BQ SCOTLAND issue 3 by We Are UMi

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ISSUE THREE: SPRING 2011

the live debate Where do Scottish tourists go from here? queen of detox Amanda Hamilton’s healthy off-screen life hunt for style The designer with an eye for old movies tram now standing Richard Jeffrey, the man tied to Edinburgh’s tracks

square root

Blythswood Square is Scotland’s most fashionable hotel – just don’t call it boutique, says Peter Taylor, the man behind it ISSUE THREE: SPRING 2011: SCOTLAND EDITION

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

SCOTLAND EDITION

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BUSINESS QUARTER: SPRING 11: issue THREE Welcome to our third issue of Business Quarter Scotland. I hope you find some enjoyable reading that makes BQ a worthwhile use of your time. While there isn’t an intended theme, what has emerged is the importance of tourism and manufacturing to our economy. The story of Hyspec Engineering, based in Ayrshire, should warm the heart, while Peter Taylor’s battle against adversity to open the plush Blythswood Square in Glasgow is a salutary tale. Richard Jeffrey’s frank interview about himself and the Edinburgh Trams is an engineer’s attempt to honestly resolve a problem. Meanwhile, two Iberians will play an important role in Scotland over the coming months. And I’m not talking about golf stars Sergio Garcia and Jose Maria Olazabal, Europe’s Ryder Cup captain. The new chief executive of Lloyds Banking Group Antonio Horta-Osorio from Portugal will be making his mark at the state-supported bank, while Ignacio Galan, chairman of Spanish energy company Iberdrola, owners of ScottishPower, has a significant part to play in Scotland’s renewables and carbon capture aspirations. Iberdrola has just bought back its stake in its renewables business, with implications for Scotland’s offshore wind development. There is nothing wrong with Iberians being involved with strategic decision-making for UK businesses. But, in the case of Lloyds Banking Group, it means a continuing shift away from Scottish spheres of influence. The arrival of Horta-Osorio from Banco Santander in March has already resulted in the departure of Archie Kane, a Scot on the main board of Lloyds TSB since 2000 and responsible for Scotland since the acquisition of HBOS. Does this matter? Sure it does. Scottish business has been battered by the banking collapse. The shocking collapse of Bank of Scotland still resonates across the land and has contributed to an increased cost of bank funding for businesses. Lloyds Banking Group, under Eric Daniels, has attempted to resuscitate the Bank of Scotland brand for business, but will a Portuguese figure who has

painted the town red with Santander want to do the same? Hardly a day goes by without an irritated business person speaking out about the difficulty of bank finance. It’s a national issue that threatens our long-term economic viability. Lloyds Banking Group, owners of Bank of Scotland, and state-owned RBS have, between them, the lion’s share of Scottish business accounts. There isn’t really much choice if you’re in business, so if these banks decline to help, then it can be extremely tough. Clydesdale Bank has done an admirable job, and HSBC and Barclays are muscling in, but their combined lending is modest, while the much-vaunted Tesco Bank and Virgin Bank still haven’t made a jot of difference in the market place. The Co-op Bank has increased business lending by 40% since 2007 but from a low base. So we need a strong RBS business bank and a revitalised, firing-on-all cylinders Bank of Scotland. Mr Horta-Osorio has to meet EU rules and dispose of Lloyds TSB Scotland and its branches network, and there is increased speculation about the future of Scottish Widows, a stalwart employer in Edinburgh. Banking funding is vital for Scottish firms and we need strong indigenous banks with the knowledge and confidence to support our growing business. And many firms are in the field of renewables, where return on investment takes much longer. Our other Iberian friend, Ignacio Galan is already a well-known figure in Scotland and a supporter of the country but our renewables future depends on strongly-funded energy companies with global interest, like his and our own SSE, having the will and the ability to invest in Scotland. These continue to be interesting times in business. And, with the Scottish election pending, it’s time to speak up for enterprise in Scotland. That’s what we hope to be doing at BQ Scotland. Have a great day!

Kenny Kemp Editor, BQ Scotland

CONTACTS 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 EditorIAL Kenny Kemp Editor e: editor@bq-scotland.co.uk Alastair Gilmour Sub-editor Jane Bradley Editorial Design & production room501 e: studio@room501.co.uk Photography KG Photography e: info@kgphotography.co.uk advertising For advertising call Alistair Fleming on 07818 411195 / 0191 537 5731 or email sales@bq-magazine.co.uk

room501 Contract Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2011 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, March 2011.

SCOTTISH EDITION BQ Magazine is published quarterly by room501 Ltd.

BUSINESS QUARTER |SPRING 11

CONTE BUSINESS QUARTER: SPRING 11

entrepreneur

Features

40 interview The engineer trying to keep Edinburgh Trams on track. Will he? Won’t he?

08 exports Scotch whisky’s annual turnover is £6.4bn – and rising up the glass

22 entrepreneur Peter Taylor’s latest hotel venture almost collapsed, but his dream came true

28 bq live debate The voice for business invites opinion from Scotland’s tourism professionals

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66 spa station

40 business lunch

Amanda Hamilton is building her offscreen business with great success

72 city living Richard Loudon knows Edinburgh residential property inside out

76 Scottish industry Alive, kicking, and – in Ayrshire – safe in the hands of Hyspec Engineering

TENTS SCOTLAND EDITION

to infiniti...

34 COMMERCIAL PROPERTY

The landmark developments creating our built environment

46 BUSINESS LUNCH

Regulars

Advertising guru Richard Marsham steps ashore at The Ship on the Shore

50 WINE Two headhunters go after an Italian job

52 fashion William Hunt has developed an eye for styling – from watching old movies

6 ON THE RECORD Doing the positives in business

62 spa station

58 equipment Porsche Design – more than just a car

10 NEWS Who’s doing what, when, where and why, here in Scotland

20 AS I SEE IT Steve McCutcheon on financial talent

62 motoring To Infiniti and beyond with Nissan’s V6

80 jock uler Gripping gossip from our backroom boy

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ON THE RECORD

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>> Tapping into Scotland’s academics Every day problems in business can often end up as opportunities. How does a Stonehaven cake-making company stay ahead in producing healthier, low-fat products, or an Ayrshire sea salt company expand its market?

Scotland’s businesses are fortunate in having world-class problem-solvers on their doorstep. Yet, for too long, Scotland’s universities and research institutions have been an untapped asset for small and medium size firms. So just how well are we using them? The answer is, we’re getting a lot better at it. BQ Scotland caught up with Dr Siobhan Jordan, the director of Interface, which connects Scotland’s 26 higher education and research institutes to business. “Since establishment in 2006 we’ve had approaches from 850 Scottish companies, setting up 300 projects, which might be short, sharp, half-day assessments, through to a three-year collaboration and transfer of knowledge,” she explains. “We are a unique service designed to address the growing demand from Scottish organisations and business wanting to engage with academia. We’ve been successful but we’ve got the capacity to do more and a similar organisation is being created in England and Wales.” Interface, with financial help from the Scottish Funding Council, is a free and impartial service which is stimulating innovation and opening the door for Scottish companies to gain academic support.

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So how has Interface been able to help? Macphie of Glenbervie, based in Stonehaven, has an 80-year history of creating innovative, premium food ingredients, including cake and bread mixes, sauces and desserts. The company has customers in 40 countries, comprising bakers, chefs and food manufacturers. “We’ve supported the company to find academic collaborators to help provide solutions to a range of challenges,” says Siobhan Jordan. Four projects, including a project funded by a Scottish Funding Council Innovation Voucher with the University of Edinburgh and a short Knowledge Transfer Partnership with Glasgow Caledonian University, were set up. The Edinburgh project looked at emulsion physics, using emulsions stabilised by particles and eliminating chemical emulsifiers, to create “cleaner label” products. It has been a significant success, and the results have since been fed directly into product development. Another project with Glasgow Caledonian University looked at improving the packaging, while a collaboration with the Rowett Institute, University of Aberdeen investigate hydrogenated non-oils to improve handling and storage processes. JC Peacock & Co, a family business based in Ayr – established in 1874 – was keen to find a natural and economically viable method to make sea salt. Peacock Salts are used for de-icing and water softening properties in food, agriculture, cosmetic and pharmaceutical industries. With help from Interface, Peacock Salts worked with Dr Carl Schaschke from the University of Strathclyde’s Department of Chemical and Process Engineering, who has experience of natural salt production methods. Peacock Salt’s operations manager Gregorie Marshall says: “Ideally we wanted to develop a

salt production process that used green energy, where little additional input of heat and electricity is required, while also developing a new plant which itself would become a tourist attraction.” A feasibility study with Professor John Finch, of University of Strathclyde Business School’s, Department of Marketing, working with PhD student Emma Reid, provided Peacock Salt with analysis of the market. The project has been hugely beneficial for the Scottish business. Emotional Sciences, based in the West of Scotland, wanted to develop tools and methodologies to understand the emotional mindset of the consumer. Dr Martin Peddie, founder of Emotional Sciences, developed software for analysing a person’s emotions and was looking at the viability for the HR market. With the help of Janette Hughes, from the Wellness & Health Innovation Project at the Innovation Centres (Scotland) in Hillington, Interface introduced Eddie Cochrane of University of Edinburgh Business School and they concluded that the software has enormous potential in a market ripe for emotional measurement. A pilot was awarded an Innovation Voucher through the Scottish Funding Council, and the Emo®Text system is currently under development. Dr Jordan says there is room for more Scottish companies to take up this service. “The initial consultation and discussion is free, but there are fees once a project is under way,” she says. “However, there are grant opportunities to help offset the cost. What we are finding is that it is unlocking a significant amount of commercial know-how in Scottish firms. That can only be good for the economy.” www.interface-online.org.uk

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ON THE RECORD

>> The politicians put their case Every political party is preparing for the forthcoming elections with one common theme – building the economy in spite of major cutbacks The economy will be the battleground for the Scottish elections on Thursday May 5. And Scotland's politicians of every hue will have their work cut out to prove they understand the importance of building an enterprising economy, in the wake of major cutbacks in public spending. With 129 seats up for grabs in the Scottish Parliament there are question marks over how well this new intake understands the requirements of business in Scotland. Two significant figures, Jim Mather, the SNP’s Enterprise Minister, and Wendy Alexander for Labour, are among those stepping down. Scottish Labour, under Iain Gray, is challenging the minority Scottish National Party, led by Alex Salmond, while Tavish Scott leads the Liberal Democrats who have been tarnished at the polls by their UK coalition partnership with the Conservatives – who have Annabel Goldie as leader in Scotland. The opinion polls suggest it will be tight, with no clear favourite as BQ was going to press. BQ Scotland attended an early hustings, hosted by HSBC in Edinburgh, and arranged by ACCA, and the Institute of Directors Scotland. The key issues relevant for the devolved government are: Scotland’s skills acute shortage; the difficulties faced by SMEs of procuring Scottish government contracts; business rates and local taxation, which is already devolved; the difficulty of firms gaining access to bank funding, and the increasing welter of red tape and regulation. But the “elephant in the room” is whether Scotland should use its full tax-raising powers. The Calman Commission examined how Scotland’s devolved settlement of the finances between Westminster and Holyrood could be improved, but it remains a contentious political issue. The Scotland Bill recognises such shortcoming and will give Scotland more control over its fiscal responsibility with new borrowing powers. But many argue this does not go far enough.

The Labour Party’s business manifesto is still being put together, but it will place emphasis on job creation, stimulating the “supply side” of the economy to allow businesses to flourish and create employment. At the hustings, Andy Kerr, a former finance minister, talked about the creation of an “Economic Cabinet” – sitting adjacent to the Scottish Cabinet – that will tackle engagement with the business community. He recalled the Smart Successful Scotland strategy which he said was a good one, and he talked of the importance of infrastructure projects, such as faster broadband connectivity, critical to the rural economy; a high-speed rail link to the south, and the Forth crossing. He said Scotland must use its levers to make it more competitive than the rest of the UK. Scottish National Party’s Kenny MacAskill, the Justice Minister, said Scotland had to put aside any notions that suggested Scotland can't do banking or financial services. He said it was still a strong suit of the nation. He added, as a minority government, the SNP has not been able to achieve everything it wanted but was about working with business to stimulate demand, while maintaining people in work was a priority. SNP’s Growth Strategy has three aspects: based on sectors, markets and companies. What will they do? They will maintain their Small Business Bonus Scheme, improve their Export Support Package, introduce a Sustainable Procurement Bill, and provide 25,000 apprenticeship places to get young people into work.

MacAskill believes there needs to be constitutional change to give Scotland the fiscal levers to determine its future, a policy supported by Reform Scotland, with support from Ben Thomson, Sir Tom Hunter and Jim McColl. Jeremy Purvis of the Liberal Democrats said that his party wanted to look beyond the short-termism of one term in parliament and build for the future. He said there were three things – the creation of jobs in Scotland, the need for smart but radical investment and a requirement for much more clarity. He said that Scottish Enterprise, Skills Development Scotland and VisitScotland all required serious attention. And that the skills agenda was vital for Scotland. Scottish Conservatives’ David McLetchie, the former party leader in Scotland, pointed out that the structural deficit of the UK needed to be dealt with. He said some people criticised the UK Coalition for tackling the debt too deeply and too fast. Yet, he said, the other parties had not addressed this UK deficit question and had no credible plan. He spoke of cutting red tape and bureaucracy. The Federation of Small Businesses in Scotland, representing 20,000 Scottish members, wants economy, jobs and enterprise at the front and centre of the campaign. All five political leaders make their case on enterprise and the economy at the Federation of Small Businesses’ Scottish Parliament election hustings at Dynamic Earth in Edinburgh on Tuesday April 12.

Scottish Enterprise, Skills Development Scotland and VisitScotland all require serious attention. The skills agenda is vital for Scotland

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INTERNATIONAL TRADE

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goldie standard

It’s a traditional, time-honoured industry, but Scotch whisky is fortunate in that there’s enterprise, reinvention – and spirit – in every dram

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Scotland’s business can still learn a lot from our Scotch whisky industry. In terms of expertise in exporting, the industry has it in spades. And while it is a traditional industry relying on its image, it has been able to innovative in terms of its products and in setting premium pricing for soughtafter products. Which is why when it comes to the current Smart Exporter programme, it is worth tipping a respectful nod to all of the whisky firms – both globally and locally owned – for the work they have undertaken over many years. Scottish Development International, in collaboration with the Scottish Chambers of Commerce, and supported by the European Social Fund, have been promoting Smart Exporter as a unique programme to increase exporting skills and knowledge. They can hold up our whisky professionals as the path to follow. It was Tommy Dewar, the whisky baron, and Thomas Lipton, the Glasgow-born grocery entrepreneur, and maker of Lipton’s Tea, who first put Scottish exports on the international stage. Tommy Dewar began the global marketing of Scotch in 1896 and his travel book Ramble Around the Globe, could well be a motto for present-day Scots. Another whisky specialist from Elgin – set up at the same time – has years of experience built on family tradition. Recently, Gordon & MacPhail unveiled one cask of The Glenlivet 70 Years Old, one of the world’s oldest whiskies, at a ceremony in Edinburgh Castle. It received plenty of coverage at home, but it was really an event aimed at the international connoisseurs market. While the United States is by far the biggest export market, worth £233m between January and June 2010, France, Spain, and the rapidly-growing markets in Singapore, South Korea and South Africa mean there were sales worth £1.4bnfor the six months. Figures for the last six months of 2010 were being compiled as BQ went to press. Founded in 1895, Gordon & MacPhail is known the world over as the custodian of old and rare single malts. Members of the third and fourth generations of the Urquhart family now own and manage the business with exports a key role.

INTERNATIONAL TRADE

The Gordon & MacPhail single malt is a typical example of the innovation involved with only 100 full-size bottles available to buy in 2011. Enthusiasts can buy a limited edition set; the Private Collection: Glenlivet Decades, which contains a bottle from every decade from the 1950s to 1990s. Scotch is worth £4bn a year in added value to the Scottish economy – with the industry spending in excess of £1.1bn annually on supplies produced north of the Border. A study by Verso Economics – The Economic Impact of Scotch Whisky Production in Scotland – has shown the industry’s annual turnover in Scotland is £6.4bn and that after oil and gas the sector remains the country’s leading manufactured export, with shipments of £3.1bn a year. The spending with Scottish suppliers, which includes £200m on cereals, helps support 35,000 Scottish jobs with the industry directly employing 10,300 people. The study, commissioned by The Scotch Whisky Association, also reveals export value has grown by 42% since 2000, from £2.2bn. The importance of this export market means that Scotch whisky supports double the number of Scottish jobs than those in aerospace and defence, as well as a similar number to those employed in Scottish universities. David and Michael Urquhart, joint managing directors of Gordon & MacPhail, said: “Following on from the phenomenal success last year of Mortlach 70 Years Old, we decided to release this ‘sister’ Generations cask as there is clearly an enormous demand for greatly-aged Scotch malt whiskies. This cask of The Glenlivet was laid down on February 3 1940, on the instruction of our grand-father John Urquhart. Since then, successive generations of the Urquhart family have been waiting for today – the day it would be ready

to share with fellow whisky lovers. We’re confident that this investment has resulted in a suite of whiskies of unparalleled quality; a real collectors’ piece.” Whisky connoisseur Charles Maclean said: “Made at the height of the Battle of Britain, The Glenlivet 1940 opens a door into a different time, another country. To smell and taste this exquisite whisky is to experience the past in a unique way – layer upon layer of flavour, profound and evocative. Its companions from the succeeding five decades provide an unrepeatable opportunity to explore subtle differences in the flavour of this prince of whiskies over half a century – as well as being a blue-chip investment.” At the heart of a new release is the pageant and the innovation in the packaging and presentation. This appeals to the aesthetics of the collector willing to pay a serious amount of money for whisky. Each bottle is presented in a tear-shaped, hand-blown crystal decanter with an elegant British hallmarked silver stopper. The decanter nestles in a sterling silver base and is framed in a handmade box, crafted in Scotland using Scottish elm. This isn’t cheap stuff either. The Glenlivet 70 Years Old was matured in a first-fill sherry butt and bottled at cask strength (45.9% ABV). Only 100 70cl bottles and 175 20cl bottles will be released in 2011. The 70cl decanter has a recommended retail price in the UK of £13,000 and the 20cl version has a recommended retail price in the UK of £3,200. Fifty limited edition collectors’ packs are also available, containing all five Private Collection whiskies, at £2,850 per pack. Prices may vary in different countries due to different excise and sales taxes and currency fluctuations. But what it shows is how even the Scotch industry has to keep learning new tricks – and keeping innovation at the forefront – to secure export business. n

A study has shown the industry’s annual turnover is £6.4bn – Scotland’s leading manufactured export after oil and gas

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NEWS

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Golf continues to swing, sausage skin firm wraps up expansion, wind generators blow hot, Obama’s oil man to visit Scotland, Stagecoach steps up bus orders, and you can’t get quicker than a Japanese fitter

>> Devro sizzles with sausage skins The sausage skin maker Devro has increased revenues and profits as more people turn to collagen casings. Devro’s revenue rose from £237m, up from £220.4m, while operating profit before exceptional items jumped 39.4% to £38.2m from £27.4m. Profit before tax was £55.2m, while dividend per share has gone up 40% to 7p from 5p. Chairman Steve Hannam said: “Operating profit before exceptional items increased 39.4% compared to 2009. Strong cash generation has enabled a further reduction in net debt to £12.2m even after investing £26.9m in capital expenditure during the year.” Peter Page, chief executive, added: “We expect to see sales volumes increase further as the capacity from recent investments comes on stream and new products displace gut.” The two key drivers remain the growth of meat consumption in emerging markets and the conversion of sausage casings from gut to collagen. Devro experienced sales growth in most of markets, with the exception of China, where it took a decision to reduce sales to satisfy demand elsewhere. Demand for collagen casings is growing rapidly in China, and the firm is looking at strategic ways to approach this market. New lines have been brought on stream in the Czech Republic and Australia, and existing lines in Scotland are being upgraded with capital expenditure increasing by £45m in 2011. The dividend will be paid on May 6 2011 to those shareholders on the register on April 1 2011.

>> Wind energy deal for David Brown Wind energy technology firm NGenTec has signed a partnership deal with global gearing firm David Brown, owned by Clyde Blowers. In return for equity, David Brown will

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provide manufacturing and testing expertise for a 1MW prototype of NGenTec’s wind turbine generator. The collaboration aims to bring products to the market by 2013, in advance of offshore wind deployments expected in 2015.

NGenTec, a spin-out company from the University of Edinburgh’s School of Engineering, secured £2m funding in December 2010 from Amsterdam-based SET Venture Partners and Scottish Enterprise’s Scottish Co-investment Fund and a grant of £800,000 from the UK Government’s Department of Energy and Climate Change. Derek Shepherd, one of the NGenTec founders, said: “We see huge advantages to both parties in ensuring that NGenTec becomes the preferred supplier of direct drive generators to the offshore wind energy market, which in the UK is valued at £70bn over the next 10 years.” Jim McColl, Clyde Blowers chairman, said: “Industrial partnerships like this can bring home-grown technology to market more quickly and can create the next generation of high value manufacturing companies in the UK and globally.”

>> Starmen gaze at a business success Blackford Analysis, a University of Edinburgh spinout from the astronomy department, which has developed commercial solutions based on algorithms originally devised for astrophysics and now applied for medical imaging on the heart, brains and bones, has won a Nexxus Life Sciences Award. The product could generate savings of many millions of pounds by increasing radiologists’ output.

>> Record year for business angels Scotland’s business angels were partly able to help fill the vacuum caused by a lack of bank funding in 2010. The LINC Scotland network was involved in 104 deals last year, 39% up on the previous year, and the first time more than 100 deals were completed in a single year.

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David Grahame, LINC’s chief executive, said “We are tremendously encouraged by the number of strong, investable proposals coming from early-stage Scottish companies. The entrepreneurial community has not been deterred by the difficult economic conditions, and our members have responded to that by investing in more fledgling businesses than ever before.” Private sector investment accounted for 73% of the total investment, with the public sector providing the balance, including grant awards and co-investment from Scottish Enterprise funds.

>> New Lloyds boss calls for bank review The new chief executive of Lloyds Banking Group, António Horta-Osório,

has announced the launch of a strategic review of the bank’s medium-term plan which could accelerate the disposal of Lloyds TSB’s Scotland’s bank branches. The strategic review will cover all aspects of the business – including the position of Scottish Widows – and will focus on ensuring that customers are at the heart of the bank’s future strategy by supporting UK households and businesses. To support this commitment, the group will place a moratorium on announcing further UK branch closures until the end of 2011 pending the review. Lloyds Banking Group has said it plans to accelerate the disposal process of the Divestment Business, known as Project Verde. Meanwhile BlackRock, the global investment firm, is expanding its finance

NEWS

and operations in Edinburgh adding 100 jobs in accounting, administration, finance and support services by the end of the year. The firm now employs around 450 people in the Haymarket area of the capital.

>> Intelligent Office is boxing clever Intelligent Office UK, an Alloa-based provider of business outsourcing to the legal sector, had announced turnover up by 13.7% to £9.9m from £8.7m, with gross profits up 37.4% to £1.78m from £1.3m. The figures reflect the benefits of restructuring in 2009 and the strengthening of the management team. In addition, Intelligent Office UK has secured a number of new contracts in London, including law firms Capsticks LLP and Boodle Hatfield LLP. >>

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NEWS

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Chairman Margaret Lang said: “We’ve worked hard to come right back from the depths of the recession when many of our customers were hard hit. We’ve had to reshape our business but we believe that the increasing interest in outsourcing, provides us with the opportunity for profitable growth. “The increased demand for Transcription Services, now our fastest growing service, combined with our new Consulting Services business, has also contributed to our growth this year. Professional service firms are looking for high quality, secure, UK based services and we see continuing opportunities where government is driving down costs.”

>> Stagecoach orders 520 new vehicles for UK Stagecoach Group is to buy and lease 520 new buses and coaches for its operations across the UK. The Perth-based transport group is investing £52m in 360 new buses and coaches. These vehicles will be introduced in bus networks across the UK, further improving the standard of travel for passengers in Scotland, England and Wales. The news is also a major boost for Alexander Dennis Limited (ADL), based in

>> BQ People On The Move Chris Smylie takes over as chief executive of leading Scottish law firm Maclay Murray & Spens real estate division on June 1, following Magnus Swanson’s completion of three successive terms at the helm. Swanson returns to the MMS corporate department as a partner.

Benny Higgins, chief executive of Tesco Bank, has joined the board of Scottish Financial Enterprise. Chief executive at Tesco Bank since 2008, Higgins was previously chief executive of HBOS Retail Business. He has also held senior positions within Royal Bank of Scotland and Standard Life.

satisfaction innovation. Response, which employes 1,800 staff in Glasgow, provides outsourced contact centre services and software solutions to a wide portfolio of blue-chip clients such as Hiscox and US Embassy.

Simon Webb has joined the Devro board as finance director designate. He will become group finance director on April 7 2011 when Peter Willimans retires. Webb, a chartered accountant, held senior finance positions have included Threadneedle, BAT, Paxar, Enodis, and most recently De La Rue, where he was group finance director. Nosheena Mobarik, joint chief executive

Stephen Vallance has been appointed a non-executive director of Map Global Property Investments. A former partner with Vallance Kliner and Associates, specialising in property, and a tutor at Glasgow and Strathclyde Universities, Vallence will be helping to spearhead the company’s expansion into the Florida property market.

of M Computer Technologies, founded in Glasgow in 1997, has been appointed vice-chairman of CBI Scotland when the current vice chairman, Glenn Allison, takes over as chairman from Linda Urquhart in September. Mrs Mobarik’s term will run for two years.

Shaun Milne has been appointed regional Grazyna Swiercz has been appointed client solution director for Response to spearhead its commitment to customer

editor for STV Local in Edinburgh. His appointment marks the growth of the online and mobile initiative, STV Local.

If you’d like to include someone on the move, please email editor@bq-scotland.co.uk

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Falkirk, one of the UK’s leading bus and coach manufacturer, employing around 2,000 people at facilities in the UK, Asia and North America. ADL produce the Enviro200, 300 and 400, minibus, single and double-decker buses, Stagecoach will also lease more than 160 new state-of-the-art vehicles in London, acquired in October 2010. Les Warneford, managing director of Stagecoach UK Bus, said: “Minimising carbon emissions is a key factor in our investment programme. We want to play our part in reducing the impact of travel on the environment. We believe there is a big opportunity to attract car users to the benefits of greener, smarter bus travel and cut our own carbon footprint.” The new vehicles are expected to go into service by April 2012. In Scotland, Stagecoach is also investing £2.4m in a new fleet of 17 hybrid diesel electric vehicles, following an award from the Scottish Government’s Green Bus Fund of around £1.5m in support funding.

>> Wood Group set to seal PSN deal Wood Group has welcomed an announcement by the Office of Fair Trading not to refer Wood Group’s £594m ($955m) proposed acquisition of PSN to the Competition Commission. As the last edition of BQ Scotland went to press – with its interview with PSN’s Bob Keiller – the Aberdeen-based Wood Group made a successful bid for the business. The full decision of the OFT is expected to be published in the next few weeks and Wood Group expects completion towards the end of April. As part of its strategy, Wood Group is selling its Well Support Division to GE for £1.7bn ($2.8bn). Net proceeds after estimated tax, fees and expenses are £1.62bn ($2.6bn) and following this disposal, the firm intend to return £1.06bn ($1.7bn) to shareholders. The disposal of the Well Support Division, together with the recently announced acquisition of PSN, is in line with Wood Group’s enhanced strategic focus on its core

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engineering and operations and maintenance activities. The disposal is conditional upon obtaining anti-trust clearances and the approval of Wood Group shareholders at a general meeting. Allister Langlands, Wood Group’s chief executive, said: “The significant investment programme in Well Support over the years and the expertise and dedication of all our people is reflected in the price achieved. I believe that GE will be a good owner of the business and, with its scale and reach, be able to accelerate the future international growth of the business. I want to thank all the Well Support people for their outstanding service to Wood Group over many years, and I wish them every success in the future. “Our shareholders will benefit from a significant return of cash and we plan to continue to pursue our successful growth strategy of targeted geographic expansion and

broadening of the service offering in our core engineering and operations and maintenance activities in oil and gas and power markets.” Wood Group is an international energy services company with approximately £4bn sales, employing approximately 29,000 people worldwide and operating in 50 countries. The group has three businesses – engineering and production facilities, well support, and gas turbine services – providing a range of services to the oil and gas industry worldwide.

>> Cairn Energy still driving ahead Higher oil prices have helped Cairn Energy return better returns. The Edinburgh-based exploration and production oil company sold over 63,000 barrels of oil per day at an average price of

NEWS

$69 a barrel in 2010, up from a $50 average in 2009. Cairn’s daily production of 130,952 barrels was a 70% increase in 2009. At December 31, net cash balances were $404m, after the Mangala field in Rajasthan commenced pipeline sales in June 2010, with revenues approaching $1.6bn. Cairn Energy Sangu Field disposal was completed on December 20 2010. Cairn’s preliminary results on March 22 will give an update on the Indian government’s approval process to sell a large stake of Cairn India to Vedanta. The transaction is expected to be completed before April 15. Greenland’s government has granted permission in January for Cairn to undertake further exploration in Baffin Bay in the Atammik and Lady Franklin blocks. The Greenland investment programme in 2010 cost $400m.

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NEWS

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>> Standard Life seek to extract mining support Standard Life Investments, the global fund manager, has urged stakeholders – including governments – in global mining and quarrying to comply with the Extractive Industries Transparency Initiative rules on good governance to fight corruption. Speaking in Paris Keith Skeoch, CEO, Standard Life Investments, said: “Standard Life Investments is a strong supporter of the EITI because it encourages transparency, which helps foster political stability and limits the opportunity for corruption. While the EITI now has over 30 implementing countries and has achieved recognition as a global standard for transparency, I believe that we must build on this momentum to improve its effectiveness further.” He said all stakeholders must endorse good governance principles. “This can only be to the benefit of the citizens of the 33 resource-rich countries that are already implementing the EITI and to investors in companies involved in extractive industries.”

>> Golf is a £300m ace for tourism Scotland’s golf tourism could grow by nearly 30%, generating a potential £300m for the Scottish economy by the end of the decade, says a new study. The new Trump course at Balmedie, opening in 2012 north of Aberdeen, and the Ryder Cup in 2014, will generate global interest in Scotland providing huge opportunities for local businesses. A study, commissioned by Scottish Enterprise and Highlands and Islands Enterprise with support from Visit Scotland and Golf Tourism Scotland, examined the potential growth and economic impact of the market. Despite the recession and continuing economic challenges, the golf tourism market has remained relatively resilient with nearly 80% of respondents expecting to see growth over the next decade. Eddie Brogan, director of tourism, Scottish Enterprise, said: “Golf tourism offers huge possibilities for the Scottish economy and this study gives businesses real ideas of how to

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maximise this potential. But to achieve the predicted growth rate of nearly 30%, public and private sectors need to work closely together to identify and take advantage of the opportunities available.” The study found the 70 most visited courses generate 75% of all the staying visitors’ green fees. The largest growth in numbers is expected to come from Germany, France, Holland, India and China, while more mature markets of North America and Scandinavia are expected to experience slightly weaker growth.

Golf tourism offers huge possibilities for the Scottish economy

>> Obama oil spill man to address renewables conference Terry Garcia, the man appointed by President Obama to undertake the commission of the BP spill is one of the keynote speakers at the Scottish Renewables annual conference on March 22 and 23, 2011. Garcia, the executive vice-president of the National Geographic Society, will speak at the Scotland Unlimited: Realising the Ambition, held at the SECC in Glasgow. In June 2010 Garcia was appointed by President Obama to serve on the National Commission on the BP Deepwater Horizon Oil Spill and Deepwater Drilling. The Commission is investigating the causes of the BP oil spill in the Gulf of Mexico and will make recommendations on how to prevent and mitigate the impact of any future spills. Prior to joining the Society in 1999 Garcia was assistant secretary of commerce for Oceans and Atmosphere, US

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Department of Commerce, and deputy administrator of the National Oceanic and Atmospheric Administration. This event for the renewables industry attracts more than 400 delegates, who this year also hear Lord Smith of Kelvin, chairman of SSE; Yvo de Boer, facilitator of the UN climate summit, Copenhagen 2011, and Stuart Cook, Ofgem. Niall Stuart, chief executive of Scottish Renewables, said: “The renewables sector has had an incredible year with the Scottish Government setting an 80% renewable electricity target, reflecting the ambitions of Scotland’s industry. Our annual conference will be the focal point for business leaders and representatives who share the desire to achieve Scotland’s aspirations for renewable energy at home and abroad.“

>> Japanese snap up Kwik-Fit Kwik-Fit, once one of Scotland’s most successful listed companies, has been sold to Itochu Europe, a subsidiary of Tokyo-based Itochu Corporation, for £637m from French equity house, PAI Partners. A new company based in the London has been set up to look after the independent tyre retailer set up by Leith entrepreneur Sir Tom Farmer. Meanwhile, another Japanese firm has announced it is taking over Borders pharmaceuticals company

Qualifications are changing

NEWS

ProStrakan. The Scottish board has agreed to recommend to shareholders a £292m bid from Japanese company Kyowa Hakko Kirin. Macfarlane Group announced an increase in pre-tax profits to £4.2m, increasing turnover to £135.5m, an increase of 9.6%. The Glasgow-based packaging and labelling manufacturing and distribution company proposed a dividend up 5% to 1.05p a share. It also paid £1.1m towards a pension schemes deficit, now reduced to £15.7m. Macfarlane Group employs 700 people at 22 sites, principally in the UK and Ireland.

Curriculum for Excellence represents a different approach to learning. It will help pupils develop skills and knowledge in more depth that can be used across different subjects and help gain abilities which can be applied to life outside the classroom. This fresh approach to learning requires new assessment methods and qualifications which are being developed by the Scottish Qualifications Authority. We are working with parents, teachers, colleges, universities and employers in your area to make sure the new qualifications will help young people reach their full potential as they progress from their broad, general education through to college, university, other learning and employment. For more about the new National Qualifications visit, www.sqa.org.uk/curriculumforexcellence

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COMPANY PROFILE

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2011 offers exciting opportunities for Scotland’s SMEs but they will need strong relationships with their banking providers to support their ambitions. This is key to the approach of Bank of Scotland and Lloyds TSB Scotland, both part of the Lloyds Banking Group.

Strengthening Relationships

ne of the great benefits of being a small to medium sized enterprise (SME) is that it can be easier to adapt business plans at short notice and exploit changes in the marketplace. As local authorities across the country feel the need to cut their budgets, many SMEs will be well placed to take on public services. However, taking full advantage of these opportunities requires foresight, planning and the support of

a bank that understands their business. At Bank of Scotland and Lloyds TSB Scotland, we never fail to be impressed by the appetite and ambition shown by our SME customers. This is not only inspiring, but allows us to demonstrate our commitment to relationship banking throughout the economic cycle. By understanding our customers’ aims and goals, it means we are well placed to deliver strong support. A long-term relationship

CK EVENTS Inverness-based CK Events began their concert operations in the middle of the economic downturn but have used their business nous to bring the likes of Rod Stewart and Westlife to the Highlands. Lloyds TSB has been an integral part of the business, helping to provide appropriate solutions and guidance to banking challenges not normally faced by SMEs. Key to our support was the relationship we had with the company’s founders, Les Kidger and Kenny Cameron. ”We have a good relationship with the Bank,” confirms Les. “They know us and we know them. Our business is doing something different, but we knew they were the kind of guys who’d back us and see our vision.” Les concludes: “The Bank is quick to offer product solutions and are very receptive to our unique demands. Even when they don’t have an immediate answer to our questions, they quickly find out the right solution. Throughout, the bank is our first point of contact to discuss plans and strategies.”

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with the founding partners of CK Events (see case study) meant that we could share their ambition to double turnover this year. Similarly, our relationship with Totseat founder Rachel Jones ensured we could support her growth ambitions at home and abroad (see case study). The spread and diversity of Scottish businesses has undoubtedly helped the country weather the post-recession years. As a bank, we try hard to understand these businesses, as well as the local communities in which they operate, so we are well placed to assist the growth of SMEs throughout the country. Not only does this support business success, but it benefits local economies and employment opportunities. Relationship managers from Bank of Scotland and Lloyds TSB Scotland, both part of Lloyds Banking Group, make it their priority to develop a broad understanding of local markets and sectors. This knowledge is complemented by frontline experience with customers, which

relationship banking enables comprehensive assessments of each company’s individual needs so the best financial solutions can be offered to fit their circumstances

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enables our managers to make comprehensive assessments of their customer’s individual needs and in turn recommend the best banking solutions to fit their customer’s business circumstances. For example, if an immediate need is to stabilise cashflow then short-term finance such as an overdraft may be appropriate. However invoice discounting can be a useful bridging tool, while term loans or outside investment may be more suitable for the longer term. By working closely with us to share information and discuss plans and strategies, we can offer banking expertise that’ll best support your business. Bells Food Group (see case study) highlights the benefits of the right kind of finance. By re-financing, they have improved efficiency and reduced costs, ensuring they remain one of Scotland’s most recognised brands. Bank of Scotland Area Director, Ian Collins, concludes: “For companies across Scotland, 2011 offers both opportunities and challenges. With our commitment to relationship banking and through the cycle support, we are well placed to assist business growth and development. If you’d like to discuss the support we can provide in more detail, please don’t hesitate to get in touch.”

COMPANY PROFILE

TOTSEAT Like many great businesses, the Totseat travel highchair was born out of personal need. Rachel Jones needed a clean, safe and portable highchair and her idea was so successful that it became the market leader in its space and Rachel now exports to 30 countries. Bank of Scotland has continually supported Rachel’s vision and maintains a strong relationship. “My Relationship Manager has a real can-do attitude. She listens to what I’m saying and does her best to help,” explains Rachel. “Having a face to face relationship, rather than dealing through a call centre, makes a huge difference. It’s about finding the right support.” Going forward, the Bank is working with Totseat on a range of solutions to grow the business.

BELLS FOOD GROUP From its humble beginnings in the Glasgow kitchen of a young baker called Donald Bell in 1931, Bells Food Group is now one of Scotland’s most recognised brands, building up a portfolio that includes Kirriemuir Cakes and a flagship range of pies and pastry products. A recent refinancing package has enabled the business to cut costs and improve efficiency. Bank of Scotland has been supporting the business for more than eleven years as explained by Ronnie Miles: “The Bank has always stuck with us and our relationship director takes an active interest in what we do. He doesn’t just sit behind a desk but comes out to our bakeries to help understand our business. I call things as I see them, as does my relationship director. That creates a refreshingly honest and open relationship.”

For more information ABOUT how Bank of Scotland can work with you and your business, please contact YOUR NEAREST AREA DIRECTOR: Ian Collins East of Scotland Area Director, Commercial 07764 287926 ian.collins@lloydstsb.co.uk Craig McNaughton West of Scotland Area Director, Commercial 07970 586261 craig_mcnaughton@bankofscotland.co.uk Graham Blair North of Scotland Area Director, Commercial 07887 821138 grahamblair@bankofscotland.co.uk

Any property given as security which may include your home may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it. All lending is subject to a satisfactory credit assessment. Please remember we cannot guarantee the security of messages sent by email. Bank of Scotland plc. Registered in Scotland number SC327000. Registered office: The Mound, Edinburgh EH1 1YZ. Authorised and regulated by the Financial Services Authority under number 169628. Licensed under the Consumer Credit Act 1974 by the Office of Fair Trading under licence number 0593292. Lloyds TSB Bank plc Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 020 7626 1500. Lloyds TSB Scotland plc Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. 95237. Telephone: 0131 225 4555. Part of the Lloyds Banking Group. The Lloyds Banking Group includes Bank of Scotland plc and a number of other companies using brands including Lloyds TSB, Halifax and Bank of Scotland, and their associated companies.

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NEWS

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>> Scenic route to £5 million Semi Scenic, the East Kilbride-based semiconductor refurbishment specialists, is expecting a bumper year with turnover close to hitting £5m. Its Managing Director Don Nicolson, said: “Our turnover last year was £1.5m and the year before £1.2m. This year we have sales of more than a million in the first three months alone. How market conditions will unfold is unclear, but on this upward trajectory, we should be looking at close to £5m for the year.”

>> New SWIP brand takes off

>> A trio of young Scottish success

Scottish Widows Investment Partnership, one of the biggest asset management houses in the UK, has unveiled a new ‘high flying’ brand imagery. The ‘Perform’ brand focuses on the sponsorship of two Twister aircrafts, known for their speed, agility and advanced design. The planes will appear at various airshows and SWIP-sponsored events around the UK.

Chocolatier Sarah Findlay, founder of Miss COCO chocolates, was recognised at the BT Scotland Young Entrepreneurs Awards, organised by the Prince’s Scottish Youth Business Trust (PSYBT). Findlay, 24, a Glasgow University graduate, set up the Cumbernauld firm last year with the help of start-up funding from PSYBT and BT Scotland. Rachel McLean, 21, founder of Sweet Peacock, a soap making business in Stepps, received the award for best website, www. sweetpeacock.com, while best e-commerce business award was given to Carol-Ann Brown (24), founder of F5 Karting (www.F5karting.co.uk) based in Dumfries.

>> RBS boost franchise deals Royal Bank of Scotland has made £100m of new loans available for the franchise sector. The fund could finance up to 1,800 new franchise businesses and 24,000 new jobs – based on typical start-up costs and franchisees typically employing around 13 staff. Graham Galloway, managing director of RBS Commercial Banking in Scotland, said: “Everybody wants to see banks funding business growth, as well as helping new businesses get off the ground to create jobs – this is exactly what this fund will deliver. For the many people left out of work by the recession franchising is a great way to start up a business – plus they get the support of a big brand behind them.” A British Franchise Association survey shows franchising turnover increased to £11.8bn last year, with the number of female franchisees increasing by 86% in the last seven years.

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>> Five companies in Scotland in Buyout Track 100 Inverness company Weldex is one of five Scottish firms ranked in Britain’s 100 private equity-backed companies with the fastestgrowing profits over the last two years. The Crane hirer’s annual profits, according to published account, have grown by 36%. The main shareholders are Dunedin Capital (58%) and the McGilvray family (37%). The five have made a considerable contribution to the Scottish economy. Together, they employ 2,600 people, having added 550 jobs over the last two years, and have generated combined profits of £90m. Edinburgh-based Wood Mackenzie is one of only two companies to have appeared on all five Buyout Track 100 lists. It was acquired by Charterhouse in a £553m management buyout in 2009. Its profits have grown 31% a year from £28.1m in 2008 to £48.5m in 2010. Fife-based M&C Energy Group was acquired by Lyceum Capital in a £22m deal in 2009 and has grown profits 25% a year from £2.5m in 2008 to £3.9m in 2010. Identification systems developer Worldmark, based in East Kilbride,

recorded profit growth of 65% a year from £4.9m in 2007 to £13.4m in 2009. In 2007, Barclays Private Equity bought the business from Bridgepoint and HgCapital. Ian Steele, senior partner for Deloitte, said: “As the economy continues to strengthen and transaction confidence returns, deal volumes and corporate appetite for expansion through acquisitions will increase.”

>> Barclays doubles business in Aberdeen Barclays Wealth, the UK’s largest wealth manager, says it has doubled business revenues in Aberdeen in 2010 as it announced the appointment of private banker, Chris Arbuthnott, who has joined the business as vice-president, Private Banking from Kleinwort Benson, where he established the Edinburgh office. Barclays Wealth is undertaking a £350m global investment programme over the next five years, 40% being invested in its people.

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COMPANY PROFILE

The importance of international trade has been recognised by one Scottish company, particularly as it operates in a sector that translates well into new markets. A Smart Exporter programme provided Gentech with the strategy it needed to succeed – doubling turnover in the process.

FOCUSED INTERNATIONAL STRATEGY PROVES SUCCESSFUL FOR GENTECH

yrshire-based Gentech International develops, manufactures and supplies a wide range of standard and bespoke level sensors to a client base of over 300, mostly blue chip companies. The range of products includes flow sensors, position sensors and level sensors to a variety of international market sectors such as the Transportation market as well as Safety, HVAC and Industrial markets. Since its establishment in 1969 by the American company Gordos Corporation, Gentech has gone from strength to strength and today the company develops, manufactures and supplies sensors on a global scale. The company had not always benefitted from the opportunities that exist through global business development. Angela Simkins, Managing Director of Gentech International, joined the firm in 2008 and was very aware of the importance of international trade for Scottish businesses. She approached Smart Exporter; an innovative international trade skills programme designed to improve the export readiness of Scottish companies, to develop an export strategy for entry into new markets. Smart Exporter is specifically designed to increase exporting skills and knowledge amongst ambitious Scottish companies and is suitable for all sizes of business regardless of whether they are new to exporting or have exported to date. Funded by Scottish Development International (SDI), Scottish Chambers International (SCI) and the European Social Fund, the programme is designed to provide a comprehensive range of services to help companies equip themselves with the right skills for international business.

gentech could not have succeeded without the help and support of smart exporter. our growth and global presence in the sensor arena has outperformed the economic climate Smart Exporter provided Gentech with advice on management training and advised the firm on strategy and general market development. A focused international strategy has proven extremely successful for Gentech. Over 95% of trucks in the US are equipped with Gentech sensors and as a result of support from Smart Exporter, the company has a more experienced and strategic team. Consequently its 2009 turnover has doubled to an impressive £5.5m with similar growth expected for this coming year. Support also

involved working closely with the international business development team at Gentech to provide market knowledge, distributor ‘know how’ and training through Smart Exporter’s International Preparedness Programme. Despite the current economic climate the business has also boosted its workforce to 84 people with the recent addition of 21 new recruits. Gentech now aims to build upon its success to date by continuing to grow and offering an even wider range of products to the international marketplace. Angela Simkins said: “Gentech could not have succeeded without the help and support of Smart Exporter. Our growth and global presence in the sensor arena has outperformed the economic climate. The training provided through the Smart Exporter programme has been invaluable.” For further information on how Smart Exporter can help your business call 0800 019 1953 or visit www.smartexporter.co.uk

Gentech International Ltd, Grangestone Industrial Estate, Girvan, Ayrshire, Scotland KA26 9PS www.gentechsensors.com

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AS I SEE IT

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Beware a short-sighted vision of business Steve McCutcheon says employers in Scotlandâ&#x20AC;&#x2122;s financial services sectors need to be careful not to set tight parameters when searching for the best people

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The stream of commuters gliding along the M8 each weekday before 7.30am heading from Glasgow to Edinburgh – and vice versa – tells you something about the health of Scotland’s economy. The rush hour is full of people heading to work in well-paid city-centre jobs. You can bet your bottom dollar that a fair percentage of these drivers are employed in either Scotland’s financial services sector or in the professions. Despite the recession, Scotland still has an incredible pool of talent when it comes to our financial services and professional services industries. We haven’t lost our abilities when it comes to banking, fund management, insurance and back office support for these sectors. And it’s something we really need to understand and celebrate, because there are still big jobs out there with six-figure salaries requiring strong candidates. I know, because my company PRG has placed many of them in the last six months. The naysayers who predicted the collapse of big ticket salaries in the central belt maybe didn’t fully account for the laws of supply and demand. Indeed, there are now upward salary pressures in some areas, for example for highly specialised technical accountants and for expertise in certain areas of corporate law and banking. If you’re an expert in liquidity, Basel III and you’re a great communicator with outstanding inter-personal skills, then you can virtually name your price. Post-crunch, Scotland’s financial services job market has taken time to recover its composure. There is still nervousness and it’s still not easy, but it is easing up. Three years ago, demand was mainly for those who could fix problems quickly and who were experts in cost controls. Now there’s more of a requirement for broader, valued-adding expertise and there’s a growing requirement in finance departments for well-trained, technically specialised accountants. At the same time, there is the truism that the Big Four lose about a third of their newlyqualified staff every year. That’s the way it works and this helps fertilise the accounting

skills needed elsewhere in industry with people who have knowledge of the Big Four’s methods of operations. A bright, qualifying accountant really needs to gain some dirty-fingernail experience out in the commercial world. Once they have this, the Big Four firms value this exposure, which is why many end up back in consultancy years later. But there’s also an interesting dynamic that needs addressed. The recruitment process for some clients sticks rigidly to what they think are the necessary attributes from any potential candidate. For example, they expect candidates to have work experience with a Big Four accounting firm (PwC, KPMG, Deloitte and Ernst & Young). They want a Scottish qualified CA, who has passed all their exams first time – sorry, no re-sits – and they often also want financial services auditing experience. All this wrapped up in an intelligent, capable person with those inter-personal skills mentioned above. But there is a recruitment – and business – issue here. A good professional recruitment adviser should know what their client actually needs, rather than what they think they want.

Despite the recession, Scotland still has an incredible pool of talent when it comes to our financial services and professional services industries

AS I SEE IT

Sure, a company might want a Big Fourtrained candidate but do they really need one? And stipulating a CA excludes many English-trained accountants and even those who are ACCA or CIMA qualified. This narrows the parameters and, while there might be sound reasons for doing so, the fact is that often there are not. The professional recruitment consultant needs to be assertive and be prepared to educate the customer. Recruiters need to challenge inappropriately narrow selection criteria, because a failure to challenge risks excludes worthy candidates who might have vital experience work. So, if there are reasons for such a narrow search field, then this should be fully discussed. Replicate this inherent conservatism across Scottish businesses and you get an indication of the danger of this prescriptive approach. The risk is that Scottish talent with different strengths might be overlooked – and that’s a negative for Scottish business. There’s another matter that employers should bear in mind. There is no shortage of opportunity if you work in finance or professional services and have specialised skills. This means a candidate’s expectation of a future employer has also increased too. It’s very seldom I hear people looking for a new job speak only about salary. Now they demand a range of other benefits. The candidate’s process of evaluating competing employers is now based on whether it’s a good place to work, whether the work is varied and interesting in its scope and what the worklife balance is like. As well, of course, as financial remuneration. So companies can’t be complacent and must ensure that, in this improving climate, they are not shutting the door on the kind of key talent that they need to grow and prosper. Rules should never replace reason. Steve McCutcheon is chief executive officer of PRG, an independent Scottish recruitment company specialising in senior accountancy and legal positions. Launched in 2002, it is now Scotland’s largest independent recruiter for the professions. n

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ENTREPRENEUR

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ENTREPRENEUR

The Square Root of Style Peter Taylor is the mastermind behind Blythswood Square hotel in Glasgow. He explains how his £30m hotel dream was saved from the brink of disaster

Hotelier Peter Taylor smiles a lot. He is a very charming business man who has created his own stylish signature on Scotland’s hospitality trade. His hotels are immaculate places for the weary to lay their heads, and for the discerning to savour the good times. But he was best known for his establishments in the East. He hadn’t conquered Glasgow, where there was certainly a more exuberant and well-heeled clientele. His “West Side Story” began when he was a guest speaker at a business breakfast in central Glasgow and was tipped off about a unique opportunity a few blocks away. After the coffee and bacon butties, he was chatting with Beverley Payne, a familiar figure in Glasgow’s hotel scene who worked with entrepreneur Ken McCulloch, creator of The Malmaison and Dakota Hotels. She asked Taylor if he was interested in turning the former Royal Scottish Automobile Club in Blythswood Square into a hotel. The place, he was told, was in a sad state; the dwindling club membership and the high cost of maintenance had taken its toll and the building was derelict, lain empty for four years, and up for sale. Yet here was a glorious Georgian terrace that was an essential part of Glasgow’s civic history.

“She was the second person that week who had mentioned it to me,” recalls Peter, as he sips green tea in the grand Salon of Glasgow’s most sumptuous new hotel. “I thought there must be something in this. I was aware of the RSA Club, but didn’t know its status. I went to see it, recognised its potential, then I bought it off-market very quickly,” he adds with an infectious grin. “It’s a trophy building. You could never create this with a new build, no matter how much effort or money you put in. This building is very special – and it required something to rekindle its magic. We’re over the moon about how it’s worked out.” The creation of Blythswood Square is all about seizing an opportunity, applying the hard graft and holding one’s resolve in the face of

adversity. Taylor might have built a successful hotel group in Edinburgh, with the multi award-winning Bonham, but Glasgow was a different ball game altogether. He purchased the building as the world went into financial meltdown and banking finance froze. And when major refurbishment work was well under way, the rear wall of the building collapsed into a pile of rubble. This caused chaos and a hold-up of nearly two years before the hotel could eventually open for guests. Previous owners originally hoped to create 43 apartments that would have involved destroying the wonderful 35-metre Salon, certainly something Historic Scotland would have frowned upon. Then they obtained planning permission for 139 rooms. >>

It’s a trophy building. You could never create this with a new build, no matter how much effort or money you put in. It required something to rekindle its magic

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ENTREPRENEUR But the wily Taylor knew any luxury hotel needed to create a sense of space and it was physically impossible to build so many rooms in such a confined area. “We’ve had great support from the City of Glasgow Council,” he says. “They were very keen to have a new five-star hotel in central Glasgow, right in the main business district.” Planning permission came through in nine weeks. In 2005, Glasgow attracted 2.8 million visitors who spent £700m at its varied attractions and events. The council’s vision was to deliver a minimum 60% increase in tourist revenues by 2016, growing tourism-related employment to 40,000, and increasing the capacity of premier hotel rooms by 3,000. A new hotel in Blythswood Square, near to the Malmaison, would be a bonus. “Even in good times it was a brave move,” says Taylor. “And I did have a number of people from the industry suggesting I was over-optimistic. Some told me that they had looked at turning it into a hotel but couldn’t get it to stack up.” Blythswood Square has been open for over a year and creating a buzz in a metropolis that loves to dress up when it goes out. The restaurant is packed most evenings – if you don’t want Mather’s Black Gold beef fillet at £40 a pop or Loch Duart Salmon at £22.50, there’s a more modest Chicken Kiev at £19.50 – the hotel isn’t chasing Michelin stars, preferring to provide great food all day long – with Josper charcoaled grilled steaks a speciality. The downstairs Rally Bar and the Salon, draped in Harris Tweed, are the smartest places to be seen in town at the moment. “We are proving all these people wrong,” says Taylor. “We’ve sold 55,000 cocktails since we opened the bar and restaurant in November 2009. Our aim is to be not-too stuffy or formal, providing a range of dishes for all tastes – when you want it, any time.” But Taylor is particularly delighted with the spa – a subterranean and fragrant cocoon on a dreich Glasgow day – that has been lovingly created and already recognised as world-leading. He says: “When you’ve got a building that’s historic, it dictates what you can do, how you

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I did have a number of people telling me I was over-optimistic. Some told me they had been looking at turning it into a hotel but couldn’t get it to stack up finish it and how you present it. But when you’ve got a spa with a new build space – a blank canvas – making those decisions is a tougher call because we could have done lots of things. It’s far better than we imagined and the feedback is brilliant.” The upmarket travel glossy Conde Naste Traveller, which has kept tabs on Taylor over the years, has already decided it is a world-class spa – a blend of Scottish sophistication with the kind of contemporary elegance that Glasgow is famous for. To complete the hotel, the six original houses had to remain intact while behind it a six-storey, 70-room hotel block was created adding to 30 rooms in the original front buildings. “We took everything away, including the in-fill building in West Regent Street,” says Taylor.

“We’ve created a high-class hotel tucked in behind the front façade, with penthouse suites with commanding views of Glasgow.” The architects, Ron Galloway Associates (RGA) had done a brilliant job, while Jim Hamilton of Graven Images designed the interiors. “Jim was more than just the interiors,” says taylor. “He challenged us on the whole customer journey. Jim played a pivotal role and has given Blythswood Square its identity and its soul. There isn’t one piece of furniture that is off-the-shelf, Jim designed all the furniture and we then had it made for us. We’ve used Harris Tweed in a big way – on the seats, cushions, curtains and bed covers.” Taylor says he was told it represents the biggest order of Harris Tweed since the original order for the QE2 in 1967, and has

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been a boon for the Western Isles weavers. “It’s the talk of the town now as a fabric, not just for fashion but for furniture, curtains and upholstery because you get different weights and it is hard-wearing with vibrant colours,” says Taylor. But there hasn’t always been this gentle smile on his face. The Salon might be special but there were some low-grade buildings at the back that had to go during reconstruction. It was a rabbit-warren of rooms, offices and stairways. On November 24 2007, a wall collapsed at the back of one of the townhouses – a major setback for Peter Taylor. Understandably, the bank became nervous. It might well have killed off his Glasgow ambition, but after some shrewd negotiations, the team carried on. What it did do was make the whole project 90 weeks late. Not only that, but corporate business at the rest of the Town House Collection had fallen off too. “The more we looked into it, the more we realised the collapse was right at the centre of the whole development,” he recalls. “We carried on but it was a stressful time.” Chard Construction did its best to retrieve the situation, but it all became very complicated. Eventually, the company went into administration. “This wasn’t all about us; there was the credit crunch,” says Taylor, “but the wall collapse would have had some impact on them, for sure.” The collapse was viewed as the contractor’s responsibility, so for Peter Taylor there was an expected multi-million insurance payout to cover the losses. Renfrew-based specialist fit-out contractors Thomas Johnstone stepped in as the new contractors and, according to Taylor, have done a brilliant job picking up the pieces. “It was on time and on budget.” Eventually, the bars and restaurants opened in November 2009, many months behind schedule, with extra costs requiring fresh banking help, and in the wake of the worst recession since the Second World War. Finally the hotel opened fully in September 2010 with its penthouses ready for customers. “I was determined that despite all these pressures, we couldn’t afford to compromise with the final result and the finishes,” says Taylor. “My father always talked about, ‘Don’t

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spoil the ship for a ha’pennth of tar’.” The nautical aphorism is appropriate. Peter Taylor was born in naval Portsmouth during the Second World War and his father was in the Royal Navy. He moved around a lot as a youngster and attended various schools, but his father retired to Dundee and Taylor went to school in Dundee. “If I’d had perfect eyesight I might have joined the Royal Navy,” he says. “But all I knew was that I didn’t want to be sitting behind a desk. I wanted to work with people. I still enjoy the buzz of working in hotels.” So, in 1961, he went to Ross Hall, the Scottish Hotel School in Glasgow, which became part of University of Strathclyde. It was there that he met his wife, Mhairi, who was also in hospitality training. He graduated in 1964 and went off to the United States, where he worked in the River Club of New York, in East 52nd Street, and then one of Manhattan’s most exclusive club – where the Kennedy clan were regulars. “The cost of living was so much compared to my meagre wages, but it was brilliant experience,” he says. “I was working in the front office and also doing night audit – or night manager. Then one of my colleagues,

also from Scotland, started to get letters about being drafted into the American military for service in Vietnam. I decided it was time for me to head back to Britain.” He took up a traineeship with Strand Hotels, then part of the Lyons Group. He worked in various departments in London’s Cumberland, Strand Palace and Regent Palace hotels. “I gradually worked my way up to assistant manager and then spent three years as a training manager, overseeing the opening of a number of new restaurants and hotels,” he says. “In that role, I also oversaw the opening of the Albany Hotel in Nottingham in 1969. I was then appointed to run the Albany. Then, in 1972, I was appointed general manager for the Albany in Glasgow.” At that time, the Albany in Bothwell Street, which opened in 1973, was the most fashionable and best place to stay in Glasgow. It had 250 rooms, two restaurants and a 700-seater conference suit. It also housed the St Andrew’s Sporting Club where Scotland’s greatest professional boxers, such as Jim Watt and Ken Buchanan fought in the ring. Peter Taylor welcomed royalty, film stars, celebrities and rock stars, including The Who when they played at Celtic Park, and maintained the >>

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ENTREPRENEUR discreet and attentive service that was to become his hallmark. “It was an amazing scene, I would say. I was in my late 20s and I remember a minor royal was staying with us and I was taking her up to her suite. She was delighted by the crowds that had greeted on her arrival at the hotel. I didn’t want to tell her the crowds were waiting to see the Osmonds.” Taylor’s focus was on training the right people and focusing on the quality of the hotel, which wasn’t really one of the acknowledged aspects of Scotland’s hospitality industry at that time. “We wanted to be a considerate employer concerned about developing the people in our business,” he says. “Even today, in Blythswood Square, we are only as good as the people we have on board. They know more about our business than anyone else. In a sense, they are the listening posts for us. We fail to listen to them at our peril.” After the Albany, he worked with Forte where he was regional director in Surrey, Sussex and Kent, before joining Thistle Hotels, and then operations director running all of Stakis Hotels, by then a major UK chain created by Reo Stakis. But he yearned to go out on his own, to run his own hotels. So, in 1984, he grabbed his chance. Over in Fife, the Lundin Links Hotel had seen better days. It was a tired old lady, once a fashionable place as a golfing hotel, but in receivership. “I was keen to get out of the big corporate scene,” he says. “I believed I could make it work and do my own thing. We didn’t have enough capital, so I persuaded Mhairi that we should sell our home in Cramond. We bought the hotel for just over £100,000. It was on its knees with almost no business.” They set about transforming the place. “We spent a lot on redeveloping. We took it from a low base and we really got it motoring and sold it a few years later for three times what we’d paid for it. Mhairi was a solid number two and, amazingly, we didn’t argue. We didn’t have time to argue.” He was prompted to sell by an offer to become involved with the old Fox Covert Hotel in Corstorphine, in Edinburgh, renamed the Capital Hotel. It was then a 55-bedroom hotel, where the liquor receipts were higher than

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So many managers opening hotels, open with a flourish, get all the kudos and soon learn it’s a long, hard haul to iron out the teething problems room sales. It was a place that had a reputation for attracting trouble. But there was land next door for development, so Taylor snapped it up and added 40 bedrooms. “We doubled the size and created a leisure club,” he says. “I was a quarter shareholder in that hotel. It took off incredibly well.” In 1989, Taylor led a management buy-out of the Capital Hotel, with help from Donald MacDonald and Sandy Orr who later founded City Inns. Then 16 weeks later, at the top of the market, it was sold again for a lot more money to Queens’ Moat Houses. He remains coy about how much money they made on this deal, but it helped him release his dream of creating his own bespoke hotel group. “In my corporate career, I was used as a clean-up boy to go in and sort things out,”

he says. “I think it’s good to stay as manager in a hotel for a while, because you have to live with the decisions that you make. So many managers opening hotels, open with a flourish, get all the kudos and soon discover it’s a long hard haul to iron out the teething problems.” He learned that luxury hotels have issues. At the Albany Hotel, for instance, room service was a serious problem because it was difficult to serve food and drink throughout the night, so far from the restaurant. The Townhouse Collection would become a reality. His first target was the Gordon Bruce, a one-star establishment, going nowhere. It was five town houses joined together in South Learmonth Gardens and wasn’t maximising its use. Taylor stripped it out and started again in

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1990. It was nearly named the Balmoral, but instead they choose Channings, which had a genteel ring of quality. A week later, much to Taylor’s relief, rival hotelier Peter Tyrie renamed the grand North British Hotel in Princes Street, the Balmoral. “I wasn’t using the term boutique at the time, and I don’t particularly like the word because it’s a bit cliched,” he says. “We wanted to do something refreshingly different. I’d worked for all the big boys. I do enjoy creating something from out of nothing.” Channings was born as the Gulf War and recession hit and it lowered its sights temporarily to accept the bus tours. But he knew that guest wanted a bit of personality, quirkiness and something different. He entered the STV’s Business Game, presented by Viv Lumsden with financier Peter de Vink among the judges, and got to the finals. This was like having free consultancy and Taylor says it

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helped him focus on his plans for expansion. In 1995, he bought the Howard Hotel, a popular New Town hotel, which was then in receivership. In 1997, he beat 12 others to acquire Muir Hall, a former university residence, which he then turned into the Bonham. It was a shell and it was decked out in eight months, ready to open in June 1998. Almost immediately, the Bonham emerged as the best place to stay in Edinburgh, tucked away in the West End. Conde Naste Traveller dubbed it one of the Coolest 21 Hotels for the 21st century. This was the kind of publicity that you simply couldn’t buy. “After that, the PR took on a life of its own,” says Taylor. “And we are about to refresh the Bonham’s public areas, creating a whisky bar.” The Town House Collection – owned by Taylor, with help from the bank – has become one of Scotland’s leading luxury hotel groups. More recently, Channings and the Howard have

been sold off to help pay for Blythswood Square. At this point, Taylor pays tribute to the team and especially to his co-director Hans Rissman. They have worked together for nine years, the last four as managing director of the company. “He volunteered to come across and lead the project and I was delighted about this,” he says. “He was brought up in the West of Scotland and went to school in Glasgow. “I looked after the building work while Hans brought on board our people – who are really the heart of the Town House business. We had 400 applications for the jobs in Glasgow. This was unsolicited, before we advertised.” What is his secret then? He smiles once again: “We don’t believe our own hype. We keep asking, could we be doing it better or differently. It is not all about bricks and mortar but our people.” The proof of this is Blythswood Square. n

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in association with

SCOTTISH TOURISM BEYOND 2011 The inaugural BQ Scotland Live Debate, held in the Malmaison hotel in Edinburgh, tackled the issue of how to grow a sustainable tourism business sector in Scotland. A lively two-hour discussion covered a welter of subjects from investment in infrastructure, access to finance for new business, through to defining Scotland’s unique selling points, our attitude to visitors and service, and the events – such as the Commonwealth Games, the Royal Wedding and the arrival of Donald Trump’s golfing complex – which create massive global opportunities for Scotland. All the participants expressed a deep passion and concern for Scotland and how it can use

For 200 years, Scotland has been leading tourism globally. It’s been through plagues, wars and recessions worse than this

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its unique national heritage, culture and friendliness of the people, to attract more visitors from abroad, but also to encourage more “staycationers” to get to know their own country better. Mike Cantlay, setting the backdrop for the debate, spoke briefly of the present state of tourism in Scotland. “If we went out and asked tourism businesses how they were doing, we’d get a variety of different responses,” he said. “But I know nobody would say, ‘It’s easy’. It’s a tough trading environment for everybody in this industry. If you look back at 2010, that’s hardly surprising. We had three acts of God; we started the year with a ‘once-in-a-lifetime’ storm, and then we had volcanic ash cloud, then we ended the years with a ‘once-in-alifetime snow storm’. And we had airline strikes, spending reviews and a recession. So it’s been a very tough trading environment.” The starting point though is that Scottish tourism has proven to be a resilience industry for 200 years. Since Sir Walter Scott “invented” the notion of romantic Scotland with his books and poetry, the nation has successfully traded on its icons of tartan, glens, whisky, shortbread and, more recently, golf. “If you look at the resilience with everything that has been thrown at us, it’s a good starting point,” said Cantlay. “For 200 years, Scotland has been leading tourism globally. It’s been through plagues, wars and recessions worse than this. Scotland’s tourism industry is coping well, despite the fact it is a difficult environment.” Tourism remains Scotland’s number one industry in main disciplines, employing

Those taking part in the debate, chaired by Peter Baber, editor of BQ Yorkshire, were: Dr Mike Cantlay, chairman of VisitScotland; Manus Fullerton, board member of VisitScotland and vice-chairman of Edinburgh Zoological Gardens; Gordon Robertson, director of communications, BAA Edinburgh Airport; John Sharkey, chief executive, SECC Glasgow; Mark Little, managing director, Barclays Wealth; Neil Steven, director of accountancy firm Johnston Carmichael; Alasdair Peacock, managing partner, Biggart Baillie; Heather Buchanan, managing director, Bluegrange hotels and apartments; Chris Harte, partner, Morton Fraser; Victor Brierley, managing director, Bagging Scotland; Tim Corfield, director of corporate finance, Deloitte; Ian Collins, commercial director for East of Scotland, Lloyds Banking Group; Willie MacLeod, director, Scottish Tourism Forum; Dr Eleni Theodoraki, reader, School of Marketing, Tourism and Languages at Edinburgh Napier University; Barbara Clark, head of communications for VisitScotland; Kenny Kemp, editor of BQ Scotland.

BQ is highly regarded as a leading independent commentator on business issues, many of which have a bearing on the current and future success of the region’s business economy. BQ Live is a series of informative debates designed to further contribute to the success and prosperity of our regional economy through the debate, discussion and feedback of a range of key business topics and issues.

250,000 people in hotels, conference venues, festivals and concerts, and in a host of activities. In 2011, it will generate £11bn for the country. Cantlay believes that major events – such as the Royal Wedding on April 29 – helps to keep the UK and Scotland in the international spotlight. He said: “It’s wall-to-wall in the media in the US. NBC were covering it every day and the question was, will the honeymoon be in

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New approach: Delegates at the BQ Scotland Live Debate listened intently and responded with constructive answers to searching questions Balmoral? This then features glorious aerial shots of the Highlands and Royal Deeside.” Scottish tourism does benefit from the big Hollywood blockbusters, such as Rob Roy, Braveheart and even the Da Vinci Code and Cantlay said the wedding of Prince William and Kate Middleton was in this bracket. And also said the Olympics in London was a profound opportunity for Scottish tourism, more than people realised – then there was the Commonwealth Games 2014, the Ryder Cup Gleneagles 2014, and another year of Homecoming in 2014. In 2015, Event Scotland has attracted the World Gymnastics Championships, and the Tour de France in Edinburgh in 2017. The arrival of giant pandas at Edinburgh Zoo – courtesy of the Chinese government – is likely to increase visitor numbers and attract people from across Northern Europe. “Where would you want to be other than in Scotland with the opportunities going forward?” he asked. But the debate threw open some challenges about the Growth Agenda for Scottish Tourism. How can this be achieved and what does Scotland have to do? The Tourism Framework for Change, a policy document set

out by VisitScotland in 2006, set a target that tourism in Scotland would grow by 50% in the following ten years. Yet, five years in, there has been precious little evidence of significant levels of new growth. And VisitScotland admits openly it needs suggestions as to where these new growth areas will be. LOOKING FOR THE BIG HITS The debate looked at infrastructure and the importance of getting people to Scotland, and then around the Highlands and Islands, it looked at the kind of funding required for tourism businesses, from bed and breakfasts through to large keynote capital development such as the £700m expansion of the SECC in Glasgow, and it looked at the quality and consistency of the experience. Mike Cantlay suggested that step changes and “big hits” were needed in various areas. He suggested, for example, the banking sector looking at how tourism business were funded and the perception that financiers have of certain parts of the tourism industry, or in transport and infrastructure and the important of Route Development Funding to promote air links to other destinations – perhaps a high-speed rail link to London, or perhaps in

marketing where he cited the £15m in marketing expenditure by VisitScotland unlocking to some £416m of additional spend. “A new approach in the relationship between VisitScotland and the people of Scotland is appearing,” he said. “This ‘staycation’ fad is more than a fad, it’s been going for several years and Scots are doing things in their own country that they haven’t done before. It’s becoming a habit, and maybe a trend.” Peter Baber posed the question: What can be done to encourage more people in the United Kingdom to carry on with the ‘staycationer’ habit. Victor Brierley said Scotland should not try and compete with foreign holidays where there was constant sunshine. “There are some incredible things you can do in Scotland,” he said. “People aren’t coming here for the sun but for the unique aspects. We all need to appreciate this. There are some amazing places and experiences all over this country.” Many of the participants spoke about the importance of golf, even at a time when the corporate market, which supported many of those events, had been hit. Mark Little spoke about his company’s sponsorship of the 2011 Barclays Scottish >>

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Open Golf tornament, which is being moved from Loch Lomond to Castle Stuart links at Inverness, on July 7-10. He said that it was a risk because they were taking a major international event to a “frontier” location that hasn’t had a lot of international exposure to top level sport, but that the local people were rallying around. “We were nearly put off because it was too far from Edinburgh and Glasgow and people from the US would have difficulty getting there,” he said. “Yet it’s a beautiful place, Inverness Airport is next door and there are 40,000 rooms around Nairn and Inverness.” THE INFRASTRUCTURE QUESTIONS Alasdair Peacock: “We need to make it as easy as possible for people to come here. So if you’re in Brazil or live in Bournemouth and want to come to Scotland, it should be easy to get where you want, easy to find accommodation, and when you get there the service quality should be of a level that people can say it’s a fantastic experience and want to come back. It’s ease across this, whether its booking or it’s transport. Sometimes we fail in that, but we are getting there.” Manus Fullerton: “There are a lot of Scottish people who have never explored their own country. If you look at our market, most of it comes from England.” Heather Buchanan, whose company is based in Melrose, says that she finds there are more weekend break – two-day trip – visitors. “Certainly it’s harder slog in the winter time and during the winter we target the local market. In the summer, we don’t have to do as

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If you’re in Brazil or Bournemouth and want to come to Scotland it should be easy to get where you want and easy to find accommodation much on the West Coast because there is the demand. We’ve had people crying in the car park because they can’t find anywhere to stay.” Chris Harte said that local events play a crucial role in encouraging people to go out of their way to visit new places and do new things. “If, for example, there is a book festival, mountain biking or a whisky festival, which is 30 miles away, that’s more likely to get you out and about to go and visit.” Neil Steven says there has got to be much more accessibility and joined-up thinking about how you get to such places and events. “I’m going to Oban to go to the Western Isles to play golf and discover the road is closed, or I find something on at the Edinburgh Festival and I decide to take my two children, then we end up standing on the train because they’ve only put on three carriages. It doesn’t work. It’s this kind of inconsistency that’s an issue.” He went on to say that it wasn’t simply about investing in tourism but in infrastructure in general. “You have to plan it and build but then there is a tourism return on the back of it.” Chris Harte: “Investment in Scotland is about

priorities. There are a million and one projects and things to do to improve life and the industry and it’s about having to make choices and what should these choices be. Say, for example, public money should be used to getting the infrastructure right and leave the private sector to make the best out of that infrastructure.” Manus Fullerton: “Where we have seen investment in Scotland’s infrastructure it has worked extremely well. The Route Development Fund for the airlines and Road Equivalent Tariff (RET) for ferries out to the Islands, introduced as a pilot in 2007 – that’s been fantastic, so Scottish Government can by its support make a huge difference in the economy. I’d love to see figures on what value this is delivering. But all too often these things are cut because there is a change of government or emphasis.” Willie MacLeod: “Road Equivalent Tariff is still a pilot on certain routes. If it is working, and it is working, why is it still a pilot after such a long time – and not been extended to every ferry route? We’re just not getting there. We pilot things and then let them stop.” “We talk about consistency of service but we

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aren’t talking about consistency of public sector support. We are very good at coming up with initiatives but not sustaining them. One of the questions for tonight was about sustainable economic growth. If we’re going to have this growth, then let us sustain the initiatives we put in place until they have run their natural course.” John Sharkey: “People don’t choose to go on holiday because of infrastructure. You don’t research the ‘infrastructure’, you go because there is an aspirational need.” He spoke of how the SEEC was working in collaboration with Triple Echo, an independent production company working on The Adventure Show on BBC Scotland, to have an Adventure Show Live aimed at people focused on outdoor sport and leisure. It was very attractive because there were a number of active niche groups using social networking that could be tapped into, adding up to a major viable event. “That’s not with public investment, that’s with a private sector partner with a private sector event that’s driving people to come to Scotland.” Victor Brierley: “The first social networking guy was Sir Walter Scott. Everyone goes on about social networking being the new thing – the magic. Scotland became famous because Rabbie Burns was out there networking and telling people about Scotland. Some people think social networking is new, it isn’t. What’s new is the tools and the technology.” He said that VisitScotland had a ‘tough gig’ because it had to try and do so many things.

Mike Cantlay: “What I really want to get at is the ‘big hits’ with this £11bn industry and you want to increase it by 50%. You are talking about massive increases. This is big stuff.” Scottish tourism sits right in the middle of the Scottish economy. It is the bedrock and its consistent, resilience and almost half the Scottish Government’s budget. Tourism has the ability to counterbalance the other sectors of the economy. “If the economy is in some difficulty and the pound weakens, then Scottish tourism immediately becomes more competitive and that helps to balance other sectors. But why 50%? Why not 100%? The answer is that Scotland needs tourism to be as strong as it possibly can be to do all these other things in the economy.” THE SCOTTISH PEOPLE What is Scottish tourism, it’s a broad catch-all, says Victory Brierley. “It’s not just pigeonholed as Scottish tourism. It’s Scotland in all its various quirks and guises.” Manus Fullerton: “One of the things we promote is that tourism is everybody’s business. You can’t get a better ambassador than a friendly and well-informed taxi driver.” But is that message percolating through to all those who meet and greet our visitors? Peter Baber asked whether the problem was that tourism is such a nebulous industry and not as clearly defined as construction, for example. Mike Cantlay talked about Vancouver being named as ‘The Best City To Live In the World’.

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He agreed it was a very friendly city where, in his experience, the people were happy and at peace with themselves. “I’ve always loved Vancouver, but Edinburgh is a better city to live in than Vancouver, in my view.” But he said the Canadians were very friendly to visitors. He reckons the strands between the whole Scottish people and the tourism industry has to be one the biggest step changes in Scotland going forward. He said this comes from the confidence of people who love the place. “We’ve got to get real about it. We need the debate and get it in perspective.” Peter Baber asked Ian Collins as one of the newcomers to Scotland what was his perception. “I’ve visited five or six places since I came up to Scotland and I probably found most of these places myself through the internet or word of mouth,” he said. “I think you can do a lot more with people who stay here.” He said he saw a lot of advertising for foreign holidays, such as New Zealand and the Channel Islands, but not a lot of advertising promoting Scotland for Scots. Gordon Robertson said his company had just realised its master plan to 2040 and says it is about more sustainable growth. “We really are a very small nation on the north-west periphery of Europe in the largest industry in the world – travel, tourism and leisure – but we’ve to get real about this. Aviation is important to bringing people here. We’ve got to look at our strengths. “We are going in a more modest way to build on more modest passenger forecasts – and people understand that.” >>

All inclusive: The tourism debate covered every business aspect from Scotland’s people to ferry pilot schemes and social networking

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He said people arriving at Edinburgh Airport have a myriad of reasons for coming to Scotland. Each one had a different and unique expectation and it was the task of Scotland to try and exceed that expectation. Eleni Theodoraki: “Is this then all about individual agendas or what the visitor actually wants? There appears a disconnection between what Scotland offers and what it gives.” Mike Cantlay: “Well, one of the big issues is that what the visitor wants and how Scotland would like to be perceived is often two different things. That’s a challenge. VisitScotland is very good at knowing the visitor from London, Paris, China or America; how this is segmented and what they want, but what we’re not good at is explaining this to Scotland.” John Sharkey: “A lot of the discussion here isn’t about how to get people here, it’s whether or not you can get people to come back.” Mike Cantlay pointed out that marketing and promotion are two different things. A lot is promotion about how places are portrayed but do not target the customers. VisitScotland, says Cantlay, has the knowledge of the customer and has the tools to get to the customer. You can’t get a city promotional campaign and get people to come unless you do it at the customer end. He agreed with Ian Collins that there hadn’t been a lot of VisitScotland marketing in Scotland until last year.

TRAINING OUR PEOPLE Heather Buchanan: “Training for the tourism industry is the key but it is highly centralised around the centres of population. When you get to the rural areas of Scotland it is one of the biggest challenges. You often run such a tight budget that you can’t afford lavish training programmes. You need to maximise your service levels to up-sell to visitors.” She said that a well-informed local person can sell a local malt whisky with a meal to a foreign visitor and that can be a special moment. Victor Brierley: “It’s really important. There are loads of people who are magic players in Scotland and it comes as second nature. There are people who understand what customers want. We don’t have to worry about a top-class place like the Balmoral Hotel where Ivan Artolli motivates his people. It’s elsewhere that you need to find the exemplars. For example, the guy who runs the Gairloch Hotel in Wester Ross trains his staff himself as a ‘mini-silo’ and he does his own individual thing. He knows his business and his customers, so you could have lots of ‘mini-silos’ across Scotland concentrating on improving service quality. Peter Baber asked about the importantance of environmental sustainability. How can we balance people coming to Scotland for the natural heritage and the nature and the need for economic development? Eleni Theodoraki: “Part of the equation for environmental sustainability is the social and local community perspectives of a nation’s

wellbeing. Obviously uncontrolled development can have a detrimental impact. There has to be a pardigm shift; it’s about training people beyond economic and including social and environmental. We’ve seen what the economic ‘dream’ or the bubble gave us, and it hurts now. It’s about caring what’s happening to your neighbour.” Alasdair Peacock: “Yes, if you get all the social and environmental stuff right, you will get the economic situation right too – I think that is what people come to Scotland for.” ON FUNDING TOURISM BUSINESSES There was discussion on how sustainable tourist projects might be funded and an acceptance that those seeking funding needed to be more creative about how they made things happen. Ian Collins: “If you look at hotels, bed and breakfasts and guest houses and the appetite for funding, we are absolutely there for people wanting to do them. Most of what we do at the moment is refurbishment and people have laid off that for a while but are now starting to do this again. We do very few new-builds, not because we don’t want to do them, but there are very few approaches for them. I worked in Cumbria for five years and everyone’s dream is to run their own bed and breakfast, and there are loads of types of properties that could be used. Very few wanted to take on an existing place and refurbish it. Our appetite to lend is not the same as the market demand at this time. If we’re talking about sustainability, re-using a building is where we need to go.

Service: Training was seen as a key driver in the success of Scotland’s tourism but it faced difficulties outside the main population centres

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Tourism is here for the long term. Investing in hotels, guest houses and other businesses was good because it often spanned generations Our appetite to lend, particularly on refurbished properties, is greater than the market demand that we’ve seen.” Tim Corfield: “There seems to be plenty of energy and I’ve seen lots of entrepreneurial activity in Scotland but funding remains difficult to access for many opportunities. The world has changed as far as how the banks operate now – that has to be considered a good thing, because there are moderations in the levels of debt. One of the major – if not the biggest – challenge we currently face in developing a sustainable tourism business here in Scotland is funding. In response, we need to be opened minded to change the finance environment and innovative in considering alternative funding sources and structures.” Heather Buchanan: “There has been stagnation, certainly for people who are trying to access funding at an SME level. At owner-operator level, it’s difficult because there are so many hoops to go through, and even when you get your deal to approval you go back and forth for months before you get the money.” John Sharkey talked about his difficulty securing funding for a new hotel adjacent to the SECC site, because it was viewed as sectorspecific and new hotel funding has been in a

poor state, yet his hotel was project-specific and related to the investment at the SECC where there was a ready-made catchment area for the hotel. Manus Fullerton said that tourism isn’t recognised as an industry in the banking world. “Parts of it are, such as hotels,” he said. “And if hotels are viewed as part of the real estate world, which has taken a pounding, then they get a black mark. If someone looks at it in a wider tourism viewpoint then you can see that it is counter-cyclical and might be quite a good investment, depending on the circumstances. Banks have to lend money on criteria laid down by the Bank of England. We are working on shaping more data and insight for the funding industry.” Mark Little: “It is extremely difficult for SMEs to get bank lending at the moment. But maybe people are looking in the wrong places for the funding. There’s an enormous amount of wealth in Scotland with entrepreneurial wealth genuinely looking at places to invest.” CONCLUSION: TOURISM IS HERE FOR THE LONG TERM Mike Cantlay said that it is often forgotten that tourism is here for the long term. Sustainable tourism in Scotland depends on ensuring the infrastructure is right, and level so service continue to rise. He said investing in hotels, guest houses and other businesses was good because it often spanned generations. He said there is no reason why Scottish tourism should not lead the economy in 200 years’ time. “I don’t know what else will?” In dealing with the question of Scotland’s tourism brand, Barbara Clark, said at its core was the attributes of being “human, dynamic and enduring”. Heather Buchanan said visitors to Scotland need to feel a level of consistency. There’s value in growing your local market to pad out the season. Finally, Mike Cantlay challenged those to keep thinking about the ‘big hits’ that would keep Scottish tourism businesses flourishing. n

Thanks to managers and staff at Malmaison Edinburgh, 1 Tower Place, Edinburgh, EH6 7BZ. For information contact: Cara Boyes, Events manager. 0131 468 5001. events.edinburgh@malmaison.com

DEBATE

BQ LIVE DEBATE, 24 february 2011: A SUMMARY Tourism really is everyone’s business - and the BQ debate was an excellent forum to develop the discussions beyond the traditional view of tourism.Tourism businesses are working hard at the moment after a difficult year and all the indications are that next year could be even more difficult. Yet tourism is resilient, strong and I think with the right investment, has the potential to pull Scotland out of the economic gloom and cheer the national spirit - I truly believe that tourism is the tonic for recession. This event was about making connections, inspiring those with the power to put tourism on the top of their agenda and focusing on the fact that tourism growth is critical to the future of Scotland. We all think we know tourism but what was clear from the debate is that tourism is actually the bedrock of other high yield sectors from transport to banking. Without the promotion of this country to leisure and business visitors, investors would be less likely to recognise Scotland’s value as a place to work, live and maximise economic growth. During the debate we learned that we need to unlock investment for tourism businesses, develop our transport, including a new route development fund, and look at ways to capitalise on the growing trend of taking a staycation in Scotland - particularly among people who live in Scotland. Getting the step changes or big hits for tourism will only come when everyone realises the importance of this industry, when it is seen as a top investment opportunity and when we all engage to make sure the visitor has the best possible experience. Barbara Clark Head of Communications VisitScotland barbara.clark@visitscotland.com

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Glasgow firm has China on a plate, Aberdeen tops the league, the coffee’s on at Loch Lomond and it’s a long walk for a pint in Knoydart – but only a quarter-mile in Edinburgh – while Indigo gets green light

>> Glasgow architectural company has designs beyond The Great Wall of China Keppie, the Glasgow-based architectural firm that once employed Charles Rennie Mackintosh, has been commissioned to design a £75m series of 30 “corporate clubhouses” for a site near the Great Wall of China. The contract comes after a successful year for Keppie in China that included projects such as the Huangshan Community Theatre and the 1000-bed Chongqing Children’s Medical

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Centre. At the end of 2010, the practice also designed a 60-storey, mixed-use urban block for the Zhongda Plaza in Chengdu and an unusual exhibition building called the Cate Carnival in the same city. Closer to home, Keppie has had a positive few months – securing the £58m Orkney Schools project; planning consent for a £3m Mortuary and Bereavement Centre for Rotherham; and

the completion of Scottish Environmental Protection Agency’s new regional headquarters in Aberdeen. David Ross, design director at Keppie, said: “We had a successful end to 2010 and an extremely positive start to 2011 with activity spanning all of our key practice areas – in health and wellbeing, in working, living and learning.”

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>> Tay planning take step forward

>> Aberdeen’s office market is top of the form

An ambitious plan determining where development can take place in four East of Scotland council areas over the next two decades has been backed by councillors. Members of the TAYplan Joint Committee have approved the Proposed Strategic Development Plan which sets out a 20-year framework for growth, development and opportunities for the area. TAYplan, the Strategic Development Planning Authority, was set up in 2008 to create a strategy for the location of major development in Dundee, Angus, Perth and Kinross and North Fife. The strategy, which will replace existing council structure plans when it is approved by Scottish ministers, will set out a framework for growth in the area. Councillor John Beare, current convener of TAYplan, said: “This is the stage in preparing the Strategic Development Plan for the region, where we set out our view on where development should generally be and how that should be implemented through all four councils’ local development plans. The plan is ambitious and is focused on delivering economic growth for the region in a sustainable way.” The plan is now being considered by Dundee City, Perth & Kinross, Angus and Fife councils before the public and other interested parties will be asked whether they support or want to object to any of its aspects. This is expected to run from June 6 until August 1 this year.

Aberdeen retains its title as the best performing UK office market of 2010, outside of London. As well as commanding the strongest rents of £30 per sq ft, Aberdeen’s landlords also offer the shortest levels of incentives of any of the 11 regional cities cited in Knight Frank’s Q4 2010 ROMP (Regional Office Market Presentation) Report. Prime headline rents in Europe’s offshore energy capital gushed higher than regional counterparts such as Birmingham (£28.50 per sq ft), Bristol (£27.50) and Cardiff (£21.00). The research also indicates that take-up of commercial property in The Granite City was strong last year with Q4 reaching 60,358 sq ft let or sold, taking the annual total for 2010 to 348,362 sq ft. This comfortably exceeds the 2009 figure by 33%. Meanwhile, Glasgow was also tapping into reservoirs of demand last year, with prime headline rents stabilising at £27.00 per sq ft. In Q4 2010, take-up was over 90,000 sq ft in Glasgow city centre, bringing the annual total to 535,000 sq ft – 15% higher than 2009 and almost 30% higher than the cycle’s low point in 2008. Edinburgh’s prime rents also remained stable at £27.00 per sq ft at the end of Q4. Take-up in Q4 was 100,000 sq ft, bringing the city centre total to 511,000 sq ft at the end of 2010 – 5.4% up on 2009. Despite limited speculative development across the UK, at 190,000 sq ft Edinburgh has the highest volume of development under way. Drew Oswald, partner at Knight Frank, said: “The last year has been difficult for the UK commercial property sector, but Scotland is still holding up well against other UK cities, as the latest ROMP figures demonstrate. Once again, Aberdeen’s commercial property sector has retained its top position against key regional cities and is off to a promising first quarter with high oil prices pushing more money into the local economy. >>

The plan is ambitious and is focused on delivering economic growth for the region

>> Bridgegate’s new look a step closer Plans to revitalise one of the most important streets in Irvine have taken a step closer with the appointment of architects to deliver a £2.4m scheme. Irvine Bay Regeneration Company, working with North Ayrshire Council, has approved a bid by Austin-Smith:Lord to regenerate the Bridgegate area via public realm improvements. The plan, which will transform the streetscape, will complement proposals for significant adjacent buildings at Bridgegate House, Trinity Church and the town centre. Patrick Wiggins, chief executive of Irvine Bay Regeneration Company, said: “The project aims to re-establish the area as a landmark location, to act as a catalyst for the economic and social regeneration of the town centre. It will provide a high-quality design, creating visual and physical improvements to this key link between the old and new town elements of Irvine town centre. Graham Ross, partner for architects AustinSmith:Lord said: “We are thrilled to have been selected for this project at Bridgegate. The level of ambition and commitment to creating a stunning public space to enliven Irvine town centre is very welcome and we look forward to working again with Irvine Bay, North Ayrshire Council and their partners to deliver their vision.” Austin-Smith:Lord recently designed Diageo’s £40m Roseisle distillery in Speyside, the first major distillery to be built in Scotland for 30 years. www.irvinebay.co.uk

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COMMERCIAL PROPERTY “Glasgow and Edinburgh also held their own in 2010 with headline rents in both cities stable at £27 per sq ft. Looking forward, we hope to see these figures retained with the possibility that occupier confidence may start to return to markets this year.” Anthea To, Knight Frank’s senior research analyst, said: “Take-up in Q4 across the UK has been patchy. While some UK cities saw weaker 2010 take-up, Aberdeen, Glasgow and Edinburgh all enjoyed a stronger 2010 take-up compared with 2009 – with Aberdeen recording 33% increase in take-up over the year. “With take-up gathering momentum against a backdrop of falling vacancy rates which are now back to a level consistent with the long-term average, the market would appear to be well into the recovery phase of the next cycle. We expect activity to increase in the second half of this year as confidence returns to the market.”

>> £31m funding for four Scottish urban regeneration companies The Scottish Government has agreed to pump £31m into Irvine Bay in Ayrshire, Clyde Gateway in the East End of Glasgow; Inverclyde Waterfront and Clydebank re-built. Initially the regeneration authorities submitted proposal for plans totalling around £60m, but these have been pared back. However, the sum represents an increase of £6m on the £25m previously planned in the draft budget. The funding will support regeneration plans for new houses, transport links, community facilities, retail and business sites and land and street-scape improvements. For Glasgow, the money is being used to create the legacy from the Commonwealth Games 2014. Housing and Communities Minister Alex Neil said: “Transforming run-down and derelict sites into areas of prosperity, offering opportunities for people to live and work, is a major priority for the Scottish Government. “Times are hard, the UK Government has embarked on a ruthless programme of savage cuts, and Scotland is suffering at its hands. But

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we will do all we can to protect areas of investment which support growth, jobs and ultimately put us on track for economic prosperity and better times ahead for Scotland.” Eleanor McAllister, managing director of Clydebank re-built, the town’s awarding winning urban regeneration company, said: “Our allocation for next year of £1.6m, which includes the additional £100k, is disappointing. It’s less than half of what we asked for and will impact on our plans for regenerating Clydebank. “But we know public funds are limited so we will be continue to be innovative and creative with the money available to get the best outcomes for Clydebank and its people through jobs and development.”

>> Waitrose open biggest store ahead of schedule Gleniffer Estates PLC handed over the keys to Scotland’s largest Waitrose store two months ahead of schedule. The early delivery will mean that Waitrose, located in Newton Mearns, will open its doors on May 12 2011. The store, which covers 36,200 sq ft, is expected to employ up to 200 people in full and part-time positions. It is a part of Greenlaw Village, a new £30m retail parade and neighbourhood centre developed by Gleniffer Estates on 6.14 acres of disused land. Gleniffer’s development partner was Walker Group with the main funder Clydesdale Bank.

>> Coffee to go at Loch Lomond Strathleven Regeneration Company and Walker Group have lodged a planning application for Scotland’s first drive-thru Costa Coffee at the £100m Lomondgate development in Dumbarton. The Lomondgate Partners have submitted a proposal to West Dunbartonshire Council to build a new 1,850 sq ft drive-thru, near Loch Lomond. If successful, the drive-thru is scheduled to open in Autumn 2011 and will form part of the roadside services area of Lomondgate,

along with a Premier Inn Hotel and Malt & Myre restaurant. The major mixed-use development will feature more than 300 new homes, a 20-acre business park and accommodate BBC Scotland and Aggreko. The village of Alford, Aberdeenshire, is set to benefit from a new mixed-use development which will provide the local community with a business centre, new technology units, 0.72 hectares of serviced employment land, a care home, nursery, a household waste recycling centre and 44 new homes. Property consultancy Knight Frank has submitted an application for full planning permission on behalf of Kirkwood Homes Limited for the 4.308 hectare site which was formerly part of Wellheads Farm. Alford is identified in the Aberdeen City and Shire Structure Plan as lying in an area for growth and its population of circa 2,100 is forecast to rise above 2,600 by the year 2016.

>> A long way for a quiet pint The Old Forge at Knoydart, Britain’s most remote pub, is yet to find a new owner and is available for sale through marketing agents Knight Frank. The Old Forge, built in the mid-18th century, is “the last wilderness area in Great Britain” and is only accessible by boat from Mallaig or an 18-mile hike on foot. It enjoys a waterfront location with moorings on the Knoydart Peninsula. It is a dining and drinking destination for the yachting and walking fraternity. A marina development is being built in Mallaig which will also enhance the waterfront trade this iconic pub enjoys. The Old Forge went on the market in spring 2010 and there has been some serious interest in it. “Most people who have viewed The Old Forge have been impressed and wanted to buy the business but a lack of bank funding has been the main deterrent in securing a sale,” says David Reid, a Knight Frank partner. Knight Frank is seeking £745,000 for the freehold going concern.

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COMMERCIAL PROPERTY

>> Gladedale capital’s Quartermile success story set to continue

With two major office buildings completed and more than 300 new-build and conversion apartments already sold, Gladedale Capital’s £450m Quartermile development is rapidly becoming one of the most sought-after places to work and live in Scotland’s capital city. Located on the site of the former Edinburgh Royal Infirmary, the development comprises an eclectic mix of prime office and retail space, turreted 18th century buildings, housing conversion properties and striking new-build apartments. At the heart of Quartermile is a civic square designed to offer a mix of cafe bars, shops and restaurants which will become the centre of the community for the people who live and work there.

>> Securing the future via securitisation – Council’s £48m regeneration plan A Scottish council is adopting a bold “spend to save” strategy in order to fund a regeneration campaign. Aiming to see an unprecedented £48m invested in regenerating West Dunbartonshire, and transforming its services over the next 25 years, West Dunbarton councillors have unveiled an

Two seven-storey office blocks – Quartermile One and Quartermile Two – have been completed at the development and each comprise almost 15,000 sq m of panoramic glass walled, Grade A office space. Leading law firms Maclay Murray Spens and Morton Fraser occupy the top three floors of Quartermile One and the top four floors of Quartermile Two, respectively. Last year, Gladedale Capital successfully sold Quartermile Two for £23m to the Swiss Foundation for International Real Estate Investments (AFIAA). Gladedale Capital’s development director, Martin Smith, said: “Our city-centre location, combined with the genuinely impressive office space we have available, continues to drive commercial property enquiries.

innovative funding project. The council intends to raise £35m through an innovative securitisation proposal where money is borrowed at competitive rates against the anticipated future rental income of the improved properties, rather than against the value of the properties themselves. Using this approach will generate an additional £13m to spend on improving the property portfolio over the next 25 years, but also means the

“There is potential pre-let accommodation here as we have detailed planning permission for another two office buildings, totalling 16,000 sq m. “With few completions scheduled in Edinburgh in the short-term, Quartermile offers a unique opportunity to those businesses that require space in the next three to four years. “We underpin what we have on offer with a flexible and responsive service that aims to ensure occupiers can create their ideal working environment. We involve them in the design and specification of the space and also allow them to roll fit out into their main contract which saves them considerable time and expense.” When complete and fully occupied, the office element of the scheme will accommodate more than 3,000 people and the businesses located on-site will have access to bars, restaurants and hotels. Gladedale Capital is also hoping to announce the arrival of an international hotelier for Quartermile’s 107-bed apartment hotel in the coming months and this operation should be up and running towards the end of summer. Looking ahead to the coming year, Martin Smith said: “In February we announced that we will build another 300 apartments in a move that will create 400 construction jobs, so we have every confidence that 2011 will be another successful year for Quartermile.” Master-planned by architect Foster + Partners, Quartermile – as one could guess – is quarter of a mile from Edinburgh Castle and the Royal Mile. For further information visit www.qmile.com

council’s ownership of the properties is protected. Under the terms of the proposal, the council will only be able to invest the £35m in projects that can demonstrate they would save the authority money in the long term. These so called “spend-to-save” schemes could include anything from new schools to more efficient energy consumption. As well as improving the council’s >>

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COMMERCIAL PROPERTY infrastructure and creating services, the cash would also be used for redeveloping the Alexandria Shopping Centre, and supporting refurbishments to Clyde Shopping Centre and the Artizan Centre in Dumbarton – all of which are owned by the council. The rest of the council’s business, commercial and industrial property would also benefit from the redevelopment work. The securitisation proposal requires the council to create a new company and a limited liability partnership, both of which will be 100% owned by the council. These would have to be run on a commercial basis to satisfy the lending bank. Councillors have agreed to proceed the proposal to a detailed business case, which will come back for consideration in September 2011. Council officers are drafting a list of options for areas that would benefit from the £35m investment and create an overall saving.

>> Easter opening for Hotel Indigo A new competitor is checking in to Glasgow’s burgeoning hotel sector in April. Following the £20m refurbishment of an ornate Victorian bank building on Glasgow’s Waterloo Street in the financial district, the Hotel Indigo is scheduled to open at Easter. Recruitment is under way to fill the posts at the 95 bedroom hotel, which will include head of department roles, housekeeping and hotel reception staff. Hotel Indigo and the neighbouring Limelight Bar and Grill will be run by city-based Chardon Management, an independent hotel management company. General manager Denis MacCann said: “Hotel Indigo is the newest ‘four-star plus’ luxury brand of InterContinental Hotels Group. Where better than Glasgow to become the first city in the UK, outside of London, to welcome this chic, stylish new concept? At Hotel Indigo Glasgow, we will be looking for professional, accomplished staff who reflect the truly individual essence of the brand.”

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>> Unlocking the quays to new development on Leith waterfront Edinburgh City Council is poised to launch a wave of development on the Leith waterfront via an innovative funding mechanism. Councillors are expected to approve £100,000 funding for design and other preparatory works on a new link road and esplanade. The proposed developments, together with a “finger pier” and lock gates at the entrance to Leith Docks, will be funded through Tax Increment Financing (TIF). Pioneered in the US, TIF involves local authorities borrowing to develop infrastructure, using the expected future increases in business rates from new developments as collateral. If given the go-ahead, Forth Ports, the council’s partner in the TIF pilot project, will go out to tender for the construction work. Council leader Jenny Dawe said: “We want to see the waterfront transformed into a quality mixed development where people want to live and work and where nearby retail, hotels, and tourism enhances the quality of life. “TIF allows us to do that and I’m pleased to see continued progress on this complex but exciting project.”

We want to see the waterfront transformed into a development that enhances the quality of life >> Many property investment funds ‘are underperforming benchmarks’ Real estate funds have not delivered the return that investors would have expected, according to a report published by the Urban Land Institute.

Tracking the performance of funds between 2003-2009, the Have Property Funds Performed? report indicates that “Opportunity Funds” – which are higher risk – delivered higher returns than “Core Funds” which are traditionally much safer. While Core Fund returns have been especially disappointing, analysis suggests that the additional returns delivered by Opportunity Funds may not be adequate to compensate investors for the higher levels of risk taken by the managers to achieve these returns. There is evidence of Opportunity Fund managers delivering superior returns through controlling the timing of buying and selling assets. However, it is the use of leverage that appears to be the primary driver of returns which presents a risk to investors. Therefore, performance fees charged by fund managers are often rewarding pure risk-taking rather than the manager’s asset-selection skills. The Opportunity Fund sample had a significantly wide spread of returns, adding further evidence to the levels of risk within Opportunity Funds. Professor Andrew Baum, Academic Fellow for ULI Europe and leader of the research, said: “Generally, Core Funds were found to have much higher levels of market risk than expected. They failed to track the direct property index, and have a wider spread of returns than would be expected. This appears to be the consequence of the use of leverage, especially in recent years.” He argues that the wide spread of returns observed in both samples highlights the fact that manager and/or fund selection risk is high. Some fund managers “clearly have performed better than the market average” and delivered value, while some managers have delivered “truly shocking” returns. He said: “Since the mid-1990s there has been a significant growth in the aggregate size and number of global property funds, largely fuelled by the investment of significant capital from institutional investors. This has seen fund managers launching new funds and raising more capital, often when many have been

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unable to show clear evidence that their funds have provided historic outperformance against market benchmarks or performance objectives.”

>> £1.47bn of property sales in 2010 More than £1.47bn of commercial property investments changed hands in Scotland in 2010, according to research from global property agents Cushman & Wakefield. The Scottish Property Investment Market Review of 2010 showed that there was a significant jump of 19% on 2009 transactions which totalled £1.24bn, signalling further tentative recovery in the market, although this is still a long way short of the £3bn average during the peak years of 2004-2007. Property expert John Hamilton of Cushman & Wakefield said: “2010 has, all things considered, proved to be a remarkably robust year for property investment in Scotland.” The number of property investment transactions in Scotland increased from 119 in 2009 to 192 in 2010. Undoubtedly, retail led the way with 53% of all transactions, the largest being the sale of the Overgate Shopping Centre in Dundee which was bought by Land Securities in December for £141m. A large number of other properties were offered to the market but did not sell, either because of over-pricing, or vendors changed their minds. Examples include the Tesco Bank sale and leaseback at South Gyle in Edinburgh, the St Giles Shopping Centre in Elgin, and the B&Q store in East Kilbride.

>> New industrial development at Arnhall Business Park Property consultancy Knight Frank is providing marketing and building consultancy advice for Carnegie Property Company on a proposed new industrial development at Discovery Drive, Arnhall Business Park at Westhill in Aberdeenshire. The site will comprise a 10,000 sq ft industrial unit, plus an integral two-storey office extending to 4,000 sq ft with car

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parking. The new unit will be adjacent to Nessco. Construction can begin once planning consent is confirmed, with completion expected by the end of the year. Arnhall Business Park is home to Costco, a Tesco superstore, the Skene Medical Practice and office occupiers including Scottish Water, Subsea 7, Acergy and Taqa.

>> Flexilife find room to Excel The first floor of the Excel Centre in Bridge of Don in Aberdeen has been rented to Flexilife Limited, an oil and gas consultancy. Acting on behalf of AWG Property Ltd, Knight Frank has secured Flexilife Limited as a new tenant on a five-year lease, at a rent of £130,112 pa. Flexlife join existing tenants, COA Solutions, Foster Findlay Associates and Houlder Ltd. The Excel Centre is situated on the Aberdeen Science and Energy Park close to the A90 trunk road in Bridge of Don.

>> BioQuarter incubates new business Leading property consultants CB Richard Ellis and DTZ have been jointly appointed to market the Bio-incubator building at Edinburgh BioQuarter. Designed for life sciences organisations, the ground floor will offer individual laboratory spaces from 289 sq ft alongside office accommodation ranging from 142 sq ft, with flexibility to allow these to be taken to create larger suites. The Bio-incubator building is being funded through £12m from the UK Strategic Investment Fund matched by £12m from Scottish Enterprise and is due to open in August 2011, with accommodation available from November 2011. Edinburgh BioQuarter brings together the Queens’ Medical Research Institute, the Royal Infirmary of Edinburgh, the Anne Rowling Institute for Multiple Sclerosis and the Scottish Centre for Regenerative Medicine in one location. From 2016, the Scottish Brain and Body Institute will bring its scientists to the BioQuarter.

Image courtesy of Jim Dunn/Glasgow Museums

>> Glasgow hotels to benefit from £100m in conference business A total of 43 conferences have been secured by Glasgow City Marketing Bureau, four of which are expected to attract more than 1,000 delegates each. The medical and scientific conferences are all scheduled to take place in Glasgow between 2012 and 2018 – equating to 16,500 delegates, 49,000 room nights and £22m in local economic benefit. As a result, the city is now on track to achieve £100m in convention sales by the end of March. Councillor Gordon Matheson, leader of Glasgow City Council, said: “These successful conference bids illustrate that Glasgow’s pedigree as an international meetings destination is winning through – despite intense competition from rival UK and European cities and the economic climate. The city’s attractiveness for conference organisers will be further enhanced by this year’s opening of the £74m Riverside Museum, plus the advent of Scotland’s new National Arena at the SECC in 2013. New hotels and other major infrastructure developments will reinforce the city’s drawing power as a venue for major commercial, entertainment, sporting and cultural events.”

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INTERVIEW

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INTERVIEW

In the tramline of fire Richard Jeffrey is a get-things-done engineer to his finger-tips. So how does he deal with the trauma of the Edinburgh Trams? Kenny Kemp finds out Richard Jeffrey is a business leader in the firing line. Nearly two years ago, he took up his position as chief executive of TIE Ltd, the arms-length project management company tasked with building the tram system in Edinburgh. He anticipated at the beginning he would be in the frontline of this half-a-billion pound battleground, yet have the bombshells been harder than he thought? Now there is a truce. At the time of preparing this article, TIE and the major contractors, the BSC Consortium – representing Bilfinger Berger, Siemens, and CAF – are in mediation to resolve a running sore that has knocked Scotland’s confidence in its own ability to deliver major public and private projects on time and on budget. With a proposed new Forth crossing now on the cards, there is an imperative to ensure that fundamental lessons have been learned about project management and procurement and about preserving Scotland’s reputation. The Edinburgh Trams project provokes extreme reactions from normally placid individuals. The whole saga has unleashed a vituperative public response fanned by point-scoring politicians and a drooling local media who have found a cause more mouthwatering than banker bashing. A “Blame the Bloody Trams” brigade

has become the 21st century version of the Edinburgh Mob – the unruly hoi polloi who once roamed the Old Town in the 19th century. Currently anyone prepared to suggest our congested capital needs a modern public transport network is inviting a haranguing. Yet there can be little doubt that if Edinburgh is to maintain its position as a cultured global capital, the city requires a transport system on par with most major European cities. What is often forgotten is that the argument is not simply about transport but is fundamentally about the economic development of our capital city and ensuring that Edinburgh is ready to support the necessary commercial growth in the next ten to 20 years. Jeffrey and his team in Edinburgh have persevered. But the dispute with the contractors has resulted in the stoppage of all track-laying while mediation goes on. Edinburgh’s denizens, infuriated by the disruption, have had a lengthy temporary breather. At the time of writing there is not yet word of when major work is likely to resume, although significant work continues in some areas, such as the setting up of the new tram depot at Gogar Park. Without prejudice, BQ Scotland wanted to find out how a business leader such as >>

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INTERVIEW

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Jeffrey was able to handle the extreme wall of criticism and yet keep a focus on the end result. Sitting in his TIE office at Haymarket in Edinburgh, silver-haired Jeffrey concedes that life has been a whole lot harder than he could possibly have imagined. But, as an engineer, he says he is used to complex challenges, and that it isn’t in his DNA to throw in the towel and walk away. A welcome reinforcement has arrived in the shape of TIE’s new chairman, Vic Emery, a troubleshooter who understands engineers and who turned around the fortunes of the Clyde’s shipyards running BVT Surface Fleet. Sue Bruce has also now arrived in her post as chief executive of Edinburgh City Council and she brings with her her own very credible track record. So did Richard Jeffrey know running TIE was going to be such a hot potato? “Yes, I did,” he says. “Interestingly, having had exposure through my business and commercial life with major strategic projects.” Jeffrey has a strong backbone for the job in hand, but acknowledges that the disputes and the constant negative backlash has been energy-sapping. He says: “Does it affect us? Yes, it does. And of course it affects everyone else too. Internally there’s a lot of pride in the people working here. They don’t like coming into work and reading or hearing stuff that’s highly critical. “Certainly we can’t hide from the situation we’re in – and we are facing up to this. When I talk to the team it is about resilience as a core skill. We have to see this project through to the end and to do the right thing for the people of Edinburgh.” Richard Jeffrey has had a significant career, including an appointment as managing director of Aberdeen Airport at the age of 33, and he sees no reason why the trams should not be successfully delivered. By instinct, his default position is to fix things. He agrees that the contractual impasse requires resolution. “Mediation is the sensible thing to do at this stage,” he says. “It can be quick. It’s not a detailed forensic examination of who is right or who is wrong. It’s a willingness for both sides to move forward constructively, and set aside the past.”

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Resilient: Richard Jeffrey has always had a forward-thinking outlook

We have to see this project right through to the end and to do the right thing for the people of Edinburgh Richard Jeffrey always wanted to become an engineer. He was born in Staffordshire, and as a studious teenager he was an avid reader of engineering magazines explaining how major new roads, bridges and hydro dams were built and their impact on society. He was outstanding at maths and studied at Imperial College in London, where he gained first class honours in 1987. His thesis was on the vortices caused by rivers flowing around bridge piers. He joined British Airports Authority – the new airports plc – as it was going through its privatisation. It was headed up by the civil engineer Sir Norman Payne who died in February last year aged 88. Payne had

designed Gatwick Airport and a fresh-faced Jeffrey worked on the Gatwick North terminal and, as low-cost air travel began to boom, on Stansted, designed by Norman Foster. “I started my career as a site engineer working on several airport projects,”he says. “What was interesting for me was that I became rather disillusioned with the lack of professionalism in the UK’s engineering industry at that time. It was backward-looking, the methodologies on site were poor and this led to contractual disputes and shutdowns.” He says it was the visionary Sir John Egan, the former chief executive of Jaguar Cars, who joined BAA as chief executive in 1990 that brought about positive change. Egan’s Rethinking Construction, which was a landmark report commissioned by the Labour Government, helped improve people and processes and drive efficiencies in large construction projects. “What Egan’s report showed was that construction projects didn’t have to be like this,” he says. “He singled out leadership, integrated processes and teams, and a drive for quality. There’s the thorny old project management joke about the five stages of a project. First, optimism and euphoria; second, disenchantment, third, search for the guilty; fourth, punish the innocent, fifth, reward for the uninvolved. Actually, there’s a lot of truth in this, and I’m sure the trams project will be no different.” There is another irony for Jeffrey. His career with BAA took him to Pittsburgh for a year, then into the airport’s international business development division, working in Naples on a drive to modernise the city’s airport. He was based at BAA’s Victoria HQ in London, flying to Italy, and commuting in from his cottage in Dorking which he shared with his wife Liz who works in property development. Then he was asked to handle a potential joint venture in South Africa. He was sent to negotiate with the new Rainbow Government about the privatisation of a group of airports. In 1995, he travelled to Johannesburg with Bill Morris, the former head of the T&G union, where they held discussions with the former transport minister Mac Maharaj, an ANC member, a prison-mate of Nelson Mandela in Robben Island, and with former president FW De Klerk.

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“We were there to take a 30% stake and explain how the privatisation of public sector airports had been successful in the UK,” says Jeffrey. “Bill Morris was there to talk about how it benefited the trades union. Here, we sat with politicians who had once had visceral hatred of each other, purely because of the colour of their skin. Now they were working together for the good of the nation. They put aside a lot of their baggage. “The whole point about the Truth and Reconciliation Commission in South Africa was there was closure. It didn’t mean ignoring or forgetting about the past, but it meant moving forward to a new level. Mac told me that it was difficult for the politicians because the people wanted freedom and all they could offer was democracy. He’s also famous for saying ‘revenge should not be our motivation’.” In the end, BAA lost out on the contract, but

for Jeffrey, still in his thirties, it was an experience that has kept a sense of perspective when dealing with the trams. “I’ve always been of the mind, ‘How do we solve this?’ which I think is solutionorientated,” he says. “Rather than, ‘who’s to blame and let’s string up those who have got us into this’.” Jeffrey is keen to see further discussion on the execution of publicly-financed projects in Scotland and believes there needs to be a new way forward. “The public sector does not always appear to have a learning culture on major projects,” he says. “In recent years, in a plc where there are shareholders demanding results, you accept that when things go wrong, you apply measures to ensure such things don’t happen again. In the public sector, this does not seem to always be the norm.“ Jeffrey undertook a senior business

MARK

INTERVIEW

management course at London Business School and had as a mentor Russell Walls, the BAA finance director. Armed with corporate finance skills, he was asked to run an airport. Jeffrey took up his post in Aberdeen, becoming the youngest manager in BAA. In December 1998, oil was a low $8.64 a barrel and the airport’s North Sea oil and gas business was declining with helicopter flights down. Marginal oilfield activity wasn’t worth the financial return. Passenger numbers were also in decline. “We had to put a lot of effort into cost control,” he says. When he moved on 21 months later, the oil price was heading up to $30 a barrel, airport revenues were up and so were general passenger numbers. BAA had a bigger job for him and he was asked to take on the job of managing director of Edinburgh Airport. “I loved working in Aberdeen,” he says. >>

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BUSINESS QUARTER |SPRING 11

INTERVIEW

SPRING 11

“There were a lots of experienced people there who helped me find my feet as a managing director, but I was keen to take on the challenge in Edinburgh which was going through a major redevelopment programme with a 25-year master plan, with new piers to the south-east, extension to the taxi-ways, new car multi-storey parking, expanded retail and a new control tower. “I had a fantastic time at Edinburgh Airport. We invested more than £200m in modernising the airport and expanding the facilities. In the six years at Edinburgh, we doubled the number of passengers from five to ten million and made it highly profitable.” Then came a crunch. He was offered a job in Melbourne working with the consortium Australian Pacific Airports Corporation (APACS), in which BAA was a partner and had 22 million passengers a year. This entailed a frank discussion with his senior figures at BAA. But Jeffrey, by now embedded in the corporate business scene in Edinburgh – elected president of the Chamber of Commerce and active in the city’s tourism forum – decided he wanted to stay in the capital. He says: “I’d just completed 20 years with BAA and six years with Edinburgh Airport. It was the right time to move on. I’ve always been someone to preach that people should go off and develop their careers in other jobs, and I was the one sitting there staying still.” So he left BAA in 2007, still only 41. He considered a portfolio career but found that he was working on international airport projects outside of Scotland. He joined Babcock & Brown, an Australian advisory and consultancy, who were looking to expand their investment portfolio in Scotland but were hit by the economic crisis and eventually ended up in liquidation in 2009. Jeffrey was headhunted to take on the trams project for the City of Edinburgh Council. The Scottish Government approved the project and the funding, but Edinburgh faced extra costs as a faltering project faced delays and over-runs on budget. The then chairman David Mackay, the former head of Menzies and a well-respected Scottish business figure, was keen to have a respected engineer like Jeffrey on board, so he agreed to step into the frontline on May 1 2009. Mackay resigned in November last year.

BUSINESS QUARTER | SPRING 11

There are a lot of economic benefits in terms of employment when everything is working. It’s in no-one’s long-term interest to have this project stall There was no honeymoon period for Jeffrey and he refuses to be drawn on what were the major problems when he arrived. “The challenge is not following into the trap of saying, ‘Oh, that’s not the way it should have been done’,” he says. “We don’t come to work to have disputes. Those who like working on projects understand there is a natural ebb and flow which makes the work more engaging. There is a big difference between running a day-to-day business with a profit and loss account and a strategic construction project. One of the big things a project has going for it is a momentum which takes you through the ups and downs. The Edinburgh Trams project has never been able to build up that kind of momentum. It’s been

stop-go, and that has an impact on the morale of everyone. There are a lot of economic benefits in terms of employment when everything is working. It’s in no-one’s long-term interest to have this project stall.” Does he take it personally? “It’s not escaped me all the venom and personal abuse,” he says. “On the other hand, it goes with the territory. I definitely have a thicker skin now than when I started. My previous chairman called it ‘strategic endurance’; I call it being dogmatic, but not so much that you aren’t prepared to change things. I’m not dwelling on the past, I’m looking ahead to a time when we’ve delivered the first stage of a great new public transport network for Edinburgh. I think the city deserves that.” n

SPRING 11

COMPANY VIEWPOINT

Over the last few years, maximising cashflow has increasingly been at the heart of many companies’ agendas. Research & Development (R&D) tax credits are one of the biggest funding mechanisms provided by Government to encourage innovation in UK businesses. Since their introduction, the schemes have supported nearly £52 billion of R&D activity in the UK. Sandra Gilchrist, director in the R&D services team at Deloitte in Scotland, has assisted a number of clients in delivering substantial cash benefits by maximising their R&D relief claims.

INNOVATION LEADS TO OPPORTUNITY consumable costs incurred on R&D projects. Broadly, for tax purposes, R&D takes place where new, or significantly improved, products or processes are being developed and it continues up to the point where the technological uncertainty is resolved. For many manufacturing companies, the transfer from the lab or bench to full scale production, or the development of full scale working prototypes can present a major technical challenge. Accordingly a number of manufacturers have made R&D tax claims for both the materials and staff costs they have committed to these trial activities. HMRC have accepted these claims where the end products generated in these trials are not sold, Sandra Gilchrist, director in R&D Services at but historically have refused claims where the Deloitte in Scotland product is sold, even if at a loss, on the basis that this represents “production” and is therefore hat constitutes R&D activity is specifically excluded from the scope of R&D tax not always straightforward. The relief. Recognising that the position was open to definition is, however, much interpretation, HMRC issued further guidance at wider than is often thought, and the end of 2009 which prevented a claim being the relief is available to many businesses outside made if there was any intention to sell the end the traditional research industries such as product. This blocked claims even where the pharmaceuticals. trials ended in failure and the product generated Historically, one of the more difficult areas to was scrapped. determine, is where R&D activity ends and where The Government are currently in consultation over production, which does not qualify, begins. HMRC this area, however in the meantime, HMRC have have recently reviewed their position on this, confirmed that they will continue to engage in leading in turn to opportunities for organisations constructive dialogue with companies to help involved with any kind of manufacturing activity resolve any issues. More recently, we have seen to potentially extend the scope of their claim. HMRC agreeing to review the fact pattern of claims While there is no definition of production for these where full scale trials are performed as an integral purposes, based on recent experiences, a number element of an eligible R&D project, even if the of principles are emerging. end product is sold. This approach is at present Since 2000, companies have been able to claim being tested by HMRC to confirm its applicability 9900A FS Striptaxad_9900A 07/03/2011 Pagea practical 1 valuablelcenhanced deductions for staff and 11:18 from perspective before issuing more

Where inspiration strikes

formal guidance, but early indications seem to be very positive. Some of the common principles for agreeing future claims that we have seen emerging in the Scottish market include: • The technological uncertainties that the R&D project was seeking to resolve need to be clearly identified to allow the contribution of the trial to be understood; • Technical staff working on R&D projects need to confirm how each element or phase of the trial contributes to the R&D process. In many cases, trial activities continue long after the R&D for tax purposes is complete; • The section of the plant or process involved in the trial must be carefully defined, so that the costs associated with the R&D element can be identified. For many large scale processing facilities this is not a trivial exercise.

IT’S YOUR RELIEF – TAKE IT! REMEMBER: n R&D is not only performed by R&D departments. n R&D is not just about rocket science. n Claims are possible even if R&D costs are recharged. n Engineering and software design can be R&D. n Large maintenance and upgrade works can be R&D. n Eligibility is not contingent upon the success of the research. n You do not need to retain IP to make a claim.

BUSINESS QUARTER | SPRING 11

BUSINESS LUNCH

BUSINESS QUARTER | SPRING 11

SPRING 11

BUSINESS LUNCH

mad men? It’s nothing like it With the public sector facing serious cutbacks, contracts from that direction are melting away. Time to move on, then. Jane Bradley talks to one of the men behind Scotland’s most creative advertising agency The Leith Agency likes to buck the trend. Its iconic Irn-Bru adverts – featuring the usually innocent animated character The Snowman stealing a can of the soft drink from a small boy and then unceremoniously dumping him in George Square – are testament to that. While other firms were closing their doors, laying off staff and rolling over and resigning themselves to the fact that advertising spend was at a serious low, Tangible, the umbrella operation which accounts for the Scottish part of the business including Leith, enjoyed a bumper year. That was in 2009. Spend from clients north of the border, including Irn-Bru owner AG Barr and brewer Coors, rose by more than a third that year and gross profits rocketed by 61% – largely due to a high proportion of public sector work. Now, as state-funded organisations begin to cut costs, Tangible is set to match its 2009 performance when it publishes its 2010 results in a few weeks’ time. It has managed to pick up a string of high-profile contract wins in the past 12 months – Scottish and Southern Energy, Sainsbury’s Finance and, most notably perhaps, Dobbies Garden Centres, now part of supermarket giant Tesco.

The man with this uncanny ability to be able to duck and dive his way through one of the deepest recessions ever to hit the Scottish economy is Richard Marsham. Still just 42, Marsham has now held the post of managing director of Leith – and subsequently managing partner for the entire Tangible operation – for almost a decade. “It’s been a funny old year, really,” he laughs. “The public sector decline was just so dramatic. That was partly because 2009 had been, from a public sector perspective, huge, but it really dropped off massively at the end of last year. “We’ve just had to move on, adapt and find

other areas. As the public sector dropped off, we just did a lot more private sector work. You’ve just got to keep fleet of foot and see where there is a bit of growth.” Now, Tangible, probably best known for Leith’s 2006 Irn-Bru Snowman ads which have generated more than one million YouTube hits south of the border, despite having rarely been shown on English television, is in a good position. Its top four clients account for 35% of its total income – meaning it is not totally reliant on any one source of income. Marsham started out his career at Leith after studying at Edinburgh University – beginning as an account executive in 1992. Five years >>

We’ve had to move on, adapt and find other areas. We did a lot more private sector work. You’ve just got to keep fleet of foot and see where there’s growth

BUSINESS QUARTER |SPRING 11

BUSINESS LUNCH later, he transferred to the client side of the business, taking on responsibility for drinks brand Kronenburg at Scottish & Newcastle. After a short stint at now-defunct advertising firm Faulds, he returned to Leith in 2002 as head of account management, becoming in 2002 managing director of the Leith side of the business – now part of Tangible and ultimately owned by FTSE-listed parent company Cello Group. “The role has changed and what I now coordinate is the Edinburgh hub of the company,” he explains. It is not just his role that has changed. The traditional advertising agency, as seen in hit US TV show Mad Men, has changed beyond recognition in the past decade – and none more so than Leith. Now part of a stable of individual companies working under the umbrella title of Tangible, the traditional ad agency sits alongside the likes of Blonde, Tangible’s digital agency, PR firm Stripe and direct marketing firm Tangible – once known as Navigator – as well as its strategy arm, Leithal Thinking. Marsham – a self confessed “posh Cumbrian” and an ex pupil of Prince Charles’ alma mater, Gordonstoun, where he is also a school governor – modestly describes the Dobbies win as “quite a big bit of business”. Originally a Scottish firm with plans to expand aggressively south of the border, its marketing will be a key factor. And for Tangible, a link to Britain’s biggest retailer cannot be a bad thing. “As the client said, ‘It’s a decent-looking fee, but I’m going to make you work very, very hard for it’,” he admits. “The potential there is huge – they are essentially quadrupling the size of the business.” But Marsham is reticent over whether the deal will lead Tangible on a path towards Tesco. “Well, they do base their personal finance arm up here, although we would have a bit of conflict over that at the moment,” he says, carefully. “Tesco in the UK use an agency called Red Brick Road in London, which is really a whole agency created around them, but we will keep sniffing around.” He tells me that since our last meeting – when I berated him for not having seen Mad Men, based in a Madison Avenue agency in the

BUSINESS QUARTER | SPRING 11

SPRING 11

Tangible link: Richard Marsham first joined The Leith Agency in 1992, straight from university 1950s and 1960s – he has invested in the boxed set. “It was good,” he admits. “It was a million miles away though.” But he does remember a time when advertising was a more jet-set business. “We used to charter a plane to go from Edinburgh to Belfast,” he recalls. “That was a long time ago now, but if there were more than three of us going to Belfast, it was worth it. One of the seats was next to the pilot and you could look out of the window – that was the in-flight entertainment. “Those days have gone down now, with the introduction of easyJet and everything.” Heading back to the office after our lunch to work on a 120-page tender document, Marsham also insists that the Mad Men image of creatives generating detailed, eyecatching ad campaigns to present at a pitch is fiction. “Tenders, tenders, tenders – they seem to dominate your life,” he laughs. “You look at Mad Men and you think ‘it’s nothing like that’. It’s a big document with hundreds of pages.” “Sometimes they do ask you for creative work,

but we would only really do that if it was worth quite a lot of money; otherwise, we just decline that kind of work.” He knows that other agencies which have been less fortunate in the recession cannot afford to do that. “It’s a tough world, you know,” he says. “Agencies that need the income have to do it, but it’s a bit of a false economy. A lot of our competitors are having a tough time at the moment – those who still have public sector as such a big part of their business. But the way it’s worked for us has been good. If you could plan it like this, you would.” He is keen to pick up a new beer client to replace Molson Coors which the firm lost last year after 22 years. Its other longestserving client, Irn-Bru, has been with Leith for 14 years. “A new marketing director came in to Molson Coors and wanted us to re-pitch for it,” says Marsham, “but our hunch was right – he had come from another company and appointed his old agency.”

SPRING 11

More retail brands are also on the company’s wish-list, as well as a furniture company – having poached a retail specialist from a Glasgow agency to boost the Dobbie’s account. “It’s a very aggressive area, they are good clients to have because they’re quite cyclical, in terms of their sale time,” he says. “But the key is to convince a client that they should do something different. “You look at them and they’re mostly all the same and you wouldn’t know what brand’s what. They lean back on a sofa with a nice cup of tea while a voice is saying ‘sale sale sale’.” At the moment, he is distracted from his main job of attracting new brands, however, by property hunting. Not for himself, but for the firm. The headquarters on the waterfront in Leith proved to be too small some years ago, prompting the off-the-wall purchase of a converted barge, parked just a few feet away on the river. Used as meeting rooms, the barge is the only place large enough for the company’s 160 staff to all congregate in one place – and only just. “I did a staff briefing last week and I thought it was about to sink,” he laughs. The newer additions to the Tangible group, Stripe and Blonde, are based in a separate building in the New Town. “We all want to be in one building,” says Marsham. “We’re hunting high and low at the moment, but there’s not much around.” But, despite its name, the Leith Agency has no particular pretentions to remaining in the waterside area to the north of Edinburgh. It was based a few miles down the road at Canonmills for 15 years in the 1980s. “We’re not going to restrict ourselves to being in Leith,” he says. “We’re Leith, but there’s also Tangible, Stripe and Blonde – and we need to find somewhere; we can’t restrict ourselves. We’ve been out of Leith before – we’ve been out for as long as we’ve been in it. I’m just very keen to get everyone into the same building – we spend a fortune on taxis going between the offices. “We just don’t know at the moment, we could stay in Leith if we can find somewhere right here, or we may not. But we’ll still be the Leith Agency.” n

BUSINESS LUNCH

Pull-apart prawns Just a stone’s throw from Tangible’s barge, The Ship on the Shore is everything a Leith restaurant should be. Good quality seafood, an interesting menu and a tastefully nautical atmosphere, makes it a regular haunt for the company’s business lunchers. Keen to try something a bit different, I bypassed the tasty-sounding cullen skink and smoked salmon with caper and lemon salad to try grilled mussels on toast with lime and hazelnut butter, while Richard opted for the bizarre-sounding steamed Scottish “spoots” with chilli, coriander and lime. Another name for the razor fish, Richard said his spoots tasted “like long squid” and “delicious.” My mussels were also outstanding, delicately flavoured, juicy and coming atop a thick chunk of toasted brown bread. Despite both of us pronouncing our portions to be huge on their arrival, we soon cleared the plates. Never able to pass on the temptation of a seafood chowder – I began to have second thoughts when I saw the size of my huge bowl of delicious creamy, potatoey, fishy main course. My selection comes with shell-on prawns – which prove fairly tricky to pull apart without burning your fingers, but I explain to Richard that I am incapable of ordering anything easy to eat at a seafood restaurant, recalling the time I spent an hour of a business lunch fighting a shell-on crab with a small hammer. I manage to eat about half of my portion, washed down with a fishbowlsized glass of a perfectly light pinot grigio. Richard’s choice of a spiced mackerel fillet in filo pastry with savoy cabbage also went down a treat. “Mackerel’s one of those fish you keep on forgetting about, but it’s really tasty,” he says. Unable to even contemplate dessert, we aid digestion with a couple of espressos and waddle out of the restaurant, both looking as round-bellied as The Snowman himself.

BUSINESS QUARTER |SPRING 11

WINE

SPRING 11

The Italian Job

Two of Scotland’s most senior headhunters have grape expectations for some unfamiliar candidates Finding the right fit for the job is a skilled occupation. Our four candidates from across Italy were all exceptionally well groomed, but which one would make the grade? The “interviews” took place in the Divino Enoteca, the intimate Edinburgh wine bar which opened last August and features the Enomatic machine which dispenses an array of Italian reds and whites. Who better to call than Scott Black and Willie Finlayson, two of Scotland’s best known headhunters from FWB, an Edinburgh institution covering Scotland. BQ asked them if they would mind putting the shortlist through

BUSINESS QUARTER | SPRING 11

their paces and they resorted to the scientific approach of the headhunter. They nosed, they sipped and then they chaffed. No spitting required. Willie, Scott and colleague Judy Wagner – the “W” in FWB – have recently been involved in identifying key people at FirstGroup, Scottish Enterprise, Optos, Aberdeen Asset Management, Highland Spring, Stewart Milne, Skyscanner and the National Trust for Scotland, so surely their skills can be put to use selecting a nice grape? The four candidates – two reds and two whites – were Taurasi Riserva, Negroamaro Emozione, Sicilia Carricante and Chambave

SPRING 11

Heady hunters: Scott Black and Willie Finlayson ‘interviewed’ four Italian wines

Muscat. They all came highly recommended. Taurasi Riserva’s CV certainly looked promising. The full name is Piano di Montevergine from the Campania region of south-west Italy. The grape is 100% Aglianico di Taurasi, a noble vine variety which mingles with hazelnut and olive trees and made at the Feudi di San Gregorio winery. The company was set up in 1986 and has become a symbol of the modern wine renaissance of Southern Italy. Scott Black says: “This was a nice, rich blackcurrant colour. When it was nosed there was a strong woody and smoky aroma. On tasting, there were deep, dark fruity flavours such as currants and damsons. It had a very dry finish but I was disappointed the flavour didn’t linger a bit longer on the tongue. It had less overall flavour than I expected, but a pleasant drink.” The tasting notes said it is well matched

with red meat entrées, fish, steaks and hearty casseroles. The next candidate was Negroamaro Emozione from the Puglia region, the south-east region bordering the Adriatic, where vines have been grown at San Petro Vernotico since Roman times. The grape is 100% Negroamaro and the producer is the award-winning Vinicola Mediterranea. Negroamaro is one of many fascinating grapes, unique to the deep south of Italy. Willie Finlayson says: “I found the wine light and woody. It was quite dry and musty. It reminded me of a glass of port. I felt the taste disappeared off the palate fairly quickly. I think it would probably get overpowered by most foods, but I reckon it would go well with something typically Italian such as spaghetti bolognaise.” The two whites were from opposite ends of the country: the Sicilia Carricante from Sicily. The grape is 100% Carricante and the producer Planeta. Black says: “I hadn’t heard of this grape variety before so was looking forward to it. The colour was interesting; a pale yellow with a slight hint of green colour. Strong melon and honey on the nose matches its taste which also lingers nicely. A pleasant summer wine, which would be good with a roast chicken salad or Caesar salad. Really like this wine – big thumbs up.” Then, from the Italian skiing regions of the north, the Valle D’Aoste Chambave Muscat. The grape is 100% Moscatto Bianco and produced by La Crotta di Vegneron. The tasting notes read: “The bouquet is reminiscent of peaches, lychee, sage and thyme. Fresh, dry taste with good body and structure and an aromatic, fresh character with a soft, elegant finish.” Finlayson says: “This was certainly light and very fruity, although it was more like an alcoholic fruit juice than a full-blown wine. There was a strong flavour of melons and pears. It was bit too sweet for my taste, indeed it was almost a dessert wine. Perhaps it was a bit ‘thin’ for a typical Scottish white wine drinker.” So there was the eclectic shortlist, which was well scrutinised by our two experts. On the day, it is always about who performs best. Any

WINE

suggestions of favouritism towards the south are dismissed out of hand. So, for Scott Black and Willie Finlayson, it was a Sicilian who got the Italian Job done.n With thanks to Tony Crolla and Sebastiano Ingaliso, at Divino, 5 Merchant Street, Edinburgh. www.divinoedinburgh.com

When it was nosed there was a strong woody and smoky aroma. On tasting, there were deep, dark fruity flavours such as currants and damsons

BUSINESS QUARTER |SPRING 11

FASHION

SPRING 11

insider outfitter

A walk down Savile Row takes the sartorially savvy by many august institutions – Huntsman, Anderson & Sheppard, Gieves & Hawkes. These are the homes of the establishment, defiantly southern, well-to-do, understated. But then comes some upstart window of suits more rock ‘n’ roll than banking ‘n’ business, lean styles in bolder colour and with touches of 50s Hollywood, favoured by footballers and TV presenters, anyone indeed, with a

Like the star footballer he once wanted to be, William Hunt is making his presence felt in the public arena with an eye for styling that engages with the ordinary people who want to feel good about themselves. It’s what his company is all about, as he tells Chris Porter

BUSINESS QUARTER | SPRING 11

reputation as something of a dandy – Eddie Izzard, Jonathan Ross, Laurence Llewelyn Bowen and Nicky Clarke... To top it off, the purveyor to such flamboyant gents is a Northerner. One of William Hunt’s proudest moments came in 2007, when, after making Gary Neville’s wedding suit, the football professional pulled some strings and the designer was appointed to design the squad suits for his beloved home-team, Manchester United. It made for some useful PR, of course – but Hunt is seriously loyal. In 2007 he turned down a potent publicity wind-fall when asked to make the suits for Chelsea. “But I’m just not passionate about Chelsea,” he explains. “I’ve also been asked to make them for the Liverpool squad. I turned that down too. But then I’d be

SPRING 11

FASHION

Inspiration: Former footballer William Hunt took engineering principles, mixed them with music, and transferred them to fashion design stoned to death if I did that.” Hunt’s allegiance has roots in more than geography. He became a professional footballer himself at 18 but, luck not on his side, it was the local music scene of Northern Soul that saw him drawn away from the pitch and towards the sketchpad. His own style of dress – inspired by a seamstress aunt and structured and simple, after the engineering he had studied while playing professionally – caught the attention of a local retailer who gave him his first opportunity to put his designs on a commercial footing. By 1988 Hunt had opened his first store, on Chelsea’s

Kings Road, before making something of a statement in 1998 by moving onto Savile Row’s hallowed turf. There his tailoring has won a reputation for certain cinematic look – the cool of Sinatra, for example, after whom Hunt has named o ne of this suit styles. Another is the Selleck. Yes, after Tom Selleck, Magnum PI, for whom Hunt has forecast a style re-appraisal by a still largely mocking public, much as Burt Reynolds has undergone. “Music has been a massive influence, of course,” he says. “I’ve seen Elvis, the Beatles, Punk, the New Romantics... but if I’m >>

If I’m looking for ideas I’ll get a load of old movies out. The clothing in them was just magnificent

BUSINESS QUARTER |SPRING 11

looking for ideas I’ll get a load of old movies out. The clothing in them was just magnificent. “What’s cooler than West Side Story? It’s just awesome. The whole idea of coloured suit linings, a signature for us, comes from that movie...”

BUSINESS QUARTER | SPRING 11

A strong, clean-lined and largely unchanging look has worked for Hunt. The last decade has seen Savile Row go through turbulent times but Hunt has played the long game. His style is consistent and business is developing – the former by extending his bespoke tailoring offer with the launch of a successful wholesale line

of ready-to-wear (“it’s all structured through, I don’t really do sloppy-wear”), a shoe range for Kurt Geiger and, coming up, a chain of shop-in-shops with independent retailer Flannels. “There has been a lot of hype – certain Savile Row tailors have been built up as amazing and

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the next thing you know it’s all gone wrong and they’re gone or had to close a line down,” says Hunt. “But the whole industry has changed. I remember the days when you could rock up to a shop with a load of clothes and say, ‘Hey, I’ve got some gear, are you interested?’ and it could be being sold on the shop floor that day. These days much of the industry is too corporate, too many layers of middle-management. I know buyers who can make buying a white T-shirt look difficult.” Those years have also allowed him to indulge other passions. Sport is never far away from his thinking. Inspired by a request to make a

pair of trousers for golfer Ian Poulter, in 2005 Hunt launched his own golfwear line. It is one suitably loud in the tradition of the game’s noisy checks and pastel sweaters of the 50s and 60s. As Hunt has said before, few sports afford a man the opportunity to dress like a pimp and still be dressed for the occasion – and that is some opportunity for a designer’s imagination to run amok. With other brands now chasing the golf pound with a sleek and bleak style, it was entirely within expectations that Hunt might go against the grain. Indeed, brands may have developed clothing lines off the back of sports sponsorship>>

FASHION

These days much of the industry is too corporate, too many layers of middlemanagement

BUSINESS QUARTER |SPRING 11

before, but few have created a tournament out of a clothing line, too. Encouraged by the number of pros asking him to back them, in 2008 Hunt went one better and launched his own national UK golf event, the Trilby Tour. It was, of course, suitably unconventional – a chance for gifted amateurs

BUSINESS QUARTER | SPRING 11

to play under professional conditions and pressures, right down to being televised by Sky Sports, including this year’s new 12-part TV series format. Never one to miss some publicity, Hunt provides the clothes and the caddies a Hunt-designed golf-bag. Last year’s winner

and runner-up have both since turned pro. The event has been called the X-Factor of Golf; Hunt takes that as a compliment. The next one has already pulled in 1,200 applications to enter. “It’s when the ordinary guy gets to brush up on his golf, brush up his clothes and play on

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TV,” he says. “It’s not an opportunity many otherwise get in life. Of course, it’s also a promotional vehicle for the golf clothing, and has really become a business in its own right. But it fits into what we’re about as a company – making ordinary guys feel better about themselves, suits that make them look a bit taller and a bit more trim.” Ironically perhaps, despite the high profile clothing and sports kit, Hunt himself is little-known compared with his peers. And that is the way he likes it. Who would know, for example, that his latest project has been putting together a TV series for Sky, a drama

based on his experiences in the golf world, for which Hunt devised the treatments and a friend wrote the script? It is currently going through budget assessments. “I think success in the business I work in is about retaining the passion for the clothing and that means it’s about keeping it small, tight, boutique,” he says. “You can still grow as a business that way, but you can only do so by finding other people who share that passion. Then you can work as a team and have a lot of fun. I like the idea of keeping my head just below the parapet. It’s worked for me.” n

FASHION

I think success in the business is about retaining the passion for the clothing – it’s about keeping it small, tight, boutique

BUSINESS QUARTER |SPRING 11

EQUIPMENT

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a dash of genius It’s a name that spells everything that’s stylish about style. Chris Porter reports on Porsche Design, a company interested in more than just cars With its elegant lines, white, composite plastic case and serrated bulb, one would be forgiven for thinking that it was some kind of concept communications tool. Look closer, however, and the name on its side, Porsche Design, suggests that maybe this is some form of ignition key, or a car door handle. It is, in fact, a pipe.

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That a name like Porsche – all speed and sex – should produce anything as prosaic, sedentary and old-mannish as a pipe might at first prompt thoughts of returning your Carrera to the nearest dealer. This would be a mistake. While design studios typically remain anonymous, letting the brand selling the product take the credit, Porsche Design is an

exception – part back-room creators, part status name, it is true that its founder, Ferdinand Alexander Porsche designed the car company’s masterpiece, the 911. But then, coming up to 40 years ago, he went on to establish an independent studio that would turn its attention to the perfecting not only of cranes, trams and even dental chairs for other

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companies – more recently a super-yacht for Royal Falcon and furniture for Poltrona Frau – but would launch the cream of its design thinking under its own name. “Of course, the first part of our name creates a certain awareness,” says Juergen Gessler, the CEO of Porsche Design, based in Zell Am See in Austria. “But there has to be design integrity and quality to convince anyone to buy one of our products and we’re selling mostly to people who do not own a Porsche. They’re people who appreciate a very modern, very puristic design language – it is a classic ‘form follows function’ approach.” It is also, Gessler concedes, an especially masculine style – austere, minimalistic, with lots of black and white, like the contents of a dream bachelor pad. “Or at least it’s masculine if you define the curved form as being feminine,” he jokes. “We don’t do many curves. But really it’s a look that appeals to a certain type of person who tends to have a knowledge of design and places a lot of importance in it. They are into the technique and materials of a design rather than the brand on it.” That rigor is one of the characteristics that makes the brand unusual – an unwillingness to add pop colours or pretty graphics to make a product stand out, preferring understatement that is almost monastic. “Bold is OK,” says Gessler, whose industrial design career started out with Mercedes and BMW. “It’s just not for us.” The second is its readiness to launch only those products where the design team feels it has made a genuine improvement on what is already available. And, not exactly a compliment to the wider design community, the third is the diversity of products in which it has found improvements to make. Luggage comes with stain-resistant coating and silent-running wheels; pens come in anti-corrode materials and with flexible barrels; its spectacles fold almost completely flat; its mobile phone is milled from a single aluminium block; its desk lamp was among the first to use LED lighting. Fashion, footwear and watches offer some smart ideas too. Recent products have included sunglasses with a unique lens replacement system (swap the lenses according to the ideal light >>

EQUIPMENT

Really it’s a look that appeals to a certain type of person who tends to have a knowledge of design and places a lot of importance in it Awareness: Juergen Gessler believes totally in design integrity and quality

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EQUIPMENT

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Rather than working on one kind of product all the time, our designers jump from one product world to the next

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conditions for the activity at hand), a fountain pen with a system that prevents the nib from drying out and a briefcase designed following research to understand exactly what typical users might want to carry with them and how, rather than providing a design with endless compartments, none of them the right size for good use. And as for that pipe... The ribbed effect is actually an integrated cooling system – akin to that used in motorcycle engines – to ensure the body is always comfortable to hold but the optimum temperature for the tobacco is maintained... Such thinking has won the company more than 120 prestigious Red Dot and ADI Milan design awards. New luggage lines, as well as small leather goods and additional watches are on the sketchpad. Indeed, Gessler argues that it is precisely because Porsche Design’s designers are not specialists in any one field, but are ready to cross-fertilise ideas from other design disciplines, that its products are innovative. “(That way of working) has a very inspiring effect,” he says. “Rather than working on one kind of product all the time our designers jump from one product world to the next. Today it’s a new watch, tomorrow the interior of a business jet. ‘Porsche Design style’ is more a way of thinking. And a timely one – design is set to play a much more important part in buying decisions for consumers.” It is certainly a thinking that has appeal – Porsche AG, the car company that shares the name, finally recognised a good thing in 2003 when it joined with Porsche Design to create the Porsche Design Group, launched to maximise the car brand’s potential beyond the auto industry. Gessler’s Porsche Design, meanwhile, has some 500 points-of-sale

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around the world, as well as 106 of of its own stores, and expects to open a further 150 or so shops over the next five years – essential, Gessler suggests, to allow consumers to experience what he calls the Porsche Design world. “There is certainly scope for more design studios to become brands in their own right, although that was never Ferdinand Porsche’s intention,” he adds. “Most of our design work is still anonymous for third party companies and that remains important in terms of generating ideas. But the fact is that there is power in creating your own products too...”

EQUIPMENT

Are there, in fact, any product categories to which Porsche Design would not turn its sharpened pencil and CAD software? There is one it has considered repeatedly, Gessler admits, although never quite committed to – laptops. Why? Because laptops have never been regarded as means of expressing their user’s personality. “They have simply been devices,” says Gessler. “But, people use to say that about mobile phones and they are now important status items. And the laptop market seems to be going that way too. So maybe...” Watch out Apple. n

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To Infiniti and beyond Frank Cullen buzzes around in a top-of-the range Nissan Infiniti M V6 Diesel which has a smooth touch of style What a difference a day makes! One day I was feeling sorry to say goodbye to my venerable old Jaguar S series, the next day I was offered the opportunity to spend the day test-driving the Infiniti M, one of a new range of high-end vehicles from the Nissan range. It wasn’t the best time to find out my driving licence had expired – who checks every ten years anyway, was my excuse.

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Soon resolved, I was on my way. For once in Glasgow the weather was fine and it was great to take possession of a car in showroom condition. My first impression was that the car looked very safe and solid with clear lines and, if anything, a bit understated. The door closed with a very satisfying clunk and I immediately noticed that all external sounds had disappeared. It was very quiet >>

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MOTORING

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The car is ideal for longer journeys. Although it was new to me I felt comfortable and in control after only a few minutes’ driving inside. There are too many gizmos to mention but the first was the keyless ignition and the second the memory feature which allows you to set the front seats and the steering wheel to the height and tilt that suits best – a handy feature if you are sharing the driving with your passenger. The satnav screen was clear and precise and doubles as a DVD player – but only when stationary. However, it was a bit of a shock to see my efforts at reversing coming up crystal clear on the screen, particularly as reversing is not my strong point. I usually delegate difficult parking manoeuvres to my wife. The fun bit, of course, is driving the car and there was no disappointment when we hit the motorway and started heading west. The Infiniti picked up speed easily and all-round vision was excellent as I joined the rest of the traffic. There is a handy little feature on the wing mirrors which brings on a yellow light to show if you are in a blind spot which proved to be very useful. Also the satnav bleeps if you dare to change lanes without signalling beforehand, a great aid to anyone on a long journey who suffers from fatigue or lack of concentration. Acceleration was swift and powerful through the six-gear automatic box which can be controlled by selecting drive, using the manual selection option, or by manipulating two paddles on either side of the steering column. The Infiniti was both fun and very safe to drive and I wish it had been around when I was required to commute back and forth to

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Understated: Frank Cullen was effusive about the car and reticent to hand the keys back England – sometimes driving through the middle of the night. At the same time it would be the perfect choice for the grand tour of the north of Scotland or exploring the delights of France or Germany. The car is ideal for longer

Facts CAR: Infiniti M30D Premium 3.0 V6 diesel PRICE: £48,269 INSURANCE GROUP: 44 C02 EMISSIONS: 199g/km POWER/TORQUE: 238ps PERFORMANCE: 0-62mph/6.9 seconds Max speed: 155mph FUEL CONSUMPTION: 33.7mpg STANDARD SAFETY FEATURES: Dynamic safety shield: intelligent cruise control with low speed following, blind spot warning and blind spot intervention. Distance control assist, forward collision warning, lane departure warning and lane departure prevention systems, intelligent brake assist. Camera with parking sensors.

journeys and would seat a family and all its gear effortlessly and it would be particularly suited to long motorway and autobahn driving. I’m sure you would arrive safe, rested and ready for the next stage of your journey. Although the Infiniti was new to me I felt comfortable and in control after only a few minutes’ driving. The car would be ideal for the busy executive with a family at home looking to being chauffeured around at the weekends and for longer breaks. The acid test for me was my reluctance to return the keys at the end of the day in the hope the kind folks from Infiniti would not notice that one of their prized vehicles was missing! n Frank Cullen is director of FMC Solutions Ltd, a consultancy specialising in working with young entrepreneurs, helping start-up businesses and established companies to grow. He is the former managing director of ntl Scotland, now Virgin Media. Car supplied by Infiniti Centre Glasgow, Braehead, Renfrew, PA4 0DJ, 0141 886 8190, www.infiniti-glasgow.co.uk

AN INSPIRATIONAL MEETING VENUE

Spring rates from £155 per person with complimentary group transfers Set by the ocean with slate blue seas and big open skies. Rolling greens and long, waving grasses. Turnberry is a place to gather,to inspire. From only £155 per person per night for groups of ten or more, inclusive of full Scottish breakfast and VAT. For every 30 delegates, Turnberry will provide one complimentary return group transfer from central Glasgow, Prestwick or Glasgow airport. For full terms and conditions please visit turnberryresort.co.uk/meetings or call 0844 811 3209

LIFE IS A COLLECTION OF EXPERIENCES LET US BE YOUR GUIDE

ENTREPRENEUR

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when detox people listen Television presenter Amanda Hamilton is using her on-screen experience to launch an international spa business â&#x20AC;&#x201C; and the signs for success look encouraging, as Kenny Kemp discovers >>

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ENTREPRENEUR

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ENTREPRENEUR On a pleasant day, the revitalising air, the open skies and rock pools around North Berwick are hard to beat. For Amanda Hamilton, it is the ideal out-doors environment to relax with her husband and bring up her young family, away from the stresses of live television deadlines and the flurry of business engagements as she build up her international spa business. The East Lothian coastal town, with its excellent local golf courses, its award-winning Scottish Seabird Centre and live links to the Bass Rock’s gannet colony, and its accolade as a Britain in Bloom gold winner from 2010, makes this the perfect place for Scotland’s health and detox guru – to detox. For Amanda, well-known as a GMTV presenter, broadcaster and dubbed “Queen of the Detox Scene”, leads not a double, but a triple life, developing her programmes at upmarket destination spas where her guests are not only pummelled and pampered but gently encouraged to detox by adopting a more wholesome approach to their lives. She has just returned to North Berwick to chill out after a hectic week in the French Alps where she is working on a spa project for the luxury ski retreat, Ferme de Moudon at Les Gets, one of the exquisite “stars” of Grand Designs Abroad. She is helping to create another of her unique experiences in the chalet, coupling her knowledge of complementary therapies using a mix of massage, yoga and colonic hydrotherapy. According to industry analysts Diagonal Reports, the European beauty and wellness market is worth a staggering £155bn a year, and high-street “spa” treatments such as massages and facials account for half of this. Despite the recession, this global industry continues to grow at breakneck speed, emerging as a value-added part of international tourism. Up until now, Amanda has been working at the luxury end with residential retreats – such as Stobo Castle in Peeblesshire – where she can spend up to a week working on bespoke consultation programmes for individual clients, or her short-sharp Turbo Detox weekend at Champneys in Tring. But she has major plans for a new type of spa experience with a range of approved organic and natural detox products.

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Being out and about is something that informs my thinking. It helps me define what I see as good for a person’s physical and mental wellbeing Amanda has become more choosy about her broadcasting commitments too, so she can spend more time with her family and build the business plan for what has been called her “Inner Spa” project. She remains a freelance presenter on BBC Scotland’s Landward and an occasional member of STV’s The Hour. That would be enough for most energetic women, but Amanda has an extra gear when it comes to motivation. “I’m trying to do more in Scotland, especially with the family being at an important age and because I’ve been spending a lot to time abroad,” she says. “So when I am here I want to keep focused on what needs to be done for this new venture.” Amanda, now 36, loves the outdoors. She was brought up in a sporty household – both her parents were gym teachers – and she represented Scotland at badminton as a junior. “I’m a really an active, outdoors person,” she says. “Being out and about is something that informs my thinking. It helps me define what I see as good for a person’s physical and mental wellbeing.” For Amanda, there is a natural way of living and her motto is: Keep It Real. Keep it Simple. At 17, she went to Napier University to study journalism and communications. When she graduated she landed a job as a news anchor in Colorado where she spent a year learning all about live television. “I’ve always had a fairly entrepreneurial spirit,” she says. “After my early spell in broadcasting, I fell into a job with Microsoft. And I cut my business teeth with them where I became a strategic alliance manager. “I wasn’t a technology geek, I was there to help people with ideas on how businesses might use Microsoft in their businesses. I started off working with partner companies and small entrepreneurial business in the

south-east of England. I was helping them become involved with Microsoft. This gave me a flavour for business life. “I had a burning desire to do something in the health industry. After I graduated, I took a course in nutritional medicine at 25. I came out of that wanting to do something that could help people with their health and diet. “I didn’t want to do health promotion or purely dietician – that really wasn’t me. I became very passionate about what people could do to change their lifestyles. But I wanted to find out much more about what was available around the world.” So she turned her back on a six-figure salary, selling up a large home in Buckinghamshire, and set up her first spa business. “It was a big risk financially but I was only 27 and I didn’t have any dependents at that time,” she says. “I could see a lot of opportunity.” A fluent Spanish speaker, she drove off to the south of Spain with an idea of opening up there because of the weather and the opportunities. She says: “It had the right market conditions at the time. I moved to Andalucía where it wasn’t too expensive to live and I spent some time seeing how it might work.” She was impatient to find out more, so she upped sticks and went to Thailand, but kept a small consultation clinic going. “I spent six months in the Himalayas working with an ayurvedic doctor,” she says. “Ayurveda is the Indian way of medicine and knowledge which means a long life. I then trained in yoga and tried to piece together all the different bits that were important to bring an overall experience. It was things that I couldn’t find in a traditional format.” What was evolving was a deeper understanding of how a healthy human >>

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ENTREPRENEUR metabolism worked, with proper digestion balanced with exercise. “It’s really a meeting of East and West,” says Amanda. “But I’m not prescriptive about things. It’s not my way or the highway. I find the variety fun – because we are all biochemically unique. Keep your food real, cut out the processed food, try and handle stress by taking exercise. Supplement your diet with supplements when needed. But I do think that people should take a break and take time out at least once a year when they restart the body and give it a catch-up and a treat. If you can’t do it in a spa environment, then recreate it at home. The busier you are, the more important it is to take time out.” She had melded together her thinking and her media background to pitch a television programme that would take people through a detox programme. “I’m a nutritionist with a lot of accumulated knowledge about health and diet” she says, “but I’ve would never claimed to be a medic. “I went around knocking on doors. I probably went to 14 different production companies before I got a ‘yes’.” The ‘yes’ was from Tern Television in Glasgow where creative director Harry Bell saw what Amanda was trying to do achieve. “We got a commission through UKTV for Spa of Embarrassing Illnesses and that was the best-selling export to over 20 countries,” she says. “It’s gone to BBC Prime and made a follow-up series including Teen Spa of Embarrassing Illnesses.” Amanda was co-producer and presenter. “One of the things I had in my bag was that I understood the media,” she says. “I’ve always been able to use this. I trained in live television when I was very young, so I’m not scared of it. I think that’s a real asset for me.” The media profile has certainly been a massive bonus, leading to further work on BBC1 and BBC2 with How to Live Longer and Something for the Weekend. “Being on television does help with the detox programme profile,” she says. The creation of the Amanda Hamilton signature detox in some of Europe’s most exclusive health resorts fitted with her deeper desire to be a successful businesswoman. “I’m into short, sharp interventions to get

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My company has taken time to grow because clients expect my personal input – that’s been a strength but also a weakness in growing a business results,” she says. “It is a challenge when you see someone every three months; it’s much better when you can get a concentrated period with them for seven days.” Her clientele has been 70% female, with a lot of professional women wanting some help in shifting weight and feeling healthier. “Some people have saved up all year to come while there are those who’ve arrive in their own private jets,” she says. “My courses are a great leveller because it boils down to everyone is going through the same thing. “My new venture is less about me – Amanda Hamilton as the front person – it’s about the team. My company has taken time to grow because clients expect my personal input – that’s been a strength but also a weakness in growing a business. I’m addressing this by training people in my techniques. “The next 12 months will be crucial for us. We’re launching the whole concept in London in May and there will be range of products to complement this. I think we are onto

something major. I’ve spent a lot of time figuring it out. I’ve been focusing on what we really do; what the experience will be like for the client. It’s a matter of weaving this into the bigger market. It’s not about a team of ‘mini-mes’, but a group of people who are exceptionally good at what they do.” Amanda is also attracting the attention of “big gun” investors in the translation of her spa and diet concept to an online audience. “I see this as being a new wave of spas, doing things differently,” she says. “I’ve had my babies (her youngest is one-and-a-half) and I still have this immense energy. I believe over the next five years we can build a very exciting business.” Amanda Hamilton is about to unlock a new wave of experiences for those who want to change their lives. With her sense of family security in North Berwick – and a place to escape – she has the building blocks and the determination to build something significant. n

INTERVIEW

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Loudon Clear Few people understand Edinburgh’s property market as intimately as Richard Loudon, the head of Simpson & Marwick’s award-winning property team. Kenny Kemp meets him The best-selling author Alexander McCall Smith populates his every-day stories with colourful characters from Edinburgh’s New Town. There would be little surprise if one was based on Richard Loudon. He is an energetic fifty-something Edinburgh solicitor with impeccable manners, an air of confidence and a real passion for his home city. That confidence could be something to do with his success in building the upmarket residential property business of law firm Simpson & Marwick over the last 31 years. Each day he still heads out to visit properties, adding another few pages to his encyclopaedic knowledge of the city. Richard Loudon could well have trampled a very different career path. The son of a notable Scottish medical family – his father John was a senior consultant obstetrician at Edinburgh’s Eastern General Hospital, while his Highland mother, Nancy, was a pioneer of family planning in Scotland – he might have been impregnated with the medical gene. Then, in his last year at the Edinburgh Academy, he undertook an aptitude test which indicated he had all the attributes to become an architect, a path later chosen by his younger daughter. (Loudon’s son and elder daughter have followed their father and mother into law and medicine.) Instead,

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Richard headed off to Sheffield University to study business studies, ended up with a law degree and then attended the College of Law in Guildford. He spent some of his probationary period at Masons in Fleet Street but the lure of London, the proximity of the law courts and the Inns of Court didn’t really inspire. Instead a young Richard Loudon headed back to Edinburgh. This was in the early days of Thatcher’s Britain with three million unemployed, a radical era of privatisation in the air, and getting a start was not normally easy. But, on September 4 1979, he joined Simpson & Marwick, then a small but venerable legal firm in 18 Heriot Row, next door to where Edinburgh’s most celebrated literary son, RL Stevenson, once lived. “I knew Douglas Moodie, the conveyancing partner at the time, and he offered me an apprenticeship over the phone. So I’ve never actually really had a job interview,” he recalls with a laugh. He was coming home for good. “Edinburgh is one of the most beautiful cities in the world. The Georgian legacy of the New Town is unique. The most incredible thing is that you can actually live on the principal streets of a capital city. There is the New Town and lots of very good residential areas within easy walking distance to the city centre, from Stockbridge, Inverleith and Murrayfield and,

on the south side, there are larger properties in the leafy suburbs of Greenhill, Grange and Morningside, all within easy reach of the shops, restaurants and bars.” Simpson & Marwick were known as specialists in litigation. Even today there are 26 partners in litigation and only three other is property – Loudon, Brian Smith in Edinburgh and David Geddie in the Aberdeen office. Residential property was seen as a service for clients but hardly the main activity for an ambitious legal firm. From early days, Loudon’s vision was to see that the property department became a worthy complement to those heavyweight litigators. Today he is regarded as one of the foremost residential property lawyers in Scotland with his team recognised as both Property and Conveyancing Firms of the Year in the 2010 Legal Awards. Of course, there are plenty of successful residential property lawyers in the capital who have enjoyed a very decent standard of living in the past 30 years, but Loudon has remained the one to beat. One Edinburgh contemporary, in the same field, described him as a tough but scrupulously fair competitor. “He has a real belief in his ability and knowledge,” he says. “Some might call it conceit, but I don’t think that’s fair. In Richard’s case it’s based on a reflection of >>

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INTERVIEW

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how he has built up Simpson & Marwick.” Perhaps it’s something about his own competitive streak which goes back to playing squash, cricket and rugby, or his current passion for golfing at the glorious Renaissance Club in East Lothian, but Loudon has turned Simpson & Marwick into a leader. He says: “I’ve played a lot of team sport over the years. The success here is down to the great team we have. Yes, the captain should lead by example and that’s what I see myself as doing, but it’s the team players that really matter here. They all do a fabulous job.” He was a litigation apprentice under Evan Weir. He recalls parking his boss’s car, buying his Capstans, and early evenings spent licking stamps onto letters by candlelight. Perhaps the office might have benefited from Leerie the gas lamplighter – immortalised by RLS – passing by during those power cuts in the late 1970s. Richard recalls that the photocopying room still retained the then-unused wet photocopying trays, where each sheet would have been hung up to dry with clothes pegs before being sent to the appropriate department. Yet, Loudon was one of a cohort of lawyers made a partner at the tender age of 25. “It was a time of great growth in law and we were made partners at a young age,” he says. “At that stage, I was the eighth partner. One retired in the 1980s but there were still seven of us together in business 27 years later, until last year.” In the late 1980s, as Edinburgh’s property market began to heat up, some solicitors were discounting conveyancing fees to gain market share, which made others question the future viability of property work. “We had the choice of doing two things – improve the quality and standards of service, raising the cross-bar, or else compete on fees,” says Loudon. “We felt the best way of going was to build a high quality estate agency and conveyancing service.” It was a snowball effect. The firm began to use For Sale boards – new in Edinburgh – and, with properties to sell, this began to attract attention. “If the properties look good and are well presented, then sellers will come to you,” he says. “The more inquiries you get, the more

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properties you have, the more you can build the business.” At that time in order to sell a house you typed-up a single sheet of foolscap which was delivered to the old ESPC (Edinburgh Solicitors’ Property Centre) office in George Street which they then presented to the public in a ringbinder. That was all you did. There were no For-Sale boards or photographs; “marketing” was an expensive advert in The Scotsman on a Thursday. The marketing of property was being transformed. Innovation in conveyancing and property was a driver for Loudon, who sees himself as increasingly entrepreneurial in his field. In 2006, he was one of five forwardlooking lawyers who were instrumental in the introduction of standard missive clauses, now used in probably over 95% of property transactions. “It proves you can make things work with others to improve the process to the benefit of all involved,” he says. The influential Edinburgh Conveyancers Forum was created as a result of the success of the Standard Clauses. “I like to think that what I’ve done is grow a business here, which is very different from dayto-day law. Seldom do I look at any statutes, cases or even textbooks.” Simpson & Marwick’s property department, under Loudon’s watch, remain ahead of the curve, recently adopting iPads to display their marketing package when pitching for business. Using QR codes, a kind of nextgeneration barcode which allows a smart phone to take an interested party right through to an internet page without a search. Then – using a Propcast as an option – the interested buyer can walk virtually through the home as a voice describes each room. “I’m pleased that we’ve always embraced technology to help people sell their homes,” he says, as he flicks his pointing finger across the tablet computer. “In the early days, I had to twist my partners’ arms to let me buy a word processor. It’s an indication of keeping ahead of the game, which we’ve always tried to do. I think we were the first Edinburgh firm to have a property website – edinburghprimeproperty.com. We are now on Version Four and constantly refining it.

“Even at the start I didn’t want to call it simpsonandmarwick.com because the firm was so well known as a litigation firm. And, in early days, people searching on the internet would have been more likely to click on a search result ‘Edinburgh Prime Property’ than one of 200 law firm names.” “Ten years ago, a lot of marketing people said there were dangers in dual branding, yet edinburghprimeproperty.com is one of the top two or three results on a Google search for Edinburgh Property. We’re also just about to launch our own mobile website. I believe the brand is now well recognised in Edinburgh along with ESPC, number one on that Google search. I can never understand why anybody would market a property using an agent that cannot advertise the property on espc.com.” So what has been the fall-out from the recent recession? “In the early 1980s most Edinburgh properties were bought by people born and brought up in Edinburgh. Since then, there has been a steady influx of people from the rest of the UK and abroad. The impact of the finance houses, the banks and fund managers meant there were very many more people coming and going. Edinburgh and East Lothian have done extremely well.” There are now an international set of people who choose to live and raise their families in Edinburgh when they are working elsewhere, perhaps in London or regularly overseas in Frankfurt or even New York. “Then, in the 1990s, a lot of people moved here because the education system was so good and the property was comparatively reasonably priced,” says Loudon. “All these subtle things influence a decision to live in Edinburgh.” The highs of 2007 – which was a record year for S&M property – and the lows of 2008 and 2009 have an indelible impact on Simpson & Marwick, now based in a modern office on Albany Street. Last year was about a slow recovery, up 51% from the previous year, while there is an expectation of a flourish during the spring of 2011. “Property sales stats can be a bit skewed,” he says. “I reckon the best properties are about 10% off the peak, the average is 15% down. But there are lots of new-build re-sales

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in peripheral areas where it’s much more than that.” The recent housing market slowdown has put pressure on some of the smaller firms who simply don’t have the marketing muscle to sustain high profile property departments. While the ESPC, of which Loudon is a nonexecutive director, remains a first port of call for prospective house hunters, increasingly the bigger firms with the ability to use marketing and innovation look likely to prevail. What needs to be done to help Edinburgh and wider Scotland? Loudon says it’s a matter of the banks and the building societies lending more money so that people can get mortgages again. So can you get a decent family house in Edinburgh for half-a-million pounds? According to Loudon, buying a serious Edinburgh house will set you back around £1m, be it a big semi in Morningside or a detached house in Inverleith. “We sold many properties over a million pounds last year,” he says. “The difference being that buyers aren’t taking on massive mortgages any longer. People who are buying are those who have been fortunate enough to build up large equity during the better years, or they have substantial capital. The days of people taking £1m mortgages have probably gone. But I’d like to be clear, every property – from a flat at £250,000 to the bigger homes – is equally important to us because they are all equally important to the client.” In the current market, a good, wellproportioned house in a sought-after area still sells well. “Before, people would accept they may have to pay big money for houses that were, in some cases, a bit of a compromise; whereas they are the ones now not doing so well in the marketplace.” So if you’re on a busy road, under a flightpath or with a north-facing garden, you might not get the premium that was available four years ago. “Properties where people accepted the element of compromise are not moving so well, because buyers are saying, ‘I don’t need to accept the compromise’,” he says. “And, therefore, a new home now needs to tick nine or ten out of ten boxes,

INTERVIEW

Edinburgh is one of the most beautiful cities in the world. The Georgian legacy of the New Town is unique rather than six or seven out of ten. As the recession began to bite, one client suggested adopting the strategy of “Thrive, Don’t Survive.” “As a result, we invested in our website and technology and took the decision to open an office in North Berwick,” says Loudon. “I saw East Lothian as an obvious extension of the Edinburgh market and love spending time down there.” And what of the future? “I’m keen to keep building the business but also take opportunities to do other things,” he says. “My wife Ailsa and I want to travel more and there are a few more golf courses to play.” He’s been inspired to make the most of life by a friend reminding him: “There were people on the Titanic who declined the sweet trolley.” While Loudon is increasingly taken by some of the more contemporary houses built in

Edinburgh – and he would love to design and build his own home – he has lived in the same house with Ailsa, a consultant gynaecologist, for 24 years. “In some respects, Simpson & Marwick is still an old-fashioned partnership, but in other respects it’s a very forward thinking, dynamic practice,” he says. “We’ve got the best of both worlds. For me, ultimately, it’s all about client service. I’ve always been willing to see properties myself, out of office hours and late in the evening if necessary, and that really can help secure the instructions.” Those litigators played their part in the story – a few partners in particular, who remain nameless, worked very long hours on a series of high profile and complex cases. “To keep up with them, I had to build something special,” he says. Peers would say he has. Now, that would make a good chapter in a Sandy McCall Smith Edinburgh novel. n

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ENTREPRENEUR

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A star turn for toolmakers

Industrial design: Craig Hyslop with his father William at Hyspec Engineering, an Ayrshire success story

William Hyslop wanted to be self employed and set up his own business in 1977. Today his son Craig runs Hyspec Engineering, employing more than 100 staff, training apprentices and with a £1.5m expansion plan. Kenny Kemp went to visit an Ayrshire gem Want some good news? Scottish engineering is alive and kicking. Despite fears of a skills shortage – which there is – there are jobs for qualified Scottish engineers in a host of persuasions across our small nation and further afield.

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What’s heartening is there are also brilliant Scottish engineering companies under the radar. You’ll find one of those unassuming gems behind the platform of an Ayrshire railway station. As commuters at Stewarton wait to board their morning trains to Glasgow,

they can hear the girn of the lathe, the whine of the drill and whirr of the grinder emanating from Hyspec Engineering. Once inside the door, the buzz becomes more pronounced and you can smell the heady mixed aroma of scorched metal, industrial

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polishes and setting moulds. Every product that leaves this company is beautifully created – sculpted with precision out of lumps of low alloy and exotic steels – using advanced computerised technology. Craig Hyslop is the managing director. He is a time-served toolmaker – one of Scotland’s true artisans of engineering manufacture – with the ability to make vital components for the oil and gas, aerospace, nuclear and renewables industries. There’s been no hype and no public relations glitz. Yet somehow this firm – based in Stewarton’s Rigg Street and employing more than 100 people with a turnover in excess of £10m – represents a better vision of Scotland’s manufacturing future. And what’s heartening is that there are other Scottish companies out there too. If Kevin McLeod, the presenter of Grand Designs, was looking at this firm he might say: “This is a refreshing place where engineering prowess and skills are cherished. But where the modern methods are embraced and used to full potential.” BQ Scotland asked industry champion Peter Hughes to suggest a typical engineering firm. (See his Dozen to Watch). He reeled off the mighty ones but he said that Hyspec Engineering, renamed in 2010 from the more prosaic Jigs & Fixtures, was a diamond. His enthusiasm is understandable. Its founder, William Hyslop, is now semi-retired at 66. While he’s in the office most days, he devotes more time to his other passions – his family and breeding greyhounds. Now his son, 41-year-old Craig, is running the show. William remains the master who served his time as toolmaker in the 1950s. He worked in various machine shops and tool rooms all over Ayrshire before starting his own business. Companies such as Scottish Tooling and Massey Ferguson, which served the county’s rich agricultural needs for machinery, and Hyster fork lift trucks. He was making press tools for these companies. He then decided to set up for himself with Hyster and then Volvo among his first customers. “I started Jigs & Fixtures in 1977 with the ambition to be self-employed,” says William. “Never at the early stages did I think we would grow to the size we are today.” Craig was six at the time. “I remember my dad

ENTREPRENEUR

Toolmaking has given us good problem-solving skills and allows us to thrive in the manufacture of complex parts working lots of hours,” he says. “He has always said to me, ‘There’s no gain without pain’.” Originally from Kilmaurs, a few miles south of Stewarton on the A735, Craig left school at 16. He joined his father, serving his apprenticeship as a toolmaker until he was 20 when the business had a turnover of about £1m. “We started off in Kilmaurs for two years,” explains Craig. “My parents bought a house with a small industrial unit at the back which was once used for hosiery – and it still had the old knitwear machines in it. It was ideal and my father put the first two machines in there.” But, in 1979, after two years, he had

outgrown the unit and Jigs & Fixtures found a place in Stewarton. The Ayrshire town is nicknamed the “Bonnet Toun” and they purchased a former hosiery factory which was still filled with bobbin wheels from knitwear machines. “We’ve been here for 32 years,” says Craig. “There’s not a lot of industry in Stewarton now, it’s mainly a commuter town. Glasgow is only half-an-hour away and has two trains an hour to and from Stewarton.” Toolmaking was once a vital element of Scotland’s world-leading engineering prowess, but today it is virtually impossible to find toolmakers in the country. Jigs & Fixtures prospered by undertaking work for the steel manufacturing and electronics industry, the car industry and the circuit board industry. “It’s a dying art in the UK but is most definitely a factor in Hyspec’s success,” says Craig. “This toolmaking background has given us good problem-solving skills and allows us to thrive in the manufacture of complex parts. It’s the kind of work we want. “People say to me, “Why did you set up in Stewarton?’ and I reply, “Why not, there is a good skills base in the area’.” Hyspec has excellent links to the M77, good rail connections, and ferry connection at Troon and Stranraer to customers in Ireland, and is well situated to service customers across the globe. In 1995, Jigs & Fixtures secured a significant deal that doubled the firm’s size overnight. The company was a sub-contractor to a world-leading organisation that supplied advanced products and systems for the global steel and foundry industries. They were leaders in the development of steel flow control products which allowed molten steel to be continuously cast rather than the conventional way of pouring into individual ingots. Craig says: “Our customer was using about six sub-contractors in the area at the time to manufacture an array of tooling; we were the only ones capable of manufacturing the continuous casting tooling. Our tools returned practically zero scrap pieces for our customer, while our competition scrap rate was very high – we were the only one to be able to make this type of tooling. “My father actually programmed the >>

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ENTREPRENEUR machine tool programs long-hand; this was before all the fancy software became available. “Computer Aided Manufacture (CAM) was in its infancy. He measured tool cutter intersection points using a calculator and his mathematical ability. That’s what differentiated us from our competitors.” This, plus the quality of the work was a game-changer for J&F. “No-one could beat us,” says Craig. “They couldn’t do the job and couldn’t produce the quality. Our customer came to us and said, ‘We want you to take over all the tooling worldwide’. We secured the contract and immediately bought over one of our rivals in order to secure their manpower. Incidentally, it was J&E Allan where my father once worked earlier in his career.” This allowed the company to build an extension at Stewarton and transfer all employees to a single site. “It was quite fraught getting it all together. Overnight we jumped from 25 people to 50 and our turnover jumped from £1m to £2.5m. We landed the contract and our turnover went up and up. In 1999, 90% of the turnover was from this single source. Industry at that time was booming, we kept getting more and more work from this single source and could not take on any new business from others.” Alarm bells began to ring. The business textbooks say that being so dependent on one single customer is not a healthy way forward for any business. Several years into the contract, global sourcing started to become the preferred choice for most multi-nationals. Sourcing strategies were changing. J&F forecast reduced levels of business and made a decision to look for other sectors of work; future growth would come from the oil and gas industry. “At that point, we had very little in the way of management team,” says Craig. “There was me, my father and one other. “The work had been relatively easy to get. Drawings came in by fax, we manufactured to customer specification, delivered and invoiced. It was a slick process that allowed us to focus purely on manufacture with minimal amounts of paperwork. “We knew current levels of business could not be sustained and decided we had to bring in

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We’re committed to training and developing our own people, it’s the only way forward and we will be recruiting two more apprentices this year other customers from the oil and gas industry.” This was an important landmark in the company’s history, with global sourcing more popular, orders were decreasing and, for Hyspec, oil and gas was clearly going to take it forward. In 2000, Jigs & Fixtures secured its first oil and gas customer, a large multi-national oilfield services company making down-hole tooling and completion equipment for wells. This opened the doors to other operators, all well-known multi-national blue chip companies. Recently, Hyspec completed the manufacture of critical subsea equipment used in BP’s offshore work in Angola. Craig explains: “As the years went on, we kept breaking into more companies as they heard about us and saw what we could do and the high standard of our work. “We’ve always re-invested in the business.

My father says, ‘We don’t have a holiday home abroad or yachts in the Firth of Clyde to show for our efforts – everything we’ve made, we put back into the business’. Although, I say to him it would be nice to have a holiday home.” Instead the money has been spent on the latest cutting-edge machine tools. In 2005, the firm took a deep breath and invested £4.75m on four Yamazaki Mazak Mill/Turn, Japanese-made, multi-tasking machines, with only a handful operated in the UK. They were delivered in 2006 and added to 11 Daewoo Puma Mill/Turn CNC (computer numerically controlled) machines. These new machines complemented the existing toolmaking machinery but more room was needed and a major extension was added beside the station. “It was a huge investment for a small firm like us,” says Craig. “The learning curve on these multi-axis machining centres was immense. But the investment has paid dividends, the

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new machine tools have improved our competitiveness. It’s also allowed us to undertake machining of larger diameter parts and more complex work to an even higher standard. Our multi-axis capability differentiates us from our competition.” Hyspec Engineering has a day and night shift, running five days a week, but there is only weekend working if a major contract needs to be completed, although the firm has an exemplary record for delivering on time, and on budget. “We’ve got seven apprentices at the moment, out of 103 people,” Craig declares before making a very valid point. “Twenty per cent of our workforce is lads we have trained ourselves. We’re committed to training and developing our own people, it’s the only way forward and we will be recruiting two more apprentices this year.” Hyspec Engineering now has account managers who are all time-served engineers having worked on the machines. “They have an engineering background, so they can talk to the customers about what we do and how we do it,” says Craig. “They know the job inside out.” Craig Hyslop says he has increased this department to support new business from the nuclear and aerospace industries. “The account managers are the point of contact for our customers, through this channel we offer continual communications, co-operation and the kind of flexibility that makes things work well. Our ethos is: Right first time. On time.” The company is certified to ISO 9001:2008, the quality standard for components in the oil and gas sector and, in January 2011, it attained AS9100C accreditation, which for Hyspec means that quality management, rather than purely the machine tools capability, will be the driver of growth. But running the company day-to-day, Craig could see that the business required some external help. He found Investors in People in Scotland an invaluable starting point in developing his own skills as a manager and that of the workforce. Further development came with a joint venture between Hyspec and Strathclyde University, along with management training firm Moonbeam.

ENTREPRENEUR

Becoming members of Scottish Engineering has also opened doors and Craig acknowledges that chief executive Peter Hughes has provided fantastic support. “The levels of enthusiasm and motivation gained through working with Peter have been highly uplifting for all of us,” says Craig. To enhance knowledge and expertise, Hyspec recently recruited two outstanding Indian nationals from an MBA programme at Strathclyde. Surendra Phatak and Sundeep Ammineni – soon dubbed Sandy by Ayrshire colleagues – joined the business to help develop a new corporate identity and assist in putting together a strategic plan to help

diversify further into the aerospace and nuclear markets. Both are now a central part of this firm – and enjoying the local banter. “What Surendra has done is give us a mission statement and help us through a re-branding that has shown we can be a global player – winning overseas work for Scotland,” says Craig. So this little gem of business is doing well – in a very tough climate. It is currently expanding its 40,000sq ft factory again, re-investing another £1.5m on an extension, and stands out as a company committed to its long-term future. So remember, Hyspec Engineering; you read about it here first. n

Top Dozen: Scottish Engineering Companies to watcH Scotland has its big guns: Wood Group, Weir Group, Clyde Blowers, Rolls-Royce, Raytheon and BAE Systems Surface Ships. Then there is a horde of engineering expertise for the oil and gas industry. But BQ Scotland asked Dr Peter Hughes, of Scottish Engineering, to name 12 firms to watch. In no particular order, this was his off-the-cuff list. Linn Products, Waterfoot, Glasgow. Home of the Linn Sondek and much more today. Set up by the idiosyncratic and brilliant Ivor Tiefenbrun and now run by his son, Gilad. Castle Precision Engineering, Castlemilk. One of the foremost CNC machining plants in the UK, servicing the aerospace industry. With immense skills base in Glasgow. Walker Precision Engineering, Cambuslang. Set up in 1979, employs 150 skilled engineers in design and assembly on three sites. Clansman Dynamics, East Kilbride. Set up by Dick Philbrick in 1994, this world-leading robotic engineering company for the forge industry is now owed by the employees. Control Therapeutics, East Kilbride. Established in 1987 and now a subsidiary of Cytokine Pharmasciences is highly skilled in polymer drug engineering and technology. In the same breath, Peter Hughes mentioned Valve Components Limited, also in East Kilbride. Peak Scientific, Inchinnan. A world-leading maker of generators for the laboratory gas industry, headquartered in the US. Fife Fabrication, Glenrothes, Fife. One of the UK's most advanced manufacturers of precision sheet-metalwork, electro-mechanical assemblies and precision machined components. Burntisland Fabrication, Fife. BiFab was formed in 2001 following a buyout by the management team. Work for energy sector includes the renewables markets. Thomas Taylor Bowls, Glasgow. A Scottish family business which was owned and run by the Taylor family for 196 years before the Heron family took it over in 1992. Allied Vehicles, Balmore Road. Glasgow. Established in 1993, the Allied Vehicles Group has grown consistently to become the UK's leading manufacturer and supplier of adapted and special purpose vehicles. Brand-Rex Ltd, Glenrothes. An innovative cabling solutions business that has expanded across the globe. Consarc Engineering, North Lanarkshire. Global experts in vacuum engineering with headquarters at EuroCentral, off M8.

BUSINESS QUARTER |SPRING 11

BIT OF A CHAT

with Jock Yuler >> Mather’s must-read list for business Some folk in life are a pleasure to meet. Jim Mather is one of them. So we’re perplexed that our approachable and bookish Enterprise, Energy and Tourism Minister is stepping down. We wish the retiring MSP for Argyll & Bute well in his new ventures – and we’re sure he’ll still be mind-mapping. As a parting request, I’ve asked him for his top ten books: The New Economic for Industry, Government and Education by W. Edwards Deming (MIT Press) The nonagenarian systems thinker argues that government and education can achieve continuous improvement by taking a scientific approach. The Age of the Unthinkable by Joshua Cooper Ramo (Little, Brown) Ramo believes that by coming together in common cause, our organisations can be like resilient immune systems able to handle any opportunity and overcome any difficulty. Trust: How We Lost It and How to Get it Back by Anthony Seldon (Biteback) Seldon suggests that our future wellbeing depends on re-establishing trust. The Puritan Gift: Reclaiming the American Dream Amidst Global Financial Chaos by Kenneth & William Hopper (IB Tauris) This great book calls for an end to shorttermism and the rebuilding of our economy in a new spirit of togetherness. The Living Company: Growing Learning and Longevity in Business by Arie de Geus (Nicholas Brealey) Ari de Geus rejects the “economic companies” that are callous about the wellbeing of shareholders, customers, employees, suppliers, communities and taxpayers.

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The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics by Eric Beinhocker (Random House Business) Beinhocker sees economies and business as evolving entities that need to befriend change. He tells us that “stasis in the fitness landscape is a recipe for extinction.” Lords of Finance: 1929, The Great Depression, and the Bankers who Broke the World by Liaquat Ahamed (Windmill Books) Central bankers who held sway at the time of the Great Depression prove central banking financial management in the UK was more geared to looking after old money and city interests than in building a cohesive society. Stabilising an Unstable Economy by Hyman Minsky (McGraw-Hill Professional) Minsky contends that capitalism is the best system we have but all-too-frequent recessions mean it is more profitable to be a speculator. The Truth about Markets by John Kay (Allen Lane) This suggests that nations need a full range of institutions to be wealthy and if you have competitive policies and share borders with richer neighbours you are destined to rise to their levels of prosperity. The Political Economy of Financing the Scottish Government by Paul Hallwood & Ronald MacDonald (Edward Elgar Publishing) This looks at four fiscal options facing Scotland: Status Quo, Fiscal Federalism, Financial Independence in the Union, Financial Independence in an Independent State – and comes out in favour of the latter. Thanks, Jim.

>> It’s oor enterprise There are times when you have to put aside those old Scot Trot Tendencies, and nod in agreement with the True Blue One. Our You-Kay Pee-Em has pointed a finger at the Civil Service saying they are the ones blocking enterprise in the UK. He said recently: “We are taking on the enemies of enterprise; the bureaucrats in Government departments who concoct those ridiculous rules and regulations that

make life impossible for small firms.”Then he singled out a few people in his list including: “The public-private procurement managers who think that the answer to everything is a big contract with a big business and who shut out millions of Britain’s small and medium size companies from a massive potential market.” And I don’t think David Cameron was referring to Glasgow University’s recent PR gaffe. The yooni wanted an international public relations organisation with a minimum turnover of £10m, yet there isn’t an indigenous Scottish firm with that kind of income. Dough! But the premier was standing up for enterprise, so I thought it might be a braw idea to suggest someone who could represent enterprise in Scotland, someone who was the epitome of our culture. Would it be Sir Tom or Sir Tom or Sir Bill or Sir Ian? Then I had a bright idea. Scotland’s real icon of enterprise sits on a bucket. Step forward Oor Wullie. He’s been the true inspiration for millions of us. Jings!

>> Political driver Brian Souter – the Stagecoach boss – is a long-time supporter of the Nats and a major funder to their election campaign. So it was amusing to see the former Scottish Tory leader David McLetchie lambast him as “ungrateful” for not supporting the Scottish Conservatives. His tongue-in-cheek diatribe was that without Mrs Thatcher’s massive programme of de-regulation of UK transport in the 1980s, the likes of Mr Souter would not have been able to make their squillions. The chances of the Stagecoach boss voting Tory are slim – he was once a supporter of a revolutionary left-wing group in his youthful days.

>> And a parting shot on… The Duke of York as a Royal trade envoy. “He’s not a bad man but he’s not very bright. He’s surrounded by dreadful people who fawn on him and he gets manipulated” – says a senior cabinet minister in The Times.

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COMPANY PROFILE

Supporting growth and rebalancing the economy is going to be a vital part of the Budget. Only recently the Government declared war on the “enemies of enterprise”, stating that the only strategy for growth is to get behind Britain’s entrepreneurs. But is enterprise the only hope for growth and how can this be achieved?

Rebalancing the Scottish economy

ere Alastair MacColl, chief executive of Business & Enterprise UK – one of the country’s leading specialists in business improvement, enterprise and economic development – discusses the importance of enterprise, growth and support for entrepreneurs in Scotland. “Supporting economic recovery and increasing sustainable economic growth is the Scottish Government’s strategic priority – and we share this focus. Our aim is to work with partners across Scotland to ensure businesses continue to have the support and resources they need to take advantage of all the opportunities on offer, impacting private sector growth across Scotland. “We need to ensure that public and private sector organisations continue to work together to create the best possible environment for business and make sure that Scotland is one of the best places in the UK and Europe in which to start and grow a business. We also need to ensure that we encourage budding entrepreneurs, giving them the support they need to develop sustainable and innovative businesses which will boost the economy. “The Finance and Sustainable Growth portfolio will also work towards achieving an increase in revenue for the private sector, enabling Scottish businesses to grow and diversify over the next year. With specific support for investment, innovation, high growth companies, priority sectors and international trade, this will also encourage more businesses to relocate to the nation and strengthen business communities. “It is also important that continued support is available for key sectors with high growth potential. Industries including energy, tourism, life sciences and the creative sector will form a key part in the economic recovery for Scotland.

Alastair MacColl, chief executive of Business & Enterprise UK

the finance and sustainable growth portfolio will also work towards achieving an increase in revenue for the private sector, enabling scottish businesses to grow and diversify over the next year Business & Enterprise UK has vast experience working within these sectors and understands the potential impact they can have on local economies. “And we believe Business & Enterprise UK has a lot to offer in terms of business improvement and as

part of our national expansion plan we are looking at how we can support the Scottish market. “A number of our substantial contracts are based in the North of England – and demonstrate our proven track record for generating success and more importantly impact. We feel it’s a natural progression to move into the Scottish market place and our experience, skills and 21st century approach to business improvement will ensure we are able to help businesses start, succeed and grow. “Our comprehensive and integrated portfolio offers a range of services to ensure support is accessible to all our customers. Over the past three years in North East England alone we worked with over 93,000 businesses, supported 12,500 new businesses and helped to create over 14,900 jobs. A recent independent evaluation report also revealed that for every £1 of public funding invested in Business & Enterprise UK in the North East, £8.04 of additional GVA is generated. “Despite continued changes to the business improvement landscape, we will continue to deliver consistent levels of support and guidance. Entrepreneurs, the business community and private sector growth will remain at the centre of everything that we do.”

For further information on Business & Enterprise UK visit www.business-enterprise.net or call 0191 426 6100.

BUSINESS QUARTER | SPRING 11

EVENTS

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BQ Scotland business events diary gives you time to forward plan. If you wish to add an event, business exhibition, or a public seminar to the list, send it to: editor@bq-scotland.co.uk

March

27th Scottish Chambers Networking Day. Perth Racecourse. Contact Dundee & Angus Chamber of Commerce on 01382 228 545.

22-23rd Scottish Renewables Annual Conference: SECC, Glasgow. To register as a delegate visit www.annualconference.co.uk

27th IOD Scotland: Looking to the Future with RBS. A lunch hosted by RBS, at St Andrew Square, to review of the state of the economy, and ask questions of some of the Bank’s leading economists. Contact iod.scotland@iod.com

22nd Women Into Business: Marketing. Atholl Hotel, 54 Kings Gate, Aberdeen, 6pm. Contact: Samantha Welsh at Business Gateway on 0845 609 6611. 22nd Business Gateway West Lothian: West Lothian Chamber of Commerce and the Federation of Small Businesses e hosting a networking evening, Enterprise Centre in Livingston. Email bgateway@westlothian.gov.uk or call 01506 777 400. 23rd BMW Joint Chamber Business Networking Lunch. The Tontine, High Street, Peebles, 12noon. Contact: West Lothian Chamber of Commerce on 01506 777 937. 24th Budget Breakfast: Bill Jamieson from The Scotsman, and David Collier from Chiene + Tait, Edinburgh Chamber of Commerce, George Hotel. Contact: Edinburgh Chamber of Commerce on 0131 221 2999.

3rd Dinner with Elaine Holt, East Coast Rail. The George Hotel, George Street, Edinburgh, 5.30pm. Contact: Edinburgh Chamber of Commerce on 0131 221 2999. 6th Inverness Chamber of Commerce Highland Business Dinner 2011. Drumossie Hotel, Inverness, 7pm. Contact: info@inverness-chamber.co.uk 9th West Lothian Chamber of Commerce AGM. Location TBC, 5pm. Contact: West Lothian Chamber of Commerce on 01506 777 937.

29th Working Lunch: ‘The Hunt’. Carlton Hotel, North Bridge, Edinburgh, 12noon. Contact: Edinburgh Chamber of Commerce on 0131 221 2999. 31st Networking Lunch with guest speaker Colin Neil, Site Director of Diageo Shieldhall. R34 at India of Inchinnan, Renfrewshire, 12pm. Contact Renfrewshire Chamber of Commerce on 0141 847 5452. 31st AngelsDen SpeedFunding Event. Harper Macleod, 8 Melville Street, Edinburgh, 4pm. Contact: cameron@angelsden.co.uk

18th CBI Annual Dinner. Grosvenor House London, 6.30pm. Contact: gemma.fisher@cbi.org.uk 19th Scottish Accountancy Awards. Hilton Hotel, Glasgow, 7pm. Contact Jackie Malloy on 0141 309 3549 or email jmalloy@insider.co.uk 24th IOD Innovation with Glasgow School of Art. A similar session at the 2010 IoD conference was most popular. Edinburgh venue, and time, to be confirmed. Contact: iod.scotland@iod.com 25th Opportunities Scotland Business Conference. Hilton Hotel, Glasgow, 9am. Contact Jackie Malloy on 0141 309 3549 or email jmalloy@insider.co.uk

April 4th Edinburgh Chamber of Commerce Premier Series Dinner. The George Hotel, George St, Edinburgh, 5.30pm. Contact: Edinburgh Chamber of Commerce on 0131 221 2999. 7th Tartan Day Breakfast Debate. Carnoustie Golf Hotel. Contact Dundee & Angus Chamber of Commerce on 01382 228 545. 13-14th VisitScotland Expo. AECC, Aberdeen. Contact: businesstourism@ visitscotland.com

26th Networking Lunch with Bob Cleland, chief executive of Howden. Venue TBC, 12noon. Contact: lconnor@renfrewshirechamber.com

June 2nd Lanarkshire Chamber of Commerce Race Day. Hamilton Park, 12noon. Contact: Lanarkshire Chamber of Commerce on 01698 426 882. 6th Dinner with Stuart Gulliver, HSBC. The George Hotel, George St, Edinburgh, 5.30pm. Contact: Edinburgh Chamber of Commerce on 0131 221 2999.

20th Ayrshire Chamber of Commerce Business Womens Networking Lunch. Enterkine House, Ayrshire, 11.30am. Contact: events@ayrshire-chamber.org 20th Hustings Business Breakfast (8.15am) In partnership with Bank of Scotland party leaders Alex Salmond, Annabel Goldie, Iain Gray, Patrick Harvie and Tavish Scott. Prestonfield House Hotel. Contact: Edinburgh Chamber of Commerce on 0131 221 2999. 20th Scotland PLC Awards. Hilton Hotel, Glasgow, 7pm. Contact Jackie Malloy on 0141 309 3549 or email jmalloy@insider.co.uk

BUSINESS QUARTER | SPRING 11

May

8th-9th 11th Annual BioDundee International Conference. Hilton Hotel, Dundee. Contact: Dr. Allison Beattie at biodundee@dundeecity.gov.uk 9th Business Scotland 2011. Royal Concert Halls, Glasgow, 10am. Contact: JobServe Events on 01823 250930. 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.

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