December 2006

News

Growing economy prompts rise in interest rates

The Bank of England Monetary Policy Committee

The Bank of England raised UK interest rates to 5 per cent on 9 November, the highest level of the cost of borrowing in five years. The Bank said that stubbornly high inflation and robust economic growth necessitated a tightening of monetary policy to keep inflation under control. The decision, which was widely expected, narrows the gap between the UK rate and the US federal funds rate of 5.25 per cent. The European Central bank meanwhile has set a rate of 3.25 per cent for the eurozone.

With strong economic growth continuing, many analysts are predicting a further rise in the UK rate to 5.25 per cent in the spring, but the Bank’s governor, Mervyn King, refused to be drawn on this. Inflation in the eurozone dropped from 2.3 per cent in August to 1.7 per cent in September, due to lower petrol prices. In the UK, however, the equivalent index fell only from 2.5 to 2.4 per cent, and the Bank is concerned that providers of goods and services are using the leeway provided by lower oil prices to raise prices in other areas. Higher costs for university education are expected to push the consumer price index up a further 0.2 percentage points in October.

Strong domestic demand meant that October was the 15th consecutive month of expansion for the UK’s manufacturing sector, with average prices charged to the consumer rising in tandem. The latest survey by the Chartered Institute of Purchasing and Supply showed an index of manufacturing activity of 53.7 for the month. All this carries the potential for higher pay settlements at the end of the year – Ford, for example, has already agreed to a 4.25 per cent pay rise for its employees in 2007. The government’s target for consumer price inflation in the medium term is just 2 per cent.


New rules aim to improve environment for business
A number of new developments look set to improve the business environment for companies operating in the UK. A new Companies Bill has received royal assent and introduces sweeping changes aimed at simplifying and improving company law. Regulations have been substantially rewritten to make them easier to understand and more flexible, especially for small companies. The government claims that the Act (the largest Act ever, with 1,300 sections) will help businesses to save up to $475 million a year, including $190 million for small businesses.

The first measures to be introduced include provisions on company communications to shareholders, allowing companies to use electronic communications rather than paper. The government says this measure, to be introduced in January 2007, will save businesses $95 million a year. New measures on takeovers and measures relating to the disclosure of information to the market will also be introduced soon, with other parts of the Act coming into force by October 2008. These will include greater clarity on directors’ rules, encouragement for narrative reporting to be forward-looking and the promotion of shareholder engagement.

Chancellor Gordon Brown is also to introduce new business-friendly tax practices. Businesses considering making large investments in the UK will be offered binding advance rulings about the tax implications of their decision – a move that has long been demanded by large companies. Companies will also be offered a speedier and more efficient resolution of disputes. In particular, inquiries relating to transfer pricing (which involves transactions between subsidiaries of multinationals) should be cleared up within 18 months, much faster than at present.

The review comes against a recent background of complaints about the line taken by HM Revenue & Customs and fears that the UK’s tax regime is becoming less competitive compared with other European countries. Senior business leaders have held a series of “highly constructive” meetings with Revenue and Treasury officials and the Revenue has agreed to set up an advisory board, involving senior business figures, to assess progress.


EU directive promises to boost UK services sector
The European Parliament has agreed the EU Services Directive, which is designed to cut red tape across the European Union and make it easier for service providers, particularly small and medium-sized enterprises (SMEs), to offer services in other member states. The government says this could be worth up to $9.5 billion a year to the UK’s economy and could create up to 135,000 jobs. Services account for around two-thirds of the EU’s GDP, and this measure promises to be one of the biggest improvements to the internal market since it was first established. The UK has a particularly strong services sector and so is expected to be one of the biggest beneficiaries of the new directive. The new rules cover a large range of sectors, including management consultancy, advertising, legal advice, architects and estate agents, distributive trades, tourism and plumbers and electricians.

At the same time, a new immigration points system to be introduced in December will mean that skilled foreign professionals and entrepreneurs seeking to work in the UK will be expected to have an adequate command of the English language. Tests for applicants to the Highly Skilled Migrant Programme (HSMP)* will be made more rigorous and transparent, and will provide a pilot for a more broadly-based immigration points system due to be introduced in 2009. Employers have been asked to join a new task-force to help draw up rules for the points system, which will replace 80 different managed migration routes that exist at present. *An article giving further explanation of this programme appears in the new 2007 edtion of Invest in the UK, which is published on 2 January 2007.

In the meantime, the latest attempt to force the UK to scrap its opt-out to the EU rules governing the maximum working week have collapsed. Business leaders have welcomed the retention of the opt-out to the maximum 48-hour week, which they argue is vital to maintain the UK’s economic competitiveness. At a meeting of employment ministers in Brussels, France led a ‘blocking minority’ of five member states that called for the UK to set a date to end its opt-out, but no agreement could be reached. The stalemate also blocked other proposed changes to the working time directive, which means that 23 of the 25 EU member states are in breach of rules governing the ‘on call’ time of medical staff.

The dispute over the working time directive – which lays down basic rights for workers on holiday time and rest breaks – has simmered since 1993 and is seen as a sign of divisions between ‘social’ and ‘liberal’ Europe. The UK’s Trade and Industry Secretary, Alistair Darling, has called the legislation a “nonsense” and called on the European Commission in Brussels to resolve the problem to avoid the risk of costly litigation against member states.


Overseas acquisitions of UK companies at record levels
Expenditure on acquisitions in the UK by foreign companies decreased slightly in the third quarter of 2006, from a total of $35 billion to $34 billion, according to the Office of National Statistics. The most significant transaction was the acquisition of the BOC Group plc by Linde of Germany, for a reported sum of $16 billion. Other big deals included the Admiral consortium’s acquisition of Associated British Ports for $5 billion, Providence Equity Partners’ purchase of the Phones4U business and Lifestyle Services division of Caudwell Holdings Ltd for $2.8 billion and the acquisition of Waste Recycling Group by Fomento de Construcciones y Contratas SA, for $2.7 billion. The biggest disposal was the sale by Banco Santander Central Hispano of the life insurance business of Abbey National plc for $6.8 billion.

UK companies meanwhile spent $21 billion in the third quarter to acquire other UK-based businesses, up from $8 billion in the previous quarter, according to ONS. UK companies also spent $13 billion (up from $6 billion) to acquire companies overseas. The biggest single foreign deal was Yell Group’s acquisition of Telefonica Publicidad e Informacion SA for $4 billion.

Despite the quarter-on-quarter fall, foreign acquisitions of UK assets are at record levels, higher even than during the dotcom boom of 2000. The total for the nine months to the end of September was $115 billion, more than the $95 billion recorded in the whole of 2005 and close to the record $123 billion spent in 2000. Companies are drawn to the UK because of its favourable regulatory regime, its global competitiveness and the absence of protectionist policies.

The latest big deal to be announced is a $10 billion agreed takeover bid for Anglo-Dutch steel-maker Corus by Tata Steel of India. The deal represents the largest ever acquisition by an Indian company, and promises to create the fourth largest steel group in the world. However, it is not yet sealed: a rival – and higher – bid has been tabled by Brazilian steel group CSN, and Corus shareholders are currently pondering their decision. In the meantime, the US Nasdaq exchange has launched a fresh takeover bid for the London Stock Exchange, offering around $5 billion, higher than a previous bid that was rebuffed in March. Again, however, the LSE rejected the bid, opting to retain its independence.


London leads the way in foreign exchange trading
The UK is by far the world’s most popular centre for foreign exchange trading, accounting for almost a third of the world’s transactions, according to the latest report from International Financial Services, London (IFSL). The average daily turnover on the UK’s foreign exchange market reached $1.1 trillion in April 2006, representing growth of 41 per cent on the same month in 2005. According to IFSL, deals transacted in London will account for 32.4 per cent of all foreign exchange trading this year. The UK’s market share is almost twice as high as the next biggest player, the US, which accounts for 18.2 per cent of all currency trading, and well ahead of Japan, in third place with 7.6 per cent.

The report highlighted a number of reasons for London’s importance as a foreign exchange trading centre. These include the city’s concentration of financial institutions, its large fund management industry and the huge number of investment banks with operations there. The UK’s easy access to markets and its central geographical location between US and Asian timezones are also critical factors. “London’s leading position as a centre for foreign exchange trading reflects its position as the main financial centre in Europe and the leading global international financial centre,” said Marco Maslakovic, an economist with IFSL and the author of the report.

Two big international players are looking to strengthen their presence in the UK’s financial services sector. US giant Citigroup is planning to move into full-service retail banking in the UK, looking to make acquisitions and take over unwanted branches being shed by British banks such as Barclays and Lloyds TSB. Citigroup already has 100 branches in the UK, although 95 of these are devoted to consumer finance, with most of its customers being international business people or American expatriates. It is keen to boost its Citigold banking service, a retail banking and investment service aimed at high net worth individuals. Citigroup lost out two years ago to Banco Santander of Spain when it bid for former building society Abbey, but has not ruled out a bid for Lloyds, which is seen as a prime takeover target.

Meanwhile Goldman Sachs is to strengthen its executive office in London, as it continues to experience stronger growth in Europe and Asia than in markets in the Americas. Senior executives will have better administrative and scheduling support to ensure they are accessible to top clients, as the investment bank does business in more and more countries around the world. Goldman Sachs sees London as a more favourable location than New York for managing deals in Asia and other emerging markets, as it is closer in terms of time zone and geography.

So far this year there have been 305 initial public offerings worth a total of $83.5 billion on the main exchanges in London, Hong Kong and Tokyo, compared with 147 IPOs worth $33.3 billion on the New York Stock Exchange and Nasdaq. Investment banks have advised on 8,001 merger deals in the Americas, valued at $1,403 billion, compared with 19,269 deals worth $1,833 billion in Europe, the Middle East, Asia and Africa.


R&D spend by UK-based companies is on the increase
Spending by UK companies on research and development rose by $3.8 billion in 2006 compared with 2005, according to the 2006 R&D Scoreboard from the Department of Trade and Industry (DTI). R&D investment by the top 800 UK companies amounted to $36 billion in 2006, compared with $32 billion in 2005, although around two-thirds of the increase was due to companies in sectors such as banking, insurance, media and retail disclosing their R&D budgets for the first time.

The remaining third, however, reflects a 4 per cent increase in R&D spending by companies surveyed for the 16th edition of the Scoreboard. The UK’s top R&D companies are keeping pace with their US counterparts among the world’s 1,250 R&D companies, with both showing an 8 per cent rise in spending compared with the previous year. The top 1,250 companies include 72 from the UK.

The Scoreboard also shows the continuing strength of R&D spending by UK companies in the aerospace and pharmaceuticals sectors and rapid growth in the software sector. Aerospace R&D increased 21 per cent year-on-year, with BAE Systems leading the way, while software spending grew by 13 per cent over 2005. R&D in the pharmaceuticals sector was worth $13 billion, with GlaxoSmithKline and AstraZeneca being the top investors.

Among foreign-owned UK companies, the top ten accounted for just over half of the total $8 billion R&D spend. Eight of the ten have higher R&D densities than their parent companies, emphasising the UK’s attractiveness as an R&D location. Smaller UK companies have also increased their R&D expenditure, with 88 more companies this year reporting spending of $1 million or above. R&D density as a whole is significantly ahead of the rest of the EU, although still below that of the US.

In just the most recent example of investment in the pharmaceuticals sector, Anglo-Swedish drug-maker AstraZeneca has announced plans to double the size of Cambridge Antibody Technology, a British biotechnology business it bought for $1.3 billion earlier this year. CAT, based in Cambridge in Eastern England, will expand its research into new disease areas, including work that was previously done by AstraZeneca in collaboration with US group Abgenix. The move will extend the group’s drive into biological medicines such as antibodies, which tend to have fewer side-effects than conventional chemical-based medicines. The first product, part of a programme focusing on respiratory and inflammatory diseases, is expected to go into clinical trial in 2008. CAT is leasing a new building that will give it an extra 92,000 sq ft of office and lab space, and plans to move in within the next 12-15 months.


Innovation and collaboration bear fruit for UK scientists
A new scheme that aims to attract the world’s best scientists to the UK has been launched by Trade and Industry Secretary Alistair Darling. The Royal Society International Fellowship scheme is designed to boost the reputation of the UK as a centre for world-class research. Participants will work in the UK and share their knowledge, and will provide a ready-made network for collaboration and future business partnerships when they return to their home countries. The scheme, which has been likened to the Rhodes Scholar system at Oxford University, will build on existing funding of more than $190 million and will create an internationally recognised British science fellowship brand, under the world-renowned Royal Society. There are also plans to open a new Research Councils UK office in Beijing in the near future, to exploit increasing science investment by Chinese companies and to make the UK their ‘partner of choice’.

The launch of the scheme coincides with new research showing that UK universities are catching up with the US in terms of linking science to business. British institutions are now producing roughly equivalent numbers of patents to their US counterparts – 1.3 patents per $19 million of research spend, compared with 1.6 patents in the US. They are also producing a far higher number of spin-out companies per $1 million of research expenditure. In the past three years alone, 25 spin-out companies from British universities have floated on the stock market, achieving a combined value of over $3 billion. With just 1 per cent of the world’s population, the UK produces 9 per cent of all scientific papers and receives 12 per cent of all citations, the highest level per head in the G7.

Nanotechnology took centre stage at November’s Innovate 2006, the annual conference of the Technology Strategy Board. A keynote session was devoted to the UK’s new network of 22 Nanotechnology Centres, which cover four key areas: nano-fabrication, nano-metrology, nano-medicine and nano-materials. The centres, previously known as Micro and Nanotechnology Capital Facilities, have been supported by $95 million in government funding. Five new centres have opened recently to complete the network, which formalises access to spare capacity in university research facilities and in industry. “The commercial exploitation of nanotechnologies presents a great opportunity for UK business. A well-funded and supported nanotechnology sector means more high-quality research, more sustainable jobs and increased wealth creation,” said Prof Hugh Clare, director of the Micro and Nanotechnology (MNT) Network.

On a larger scale, scientists from the UK and the US have unveiled a revolutionary new aircraft design that minimises noise and increases fuel efficiency. The ‘blended wing’ concept has grown out of the $4 million Silent Aircraft Initiative (SAI), a three-year collaboration between Cambridge University and the Massachusetts Institute of Technology. The SAX-40 airliner is said to be so quiet that it cannot be heard outside of an airport and, in addition, it is 25 per cent more fuel-efficient than standard aircraft. The design reinvents the overall shape of the aircraft as a single flying wing, with the engines positioned above the body so that sound waves are reflected upwards, and flaps and slats removed from the wings to reduce noise when landing. The SAX-40 could go into service by 2030, say the researchers.

Another transatlantic collaboration has been agreed in the field of life sciences, between the California Institute for Quantitative Biomedical Research (QB3) and a number of Scottish universities. QB3 is one of four new Californian institutes for innovation that are designed to link academia and industry, with the aim of driving economic growth in the US state. Two of the four institutes are headed by Scots – proof, according to Scottish First Minister Jack McConnell, of the importance of the ‘Globalscot Network’ in forging agreements of this nature. QB3 director Reg Kelly, himself a Scot, said: “I was very impressed with the convergence of Scotland and California in the ways we are both trying to bring academia and industry together to support innovation. I think there are tremendous opportunities for Scotland to contribute to the life sciences through its strength in bioengineering.”


Training initiatives aim to expand national skills base
A unique training facility for the chemicals industry has opened at Stallingborough near Grimsby in Yorkshire and Humber. The Centre for the Assessment of Technical Competence Humber (CATCH) appears to be an active chemicals plant similar to many others in the area, but is in fact a ‘real-life’ training facility that is aimed at addressing shortages of technically trained staff in the sector. These are partly due to new legislation that restricts the training of unskilled staff on potentially hazardous sites.

The site comprises a full-scale section of a plant with working machinery, a control room, workshops and training rooms. Instead of chemical substances running through its pipes, however, it has non-hazardous liquids and powders. The facility will be open to all chemical companies in the region and will also train apprentices, who otherwise would have to learn in the classroom. It is being funded by Yorkshire Forward, the Learning and Skills Council and the European Regional Development Fund.

The launch of the first three National Skills Academies has been announced by the government, introducing a new network of sector-based vocational education and skills training centres for 16-19-year-olds and adults. The first three academies, which will shortly become operational, are for the financial services, construction and manufacturing sectors. A fourth, for the food and drink industries, is close to being approved. Bids from the nuclear, chemical, hospitality and creative and cultural sectors have also been accepted, and the government will now ask their backers to work up business plans for the next stage of the process.

The government is investing $171 million in the programme, which will be delivered by the Learning and Skills Council working with employers and Sector Skills Councils. The aim is to have 12 academies up and running by 2008, providing training for 500,000 students. Business sponsors of the first three academies include Nationwide Building Society, Balfour Beatty, Merrill Lynch, Nissan, Corus, BAE Systems and Ford.

Employers will be encouraged to make their own staff available to assist with training and to offer work placements for hands-on experience. In the construction sector, for example, a number of training centres will be established alongside significant projects in the run-up to the 2012 Olympic Games in London. The financial services academy plans to set up regional training centres in London, Leeds, Manchester and Norwich, while the manufacturing academy will open centres of excellence in the North East and the West Midlands.
 

The North West is the UK’s second biggest car-making region after the West Midlands, but has been hit by job losses in recent months. Halewood has improved its performance dramatically to become one of the best-performing plants in Europe, and is building the Freelander 2 side-by-side with the Jaguar X-Type. Ford has been struggling globally recently, as higher petrol prices have pushed consumers towards more fuel-efficient Japanese cars. However, the US parent company insists that the UK brands in its Premier Automotive Group (PAG), including Jaguar and Land Rover, are not for sale. The possible exception is luxury brand Aston Martin, based in Warwickshire in the West Midlands.


Manchester welcomes Chinese investors
Manchester, the economic capital of the North West, is becoming an increasingly popular business destination for Chinese companies. Seven firms from the People’s Republic have recently set up operations there, following a networking event co-hosted by the Northwest Regional Development Agency (NWDA). NWDA and MIDAS, Manchester’s investment agency, have been working closely with the companies to ease the relocation process, offering advice and guidance to ensure that they have the appropriate business and marketing support.

The North West has strong cultural links with China, and Manchester is home to one of the UK’s largest Chinese populations outside London. China is also a key overseas market for the region, and NWDA and MIDAS have appointed a dedicated China country manager to promote it there. The two agencies are also supporting Sinoventures, a business incubator for small and start-up high-tech Chinese companies based at Manchester Science Park. The unit is one of only two business incubators in the UK recognised by the Chinese Ministry of Science and Technology.

The seven companies making the move to the North West are Jialiya Trading Ltd, Totemic Trading Ltd, Kangman Trading Ltd, Golden Star Trading Ltd, Orion Godpower Trading Ltd and Bohai Shoes Co. “Manchester is a great place to do business … and an ideal location to be a trading centre serving the UK market and other European countries,” said Sam Xu of Totemic Trading.

Regional news
Extricom, an Israel-based designer and manufacturer of LAN wireless infrastructure solutions, has announced a major expansion of its European operations, with a new London headquarters at its core. The company’s enterprise-level WLAN system represents the next generation of WiFi, with a fundamental shift in architecture from ‘cell planning’ to ‘channel blanket’ topology, eliminating the co-channel interference that is a major problem with traditional WLAN systems. Key customers for the technology are enterprises in the education, healthcare and government sectors. As well as Europe, the new office will also serve the Middle East and Africa regions.

Lockheed Martin, one of the biggest aerospace technology groups in the world, has opened a new software laboratory at the Farnborough Aerospace Centre in Hampshire, South East England. The Software Integration Facility & Technology (Swift) centre will provide a reconfigurable experimentation centre that will enable researchers to rapidly develop solutions to complex problems. According to Lockheed Martin, it could play a key part in the UK’s development of ‘network-enabled capability (NEC)’, a programme to enhance military capability through better exploitation of information, with the aim of addressing emerging threats and other operational challenges. The lab will be used to demonstrate Lockheed Martin’s capabilities to military and civilian customers and to run demonstrations during the proposal and development phases of programmes.

Global energy company ConocoPhillips is investing $399 million to extend capacity and increase efficiency at its combined heat and power (CHP) plant at Immingham in Yorkshire and Humber. Work will start in the first quarter of 2007, and the extension is expected to begin operation by the second quarter of 2009. The company has also taken on its first apprentices, who will work with the Humberside Engineering Training Association to develop their skills. ConocoPhillips will train five young people a year over the next four years. In the meantime, Dutch airline KLM is to launch a fourth daily service from the region’s Humberside Airport, with the addition of weekday service to Amsterdam.

Halifax in Yorkshire and Humber is set to become home to the latest generation of supply chain management technology. Work is progressing on the new European Centre for Automatic Identification and Data Capture (AIDC), and is expected to be completed by spring 2007. The centre, backed by funding from Yorkshire Forward, the Department of Trade and Industry (DTI) and AIM UK, will feature a 60-seat theatre and a laboratory, and will include working examples of AIDC in environments such as medicine, local government, retailing, manufacturing, food chain, security and transport. AIDC technologies are predicted to revolutionise supply chain management in the same way that bar-coding changed the face of retailing.

Australia-based professional services firm GHD Pty is to open a European headquarters in York, Yorkshire and Humber. The company, which has offices throughout the world and a global workforce of 4,500, has recruited eight employees initially, but it is looking to substantially expand its European operations over the next two years. GHD works in the infrastructure, mining, industry, property, defence and environment sectors. It has been involved in projects ranging from infrastructure management for the Sydney Olympic Games to master-planning for one of the world’s largest man-made islands, The Palm at Jebel Ali in Dubai. For its new base, it has purchased 3,200 sq ft of office space at York’s Science Park.

Japanese giant Ricoh has opened a new European sales HQ office at the Ricoh Arena building in Coventry, West Midlands. The operation will create 170 new jobs as the Ricoh group looks to increase its brand recognition and sales across Europe. Meanwhile, new Formula One racing team Prodrive has been granted planning permission for a new facility at nearby Fen End. This will enable it to become the 12th competitive Formula One team in 2008, and will create 1,000 jobs. These announcements follow the recent decision by Ford to invest $1.9 billion to develop environmentally friendly technologies for cars at research centres in the West Midlands and at Dagenham in Eastern England.

EndoSoft, a division of US-based UTECH Products and an established provider of medical software to specialised medical fields such as gastroenterology, pulmonary medicine and urology, is to open an office in Leicester in the East Midlands. The new office, based at the Innovation Centre at De Montfort University, will allow the company to develop its presence in the UK with minimum set-up costs. Initially it will employ four people, but it is hoping to expand its sales reach across Europe.

BC (formerly known as the BioComposites Centre) of the University of Wales, Bangor is hosting a new ‘green’ product development centre that is more advanced than any other in the UK. The $1.4 million Tech Transfer Centre (TTC), based on the island of Anglesey, offers natural materials research facilities that allow companies to build large-scale prototypes. BC is part of the Centre for Advanced and Renewable Materials (CARM Technology), based at the University of Wales, Bangor and the North East Wales Institute Wrexham (NEWI). It has invested over $1 million in equipment to support research into environmentally friendly products, particularly low-carbon economy materials. Already it has developed a new process to recycle waste MDF, which is having a significant impact on the furniture and construction sectors.

Japanese corporation Terumo, which manufactures medical devices, is expanding its Vascutek subsidiary in Scotland. It will create 212 jobs over five years at a new 18,600 sq ft facility at Inchinnan. It is expanding its current premises to manufacture a new endovascular device, the Anaconda, which enables surgeons to treat vascular diseases using less invasive techniques. This can mean fewer post-operative complications and faster recovery times for patients. The $10 million investment was backed by $2 million of funding from the Scottish Executive and a training grant of $623,000 from Scottish Enterprise.

The Aerostructures division of US-based Goodrich Corporation is to create several hundred new jobs with an expansion of its aircraft component maintenance, repair and overhaul (MRO) facility at Prestwick in Scotland. The extended facility, which will employ more than 500 people and will double in size from 120,000 sq ft to 250,000 sq ft, will provide Goodrich with extra capacity to support its MRO business. The latest expansion was backed by $3 million from the Scottish Executive under the Regional Selective Assistance (RSA) scheme.

Shell has announced a major expansion of its financial shared service operation in Glasgow, Scotland. The centre opened in 1998 and provides financial services for Shell operations in 12 countries. Now the existing 350 jobs will be consolidated, and 100 new staff will be taken on over the next 12 months, with the help of an RSA grant of $1.9 million over two years. Shell operates in over 140 countries and the grant will allow the Glasgow operation to be competitive against similar facilities elsewhere in the world.

First Data International, a global leader in electronic commerce and payment services, is to open a new facility in Glasgow’s International Financial Services District. The company’s new contact centre is expected to create more than 430 jobs over the next five years. First Data serves hundreds of card issuers in nearly 70 countries, and offers a comprehensive portfolio of payment services, including electronic processing, ATM and POS management, switching and authorisation, fraud and risk management and customer services. The Scottish Executive has supported the investment with a grant of $4 million. The financial services sector is seen as one of Scotland’s key industries, having grown by 36.5 per cent over the past five years. It now generates $9.5 billion in GDP, nearly 6 per cent of Scotland’s total.

Sasol Technology UK Ltd (STUK)’s chemical laboratory at St Andrews University in Scotland has exceeded its initial targets, creating 30 high-value scientific jobs (against an initial estimate of 25) and investing around $19 million since it was established four years ago. The facility, set up in labs rented from the university, is a homogenous catalysis centre of excellence, and its scope has recently been expanded to encompass elements of heterogenous catalysis, a core technology for the South Africa-based company’s operations worldwide. Since beginning operations, STUK has filed 11 patents and has cemented its position as a key component in Sasol’s global research strategy.

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