons service ethos,” says Simon. “They helped us over to a more digitally led business by structural change. “I had been strutting about, chest puffed out, and plcs in London were saying Pearsons was a pain in the neck. KPMG admired the growth, called us a real success, but said profit was

ENTREPRENEUR

nowhere near what it should be. We had gone for growth through people, offices, cars and equipment, not keeping control of the costs. The answer was to make us much more digitally focused. Over six months, we underwent root and branch restructure. “Reluctantly, we closed our traditional marketing and exhibition side, which gave 5% of turnover. In tough times, you must focus on core business. It was a hard decision. Some people involved had worked with me for a very long time. You don’t do such things lightly, but I had a business to run, and you must protect the business as a whole.” There were eight redundancies. “Everyone had thought we were mad launching Sector1 six months after the dot com crash in April 2000. We had this huge volume of public sector, not-for-profit recruitment ads we had to circulate locally, nationally and internationally. They can run to 3,000 vacancies a month. “They still dominate what we do in the North East and Yorkshire. We saw online as the way of moving things forward then. We went to the bank for a loan, which was naive given the dot com crash. But I had done many presentations. I went into the bank, did the build-up. I said it was internet-based. I was a Star Trek fan, still am, and the bank manager had that beam me up Scotty look. His eyes glazed over. “Banks still don’t understand the internet and, needless to say, I didn’t get funding. So we went to our clients instead. We offered, once their ad had appeared in the Press, to load it onto Sector 1 for free. “They said yes, and in return we asked if they would put more vacancies on Sector 1. Again, they said yes. So our clients did the advertising for us. I’d like to say it was all my idea, but it came from one of my colleagues.

“Now it gets 4m visitors a month. We carry 2,000 vacancies a week roughly. Its heritage is not-for-profit, but we launched in October to the private sector. Build-up there has not been so fast because of the recession, but it’s a very strong product in the North of England, with something like 450,000 unique users a month. “So already it is a unique jobs and careers board covering a unique area of the North East and Yorkshire. No other jobs board comes near to it in content or traffic. It has been really successful. We want to make Sector 1 the life, soul and heart of the world of work.” To that end, additional online content is planned, including an Agony Aunt offering careers advice. “People will be able to text in, and questions will be answered online. We’ll feature career programmes and build up to be the Facebook of the world of jobs and careers. “In our small way, we’re as good in terms of functionality, if not better, than our national competition. We haven’t the muscle or money to take them on nationally, but we don’t want to. What we want is to be very strong in our own area.” In a very young sector, Pearsons is a mature digital recruitment and marketing company, and unusually for a business that was once a recruitment advertising agency, Sector 1 carries editorial content too. “How can we give clients unbiased advice? Easily. If it didn’t work, we would lose credibility.” Understandably, Simon now advocates external opinion. He explains: “Often, you can’t see the wood for the trees. We were told a few home truths – like the unchanging thing in business is the need to change!” While Simon stresses that Pearsons will remain a North East business, it extended to Leeds in 2001. The Newcastle operation followed at Horton Park, near Ponteland, three and a half years ago. >>

How can we give clients unbiased advice? Easily. If it didn’t work we would lose credibility

BUSINESS QUARTER |APRIL 09

ENTREPRENEUR

APRIL 09

On a wing and a prayer

Middlesbrough has 25 staff in account handling, creative, finance and back office. Newcastle is the digital centre and major account handler employing 30. Leeds, an account handling centre, employs seven. Leeds was downsized in the overhaul, but does very well on a low overhead. Simon’s only reservation about consultancy came when he was advised to take the title of chairman. “I thought, ‘Oh my God, they’re putting me out to grass. End of the world’. I said, ‘don’t you have to be 80?’” The sight of an elevator suited to wheelchairs in premises he was considering did not help, but they told him he misunderstood, citing five company chairmen aged between 45 and 50, and said he should be more a steady hand on the tiller, looking strategically, managing the direction of the business and leaving daily operations on MD level. For two and a half years, he has been doing that while also networking intensively to raise the profile of the business, now around 10th among the independents in its sector. “It’s the best advice they ever offered me,” he says – partly because he now also has more time with his Parisian wife Catherine, who is an invaluable sounding board, and with daughter Isabel, 24, an aspiring actress, and sons Alexandre, 23, who is studying theology at Edinburgh, and Henri, 17, who is at Ampleforth School. More time, also, to talk to the dog – if only he would listen. ■

BUSINESS QUARTER | APRIL 09

Simon Pearson, 57, fights Teesside’s corner with the tenacity of a pit bull terrier. “That’s where my roots are,” he says proudly, though his comfortable home now is at Galphay village, overlooking the handsome remains of 12th Century Fountains Abbey, near Ripon. His ‘don’t forget Teesside’ campaign when One North East was being set up landed him on the agency’s marketing panel. He is pleased to have seen many old rivalries between Tyneside, Wearside and Teesside ironed out since - on all but their football fields. He left Mill Hill private school in Middlesbrough at 17 with three ruefully remembered O-Levels; he was ‘inattentive’. He would have enjoyed a university experience ‘for its social interactivity’, but he can feel consoled that his acumen now has taken him onto the advisory council of Teesside University’s business school. Simon came through the academy of hard knocks in the end - the academy New Labour never champions. He lurched from job to job, including carpet salesman at Newhouses department store in his home town. It may not have been his inadequacy that now has Debenhams standing where Newhouses was, but he does think maybe he did cost the firm more to employ than he brought in. “At 18 my father said I needed to get a real job. He knew someone in recruitment and marketing and how did I feel about that? I said I’d think about it. He said, ‘no you won’t - you’ll do it’.” Simon became a messenger at the Teesside office of Kidd’s, a Leeds agency. “I had no qualifications, but I ended up running the office and saw things could be improved.” When Kidd’s felt the North East had little more to offer and pulled out, Simon, after 17 years of working for someone else, left amicably to set himself up ‘on a wing and a prayer’, in 1986, with loans from both grandmothers, a borrowed car, an overdraft, and six staff. He retained all 20 of Kidd’s Teesside clients and many remained with him over the years. “London competitors said I was crazy to start up in an industrial town like Middlesbrough, but they were wrong. Pearsons is now a very successful business, one they see as quite formidable.” His first big test came after only six months. Cleveland County Council took its recruitment and marketing in house. “Almost overnight we’d lost a third of our business,” he recalls. “I didn’t tell the bank! It was a huge blow. We pressed on, sold aggressively, watched our cashflow very carefully and ultimately grew and developed.” Cleveland Council died, but Pearsons’ subsequent growth was described by analysts as ‘phenomenal’ at 325% in six years. The Cleveland setback was a good thing, Simon says now. “Our ready-made client base had been a comfort zone. We could have sunk into complacency. Instead, we were horrified. These sorts of events force you to look at the business, and further afield for new business. We became much more focused.” Another hurdle had to be cleared though. The early ’90s recession saw marketing and recruitment budgets slashed, and Pearsons losing money on a £4m turnover. “But remembering our previous lesson, we maintained a strong cashflow, developed very good relationships with clients, and had a strong service ethos. Clients remained loyal and were supportive throughout the difficulties.” The mid to late ’90s, when turnover had risen from £7m to £23m, was when the company got carried away on growth.“We’d got so engrossed in managing it and maintaining client delivery, quality and reputation that we neglected a fundamental - to generate good profits. We were profitable, but nowhere near targets.” Restructuring changed all that and change continues, albeit less volcanically now. “The company is pushing up the digital work, all done in house - programming, design, search engine optimisation. Whatever is done goes straight on the bottom line. Volumes of media space we buy as brokers are done on a commission, so margins are much smaller.

BUSINESS LUNCH

APRIL 09

Tuned in

Tom Harvey, chief executive of Northern Film and Media, explains to Jane Pikett why a truly national and international outlook is crucial to rejuvenate the broadcast landscape of the North East Tom Harvey, chief executive of Northern Film and Media, is very pleased to be asked out, he says, because he doesn’t get out to lunch too often. This scotches my fantasy that people who work in film and telly spend many hours each day at lunch and, when they’re not doing that, they’re at glamorous drinks receptions. Disappointingly, however, life in the creative media is not quite as Absolutely Fabulous as I like to imagine. In fact, the last time the elite gathered in large number – in February, at The

BUSINESS QUARTER | APRIL 09

Sage Gateshead, for the prestigious Royal Television Society Awards – the mood was darkened by the news that the region’s last home-grown drama series, Robson Green’s hugely popular Wire in the Blood, had been dropped by ITV. Times are more than tough for the region’s television industry, while its creative partners in film, interactive media, music production and computer games are likewise operating in a hugely competitive international economy.

Which brings me to lunch with Tom, head of the group championing the region’s commercial creative industries; a group which has just (the very week we meet) secured £1.9m from One North East to guarantee its funding for the next three years. The news couldn’t come at a more important time, particularly in terms of the support required by the region’s television industry. “Programmes get cancelled, so in telly you always have to be developing your next

APRIL 09

BUSINESS LUNCH in association with

project,” says Tom. “That’s difficult, because when you’re in production, it’s very full on. With One North East, we have put in place a network TV development fund specifically to support the development slates of companies like Coastal Productions [Wire in the Blood, Place of Execution] in the region.” It’s a good example of the direct impact Northern Film and Media (NFM) has on the creative industries. It has invested more than £7m in 1,300 regional projects over the last five years, helping to develop content, provide business support and link North East talent to national and international markets. The North East, as we all know, is a village; a very friendly village, with an extraordinarily strong sense of self. But there is also, Tom warns, a tendency towards insularity which can be dangerous. It is crucial, he says, to explore outside our regional comfort zone if we are to fully exploit the economic potential of the commercial creative industries, which are worth billions to the UK. “These industries are truly global,” he asserts, “and to succeed, you must have networks outside this region - nationally and internationally. The North East has to make the effort to engage with the rest of the world.” The industries supported by NFM are each uniquely complex, and being an expert in all of them on a global scale, as Tom Harvey’s role demands, is equally complicated. “It’s been difficult explaining to funding bodies about an industry like film, say, that employs 100 people one day and two the next, or an industry that is based predominantly on ideas and intellectual property, as these are. “Unless you understand how a production company makes money long term, ie by having its development machine working effectively, then you won’t get it. This isn’t a production line making cars or ships, it’s a weightless economy. “We aren’t exporting goods on ships, we’re exporting at the push of a button. It’s taken a lot of time, a lot of talking, and One North East has a phenominally hard job, but it is starting to understand these industries now.” Northumberland-based for seven years, he is committed to the region, and is frustrated by its insular nature. “You can get a thinness of biographies of the people making the

decisions,” he says. “It’s about connecting outside the region. If you just have groups of companies who only talk to each other, you will only have a service economy. “Our organisation has partnerships with the BBC, Bafta, PACT [Producers Alliance for Cinema and Television: the trade association for independent UK TV, feature film, animation and new media]. Our funding panels include people who are high up in industry and are not necessarily from this region. “We have, in the region, to plug in outsiders with vastly different experience and be less obsessed with hanging on to people, more interested in anchoring them and encouraging them to work around the world and then come back. We shouldn’t be trying to catch up with other places in the UK, but looking globally for good practice. Fascinating things are going on in Singapore and Birmingham. It’s a small world and it’s not a reflection on the region to look for global excellence. Settled in Northumberland with his wife and four children (two boys, 11 and 13, and two girls, four and two), he is anchored in the region. “Having a global viewpoint doesn’t mean I don’t love living here, working here, cycling round Northumberland, but there is sometimes an insular, self-congratulatory nature here that can be dangerous. People seek regional recognition, but you need to be aiming at international recognition.” Tom’s career path to NFM has been creative and varied. Hertfordshire-born, he studied film in London, the creative side of which he loved, though the theory got a bit much, hence he took time off in second year to go to mime school, of all things. After graduating, he worked as a runner for David Puttnam – ‘a lucky break’, he says. “It was just after the Killing Fields and a phenomenal, extraordinary time. The office was full of major movie stars

all the time,” he says, grinning at the memory of opening the projection room door one day to find a man on the other side who put out a hand and simply said: “Hi, Bob Redford.” “One day, I was sitting typing and turned round to find Barbara Streisand in the doorway. Another time, I went to fetch something from a room and didn’t notice that Robert de Niro was sitting at the table. One of my heroes - and I couldn’t think of an excuse to go back in!” It was a great introduction to cinema for the budding producer, and afterwards he worked as an assistant director, produced short films and also pop promos for bands including New Order and Happy Mondays. “Meanwhile, I was going to LA and pitching ideas, but it was a tough time to be making films and I reached a point when I thought, ‘are my skills really here?’ I was then offered the job running the Edinburgh Television Festival, which was incredible, and allowed me access to the great and the good in television, putting sessions together around the international issues in broadcasting.” Michael Jackson then lured him to BBC2 as commissions and strategy executive, but after two years he was attracted to the then burgeoning world of online content, co-founding an interactive drama company. “It was phenomenally creative,” says Tom. “It was the dot com boom, so you could travel the world and everyone was incredibly interested. We won a Bafta for an online drama called Online Caroline. David Puttnam presented it and, as he handed it to me, he said ‘about time’, which was wonderful of him.” Then came the job with NFM. It is very much an enabling role for film, TV and interactive media and as such is a fusion of his career paths to date. It is a complex, demanding job. “We’re on the brink of very big changes. >>

These industries are truly global and, to succeed, you must have networks ... nationally and internationally. The North East has to make an effort to engage with the rest of the world

BUSINESS QUARTER |APRIL 09

BUSINESS LUNCH A lot of TV production has disappeared, but there is a second, third wave of interactive stuff going on and this region is very good at that.“ ITV has been widely criticised for withdrawing from the regions and the BBC has cut regional programme making, but Tom is encouraged by Peter Salmon, the newly appointed director of BBC North, who recently announced that the 13-part CBBC series Tracy Beaker will be filmed in Newcastle. Its £2m worth of production activity this summer will bring work back to the region for technicians, actors and film crews. “The BBC has also taken very seriously the idea that it has to reinvent the way it commissions,” says Tom. “They have to come out of London and use technology more to connect and build relationships with producers in the regions. The BBC needs to appreciate that the licence fee is paid by everyone in the country - to the tune of £134m in the North East - and ITV’s withdrawl from the regions has actually left the licence fee very exposed because it puts the focus back on the BBC. “Fortunately, Peter Salmon is a fantastic champion for the BBC in the North. We can transform ourselves through him and his team, using fast connectivity to create and build links. There are big changes coming in the way we work now and that makes me optimistic. “We also have to champion Tracy Beaker, use it in the broader regeneration agenda and make it stick here, or that will disappear too.” Whether anchoring Tracy Beaker in the North East means helping the BBC fund expensive location shoots (Tracy on the Quayside, Tracy on Hadrian’s Wall, Tracy at the Angel ...) is up for discussion; certainly location filming is crucial. “We are an isolated region geographically, and if people here don’t network outside, we will get incredibly isolated. Then, if the region is not seen on people’s screens, we get more isolated still.” The way the region is perceived is affected significantly by what the UK and the world sees on its screens, he says. “We have fantastic cultural icons in this region, but if you talk to people in London about the North East they don’t talk about The Angel or BALTIC, they talk about Cheryl Cole and Ant and Dec. “They’re fantastic North East exports; but they aren’t here. That’s why globally connected

BUSINESS QUARTER | APRIL 09

APRIL 09

media is so important, because it’s the stuff made in the North East that people see.” Patrick Collerton, of Yipp Films, who won an international Emmy for The Boy Whose Skin Fell Off, shot TV adverts for NatWest and ASDA here, doing more, asserts Tom, to put the region on the map than regional advertising campaigns often can. NFM supports production companies from outside the region in finding locations and assists local authorities working with producers. “Incoming productions are also important because we have a crew and facility base that needs employing. The number of crew and facilities on our database has gone down by a third over the last 18 months and local spend has reduced by a similar amount. “So, you can see why we are keen that the region understands the importance of TV, which is a £90m sector. Once you start eroding that, you start to reach a tipping point where the expertise has gone. “Coastal Productions is world-class, as is Tom Gutteridge [the International Emmy-winning chief executive of Newcastle-based Standing Stone Productions]. You have a range of independent companies now. There are probably 20 programme makers in this region who are all very good at what they do. “There is no such thing anymore as a regional economy in television because Ofcom allowed ITV to reduce their commitment to regional TV. That’s a real shame. People want to see their lives, their communities, reflected on their screens. I don’t think it’s good enough to say this region spends £134m in licence fees and what we get for that is fantastic television. It isn’t necessarily television that is relevant to this region; it’s EastEnders.” But is it realistic to expect investment in network regional programming? “Not really no. It’s expensive. It’s sad. Tyne Tees TV, for instance, had a phenomenally prominent part to play in the political and cultural life of the region.” So what is achievable? “In five years, I’d like to be able to tell you a story of talent from here working worldwide, of a shift away from London into regional centres; a more migrated talent base across the country, where technology connects people across the world. Achievable? I think so. I hope so.” ■

Out to lunch We enjoyed a fantastic lunch at Close House Hotel in the Tyne Valley. It began with much debate over the menu, Tom declaring that he never has soup (it was curried parsnip, which sounded very nice) because he was always disappointed as a child when he came home from rugby and find it on the tea table. I don’t have it because it’s a blazing hot day in April, bizarrely ... So we both start with guacamole and white crab meat tian, which is stunning and accompanied by warm home made bread rolls. Our wine is sauvignon blanc; a fine partner for my mullet, which is fantastically flavoursome with a firm texture and a crisp skin. People forget about texture, we agree. He goes for lamb cutlets (pink) from Bishop Auckland. They’re extremely good, he says, but he resists the desire to pick up the bones and gnaw, this being a rather smart, though not stuffy, restaurant. I help him with his mocha tart for pudding, which is extremely rich, though not cloying; just delicious. I particularly like the Northallerton clotted cream served with it. It’s great food. Fantastic actually - great ingredients, beautifully cooked and served in generous portions, nicely presented. No silly foams or froths. Very good. Close House is also beautiful, and only ten minutes out of Newcastle. It’s a fantastic treat - especially for us media types who never get out to lunch ... honest. Close House Hotel, Heddon-on-theWall, Newcastle, tel 01661 852 255, www.closehouse.co.uk

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MARTIN ON WINE

APRIL 09

Jamie Martin rewards himself for a day of household chores with two tasty tipples, kindly provided by Michael Jobling Wines Via Fordulo, Pino Grigio, Aszar-Neszmely region, 2007, £4.50 ex VAT It had been a beautiful spring Sunday when I came in from mowing the lawn and washing the car to sample with my family a delightful Pino Grigio from the Neszmely region of Hungary. The roasted almonds were out and the wine had been cooled to perfection. I have not had Pino Grigio from Hungary before and this wine surprised me; it was fresh, light and delicate – very European but very enjoyable. My wife Michaela and daughter Sophie, who know a thing or two about wine, both said that they could ‘drink gallons of it’ and I am sure they will! My son Will said that he was looking forward to appearing knowledgeable by ordering it when we go to Budapest to watch the Hungarian Grand Prix later this summer. All in all a delightful wine and an ideal aperitif for the roast chicken we had later that evening. Casa Silva, Los Lingues, Carmenere, 2006, £8.45 ex VAT Always a slightly unconventional Gosforth family, with the chicken we tasted a bottle of Carmenere Gran Reserve from Chile. The Silva family have been producing wine for more than 100 years in the Colchagua Valley, the region which today produces Chile’s finest premium wines. Oz Clark would appreciate the

BUSINESS QUARTER | APRIL 09

family’s emphasis on their terroir (although James May might have a different view!). According to my daughter Sophie, the Carmenere tasted of the Andes mountains, it was powerful but elegant and had a great deep purple colour. The family variously smelt plums and toffee and tasted blackcurrant, chocolate and oak - it is a very pleasant delicious wine and took Sophie back to her time in Chile during her gap year when she spent three months there on Operation Raleigh. Will and I just thought it was a good wine which helped us to relax after a long gruelling day doing our ‘chores’. As a family, we were definitely sold on both and my wife Michaela was immediately on the phone to ring Michael Jobling to order a case of each. It looks like we will be drinking more of these over the summer – and I have no hesitation in recommending you do the same! ■ Jamie Martin is Managing Partner of Newcastle-based law firm Ward Hadaway

Jamie Martin’s wine was selected by Michael Jobling Wines of Ponteland. Contact Michael Jobling or Vickie Jackson, tel 0191 378 4554, or see the website at www.michaeljoblingwines.com

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I think. Therefore I du Vin.

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FASHION

APRIL 09

Chris Porter charts the rise and rise of the uber fashion brand Hugo Boss – a very German name with a very German sense of style

BUSINESS QUARTER | APRIL 09

Rigorous lines, a monochrome palette, a hint of the military: the qualities of minimalist style suggest something of the killjoy, a serious counter to the exuberance exhorted by much of today’s more disposable fashion. It is an attitude that flies in the face of those unwaveringly positive characteristics attributed to the fashion designs of Britain, France, Italy and the US, each by turns quirky, sophisticated, sexy and relaxed. And it’s one that perhaps best fits German fashion – though the term itself might be considered an oxymoron. But there are exceptions: Jil Sander, MaxMara and Escada are all international fashion brands with Teutonic roots, with a new avant garde led by the likes of German designers Kostas Murkudis, Bernhard Willhelm and Markus Lupfer. “Society and education in Germany is very organised, so there’s a traditional regard for the rules, which more recently is encouraging a rebelliousness among young designers,” explains Lupfer. “But when it’s done well, the resulting minimalism is appreciated, because it’s actually difficult to pull off. You’re not allowing yourself embellishment to bring attention to a garment.” Perhaps one brand above all, and one not known for embellishment, has spearheaded the very idea of German fashion, even if its fans probably equate it, now Germany’s largest manufacturer of men’s and women’s clothing, with an international viewpoint rather than that of its homeland. Its power in the menswear industry especially - and power is a word that is essential to >>

APRIL 09

FASHION

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FASHION

APRIL 09

A serious counter to the exuberance exhorted by much of today’s more disposable fashion

this brand’s make-up - is perhaps best encapsulated in its new Matteo Thun-designed head office in Coldrerio, Switzerland; a modernist box lashed by a dramatic framework of timber lattice-work. The building almost stands as an architectural symbol of the brand itself: strait-laced, formal and, yes, rather Germanic underneath, avant garde and expressive on the outside. Indeed, that brand has come a long way since 1923, when a tailor called Hugo Ferdinand Boss set up shop in Metzingen, near Stuttgart, building a strong business making work wear and uniforms before he died in 1948. Come 1967, darker times past, the business was acquired by Boss’ grandsons Uwe and Jochen Holy and thus began its ascent. It was one of the first major menswear manufacturers in Germany to undergo a modernisation of production facilities and soon learned the power of massive global advertising campaigns. As a mid-60s recession kicked in, the brothers also switched to a more youthful, fashion-conscious, dark, slick suiting made from lighter Italian fabrics. In many ways, Hugo Boss helped to define the ‘modern classic’ sensibility of

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grown-up urban style today. This spring/summer’s new Black label collections - the menswear all slim-line, cropped two-button tailoring, fitted double-breasted suits and classic trenchcoats in charcoals and beiges, the womenswear all constructed silk blouses, straight-cut trousers and pencil skirts - strike that delicate balance required to take its wearers from boardroom to bar. The Holy brothers’ move was a major gamble that paid off: within a decade Hugo Boss was outperforming all the domestic competition. Indeed, more than that, sales to the US (which, after Germany, is still the company’s largest market) established Hugo Boss as byword for success with a macho edge, as endorsements from the likes of Bjorn Borg and Sylvester Stallone only underlined, and sponsorship of several golf pros and a Formula One team drove home. By the time the company went public in 1985, it was not only one of the defining brands of the power-shouldered, dress-to-impress decade, but was arguably the defining brand of the decade. Crockett and Tubbs of Miami Vice, all pastel t-shirts and rolled-up jacket sleeves, were both outfitted by Hugo Boss. The very name - Boss - could not have been more fitting. A year later, it was worth more than all other German menswear manufacturers >>

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FASHION

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What seems less in doubt is Hugo Boss’s adaptability to change. Not many designer labels seem equally appropriate for a consumer world in which the bubble has burst, as for the boom years that preceded it

combined. By 1990, just before the Italian fashion giant Marzotto became Hugo Boss’ effective owner, it was a DM1bn company. Since then, the brand has grown, launching more fashion-forward lines, womenswear, sports and golf collections, fragrances and accessories with a more understated aesthetic. Indeed, it was finding that aesthetic - under the leadership of Peter Littman, an ex-marketing executive in the carpet industry - that arguably saved the brand from its association with the now discredited era of yuppiedom and ensured its longer life. Littman developed separate brands at different price points, including a luxury one named after Werner Baldessarini, the company’s long-time design chief, both extending the company’s reach but also ensuring that the cachet of its top lines was not diluted. He also moved some production to eastern Europe, while insisting that the more complex

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finishing of the tailoring be carried out by experts in Germany. Again, the then innovative multi-brand strategy paid off: the year after, sales dropped, but profits rose a whopping 74%. Image too was cleverly manipulated once more: out went the ‘greed is good’ associations and in came the ‘fashion brand as cultural force’ with the Hugo Boss Prize, a $100,000 annual award for achievement in contemporary art, now in its 13th year. It is probably an apt summary of the brand’s continued success over those years that it now has more than 1,200 of its own stores across 80 countries worldwide, with a turnover in the first nine months of 2008 of €1,328m, and is now of such potency that, alongside the likes of fellow powerhouses Prada and Armani, last year it was able to launch, of all things, a Hugo Boss mobile phone. That product is arguably an echo of its flashier breakthrough days of the 1980s, when the mobile phone, like the Boss suit, was totemic of having climbed the corporate ladder. It already looks out of place, and whether it will look quite so appropriate when the recession finally bites home remains very questionable. What seems less in doubt is Hugo Boss’s adaptability to change. Not many designer labels can seem as appropriate for a consumer world in which the bubble has burst as for the boom years that preceded it. It is all too tempting to apply the stereotype of German efficiency, but in Hugo Boss’s case, that is one quality that will undoubtedly keep it around for another 85 years. ■

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EQUIPMENT

APRIL 09

SOMETHING FOR THE WEEKEND

Our travel needs are so many and varied these days that we need a full complement of luggage types simply to ensure that every eventuality is fulfilled in terms of form and function. Fortunately, our favourite design houses have all the answers, as Chris Porter explains

Travel is not what it used to be. If boarding an airliner used to be a glamorous experience, these days it’s all hassle followed by hustle for a seat. Back in air travel’s golden age of the 1950s and 60s, which was admittedly before its democratisation, nothing symbolised one’s high-flying status more ably than the trunks and valises with which starlets would be seen dis-embarking from their Stratoliner or, come the jet age, Comet. It is an image that has resonance today, as witnessed by paparazzi shots of the celebrity set travelling with what appears to be their entire wardrobe. No wonder luggage is big business, and not just for the budget airlines, some of which have introduced a premium for checking bags in. Between 2001 and 2006, the UK retail market for luggage grew by 36%, according to Mintel, making for a market worth £368m. In part, this is because we travel more frequently - with the traditional two-week annual holiday losing out to multiple short breaks of two to five days throughout the year, according to research by STA - with business travel also on the up (until, at least, the recession took hold). It is also because the changing nature of travel has meant changing needs for the luggage we use: a sizeable but portable holdall for the long weekend, through to the sturdier, practical mid-size case that is big enough to warrant pull-handle and wheels, but small

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enough to count as carry-on luggage a crucial consideration for travellers seeking to save time and money. Indeed, this compact style has, along with lap-top cases, been the best-seller over recent years. Meanwhile, models that are eminently practical but are, for business meetings at least, unsuitable in style terms, such as the rucksack, have fallen from favour. What has become central to the new luggage market has been a meeting of both style and functionality. Premium fashion brands used to corner the market for the former with logo-heavy collections that lured a certain customer but often ill-considered for anyone without a butler. Meanwhile, functional products from specialists like Antler and Tumi considered key features like durability, multiple compartments, security and mobility, but neglected to make them sassy. Recent years have, however, seen the two worlds blur, with functionality a given and fashionability distinguishing launches from fashion brands like Mulberry, Burberry and the luggage specialists. For the likes of Louis Vuitton, this is something of a return to form. In the late 1800s, the label anticipated a new era in travel and designed accordingly with - contrary to tradition - flattopped trunks that could be easily stowed, >>

top: Bric’s dark brown holdall with leather trim £235, bottom: TUMI Esmond Travel Satchel in flax £660

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EQUIPMENT

APRIL 09

made of poplar for rigidity and lightness. Zinc trunks followed for tropical climates, plus models that turned into beds for tired explorers and others designed specifically for cars and planes. In the 1890s, Vuitton patented an impregnable five-tumbler lock, and a number for each rigid case is registered with Louis Vuitton even today. Similarly, Dunhill, the British men’s luxury goods brand which also has a heritage in travel, has launched lines like the Connaught; light and durable in black tumbled leather with ruby red linings, it aims to target both the business and leisure markets. The demand for good-looking functional lines has even fuelled a revival in names like Globetrotter, the British company that built its reputation on cases made from ‘Vulcan fibre’; multiple layers of glued card which - as its famed logo demonstrated - were able to withstand the weight of an elephant. Now with its first dedicated store in London’s Burlington Arcade, Globetrotter has introduced new styles; unchanged in principle, but now in a variety of sizes and limitededition colours. Following well-known customers such as Winston Churchill, the Queen, who used them on her honeymoon, and Edmund Hilary, who used them to transport kit to Everest base camp, Globetrotter has won a new generation of fans drawn to its retro appeal. Picture an old case smothered in destination tags and stickers and it is almost certainly a Globetrotter. Their only real competitor in the style stakes - Zero Halliburton’s classic aluminium travel case, originally designed by aircraft engineers in 1938 - has also won a new following. Indeed, luggage’s two worlds of flash and form are increasingly working in collaboration. Samsonite, for example, has won a reputation for its use of advanced materials, with this season’s new collection featuring scratch and UV-resistant mirrored surfaces, their structures made from moulded EVA panelling and armoured nylon; ideal for facing up to the roughest of luggage handlers. It has also re-launched ‘heritage’ designs and co-designed a luggage line with the French designer Philippe Starck and another with fashion designer Alexander McQueen. Now

BUSINESS QUARTER | APRIL 09

the company, which is celebrating its centenary, has created what it calls its Happy Travel suitcase line, with Dutch fashion design duo Viktor and Rolf. With padded compartments for your laptop and other gadgetry, the appeal of travel’s old-world glamour has not been lost on the Dutch design duo. The Hero case, for example, has a vintage aeroplane print, while Viktor and Rolf have declared that their aim is, ‘to celebrate the world as the world of your dreams’. Clearly, they have not been through Terminal 5 lately. Such is the demand for good-looking utilitarian luggage, there are new players with the additional appeal of prestige names. Victorinox, maker of the Swiss Army knife and lately re-launched as a lifestyle brand, has turned its skills for multi-use pocket tools to its Swisswerks luggage line, complete with a nano-tech coating that repels water and dirt and in a material that makes its among the lightest cases available. Meanwhile, the Porsche Travel System, the new luggage line from Porsche Design, has the same engineering qualities as the car marque, with models made from anodised aluminium, with detachable lid, removable partition and automatically retractable towing belt. Some styles have wheels also, though they may not promise the same acceleration through customs as the famous name might suggest. Small wonder that luggage is regaining its cachet as a status item, as prized for its combination of style and content as, for example, a premium mechanical watch or hand-made fountain pen. Perhaps the clearest indication of this is BagChipElite, a company that launched last year to design special RFID (radio frequency identification) tags co-ordinated to your luggage. The tags, which the company is still in negotiation with airlines to roll out, allow your luggage to be easily tracked down and identified should it be lost in transit. And with luggage like this, losing it could be more painful than the simple realisation that you’ll have to wear the same underwear for a week. ■

top: Bric’s olive Gladstone bag with tan leather trim £250, middle: TUMI Montague duffle in black £700, bottom: TUMI York briefcase in covert cloth with leather trim £790 Stockist enquiries: TUMI, 170 Piccadilly, W1, tel 0207 493 4138 Bric’s, www.uk.forzieri.com tel 0800 051 8894, Selfridge’s tel 0800 123 400

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MOTORING

BUSINESS QUARTER | APRIL 09

APRIL 09

MOTORING

HUNGARY FOR SPEED

Chris Porter puts one of Ferrari’s new thoroughbreds, the 599 GTB Fiorano, through its paces on an exhilarating journey from London to Budapest. A tough job, but someone had to do it… Sight-seeing is not best done at 150 mph, even if there are a lot of sights along the road from London to Budapest. But when you’re sitting in a Ferrari 599 GTB Fiorano - Ferrari’s most powerful road car in its class to date, exceeding the punch of even its legendary F40 - free of speed limits on the German autobahn and still short of the 50 cents piece you needed for the toilets at the last petrol stop, well, the temptation is simply too much. This, after all, is a car that will get you from 0-60 in a sphincter-clenching 3.7 seconds. Oh look, there goes another picturesque castle. There, in a blur, was an ancient monastery.

There an Alpine range or two. We could pack a lot more in. Indeed, this Ferrari, built to retain the racing engineering of purer sports Ferraris, but with the luxury of a touring car, has a top speed in excess of 205mph. It’s just that, at around 150mph, while you know the car can do more, you’re sure that you can’t. It is at speeds not much greater than this that F1 racing drivers are said to have out-of-body experiences - and I feel like I’m starting to float. Not for nothing has the Ferrari design team given the 599 a central grip for what it euphemistically calls ‘extra passenger purchase’; aka hanging on for dear life. >>

BUSINESS QUARTER |APRIL 09

MOTORING

APRIL 09

The grip is leather-clad, as are the seats, styled to hold the seat of the driver’s pants - by which he may well be driving - firmly in place, without sacrificing comfort. It is just one of the details that Ferrari is now putting into its cars in a bid to develop the touring market, all too aware perhaps that those models with the F1 looks and the bumpy rides may look the part, but hardly make for leisurely driving. And with Germany the company’s key European market, followed by the UK, the touring market (thanks especially to the Channel Tunnel) is a growing one. It may be more convenient to take the Eurostar or to fly across Europe - but for those with the five days to spare, not to mention a greater love of high torque and engine pitch than small talk and stunning scenery, Ferrari is certainly one way to do it. Just expect to overshoot the occasional motorway exit. You may also make some friends, as wherever you go, a new Ferrari seems to draw crowds and congratulations. ‘Wow!’ is a seemingly international word of appreciation, strangers want to shake your hand as though you’ve just cured cancer, and the driver (even one who has borrowed the car) basks in the glory reflected off the polished bonnet. But this is all when you’re stationary, of course, and that’s not often. The drive may take in diversions on a whim, but first stop might be Mayschoss, through the red grape vineyards of the Rhine valley and on

through the UNESCO World Heritage Site of the Rhine Gorge and up into the more mountainous terrain of Austria. It may take in Schloss Neuschwanstein, the 19th Century Bavarian palace and inspiration for Sleeping Beauty’s Disney castle, or Schloss Linderhof, King Ludwig II’s scaled-down take on Versailles. Via Salzburg and Lake Wolfgang, snowy peaks looming over its crystal surface, you might take the Danube river route via Melk Abbey and then onto Sopron, on the Austrian/Hungarian border. From there, next stop will be Budapest and its 1,100 years of history, not to mention, being Europe’s largest spa town, its 80 thermal springs and 12 medicinal baths. This will be a journey of both grey motorway straights and winding routes through verdant valleys, all accompanied by a distinctive Ferrari gurgle, and there is no getting away from the fact that, after this amount of driving, the destination could not be better chosen. For you may be in need of a massage, despite having rocketed along in one of Ferrari’s new breed of comfy car. “We’re acknowledging that there are drivers who don’t want a car they may only get to use a few times a year on the track - they want a Ferrari in terms of sportiness, but also one they can use every day, or go away in for the weekend,” says Ferrari’s brand director Dany Bahar. “So, looking forward, there will be a change in the mix of cars from Ferrari. We’ll always be in the sports car sector, but if >>

This will be a journey of both grey motorway straights and winding routes through verdant valleys, all accompanied by a distinctive Ferrari gurgle

BUSINESS QUARTER | APRIL 09

APRIL 09

MOTORING

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MOTORING

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you segment it between extreme sports cars and grand tourers, I think we will see more GTs.” Indeed, the emphasis on touring is a new side of the prancing horse and part of something of a brand overhaul. Ferrari claims that the credit crunch has nothing to do with this, though it must have been taken aback by the 700 or so secondhand Ferraris that came onto the market in the week after the closure of Lehman Brothers. But it is having to respond to a changing world in which, potentially, for financial and environmental reasons, the end of the era of the super-sports car is nigh. The company is, for example, producing more ‘eco-friendly’ cars - its newest, just-launched

For a moment the driver, even one who has borrowed the car, basks in glory reflected off the polished bonnet

model, the Ferrari California, also a GT, producing 25% fewer emissions than its other contemporary models. Ferrari concedes that this is still a lot - though its target is to build engines by 2012 that reduce emissions by 40% on its 2007 levels. The company is maximising branding opportunities also: Ferrari is on track to being as much a lifestyle brand as an automotive one, with 20% of its margins now accounted for by Ferrari-branded clothing, leather goods, fragrances, models, memorabilia, sportswear in association with Fila and, the latest tie-in, audio equipment with Meridian. To this end, this winter sees the opening of the first Ferrari shop in the UK, on London’s Regent Street; one of 24 now around the world. And in 2010, residents of Abu Dhabi will get even more: the first Ferrari theme park, €600m’s worth. “The world of Ferrari is made up of those who own a Ferrari on the one hand and those who love them - the Ferraristas,” says Bahar. “The core business may always be about making exclusive sports cars, selling less than the market demands, but there is also a space for other products with the same values as the brand. “We have to be careful which products we license and choose very carefully the products we launch, not diluting the value of the brand, regardless of the commercial success it might have. But Ferrari is something more than a car manufacturer now.” Certainly, it has always been a provider of memorable experiences that go beyond what is, for most people, the routine necessity of getting from A to B. The lorry spill becomes the great leveller - when traffic grinds to a stand-still a Ferrari is denuded of its purpose and is little better to be in than a Trabant. And in a five-day drive, a few jams might be expected. But when the road clears, the skies are blue and the scenery spectacular, the Ferrari comes into its own and 40 hours of driving suddenly seems like an adventure - albeit at some acceleration - rather than a chore. ■ Available from: Brooklands Ferrari, Ring Road, Lower Wortley, Leeds, W. Yorkshire LS12 6AA, www.ferrari.com, £202.500

BUSINESS QUARTER | APRIL 09

What Bob says ... Introduced in 2006 to take over from the 575 Maranello, the 599 was designed by Pininfarina under the supervision of Frank Stephenson designer of the new Mini and Fiat 500. The aluminium body and chassis ensure it weighs 50kg less than its predecessor, and it has 34% greater torsion strength than the outgoing 575. It’s also, as a car bestowed with F1 technology, the closest you will get to driving a Formula One car. It has F1 trac, for instance - an all-new traction control system operated via a dial on the steering wheel – plus F1 superfast; a rapid-change, twin-clutch gearbox. The Manettinio system (another steering wheel dial) has five settings: ICE mode offers increased traction control; NORMAL is what it says; SPORT offers optimum dry-road performance; RACE is ideal for track use and fast gear changes; and CST puts your life in your own hands! The dashboard also features an LC (Launch Control) button. Keep the revs steady at 5000rpm when you press it! The 599 engine is from the Enzo Ferrari. Its 6.0 litre V12 develops 620bhp, pushing it to 205mph - 62 mph in 3.7 secs and 124mph in an amazing 11 secs. The engine is a work of art, with crackle finish cam covers and polished intake pipes, while the interior is a collision of carbon fibre and leather; the seats supportive and long distances devoured with ease. If you’re interested, the 599 should average 13mpg and emits 490kg/m, putting it in the top road tax bracket G; minor details, no doubt, for the potential owner! Bob Aurora is an independent car reviewer and also owns Sachins restaurant on Forth Banks, Newcastle. bob@bq-magazine.co.uk

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INTERVIEW

BUSINESS QUARTER | APRIL 09

APRIL 09

INTERVIEW

BATTING FOR SUCCESS Durham is one of England’s most ambitious cricketing counties, both on and off the field. Jane Pikett discusses the unique business of running a highly ambitious sports club with chief executive David Harker

I choose a good day to meet David Harker, chief executive of Durham County Cricket Club. The previous evening, councillors have approved the club’s £45m revamp of the Riverside Complex in Chester-le-Street; a development which should secure its place as one of the England’s premier grounds. Fittingly, it is a glorious spring day, the first really warm day of the year, and we are all shirt sleeves and sunglasses at the Riverside.

All we need to make it perfect, in my opinion, is an Ashes test match, an Aussie middle order collapse, and 20,000 fans in attendance to enjoy an historic England victory. Sadly, Riverside won’t be hosting an Ashes test this season, having lost the honour, controversially, to Cardiff. It will, however, host an England v Australia one day international (ODI) and the England v West Indies test match in May; an attractive follow up to >>

BUSINESS QUARTER |APRIL 09

INTERVIEW

APRIL 09

New dawn: The £45m development work at Durham’s Riverside ground heralds a bright future on the international cricketing stage England’s winter tour of the Caribbean. Audiences here are growing rapidly (by 23% last year) and more than 150,000 people are expected this year to enjoy the test match, the ODI, the explosive Twenty20 Cup series and the LV County Championship, as Durham aim to retain their status as the top professional county in England and Wales. This is a highly ambitious club; its hunger on the field matched by the senior management team’s drive to secure the ground’s place among the world’s best. The ambitious redevelopment of the ground, newly approved by Chester-le-Street Council subject to further application to the Secretary of State for Communities, will bring a 150-bed hotel, new conference and banqueting facilities, and – crucially for its future as a top-flight test match venue – permanent seating for 20,000.

BUSINESS QUARTER | APRIL 09

There will also be permanent floodlights (their height now scaled down to appease objectors) and two giant replay screens. But will the work over the next two to three years guarantee Riverside’s place in the top flight in the face of growing competition, not only from the established names of Lord’s, The Oval and the like, but also from new names such as the Rose Bowl in Southampton and the big-hitting Sophia Gardens in Cardiff? “This development is essential if we are to continue to stage international cricket,” asserts David Harker, adding that full regional support is also crucial. “We will create a superb venue, and we also have to work as a region to value these events’ economic value to the whole of the North East. “The millions of pounds this club can bring to the region far outweigh the parochial concerns

of a few about the development work and the traffic issues that come with big matches. “I hope that the region as a whole can take a longer-term view. This isn’t just a cricket question; we are the biggest private sector employer in Chester-le-Street and we need these events to sustain our growth for the whole region. “One North East and Durham County Council have been generally supportive [One North East approved £715,000 towards the £45m revamp at Riverside] and our continued success impacts on the regional image and on the regional economy.” The club’s history is long and proud. Established in 1882, Durham were Minor Counties Champions a record-equalling nine times between 1900 and 1984. First-class status was awarded in 1991, but until 1994

APRIL 09

the club had no proper home ground, despite the likes of Ian Botham, David Graveney, Wayne Larkins, Paul Parker, Geoff Cook, Dean Jones and Simon Hughes on the playing staff. The Riverside - renowned as one of the most picturesque grounds in the country - has been home since 1995. It has been improved much over the years and now has a successful bistro, conference and hospitality facilities, the Playing for Success Learning Centre and a Media and Education Centre. Host to one-day internationals since 1999, the ground hosted its first test match - England v Zimbabwe - in 2003 and it is now a worldrenowned sporting venue; unlike, notably, Cardiff’s Sophia Gardens, which - incredibly remains a test match virgin until it kicks off the Ashes series in July. It is also a music venue (its musical offerings include Sugarbabes and James Morrison this summer) though these events are not, David Harker says, nearly as lucrative as you might suppose because of their massive overheads. They do, however, raise profile, bring revenue to the region and showcase Riverside’s hospitality facilities to a different audience. Prestigious international cricket matches are, however, crucial to the commercial growth of the club, and the loss of the July Ashes test match to Cardiff was a blow. “When we bid for it, you were talking about £600,000 maximum to bid for a match like that,” says David. “We put in a bid for £1m and we thought that would break the mould. But Cardiff were supported by the Welsh Assembly and put in a bid for £3m. How could we compete with that? “We had come up the hard way and earned our spurs and they hadn’t - still haven’t staged a test match. But you have to move on, and our response has been to concentrate our minds on the development of the stadium.” On the field also, the club has progressed, and the team’s success boosts its commercial prospects. Only 17 years a first-class county, Durham enjoyed its most successful season to date in 2008, claiming the LV County Championship, reaching the semi-final of The Friends Provident Trophy and the Twenty20 Cup and finishing third in the NatWest Pro40 Division One. The club’s international credentials are also

sound; established England names Steve Harmison and Paul Collingwood are Durham squad members, though their England contracts mean they are rarely available for their club. England-capped players Liam Plunkett and Phil Mustard are also Riversidebased and the club has also now secured Australian ODI and Twenty20 opening batsman David Warner as its overseas player for the 2009 Twenty20 Cup competition. High-profile players bring kudos and attract other good players while, says David Harker, having players with international commitments mean the club’s talent is boosted further because you can’t depend on their presence. “We have to have a bigger squad to cope with it. As a young player, you want to be in a strong side and that’s what we provide,” he adds. And what of the pressures on England players these days, pressures that are felt keenly by Harmison, for one example, who is known not to enjoy long overseas tours. “In the old days there was not as much cricket or as much media scrutiny,” says David. “It’s a much more intense sport and the interest in the England players now is almost unrelenting. It’s a demanding job for the players, as is running a club like this. People think we spend our summers here watching cricket and the winters twiddling our thumbs. Obviously, it isn’t quite like that.” So what is it like, the business of sport? What skills does a top-flight, ambitious club’s chief executive require? “You need business skills first, but empathy for the sport also,” he says.

INTERVIEW

“In cricket, there’s an element of being a temporary custodian of a very special game. It’s all about the people here. The job of any chief executive is to provide an environment where there is a shared vision and values and we expect a level of commitment that means we have to give a bit back at other times. The culture of the business is informal, friendly, respectful and progressive.” As a business, as well as on the field, this is an ambitious and exciting club, and in a major coup, Emirates airlines has recently been announced as Durham’s Twenty20 Cup sponsor. Last season, Northern Rock sponsored the entire club, but after the nationalised bank was unable to renew its contract, David and his senior team opted to spread any future risk by separating the club’s sponsorship deals into packages. Hence Ebac, the Bishop Aucklandbased maker of de-humidifiers, is now proud sponsor of the Friends Provident Trophy, while another backer (unannounced at the time of writing) has been secured for the NatWest Pro40 league. “Losing Northern Rock made us think differently about our sponsorship,” David explains. “Northern Rock took a genuine interest in the success of the club and we would not have achieved what we have without that. But they supported us because we were a North East club, and we have to be more than that to attract other sponsors. Being county champions helps of course.” Sport is a fickle business, however, and there’s not a lot of difference between the top >>

People think we spend our summers here watching cricket and the winters twiddling our thumbs. Obviously, it isn’t quite like that

BUSINESS QUARTER |APRIL 09

INTERVIEW

APRIL 09

concerns in India, he was quick to declare Riverside a potential venue. Ditto the potential for Australia to play Pakistan in England next year because of security issues in Pakistan. “This is a business like any other. It’s about commercial generation, though it’s unique because of the variety of income streams. We are open to new opportunities. “As long as we plan creatively, as we have in the past, there is no reason why we won’t secure our name internationally. Lords is known for its history, we are known for being the most welcoming and friendly venue in the country. Our strategy is about great service, great facilities and great customer care. “We also have a great strength in the local audience. Club cricket is very well established and vibrant in the North East. There is a love and pride and tradition of cricket in the region and this is of enormous value to this club.” ■

Star player: Durham and England star Paul Collingwood in action at the Riverside and the bottom teams in Division One. The club invests in its Academy in the knowledge that success on the field will encourage commercial success. One thing you can be sure of in sport, David says, with a rueful smile, is that you can never be sure of anything. “People do like to be associated with successful organisations, however, and we know that makes the commercial side easier for us. Our profile is higher when we are doing well on the field.” David came to Durham in 1990, an auditor on secondment from Price Waterhouse, as was, to develop the club’s business plan to become a first class county. It was fascinating work and, although he had only what he calls ‘a passing interest’ in the game, he became hooked on the club and applied for the chief executive’s post. “I thought I’d be here three to five years and then go back to my career,” he says, “but it’s continued to be interesting and varied. Our values are very much to the fore here. The place is professional – and friendly.” He also has to accommodate a varied audience that includes men in fancy dress for whom the quality of the beer on offer is as important as the quality of the game, plus families who

BUSINESS QUARTER | APRIL 09

require a less, shall we say, ‘lively’ atmosphere. There’s plenty of room for all here, he says, having created family areas and built up a successful catering and corporate hospitality business. In a business of multiple revenue streams, gate receipts, catering and corporate hospitality are significant income generators, as are sponsorship, the 4,500 members and the England and Wales Cricket Board (ECB). And what of the future of English cricket and the sometimes uncomfortable relationship between Twenty20 and the traditional long game? The game is still, he says, not quite clear about what it wants to be. “There’s still this feeling that Twenty20 is somehow not quite cricket, but it stands on its own two feet as an event in its own right. We also need a support strategy for test cricket and the traditions of the game. The two do not have to be mutually exclusive.” One of the most noticeable things about David Harker, if you keep your eye on the media, is how modern his approach is; how open he is to opportunity, whatever form of the game it takes. So, when it looked as if Indian Premier League (IPL) matches might switch to England (they went to South Africa) as a result of security

The Riverside hosts an England v Australia Natwest Series One Day International on September 20 and the England v West Indies npower Test, May 14-18. For details, see www.durhamccc.co.uk

Charity Foundation Durham CCC is in the process of setting up its own charity. The Durham County Cricket Foundation will deliver programmes that fall under the pillars of grassroots sport, club development, and health, education and social cohesion. These programmes will be delivered into County Durham, Northumberland, Cumbria and Teesside and the club aims to reach more than 50,000 people each year to build self-esteem, raise expectations, offer people the opportunity to become fitter, healthier and more active, help develop local communities and tackle issues such as racism, bullying and antisocial behaviour and encourage more people to commit to their education. For information, contact Mark Foster, tel 0191 387 1717

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APRIL 09

INTERVIEW

ON MESSAGE With fewer players than a football team but two Rolls-Royces of printing, Nigel Vickers has built a £1m-turnover business that competes successfully against much bigger rivals. He tells Brian Nicholls how

If you’re not familiar with Nigel Vickers’ business, you will surely have seen some of the flamboyant fruits of its work. His company, Chromazone, prints all kinds of design display - billboards, posters, hoardings, cut-outs, pop-up stands, banners, signage, window and vehicle graphics. Its impressive client list includes M&S, Mothercare, Prontaprint, Nike and John Lewis, of whom Nigel says: “We have worked successfully with the Newcastle store over the last three to four years. As a result we have capitalised on our relationship to work for other stores in the group.” For M&S, Chromazone has provided internal signage and store directions in more than 100 UK outlets. Sometimes it works directly with the end customers, such as M&S and Mothercare, at other times, the work is done through intermediates like shop fitters and design agencies. “We find ourselves on lists of proven suppliers once we’ve shown our capability in one or two stores,” he says. “We’ve worked with Prontaprint periodically

over a number of years, doing display graphics for their stores around the country. They have used us mainly to provide light boxes or point-of-sale items.” Contracts like these are won against tough national competition. In an industry where many firms have folded or merged, this David stands up to Goliaths with dedicated staff, fewer than a football team in number, and two thoroughbreds of printing, a Durst Lambda and a Rho. With these, says Nigel, they have at Team Valley, Gateshead, the technology and printing capability to match work by any national corporate. “We can punch well above our weight, providing the quality and fast turnaround required. “Our 10-strong team has the necessary skill base, so our advantages are quality, flexibility and great service.” “Both printers are looked on as digital Rolls Royces among equipment for large format printing. “The Italian manufacturer didn’t expect to sell many Durst Lambdas when they were first

brought to market. They reckoned on maybe two or three of these photo-digital printers in the UK. But I think there are about 40 around this country now, primarily in the South and the Midlands. “There aren’t many in the North – this is the only one in the North East. The others are in Edinburgh, Glasgow, Manchester and Leeds. As for the Rho, it’s a very versatile flatbed digital screen press, whose inkjet printer reproduces onto any surface.” The first impression of the print shop is that it could be a bio-tech laboratory. It looks spotless, light and airy with no trace of inky fingers. “We get a good day’s work done then go home and live a life rather than drifting into evening working. It’s easy to slip into that.” Nigel’s keenness to get home promptly is understandable. Originally from Darlington, he and his wife Penny and their two children, Laura, 10, and John, seven, moved four years ago from Newcastle to village life at Anick in the picturesque Tyne Valley. Technology ensures that Nigel needn’t be >>

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INTERVIEW

APRIL 09

on site for work to go on. He explains: “We can queue up a lot of files from the computer servers and leave work printing overnight. We can go home, come back in the morning, take that work off, process it and apply the print finishing. Some of our best printing work has probably been done when we’re not here.” The machines each cost about £200,000. Nigel says: “It was quite a commitment investing in the first one. We had to move premises to accommodate it.” Even then a hole had to be knocked in the wall to permmit entry to the former architects’ studios. Earlier, the firm had premises near a university library in Newcastle, to which they had moved in the 1980s when their customers were mainly design and advertising agencies. It was a nice place to be based, as Nigel remembers, but lacked space for the Durst. “When desktop publishing came, and computer graphics fairly early on entered the design industry, Apple Macs penetrated quickly. We realised we had to move with this new technoogy. So we became a colour print provider in those days before people had their own in-house desktop colour printer. “We offered the service to people in town running A4 and A3 prints. That led to developing larger format printing. We had the skills and technology to move to poster-size printing and beyond. We could walk into practically any company and its marketing manager would have a drawerful of slides and transparencies, to print from. He’d be wanting prints for display and we’d offer that service directly.” Nigel, at 46, has now, in fact, a £1m a year turnover company. “It still feels like a new business, to be honest. I’m highly motivated as a person. The company’s success is central to my ambitions and I’ve got a long way to go with it yet.” Five years from now, then? “I think we have potential to move to the next level of where technology is driving the industry. We’ve a very strong customer base and we don’t specialise in any one area. I sense opportunities in several key sectors. “If we want to look for growth potential we can do so from a fairly strong and established business base. ■

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Staying the distance

The first impression of the print shop is that it could be a bio-tech laboratory. It looks spotless, light and airy with no trace of inky fingers

Nigel started the company in partnership with a friend, Geoff Turnbull, when he was 24. The partnership ran for 12 months. Nigel says: “We were both quite young and adventurous, but we probably had different reasons for wanting to set up. Geoff was a very serious middle distance athlete, so he had to choose between running and working in the first 12 months. “He realised he had mileage to go as a runner and work would be a bit more demanding than he probably planned for. So he stepped sideways and I took it on. Geoff ran when Coe, Cram, Ovette and Mike McLeod were key runners. “I had the technical knowledge. I had started doing the wrong courses at college and lost interest. I was doing economics and business studies. I shouldn’t say that of the business, should I? But the economics weren’t appealing. So I took a year out and worked in this industry. “I set up the business in that time and never finished my course. Geoff had finished his degree course and was awaiting job offers from top accountancy practices. But he was also holding for a year or so to pursue his running career. “He thought being self-employed might be a bit of a nice way of managing his training requirements, but soon realised that he was working till midnight every night and trying to start something that wasn’t what he expected. We parted on good terms and are still friends. “To get experience myself, I worked for a small photographic processing company. I’d always been interested in taking and printing photographs and had taught myself the printing side while I was still at college. So while being self-taught in that respect, I also got the work experience I needed.”

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Tomorrow’s world Will County Durham’s new and all-powerful unitary council be enough to halt an economic slide? Chief executive George Garlick outlines the new tomorrow for Brian Nicholls

Business looks set to continue getting public-sector support at its present levels in County Durham, despite the big financial pressures on the new and more powerful county council. That’s the position, as rumours of abolition surrounding County Durham Development Company are officially discounted, for now at least. Bolstering the county’s lagging economy seems to be the new unitary authority’s concern. These indications come through George Garlick, inaugural chief executive of the new council which is the country’s third or

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fourth biggest unitary authority and the North East’s biggest council in population (around 500,000) and spend. Gross expenditure for County Hall’s new body of 125 elected representatives, replacing seven district councils and the old county authority, will be £1.2bn, against £1bn for the previous county assembly. The extra covers functions provided previously by the districts. Council taxpayers had been told £20.5m a year would be saved in all. George Garlick, who holds an OBE for services to local government, says the authority is on course to

save £14m in the first financial year and £20m in 2010-11. He predicts greater efficiencies and better service through economies of scale, and a general rise in best practice. No compulsory redundancies have been made yet, though 175 fewer employees are expected to be required. “I think and hope we’ll get quite a number of voluntary early retirements,” he says. “I’m hoping we can keep compulsory redundancies to a minimum.” Meanwhile, the county’s GVA (gross value added) has to reach a level comparable with

APRIL 09

Places like NETPark show how a combination of high tech and university across the county can develop businesses in similar activities

the North East as a whole to help close the wealth gap with the South East. Multinationals Fujitsu and Samsung have come and gone in next to no time, the hardship left by the end of coalmining is still being addressed, and the bottom has fallen out of once staple manufacturing like power tools and white consumer goods. The fade of major inward investments of the 1980s and 90s has been evident across the region, as George points out. “As, hopefully, we come through recession, we must try to focus in particular on the high quality, innovative high tech and high spec engineering businesses developing here. “I think groupings of that sort will lead to more of the same coming in. Places like NETPark show how a combination of high tech and university across the county can develop businesses in similar activities.” He may be inspired in this respect by the likes of Thorn, developing new low-energy lighting from a new Spennymoor base that will employ 700 people, and Kromek at NETpark which is pioneering digital colour imaging for x-rays, and 3D imaging that it claims will change the way we see the world. Even as he spoke, a new 19,000sq ft building was being approved for NETpark science and technology park at Sedgefield to suit a global operation. Also ripe for advance is tourism. He wants visitors to Durham City to extend their stays, taking in places like Bishop Auckland, Weardale and Teesdale. “They have a lot to offer, as well as places like Seaham,” he says. >>

INTERVIEW

The philosopher’s stone Few chief executives of local authorities are steeped in philosophy, but George Garlick is. Has his degree in the subject helped in the job? “Very much. Philosophy is quite allied to law and discipline - probably one of the reasons why I went into law. It gives the capacity to analyse and respond quickly to difficult situations. Sometimes its moral aspect is challenging,” he laughs, “but I have enjoyed it.” Though accomplished, he is not bullish, preferring – as readers will have noticed - to sprinkle the word ‘hopefully’ quite liberally into his talk of tomorrow’s County Durham . Had he not stayed in local government he might today have been a barrister, ‘hacking my way round the country quite happily’. He was offered a place in chambers, but he believes he has the best job in the world, since everything a local authority does is designed to make people healthier, wealthier, happier and give them more opportunities. Councillors at County Hall think that having lured him from Stockton Borough Council after 13 progressive years there is a coup. He was the first chief executive recruited to the new wave of unitary councils. As Simon Henig, the council leader, sees it: “We have recruited an outstanding star of local government, whose reputation is built on leading change, delivering improvements and making things better.” George, after 25 years in local government, believes councils and other institutions cannot make changes for the good of people unless they work in partnership with others. “Single interventions by single agencies don’t really work,” he suggests. This will be the second time he has set up a new authority. The first occasion came in 1995; Cleveland County Council was abolished and Stockton Council took over the county functions. As he sees it: “Cleveland was abolitions downwards; this is abolitions upwards. You’re bringing together here eight councils, more than 20,000 employees, an enormous number of district and county council HQs and area offices. Just closing eight sets of accounts and creating a unified one is complex. Preparing a budget for 2010-11 is a huge enterprise.” Transferring 7,000 or so staff into new structures may go on for a year, during which time systems and policies have to be standardised. But George still expects Durham will be easier than Cleveland was to tackle. Councillor Henig is confident George is up to it. “He tackled a similar task with great success and his impressive track record is mirrored in the Audit Commission’s description of Stockton Borough Council as being ‘in the premier league of stellar performers’.” George too is confident. “All my work experience – in county, metropolitan, unitary and even for a short time a district council – tells me the most effective model for local government is where all services are delivered by a single council.” He sees running a council this size as similar to running a not-for-profit business, the difference being that the bottom line is not about cash. “For us it’s about output - whether in service provided or levels of children’s attainment in schools, the level of health and wellbeing that older people enjoy, the level of independence and job opportunities that people generally enjoy. But at the end of the day, it’s still about managing a business.” He does not see the absence of a large city as a handicap. “That’s just the nature of County Durham - very interesting with its many communities of between 3,000-4,000 and 40,000. And we do have Durham City, and the World Heritage Site in its middle, providing a symbol - the cathedral and the castle - not just for Durham County, but for the North East. It’s up there with the Angel of the North.” Does being the North East’s biggest council now give Durham County great clout in regional terms? “I think it’s less about clout than immense contribution in a North East context. We are the largest council in the smallest region of the country.”

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INTERVIEW

APRIL 09

“Over 13 years of good times generally, Durham, in GVA terms, has declined against the product of the North East. That is not sustainable. Over the next 10 years we must close the gap between Durham and the North East, and indeed the country. We need to concentrate on small businesses and start-ups. “In the first year, we are probably looking at business as usual in business support and in support for a number of outside sectors, such as the voluntary sector. “We had been providing through district councils and CDDC £3.4m in business support. This matches up with £4.5m external funding. Business Link spends about £6m in the county. So the total is around £14m as it stands. We expect that to go forward into the new county, and the first year of the new unitary authority. “Especially in this climate, a lot of support is required. In financial support, obviously we could all do with being able to put a great deal more in. “Besides CDDC going forward, we are inheriting a range of business support services, including business units. We have to try to bring all these together so we have a single offer. But certainly there is no plan to discontinue CDDC. We’ll go through with that certainly for the next 12 months. “Continuity of inward investment support and general support is pretty crucial. That’s the message we are getting from business. People I have spoken to have been supportive of CDDC.” Reclamation and regeneration are integral to all this. “The regeneration issue at the moment is the collapse in property markets. So much regeneration is property based. Housing sales support, crucial over the last five years, is very difficult at the moment. “So some projects we hoped would go forward will be slowed I think. However, it gives an opportunity to look closely at potentials across the county, and to focus on areas where you can really get economically added value, real growth points. “A lot is going forward. Housing growth points south and east in the county are under way, with interest from developers and some housebuilders still. That is encouraging, I think. The Seaham project continues, a good example of the future for a lot of Durham:

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Over 13 years of good times generally, Durham, in GVA terms, has declined against the product of the North East. That is not sustainable. Over the next 10 years we must close the gap

cleaning beaches and areas generally, restoring the attraction of areas in the post-industrial climate. Then get infrastructure and jobs in, and you can really see, as in Seaham now, how great a place County Durham is to live and work. “People are still interested in moving here and in Durham City, the improvement for visitors and tourists continues through the continuing Durham City Vision.” How would the new council respond to an application expected for a resumption of coalmining in the Seaham area? “We haven’t had extensive discussions on mines. I don’t know the technicalities of the new methods proposed. Anything that will contribute economically and is sustainable is something we’d look at very closely.” But, he adds cautiously: “There is a big debate on the carbon impact.” The new Durham County (borders unchanged) has at least got off lightly in the banking crisis. George Garlick says: “One of the district councils had £7m in one of the Icelandic banks. That’s the only effect from that direct route into eight authorities coming together. “However, the impact of recession on local services is much greater. We’ll have a £10m drop in our investment earnings this year simply through the falling interest rate.” Income from various fees will be down, likewise from amenities. Services for individuals also become financially strained as people lose their jobs, whether the services are in advice, direct social services, education support, or free school meals. “It all makes for tens of millions of pounds worth of impact. In income, we have definitely lost £14m for the next year. We can’t quantify the extra demand on services yet, but it will be significant.”The average increase in council tax across the county is 2.9% - ‘average’ because, as the chief executive points out: “Previously, since all the district councils had different tax settings, there was a differential; between residents in Easington and Derwentside for example. “In future, everybody will pay the same, but for the present, while the average rise across the county will be 2.9%, it could in some areas go up 4.75%, while elsewhere it could be minus one per cent.”

APRIL 09

INTERVIEW

The 2.9% is about in line with the average across the country. What can people expect? “They no longer have to think about who they have to talk to about services; there’s just one council. Service improvements will start to show towards the end of year one, then onto years two and three, across a range of services, introducing a breadth of vision, economy of scale. “Hopefully, over five years we can create an offer in Durham in terms of business and the economy that will reverse the slide. Hopefully, we can be ambitious and innovative on a large scale, making the most of the county’s natural and human assets - a more prosperous county than now.” ■

George Garlick in person Age: 52. Birthplace: Nottinghamshire. Education: Dartington Hall School, Hull University (BA, philosophy, 1978). Career: A qualified teacher, he taught in the Saudi Arabian Monetary Agency’s college in Riyadh for two years and returned to England to become legally qualified. Was a solicitor with various councils, then assistant chief executive with Cumbria County Council (1993) and first chief executive for Stockton Borough Council (1995). Achievements, activities: A director of Tees Valley Regeneration, he helped to develop the Stockton campus of Durham University and the Teesdale and North Shore developments linked to the River Tees Barrage. Has chaired the Association of North Eastern Councils officer grouping, the North East Improvement Partnership, and is active on national bodies. Hobbies: Walking, reading. With little time for golf now it doesn’t really matter - he’ll continue to play as badly as ever, he says. Personal: Lives in Norton on Tees with his wife Pinki and their son Atticus, six.

BUSINESS QUARTER |APRIL 09

COMPANY PROFILE

APRIL 09

The new Press Association Newcastle EBP Media Experience brings schools and businesses together for mutual benefit

MEDIA EXPERIENCE

VERY modern business fully appreciates the value of effective communication, and the new Press Association Newcastle EBP Media Experience is a fantastic opportunity for businesses to engage young people in producing company communications. The new centre, at the headquarters of The Journal, Sunday Sun and Evening Chronicle in Newcastle, offers industry-standard print, video and online journalism facilities and innovative education projects for young people run in partnership with local business. Students will be given the opportunity to produce real media, including newspapers, magazines and websites, at the centre, where they can also see Newcastle Chronicle and Journal’s newsroom and presses in operation. “This is an opportunity for the region’s businesses to directly benefit by becoming involved in the innovative education projects at the Media Experience,” explained Newcastle EBP chief executive Gillian Bulman. “This is a regional resource for schools and businesses with state-ofthe-art equipment and the businesses which get involved in projects here can benefit in terms of PR and staff development. “We are very open to suggestions from businesses as to how they might get involved. For example, companies requiring published material, such as annual reports or brochures, may wish to get involved in a project for young people to produce them here, using the superb facilities and on-site expertise of a major regional media operation producing a range of print and online media. “The Media Experience is also within the Press Association’s renowned journalism training centre and will be supported by its staff and students. We are also linking with the innovative projects run at the City Learning Centre in Newcastle.” The Press Association is the national news agency of the UK and Ireland and the centre will be

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BUSINESSES REQUIRING THEIR OWN PUBLISHED MATERIAL, SUCH AS ANNUAL REPORTS OR BROCHURES, MAY GET INVOLVED IN A PROJECT FOR YOUNG PEOPLE TO PRODUCE THEM HERE, USING THE SUPERB FACILITIES AND ON-SITE EXPERTISE OF A MAJOR MEDIA OPERATION Left: Gillian Bulman, chief executive of Newcastle EBP equipped with the latest Mac technology and Adobe publishing software. The Media Experience is based on similar schemes operated successfully by The Press Association in London and Howden, East Yorkshire. Tony Johnston, head of Press Association Training, said: “We are delighted to be working with Newcastle EBP in providing this fantastic workbased learning facility. “It will give students the chance to get first-hand experience of the media in a fun environment, while developing other skills such as communication, organisation and leadership.” Funding for the hardware and software in the centre is provided by Newcastle EBP and the dayto-day running of the centre, which opens in June, is co-ordinated by the EBP’s Kay Thompson, former manager of Newcastle Chronicle and Journal’s Community Newsroom.

For further details, please contact Kay Thompson, Newcastle EBP, tel 0191 277 4444 email kay.thompson@newcastle.gov.uk

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APRIL 09

If comfort food is a must in these trying times, then temptation lies on our own doorstep. Brian Nicholls discovers how the North East has become home to one of Europe’s biggest ice cream makers

COMFORT FOOD Right then you sweet tooths, are you aware that your ice creams this summer will include KitKat cones? And a return of Lyons Maid that cinema intermission indulgence that melted many a young girl’s heart in the back rows of yesteryear? Both brands will be bring their cooling comfort and joy as ice cream sales peak during the coming months. Meanwhile, their creator, R&R Ice Cream is revelling in all its frozen assets. A great North East business success based at Leeming Bar near Darlington, it has, in little more than two decades, metamorphosed into a massive tickler of tastebuds. Formerly a North Country farmer’s modest investment called Richmond Ice Cream, it is today the UK’s largest volume manufacturer of

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ice cream and Europe’s second largest ice cream manufacturer in ‘take home’ varieties. Charlotte Hambling, R&R’s senior marketing manager, says enthusiastically of the KitKat cones: “KitKat is a truly iconic British brand. It’s coming in as an ice cream cone exclusive to the ‘impulse’ market.” And Charlotte does not doubt the timeliness of the launch. “With the parent brand experiencing a massive public awareness worth over £170m and showing strong double digit growth – this is the perfect time for a KitKat ice cream,” she asserts. As for Lyons Maid, she affirms its enduring quality among consumers following what she terms an incredibly successful re-launch last September. It is now sold, in case you hadn’t

noticed, as raspberry ripple mousse, milk chocolate sticks, vanilla, raspberry ripple and Neapolitan, as well as strawberry, blackcurrant and pineapple splits. “Our new Lyons Maid extensions to the re-launched range sit perfectly in the essence of the brand,” she says. “These are traditional products and they fit everyday family meal occasions.” The profusion of flavours and shapes seems limitless as R&R bids to better its sixth place among North East and Yorkshire firms which appear in the latest nationwide Top Track 250 List of biggest mid-market private companies. Group turnover for the UK and European operations was around €500m last year. The £200m spend from Britain represents

APRIL 09

about £3.28 from every man, woman and finger-licking child. R&R Ice Cream brings in about 300 ‘projects’ a year, a third of them new products and the remainder recipe re-formulations and/ or packaging re-designs. That’s a startling demand on marketing ingenuity in any business, and last summer it largely enabled R&R to grow ‘impulse’ sales by 15% in a market of overall decline. One impulse contract alone won last year was worth £2.5m. The average product calls for anything up to 20 different ingredients and three or four items of packaging, whether carton, case, wrapping or lollipop stick. Ten basic ingredients include water, milk, sugars (x3), emulsifier, stabilisers (x2) – but also other compound ingredients such as sauces, chocolate and other inclusions are added, and these can have several ingredients themselves. Entry and departure of products in this market place are dictated partly by public fads and fancies. So out of 607 products ‘live’ in the system, perhaps 200 are no longer turned out. That does not mean the end. Anything with a hint of heaven might just, like Lyons Maid, come again. R&R’s corporate growth has come through a tasty series of mergers and acquisitions, and Leeming Bar’s operation employs 350 - more than half the group’s UK complement of around 600. Many of the UK’s most popular brands now carry the R&R trade mark. These include Nestle products such as Mivvi, Yorkie, Rollo, Smarties and After Eight. They also include Skinny Cow, the leading UK brand in ‘healthy’ eating ice cream, and Fab, the UK’s number one ice lolly, now 40 years old. It has had a juicy orange flavour added this year. Mivvi, like Lyons Maid, returns to cash in on a retro resurgence. Popular particularly with older consumers who remember it from before, it became a number two ice lolly in a recent 12-week retrial. Now repackaged, its 20% juice content is complemented by clotted cream and is all wrapped up in a major packaging re-brand which reflects its high quality credentials. Nestle lines also include Munchies, Fruit Pastilles, Milky Bar and Mr Men, while high hopes are held this summer for Lion Bar and

INSIGHT

It comprises vanilla and chocolate ice cream swirled around a KitKat finger and all wrapped in a cone. A designer 99, some might think

Nesquik tubs. For the former, R&R is out to replicate in ice cream the success of Nestle’s chewy 1980s favourite Lion Bar, which pulls in £8m-plus in confectionery. Meanwhile, the latest addition to the core Nestle kids’ range is an 800ml Nesquik tub whose chocolate ice cream has less sugar and fat and is made with fresh milk. Also new this year are Rowntrees Fruit Screamers, mini ice lollies with no artificial colours and 20% fruit juice in strawberry, orange, lemon, lime and pineapple flavours. A major coup recently was winning a clutch of deals potentially worth around £2.5m for the Nestle, Thorntons and Ribena impulse

products. There are two Ribena variants and a new Thorntons range made with Belgian chocolate and double cream – Toffee Temptation and Chocolate Trio White with, new for 2009, White Delight and Milk Choc Truffle. Besides supplying retailers with individual ice creams for impulse buyers, the company produces own-label multi-packs, tubs and convenience desserts. In the UK, R&R’s main stockists are supermarkets, and besides a presence of its branded products it claims to be the multiples’ largest supplier of own-label ice cream. Its ‘take home’ and impulse products are also >>

Green ice cream – the in thing Green ice cream is another R&R advance. No, don’t screw your nose up – this is green in the environmental sense. R&R has invested £1.5m in a fully automated waste treatment plant at Leeming Bar, enabling some of the manufacturing waste to electricity for the factory. Previously, waste was treated on-site then piped to Yorkshire Water’s nearby effluent treatment plant for further processing and discharge. Now R&R will do the job through reverse osmosis that will also give clean, safe-todrink water that can be used to wash down and clean equipment and floors in the factory. The retained waste could go to a sludge tank then a nearby bio-digester, where methane gas would be produced to generate the electricity. Alternatively, with so many farms on the doorstep, driers could be installed to bake the sludge for resale as animal feed. The options at the time of writing were still being evaluated. The plant is due to run from this month. Besides Leeming Bar, R&R has two factories in Germany and one in Poland and France. It also has a factory at Crossgates, near Leeds, recently given a £7m extension, a £6m upgrade to the mix plant and a production line able to produce more than two million ice cream products a week. Among Crossgates’ 21 new products brought out last year was the UK’s first Fairtrade ice lolly. An own-label product for The Co-op, it contains mangoes from Peru, bananas from Ecuador and pineapples from Costa Rica. R&R Ice Cream also supports charity, including recently Marie Curie, the Rainbow Trust and Hope & Homes for Children.

BUSINESS QUARTER |APRIL 09

INSIGHT

APRIL 09

available at many independent retailers. The impulse range is also sold by mobile operations and leisure park outlets which include The Alnwick Garden. Martin Williams, sales manager of wholesale at R&R Ice Cream, says: “Winning key contracts like Alnwick Garden shows the strength of our impulse range. A lot of planning and research goes into pitching for this kind of business, and the hard work is paying significant dividends.” A remarkable transformation then, since Yorkshire farmer Johnny Ropner acquired Cardosi, a family ice cream manufacturer at Thornaby. Hitherto, Ropners’ family name had been associated more with marine and other insurance broking and the Ropner Shipping Company at Hartlepool, which ran from 1875 until its takeover in 1997. In the ice cream making, four people were

employed at the start, the main product being own-label ice cream made for Hinton’s supermarkets. Hinton’s, which was based in Middlesbrough, was sold to Argyll in 1985, which then merged with Safeway two years later and faded further into history when Morrisons bought Safeway in 2004. Johnny Ropner changed the company name to Richmond Ice Cream in the year of Hinton’s takeover and moved the production to Leeming Bar. Richmond Ice Cream’s big leap came when it was bought for £182m in 2006 by Oaktree Capital Management; an American investment firm which also owned Roncadin, Germany’s biggest own-label ice cream maker. Oaktree’s purchase of all the shares opened the way to bring about R&R - Richmond and Roncadin - and Leeming Bar became its base because of its proximity to the A1 and its

potential for factory and parking expansion, both of which went ahead later as part of its continuing development. The R&R combination has already enhanced the strong market positions held by both operations. Oaktree’s objective also in merging Richmond’s management and capability with Roncadin’s potential is to enjoy ultimate ownership of the largest and most profitable private label in Europe. As Charlotte Hambling says: “Our summer range has been created with family in mind and responds directly to current macro trends and an impacting economic climate.” Some of us might say, more simply, that during hard times we all feel entitled to a small personal indulgence and, given the right weather this summer, a lot of us will probably go for fancy flavoured ice creams, whether R&R’s or anyone else’s. ■

How an ice mountain came about 1932: A young Italian, Regina Roncadin, opens her first ice cream parlour in Osnabrück, Germany. 1970: Regina’s nephew Edoardo sets up Roncadin’s first chain of parlours in Germany. 1982: Roncadin’s first industrial production of ice cream marks a move into new territory. 1985: In Yorkshire, farmer Johnny Ropner acquires Cardosi, a local ice cream manufacturer, and Richmond Ice Cream is born. 1995: Windsor Creameries becomes the first of Richmond’s many strategic acquisitions, aimed at consolidating the UK ice cream supplier base and positioning the business as the UK’s leading investor in ice cream manufacturing. Roncadin transfers its traditional Italian ice cream and cake-making for catering businesses, from Roncardin to a subsidiary, L’italiano Ice Cream GmbH. 1997: Still booming, strategic acquisitions include a takeover of Girki, and Roncadin SA is set up in Vayres, France. 1998: In the UK, a Richmond merger with Treats Group plc gives entry to the ice lolly market. Retaining the plc listing on the London Stock Exchange, the company is now known as Richmond Foods plc. 1999: With its retail brands on sale right across the Continent, Roncadin SpA. is quoted on the Milan Stock Exchange. 2000: Richmond acquires soft-scoop rival Allied Frozen Foods. With four sites now across the UK producing speciality, bulk and individual ice creams, the firm claims to be the UK’s biggest producer in volume and product range. Dr Oetker Ice Creams becomes the latest Roncadin acquisition, marking the start of brand activities in Germany.

BUSINESS QUARTER | APRIL 09

2001: With Nestlé UK Ice Creams acquired, instantly known brands such as FAB, Smarties and Rowntree’s Fruit Pastil-Lolly are added to the Richmond portfolio. 2002: At Richmond another sector in the impulse market is entered, with acquisition of the Ice Creamery brand. 2003: Sheffield-based ice cream manufacturer, Oldfields, become Richmond’s latest acquisition. 2004: Roncadin acquires Zielona Budka in Poland, an exclusive retail co-operation deal with Glacio in Belgium, and purchase of licencee and production rights for Valensina fruit ices and Fit For Fun wellness ice creams. Richmond buys De Roma, whose modern Wigan factory adds to capacity for producing handheld ice creams, lollies and arctic rolls. 2005: Roncadin is acquired by US-based investment fund, Oaktree Capital Management plc. Skinny Cow, the UK’s first indulgent low-fat ice cream brand, joins the Richmond fold tapping into major consumer food trends. The German Agricultural Society (DLG) awards 19 gold, 26 silver and two bronze medals to Roncadin’s brand products. 2006: Roncadin acquires the ice-cream division of Nordmilch eG, including the Botterbloom brand and licences for Masterfoods and Ahoj-Brause. Schröer Eis GmbH too is acquired, whose North-Rhine production plant completes the capacity to supply a full range category in ice-cream. Oaktree Capital Management buys Richmond Foods to merge with Roncadin. 2007: Enter R&R Ice Cream, Europe’s largest ice cream manufacturer, with seven production plants across Europe.

CONFERENCE, TRAINING AND EVENTS BUSINESS, ADVENTURE, TRANQUILLITY Longhirst Hall, Morpeth, Northumberland, NE61 3LL Telephone: 01670 795 000 Email: enquiries@longhirst.co.uk www.longhirst.co.uk

EVENTS DIARY

APRIL 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 20 MAY NECC North Breakfast Club(8am). information@necc.co.uk

APRIL 28,29 APRIL Masterclass in Bid Writing Fabriam Centre, North Tyneside. Contact: tel 0191 280 4238. info@alignedsolutions.co.uk. 28 APRIL Know your Business: Greater Insight with Business Intelligence, briefing on technologies. Perfect Image, Newcastle Technopole (8am). Contact: Sarah Maluila, tel 0191 201 2111. sarah.maluila@perfect-image.co.uk 28 APRIL Securing Futures Conference, CONNECT North East conference to help fledgling technology firms with security innovations win funding. Hardwick Hall, Sedgefield. www.connectnortheast.com 28 APRIL Stress, Recession, Change and Enhancing Employee Wellbeing, Newcastle (8.30am). Contact: info@rumanahealth.com 28 APRIL Ask the Expert and Business Surgery, Spennymoor Town Hall. See www. sdbn.org.uk. Contact: tel 07947 409838. info@sdbn.org.uk 29 APRIL ICE (NE) Meet the President, on Tyne boat cruise, Newcastle Quayside. Laura.tweddle@jacobs.com. 30 APRIL Solutions to skills issues for process industries, national conference (8.30am) York Racecourse. See:www.processnationalskillsconference.co.uk. Contact: Nicky Wake, tel: 01706 828855. conference@process.nsacademy.co.uk 30 APRIL North East Business Awards, regional final. www.nebusinessawards.co.uk

21 MAY NSCA agm and Tyne and Wear Society of Chartered Accountants agm, Northern Counties Club, Newcastle (12.30pm). marie.rice@icaew.com 21 MAY Sixth Annual Conference and Dinner of the Entrepreneurs Forum, Hilton Hotel, Gateshead (10am, dinner 7pm) Contact: tel 0870 850 2233. info@entrepreneursforum.net or visit www.entrepreneursforum.net 22 MAY ICE (NE) seminar, Sustainable Communities, Centre for Life, Newcastle (9am). Katerina.fytopoulou@pbworld.com 26 MAY Tender Bid Writing, morning taster session run by Fabriam Networks and Aligned Solutions, Fabriam Centre, Cobalt Business Park/Silverlink. Contact: tel 0191 280 4350. E-mail fabriam@lexica-communications.com 27 MAY NECC South Networking Lunch, The Work Place, Newton Aycliffe (11am) information@necc.co.uk 28, 29 MAY Masterclass in Bid Writing. Fabriam Centre, North Tyneside. Contact: tel 0191 280 4238. info@alignedsolutions.co.uk. 30 MAY ICE (NE) Creative Construction Schools Final, Lindisfarne Room, Newcastle University (10am). emdeegee.input@virgin.net.

JUNE 5 JUNE Sins of Information, North East Fraud Forum annual conference with key speaker Lord John Stevens. Contact: tel 0191 284 5920. northeast.fraudforum@btinternet.com.

30 APRIL NSCA Accounts and Audit Update, Ramside Hall Hotel, Durham (1.30pm). marie.rice@icaew.com 30 APRIL ICE (NE) Annual Dinner and Robert Stephenson Awards, Marriott Gosforth Park. John.jeffrey@colas.co.uk

8 JUNE NSCA seminar, VAT Issues for the SME, Ramside Hall Hotel, Durham (2.30pm). marie.rice@icaew.com

MAY

9 JUNE NECC agm, Ramside Hall Hotel, Durham (11am). information@necc.co.uk

7 MAY Enterprise Challenge Newcastle University Business Plan Awards, Civic Centre, Newcastle. kate.moore@ncl.ac.uk. 7 MAY Impact of Culture on International Communications, breakfast seminar for firms wishing to learn more about Germany. Organised by Fabriam Networks, Lexica Communications. Fabriam Centre, Silverlink. Contact: tel 0191 280 4350. fabriam@lexica-communications.com.

9 JUNE NSCA seminar, Basics of Accounts Reporting (tbc) Ramside Hall Hotel, Durham (9.30am). Also Money Laundering Update (1.30pm) marie.rice@icaew.com 11 JUNE ICE (NE) seminar, Advances in Ground Investigation, Central Square, Newcastle (1pm). G.shore@royalhaskoning.com 12-14 JUNE Multiple Sclerosis national conference 2009, Sage, Gateshead. Tel: Victoria Beynon 0191 233 9065, victoria.beynon@golleyslater.co.uk.

11 MAY NSCA Charities Update, Ramside Hall Hotel, Durham (2pm). marie.rice@icaew.com

17 JUNE ICE (NE) talk, Joint Venture – New Tyne Tunnel, Central Square, Newcastle (5.45pm).fytopoulok@pbworld.com

11 MAY ICE (NE) lecture, Professor Ian Arbor on The Carbon Challenge for Transport, Central Square, Newcastle (5.45pm)

18 JUNE NECC Durham Tees Valley Dinner (7pm) tbc. information@necc.co.uk

13 MAY NSCA Solicitors’ Accounts Rules seminar, Ramside Hall Hotel, Durham (1.30). marie.rice@icaew.com 13 MAY Northumbria University IT Risk Summit, data protection, etc and launch of North East Warning, Advice & Reporting Point (9.30am). Contact: marketing@r-m-t.co.uk. 14,15 MAY Thinking Digital, The Sage, Gateshead. www.codeworks.net. 15 MAY NECC Enterprise Dinner,Stadium of Light, Sunderland (7pm). information@necc.co.uk 19 MAY CECA (NE) Watson Burton Presentation, Disputes Resolution (adjudication v mediation v arbitration v court proceedings, risk management). Durham County Cricket Club, Chester le Street (8am) Vicki Munro, tel: 0191 228 0900. kellceca@aol.com 19 MAY Teesside Society of Chartered Accountants agm, venue tba (4.30pm). marie.rice@icaew.com

BUSINESS QUARTER | APRIL 09

23,24 JUNE The Game Horizon Conference, The Sage, Gateshead. www. codeworks.net. 23 to 25 JUNE Youth Engineering Show 10:00, 11:45, 13:30 Rainton Meadows Arena, Houghton-le-Spring, 24 JUNE NECC South Working Lunch (11am). information@necc.co.uk 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.

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BIT OF A CHAT

APRIL 09

>> Lucky for some

with Frank Tock >> Not out of puff yet We in the North East gave the world its railways, yet new stock for the East Coast Line will mainly give work to Japan, assembled by 200 of us here – if we’re lucky. The trains won’t even be truly high speed. You still have to visit France – or Japan - for that. Sadly, we still have the skills to build our own rail transport. Witness Tornado, the Peppercorn class A1 steam locomotive now puffing along the tracks, the first main line steam engine built in the UK for almost 50 years – and under North East expertise. Enthusiasts in Darlington – where else? - have shown Britain can still make things. And thousands of us stumped up £3m and waited 18 years with confidence. All right, it’s not appropriate for mass production today. But who was responsible for the loss of a once great industry – not the engineers, obviously. Today we can’t even run a tourist line without help from overseas. That is not to discredit in any way the new company restoring regular rail services along Wear Valley. The new British American Rail Services (BARS), which took control of the faltering tourist attraction, looks capable of great achievement. Trains may even run directly to the rail network from the line closed in 1996, and carrying now not only tourists, but other passengers and freight too. Wear Valley is still mineral rich, consultants say, sufficiently to support such a rail service. That could help Eastgate’s long-term recovery from a cement plant closure. Perhaps modern rolling stock could even be built there.

BUSINESS QUARTER | APRIL 09

Business titans build fortunes snapping up struggling rivals in the bad times. Insolvency expert Jim James says that now is the time to prepare for a surge of acquisitions. He is North East chairman of R3 and head of Insolvency and corporate recovery at Ward Hadaway law firm. And he expects more businesses will fold now than in the early 1990s. “There’ll be excellent opportunities for those with capacity to take advantage,” he says.

>> Black mark for ink sales But don’t knock supermarkets altogether. When stationers traded profusely in a small way, it would have been inconceivable not to find some ink to write with. So why, in today’s massive discount sheds, claiming to give comprehensive service, are we repeatedly unable to find the requisite cartridge of printer ink? My printer is a popular brand, but three times recently the computer chain store that sold it to me has been unable to produce a suitable cartridge from stock. We were even assured stock would be replenished next day and the missing item should be available then. It wasn’t. Approaches to three other big stores ended in similar frustration. Finally, a supermarket obliged. Memo to stores boasting a full business service: look to the basics first.

>> Peter steps down Delighted to learn that Peter Smith will remain active in commercial property despite retiring from GVA Grimley. The former senior partner with Lamb and Edge, who headed GVA Grimley’s North East office following the merger of the firms, has given 38 years to the two. A retail specialist, he can look back on roles he had in creating Monument Mall in Newcastle, Keel Row in Blyth and St Cuthberts Walk in Chester-le-Street. Peter says: “I’ve seen the region change dramatically over the last four decades with property development at the forefront of reshaping our cities.” That’s something no-one can deny. Peter, a member of the RICS President’s Panel, will continue his arbitration work and also act as a consultant to GVA Grimley.

Next time: It could be southwards for MIchael

>> Wrong day, folks

>> Snowed under

Ever since they campaigned for Sunday opening and won, supermarkets have been loath to let religion stop their tills flashing and ringing. But, since they do make a token gesture to Christianity at Easter, shouldn’t they close en masse on Good Friday, the most moving day emotionally on the Christian calendar, rather than Easter Sunday.

Next challenge for Michael Mitten, the Arctic walker featured elsewhere in this issue: “There’s always the South Pole,” he said optimistically, before setting off on his first jaunt. And you know, we think he was serious. The boss of Houghton International did add a rider: “My fiancé will probably kill me for saying that.”

CY CMY

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