Bq scotland issue 8

www.bq-magazine.co.uk

ISSUE EIGHT: SUMMER 2012

data disciple How new science is changing healthcare rental revolution The shifting dynamics of the property game forever friends Inside the 150-year-old society with a bright future anchor man Meet the Glaswegian charged with keeping Dundee’s

£1bn waterfront plan steady and on course for success

Smokin’ aces Wooing the US with rock ‘n’ roll salmon ISSUE EIGHT: SUMMER 2012: SCOTLAND EDITION

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

SCOTLAND EDITION

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WELCOME

BUSINESS QUARTER: SUMMER 12: issue EIGHT Welcome to BQ Scotland. This is our eighth issue and we hope you enjoy it and find it a good use of your valuable time. We are committed to writing about business in Scotland and hearing how business people from various sectors have made a difference in their working lives. What is clear is that there is no magic formula to success in business; while most successful people have made the most of their opportunities, watched the cash flow, and picked themselves up when the going became tough, there is a kaleidoscope of fascinating stories about the enterprising individuals creating wealth in Scotland today.

There is an unintended theme about this issue of BQ. It is about the perpetual search for new markets and fresh ways of doing things. And there are reasons to be optimistic too – if we can look over the horizon and beyond the current economic gloom. We are fortune to have a number of high-profile projects and international events that can pull Scotland out of recession and make our nation flourish.

One of the most exciting is the Dundee Waterfront project: something that is of genuine international interest. Dundee has the potential to become an urban leader for Scotland and the V&A in Dundee is certain to be a winner from the start. The focus on regeneration also bodes well for Glasgow 2014 and the legacy that can be created in the East End, and our Business Lunch interviewee, Ed Monaghan, of Mactaggart & Mickel, talks about this.

We’ve also got a BQ2 Special Report on how businesses can make the most of the Winning Years, culminating in the Commonwealth Games in Glasgow, the Ryder Cup at Gleneagles and the Year of Homecoming Scotland 2014. All that, and the Battle of Bannockburn commemoration and a referendum on Scotland’s future.

Our interview with David Sibbald talks about how we must manage to make sense of all the welter of digital data that now envelopes our lives – and how a new generation of ‘data

science’ workers, earning good salaries, can be developed in Scotland to help both financial firms and the NHS. We also talked to Fiona McBain of Scottish Friendly. Her team has proved that you don’t have to be a massive financial player to succeed – but one that is driven by efficiencies and how to make IT systems work for the business, rather than have IT people dictating what can be done.

BQ was invited to La Bonne Auberge in Glasgow to talk to Maurice Taylor, not only is he a legend in the sphere of hospitality but someone who has shown how hotel management can be a profitable and interesting profession. Remaining on the food front, our story of St James Smokehouse in Annan is an interesting tale of redefining a traditional product like smoked salmon.

While David Alexander, celebrating 30 years in the property market, talks about the increasing importance of the rented sector. With mortgages still hard to come by, this is a trend that is likely to develop even further in Scotland. So we hope you find this edition readable – why not put it in the suitcase and take it on holiday! Those of us who have been involved with business journalism in Scotland know only too well that good publications have come and gone.

We do need your support and we are grateful for it. Thank you for your feedback too. Let us know what we can do to improve.

Kenny Kemp, Editor of 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 Andrew Mernin Sub-editor e: andrewm@room501.co.uk Gillian Law Editorial Karen Peattie Editorial e: karenpeattie@btopenworld.com Design & production room501 e: studio@room501.co.uk Photography KG Photography e: info@kgphotography.co.uk advertising For advertising call 0191 537 5720 or email sales@bq-magazine.co.uk

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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, June 2012.

THE LIFE AND SOUL OF BUSINESS SCOTLAND EDITION

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BUSINESS QUARTER |SUMMER 12

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Features

38 reach for the skies The aftermath of GIP’s acquisition of Edinburgh Airport

20 smokin’ aces How St James Smokehouse in Galloway has given salmon a rock ‘n’ roll edge

26 warm and friendly Fiona McBain on why 150-year-old Scottish Friendly has a bright future

32 move over, maths Big data science could have a huge impact on finance and healthcare

BUSINESS QUARTER | SUMMER 12

46 dj for rent The company at the forefront of Scotland’s rental boom

52 on the waterfront Glaswegian Mike Gallloway on leading the £1bn regeneration of Dundee

74 legend at lunch Maurice Taylor’s journey from lowly waiter to a driving force in hospitality

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26 the rise of big data science

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TENTS SCOTLAND EDITION

42 commercial property

The landmark developments creating our built environment

the alexander technique

58 business lunch Ed Monaghan from Mactaggart & Mickel tunes into the Stereo experience

Regulars

62 wine Grape expectations of Spanish wines from Gordon Dow

64 motoring Out on the open road with the BMW 640d Gran Coupe

08 on the record Empty property rates and financial sector skills come into focus

12 news Who’s doing what, when, where and why, here in Scotland

18 as i see it Iain Scott on how Scottish businesses can be more enterprising

66 fashion

46 checking in with a legend

The menswear maestro who sits at the heart of a French fashion dynasty

70 equipment How pen and paper are rising against the machines in the luxury market

80 jock uler Gripping gossip from our backroom boy

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74 BUSINESS QUARTER | SUMMER 12

ON THE RECORD

SUMMER 12

>> Running on empty or driving recovery?

Plans to increase empty property rates in Scotland have left some organisations fearing the worst, as Kenny Kemp reports

Princes Street in Edinburgh is symbolic of the precarious state of the commercial property industry in Scotland.

A recent investigation published in The Scotsman newspaper revealed that 11 out of the 78 shop units on what is one of Scotland’s most prestigious addresses are lying empty – a total of 14%.

And it pointed out there were four more earmarked for closure making this nearly 20%.

Research by the Edinburgh Chamber of Commerce suggests that Princes Street shops have suffered a loss of footfall of anything from 50% because of disruption caused by the tram works.

And Princes Street is losing its unique local qualities – with 14% of outlets on the famous street now mobile phone stores. Compare and contrast with Buchanan Street, a pedestrianised thoroughfare which is bustling with activity - and a superb Apple store - and preparing for even more retail brands with the opening of the Land Securities’ Buchanan Quarter next year.

This has a lot to do with consumer confidence and retail rentals but the value of wider commercial property sales in Scotland plunged

BUSINESS QUARTER | SUMMER 12

by 40% during the first three months of this year. Confidence has been crushed by fears of a UK double dip recession, combined with the Scottish Government’s planned increase in empty property rates.

As a result, the value of sales plummeted by £235m to £355m in Q1.

The total volume of sales was down by 20%.

Despite a relatively stable performance in the last quarter of 2011, the figures reflect another downturn for the commercial property industry. The results support research by the Investment Property Databank, revealing a renewed downturn in commercial property values. Industry insiders expect things to get even worse next year, especially if the Scottish Government implements its plans to reduce rates relief on empty properties.

Dubbed a ‘tax on failure’, its implementation would act as a further disincentive to invest in development and regeneration – at a time when the market struggles to find investors.

David Melhuish, director of the Scottish Property Federation, said: “The commercial property industry broadly mirrored the wider economy in the first quarter of 2012 as it entered a double dip recession.

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“The Scottish Government really must take notice of these figures and think again about the planned increase in empty property rates. With such weak demand – and with both the value and volume of sales falling sharply – this isn’t the time to increase tax on unproductive premises.”

This is echoed by CBI Scotland who have called on the Scottish Government to reconsider the proposals outlined in the Local Government Finance (Unoccupied Properties, etc.)

(Scotland) Bill.

In its submission to the Scottish Government, it stated that Ministers should avoid eliminating or reducing the rates discount applicable to empty commercial and industrial properties. Andrew Dyce, policy executive of CBI, said: “CBI Scotland remains unconvinced of the non-domestic rates measures included in this particular piece of legislation for a number of reasons.

“The proposals amount to a decision to levy an extra £18m from Scottish firms, per annum, at a time when many companies are facing considerable economic hardship.

“While there may be an impression that this cost will mostly be footed by more ‘resilient’ major commercial property landlords, this is not necessarily the case: larger property companies typically enjoy relatively high occupancy levels (usually in excess of 90%), and thus these proposals may actually end up having a greater impact on other organisations - private and public - with a genuine surplus of property, as well as businesses which may be looking to move and expand.”

He said it represents a ‘tax on distress’: property owners are facing the prospect of having to pay increased charges for buildings that are not earning them any money in the first instance, compounding the financial repercussions of holding a property which isn’t providing a return.

The proposals come about as a result of a belief that the empty property rates relief

SUMMER 12

regime acts as a disincentive to bringing empty properties into use.

“This is simply untrue,” says Mr Dyce, “commercial premises are rarely left empty on purpose, as they do not generate an income for their owners, and in most cases non-domestic buildings are unoccupied simply due to lack of demand – a fact that changing

ON THE RECORD

the rates relief regime is unlikely to alter.”

CBI Scotland considers that the measures run contrary to the Scottish Government’s intention of encouraging investment in Scotland and boosting economic growth.

CBI Scotland welcomed the motivations behind the proposals saying, “it is in the best interests of government, landlords and

the economy to see as many non-domestic properties occupied as possible”.

However, it encourages the Scottish Government to focus its efforts on boosting demand for empty properties, as opposed to penalising those firms with empty or un-let commercial premises, who are suffering the ill-effects of a sluggish economic climate.

>> Paying the price of the financial sector skills gap Without intervention one of our key sectors will continue to rely on skills from outside Scotland, writes Kenny Kemp The news that Lena Wilson, the chief executive of Scottish Enterprise, has taken up a non-executive job with Intertek earning an extra £53,000 a year for one-day’s work a month - was always likely to raise a few eyebrows. Not least when Scotland’s enterprise agency needs to grow more high earners from our own population.

There is no doubt Lena Wilson has been a hard-working and effective leader of our national agency but chairman Crawford Gillies’ quotation that Lena is “scaling down other commitments to allow herself the capacity to deliver this role [with Intertek],” doesn’t really sit well with the superannuated work ethos of ‘public service’. Intertek Group is a FTSE 100 company listed, with more has than 30,000 employees in over 1,000 laboratories and offices in more than 100 countries across the world. It will surely take a dedicated non-executive more than a day a month to provide real value and challenge to the board?

There are serious issues to tackle concerning the kind of business skills we are developing in Scotland. And Lena Wilson, who has been a member of Financial Services Advisory Board, chaired by the First Minister, will know

and appreciate this. A quarter (28%) of jobs paying over £50,000 per year within the Scottish financial services sector were filled from outside Scotland last year, according to Change Recruitment Group’s financial services survey. However, the vast majority (88%) of positions taken - up under the £50,000 salary threshold were done so from within Scotland. The sector, accounting for over 95,000 jobs in Scotland, is keen to hang on to talent with two in five (39%) candidates experiencing some kind of counter offer from their current employer upon handing in their notice. Candidates who chose to move to a new role within the sector saw an average salary uplift of 8%.

Change Recruitment director Andrew Welsh says: “Within the last year we have seen an influx of talent from financial services centres such as London, Dublin and Luxemburg.

Scotland has a wealth of financial services expertise, second only to London in the UK. However, at a senior level clients are looking for a specific skill set and product knowledge that frequently has them looking further afield to attract talent. The established market and the high standard of living make it relatively easy to attract candidates to Scotland. 2012 is off to a fairly promising start in regards to job vacancies. Some clients have remained hesitant when it comes to increasing their permanent headcount, but on the whole we have seen an upturn in vacancies for permanent staff.”

But in Scotland, too much of the lowerpaying recruitment remains heavily weighted towards temps and contractors, and while temping rates are above that of the

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equivalent salary, it gives less security when there is a downturn. In reality, there aren’t enough properly qualified Scots to run what is one of our most important sectors. Surely, this is something that needs tackling by FiSAB? But look at the Government website, and there is no indication when such an illustrious group of high-earners will be meeting again. And here the lingering problem of Scotland’s long-term unemployment, which can’t all be blamed on the Coalition Government policies, no matter how much George Osborne has become a hate figure north of the Border, needs to be tackled more strenuously. Andy Willox, the Federation of Small Businesses’ Scottish policy convenor, feels that more needs to be done to tackle our employment gap.

“Mass, long-term unemployment is not only a tragedy for the individuals and families involved but also poses a threat to the health of communities in which many Scottish small businesses are embedded. Recent statistics show a small step in the right direction.

However, this can’t be the end of the work to get Scotland working and the economy moving. Ensuring different parts of government are all working in harmony toward these joint goals has to be a priority for all of our elected representatives.”

His members’ survey showed that only 15% of Scottish members were satisfied with local authority business services. The confusion over Business Gateway services, once the domain of local enterprise agencies, and how consistently they are delivered across 32 local authorities, is perhaps something Scottish Enterprise needs to sort out.

BUSINESS QUARTER |SUMMER 12

ON THE RECORD

SUMMER 12

>> Awards put Knockraich on the menu for tourists A Stirlingshire dairy farm stole the show at the Scotland Food & Drink Excellence Awards, writes Karen Peattie It was the big surprise of the night. Katy Rodger’s Knockraich Farm, a Stirlingshire dairy firm, had just been named winner of Product of the Year in the Scotland Food & Drink Excellence Awards. Earlier in the evening, the small producer’s range of pro-biotic yogurt had won the dairy category.

There’s no other way to put – Katy Rodger was speechless. Having entered the food and drink industry “Oscars” for the first time, Rodger and her daughter, Helena Johnston, were surprised to be shortlisted so beating near-neighbour Graham’s The Family Dairy to win the dairy award came as something of a shock to both of them. But when awards host Hardeep Singh Kohli announced that Knockraich had also won Product of the Year, she thought she was “imagining it”.

“I really couldn’t believe it,” says Rodger. “To win one award was absolutely amazing but to win two? I’m still pinching myself. We’ve worked really hard on these products so to be recognised by the industry in this way has given us a tremendous boost and confidence to take the business forward.”

The Rodger family has been farming at Knockraich, Fintry, since 1947 and today it is home to a herd of British Friesians whose milk is used in the firm’s yogurts and other artisan dairy produce – frozen yogurt, dairy ice cream, Knockraich Crowdie and crème fraiche. A custom-built creamery opened in 2009.

“We started supplying our first farm shop in May 2011 and things have really taken off since then,” explains Helena Johnston. “We were listed by the new Hopetoun Farm Shop near South Queensferry and suddenly a lot of people were asking for our products and we were being approached by people wanting to find out more. We’re also in The Three Chimneys on Skye and Restaurant Martin Wishart in Edinburgh.”

The award-winning pro-biotic yogurts have recently been repackaged and Knockraich’s other products are receiving a similar

BUSINESS QUARTER | SUMMER 12

makeover. “Winning at the Scotland Food & Drink Excellence Awards has come at just the right time for us,” says Johnston. “We’ve just signed off the new packaging and are talking to quite a lot of potential new customers so it’s all very positive and exciting.”

Knockraich has also recently received its Safe and Local Supplier Accreditation (SALSA), an approval scheme designed specifically for local and regional food and drink producers to help them supply their products to retailers and caterers. Having a real point of difference is also important – the Knockraich yogurts are gluten-free and suitable for vegetarians, and have no added colours, flavours or preservatives. For Katy Rodger and Helena Johnston, however, it’s not all about making dairy products. The farm is also home to The Courtyard Café and Katy Rodger Making Interiors. “I could be making yogurt then an hour later doing a quote for curtains,” says Johnston. “The interiors showroom has been here for a long time – interiors are my mother’s real passion. We specialise in hand-made curtains and blinds, and are well respected in the industry for our quality and

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our attention to detail and service.

“The café’s also really popular and has been great as a test-bed for our products. What we find is that people will come spend a couple of hours with us – enjoy lunch or some home baking and have a look in the showroom where we offer a wide range of soft furnishings. We’ve become established as a destination and attract a lot of tourists now.”

Knockraich is certainly one of Scotland’s up-and-coming food companies and, with two Scotland Food & Drink Excellence Awards under its belt, attracting interest from buyers will be much easier. Richard Lochhead, the Cabinet Secretary for Rural Affairs and Environment, attended the event at Dunblane last month and made a point of speaking to all the winners.

“I was introduced to the food minister and he was extremely interested in our products and what we’re doing at Knockraich,” says Johnston. “He said he was encouraged by the levels of innovation in the Scottish food industry, particularly from small companies like us, and hopes to try our products at some point,” he adds.

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NEWS

SUMMER 12

Powering to European glory, cheers to new jobs and investment, bus firms join forces, happy campers pitch in with major investment, and Edinburgh employer makes leaps and bounds from French Cognac producers to work with Glencairn on the premium bespoke drinks market. Over the last five years sales are up 300%, pushing turnover to nearly £5m.

Glencairn, employing 30 in East Kilbride, was set up by Raymond Davidson over 30 years ago, and remains a family business run by the three Davidson brothers, Paul (44), Scott (40) and Andy (27).

>> Edinburgh Napier Staff climb for CHAS

>> New centre proves fit for a princess The Princess Royal has opened the £54m University of Edinburgh’s Scottish Centre for Regenerative Medicine building.

Designed by architects Sheppard Robson, SCRM is the first facility of its kind in the UK and is set to become the first laboratory in Scotland to receive a BREEAM Excellent rating. BREEAM is an environmental assessment methods and rating system for buildings. Located at Edinburgh BioQuarter, the SCRM building will provide an environment for the study and development of new treatments for diseases based on regenerative medicine.

>> Royal approval Glencairn Crystal has received a Queen’s Award for International Trade. This reflects the huge growth, particularly in the last five years for ultra premium luxury products within the whisky industry.

Glencairn is Scotland’s only remaining independent crystal designer and manufacturer. There is growing demand

BUSINESS QUARTER | SUMMER 12

On 24 August 2012 staff from Edinburgh Napier University are climbing the four most northerly Munros in Scotland (Ben More Assynt, Conival, Ben Klibreck, Ben Hope) within a 24-hour period to raise vital funds for CHAS (Children’s Hospice).

This challenge is already testing their endurance, determination, commitment on their training events, but they have already raised over £6,000 for the charity.

“We have been astounded by the generosity of people sponsoring us and also providing support to the team like Peter Vardy Motors who are providing the transport for the event,” said Graeme Bishop, head of campus services at Edinburgh Napier University.

“CHAS is a very worthwhile charity who works with lots of family’s across Scotland, and the team would like to raise as much money as possible for them before the big event,” he added. Individuals or organisations looking to support the challenge are asked to visit http://www. justgiving.com/napiermunromadness

>> First for sustainability Aberdeen-based FirstGroup, the transport operator in the UK and North America, has been named best sustainable business in

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the UK and second best in the world. EIRIS, the leading global provider of independent research into the environmental, social, governance and ethical performance of companies, assessed the sustainability performance of all 2,063 companies in the FTSE All-World Developed Index. FirstGroup came second in the EIRIS top 10 ‘Sustainability Leaders’ list.

Terri Vogt, FirstGroup’s head of Corporate Social Responsibility (CSR) said: “I’m delighted that FirstGroup has scored so well in the EIRIS Sustainability Report, which is highly respected and authoritative. To be rated as the best performing company in terms of sustainability in the UK, and the second best globally, is quite an achievement.”

To be rated as the best performing company in the UK and the second best globally is quite an achievement >> European glory Aquamarine Power has won a major European Commission environment award in Brussels. European Commissioner for the Environment, Janez Potocˇnik, gave the Edinburgh company first prize in the ‘product’ category for its Oyster wave energy technology.

The company is commissioning its Oyster 800 device at the European Marine Energy Centre in Orkney.

SUMMER 12

NEWS

>> Bus firms gear up for global expansion

Time for a toast: Paul Walsh, chief executive of Diageo, which has brought much-needed investment and new jobs to Scotland

>> Diageo cheers job market with £1bn investment Diageo, the world’s leading premium drinks business, is to invest over £1bn in Scotch whisky production over the next five years.

A new malt distillery will be built, alongside a programme of expansion at a number of Diageo’s existing distilleries. Plans are being draw up for a second new distillery which will be built if global demand for Scotch is sustained.

The company also plans to invest in substantial new warehousing capacity to house the millions of additional litres of Scotch whisky.

Diageo chief executive Paul Walsh said: “This is a pivotal moment in the development of the Scotch whisky category for Diageo. Over recent years our brands have achieved remarkable, sustained global growth. Scotch whisky is Scotland’s most celebrated manufactured export, led by brands like Johnnie Walker, resonating with consumers from Boston to Beijing.

“We expect that success to continue, particularly in the high growth markets around the world, which is why we are announcing this major investment in Scotch whisky production, committing over £1billion in the next five years, to seize that opportunity for global growth. This builds on the foundations we have already laid down over recent years through sustained investment in both production assets and in maturing Scotch inventories.

“Scotch whisky is a significant manufacturing export industry in the UK, driving domestic investment and job creation through our success in exporting to high growth markets around the world.”

Across Scotland the investment will create over a 100 new Diageo jobs, largely high value jobs in rural areas of Scotland. It is also expected the investment will create an average of 250 construction jobs for each year of the investment period and in wider Scottish economy there will be a knock on effect which will generate around 500 further jobs.

Diageo is also making a contribution to efforts to tackle youth unemployment by taking on 100 apprentices and graduate trainees over the term of the investment. Paul Walsh said: “I’m particularly pleased our investment will generate significant numbers of new Diageo jobs, as well as boosting the local construction sector and stimulating job creation throughout the Scottish economy. We are determined to use this investment to make a contribution towards helping people into training and work through our apprentice and graduate placement scheme and by using the opportunity to encourage suppliers to take on apprentices to work on the investment projects.”

In the first half of 2012, Diageo’s Scotch category saw 8% volume growth and 14% net sales growth. Diageo also plans to commit £5m over five years towards community initiatives as part of its sustainability and responsibility programme in Scotland.

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Alexander Dennis Limited, the UK’s biggest bus maker, headquartered in Falkirk, has formed a strategic alliance with New Flyer Industries, North America’s leading manufacturer of heavy-duty transit buses. The move signals the creation of a powerful new force in the USA and Canada.

The firms have a contractual Joint Venture designed to target the medium-duty, low-floor bus sector in North America and to transform the segment with a range of light-weight, fuel efficient products based on ADL’s hugely successful midi bus range.

Colin Robertson, ADL’s chief executive officer, said: “Transit authorities are being squeezed on all fronts as the economy tightens and the impact of the recession continues relentlessly. Our Enviro200 midi bus is a world-beater, leading the field in markets as far apart as Britain and New Zealand. It is light-weight, highly manoeuvrable, enjoys unrivalled fuel efficiency and has incomparable whole life costs. These are the reasons why we have sold 16,000 of them around the world”.

Alexander Dennis is Britain’s biggest bus and coach manufacturer, doubling its turnover in the last year to £360m. It anticipates further growth of around 20% in 2012. ADL employs 1,900 people and has three principal manufacturing sites in the UK.

>> Cooking on gas Dumbarton-based Aggreko has been awarded a two-year project for 100MW of gas powered generation in the Dominican Republic. The agreement, which valued at circa £60m will serve as an interim emergency solution to Edenorte, the Northern electrical distribution company of CDEEE, in the Dominican Republic.

There is an urgent need for power in the Dominican Republic due to a rapid increase in demand for electricity, driven by economic growth in the country, which has affected national grid stability.

BUSINESS QUARTER |SUMMER 12

NEWS

SUMMER 12

Keith Charlton, managing director, Bunk Campers; Malcolm Roughead, chief executive of VisitScotland; Louise Corken, marketing director of Bunk Campers, and Keith’s wife have a seat in one of Bunk Campers’ vehicles at VisitScotland Expo 2012 in Edinburgh

activity. However, we know that when times are tough, companies can be tempted to put off investment so over the past year we’ve had to look at new ways to stimulate greater levels of interest.”

>> Leaps and bounds

>> Happy campers pitch in with major investment Bunk Campers, a campervan and motorhome rental company, has invested £500,000 in opening a new depot in Edinburgh.

Irish-based Bunk Campers work with a network of 50 tour operators worldwide bringing affordable campervan hire to overseas visitors wanting to visit Scotland and Ireland.

The company also offers what it describes as “great value deals” online at www.bunkcampers. co.uk to locals wanting to explore a bit closer to home.

“At Bunk Campers, we focus on identifying growth tourism economies.

“Working with VisitScotland, we are proud to announce our investment of £500,000 in the Scottish tourism economy creating five new jobs in customer service and renting out our new fleet of 2012 campervans from our first Scottish depot,” said Keith Charlton, managing director of Bunk Campers.

Read more on Scotland’s tourism business - including an interview with Malcolm Roughead - in our BQ2 Scotland Special Report.

>> Innovation spend rises Scotland’s companies are investing in their business growth through innovation, according to the latest figures compiled by Scottish Enterprise.

The figures, unveiled at the Scottish Technology Showcase, show that despite economic conditions, Scottish companies are continuing to recognise the importance of innovation in developing new products and processes, increasing their competitiveness and accessing new markets, both at home and overseas. Scottish Enterprise has invested £16.7m in 114 projects through its R&D and

BUSINESS QUARTER | SUMMER 12

SMART: Scotland grants over the past 12 months, which helped to leverage a further £55m of investment by Scottish companies in new research and development activity.

SE has also offered advice and guidance to 1,500 companies through its innovation support service and innovation workshops and supported 428 companies to develop and launch a new product, adopt a new business process or create a new business model.

Paul Lewis, managing director of operations for Scottish Enterprise said: “Our R&D funds helped to generate more than £70m of investment in new research and development

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Jumpstart, a Scottish R&D tax credit specialist, is launching a major recruitment drive to create 40 jobs. The Edinburgh-based company is increasing its business analyst team by 20 people and its specialist technical analyst team by the same number in order to keep pace with demand for its services. The technical analysts, who are vital to the success of submissions to HMRC will be expected to have at least a BSc 2.1 but more likely to be educated to PhD level. Jumpstart has a turnover of £3m since its inception in 2008 which is set to rise to at least £5m next year.

>> New Boston boss Standard Life Investments, the global investment manager based in Edinburgh, has appointed Jack Boyce as managing director, head of US distribution in Boston, along with two additional senior executives to support clients and consultants. The three will join an expanding office at Standard Life Investments’ US HQ in Boston. Jack joins from Pinebridge, based in New York, where previously he was managing director and co-Head of global distribution.

>> Good vibrations One of the Scotland’s leading safety vibration specialists has unveiled a new mobile HAV safety device at Britain’s biggest health and safety event, helping monitor hand arm vibration exposure.

Reactec, the company behind the HAVmeter, which monitors and reports the amount of vibration workers are exposed to when using power tools, launched its new SMARTcharger at the Safety and Health Expo 2012 at Birmingham’s NEC.

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COMPANY VIEWPOINT

Leading business advisory firm Scott-Moncrieff discusses the new National Loans Guarantee Scheme and questions whether it misses the point.

IS THE NEW NLGS THE SOLUTION FOR BUSINESSES SEEKING BANK FINANCE?

I

T HAS been reported that tens of thousands of small British businesses will have access to cheaper credit after the launch of a new government loan guarantee scheme. The new National Loan Guarantee Scheme (NLGS) was launched on 20 March 2012 and claims to help businesses by reducing the cost of bank borrowing.

The scheme provides participating banks with up to £20 billion of guarantees, allowing them to borrow at a cheaper rate – the banks will then pass this saving on to business by offering a 1 percentage point reduction in interest rates.

Participating banks are Barclays, Bank of Scotland, Lloyds TSB, Natwest, Royal Bank of Scotland and Santander. In addition, Aldermore, the asset and invoice finance specialists have also agreed to join in principal.

Although the scheme is being run by HM Treasury, the participating banks have the sole responsibility for making decisions on loan applications - usual lending conditions apply. To apply, businesses are asked to approach their usual relationship managers at the participating banks.

At the scheme launch, George Osborne stated “The Government has promised to help small business get access to lower interest rates. Today we deliver on that promise.”

Isn’t this all in danger of missing the point?

With interest rates as low as they are, surely the priority for most businesses is the availability of credit, not a 1 percentage point reduction in interest rates for those who can secure it?

With widespread redundancies at the High Street banks and the seemingly never ending reconstructions and reshuffles, for many businesses, I suspect, the notion of contacting their “usual relationship manager” will be a challenge, and for others, faintly comical.

I suspect this scheme will not be well received by the banks either. Bankers I have spoken to fear it will not bring the change that most companies are

Gareth Magee, partner and head of the Technology Group

... but perhaps greater

eligible. The other fact that might disappoint many prospective borrowers is that the scheme applies to term loans and asset finance only – traditional working capital facilities such as overdrafts are specifically excluded.

I would argue that greater use of the existing Enterprise Finance Guarantee (EFG) scheme would be far more welcome. The EFG scheme (like its predecessor, the Small Firms Loan Guarantee Scheme) exists to encourage banks to lend to UK businesses in situations where traditional bank financing would not be made available due to a lack of security. It provides the bank with a 75 percent guarantee towards the loan, significantly reducing the bank’s exposure. Take up of the EFG, since its launch in 2009, however, is patchy at best. Many local bank managers I speak to say they are struggling to make good use of the EFG scheme because they are hampered by existing bad debts and simply can’t get new propositions past their credit panels.

Clearly the Government must be seen to be providing a range of measures to ease the pain of the small business owner, but perhaps greater focus on promoting the use of the existing EFG scheme - which can make a real difference to the UK economy – is the priority.

focus on promoting the use of the existing efg scheme - which can make a real difference to the uk economy – is the priority hoping for. Some underline the fact that all current lending criteria remain – the scheme potentially just brings discounted rates for those who are already credit approved. Indeed businesses described as being “in financial difficulty” are not

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Gareth Magee is a partner and head of the Technology Group at chartered accountants Scott-Moncrieff T: 0131 473 3500 E: gareth.magee@scott-moncrieff.com

BUSINESS QUARTER |SUMMER 12

NEWS

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>> Scientists look to out-smart Google Computer scientists at the University of Glasgow are taking part in a project to develop a search engine to rival Google that will draw its results from sensors located in the physical world.

The European-funded project, known as SMART, for ‘Search engine for multimedia environment generated content’, aims to develop and implement a system to allow internet users to search and analyse data from sensors.

Users will be able to receive responses to questions such as: ‘How busy is the city centre?’ Currently, standard search engines, such as Google, are not able to answer search queries of this type.

Dr Iadh Ounis, of the University of Glasgow’s School of Computing Science, said: “The SMART project will be built upon an open-source search engine technology known as Terrier we have been developing at the University since 2004, and we’re pleased to be involved in this innovative research initiative.

The SMART project is a joint initiative including Atos, Athens Information Technology, IBM’s Haifa Research Lab, Imperial College London, City of Santander, PRISA Digital, Telesto and Consorzio S3 Log.

>> Industrial ancestry revealed Malcolm Construction, in partnership with three of Glasgow’s biggest house builders, have stumbled on some of the city’s great industrial past working on the new Athletics Village in the East End of Glasgow. During works on the site, archaeological excavation has been ongoing and has uncovered numerous finds. First excavations of the site revealed the buried remains of the 19th century Springfield Print and Dye Works, once famous for the production of Turkey Red dye. More recent excavations have been on the remains of the Glasgow Water Works Corporation, which once supplied water for the city of Glasgow.

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>> Eastern promise

>> Deal Down Under

An Aberdeen-based company specialising in online collaboration and communications is enjoying success with a joint venture in Malaysia. 365 Collaboration Ltd provides a service for the businesses embracing cloud computing technology.

Managing director Karen Phimister, said: “If SMEs are to succeed in contributing more to the GDP of their domestic economies, then it is essential that they use ICT to raise efficiencies and innovate the ways in which they work.”

Wood Group Kenny has been awarded a three-year contract by Marine Power Technologies in Australia to provide project management and support services for the development of an Energy Island off the south coast of Australia.

Six islands are being linked together to create and Energy Farm of wave devices to supply 16,500 households with power.

>> Taxing times The Scottish Government is to establish a new tax collecting authority called Revenue Scotland. Colin Borland, the Federation of Small Businesses’ head of external affairs in Scotland, said: “This move will be watched with interest by Scotland’s business community. The establishment of Revenue Scotland must not create additional paperwork for Scottish small businesses. We look forward to working with the Scottish Government to iron out the critical details.”

>> Fast-track to growth >> Showing some bottle The First Minister Alex Salmond has toured Tennent Caledonian Breweries £4m bottling line which gives Tennent’s the largest and most technologically advanced beer bottling operation in Scotland.

The facility has the capacity to run 50,000 bottles per hour.

The bottling line will contribute to Tennent’s domestic and international presence with Tennent’s lager being shipped to Ireland, Canada, Australia and Italy. In all, Fifty jobs have been created both at the bottling line and in other areas of the business.

The First Minister also toured the Tennent’s Training Academy, a £1m centre of excellence for the pub and hospitality industry. Over the last two years the centre has trained over 5,000 academy students across a range of courses.

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A Scottish company behind the world’s first video on-demand TV system for trains has agreed a new financial deal with Clydesdale Bank. Edinburgh-based Volo TV has so far generated income by selling its televised entertainment service to train passengers travelling on board First Great Western trains.

The company has also secured a contract with Western Australia’s Public Transport Authority on routes from Perth to Kalgoorlie.

Ian Wright, marketing director at Volo TV, said: “Our business has gone from strength to strength – particularly after we broke into the Australian market last year.

“We have spent a great deal of time reviewing our business model and feel that now is a good time to change the way we generate our income. Clydesdale Bank is providing Volo TV with facilities to enable it to change its business model.

The facilities were agreed as part of Clydesdale Bank’s Investing for Growth Strategy – an initiative which helps successful businesses to grow and develop.”

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>> Angel recruitment drive The European Angels Fund, managed by the European Investment Fund, which provides co-investment equity to business angels and other non-institutional

investors, is now inviting applications from new business angels. The criteria for business angels wishing to apply to the EAF include: adequate experience in the targeted investment area; track record of

NEWS

successful investments; good access to quality deals; and financial capacity to invest at least €250k in total during the 10 year agreement lifetime.

Further details from: www.eif.org

>> BQ people on the move Kenneth Barker of Baillie Gifford has joined the board of Scottish Financial Enterprise.

Kenneth joined Baillie Gifford in 2001 and is now a Director in the Institutional Clients Department with responsibility for fixed income clients. He has been a partner since 2008.

Loganair has appointed Philip Preston as its chief operating officer. Philip, who was managing director of CalMac Ferries until late 2011, will oversee the airline’s flight crew, cabin crew, engineering and ground service delivery functions. Based in Glasgow, he will be responsible for a team of 380 at locations throughout the Highlands and Islands.

Grant Thornton has appointed Bryan Crawford to head up its capital allowances division in Scotland. Bryan is a dual qualified surveyor and tax practitioner with almost 15 years’ experience of capital allowances and related property tax issues. He worked for a big four accountancy firm for 11 years.

French Duncan has appointed Bruce Gellatly, former partner at Ernst & Young, as managing partner of its Edinburgh office.

Bruce takes up the role of managing partner in Edinburgh following the appointment of Jeff Meek, as head of French Duncan’s forensic accounting department. David McGinness has also been appointed a senior manager, working out of the firm’s Glasgow office, follows the appointment of Brian Milne as partner in French Duncan’s business recovery practice.

involved with NCT Leather for over 20 years, having worked on the installation of the company’s wet blue plant mechanical services in the 1980s.

SWIP has appointed Ian Marsh as head of marketing, based in Edinburgh, reporting to Francis Ghiloni, director of distribution & client management, and will be responsible for shaping SWIP’s marketing strategy. He joins from BlackRock.

HBJ Gateley has promoted six senior associates.

Stuart Clubb, dispute resolution; Paul Minto, energy; Mike Scott, corporate recovery; Anne Struckmeier and Frazer Wardhaugh, both construction, and Susan McDonald, social housing and regeneration, have all been made partners.

Edinburgh Instruments, a global leader in the manufacture and development of high-end scientific technology, has announced Dr Derek Shepherd as chairman. Dr Shepherd spent over 25 years with Aggreko plc.

Finlayson Wagner & Black (FWB), the Edinburgh corporate headhunters, have been involved in placing a number of appointments: Keith Ruddock has joined Weir Group as General Counsel following the retirement of Alan Mitchelson. Keith joins from Royal Dutch Shell where he was General Counsel for Upstream International, based in the Netherlands.

Robin McGill has joined Exova as Director, William Riddell has been appointed as Managing Director of NCT Leather, part of the Scottish Leather Group. William has been

Energy Sector Europe. He was previously the CEO of AWE plc. Exova is a global provider of laboratory testing, advising

and assuring services to many of the world’s most innovative companies.

Professor Chris West has joined the Royal Zoological Society of Scotland as CEO. He held a similar position in South Australia where he led the team that introduced a pair of giant pandas to Adelaide Zoo. Aberdeen Business Improvement District have appointed Susan Bree as the Director. Susan had previously been CEO of Dunfermline’s BID, Dunfermline Delivers.

Roy Cunningham is joining Macduff Shellfish as its new CEO. Roy joins from Young’s Seafood owned operation, Macrae Edinburgh, which he headed up for the past 10 years.

Skyscanner has appointed Shane Corstorphine as its new Chief Financial Officer. He joins from Barclays Bank where he was Head of Business Management, Scotland.

TauRx Therapeutics, a life sciences business focused on therapies for central nervous system conditions, has appointed Dr Jiri Hardlund as Chief Medical Officer.

Graeme Bissett, previously recruited as Non Executive Director, has now been appointed Chairman of Macfarlane Group.

Qube GB is a fast growing engineering, installation and maintenance provider which has appointed Caroline Keefe as HR Director. She joins the company from Scottish Building Society and was previously with Scottish & Newcastle.

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

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BUSINESS QUARTER |SUMMER 12

AS I SEE IT

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Don’t clog up your enterprise arteries Only a lunatic would attempt to do more for less - yet since the financial meltdown of 2007, that’s precisely what many businesses and organisations - public, private, voluntary, arts, big or small - have been trying to do.

Such an approach may seem easy. Identify chunks of budget and cut them. Identify strands of staffing and reduce them. But it's also incredibly foolish. The result may look like an apparent cost reduction, but look harder and you will find a more stressed and less productive workforce.

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No, if you really want to get ahead you have to learn to think and act differently. This is where intrapreneurs, the forgotten little brothers or sisters of entrepreneurs, come in.

An intrapreneur is enterprising inside their organisation. It is the intrapreneur who finds new ways of doing things, and creates new products and services. Doing more for less is not for them. They do things differently, and have more fun, are more productive and create more profit as a result.

So where do these intrapreneurs come from?

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Well, Intrapreneurship - the art of being enterprising while working for someone else - is something that both companies and individuals can learn.

My company, Cognitive Business Therapy, has been teaching people and organisations how to be enterprising for over 20 years, and I've worked with groups as diverse as tomato growers in the Clyde Valley, the NHS, colleges and the voluntary sector, helping all of them learn to be enterprising.

The starting point is always the same. I look at

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their enterprise arteries. Every organisation or business has them. They are the pathways for the lifeblood of successful, vibrant business.

Unfortunately many busineses or organisations are near to death, their enterprise arteries are so clogged up. Policy, procedure, politics and process clog up the enterprise arteries of organisations and businesses just like fat. That is why there is a need to encourage intrapreneurs. They fight the sluggishness from within and can make massive changes. I’ve seen it happen - college lecturers creating new products, NHS managers transforming teams and tomato growers developing a new strain with a 40% profit margin.

Intrapreneurship works - if you let it.

To check organisational enterprise health, I apply this simple diagnostic test when I start to work with organisations and businesses.

Answer the five questions yourself - the answers will reveal much about your business or organisation’s current attitudes to innovation, and will lay the foundation for unlocking potential, in you as an individual, or in your workplace.

1. The Talk Artery Do you have an opportunity to discuss things with colleagues in an informal way and is it

encouraged? How often do you set aside time in your business just to chew the fat over your competitors, your customer’s behaviour and even your customers’ customers.

2. The Idea Artery If you have an idea are you able to run with it, or does it get passed up the line, or taken to a committee where it dies a slow death? Do you encourage thinking from all direction – or do you kill off any suggestions because you haven’t come up with them yourself, or they come from someone who is the most junior in the business?

3. The Test Yourself Artery Do you have a chance to test yourself? Are you doing what you are great at or firefighting? Yes, you’re too busy to do the background and research, but what about giving it as a project to someone else in the business? Give them a timescale and get them to report back promptly on what they find.

4. The Have A Go Artery When someone comes up with a new way of doing things, does it get a chance to be put to the test without expectation? As in, “Have a go and let’s see what happens.” Often it’s a

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AS I SEE IT

matter of resources – how much are you prepared to spend on exploring an intrapreneurial idea.

5. The Shock Artery Is your world of work going through sudden unexpected change?

Has your organisation had a shock and, if so, is the management response to do more of the same with fewer resources or to respond and say, “it’s time for something different?”

If the answer to the first four questions is no and the answer to the fifth is "Yes - big shock”, then it's time for a change.

You cannot do the same or more with less you need to get the blood flowing again.

As somebody once put it to me very neatly, "it's time to be less janitorial and more entrepreneurial.”

Or should I say Intrapreneurial! n Iain Scott is the leading UK specialist in how people and organisations learn to be enterprising. He blogs on coffee, scones and business therapy. www.cognitivebusinesstherapy.co.uk Twitter: @enterpriseiain

BUSINESS QUARTER |SUMMER 12

ENTREPRENEUR

BUSINESS QUARTER | SUMMER 12

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ENTREPRENEUR

Smokin’ Aces of Annan Tucked away in a glorious corner of Scotland, St James Smokehouse in Galloway is wooing the United States with its ‘rock ‘n’ roll’ innovation for salmon. Karen Peattie caught up with its boss Brendan Maher

As accustomed to the Miami climate as he is the unpredictable Scottish weather, Brendan James Maher could have been forgiven for thinking he was back in the States when he joined the great and good of the Scottish food and drink industry outside in the late May sunshine at the reception before the Scotland Food & Drink Excellence Awards.

Mingling with other guests at the “Oscars” of the industry at the Doubletree by Hilton Dunblane Hydro Hotel in Perthshire, Maher was quietly confident that his Dumfries and Galloway-based company, St James Smokehouse, might pick up an award in the fish and seafood category in which two of its premium Scottish smoked salmon products were shortlisted.

Chatting away at his table to Jo Macsween of the iconic haggis maker, who would later win the meat category award for her Edinburgh firm’s microwaveable haggis and black pudding, he was also looking forward to a sumptuous culinary extravaganza prepared by celebrity chef Nick Nairn using the finest Scottish and locally sourced produce – new season pea soup, tikka spiced Scrabster

halibut with Isle of Seil langoustine, pickled cucumber, radish and coriander dressing, and slow braised neck of Dornoch lamb with skirlie potatoes, aubergine puree, British asparagus and crispy ham.

But when comedian and self-confessed foodie Hardeep Singh Kohli, the compere for the evening, outlined the shortlist before revealing the winner – a trio of Loch Duart salmon products – the St James Smokehouse team was left somewhat deflated.

Fast forward to Friday morning, however, and the previous evening’s disappointment was long forgotten when the good news arrived that the company had achieved British Retail Consortium (BRC) Global Standard accreditation at its most stringent Grade A level. “It was a bitter-sweet couple of days for us,” says Maher.

“We were confident about the Excellence Awards because we’re so proud of our products and the quality of our products, plus we won Business of the Year and International Business of the Year in 2011.

“It just didn’t go our way this time. But, you know, when we heard the news about our >>

21

BUSINESS QUARTER |SUMMER 12

ENTREPRENEUR BRC audit….well, that really did feel like winning an award.”

For those not involved in the food industry, BRC accreditation is a global standard that manufacturers and suppliers need if they want to do business with most UK, North American and European retailers. “It was a great way to end the week,” he says.

“I have a great team of people and they’d all pulled together to prepare for the audit so I’m certainly not complaining.”

On the contrary, Maher is ramping up operations at his Annan smokehouse, formerly occupied by Pinneys of Scotland, part of Young’s Seafood. A £500,000 expansion of the premises in the town’s Station Road – bolstered by a £209,487 grant from the European Fisheries Fund – has recently enabled the firm to open a new filleting and portioning operation which will boost capacity and allow the business, for the first time, to handle whole fish.

It’s an exciting period in the history of the company, which was founded by Liverpoolborn Maher and his wife, Alexandra, in 2003.

St James Smokehouse started life initially as a brand with production outsourced to a number of small smokers in Scotland. “This was a great way to get started,” says Maher, “and while we were happy with our product we were getting inconsistencies in flavour so we decided to work towards establishing our own smokehouse.”

Under the auspices of master smoker Leo Sprott who oversees a simple salt and sugar smoking process, the first St James Smokehouse opened in Newton Stewart.

Business flourished and demand for the firm’s premium smoked salmon saw it outgrow these premises. An opportunity arose to relocate to Annan and the business has been on an upward curve ever since.

While the domestic market remains important to the future growth of St James Smokehouse, it is exports that are currently driving the business with the US market performing particularly well.

Around 60% of current exports go to North America and the company has established a sales office in Coconut Grove, Miami where Maher, a former graphic designer, now spends around half his time.

BUSINESS QUARTER | SUMMER 12

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“I saw a massive opportunity for us in North America quite early on,” Maher explains.

“There’s a huge demand for smoked salmon there and a perception that anything ‘Scottish’ is superior but what you had was US domestic smokers buying it in from Chile, smoking it and sticking it in a bag with a bit of tartan on it – the quality just wasn’t there so I decided to start knocking on doors.

“There was a gaping hole in the US market for a genuine Scottish product. We were confident we could fill that void.”

Maher’s intuition – and tenaciousness – paid off. The company says it’s decision to move into the North American market has boosted its annual turnover to $25m (£16.1m).

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“St James Smokehouse is now the most successful Scottish smoked salmon brand in the USA,” he says, bursting with pride.

“It hasn’t been easy but we’re now supplying the likes of Whole Foods Market, Mandarin Oriental hotel group and Kings.”

In 2011, the company further enhanced its reputation in the US when its St James Scotch Reserve Smoked Salmon infused with Hendrick’s Scottish Gin & Tonic won the Best New Retail Award for Seafood Excellence at the high-profile International Boston Seafood Show. Other awards include the 2011 Best New Chilled Food at Gulfood in Dubai, the world’s biggest annual food and hospitality event, seven Gold medals from the Guild of

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Fine Foods’ Great Taste Award in 2010 and 2011 and three gold medals from the Monde Selection International Quality Institute in the World Quality Selections 2012, two of them for the gin and tonic infusion.

It’s certainly an unusual flavour. Others include Garlic & Pepper, Whisky & Wild Honey, Lemon & Pepper, Orange & Pepper, Pastrami, Gravadlax and, of course, the stalwart of the range – St James Smokehouse Scotch Reserve Scottish Smoked Salmon.

“You’re not going to float everyone’s boat with some of our flavours but what we’re trying to do is produce premium-quality, Scottish smoked salmon that first and foremost tastes great,” says Maher. “We’re not attempting to produce products that have an overpowering taste of gin or whisky – it’s about enhancing the natural flavours of the salmon and smoke in a subtle and complimentary way. Not everyone gets it but in a mature market like ours you need to keep pushing boundaries.

“If you’re not innovative, your products become dull and that’s not good for the wider sector in which you operate. When it comes to smoked salmon, retailers and chefs are constantly looking for something a bit different, something exciting. I suppose we have a bit of a rock ‘n’ roll approach to what we do – we’re not afraid to be bold. It might not always work, but at least we’ve tried.”

As one of the few remaining traditional family-owned smokehouses in the UK, St James Smokehouse has had to be ambitious.

Operating in a fiercely competitive market dominated by seafood giants such as Young’s, the company focuses very much on the premium end of the market and trades on its “100% Scottish” attributes. All product is sustainably sourced and free of antibiotics, growth hormones and nitrates.

“You need a point of difference in this business,” Maher points out. “That’s one of the reasons we’re moving into filleting. Again, we’ve done our research and while there are a lot of players out there, very few are handling a whole-head product and there’s a shortage of filleting plants for fresh salmon portions.

“Our aim is to become a one-stop-shop for salmon and persuade the retailers taking our smoked salmon to buy our fresh salmon

ENTREPRENEUR

There’s a real buzz about the industry just now and it’s great to be part of something that’s so robust and making an impact

portions. It’s about cementing our position as an all-round salmon specialist. I don’t think I’m being over-ambitious when I say this new operation has the potential to add another $20m [£12.9m] to our business.

“Our size allows us to be pretty nimble so we can produce salmon fillets to whatever specification our customers want. Everyone’s hugely excited about it and we’re having to take on new staff, too – that’s fantastic for Annan. We’ve got around 40 people just now and they’re a great team. There’s a real camaraderie among the staff and recognition that we’ve all got the same goal – it’s one of the things I love about the business.

“We all muck in because we’re a small team.

St James Smokehouse has grown organically and a lot of the staff have been on the journey with me since the beginning. I still help out on the factory floor and do what needs to be done – we all do – and even though I spend so much time travelling I always fly economy class. I don’t have any delusions of grandeur.

With me, what you see is what you get and people respond well to that.”

Does he ever run short of inspiration? “No, because I’ve got such a great team around me,” Maher states without hesitation. “I think as well that because I started my career as a graphic designer and worked in some of the top design companies in London, I was bitten by the creativity bug and became fascinated with marketing, advertising and brand development. The experience also made me realise that I wanted to run my own business and transfer my skills and knowledge into a company of my own.”

The early 1990s saw Maher move north to Cumbria where he accepted a job with a smoked salmon company. “I had a gut feeling

23

that there were real opportunities in Scottish smoked salmon and the Cumbria job confirmed this – there was a huge gap in the market for handcrafted, artisan-produced Scottish smoked salmon.”

Maher’s creative juices soon kicked in and the St James Smokehouse brand was born, gradually taking shape around his aspiration to create a high-quality, luxury product which was destined to be marketed and sold around the world.

Meanwhile, St James Smokehouse continues to expand into new overseas markets. Existing territories including Dubai, Egypt, Germany, Hong Kong, Portugal, Spain, Singapore, Thailand, Uruguay and UAE. “Increasing our presence in international markets is very much part of our business strategy over the next 18 months although the UK is equally important,” Maher points out.

“That’s why our BRC accreditation is so important. We’ve invested heavily in quality control and product development because we want to grow the business and extend the reach of the St James Smokehouse brand, both in domestic and international markets.

Smoked salmon is such a wonderful product and we want ours to be the best.”

Talking generally about the current state of the Scottish food and drink industry, Maher is upbeat. “It’s doing well,” he suggests. “In fact, there are parts of it that are in extremely rude health and exports are up. There’s also a tremendous amount of innovation in our industry just now. You only had to look around the room at the Scotland Food & Drink Excellence Awards to see who was there and when I got talking to people afterwards, I was amazed at what some of them are doing.

“We have some outstanding >>

BUSINESS QUARTER |SUMMER 12

ENTREPRENEUR manufacturers in Scotland who are overflowing with ideas and it’s great that there’s such a lot of support. At St James Smokehouse, for example, we’ve had our grant from the European Fisheries Fund but there’s also the expertise and knowledge that you can tap into at organisations like Scotland Food & Drink and Scottish Development International (SDI).”

St James Smokehouse has worked particularly closely with SDI, travelling with the organisation and other salmon companies to exhibit on the Scottish pavilion at Gulfood earlier this year. The company also exhibited at the European Seafood Exposition in Brussels.

The Scottish Salmon Producers’ Organisation backs up Maher, pointing out that Scottish salmon has recorded impressive market growth in a number of new emerging markets, with exports to the Far East having increased nearly 900%. Meanwhile, a collaboration of Scottish seafood bodies is seeking to boost exports in largely untapped markets, with a focus on growing high-end sales in the Far East. Activities in emerging markets to maximise opportunities for Scottish seafood include educational and networking sessions with hotel chains, restaurant groups, chefs and buyers, and special “Scottish Seafood Weeks” aimed at both consumers and the food industry. A seafood marketing toolkit is also being developed to help Scottish businesses promote their products in the Asian marketplace. SDI chief executive Anne MacColl comments: “The Asian market offers huge potential for Scottish food and drink companies and it is a very good fit for Scotland’s strategic focus on premium products, health and provenance.

“Our international food and drink strategy for Asia, developed in consultation with key stakeholder organisations, aims to fully exploit these opportunities.

“Focusing on the areas where Scotland already has a global competitive advantage, such as whisky, seafood and red meat, the strategy promotes Scotland as the ‘Land of Food and Drink’, helping to ensure that food and drink companies in Asia see Scotland as the ideal partner of choice.” Scotland’s international trade and investment strategy, launched last year, sets ambitious targets for Scottish

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companies to increase the value of exports, with a target of 30% growth by 2017 for the seafood sector. With Scotland the third-largest salmon producer in the world – a statistic that is often overlooked – salmon is of critical importance to the Scottish economy, particularly in rural and more remote areas where the industry is a major employer. In fact, the salmon industry in Scotland supports some 8500 jobs, around half of them in remote rural

communities. Mayer says: “There’s a real buzz about the industry just now and it’s great to be part of something that’s so robust and making such an impact. I think when you consider the economic climate we’re living in just now and the restraints on everyone’s budget, the food and drink industry is a fantastic success story and there’s much to celebrate – St James Smokehouse is very much a part of that success story.” n

ONLINE: Visit Business Quarter online to read a special exports report from the Scottish Salmon Producers’ Authority www.bq-magazine.co.uk/scotland

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INTERVIEW

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SUCCESS STORY

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John Stewart was the founding secretary of the City of Glasgow Friendly Society. He set the tone, creating an organisation where members had a democratic voice and claims were met promptly. Under his guidance, it became established as a mutual insurance society with the aim of paying funeral expenses so policyholders avoided a pauper’s grave.

When Fiona McBain arrived in 1998, it had been only four years since this Glasgow society had acquired a small Dumfries insurance outfit to become Scottish Friendly. By then, it had a single savings product but was ready for dramatic change.

While a bronze bust of a bearded John Stewart graces the pleasant open-planned offices in Blythswood Square, Fiona McBain, who became chief executive in 2006, has also made her indelible impression on Scotland’s largest mutual life office. As mighty financial institutions across Europe have withered in the Great Credit Crunch - and now the Euro Crisis - this modest Glasgow operation has been

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able to weather the great storm.

“I came from the Prudential in 1998, having been with Scottish Amicable though the de-mutualisation. It was a massive organisation and my remit was financial reporting, which was just one aspect of the business. So it was fantastic to join Scottish Friendly, which was a much smaller company with a wider remit.”In 1994, Scottish Friendly became an incorporated society with authority to extend its product range.

It moved into direct marketing and this proved to be a massive boost as a sales force was an increasingly expensive way to win business. As a result Scottish Friendly was fortunate: it was big enough to have money to invest in new developments, yet small enough to undertake projects more efficiently. It then closed its sales force and stopped its door-to-door collections, as subsequently did so many of the big name insurance companies.

“I’m very proud of the changes that we’ve driven through here. Sometimes I say to

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people at Prudential we could have sorted them out as well!” she says with a smile. “But I do acknowledge that there are different challenges of scale,” she adds.

Fiona McBain can stand in the middle of the converted Victorian townhouses that are the Blythswood Square office and cast a weather eye on what everybody is doing.

Even at the height of its recent expansion, when there were three offices, it was still small enough to communicate with the whole staff.

She was brought in by Bob Thomson, the then chief executive, and the actuary, Jim Galbraith, who is the deputy chief executive, because they realised their success was on the back of a single product, the Tax-Exempt Savings Plan.

Fiona was tasked with helping to launch an ISA and the OEIC [Open Ended Investment Company] that underpins that. Here she recounts a story that would grace the case study section of Harvard Business Review, as she explains there are two strands to the way she runs Scottish Friendly: a constant search

for efficiencies and ‘prudential capital management’. Scottish Friendly had a rather comfortable in-house IT team who were asked

by Jim and new girl Fiona to set about launching the new products. They explained that it was vital to feed off the UK government’s flagship campaign, which was then extolling the benefits of Individual Savings Accounts. But the IT team shook their heads, and displayed some resistance to what was being suggested.

“We were told it would take them 18 months to build a platform for a new product. Not only would we have missed all the free generic ISA marketing but we would have missed a whole year’s business,” she recalls.

This was simply not good enough.

So, much to the chagrin of the in-house IT boffins, the company went externally and bought a software solutions package to get moving. The ISA was launched in good time and caught the tide.

But it triggered Fiona’s drive to get IT >>

Warm and Friendly Seven men set up a committee to create the City of Glasgow Friendly Society in 1862. 150 years later, one woman has been at the forefront of ensuring that the same organisation, now known as Scottish Friendly, is well positioned for future generations. Kenny Kemp went to meet Fiona McBain

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SUCCESS STORY working for the business.

“From that day, it became a bit of a mission for me. I said that IT had to be an enabler not a business blocker,” she says.

Further savings had to be made to keep the society competitive. In 2002, [the management team] Thomson,Galbraith and McBain made the decision to purchase software package from a little-known New Zealand company, called Tacit, now part of the Australian Bravura Solutions. Scottish Friendly had five different systems with various manual interventions, each with specialists and a complexity that increased costs. It all needed proper integration and Tacit’s software was a winner. “It has become something of a cliche that you adapt an off-the-shelf system rather than customise one. We really lived that and stuck with it.”

Tacit’s software was not well-known in the UK, but was cleverly adapted for Scottish Friendly’s Child Trust Fund, gaining quick approval from the Inland Revenue. This pragmatic approach pushed everything onto a single system: a project delivered on time and on budget. It meant minimal licensing arrangements and customer’s details and data was accessible in one place. This was award-winning stuff; there was a return on investment in less than three years; there were immediate cost reductions of over 40%; and a single customer service person within Scottish Friendly could deal with over 15,000 policies, while the resolution of client inquiries improved by 80%.

What Fiona McBain also liked was that the IT department was not determining the timeline for new products to market. This all made the wider savings and pension industry sit up and take notice of this Glasgow minnow.

“It was about re-engineering how we do things. Scottish Friendly did silo processing with seven different departments, a team looking after new business, another, the administration, another call querying and another claims, etc.”

This was crunched into front office and back office. “Now if you work in our back office you have to be able to do any aspect of a policy life-cycle: from new business all the way through to maturity or death claims.”

She says that Scottish Friendly is unique in being able to do this – and it makes the job

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more varied and interesting for those who relish a wider job remit.

“It’s easy to say we re-engineered and took out 40% of the overhead. In reality, that means an awful lot of change and it means redundancies. It means a lot of pain. I used to think ‘change management’ was an esoteric thing, it’s not, it is very real, and it affects people’s lives and confidence.”

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While Fiona McBain is quietly spoken, she concedes that she was perhaps rather arrogant in her part in driving through the changes.

When she approached a staff member who might only ever process one aspect of the job, she tried to reason that they would get more job satisfaction. Yet some feared that their skills and core expertise were actually being eroded and taken away.

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“We had to do a lot of supporting and talking through this. There were some who preferred to stay with their one area of specialism, and they’ve gone elsewhere, those who have been prepared to undertake a wider role have thrived and felt more empowered. They are engaged,” she says.

On ‘prudential capital management’, there is also a tale to tell. In 2004, Scottish Friendly, as part of its re-engineering, looked again at its investment strategy – or how it was going to grow the customer funds. Most larger pensions and savings companies have in-house fund management houses which look after the inflow of funds, and often win external mandates. Scottish Friendly, being significantly smaller, places the bulk of its investments – 80% - in tracker funds, which follow the fortunes of the main indexes. There is an internal investment committee looking after this and making judgement about the actual allocation of funds into investment classes such as equities, bonds and liquid cash. The other 20% is used externally and this is the ‘spicy’ money which is actively managed by two of Scotland’s most respected smaller investment houses, Sandy Nairn at Edinburgh Partners, who was formerly the chief investment officer at SWIP, and a founder of the partners in 2003, and Colin Mclean, at SVM, and one of the most thoughtful and successful investment professionals in the UK. In this post-banking crash environment and with massive uncertainties in Euroland, finding the balance between a safe haven and a decent return on investment is as rare as hen’s teeth.

“Generally, our way of working is seen as lower risk and it is certainly lower cost. Our appetite for risk fits with our customer profile and the types of products we sell to them. But we aim to get the best of both worlds, which is why we have the 20% policy of active funds, so we can get some additional upside.”

Fiona McBain learned a great deal from Bob Thomson, who had been with the business for more than 30 years. She is committed to the principle of mutuality extolled by John Stewart and the six other founders, and is a board director of the Association of Financial Mutuals, the trade body encouraging us all to put more savings away for our futures.

“I really believe passionately in mutuality. The

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Why seek to pay a return to a third party if you don’t need to? It’s a cogent point that has gathered momentum in recent years

easiest way to characterise it is to say: ‘Why would you have a third party shareholder if you don’t have to?’ Why seek to pay a return to a third party if you don’t need to?”

It is a cogent point that has gathered momentum in recent years.

“There are other mutual life offices – none in Scotland except us unfortunately – that show you can be professional and dynamic.”

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[Scottish Provident, Scottish Life and Bright Grey, employing thousands in Scotland are still mutual, but are part of their parent, Royal London, which is based in London and Wilmslow.]

Yet, ten years ago, mutuality was perceived as an old-fashioned and inefficient business model out of kilter with modern capitalism because the policyholder could not generally hold the managers accountable the way that shareholders could. This has been turned on its head, partly by the banking collapse and the damaging culture of short-term trading in stock market listed firms. Fiona McBain and her AFM colleagues have been fighting back with some brio.

“Customers from a mutual get a better return, which is what you’d expect, if we’re running the business properly. We don’t have to pay shareholder dividends, instead this goes back in the pot for the policyholders,” she says.

The pension time-bomb is also is issue. “You don’t need a degree in economics to know that we all need to make better pension and savings provision for ourselves. The government need to make it easier for people to do that.”

Scottish Friendly has 1.5 million policyholders and it would be difficult for them to express a singular voice, so these interests are represented by the ‘Delegate’ system, which meets twice a year to raise any matter of concern about the operations of the business.

Here 30 delegate representatives are brought on board, given comprehensive information about the company and then encouraged to take an active interest.

“Scottish Friendly is a living example of bringing all the efficiency drives that any shareholder could demand and all those benefits go straight to the customers.”

Elsewhere smaller societies have disappeared or been eaten up because they did not have the efficiencies to make money out of small-value policies, particularly as the cost of regulation exploded and marketing to win business was expensive. Yet Scottish Friendly – selling a £300 a year policy - is required to have the same overhead as Prudential, which might be selling £100,000 a shot bonds.

“With us, people can save for as little as £10 a month. I’m proud of that and that’s what >>

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SUCCESS STORY we need to be able to offer to customers. But the UK regulator has to do its bit too to help us make this easier to do. With our regulatory overheads, it becomes increasingly difficult to provide low-cost products which encourage lower-income people to save. Yet this is exactly what the country needs.”

Once again, Fiona McBain returns to her story on controlling the costs. “What we have done is drive on with our efficiencies – through the IT programmes I’ve talked about - to remain competitive, so that we can offer small-value products and still make money.”

She wants to clear up one point about over-stating the mutuality side.

“A lot of our customers don’t buy into us because we are a mutual, they buy in because of the direct benefit of that, which is to do with service and returns.”

This trick has also attracted the attention of major financial plcs in the UK, who have looked on in wonder at how Scottish Friendly had done things that have not been possible in the larger companies. This has led to Scottish Friendly actually handling business for some UK majors.On the product front, the Junior ISA was launched, and then a range of variations, where different family members can save for the family in different pots, so each auntie and uncle knows their own contribution. Her colleague, Sales and Marketing Director Neil Lovatt, who arrived shortly after McBain took the helm, has been instrumental in re-shaping many of the

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products. Then when Scottish Friendly completed its platform for pulling investments together – its ‘Wrap’ platform – it was then able to offer SIPPS, Self-Investment Pensions Products. “We concentrate on what we are good at and don’t dive into some big risky venture, but we don’t stand still either. We are constrained by the tax laws but we are constantly trying to find ways of developing what we do.”

Scottish Friendly is preparing to launch a new product with no penalties for customers if it is

We concentrate on what we are good at and don’t dive into some big risky venture, but we don’t stand still either

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cashed in early. While it uses direct sales channels and online e-commerce, it is increasingly involved with partnership distribution, selling the Tax-Exempt Saving Plan to customers of Royal London, Phoenix and the Eui Group, owners of the Admiral brand.

There is another major chapter in Scottish Friendly’s recent story. The IT strategy proved to have an unexpected upside with a golden lining. Scottish Friendly won a contract to administer the wrap business of Nucleus, an Edinburgh group of independent financial advisers. It opened the gates to more outsourcing work.

“We have major UK plcs coming to us now asking us to launch their products for them.

We white-label our products and it goes to their customer base. We can launch a product in 12 weeks, when larger organisations often need 12 months. We can do it quicker and more cost-effectively.”

She takes pride in this because six years ago – before she became chief executive - many of the larger players would have said: ‘Scottish who?’ The wrap platform made significant progress, attracting industry admiration and business from the likes of Norwich Union, and it meant expansion for the Glasgow-based organisation with new Glasgow offices.

Alongside, Scottish Friendly was also able to

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consolidate a number of smaller societies; including its nearby Glasgow rival, Scottish Legal Life, described by Jim Galbraith as a merger of the “Celtic and Rangers of friendly societies.” Overnight, Scottish Friendly grew by a third. Then, in the summer of 2010, Citi, part of the US giant CitiGroup, made an unsolicited approach to buy the wrap platform and its administration team. It involved hiving off the St Vincent Street and West George Street staff to a new company, and it was an emotional wrench for McBain, her chairman Michael Walker, the debonair lawyer and former head of leading Scottish firm, Maclay Murray & Spens, who took over in January 2009, and the board. But the decision was taken and a substantial undisclosed amount was placed into the policyholders’ pot.

“I’m very proud that an organisation of the size and scale of Citi saw real value in what we were doing and paid us a significant premium for that business. Because we’re a mutual everything that we create goes back into the pot. It was quite emotional too when they took down the blinds down with the Scottish Friendly name and replaced them with Citi ones. On a business level, we could see the value in crystalising that premium now.”

In January 2006, Scottish Friendly administered £600m in policyholders’ money and, by the end of 2011, it was £4bn. In April this year, the mutual announced funds under management of £2.2bn, with life and pension sales up 20%.

“I don’t think you can over-estimate the achievement in building that functionality. I’m clear it [the sale] was the right thing to do, but there were a few tearful moments. We’ve kept close to the business through the transition.”

She remains ambitious for the business with a dynamic team in place. They had certainly done a massive amount to set the Glasgow mutual on its path for the next 150 years.

John Stewart would be proud that his legacy remains in such safe and capable hands.

“In a nutshell, today it is all about giving people maximum access to their savings. We’re still true to the original mission. Why have we succeeded when all the other mutual life offices have failed? It’s because we concentrated on what we are good at – and not go off on some risky venture,” she concluded. n

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The rise and rise of Fiona McBain Fiona McBain studied mathematics at Glasgow University with an inkling to become a teacher, but she also took psychology which pushed her toward clinical research. Research posts were hard to find, so she decided to study accountancy to give her career more options, and moved to London where she undertook her articles for the Institute of Chartered Accountants of England and Wales, with Arthur Young, now Ersnt & Young. She carried out auditing for a range of customers, including Lloyds of London, international banking clients, and music publishers such as EMI, EverReady, and even McDonald and Mills & Boon.

“Auditing is a fantastic introduction to business because you get to see such a range of business and it was amazing working in the main office.”

“I knew I wanted to work abroad, so once I’d qualified in London, I got an opportunity to go to work in the United States with Arthur Young.”

She was based in Phoenix, Arizona and continued her auditing work on large North American corporates.

“If you think what the numbers represent and engage with the people who are running the business you get a rare insight. Every business is about people. You are having the opportunity of going into different business and meet different people.”

Fiona worked for Scottish Amicable in St Vincent Street, Glasgow, before moving out to Craigforth, outside Stirling, where she was financial accounting manager.

Headhunters approached her, but were concerned that her love of globe-trotting had previously taken her off on two ‘gap-years’ travelling in Africa and Asia. So she agreed to stay at least for three years, she has remained for nearly 14 and looks content to be there for some time to come.

“When I came to Scottish Friendly, I had ‘Finance Director’ on my business card but sometimes I would still do the pay roll. Even to this day I do things that you might not expect a chief executive in a larger business to be doing.”

Fiona McBain, now in her 50s, remains a private person, who reveals that she still loves travelling during her holidays, enjoys attending music festivals and having quiet weekends at her cottage near Loch Awe.

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INTERVIEW ENTREPRENEUR SUMMER 10

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Move over, Maths.

Welcome to Big Data Science David Sibbald believes that the emerging discipline of ‘data scientist’ can help solve many of the world’s deep-rooted problems. Aridhia, one of his Scottish-based companies, is attempting to improve our healthcare in an innovative partnership with the NHS in Scotland and Dundee School of Medicine. Kenny Kemp caught up with him

It is a glorious Monday morning in Glasgow with the sunshine beating down on lush green Bellahouston Park. Indeed, it’s almost tropical.

The perfect weather to greet David Sibbald, one of the most successful Scottish business figures in the last 20 years, who has just flown back from Nairobi, where he has spent a week with the Johari Foundation and its 12-strong social enterprise team. Johari means a precious jewel in Swahili.

David Sibbald is a man of staunch conviction about the application of computing technology – or informatics - and its ability to change hundreds of millions of lives for the better. While he has followed his conscience, he has no doubts about the gargantuan difficulties of resolving the perennial and intractable problems of poverty and disease.

He says he is simply trying to ‘do his bit’.

Sibbald’s two Scottish companies, Sumerian and Aridhia, both in the emerging discipline of ‘big data’ science and informatics, are deeply intertwined with his charitable work, through the Johari Foundation, while he and his wife,

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Catriona, and his three adult children, spend time involved in projects in Africa, Afghanistan and Laos. Active ‘dusty knee’ philanthropy is at the heart of Sibbald’s life.

While Sumerian and Aridhia have crosspollinated each other in terms of their business systems, they also feed in as supporters of the Johari Foundation’s work. At one time, Sibbald thought that the foundation might get more from the businesses; in fact it is the reverse, the businesses have gained so much from what has been learned from the sustainable development programmes.

“There is strong commitment in terms of time, money and energy from Sumerian and Aridhia into helping the foundation. It works both ways – and I never thought it would. I used to think it would be really helpful for the foundation, which it is, but now I think it is more helpful for the companies because people get to see something different.”

For example, a Scottish computer science graduate can be wrestling with a complex technical ‘data’ problem in an airy, air-

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conditioned office in Blythswood Square, with the usual gripes and groans about working life, then they are transported to Kibera, the second largest slum in Africa, where they witness a parent-less family, devastated by AIDS, living in appalling conditions, with no security, sanitation, or running water, trying to keep mind, body and soul together.

“I think this affects everybody. I’ve been travelling in Africa since my early 20s and I’m still affected by things in the same way. This is not to do with money: it’s important to have it, but it is no way the answer. It is time and commitment, long-term enthusiasm and passion that makes the difference in these terribly difficult environments.”

The foundation’s social development programme includes a feeding and basic education programme for a few hundred children in Kibera and an extensive sports programme for 500 kids, mostly football.

There is also a high school programme for slum kids, which has been running for eight years. David Sibbald, now 52, shares his >>

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ENTREPRENEUR INTERVIEW SUMMER 10

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ENTREPRENEUR delight that three pupils have come through and are now at university. It also has a fashion arm where 16-20 year old women from deeply vulnerable backgrounds are given one-year apprenticeships in arts and crafts to produce garments for sale in the West. The Johari fashion brand is now a social enterprise business, with a workshop selling in the United States, Spain and Japan, and a longer-term ambition to grow and then self-fund the programmes within five years.

“Typically, these girls have very low levels of previous education and self-confidence. They are the most vulnerable community in the slum in terms of exploitation, prostitution and drugs. We run the apprenticeship programme and then give them a glimmer of hope and a secure job with Johari.”

Sibbald is cautious about being seen as a white foreign donor telling local Africans how to run their lives and projects, so the social enterprise gives full autonomy to the managers on the ground.

“When I am with our team in Kenya, who are all local Africans and have been together for eight years, I’m conscious of never, ever, ever saying what to do because I am the least qualified to say what should be done in such circumstances.”

He says the Kenyan team can teach a lot about leadership and how to evaluate decisions, which are often a stark question of who lives and who is left to survive on their own. The demand for help is over-whelming.

“I have met so many people inspirational and compassionate people across Africa, many of them women. There are all those people doing community-led things in horrendously difficult circumstances, day-in, day-out. We all think we are doing so well in Scotland, but part of the

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reason is that we have an environment where we were magically dropped in. We’ve had the circumstances in Scotland of free education, health care and social security to do well.”

Much of this good work has been a result of the success of Atlantech, started 20 years ago

by Sibbald, then in his early 30s. He had returned from Silicon Valley, where he was working as a computer programmer, and started his business in the spare room. Among

I am conscious of never, ever, ever saying what to do because I am the least qualified to do so in such circumstances

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the first wave of broadband technology and embryonic e-commerce, Atlantech was much admired but a tiny player and Cisco Systems, the US telecoms systems giant, made an offer that was difficult to refuse.

“It was a transformational time in so many respects. We take it for granted now, but it wasn’t too far down the road. Anything before 1995 is pre-history.”

Atlantech was sold in 2000 for £120 million, with David Sibbald the most significant investor. He worked for Cisco Systems for a year and enjoyed his time.

“I had never worked in a larger company before, I’d worked in a start-up in the United States or as a freelance software developer, so it was an education for me. Atlantech was the first European acquisition that Cisco had made and it was important to help with the integration; there are a load of differences between Europe and the United States. One of the things that was important to me was, how do we get the 100-strong workforce in Atlantech to build a second career in a larger US company?”

There are still original Atlantech hands working for Cisco in Scotland, now at the Eurocentral off the M8, which means a lot to Sibbald and proves that the technology had a long-term value for the parent.

Using his new-found wealth, he took six months to set up his projects in Africa and Afghanistan, under the banner of the Kate MacAskill Foundation, run by Catriona Sibbald and named after Catriona’s Hebridean grandmother, who died last year at the ripe age of 108 years old, and they develop a schools project in conjunction with UNICEF. “I figured I would always start another business and that was the plan.”

In 2002, he set up Sumerian Networks with its office in Blythswood Square in Glasgow. It was started with a small group of computer science people working with clients in banking and with some of the Big Four accounting firms.

But it took time to find its market as the financial crisis kicked in. Today it is a leading ‘analytics’ company with a roster of corporate clients, including Bank of America Merrill Lynch, where their work on foreign exchange trading capacity and the latency of operational systems secured an American Financial

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Technology award in 2010.

Sumerian required several tranches of Sibbald’s financial help to kick start it into its successful trajectory of financial informatics. Sibbald remains as chairman but the company is now run by chief executive officer Bryan Clark, the former Chief Information Officer of KPMG, who joined in 2011, when the original chief executive Calum Smeaton decided to take some time off.

“It’s the sequential money that goes in. I’ve realised that it is really, really hard to predict the future. For me, it’s never been a smooth path, and I suspect for most people that’s the case. You do start off with a sense of what you’re going to do and if you think you have enough money to get you to a point.

Invariably, you don’t have enough and it doesn’t quite turn out how you think.”

Ten years on, building a business such as Sumerian remains an enormous challenge.

Firstly, there are variables in what technology

ENTREPRENEUR

can do - and then there are the people. “There is a chicken and egg situation concerning technology and investing. You can have an idea, but people need investment before they press ahead. When you build a plan you might say you need ten or 20 people to build a piece of work, but this means you are treating people as some sort of ‘unit of production’, when they are absolutely anything but units of production.”

With ten or 20 people you get a wide variation in how people respond and this has a material input on how things work, whether a team comes together or not.

“When you start something, there are so many variables you just can’t wrap your arms around them and you’ve just got to say: ‘That’s what it is, and be honest about it.’ Rather than think you can be in control.”

Sumerian’s basic business premise has not changed. The advanced world is being overwhelmed with data. This requires deep

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analysis to determine how efficient and effective business systems are. For example, a major bank has numerous streams of information about its customer and its electronic transactions, but this is not always joined up, or a large trading floor might have 50-60 million foreign exchange quotes per day where a millisecond delay can mean the difference between losing margin. Sumerian’s experts analyse all of the 60 million trades to help business interpret this information more precisely, and target weaknesses in the latency.

“Most businesses rely on their infrastructure, their assets, services and applications to make the company tick. That’s how it works in a big financial services industry. However, the reality is that people are not really as aware as they need to be. In many cases, they don’t know what is going on in the business.”

This is a vivid picture of complex businesses drowning in information when they need to store and collect piles of data for the purposes of customer management and regulation.

Over the next five years, the projection is that it is going to get worse.

“There is a whole notion of ‘the internet of things’ – everything will be tagged and networked. So we can have RFID tags on a tin of beans, so you can track exactly where it is.”

Once it was trucks and ships, then it was high-value goods like Gillette razors and blades and Scotch whisky, now it is tins of beans.

“It does sound ridiculous but that’s where it has got to because the price point of a lot of that technological connectivity is so cheap.”

This means a massive proliferation of new data, that will swamp firms unless they sort it out. So there is now a necessity for human analytic skills and methods to interpret and make sense of this tsunami of digital information, then the ability for people to consume this data and do something sensible with it. To this end, Sibbald and his Sumerian colleagues have been at the forefront of an emerging breed of intelligent worker – called the ‘data scientist’.

“It is a new and it needs to be understood.

The Informatics School at Edinburgh University is closest to understanding what this means and it is getting built into undergraduate and post-graduate programmes.” >>

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ENTREPRENEUR Scotland’s school-leavers have chosen computing science, with mathematics and statistics, or applied science with physics and electrical or software engineering, as a career option, then stumbled into ‘data science’ or informatics. But Sibbald believes it is emerging as an independent discipline which requires specialisation, and one where Scotland could well take an international lead.

“In the industry, people do recognise the notion of a data scientist, somebody who can actually understand the meaning and purpose of data and how to lay it out in a way that you can analyse it for a specific purpose.”

This informatics explosion has led to the healthcare spin-out from Sumerian of Aridhia, based in Edinburgh.

“This is actually where I spend most of my business time now. It started in 2008 and the premise behind this is really interesting model is that the rise of chronic disease, not just in the developed world, but in the developing world.”

The rate of diabetes in India and China is reaching epidemic proportions, higher even than in the West. People are living longer and there is an increase susceptibility of chronic illness, such as cancer, dementia, diabetes, respiratory and cardio-vascular disease. The impact on economies is already massive, yet there is not enough joined-up longitudinal care for people with common complex disease.

Even in Scotland, the GP is seldom properly connected to the wider picture of care.

“Most people have got personal experience of how fragmented the health service is. It’s not just between primary care at the GP and secondary care, it’s when you go to secondary care with a couple of hundred specialities and sub-specialities. Specialists tend to look at you through the eyes of the disease they deal with.

Part of the premise of setting up Aridhia was the important part to play in joining up all the disparate element of healthcare.”

In 2007, David Sibbald met Andrew Morris, professor of medicine at Dundee University, head of the bio-medical research in Dundee, an international expert in diabetes and the Chief Scientist for Scotland, at a dinner and they hit it off.

“He is a great guy. He is a polymath: a brilliant physician and scientist,” says Sibbald. “This is one of the great things about Scotland,

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sometimes you are able to connect with people. The place is small enough so you can get connected and people, on the most part, are very open and ‘normal’.”

He shared David’s deep interest in informatics because Dr Morris had built a diabetes database and network which now connects

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Scotland’s 250,000 diabetes patients.

“Every patient across Scotland is now on his diabetes database. Everyone in the medical profession can see the last intervention and entry point of contact with anyone in the healthcare system, so there is no multiple prescriptions on drugs, there are no wasted

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repeat tests because they have the test history and pretext notes for anyone in the health care system,” explains Sibbald.

Diabetes is a progress bio-medical disease with a changing set of circumstances, so by monitoring the changes it is possible to predict where a patient might be – and what interventions are required along a pathway that can be plotted. But this begs the question: why can’t this be done for the rest of the Scottish population?

“Exactly. This is the big question for health care in Scotland. I said to Andrew, ‘This is great, but why can’t you do that for all the other conditions?’”

There is not a single answer because the database on diabetes has taken 20 years to build, but there are deeper issues about the natural conservatism of the UK’s medical profession and its resistance to change.

Aridhia came into being to pull together this multi-disciplinary approach with scientific and clinical input dovetailing with informatics and computing. A joint venture company was set up between the NHS, University of Dundee’s School of Medicine School, as shareholders with their medical expertise, and Aridhia and Sumerian, with their informatic know-how, putting in the investment finance.

The idea was to build a team with genuinely complementary skills and backgrounds. The company raised an initial £7.5m and its initial projects in the UK, Australia and Kuwait have been highly successful. Sibbald is now eyeing up a partnership in the United States. Aridhia is in a fund-raising round to raise a similar amount by the end of the year. Venture capitalists Scottish Equity Partners, which backed Sibbald’s original Atlantech venture, when it was tied to Scottish Enterprise, is an investor in both Sumerian and Aridhia.

“One of the things we have done in Tayside is run a set of scoring algorithms on top of a patient population which has been developed by the University of Dundee. It basically predicts the rate of admission or re-admission into secondary care. The results have been really strong and co-relate well with the GP’s local knowledge.”

The issue is to get the primary care service to intervene before there is an admission at accident and emergency because each patient

ENTREPRENEUR

We have phenomenal expertise from a life sciences perspective but a lot of the data is trapped in data silos behind walls

cost between £4,000 and £6,000 on entry, and this cost escalates quickly depending on any further complications. Sibbald is categoric that any informatic system must not be defined by computer scientists but by clinicians.

“We have a large clinical faculty of specialist expertise that is defining what is happening.

That is the way to get acceptance, rather than some techie guys, who have no domain expertise, saying you can do such-and-such.

Of course, you need the informatics and analytical capability, but you need to be humble about this as well. The domain in terms of chronic diseases is very complicated.”

Sibbald is clear about the benefit.

“Informatics is an enormous driver of efficiencies, making the right information available at the right time to the right professional when they need it.”

The magic is that Sumerian and Aridhia are not inventing something new. Both companies are capable of using existing technology, such as a secure cloud computing server supplied and supported by Amazon as part of their informatics infrastructure, which can literally be rented by the hour.

“We are not starting from a clean sheet. There is a phenomenal amount of open sources software and components in the market that we use and cloud computing services all over the world.

Why do we need to re-invent this?“ Reflecting on this exceptional capability, Sibbald remembers that what was needed to build a system 20 years ago was a colossal from-theground-up operating system with compilers, with vertically integrated systems using component which were often fraught with complexity and difficulty. Against what you

37

have to build now, ‘it is like night and day’.

Aridhia’s value is its ability to focus all of the attention on setting up a informatics system to tackle, for example, breast cancer sufferers and their treatment.

With this, Sibbald and his team have looked at the definition of the health problems, not just in Scotland but globally, and build a set of informatic services that are scalable and extensive across different diseases. In Australia, they now have a cancer care product, like a min-laboratory, which monitor an outpatient and sends information back to a central clinic resource, while they are also selling bundles of products monitoring diabetes through informatics in Kuwait. It is this kind of Scottishdesigned informatics healthcare that has a global market.

“This is something that Scotland could be really good at. It’s back to size again. We have phenomenal expertise from a life sciences perspective but a lot of the data that helps build services and companies is trapped in data silos behind walls. There are a host of services that could be of benefit to society.”

Sibbald remain quietly enthusiastic and proud of his companies. “We have a simple philosophy in both businesses: we are trying to do something interesting and valuable. We are trying to build something that is here for the long-term and we have strong relationship in both firms with our philanthropic activities with Johari.“ David Sibbald knows that informatics can change the world. And that a sustainable stream of revenues from successful business will also have an impact on his foundation.

He has the kind of real-life job satisfaction that few can hope to match. n

BUSINESS QUARTER |SUMMER 12

SUCCESS STORY

SUMMER 12

The new owners of Edinburgh Airport landed at their £807m asset in June. Here Michael McGhee, who steered the deal for GIP, tells Kenny Kemp that the airport is in good shape for the competition battles ahead

Scotland’s airports reach for the skies BUSINESS QUARTER | SUMMER 12

38

SUMMER 12

Sky high ambition: GIP’s Michael McGhee sees a bright future for Edinburgh Airport as its global profile continues to grow

During the Battle of Britain some of the earliest sorties of Hurricanes against the Luftwaffe were flown from Turnhouse aerodrome. Now a new battle has begun for Edinburgh Airport as it locks swords with its commercial opponent in Glasgow.

This is exactly what the UK regulators wanted when they demanded that Spanish-owned BAA, who once owned Heathrow, Gatwick and Stansted, along with Edinburgh, Glasgow and Aberdeen, split up Edinburgh and Glasgow. BAA chose to dispose of Edinburgh, keeping Glasgow and hanging onto Aberdeen, which is one of the fastest growing in the UK [an 11.7% increase on traffic last month].

Now for Scotland’s two Central Belt airports, only 52 miles part, the friendly battle has commenced. The £807m was handed over to BAA on Thursday 31st May, and the GIP executive team for Edinburgh Airport Limited arrived for its first day in charge on June 1.

BQ Scotland caught up with Michael McGhee, the front man for Edinburgh’s new owners, Global Infrastructure Partners, on his first day

SUCCESS STORY

in his new asset. “We have a meeting today with our new executive team this morning to outline our vision and plans, and how we work together.”

Days before taking over, Sir John Elvidge, the Permanent Secretary in the Scottish Government until 2010, was appointed chairman of Edinburgh Airport.

Michael McGhee said: “Our investment in Scotland is a significant one, so we are delighted to have secured Sir John as chair. His knowledge of Scotland will be particularly important as we raise Edinburgh Airport’s profile around the world, and build strong relationships in the city and beyond.”

Sir John, his full appointment pending a review, said he hoped to establish the airport as a highly competitive force that grows and develops in tune with the needs and aspirations of Scotland and its capital city.

Gordon Dewar, who ran both Glasgow airport, from 2007-2008, and Edinburgh, from 2008 to 2010, is returning as chief executive officer.

He is finishing off his work with Bahrain International Airport, and his recent knowledge of the Middle East market will be useful for Edinburgh. David Wilson is coming as chief operating officer, who has been head of airfield operations at Gatwick and is returning to his home town.

“We will be making some more Scottish appointments over the next few months, to complement the board we already have and strengthen the operational side,” he said.

The whole team had time to tour the airport’s sections, gaining their first full impression and introducing themselves to the staff.

“Everyone seems enthusiastic,” said McGhee.

“We have a different approach from BAA, which meant each airport was part of the system. We run each airport on a stand-alone basis. This means we do what is best for Edinburgh and proceed accordingly.”

“We’re looking forward to competing with Glasgow and offering an alternative. The passengers will benefit as both airports sharpen their acts. We won’t lose all our traffic, and they want lose all theirs, but the margin of traffic does make a difference. So it’s important for both airports to do well,” he added. It has been a quick turnaround after the deal was agreed on 23 April that GIP, an

39

independent global infrastructure fund manager, reached with BAA. Adebayo Ogunlesi, Chairman and Managing Partner of GIP said: “Edinburgh Airport is a high quality infrastructure asset.

“Its acquisition is a landmark deal for GIP and represents the first investment by GIP II. We see significant opportunity to apply our tested and successful operational expertise and our knowledge of the global airports sector to develop and enhance the performance of Edinburgh Airport in years to come.”

“We plan to work closely with the airlines to improve customer service and quality in a similar fashion to the strategy we are successfully executing at our existing UK airports London Gatwick and London City. We expect to continue to develop Edinburgh Airport into an attractive and efficient capital city gateway by improving the experience of our passengers, business and leisure alike,” said McGhee. He explained that the long-term key priorities will be similar to those of Gatwick and London City Airport, which is about maximising capacity. “Our take-over timing isn’t great because over the next three weeks we are entering the really busy season for Edinburgh. So the immediate priority is to keep our eye on the ball and ensure that everything is done to handle the volumes then, when we come up for air, we will be focusing on seeing how we can improve the check-in and security, which is where people are held-up most at the moment. We want to cut the queues. We could do with a bit more space for security, so we will be looking at how best to do that.” He explained that the airport’s security area is likely to be re-vamped in the coming 12 months. Punctuality is clearly a major matter and he said the new owners will be looking at international arrivals to see if this can be handled more easily and efficiently.

“We will be trying to get service levels and efficiency levels up. Once you do that, you make it more attractive and then we will be looking around for new business.”

The board has wasted no time in authorising some capital projects to improve the airport where the condition isn’t as good as it hould be, on the taxiways and on the car-parking outside the terminal which need resurfacing. “Otherwise, we’ve found >>

BUSINESS QUARTER |SUMMER 12

SUCCESS STORY

SUMMER 12

The economic environment is not very positive so we are going to have to work very hard to make it work

the airport to be in good condition so far.

“It has just come out of a significant capital expenditure programme.”

But Glasgow was not about to sit back and let Edinburgh do the running. It released figures that showed a resurgence in holiday flights that helped Glasgow Airport regain significant ground on Edinburgh five years after it was overtaken as Scotland’s most popular airport.

Figures by owner BAA showed Glasgow had 6.7% more passengers in April than a year earlier, its third consecutive month of growth, while Edinburgh had a decline of 1%. In this war for bums on airline seats, this kind of statistic matters. More recent stats show this upwards trend continuing at Glasgow, with 660,000 people travelling through the airport in May. Part of this increase can be attributed to the impact of the Icelandic ash cloud which caused disruption in May 2011. But even after adjusting for the ash cloud, passenger growth was still significant at 6.2%. Glasgow’s growth has been largely down to a resurgence in the holiday market, which has formed the backbone of its traffic, in contrast to the business travel and inward-bound tourism that dominates at Edinburgh.

And Michael McGhee is realistic. “The economic environment is not very positive, so we are going to have to work very hard to make it work.”

Amanda McMillan, managing director of Glasgow Airport, said: “Despite the challenges presented by rising fuel costs and further increases in Air Passenger Duty, we have enjoyed considerable success in expanding our route network.

“This has been a major factor in encouraging more people to fly from Glasgow Airport.”

Passenger growth at Glasgow Airport has

continued with almost 550,000 people travelling through the airport in April 2012, representing an increase of 6.7% compared to the same period last year. An increase in demand for both international and domestic travel, which grew by 5.6% and 7.7% respectively, ensured it was another busy month for Glasgow Airport which has succeeded in adding a number of new routes in recent months, including direct flights to Barcelona, Rome and Venice.

“April’s figures were extremely encouraging and with a number of services such as Canadian Affair’s direct flights to Vancouver and Calgary, and US Airways’ Philadelphia route getting underway in May, we hope to maintain this pattern of growth. We also have the launch on Friday 1 June of Emirates Airline’s second daily service to Dubai to look forward to, which will play a vital role in further enhancing Scotland’s connectivity with important global markets.”

In April, Loganair introduced a direct service to Newquay and Jet2.com announced it is to add the Turkish resort of Bodrum and Gran Canaria to its 2013 summer schedule. Glasgow Airport also learned it is to become the first airport in Scotland to welcome one of the world’s newest passenger planes after Thomson Airways confirmed it will fly its Boeing 787

Dreamliner from the airport when it is delivered next year. For McGhee, the arrival of the Boeing 787 into Edinburgh will also make a dramatic change in that it is a more efficient, longer-range aircraft able to fly point-to-point, rather than the hub and spoke systems favoured by the major airlines, such as BA and KLM. “On longer hauls, our priorities are North America and the Middle East. In due course, and we have to be realistic and see how the market goes, we would like to encourage operators to serve Edinburgh directly. It has a lot going for it as a destination and that is something we would want to build on.” GIP’s financial adviser on the Edinburgh deal was RBS, with Slaughter and May, the legal advisers. Global Infrastructure Partners is an independent infrastructure fund manager that invests worldwide in assets and businesses in both the OECD and emerging market countries. GIP targets investments in single assets, and portfolios of assets, in power and utilities, natural resources infrastructure, air transport infrastructure, seaports, freight railroad, water distribution and treatment and waste management. GIP has offices in New York and London and its other airport investments are a 75% interest in London City Airport and a 42% controlling stake in London Gatwick Airport. n

Breakdown of passenger numbers for April 2012 Terminal Passengers (000s)

Month

% Change

Jan to Apr 2012

% Change

May 2011 to Apr 2012

% Change

Glasgow

547.2

6.7

1,900.8

3.8

6,932.9

3.6

Edinburgh

767.5

-1.1

2,636.5

-2.0

9,330.5

3.9

Aberdeen

274.3

11.0

1,020.4

13.2

3,222.5

11.7

Scottish Total

1,589.0

3.5

5,557.7

2.5

19,485.9

5.0

BUSINESS QUARTER | SUMMER 12

40

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COMMERCIAL PROPERTY

SUMMER 12

Double boost for retail centres, historic hotel to change hands, five go to Buchanan Park, auction house helps bid for growth, and Harry Potter author casts spell to aid healthcare project >> Retail rush Internacionale and The Card Factory have signed 10 year leases with Aberdeen’s Bon Accord & St Nicholas Centres, owned by the Scottish Retail Property Limited Partnership (a joint venture between Land Securities and British Land). Internacionale, due to open within the St Nicholas Centre, has agreed a 10-year lease on a 5,140 sq ft unit at a rent of £240,000 a year. A 10-year lease has also been settled with The Card Factory on a 1,529 sq ft unit at £140,750 a year. It is due to open at the St Nicholas Centre. The signings come after food brands YO! Sushi, Di Maggio’s, Prêt a Manger and Café Rouge joined the centres’ new look food terrace, part of Bon Accord & St Nicholas’ £8 million refurbishment.

>> Car park deal signed Canada Life is to fund a new multi storey car park at Glasgow’s Scottish Exhibition and Conference Centre (SECC). The fund is committing £23.2m for the completed development. Knight Frank and Shepherd & Wedderburn represented Canada Life, while CBRE and Dundas & Wilson represented SEC Ltd, owners and operators of the SECC and surrounding land.

>> Baird House boarders Edinburgh-based financial planning firm Mearns & Company has moved into new waterside premises at Baird House at Edinburgh Quay. The firm has signed a ten year lease with landlord RReef – at £18 per sq ft – to become the sole occupier. Baird House comprises 3,061 sq ft of office space over ground and first floor levels and enjoys a unique setting beside the Union Canal.

BUSINESS QUARTER | SUMMER 12

>> No keep for castle owners Dornoch Castle Hotel, in the heart of the Sutherland town of Dornoch, and owned by Colin and Roselyn Thompson, has gone on the market. The hotel occupies a stunning building dating from 1480 when the original building was built as a palace to the Bishop of Sutherland. The hotel sits directly opposite 12th Century Dornoch Cathedral.

With one of the world’s best Links Golf Courses on its doorstep Royal Dornoch attracts golfers throughout the year from all over the world.

Knight Frank’s partner David Reid is handling the sale and commented: “I have sold Royal Dornoch Hotel which attracted huge levels of interest and sold within a matter of a couple of weeks of coming on the market. With its amazing history dating from the 15th Century there is no question that Dornoch Castle Hotel will receive similar international interest and, the fact that it is trading very well with exceptional profits will appeal to a huge variety of buyers.”

For the latest news and views from Scotland’s commercial property scene, read BQ Magazine online at: www.bq-magazine.co.uk/scotland

42

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COMMERCIAL PROPERTY

SUMMER 12

>> Artizan upgrade Refurbishment works is underway at the Artizan Shopping Centre in Dumbarton as part of a wider project to upgrade the Centre.

In order to attract new tenants, owner LaSalle Investment Management LaSalle has commissioned BNP Paribas to complete the works which comprise the stripping and fitting out of three empty units. The main exterior facades on College Way, Risk Street, High Street and St Mary’s Way will also be cleaned, re-painted and repaired. The works are due to be finished in July.

>> Shepherd leads the way Shepherd Chartered Surveyors is offering industrial premises on a large site in Prestwick for sale. The 10,000 sq ft property at 2 Marsmount Road within Shawfarm Industrial Estate, an established industrial area lying to the north of Prestwick town centre and close to Prestwick Airport, offers scope for sub-division. The site extends to 1.2 acres with car parking available.

>> One in a thousand property on the market One of Glasgow’s most prominent and admired West End buildings, 1000 Great Western Road, is up for sale. Knight Frank is selling 1000 Great Western Road on behalf of Nuffield Health who have, in recent years, used the building as an annex to the main hospital on Beaconsfield Road.

A spokesman for Nuffield Health said 1000 Great Western Road is surplus to requirements.

Knight Frank’s Partner David Reid said: “I am delighted to be selling such an important and prominent Victorian building which sits on an elevated position overlooking Great Western Road and the rugby club with well-known buildings such as one Devonshire Gardens also close by”.

The works will comprise the stripping and fitting out of three empty units Lend Lease deal

>> Five go to Buchanan Park

>> Auction house bid

Five tenants have been signed up at Buchanan Business Park in Stepps, Glasgow, owned by Catalyst Capital. The lettings including 1,924 sq ft in office suites within the Business Centre for Sunter Investments, Proview Security UK, Sigma Surveys and VRS Veri Claim. G4S Secure Solutions has taken 2,305 sq ft on Floor 6 of Buchanan Tower, which is nine floors.

All lettings at £13.50 per sq ft.

Strutt & Parker is joining forces with auction house Christie’s in a bid for expansion. Christie’s is one of world’s leading network of luxury residential real estate specialists, with 125 brokerages in more than 40 countries. Strutt & Parker, with 50 offices in the UK one of the UK’s largest privately owned property partnerships, aims to use Christie’s worldwide marketing reach and global auction house exposure.

BUSINESS QUARTER | SUMMER 12

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A contract worth £89m to develop a new university facility in Glasgow has been awarded to property group Lend Lease. The company fought off competition from a number of major firms to win the contract that will see the University of Strathclyde’s new Technology and Innovation Centre built adjacent to the university. The nine-storey, triangular development will cover 260,000 sq ft.

SUMMER 12

COMMERCIAL PROPERTY

>> Real estate experts descend on Scotland

>> Rowling’s legacy Construction firm Mansell has begun work on a research facility in Edinburgh, backed by a £10m donation from the Harry Potter author, J K Rowling. The Anne Rowling Regenerative Neurology Clinic has been named after J K Rowling’s mother, who suffered from the degenerative neurological condition, Multiple Sclerosis.

Located at the front of the University’s medical school, alongside the Royal Infirmary of Edinburgh and biomedical research facilities, the 455m² centre will provide research into degenerative neurological conditions including Alzheimer’s, Parkinson’s, Motor Neurone and Multiple Sclerosis. It is due for completion in autumn 2012.

Callum Leslie, Mansell’s regional director said: “To be involved in a commission such as this further cements Mansell’s standing of delivering innovative projects within the field of medical research. It follows on from our involvement in the construction of the third and final phase of a new cancer research facility in Glasgow - The Beatson Translational Research Centre.

Mansell Construction Services, part of Balfour Beatty Group, operates across the UK in a range of sectors, including social housing, interior solutions, airports, defence, telecommunications, education, heritage and health.

Edinburgh hosted one of the world’s largest real estate research events over the summer when the European Real Estate Society held its 19th annual conference. The conference, from 13-16 June, at the Appleton Tower on the University of Edinburgh campus, was being organised and chaired by the Institute for Housing, Urban and Real Estate Research at Heriot Watt University, in conjunction with Nottingham Trent University. The keynote session, supported by Standard Life, CBRE and the City of Edinburgh Council, was chaired by investment market veteran David Hunter.

Professor Colin Jones, from Heriot-Watt University, and Professor Colin Lizieri, from Cambridge University, presented papers.

Edinburgh hosted one of the world’s largest real estate research events over the summer >> Knight’s victory Aberdeen-based Knight Property Group has received planning permission for its six acre Prospect Park development in Westhill, Aberdeenshire.

Construction of three properties will start over the summer, commencing with a 51,500 sq ft office building pre-let to an oil and gas service company. The building will provide four storeys of grade A office space. The two remaining properties are three and four storey grade A offices of 18,785 sq ft and 21,656 sq ft. The latter has been pre-let to an operator on a 15 year lease.

>> Parcel firm’s prize Ryden has leased around 11,000 sq ft of industrial and office space at 7 Lyon Road, Linwood. The tenant is AJG Parcels Ltd at a rent of £30,000 per annum. The property

45

occupies a prominent position fronting the A737 close to the St James’ Interchange. AJG Parcels services a wide variety of customers throughout Argyll and the Western Isles.

>> Dock goes green A strategic dock, ten miles from Glasgow City Centre, is undergoing a £1.3m transformation to create a key location for Scotland’s renewable energy sector. The 53 hectare Westway industrial site and adjoining dock in Renfrewshire is to be one of the first beneficiaries of Scotland’s National Renewable Infrastructure Fund (NRIF) which aims to bring dock facilities back into operational use to support.

Site owner, WB Westway, has successfully secured £500,000 to support its ambitious £1.3m project that will involve dredging the River Cart as well as improvements to the quayside.

>> Property plunge The value of commercial property sales in Scotland plunged by 40% during the first three months of 2012. Confidence was bashed by fears of a UK double dip recession, combined with the Scottish Government’s planned increase in empty property rates. The value of sales plummeted by £235m to £355 in Q1. The total volume of sales was down by 20%.

>> Centre spot Standard Life Investments Property Income Trust has acquired a city centre office in Glasgow for £4m. The office, at 140 West George Street, was refurbished in 2009 to a Grade A specification and the building is currently let to six tenants including Cyril Sweet, Anderson Fyfe LLP and Central Insurance Services Ltd. Jason Baggaley, manager of Standard Life Investments Property Income trust, said: “This new purchase continues our approach of investing into good quality buildings in strong locations.”

BUSINESS QUARTER |SUMMER 12

ENTREPRENEUR

SUMMER 12

The Alexander technique Thirty years ago David Alexander arrived in Leith and set up his property company with the help of the bank.

Now, as the residential property sector in Scotland tries to recover from the credit crunch, he talks to Kenny Kemp about the boom in the rental market

BUSINESS QUARTER | SUMMER 12

The banking crisis has delivered seismic changes in how we live our lives.

Thirty years ago, prudent and aspirational Scots simply wanted to get onto the property ladder and enjoy the sensation of living in a property that was increasing in value year after year. Not anymore.

Buying and selling properties in Edinburgh, Glasgow and Aberdeen became an endless dripping roast for the conveyancing solicitors and estate agents, while the banks and building societies were delighted to lend, lend, lend with little or no deposit. Not anymore.

Today, instead, the residential rental sector is booming. The Citylets quarterly report on the Scottish Private Rented Sector has been running for five years. It has shown that housing sales volumes have contracted by half while the volume of rentals has more than doubled. This is the new reality. With the Council of Mortgage Lenders pointing out that a typical first-time buyer in Scotland requires to lay down a deposit of 21% on their new property, the equivalent of £25,037 [more than an average salary of £24,556], it is little wonder that the emerging generation of professionals are much keener to rent for the time being In 1982, with Britain fighting a war with Argentina in the Falklands, a young freshfaced Lanarkshire lad arrived in the capital hoping to make his fortune. David Alexander was clean-cut, well-dressed and persuasive, and he charmed the Bank of Scotland manager at the Goldenacre branch. With little more than a cheery grin and a handshake, he managed to get funding for his property company, which is now DJ Alexander.

Originally from Hamilton, Alexander left

46

Earnock High school without any qualifications and worked as a labourer in Ireland Alloys, before landing a job as a salesman with Rank Xerox when he was 20.

“I was passionate about doing something for myself. I looked at the sales market for property and it was handled by solicitors – and I felt it was done very poorly. There wasn’t the customer service there. I thought I could bring a bit of passion and drive to it,” he recalls, sipping a black coffee in Tiger Lily’s in Edinburgh’s George Street.

“I reckon I wasn’t well liked because I was trying to ruffle it up a bit.”

In 1982, the housing market was in the doldrums – although nothing like as bad as the current situation – with stagnation in property prices. It was a different era of business banking too. Alexander went to meet Ian Lewis, the bank manager at the Goldenacre branch.

“I said to him, ‘I don’t have any collateral but I have myself and I can work hard.’ And, to my surprise, he backed me.”

It was the start of a long-term relationship that was beneficial for both parties. David Johnston Alexander opened his office in Leith, but quickly learned a home truth. His first property for sale was at 9 Warrender Park Terrace, in the heart of Marchmont, then becoming Edinburgh’s noisy student quarter. It was a four-bedroomed flat, with two public rooms and he was trying to sell it for £32,000 - in today’s terms around £450,000. >>

Hot property: David Alexander is making the most of the current rental boom

SUMMER 12

47

ENTREPRENEUR

BUSINESS QUARTER |SUMMER 12

ENTREPRENEUR “We couldn’t sell it. It was a huge flat. The lady who owned it said, ‘If you can’t sell it would you let it out for me.’ I told her we didn’t do letting. But she said, ‘I’m down south now, just put an advert in The Scotsman and find a tenant’.”

Alexander complied with her wishes; placed an advert in the paper and the phone didn’t stop ringing, with 40 inquiries within the first 24 hours.

“I thought maybe I’ve come across something here. I thought perhaps I should move into residential letting. And that’s how it started, with one flat.”

DJ Alexander, now with 57 staff and offices in Glasgow and Edinburgh, was up and running.

However, there was a serious stumbling block to expanding residential renting and the first five years were a steep learning curve. While Alexander found Edinburgh a ‘closed shop’ for city solicitors who went to the right schools, he was a trailblazer in the capital’s rented property sector, and was aided by the former Conservative Chancellor of the Exchequer Nigel Lawson, who in 1988 brought in the Short Assured Tenancy, which opened the floodgates to letting.

“The problem up until 1988 was security of tenure. Ordinary individuals were put off renting out a house because it was difficult to get rid of bad tenants who refused to pay their rent. It was time, money and effort and people simply didn’t want the hassle,” he recalls.

“You needed to know that if you wanted to liquidate your asset or there was a problem with tenants that you could get them out. So the door was opened in 1988.

“This offered the opportunity of a rental for a fixed period of time. There was basically no problem at the end of the period and you could terminate the tenancy when, historically, you couldn’t do this.”

In the 1980s, many rented properties simply didn’t have a great reputation with secondhand furniture, old-fashioned cookers and fridges, and frayed carpets. Yet expectations were rising and landlords had to meet this with new furniture, newer kitchens, better washing machines and dish-washers, enhanced home entertainment and better beds and mattresses.

The changes brought newcomers into the market and investors began to realise that

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residential property was an asset class with decent returns. Then, in the Noughties, the buy-to-let boom was fuelled by low-cost mortgages for those looking for a home for their pension pots. This all required fresh levels of supervision and asset management.

DJ Alexander now also operates as an asset manager, more proactive in terms of repairs, and encouraging landlords to understand that maintenance and regular upgrading of the facilities are vital, and a proper programme of repairs is required, putting around 10% of the annual income back into the fabric. He has some clients who go back 25 years and are still in the rental market.

In 1982, Dove Davies, Gerling, and Rydens were the three main letting agents in Edinburgh, with others such as James Gibb.

Now there are around 175 in the central belt, with the top five having hundreds of properties on their books. The rental management business was evolving, becoming more professional, better regulated and much more secure for both landlord and tenant. Typically, fees are about 15% of the rental income.

Recently, there has been some consolidation within the sector, with companies such as Ayrshire-based Lomond, trying to buy up letting smaller agencies.

DJ Alexander has around 5,000 properties in Edinburgh and Glasgow under management, making it one of the largest independents in Scotland, a status it intends to retain. With the minimum property value around £150,000 up to the maximum of detached stone houses on the Grange worth £2-3m, the value of the portfolio is in several hundred million.

What is now emerging is a new asset class of longer-term residential letting. Alexander is in discussions with Scottish-based pension fund managers and institutional investors to set up rental portfolios in central Edinburgh, which it

will manage, modelled on the continental system in France and Germany, where people have enjoyed much longer term leasing and security of tenure.

“I think you will look at a number of developers who, if they can’t sell the units, will look at the much longer term rental market.

This is a sea-change,” he says.

The focus is now on rental yield, rather than capital growth. Renting property brings a yield of 3.5-4 %, without any capital appreciation, when a savings account is at 2%.

David Alexander is clear about one thing: “We wanted to stick at the quality end. A crap flat will mean a crap tenant. We try to be very focused and I think if I wouldn’t stay in the flat myself, then we don’t want to manage it. If it’s a landlord that doesn’t want to do what needs to be done, then we’re not interested in them.

We don’t want to cut corners.

“In some cases it might be better to advise a landlord to take less rent to get a better quality of tenant.”

For example, a single woman working as a manager with a retail chain might be better than a young family with two children because there might potentially be less wear and tear on the property.

“In my 30 years I’ve never known the demand for letting property to be so high. At the beginning of the year we let 80 properties in nine working days. This gives you the level of demand. We are finding now that the length of tenancy is increasing substantially: where people would come for six months to Edinburgh renting initially and looking to get onto the housing ladder, they either can’t get the finance or don’t want to get.”

Alexander says the analysis of whether to buy or rent a house means that if you take away capital appreciation – and the market is presently flat – there is no real benefit of >>

If I wouldn’t stay in the flat myself, then we don’t want to manage it and if it’s a landlord that doesn’t want to do what’s needed, we’re not interested

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ENTREPRENEUR

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ENTREPRENEUR buying. “You don’t have a deposit to find, legal fees and if the roof leaks someone else fixed it. You’re not left with a house that you cannot sell.”

He says everyone wants to get into the housing market when there is capital appreciation, but if you take that away people say I’m better just renting. People who bought at the peak of the market in 2007-2008, will be looking at a 20-25% drop in the value of their homes.

“You will be very lucky if you come out with anything less than that. Everyone thought Edinburgh was this special little place that was immune to the rest of the world. And on the way up it certainly looked that way, but Edinburgh has been affected – especially with the demise of the big banks. There were so many big stone houses being sold to the high earners, which has disappeared now. A house that drops by 50% has to increase by 100% to get back to where it was. If you’ve a house worth £100,000, and it loses value to £50,000, it has to go up 100% to get back to where it was.”

It hasn’t been without its turbulence. Alexander was bitten badly too. In 2007, he ventured into the London market with an office in Knightsbridge, and a central London flat, but his timing wasn’t right, and he lost £2m.

“I learned that you should stick to your knitting. I lost a huge amount of money but I’m glad that I did it. There’s no point in looking back, all your eggs can’t be double yolked. It was 20 minutes before everything went wrong.”

He was managing a number of property funds and the bank said they wanted to invest more in London and wanted Alexander to manage this. “I stupidly said I would have an office in London. This was going to be the feeder for all the managed properties. But when the banking collapse happened the bank was no longer interested in London property.”

He returned to Edinburgh, determined to focus on what he knew best.

“Residential letting has always done well in Scotland. It had got me into the position and it managed to get me out of it. He says a lot of his recent business has come from property portfolios in administration, from KPMG, Deloitte and PwC, where the administrators

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Everyone thought Edinburgh was this special little place that was immune to the rest of the world

require a managing agent.

So when does he think prices will return to the glorious days of 2007? He laughs and shakes his head. “Well, that could be 2020.”

“People say to me; when are we going to be back to normal and I say, ‘This is normal’.

What was happening up until 2007 was abnormal. It was not sustainable. We were all caught up in it and thought this is fantastic.”

Pre-collapse, if anyone went to the bank with a project and business plan that predicted that you would get double-digit growth in the housing market in the next ten years, the bank would agree with that and given them a loan.

“But that was fundamentally flawed. How was it possible that you’ll get 10% plus every year in house prices? It was just not possible because wages could not keep pace with this.

But we were all caught up in that. I sat there for 26 years and thought it could only go one way. It was very difficult to say it was all going to fall. We could see it coming but when it happened it was too late.”

Thirty years ago, a landlord simply rented the home. Now there are a raft of regulations which Alexander accepts but says some are verging on political correctness gone mad, rather than benefiting the public.

“There’s landlord registration, which is the most hideous thing in the world. If you don’t register with the council you can be fined £50,000 for renting your house. I don’t quite see the logic in that. You need to pass a test that you are a fit and proper person to rent your house, so you have to declare any criminal convictions, and if you have they may not allow you to do it.”

Along with compulsory energy efficiency certificates, he feels it is simply another taxation stream that has to be recouped by landlords in the form of higher rents. He also says the anti-social behaviour act is potentially draconian on landlords. “If a landlord has a tenant who is behaving anti-socially and disturbing the neighbours, and is not seen to be doing enough to stop it, the judge can tell the tenant, not to pay the rent. Don’t you think the tenant will continue with the anti-social behaviour, if he doesn’t have to pay rent. It’s just madness!”

Thankfully, there hasn’t been a case through the court, but that remains the letter of the law. Over the years, he has looked to Sir David Murray, the former Rangers owner, as a mentor for his firm. Even before the recent shock news of the Ibrox side’s battle with administration, Alexander paid tribute to Murray. “He’s been a fantastic friend – and also a client. We used to help the Rangers players settle in Edinburgh, where they weren’t so caught up with the Old Firm rivalry. I have tremendous admiration for the man, who has so many setbacks in his life and you speak to him today at 60 and he’s as enthusiastic and passionate as he was when I spoke to him first 30 years ago. What he’s had to come through, he is inspirational. I’ve always found him very helpful.”

Alexander remains the sole proprietor with his senior management team in accounts, maintenance, new business, with people working for him for over 20 years. “They have been crucial for the business, having continuity of people that you are speaking to is very important. We all work together.” n

ONLINE: Visit the BQ website to read an in-depth report on the changing face of Scotland’s rental market. www.bq-magazine.co.uk/scotland

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On the Waterfront

Dundee has embarked on a £1bn regeneration project, the anchor of which is a stunning museum which will bring jobs and visitors to the city on the Tay. The city’s Glaswegian development director Mike Galloway is leading the project. Kenny Kemp went on a tour

The visitor arriving in Dundee by train gets a rather uninspiring welcome after the grandeur of the great railway bridge. Climbing a flight of stairs at the station, a woman’s voice repeats on a Tannoy loop: “Customers are reminded to always use the handrail and take care on the stairs.” Once is enough; but it is repeated four times by the time you reach the top step.

It almost sounds like a video installation – and being Dundee - with its unbeatable track record in the Turner Prize, it might well be so.

However, arriving in Dundee by train has always been a guddle of working out where exactly you are. But Dundee is moving. Its heart and soul is moving back towards the silvery Tay that has made it a famous city.

Dundee is investing £1bn in its waterfront regeneration. The man leading the Waterfront project is Glasgow Boy Mike Galloway, who is Dundee City Council’s director of city development, working in a project board with Dundee chief executive, David Dorward, and councillors Ken Guild, the chairman, and Will Dawson along with Eddie Brogan and Allan McQuade from Scottish Enterprise. He and colleague Allan Watt, the Dundee Waterfront project co-ordinator, have offered to give a guided tour of what is set

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to become a fantastic new cityscape.

“What we are trying to do is sort out Dundee’s front door. You make your mind up about a place very quickly – often in the first couple of minutes. Anyone who arrives in Dundee for the first time now, is coming into a very disorientated and uninspiring area. We felt we had to radically improve the environment,” he says. But wasn’t Dundee regenerated 20 years ago with the arrival of the Discovery and the title: City of Discovery?”

“It is a continuation of that regeneration. The City of Discovery was all about using the universities and the art college as an engine for the local economy, particularly the medicine, bio-science and digital media. That has been highly successful and Dundee is regarded as one of the leading places in the world for life sciences.”

Indeed, Dundee punches well above its size for the number of Nobel Prize laureates, for its world-class work on cancer and diabetes, with its Welcome Foundation Research Centre the biggest in the world. Its pre-eminence in digital technology and computer game design has put the city on the map. But the waterfront from the airport to the docks – cut off by trunk roads and the railway track, has been a lost opportunity. So the Waterfront

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vision is: “To transform the City of Dundee into a world leading waterfront destination for visitors and businesses through the enhancement of its physical, economic and cultural assets.”

And there are five zones being regenerated.

The funding key unlocking the project was nine years ago when the Cities Growth Fund was established by the Scottish Government following a review of the nation’s main urban places. Scotland’s six cities [there are now seven since Perth re-gained its status] were viewed as the engines for future economic growth and were given lump sums to grow their business base. The other cities spread their money thinly across a number of projects, Dundee decided on the big bang approach.

“In Dundee, we took the view that if we spread it out we wouldn’t have anything of any real effect: not a game-changer. Therefore, we should put all our money into one project and that was Waterfront Dundee.”

From then on Galloway has been charged with turning the masterplan and vision into a reality. “It was then that we brought a stronger partnership together involving Dundee Council and Scottish Enterprise.”

With extra funding from the council, Scottish Enterprise, European Regional >>

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SUCCESS STORY Development Fund, and the recycling of receipt for the land sales which has been ring-fenced for the development, this was a project of national UK significance. Dundee was pleased that the surrounding local authorities of Perth, Angus and Fife, also supported the council’s plan, expecting spin-offs in terms of jobs and housing from an improving Dundee.

Dundonians are typically cautious and sceptical of grandiose schemes for their Tayside city. The city has faced acute deprivation in some districts and many have struggled to find proper work in the newer knowledge-based industries. Mike Galloway knew that a lot of groundwork was required and £3.4m was spent on the initial basic infrastructure work, which will include re-routing the major roads into two new Boulevards. But the waterfront project also needed a flagship attraction to anchor this ambition. “I think there was a lot of scepticism at the beginning because people thought the waterfront had been ‘done’ before during the 1970s and 1980s, when it got the Hilton hotel, Tayside House and the Olympia Leisure Centre and Pool. People would say, ‘You’ve made a mess of it once, who is to say you won’t do the same again.’

“We had quite a job convincing people of what we were trying to do – and our ability to deliver it. And the jury is still out because we’ve got to deliver the vast majority of it, but people are on side now.”

For Galloway, the imperative is to demonstrate to the young generation that this will get them into work. This, after all, is not about a nice place with a view to sip a Starbucks’ Frappuccino, but about real jobs for people.

“We are talking to the schools and advising the younger people in Dundee about what kind of careers will be available to them and then getting things like great hospitality courses in the local colleges, good engineering courses that will match the requirements of the life sciences or renewable industries – such as wind turbine manufacturing.

“There is a lot of expectation about turning around the city’s economy.”

But the game-changer was landing the Victoria & Albert Museum for Dundee, the result of a dinner. In 2007, Sir Mark Jones, director of the V&A since 2001, who had been

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Home from home: Glaswegian Mike Galloway is leading Dundee’s regeneration a director of the National Museum of Scotland, and involved with SCRAN, the Scottish Cultural Resources Access Network, knew the secretary of the University of Dundee, and came to see the work at the Duncan of Jordanstone College of Art and Design (JCAD). That evening, the University principal Alan Langlands held a dinner in his residence which included Mike Galloway. The topic around the table was the importance of design, and its industrial applications and it turned to the regeneration project.

“We were talking about the Guggenheim in Bilbao and we told Mark about the Waterfront in Dundee and he was really interested in the location. The V&A didn’t have any proposal in

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mind to build another museum anywhere in the UK – although they had a project in Sheffield - but they were looking to demonstrate their outreach beyond London.”

This cluster of design expertise, not just in fashion and contemporary art, but in computer technology, health appliances and life science manufacturing, has emerged as a speciality to rival the old city moniker of the ‘The Three Js: Jute, Jam and Journalism’.

Design Dundee Ltd is leading the V&A project; it is chaired by Lesley Knox, and is a partnership between the V&A, the University of Dundee, which includes the School of Architecture and the Duncan of Jordanstone College of Art and Design, the University of

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Abertay Dundee, Scottish Enterprise and the Council. While DJCAD is a central pillar of this with alumni such as Louise Wilson, artist and filmmaker Luke Fowler, shortlisted for the Turner in 2012, and Turner Winner in 2010, Susan Philipsz, plus staff members including Louise Scullion, Matthew Dalziel and Graham Fagan. The college and its output is genuinely world class. In the last two years DJCAD students have won more awards at the London New Designers exhibitions than any other institution in the UK. That initial dinner-table conversation continued over the coming months culminating in a 20-year agreement. This has given everyone a tremendous boost.

“It was really important that we got a world-class architect but we were very keen to get someone who was the next emerging star architect. There wasn’t an appetite just to get Frank Gehry to design it. [He designed the Jewel Box Maggie Centre opened in Dundee in 2003].”

Galloway was one of the judging panel, along with Moira Gemmill, the project director from the V&A, and Graeme Hutton, dean of the School of Architecture, Jill Farrell, of Scottish Enterprise, Clive Gillman, of Dundee Centre for Contemporary Arts, and architect Jim Eyre.

The panel was chaired by the well-known Scottish business figure Lesley Knox, who heads up Design Dundee Ltd, and is also past chair of Alliance Trust, one of the City’s major investment companies, and Edinburgh private client investors, Turcan Connell. She is also a non-executive director of Centrica and SABMiller.

The selection process involved a public exhibition of the six short-listed designs where Dundee folk turned out in their thousands at Abertay University Library to choose their favourite. The winning architect, announced in 2010, was Kengo Kuma and Associates from Japan. Kuma was born in Yokohama in 1954 and is one of Japan’s most celebrated modern architects and he described his design as ‘A Living Room in the City’. He was the clear favourite with the panel. Kengo Kuma is also working in partnership with Edinburgh practice Cre8architecture, set up in 2006, by Peter Bowman, Ian Hogg and Lynn Algar.

The V&A at Dundee will give the city an

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There is a lot of expectation about turning around the city’s economy

international edge. It is a £45m project, due to open in 2015. The Scottish Government has given £15m with another £15m coming from European funds and the Heritage Lottery Funds. (A recent advance of £9.2m from the Lottery has allowed first phase work to begin), with the remainder from private fund-raising donations. One anonymous donation of £2m has already been pledged.

On the day of BQ’s visit, Mike Galloway spoke of the proposal which will soon go to Dundee’s planning committee. The decision to build out into the water was taken because Scotland’s politicians wanted to get this prestige project going more rapidly and no space was then available, so a previously rejected idea to extend out across the Tay

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was dusted down and re-worked.

“It is very unlikely that there will be any objections to the building. There is huge public support for it and it is an integral part of the masterplan.” He points a finger out towards the river. “Basically there are two main functions within the building. Firstly, there are Galleries One and Two which, when combined together, will be the largest single exhibition area of its type in Scotland. What it will be able to do is take the travelling exhibitions from the V&A – this will be its big blockbuster tours.”

“The V&A has given us a commitment for at least 20 years that it will provide Dundee with its major touring exhibitions. These are often the world-class design exhibitions that tour the world’s top galleries. So this gives Dundee a genuine lead and another reason to come here. We provide the building and we run it.

That’s the deal we put together.”

Secondly, in Galleries Three and Four, there will also be a slowly evolving display of Scotland’s own heritage in design, giving room for the likes of Robert Adam, Christopher Dresser, Harris Tweed, Charles Rennie Mackintosh, Phoebe Traquair and Bill Gibb, to have their work displayed.

“This will show design’s importance to products and the world of business and manufacturing. It marries well with Dundee’s intellectual and creative sector today,” says Mike Galloway.

It’s a challenging architectural environment since the tidal Tay is the largest river in the UK, although the engineers will be able to drill through the silt to reach the bedrock, just metres below the surface. The building pier will be on piles in the Tay at the end of Union Street (an ironic name given that the local council is SNP!) which will link the museum and the main shopping district.

The V&A’s illustrious neighbour, the Discovery of Captain Scott fame, in its wet dock beside the new V&A, will be given a new berth, so that visitors can directly connect between the town and the waterfront gallery.

The five zones are Riverside, with its nature park and flats, Seabraes, the Central Waterfront, where the V&A will be sited, City Quay, and Dundee Port. Heading east from the Central Waterfront – where the public >>

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SUCCESS STORY sector investment is around £75m - towards the Tay Road Bridge, a significant infrastucture project has been completed to take the run-off water from Dundee’s hills to prevent flash flooding. A massive hidden tank area will take tens of millions of litres sitting underneath an extended Castle Street, which will again have access to the waterfront.

“We are future-proofing this is terms of rising sea-levels too. This is an essential piece of infrastructure for the waterfront area and once it is landscaped, no-one will know it is here.”

The Hilton Hotel is a 1960s eyesore and there are discussions to see if it can be demolished and rebuilt. Nearby, the Tay Road Bridge, which was opened by the Queen in August 1966, is having the run-off ramps shortened to give more space for the regeneration. This will free up more space for development.

Further along the waterfront, going under the road bridge, the historic harbour area of City Quay, then leads to the Camperdown Dock and the supply ships for the North Sea energy and renewable industry. Then there is the prospect of more cruise ships berthing, with tourists visiting Dundee, St Andrews, which is 12 miles away, or Glamis Castle. “Dundee is a fantastic base for a lot of these tours,” says Galloway. “There is an amazing dock complex here: much of it Grade A listed. Dundee was extended in the 18th century and reclaimed land extended the dock to its present waterfront. We have been working to uncover some of the old docklands which are hidden behind the current breakwater.”

“Our proposal is to open a marina at City Quay but we need to create a new sea lock where boats can have 24-hours access to the estuary. At the moment it works on tidal access. We will be sorting this out with a £2.5m project.”

With the V&A at Dundee as an anchor, Galloway and his team are working to attract a new five-star hotel next door that will service the international visitors and art critics they hope will put Dundee on their itineraries. Next door, the waterfront 1960s Olympia Leisure Centre, with its swimming pools and flumes, is being re-located, with the addition of a 50-metre swimming pool, one of only a handful in Scotland; while Michael Carolan, an oil explorer with property interests through

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MEC Services has been refurbishing the old Tay Hotel and Malmaison Hotels has signed a 30-year lease for the building which opens in May next year. Mike Galloway is also deeply impressed with the work of local property group Unicorn, an award-winning company set up in 2005 and working in the City Quay area. Tim Allan, the director, has said that successful cities utilising the waterfront cities have to have a ‘delightful’ aspect and he feels strongly that V&A and the other regeneration projects will create a new urban dynamism, a view shared by leading digital entrepreneur, Chris Van der Kuyl, who anticipates Dundee having a world-class waterfront to match Sydney with the Opera House. Tim Allan and his Unicorn colleagues, Peter Hookham and

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Steven Garry, have already finished several buildings on City Quay, including the landmark Clocktower development overlooking the Victoria Dock, Dundee One, a waterside office block for digital business with spectacular views, and the redevelopment of the Panmure Shipyard, the site of the original shipwrights who built Captain Scott’s Discovery. Mike Galloway feels that the Panmure development, with Chandler’s Lane, its historic Victorian cobbled street and converted heritage homes, alongside modern townhouses, is typical of the developments that will attract Dundee’s next generation of city dwellers. The development also pleases Allan Watt, who explains that Unicorn also invested £18m on River Court and City Court, which is owned by

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the Scottish Police Service Authority serving as Dundee’s own CSI. “The next phase that we are about to see will radically transform the city’s appearance and transform perceptions of the city. This is important in attracting and retaining key talent around life sciences, renewable energy and digital media,” he says.

To the west of the Central Waterfront, there is Dundee Contemporary Arts Centre, which has also been a catalyst for artistic life in the city, the Science Centre, and Vision, a refurbished jute factory, which extends into the caverns in the cliff. This is for start-up businesses, with room for sound studios at the back where there is no light. “The plan is to extend this area into the Seabraes zone, where there is a large piece of land which we own. This is the old railway goods sidings and was bought by Scottish Enterprise from Railtrack a number of years ago. We are going to create a Container City using ship’s containers in a very contemporary way to create low-cost flexible space for creative industries, particularly digital media. Although minutes from the University, District 10 as it will be known, was an unknown area of Dundee because it was surrounded by a high wall, and as far as the citizens on Dundee were concerned there was no direct access to the waterfront.”

Dundee has a high proportion of graduates in the overall population with around 40,000 students who are important to the local economy, but too many of them disappear once their education is completed. Watt says: “We’d like to keep them in the city – or at least to come back to the city in due course.

To do that, we need to find the right sort of work environment and the right quality of lifestyle.” Dundee has already built a new multi-storey car park to soak up some of the sprawling car parks that once fanned out over the area. Dundee station – and probably the Tannoy announcer – is also being redeveloped with a hotel on the upper floor and new retail around, leading downstairs to covered platforms, which will be replaced before 2015.

Then there is the Tesco conundrum. The supermarket chain has a store on the waterfront with a sprawling car park and petrol station. It would be in keeping if they could look at something more aesthetically fitting for Dundee’s ambition. n

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Mike Galloway: A tale of many cities Mike Galloway is well-and-truly an adopted Dundonian. Yet he was brought up in Glasgow, and his family moved to Perth when he was 12, ending up a St Johnstone supporter, and playing for their junior teams. In football-loving Dundee, with its tribal rivalry between the Dens Park and Tannadice outfits, this has given him an element of immunity from office ribbing. He travelled 20 miles along the A90 to study town planning at Dundee University from 1975 until 1979.

“Really at that end of it, I didn’t want to be a planner. I’d had enough. But my passion came back by doing an urban design course at Oxford Brookes.”

Moving back to Glasgow he cut his professional teeth on the Merchant City precinct, then he moved to London working for Lewisham Council on the Deptford docks on the Thames. From there, he landed in Manchester and was put in charge of the city centre during the Castlefield regeneration project. It was the UK’s first urban heritage park in 1982.

“I was involved in the first Olympic bid for Manchester, which was unsuccessful, but not the Commonwealth Games. We were just putting in the trams, and managed to bring in the first new housing into the city centre for 30 years, so it was the beginning of Manchester’s Renaissance,” he says.

The Glasgow Boy was drawn back to the city of his birth in 1988 and he took on one of the city’s most celebrated projects: the Crown Street Project in the Gorbals. The slum clearance project after the Second Wold War had left this working class community scattered to the new town or left to live in the Sixties high-rise blocks, riddled with dampness and marred by vandalism. Sir Basil Spence might have designed the 20-storey blocks, inspired by Le Corbusier, but they were increasingly poor places to live. In 1990, it was time to recreate a new way of living and the Crown Street Project became an exemplar of urban renewal, its less-dense mix of 900 homes for social housing and owner-occupation.

He set up his own company, Galloways, working with the Glasgow Development Agency, then led by Stuart Gulliver, which championed the Gorbals project, and then others, including an early phase on rebuilding the Stornoway waterfront. Mike was the Gorbals director for seven years while it won a fist of design and architecture awards.

“At the time I thought that was the pinnacle of my career and I would never be able to do anything better than that – but it hasn’t quite worked out that way,” he says with a smile.

He came with his wife to Dundee for a reunion party and saw what was going on in the city, and weeks later the Director’s a post came up and he decided to give up his business and work for the council. He divested all of private company investments to concentrate on the job in hand.

“I had remembered Dundee city centre being choked with traffic and now here was this high-quality pedestrianised zone and plenty of public art on display. A fantastic amount of excellent regeneration had taken place with real attention to detail – not just in the centre but elsewhere - but nobody had really tackled the waterfront. It was crying out for something.”

Mike Galloway studied the Guggenheim regeneration which has stimulated business and driven new companies into Bilbao, increasing the local income tax take. “We spoke to the development company and learned from their approach. They have benefits that we can’t realise: they have local taxation, so when they increase the tax base they can capture the value it generates. We can’t do that.”

In essence, it is all about work – bringing businesses and jobs to Dundee or encouraging them to start here. “We have managed to bring together all these different stands of planning, transport, economic development and property, so that it is a one-stop shop for business and investors.”

And Mike Galloway has thrown out a personal invitation to contact him if they want to open up in Dundee. By 2020, Dundee could well be one of the coolest places to live and work in Britain.

That would be a legacy.

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Village life tastes sweet for ed Ed Monaghan has overseen the rapid diversification of Mactaggart & Mickel from house-builder to a firm with a foothold in a range of new lucrative markets including sports facilities, as Gillian Law discovers

Ed Monaghan, chief executive of Mactaggart & Mickel, positively buzzes as he talks about building the Athlete’s Village for the 2014 Commonwealth Games in Glasgow.

A sports fan – and keen athlete himself – he is thrilled to be responsible for getting the accommodation ready for the Games.

The whole company has been caught up in the excitement, he says. “I had been involved for about a year and a half before it started to feature for other people in the organisation – and I was really surprised and pleased at how excited they were to be part of it. And that is

replicated around our sites, I know a lot of employees want to go there and be part of it,” he says. The Athlete’s Village and other contract building projects represent a shift in focus for the 85-year-old company. Until recently, Mactaggart & Mickel was a house-builder, with very little other work. But the recent downturn in the housing market has seen the company look at what else it can do – and brought in interesting new projects, like the Commonwealth Games and a veterans’ housing project in Renfrewshire for the charity Erskine.

If you track back a few years to when the downturn really hit, the housebuilding market dried up overnight

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“If you track back a few years to when the downturn really hit the property market, the house-building market pretty much dried up overnight. And we had to ask ourselves, as anyone would do – what can we do now? It was really just about looking round the business and trying to identify people with key skills that maybe came from different sectors.

The contracting side was the most obvious because, in effect, we’re still building houses, we’re just not building them for sale,” he says.

Getting a toe in this new market was a challenge, because it wasn’t something Mactaggart & Mickel was known for, and “some of the housing associations have peculiar rules, whereby if you haven’t traded in that discipline for three years they won’t entertain you!

“The fact we’d been building houses for 85 years seemed to be lost… But in fairness we got talking to good partners, won our first contracts, and it’s just moved on >>

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BUSINESS LUNCH from there,” he says.

This diversification drive has also seen Mactaggart & Mickel increase its interest in timber systems, commercial property, rental properties – and a drive south of the border to buy up some land. When every other builder was backing off from buying ‘strategic land’, Mactaggart & Mickel has bought up 800 acres and is currently working on planning applications for this, with more purchases in the pipeline.

“When others pulled out, we moved in – and we expect to see a return on that investment in 2014,” Monaghan says.

All of these new markets have helped balance the books, but Monaghan stresses that Mactaggart & Mickel’s focus remains strongly on housing. That’s where the most revenue is still to be made, and where the company’s heart lies.

“We take a lot of pride in building someone a home, for their family to grow,” Monaghan says. In recent years, that focus on ‘homes’ got a little lost, he says, as people bought just to immediately resell, seeing houses as investment vehicles rather than places to live.

“That didn’t help the sector focus on the core value, which is building a home. People buying a house just to sell it takes a little bit out of the relationship.”

Not that Mactaggart & Mickel didn't play its part in, and benefit from, the boom in the housing market, he stresses.

“We were caught up on the same treadmill as everyone else – it’s difficult to stop. And we weren’t in the business of turning sales away!

But we could tell things weren’t sustainable.”

The million dollar question is, when will that market recover?

“We’ll always need homes. We offer a product that is still invaluable – you can’t really do without it. But will we go back to that environment? Not for some considerable time.

The environment’s not there, the funding streams aren’t there, mortgages are still pretty scarce. I don’t see anything changing in the foreseeable future.”

Monaghan would, perhaps naturally in his position, ask both the Holyrood and Westminster governments to reconsider their views on investment to stimulate the economy.

“I think the construction sector can be a

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stimulus for growth. Building our way out of recession is, in my view, a better way than cutting our way out of it – which at the moment I don’t think is working.”

Monaghan has worked for Mactaggart & Mickel since he joined as a 16-year-old apprentice. Glasgow born and bred, he started work early because his father had died when he was 14, and “it just seemed the right thing to do”. He quickly realised, however, that working as a painter and decorator was not what he wanted to do for the rest of his life, and set about studying for an HNC in Building Management in his spare time.

By the age of 24, after six years of studying (“It was a long slog!”) he applied for a role in Edinburgh as a junior buyer in Mactaggart & Mickel’s procurement office.

“I wasn’t actively encouraged to go into construction management, because that tended to be something joiners and builders did. They see more of the construction process, you see, whereas I’d come in at the end. But the opportunity came up – and I grasped it with both hands.”

Monaghan was appointed to the Mactaggart & Mickel board in 2002, promoted to managing director in 2005, and chief executive in 2007.

“I’ve been very fortunate. They are a very good company. I’d like to think that in my short tenure as chief executive I’ve added to that, but they were always a good employer and I’ve had lots of opportunities,” he says.

Mactaggart & Mickel is very supportive of growing people within the company, and still

Building our way out of recession is, in my view, a better way than cutting our way out of it

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runs an apprentice programme for young people aged 16 to 18.

“Fewer companies do it now, but we see the apprentice programme as our future. We map the intake against our future needs – though that’s been challenging, given the uncertainty in the market! But we still take apprentices every year and in the main they stay with us.

They go on to do all sorts of things – we have lots of former apprentices in management roles.”

Monaghan himself takes a keen interest in training young people, chairing the Scottish Skills Group within C Skills – the skills council and industry training board for the construction sector – and sitting on the board of his old college, the City of Glasgow College.

“It’s nice to be there, and hearing all the students do presentations on their projects – because that’s the future.”

Monaghan recognises the importance of constantly learning at management level, too.

“There’s a lot of learning as you go, of course, but I did a senior management development course at Cranfield Business School two years ago – and I also really enjoy going to seminars to find out what other people are doing. I’ll come back with a list of 20 ideas, good ideas that someone in a different sector is doing, and ask my team “why can’t we do that?”

Employee forums across the company ensure that everyone’s voice can be heard, and initiatives like flexi time, working-at-home policies, and other initiatives to help people manage their lives have made Mactaggart & Mickel a popular place to work, at a time when financial rewards are increasingly difficult to offer.

Monaghan is clearly a busy man, but looks after himself with regular running – the morning we met he had run his regular 10km route before work, and he runs the Glasgow half marathon every year. “This will be my 22nd in a row!”

Living in Newton Mearns on the south side of Glasgow with his wife Jill, sons Fraser and Duncan and daughter Morven, “in a Mactaggart & Mickel house, of course”, Monaghan says the whole family is sports mad. A trip to London is planned for this summer for the Olympic Games, and flights to Paris will be booked if Bradley Wiggins looks

BUSINESS LUNCH

Stereo proves a sound place for lunch Stereo is a vegan restaurant down a rather alarming-looking alleyway in central Glasgow.

Once you make it through the doors, though, you find yourself in a funky little café with a music venue downstairs.

It’s a bit scruffy round the edges, but incredibly friendly and serves delicious food. Ed is a regular, dropping in at lunchtime from work, or with his all-vegetarian family at weekends. “It’s just a little bit different – I enjoy it,” he says.

You might not expect it of a man who runs 10 kilometers, five days a week, but Ed admits he always orders the same thing – deep fried veggie haggis fritters with chips.

“It’s really good! But all the food is great,” he says. And his plate does arrive with a giant pile of salad, to balance out the deep frying.

My own tempeh sandwich – the vegan equivalent of a ‘bacon buttie’, I suppose – is equally tasty, on soft brown bread with mayonnaise and leaves, and another huge mound of salad.

We clear our plates quickly – too quickly for the photographer, who uses that as an excuse to order another plateful that he then scoffs himself and declares delicious.

If we’d been feeling more health-conscious, we could have had a variety of tapas, salads, soups and sandwiches, and there’s a full bar on offer – this is a lively venue and packed at weekends.

Great coffee, too, which we enjoy before heading back out into a sunny Glasgow afternoon.

22-28 Renfield Lane, Glasgow, G2 5AR. For reservations call 0141 222 2254.

like taking yellow in the Tour de France.

As well as running, Monaghan has competed in triathlons, and has a “long list of things that zI’m trying to get through,” including cycling up the Alpe d’Huez in France.

Last year’s New York marathon saw another item ticked off that list – this is a man who

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makes things happen.

And it’s just as well. With “700 houses to build in about, oh, 700 days!” for the Commonwealth Games Athlete’s Village, along with myriad other projects, Monaghan has plenty to keep him busy. He finishes his coffee and heads back to work. n

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DOW ON WINE

SUMMER 12

Grape expectations Gordon Dow finds that some low-cost Spanish wines are remarkable value for a relaxing afternoon in a sunny garden It is astonishing what you learn when you are asked to be a one-off wine reviewer with Business Quarter Scotland. Meeting the enthusiastic Richard Meadows, who set up Great Grog after ten years with Oddbins, you get a potted tour of the wine-growing regions and their current economies. For example, the New Zealand sauvignon blancs are sure to rocket in price because of the poor harvest in the Marlborough region, while Italy is still churning out over-priced Pinot Grigio for the get-it-down-your-gullet brigade. And there are unintended consequences caused by the crisis in Europe and the difficulties of Spain and Greece. One is that non-Rioja Spanish plonk is remarkably good value and truly wonderful to drink. That’s exactly what I found out.

Marques de la Villa, Malvasia. 2010. £6.50

This wine, produced by a cooperative in the north-west, is ideal for accompanying something tangy. The 95% malvasia (a cousin of frascati) and 5% verdejo grapes are a fresh aromatic white, bursting with sharp citrusy flavours. Incredibly appealing on its own, the wine has strong ripe peaches as a base. It had an initial dryness, which gave way to an edge of sweetness. This balance lent itself to serving with a delicious slice of gammon. The gammon’s saltiness tempered with the wine’s sweetness ensured

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a wonderful, balanced experience. You cannot help but want to make sure you have a sip with each mouthful of food. A highly recommended experience – and what a great price.

Juan Gil, De Cepas Viejas, Monastrell, 2010. – Jumilla. £8 Open the bottle and let it breath for a few minutes. Then pour and prepare to indulge with a rich fruity red wine. It is an experience of thick dark fruits like blackberry’s and plums, tempered with essence of a creamy vanilla.

Although full-bodied, it had a smoothness which gives it almost a feeling of drinking a stronger Cabernet Sauvignon.

This is what you purchase when you want to give yourself a well-deserved treat. Sit in a lounger in the garden, as I did, with a selection of bread and cheeses and you’ll be a happy camper! Make sure you have set an afternoon aside to enjoy this wonderful wine. n Richard Meadows, at Great Grog, knows his stuff. He’s also moved his warehouse to 17 East Cromwell Street, Edinburgh.

Phone 0131 555 0222 or email www.greatgrog.co.uk Free deliver for 12 bottles of more.

Thanks to Stewart Campbell and his accommodating team at the Malmaison Hotel, 1 Tower Place, Edinburgh, EH6 7BZ, for making space in the restaurant to take our photographs.

Gordon Dow is the founder and chief executive officer of the Power Lunch Club, an events organisation for senior directors and chief executive officers, in Edinburgh and Glasgow.

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DOW ON WINE

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MOTORING

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A good-to-be-alive drive

Sean Robinson, managing director of Park Lane Group, made the most of the sizzling early summer weather to test drive a BMW that gave him happy motoring memories What an excellent way to start the week for a petrol head! Glorious sunshine in Glasgow, then meeting Cameron Wade, a truly nice man from Douglas Park BMW, who actually gives me the key fob to BMW’s newest model (so new in fact it’s not officially launched until the following week). He’s never met me before, yet he let’s me disappear from the showroom with the sparkling new motor and head out on the open road. What followed was a perfect good-to-be-alive drive.

Heading north out of Glasgow, the A808 on

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that wonderfully winding scenic road towards Loch Lomond, through Drymen, Aberfoyle, across country towards Dunblane, a pit stop at the delightful Blairmains Farm shop and restaurant near Bridge Of Allan for a light lunch, then back down the motorway to a still-sunny Glasgow, all without a drop of rain!

I was driving the new BMW 640d Gran Coupe which is their version of the ‘big saloon’ Coupes that have come on to the market in the last few years. The 6 Series Gran Coupe is effectively the 6 coupe stretched out to a

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shade over 5 metres, with the addition of two extra doors, the result being what is in my opinion one of the most elegant, stylish and streamlined of todays ‘big’ four door Coupes.

It’s as good to look at as Aston’s Rapide and is clearly aimed at the Merc CLS and Porsche Panamera market. On style and design alone it’ll give the competition a real run for their money especially with the BMW sporting and quality pedigree.

The car I was driving, the 640d, had BMW’s M Sport specification and is powered by the

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brand’s new twin turbo 3 litre diesel unit which produces an impressive 309bhp and 465lb ft of torque. The combination gives an astonishing mix of power across the range and takes you to 60mph in a very impressive 5.6 seconds. BMW really has mastered the art of the diesel engine in terms of maximising performance, while it is so quiet that you wouldn’t know it was a diesel. In fact, I really can’t understand why anybody would buy the petrol model. I have no doubt they are good but this car has sports car performance and even on 100-mile journey, most of it on rural roads, it returned over 36mpg.

In terms of comfort, the Gran Coupe will seat four in style and absolute comfort with the rear only getting a little tight if there are two six footers front and back. It’s just nice to get in the car with the four pillar-less sculpted doors looking more like works of art than car doors. Inside the car adopts the most modern of BMW design, including a sweeping dash and centre console swathed in leather that seems to wrap round the driver offering all the controls at your finger tips. BMW’s latest i-drive controller is light years ahead of where it was in my old 6 series. It’s really easy and instinctive to use with all information being clearly displayed on the big centre screen. The seats themselves, aptly called comfort seats, offer adjustment in every way you could think of - and one more as I discovered just as I was reluctantly handing the car back.

This big 6 Gran Coupe has the driving feel and handling of a sports grand tourer car but with much more to offer. It has loads of power on tap through the 8-speed electronic automatic gearbox and if you really want to go looking for a few points on your licence just press the little button next to the space-age gear stick and select ‘Sport’ ….. and it really goes whilst making a real grunt as you change gear using the F1 style flappy paddles mounted on the

MOTORING

Perfect weather to fly: Sean Robinson prepares to soar in the sun aboard BMW’s finest thick set leather M Sport steering wheel.

There’s even a sport plus mode but I didn’t have the heart to try it on what was a three-hour old car. Comfort mode selected, and you could just drive this car all day long, preferably on an Autobahn. There’s also a comfort plus setting if you’re taking your Gran for a Sunday drive in the Gran Coupe, and an eco-drive function for absolute efficient performance. It’s hard to criticise this car, which is essentially a fantastic four-door, four-seat luxury Coupe that is more practical than its two-door sibling, has outstanding performance yet can still return over 40mpg. It also has a good size boot, offers driver enjoyment without costing passenger comfort, and not least is just lovely to look at with those long sleek BMW

I believe they’re forecasting sales of 700 next year. They may have to revise that to 701 at least

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shark-like lines. Now it’s not cheap, but this car does sit at the top of the BMW model line up.

The 6 Series Gran Coupe range starts at £61,380 and up to £68,560 for the tested model. You can then start adding some extras.

The test car had a full spec and the one thing I would recommend is the big glass roof which just gave the cabin that extra airiness and light.

Needless to say, this is another great car from BMW. I believe they’re forecasting sales of 700 next year in the UK, they may have to revise that up to 701 at least! n Sean Robinson is joint managing director of Park Lane Group, one of Glasgow’s leading independent property development companies, based in Cowcaddens.

BMW 640d M Sport Gran Coupe, OTR Price £77,130.

Car supplied by Douglas Park Glasgow BMW/MINI, 3-33 Kyle St, Glasgow G4 OHP 0141 333 0088, 0141 333 8245 www.douglasparkglasgowbmw.co.uk

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FASHION

SUMMER 12

The menswear maestro The remarkable journey of Kim Jones has taken him out of Africa and into the heart of a French fashion dynasty. Josh Sims talks trends, travel and taxi drivers with Louis Vuitton’s head of menswear design

Cut from a different cloth: Kim Jones is one of the most sought-after stars of menswear design and a recent recipient of the British Fashion Council’s Menswear Designer of the Year award

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Kim Jones has rather unexpected plans for an alternative to his career in fashion. He would, he says, “have to do something else entirely - conservation maybe, working with animals”.

Perhaps that stems from his childhood - his father’s job meant he spent much of it in Africa. Unfortunately, at the rate he’s going, his David Attenborough moment is unlikely to come. He is, after all, 2011’s winner of the British Fashion Council’s Menswear Designer of the Year award, for the third time; his CV now spans work for his own label, as well as the unlikely mix that is Mulberry, Umbro, Uniqlo and Alexander McQueen, and the creative directorship of Alfred Dunhill; and he is also now the new head of menswear design for Louis Vuitton.

“Nowadays fashion is all about big brands and that means, as a designer, you have to be adaptable - I have a broad perspective on menswear because I’ve done so many different types of things,” he says. “It’s also a huge demographic I work with now - from super-rich kids of 16 to more traditional 80-year-olds who could be buying the same product. Of course, you can style it up to give that sense of power that some brands have.

But it’s just as much about detail and craft.

These are very real clothes. And they should be. The job is to provide people who work really hard with things they can invest in and then enjoy and appreciate - it may be a €5,000 leather jacket but it will last a lifetime.”

OK, so the spring/summer collection’s ties shot through with 24ct gold silk, cafe racer jackets in alligator skin, or the famed LV monogram on scarves and bags may not be top of every man’s shopping list. But the louche suiting, comfy pyjama pants, desert boots and safari-style clothes, or the new collection’s baseball jackets and kimono shirts as well as technical clothing given a luxury spin and preppy classics given a technical one, could well be. It is clever stuff too. Silks, for example,

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FASHION

are triple bonded to be breathable, while pockets are edged with performance tape. It is a properly grown-up collection from a line established by Louis Vuitton only in 2000.

“I just like the kind of clothes you can take on a plane and which won’t crease up too much,” Jones explains, somewhat undercutting fashion’s usual love of fluff with a solidly everyday consideration. “As a designer I like to think about how products can make a stressful life less stressful. How can a customer get the most they can out of a jacket? Because a jacket at this price has to pay its way.

And the technical capability of a company like Louis Vuitton is just beyond. That’s really where the progress comes from - in fabric development and materials. I’m a fashion designer but here you can’t help but get more product designery.”

For all that Louis Vuitton has been somewhat tarnished by the luxury world’s love of glitz, smart design is really what it set out to be about. Louis Vuitton the man’s original remit was officially catering to the needs of Empress Eugenio de Montijo, wife of Napoleon III. Vuitton’s idea for a flat-bottomed trunk which he introduced in 1858 - allowed them to be stacked; they were constructed in such a way, using unusual materials the likes of grey Trianon canvas, to make them strong but lightweight and airtight. The branding only came 18 years later, as a step to combat the widespread ripping off of his design.

Jones certainly travels a lot himself - indeed, travel is where he gets a lot of his ideas, >>

I’ve never wanted my name on anything so this role suits me

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FASHION

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and travel remains the underpinning of the Louis Vuitton world, Jones suggests. He visits Africa every year and makes an effort to travel to as many new places he can, especially now that his new contract includes one of those generous five week summer vacations beloved of the French - “which is like being back at school,” he jokes. “And, like the shockingly rude taxi drivers here, it’s all very French too it’s complete switch-off. You don’t even get an email.” But one eye is always on work. “I went to Mongolia last year,” he says. “And there’s a Louis Vuitton store there. It’s pretty crazy.

Travel makes you realise how many different types of customer there are and how they all shop differently.”

As for getting in some clothes shopping himself, that’s unlikely. Like a lot of designers, he claims that “when you’re looking at clothes all day, you get to the point where you really don’t want to think about what you’re wearing yourself” - and, when he does buy, takes the rather unimaginative, very male approach of buying in multiples to keep stocks up for his “usual uniform of shirts with jeans or chinos”.

He is, in other words, refreshingly unfashiony, which, one suspects, is one reason why he got the job. “No, I’m not that fashiony,” Jones agrees. “I don’t go to the parties. I have a cosy apartment here in Paris and do a lot of cooking. Tonight I’m staying in and watching a DVD - something dumb. But I’ve never wanted my name on anything, so a position like this one suits me well. I’d rather just have respect from people in the industry.” n

I’m not fashiony and I don’t go to parties – but I do a lot of cooking

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FASHION

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EQUIPMENT

SUMMER 12

scribes against the machines As new technology continues to threaten the old tools of intellect, one institution is fighting back by keeping alive the medium that has held the scribble and scrawl of its patrons for 180 years, writes Josh Sims

BUSINESS QUARTER | SUMMER 12

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It might seem that in the age of email, in times when the Indiana Department of Education has decided that teaching children to type rather than write is a better idea, the traditional letter might be doomed. Tell that to Germany’s Buttenpapierfabrik Gmund, founded 180 years ago and arguably the most elite large scale artisan paper maker in the world - both under its own name but also for the likes of Swarovski, Louis Vuitton, Hermes and Tiffany, among the many companies who still regard the paper they use as an expression of the image they project. Tell that to the hard core fanatics for whom luxury is still ink and paper, not a keyboard, no matter how swish the gadget.

“Quality paper still matters,” says Gmund’s Anja Wackerhage. “Even if the only paper you use is in giving your business card, people recognise the quality of the paper almost subconsciously. They can feel it. The market for top quality paper may be a niche one, but there is an appreciation for the evocative aspect of paper texture maybe precisely because we spend so much time sat at computer screens now.”

And that touch quality to paper is something that Buttenpapierfabrik Gmund takes very seriously. Aside from the 52 standard colours the company works with (it also creates bespoke shades as part of many companies’ corporate identity), it has also developed

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EQUIPMENT

papers not only of different weights but of different tactility - with silky mother of pearl surfaces, for example, or a honeycomb or leather effect. A paper might be blended with cotton or - one of its latest creations - even with mohair. Small wonder then that each new style of paper takes 18 months to develop, often shaped around trends in travel, fashion and interiors.

Not that the company is in any hurry - suitably for one espousing the slower, more contemplative life that makes time for letter-writing. Owned by the Kohler family for the last 107 years, and specialising in artisan papers since the 50s, “there is the freedom to design new papers at our own pace,” >>

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EQUIPMENT

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As with all luxury products there has to be an appreciation of the craft involved.

These people know paper can transmit more than what is written on it

Leafing through the history books: Gmund has been supplying artisan paper to the world for over 180 years explains Wackerhage, “and that can be important when catering to a niche market.

Creativity goes into the paper, not the paperwork.” Indeed, much of Buttenpapierfabrik Gmund’s output is still made on a paper machine first installed in 1886. It only bought its second machine a century later. That does not mean, however, that the business is antiquated. Growing environmental awareness has been one argument against the use of paper - not only to save forests but because paper manufacture is energy and water intensive. Consequently, the company has systems that purify and re-use water seven times over while using the same water to generate 70% of its own

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energy. Unsurprisingly, it has also recently launched the first 100% recycled and the first carbon-neutral artisan papers.

“There are still those people who just don’t care about the paper they use,” says Wackerhage. “But those that do, understand the complexity of paper production at this level. As with all luxury products there has to be an appreciation of the craft involved. These same people know paper can transmit more than what is written on it.”

How it is written on is, of course, just as important to some. And if Germany is leading the way with elite papers, the nation’s strong reputation for manufacturing excellence is also seeing its pen-makers reap the benefits of this

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new interest in this decidedly un-technical form of communication. With brands both international and niche, from Pelikan to Bossert & Erhard and Faber-Castell, from Montblanc to more modern, mass-market but no less smart designs from the likes of Rotring and Lamy, Germany’s fountain of ink runneth over. “Historically the German industry has been relatively slow in picking up the latest in pen technology, so it is rarely cutting-edge but when it does it perfects that technology to make it work properly, as it has also done with cars, for example,” argues David Peresi of the Writing Instrument Society and co-founder of the Hamburg Pen Show. “The pen industry here is another branch of the engineering

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business, or of the product design business, for which Germany is famed. It has a policy of always improving rather than simply adding novelty.” In addition to that engineering heritage - it was, after all, a German, Daniel Schwenter who first prototyped the notion of a pen that carried its own ink supply back in 1636, while German inventiveness has also seen the development of iridium-tipped nibs and specialist rubber - it was also commonplace in Germany to write in copper-plate script as late as the 1940s.

“There has long been a respect for the hand-written here, and for the instruments you use to do it with,” notes Peresi.

Just such a respect has given German

penmanship a long history. Last year, for example, was the 250th birthday of FaberCastell, launched by Kaspar Faber, a cabinet-maker working in Nuremberg who moved to Stein in order to escape the bigger city’s strict rules governing crafts - thus allowing him to start a side-line in making pencils, a tradition for the region that can be dated to 1660. But age does not mean technology ceases to advance: the brand’s latest line, Ambition, has a twist mechanism to extend or retract an especially large-capacity refill, which uses a special quick-drying ink.

And Germany is still seeing the launch of new brands. Duller, for instance, is the latest and among the most contemporary, designed with

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strict Bauhausian ‘form follows function’ thinking by Dietrich Lubs, the esteemed designer for the German consumer products company Braun. That gives competition for the Heidelberg-based Lamy, whose trademark minimalism continues with the Dialog 3, the first fountain pen in which both nib and clip are retractable, or its new sandblasted stainless steel Econ line, designed by EOOS, the design office that scooped the gold Design Prize of the Federal Republic of Germany last year.

Is the pen still mightier than the sword?

Recent world events may suggest not. Is it mightier than Qwerty? It is certainly more intimate, more human, and, it seems, no less in demand. n

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ENTREPRENEUR

SUMMER 12

Lunchtime with a legend In the early 1960s, a young Scottish waiter landed a plum job in one of Paris’s most prestigious gastronomic establishments. It was an experience that shaped Maurice Taylor’s life, leading to a successful business career that changed the face of Scotland’s hospitality industry.

Kenny Kemp met him at his Glasgow restaurant, La Bonne Auberge There is a new Hall of Fame for distinguished entrepreneurs with a connection with Strathclyde University. It was created at the place of learning in Glasgow last December and among the illustrious inductees are Sir Tom Hunter, John Logie Baird, James ‘Paraffin’ Young, Ivor Tiefenbrun, Jim McColl and Brian Souter. Maurice Taylor, one of Scotland’s most successful hospitality business figures, also takes pride of place.

“Would you believe, wee Maurice Taylor fae Barrheid is in the Hall of Fame too,” he says, exaggerating his West of Scotland accent.

“And in 2004 I was given an honorary doctorate from the university which I accepted on behalf of my father, who died in 1982.”

It’s a bustling lunch-time in La Bonne Auberge, packed with a mix of elderly dinners enjoying their mushroom crusted fillet of Scotch beef with tarragon and shallots and bottles of Cote du Rhone.

Maurice Taylor, now in his early 70s, bound in and introduces himself, before sitting at the table with its neatly laundered white tablecloth. He hands three business cards, one as Chief Executive of Chardon Management Group, which looks after a raft of hotels, health clubs and restaurants, another as a visiting professor at University of Strathclyde Business School, and the last as Commander

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Dr Maurice V Taylor, KCSJ, FBIM, FHCIMA, of The Sovereign Order of St John of Jerusalem, Knights Hospitaller, an ancient order set up during the Crusades and now devoted to good causes.

His own crusade to bring service and value to the hospitality trade is well worth recounting.

Maurice Taylor was indeed born in Barrhead.

He says he was the 'runt of the litter' from an academic family with his father, James, a Glasgow University graduate, the school headmaster and dominie, and provost of the local burgh, which had its own council until 1975. Asked why he started a career in hospitality, Maurice jokes that he is ‘a failed engineer’. He was sent to St Aloysius’ College in Glasgow and then to a boarding school at St Benedict’s Abbey in Fort Augustus, beside Loch Ness.

“I was never a great academic as such but, surprisingly, I won a few prizes for languages, including French.”

His adolescent interest was in building things.

“I started a workshop up at the Abbey and built canoes and repaired outboard engines.

I build my first motorbike when I was 13.

Anything mechanical fascinated me, and still does. When I left boarding school, much to the chagrin of my parents, I didn’t want to go to university and couldn't get out of

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school quickly enough.”

Much to his father's dismay, he landed an apprenticeship at Weir's of Cathcart in 1957.

He recalls his final job was as a junior engineer testing pumps for the reactors of Britain's first nuclear submarine, HMS Dreadnought.

He went to night school, gained his national certificates in basic engineering, and was accepted to the Royal Technical College, just emerging as the University of Strathclyde, where he began an engineering degree.

“I used to race motor bikes and cars. We started doing insurance write-off because we didn't have any money.

“We did them as 'homers' in Weirs. A friend of mine was doing up this Triumph Tiger Cub, the smallest one they built.

“I crashed it badly, hitting a wall at 90mph, with no crash helmet on. “ He ended up in the Southern General with severe injuries and the last rites given to him, yet he miraculously pulled through, spending three months in hospital.

“When I came out I had missed my exams at Strathclyde University and took a job as a junior night porter at Turnberry hotel.”

This was then owned by British Transport Hotels, an arm of the nationalised British Rail, and regarded as the best hotel training ground in Scotland at the time.

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ENTREPRENEUR He was spotted and asked if he would like to join the management trainee scheme.

“I was completely fascinated by the theatre of Turnberry, particularly when the major championships were going on.

“All the big names from the world of golf were staying there.”

It was sheer fluke for him, because no-one in his family had been in hotels, indeed his dominie father rather frowned on ‘hospitality’ as a proper career.

The legendary Monsieur Pierre Vacher was then group managing director running British Transport Hotels adapting a French-style of hotel-keeping across the portfolio, which included Gleneagles, and the Balmoral and Caledonian, in Edinburgh, where Maurice later met his wife, Una. She has been at Scottish Hotel School and her first job was as a house-keeper in the five-star hotel. He worked in several Scottish hotels but was keen to get, travelling to Spain and Switzerland to sample top hotel life but it was his arrival in Paris that changed his outlook on the hospitality business for ever.

“I wasn’t particularly special but I had an aptitude for languages and that helped me when I went to work abroad.

“I think this came from my mother’s encouragement at an early age, teaching me about language, vocabulary and the derivation of words. She was a teacher, so languages fitted comfortably with me.”

Maurice still speaks pretty fluent French – and is very comfortable in France.

As a young man, he landed a job at the Tour D’Argent in Paris, then one of the greatest restaurants on the planet. This is an establishment on the banks of the Seine without parallel and a legend of French cuisine and service, run and owned by Claude Terrail.

Terrail was a French gastronomic icon who took over from his father in 1947 and his maxim was, ‘There is nothing more serious than pleasure’.

The international jet set would gather at the Tour D’Argent: Marlene Dietrich, Sammy Davis Junior, Jacques Charrier and Brigitte Bardot, were all regulars and Maurice was a waiter there the night that President Kennedy was assassinated in 1963.

“I was the only Scotsman, as far as I know, >>

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ENTREPRENEUR that has ever worked there. I’ve been back as a guest and still have a great fondness for it.

It’s only a few years since Claude died at the age of 92.”

Fast forward 40 years, Maurice Taylor’s own Glasgow restaurant, La Bonne Auberge won ‘Restaurant of the Year’ for Europe, Middle East and Africa for Holiday Inn, with the presentations in the Paris Intercontinental Hotel, next to the Opera House.

“I talk to our staff and hotel management school about my time at the Tour d’Argent and the standards that were expected. The great thing is that it gave me a set of standards to work to because its professionalism was world class.

“When we won the award I took the chef and the hotel manager to Tour d’Argent for dinner the night before and it was every bit as wonderful as I remember.”

Around midnight, after chatting to the waiter and telling him that he was a former employee, the charming M. Terrail, then aged 90, appeared, kissing the hand of Maurice’s female general manager, while Maurice took the opportunity of thanking him for instilling standards that remained with him for the rest of his professional life.

Maurice Taylor returned to Scotland and worked at Gleneagles as assistant general manager in 1965, and then got married to Una. But he could see the career path within British Transport Hotels was a case of ‘dead-men’s shoes’.

“It was difficult and if you had any ambition at all you thought you were never going to get anywhere,” he says.

The newly-weds existed in a caravan in Auchterarder because they had little money, so he knew he had to find a job that paid more. In the meantime, he met Gavin Reid, a scion of leading brewers, Scottish & Newcastle, who were starting Thistle Hotels.

There were opening a new hotel in Dundee called the Angus and Maurice landed the job as banqueting manager.

“This was my break away from British Transport and there was rapid promotion for me because 18 months later I was running the Lorne Hotel in Sauchiehall Street in Glasgow.

I ran that for over three years.”

He felt he didn’t have London experience on

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I’d been taught extremely well how to run hotels and restaurants but Rosier taught me how to run a business and that was different his CV so he joined the Royal Garden at Kensington where, Neville Watson, one of his former Gleneagles bosses, appointed him food and beverage manager. But living on meagre hotel wages, with a wife and children, David and Nicola, and trying to buy a house in

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London proved to be too difficult, so when he was offered a managing director’s job by a private company in the Trossachs, he returned north. He worked for Armand Rosier, a successful builder from Coventry whose wife loved Scotland, and helped him build the

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group into three hotels. “I’d been taught extremely well how to run hotels and restaurants but Rosier taught me how to run a business and that was different. I got the cheque book and had to write the cheques and make sure the cash flow was right. I learned how to do management accounts.”

His ambition now was to have his own place.

He opened a Royal Bank of Scotland account in October 1972 with plotted a future. With £5,000 from selling a Glasgow flat in Hyndland, plus a £3,000 loan from his mother-in-law, he rented the Electrical & Plumbers Trades Union offices in Edinburgh’s New Town.

He began the conversion in January 1973, creating his own hotel company, which became Chardon Hotels Limited. The hotel he opened was called the Albany Hotel, still there as a boutique hotel.

“I built that with my bare hands and it is still a nice hotel. I ended up with three hotels in the first year, all leased, including the Marie Stuart Hotel at Lochearnhead, and the Windsor Hotel in Nairn. I grew the company and was able to buy the Beacons Hotel in 7-8 Park Terrace in Glasgow.” The Glasgow hotel was almost bust and Maurice took over the loan from 3i and raised the cash for the freehold. He converted the basement to create La Bonne Auberge, which opened on Bastille Day 1975, and soon became one of the trendiest spots in the city.

The Mediterranean Brasserie caught the mood of the time and next door he opened Harvey’s American Bar and Diner, the first major hamburger joint in the city. The first manager was Ken McCulloch who went on to become a success hotelier in his own right.

“Both of these were immensely successful and it took a business from £90,000 a year turnover to £1.5m. That was the making of La Bonne Auberge brasserie concept,” he says.

He sold the leases elsewhere and scraped enough money to buy the Lorne Hotel in Sauchiehall Street, from Thistle Hotels, adding the Garfield at Stepps, which gave him three substantial freehold hotels. Lorne was expanded with another acquisition next door, increasing the size to over 100 bedrooms.

Maurice’s company was beginning to join the major league.

In 1986, he sold the Garfield, to Trevor

ENTREPRENEUR

Paterson, and the Beacons for several million pounds, and the following year he sold the Lorne to Queen’s Moat, a listed plc, for a further £3.5 million. He cashed in his other businesses too. He was a millionaire at 45 and thought about enjoying the good life – but his phenomenal work ethic kicked back in. He began looking at franchising operations, including Burger King in the UK, which was taken on by Diageo.

Between 1986 and 1994, he used his funds to build high-quality apartments first in Notting Hill, then Swiss Cottage, converting older houses into modern places, using a team of hard-grafting Polish builders. “I contend a chimpanzee could make money in London at that time. It was the boom time and it petered out in the 1990s.”

He bought Carronhall Engineering, a bust company in Stonehaven, which was revitalised and became accredited with the Ministry of Defence, and created the first ‘toilet-pod’ companies in the UK, which fitted out complete high-spec bathrooms in a box in Scotland and delivered by low-loader and installed them in top London condomiums, hotels and places such as Broadgate shopping centre at Liverpool Street Station. He also built about 80 houses in Livingston.

If that wasn’t enough, Maurice Taylor was hyper active and invented Parklands Country Club in Eastwood, which was a new American leisure concept. In the first year it made £250,000 in bottom line profit, with 4,500 members paying by direct debit.

But in 1994 the hotel business lured him back.

He knew franchising was building a head of steam in the UK and he began talking to Accor, owners of Wagon-Lits, about a deal to buy their seven Ibis concept hotels in the UK. He sensed that budget-hotel franchises were a massive growth area. But he recognised he was very proprietorial and unwilling to share his success. His idea was to put La Bonne Auberge into Ibis, but his stockbroker at Greig Middleton unwittingly revealed the scheme and Ibis put Café Rouge into the chain instead.

It still rankles with Taylor but he decided to build his own hotel in Glasgow and was introduced to Holiday Inn, part of the InterContinental Hotels Group, by his architect Mark Lironi, of Cobban & Lironi.

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“Holiday Inn had an agreement with a Canadian company called CHIC which had built 14 hotels in the UK. They ran fabulous hotels. One of them was at Anderston Quay in Glasgow. But Chick fell out with Holiday Inn and changed it to the Marriott franchise. They then sold the 14 hotels and the master franchise to Whitbread.”

When the Holiday Inn signs came down, Maurice saw a franchise opportunity and put the sign above his new-build hotel in West Nile Street, opposite the Glasgow Royal Concert Hall, and put up in 38 weeks by Balfour Beatty in 1994. It was a smart move: the lowest occupancy rates was the first night when it was 55% and, since then, it has been 85% since 1996, now with 120 bedrooms while its Bonne Auberge restaurant turns over £1.5 million a year.

“The food you get today is every bit as good as the food we served in Park Terrace when we started off.”

“I was a bit apprehensive about going in with Holiday Inn after what I heard happened with CHIC. I was worried about the global player telling the wee Scottish hotelier what to do. I wondered if I could hack it in the big league.”

Kemmons Wilson, the founder of Holiday Inn, had begun franchising in 1952 in Memphis and, by 1979, when he retired there were 1,790 around the world. Maurice got his jacket off again as the Holiday Inn’s sub brands began to expand in the UK and he became a committee member of the owners’ group for Europe, Middle East and Africa, with 4,500 IHG hotels and nine brands around the world.

“I got into the system and they were growing it. I was one of the first Holiday Inn Express in the country and I became chairman of the food and beverage committee, then chaired both the IT and sales and marketing committees. I managed to fit in after all.”

He admits he was too individualistic to be a corporate man but because he was chairing the committees he was invited to IHG’s Atlanta headquarters and saw how the Americans ran the management group. He met Kemmons Wilson, who told him, “Scottie, if you get a job you like, you don’t have to work for the rest of your life.”

Chardon Hotel Group Ltd began building some more branded hotels and taking on >>

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ENTREPRENEUR the management of other hotels using his experience and know-how.

He now owns four hotels and has aspirations to build another two, but Chardon Management Ltd, the management group and a separate entity, is run by a team with shares in the business.

Maurice is chief executive with Robert Crook, the managing director who joined Maurice 15 years ago, and Cesidio Di Ciacca, a wellknown corporate lawyer in Scotland, is the chairman. David Chapman is finance director, James Ford, operations director, while Maurice’s daughter, Nicola, is marketing director. It now manages 36 hotels with a consultancy agreement for another 20, with brand across Britain, including Holiday Inn Express, Hilton, Marriott, Doubletree, Marks, Quality Hotel, and the new Indigo Hotel in Glasgow and Edinburgh.

“We’ve been running the consultancy for ten years – it’s been an overnight success!”

Chardon Management’s brand portfolio includes Maurice’s La Bonne Auberge; Limelight Bar & Grill; Triangle Health and Fitness; Tri Health & Beauty and Hoteldeals. co.uk. The company employs 50 staff directly whilst its portfolio of managed hotels employs over 2,000, with a turnover of its managed hotels portfolio of £163m.

“We are trying to expand the portfolio by 20% a year and we are always looking for further hotel management contracts with developers, investors and administrators,” he says. Taylor’s engineering background has been impossible to suppress. He once devised an ‘impress’ control system to calculate actual stock of beers and bottles in the hotel bar, which cut down shrinkage, then he created a set of Haynes manual-type folders for his hotels, which he calls the bibles according to Chardon Hotels.

They are at the foundation of each hotel’s standards, including how to make a bed.

The Chardon Training Academy goes on the road around the hotels when required to, by the general manager as the captain of his hotel ship.

“When Intercontinental saw our bibles, they wanted to copy them – but they are our family silver. There is a bible for every department in the hotels, right up to crisis management.

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I’d rather be a fantastic threestar hotel than a crap five-star hotel.

I have always looked for value for money

There are very few hotel groups that have a set of bibles on how to run a hotel.”

Chardon’s managing director, Robert Crook, who also has a top pedigree in running hotels, such as the Crowne Plaza in Leeds, and working in Holiday Inn’s HQ in the UK, worked with Maurice on the creation of the bibles.

“He is a key player in all this. We have something like 100 years’ experience between us, which is all distilled into our bibles.”

The major franchise companies have a minimum service agreement which tell you what but, according to Maurice, they

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‘don’t tell you how.’

What a large franchising groups brings to the table is its international reservations system, which means the customers can book a hotel for free anywhere in the world, and powerful databases of customers. This has evolved into sophisticated pricing for rooms, based on supply and demand.

“With the advent of the web we can text people and offer keen prices. The objective is to get as personal service as you can get for a global organisation.

“From Okinawa to Oklahoma, we are saying ‘we need your business’, so we ramp up the occupancy percentages.”

His advice to those wanting to build a hotel group is to go for a brand, and his consultancy helps find the right brand and brand for the right site.

“People get fetishes about things. Someone might have stayed in the Crowne Plaza in Hong Kong and think we should have that hotel in Scotland.

“We look at this in the cold light of day and discourage those from building hotels that don’t suit the available market. It’s about maximising the potential. I’d rather be a fantastic three-star hotel, rather than a crap five-star hotel. All over my business life I have looked for value for money.”

He used a favourite analogy of the difference between types of cars.

“You don’t get a Rolls-Royce for the price of a Mini. But a Mini is a fabulous car and it’s great value for money. It’s the same with a Volkswagen, great value for money, and I’ve got a Bentley, so I know what I’m talking about, and I love cars.”

“It is like going to the Tour D’Argent and paying $1,000 for a meal for four.

“For me, it is wonderful value for money because of the artisan and the craft and the staff, it’s worth every penny. That’s value for money. But I can go into a good fish and chip shop – like the local one in Helensburgh where he cooks the fish individually - and if I get good value for money, then this is brilliant.”

So, for Maurice Taylor, it must be value for money. “The secret is to do what you do and do it well and don’t charge like the Light Brigade for it. People don’t like being ripped-off.” n

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COMPANY PROFILE

Bett Homes’ new specification showcased at Kingswell, Auchterarder

BETT HOMES OPENS NEW SHOWHOME AT KINGSWELL, AUCHTERARDER

B

ETT Homes has revealed a stunning five bedroom detached Eames showhome featuring the developer’s new specification at its exclusive Kingswell development in the sought after town of Auchterarder.

Located just off Lundies Walk, Kingswell comprises a collection of three, four and five bedroom detached homes with prices ranging from £199,000 to £339,995.

To help customers move into the home of their dreams, part exchange is being offered as an incentive on selected plots. This means Bett Homes will buy a customer’s current home, allowing them to stay in their existing property right up to completion of the sale.

Grace Brownlow, sales and marketing director at Bett Homes, said: “Kingswell is an outstanding development which has already generated a significant amount of interest. Our Eames showhome is ideal for potential buyers to view as it demonstrates the impressive build quality and thoughtful design of all of our homes, along with the exceptional standard of the new specification.

“Anyone interested in living in this beautiful part of Perthshire should come and visit us to see the superb homes at Kingswell and find out about the excellent incentives we offer customers.”

Bett Homes’ new specification was developed following extensive customer research. This involved speaking directly to potential buyers to find out exactly what people want from a new home and has ensured the developer’s latest specification provides an enhanced combination of form and functionality.

The new specification available on all properties at Kingswell includes a stunning choice of fully fitted kitchens which are intelligently arranged and offer innovative additional storage space as required by today’s modern lifestyles. Kitchens feature soft close doors and integrated appliances including fridge/freezer, dishwasher, AEG stainless steel oven, hob, hood and microwave.

anyone interested in living in this beautiful part of perthshire should come and visit us to see the superb homes at kingswell Bathrooms have stylish sanitaryware and luxurious baths with concealed bath fillers. Ensuites now offer contemporary showers with attractive brassware as well as useful storage solutions, chrome-heated towel rails and high quality tiling

by Porcelanosa.

There is a choice of internal doors throughout the homes, which are bespoke and complemented by unique Italian-designed door handles, whilst master bedrooms also benefit from a choice of impressive contemporary fitted wardrobes that have sliding doors to maximise space and storage.

Grace concluded: “The reception that our new specification has received has been extraordinary and people cannot quite believe that it comes as standard. When this is combined with an excellent choice of homes in a prestigious location it makes living at Kingswell a hugely attractive proposition to potential homebuyers.”

Just south of the Highlands and north of the

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picturesque Ochil Hills, Auchterarder is within easy reach of Scotland’s rugged west coast, yet only a short drive from central Glasgow, offering the perfect blend of rural peace and access to urban amenities.

The sales office at Auchterarder is open seven days a week from 10am-5pm. For further information on the development, contact the sales advisor on 0844 9678916. More detail on Kingswell and the properties available can be found at www.betthomes.com/kingswell

BUSINESS QUARTER |SUMMER 12

BIT OF A CHAT

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>>A radical road for teaching

with Jock Yuler >> Sir Angus on leadership Thirty years ago, in October 1982, Angus Grossart penned a thought-provoking paper for the Scottish Council Development and Industry’s 13th International Forum in Aviemore. We were in the jaws of a recession then and it was entitled ‘A Climate of Leadership’ and intended to stimulate discussion.

Sir Angus stated that there had been a failure in leadership in Scotland, across a wide span of affairs for many years. He singled out Sir James Lithgow, Tom Johnston, Lord Fraser of Allander and Hugh Stenhouse as past giants of our history. “If we have had a failure in our standards of leadership this may be no more than we deserve, for as a nation we appear, at worst, to have lost our confidence in the role of leadership and, at best, to be incapable of responding to it when it does occur.”

What did Scotland’s business doyen mean by leadership?

“It is the quality of the individual who sees ahead of immediate events and impels others to attain some difficult but worthwhile goal with him. The leader will have discerned clearly where he is going; this will seldom have been an obvious objective to others for the visible and easy challenges will already have been tackled.”

Re-reading his paper with the benefit of hindsight, Scotland is probably now blessed with much stronger leadership. But he warned. “The less tangible ingredients of vision and oratory may have persuasive effect when embraced by a strong personality but they should never be confused with the real thing.” Exactly.

BUSINESS QUARTER | SUMMER 12

Let’s talk about edukayshun. Fred Smith, the boss of FedEx, makes an interesting point that should be debated in Bonnie Scotland. He says: “I personally think that the US federal government - and you’re talking to a liberal arts major here should restrict its funding of higher education grants and loans to science, maths and engineering because that’s where most of the value added comes.

He says there is too much emphasis on ‘college degrees’ and points out a FedEx airplane mechanic, working on a Boeing 777, earns more than a $100,000.

“You don’t have to have a college degree to get that job. You don’t have to have known Chaucer and The Canterbury Tales.

You can go right to West Memphis, Arkansas, where we have a relationship with the community college and be trained to be a licenced mechanic.

Then you can come to work with FedEx.” Time to ditch grants for these English Lit degrees then?

>> Don’t scoff at economy Hands up! I was invited by RBS for an evening banking event in Glasgow. There was pleasant food and a couple of glasses of decent wine. It was modest corporate entertaining and I was able to speak to some RBS people about serious business matters.

Big difference with shelling out thousands for London 2012 corporate tickets. The Daily Record reported £7,500 a ticket for the

prestige tickets including caviar. Doesn’t anyone feel uncomfortable about this at bank HQ?

>> Vietnam miracle Want to find out why Vietnam is one of the fast growing economies.

Get a copy of Tunnel Rats by my old friend Australian-Scot Jimmy Thomson and Sandy McGregor. It’s about the incredible industry and inventiveness of the Vietcong when fighting the war against the US and Western forces. The Vietnamese work ethic building massive tunnel complexes for troops continues in a nation that’s heading for the top 30 GDPs in the world, with over 90% of the businesses SMES.

>> Let the bandit hunt begin I was sorry to have missed the Business In Parliament event. By all accounts, it was a good show with a serious tone. It seems Sir Tom Hunter was bang on the nail with his views about wealth creation and entrepreneurship. But we also need an in-their-face campaign to rein in the cash-in-hand bandits who are avoiding the taxman. In my view, it’s time the Scottish Government and HMRC got serious about this booming black economy.

>> And a parting shot on… Facebook

Facebook founder Mark Zuckerberg has been named Time magazine’s Person of the Year. They said he has single-handedly changed the way we waste time at work Jay Leno

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bq-magazine.co.uk - more than just a magazine, when and where you want it.

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Register with us and you also have the ability to tailor your own personal magazine content, choosing which content you wish to read from our regions and join other BQ readers to contribute your own thoughts whilst also having access to a range of unique offers and special promotions.

Should you wish we’ll also keep in touch with our regular BQMobile update which will bring you details of our most recent key interviews and stories as well as news and events of interest that we feel are worthy of your time.

For more information or to find out how bq-magazine.co.uk could benefit you and your business contact the sales team at room501 publishing on 0191 5375720 or e-mail sales@room501.co.uk

EVENTS

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BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to editor@bq-scotland.co.uk and please put ‘BQ events page’ in the subject heading

June

20 Business Forum Scotland, Starter for 6, investment programme. Start-ups gain expert insights. Corinthian Club, Glasgow. 5.30-8pm 20 Using Intellectual Property to Grow Your Business, Ducks at Kilspindie, Aberlady, 8.30-10.30am. Midlothian and East Lothian Chamber of Commerce.

Information: www.melcc.org.uk 21 WeDO. Summer Social Drinks Events. Members and invited guests only, in aid of Aberlour Child Care Trust, 6pm. 08708 759 793.

21 How to Secure New Funds from Your Bank. Fife Chamber of Commerce.

Elaine Campbell, Bank of Scotland. Rothes Hall, Glenrothes. 7.45-9.25. www.fifechamber.co.uk 21 Doing Business in Russia, Edinburgh Chamber of Commerce. HSBC, Hobart House, Hannover Street, Edinburgh, 9am-2pm.

11 Thrive for Business Lunch Club, Brendan Maguire and Steven Moffat.

12-2pm. Scotch Malt Whisky Society, Edinburgh. 0131 526 3104.

11 Thrive for Business Lunch Club. Sandy Kennedy, Saltire Foundation, and, Jim Duffy, Entrepreneurial Spark. Blythswood Square Hotel, Glasgow, 12-2pm.

Contact Ola on 0141 428 3020.

19 Power Lunch Club, with guest speaker, Watt Nicoll. Brechin Tindal Oatts, 48 St Vincent Street, Glasgow. 12-2pm. Contact: info@powerlunchclub.co.uk 19 The HUNT networking lunch with Glasgow and Edinburgh Chambers of Commerce, Carlton Hotel, Edinburgh. 12 noon. www.glasgowchamberofcomerce.com 26 Transport Business Breakfast. Thistle Airport Hotel, Aberdeen, 7-9am. www.agcc.com

21 Annual BBQ and Jazz networking evening. Glasgow Chamber of Commerce, Hilton Garden Inn, Glasgow. 6pm. www.glasgowchamberofcommerce.com

31 Lunch and Learn: Glasgow Chamber of Commerce event, Corinthian Club, Glasgow, 12 noon. www.glasgowchamberofcommerce.com

22 The Scottish Economy: Growth and Opportunities. Glasgow Chamber of Commerce. Thistle Hotel, Glasgow. All day conference event. 9am. www.glasgowchamberofcommerce.com 22 Ayrshire Chamber Open Doors Day, Prestwick Airport. 10-12 noon.

Speaker: Helen McBride. Contact: events@ayrshire-chamber.org 22 Lecture by Graeme Leach, Chief Economist and Director of Policy at the Institute of Directors, UHI Office, Inverness. 4.30-6pm. Iodscotland.com 26 Alternative Ways to Finance Your Business. FSB West of Scotland. Greenock Town Hall, 4-8pm. www.fsb.org.uk 27 Take Control of Your Energy Budget. David Hunter, M&C Energy. Breakfast.

Edinburgh Chamber of Commerce. Ghillie Dhu, Edinburgh. 8.30-9.45am 27 Business Briefing, organised by Fife Chamber of Commerce, by William Dowson, Bank of England, Balmule House, Dunfermline, 12-2pm www.fifechamber.co.uk 27 Lunch ‘n’ Learn with SaBRE, Aberdeen and Grampian Chamber of Commerce, Gordon Barracks, Bridge of Don. 11.45-2pm. www.agcc.co.uk 28 Networking Lunch with Andrew Maclean, Clydesdale Bank. Renfrewshire Chamber of Commerce. Ingliston Country Club and Equestrian Centre, Bishopton, 12-2pm 28 Scottish Home Awards 2012, Glasgow Hilton.

28 Life Sciences Strategy for Scotland with Scottish Enterprise and Dave Tudor of GSK. Developing Manufacturing Excellence. GlaxoSmithKline, Montrose.

10am-2.30pm. www.agcc.co.uk and dundeeandanguschamber.co.uk

July

2 Business Summer School – the importance of reliable and secure IT. West Lothian Chamber of Commerce Alba Business Centre. . 9.30am-12 noon.

Livingston. www.wlchamber.com 3 FSB Glasgow City Branch Meeting. Spotlight member: Alan McCafferty of Simply Cashflow Contact: martin.little@fsb.org.uk or 07802 400495.

5 Power Lunch Club, with guest speaker, Sue Bruce, Chief Executive of Edinburgh City Council. HSBC, Hobart House, Hanover Street, Edinburgh.

12-2pm. Contact: info@powerlunchclub.co.uk

BUSINESS QUARTER | SUMMER 12

5 Renewable Energy Supply Chain Workshop. Dundee & Angus Chamber of Commerce, with Scottish Enterprise, Dundee Renewables and Angus Council.

Apex Hotel, Dundee. 9.30am-1.30pm

August

2 Power Lunch Club, with guest speaker, Jane Wood, Chief Executive of Scottish Business in the Community. HSBC, Hobart House, Hanover Street, Edinburgh. 12-2PM. Contact: info@powerlunchclub.co.uk 2 Tennent’s Training Academy Networking Event, Glasgow Chamber of Commerce, with John Quinn, former UK chef of the year. 6pm. www.glasgowchamberofcommerce.com 7 Thrive for Business Breakfast Club. Keith Neilson of Craneware, Royal Scots Club, Edinburgh. 8-10am. Contact: 0131 526 3104.

14 Thrive for Business Property Club. David Peck, of Buccleuch Property.

Royal Scots Club, Edinburgh, 8-10am. Contact: 0131 526 3104.

16 Power Lunch Club, Brechin Tindal Oatts, with guest speaker, Jane Gotts, Programme Director at Business Club Scotland. 48 St Vincent Street, Glasgow, G2 5HS. 12-2PM. Contact: info@powerlunchclub.co.uk 23 How to Excel at Leadership, Fife Chamber of Commerce, Ian Donaldson, Carters CA. Rothes Hall, Glenrothes, 7.45-9.15am. Contact: fifechamber.co.uk 30 Federation of Small Business in Scotland, SCDI Business Convention, RBS Gogarburn, Edinburgh. The Second National Business Convention returns to Edinburgh. 8am-6pm. Detail events@scdi.org.uk

September

6 Power Lunch Club, with guest speaker, Richard Loudon, Partner at Simpson & Marwick. HSBC Corporate, Hobart House, Hanover Street, Edinburgh, EH2 1EL. 12-2PM. Contact: info@powerlunchclub.co.uk Please check with the contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above e-mail address of any changes or cancellations as soon as they know of them.

The diary is updated daily online at www.bq-magazine.co.uk

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SCOTLAND IS SUCH A CREATIVE PLACE, WE NEED A WHOLE YEAR TO TELL YOU WHY The Year of Creative Scotland 2012 is a year-long celebration of the nation’s artistic strengths, cultural assets, and creative vibrancy. To find out more visit www.visitscotland.com/creative

www.creativescotland.com Dancer Ruth Mills in CUT, Smallpetitklein Dance Company (photo: Dylan Drummond) www.smallpetitklein.com