October 2008

NEWS

UK financial system is fundamentally sound, says WEF report
The United Kingdom has emerged in second place in the World Economic Forum’s first Financial Development Index, a comprehensive analysis of financial systems and capital markets in 52 countries. The UK was narrowly edged out of top position by the United States, but these two significantly outstripped the remaining countries in the top 10: Germany, Japan, Canada, France, Switzerland, Hong Kong, the Netherlands and Singapore.

The Index, which examined key drivers of financial system development and economic growth in both developing and developed countries, is intended to provide a means by which countries can benchmark their performance and evaluate priorities for reform. The rankings are based on over 120 variables spanning institutional and business environments, financial stability and the size and depth of capital markets, among other factors. An important measure captured by the Index is the degree to which businesses feel they can easily access capital. It draws on data taken from a variety of publicly available sources as well as the World Economic Forum’s Executive Opinion Survey, a comprehensive annual survey conducted with its network of Partner Institutes.

The Index looked beyond the current financial turmoil in the US and the UK to discern fundamental strengths in their broader financial systems. In doing so, it validated the collective strength of financial intermediaries in both countries, including banks, investment banks and insurance companies, as well as robust equity, bond and derivatives markets. Areas of potential concern, according to the WEF, included factors such as distortionary tax policies in the US and the relatively high cost of doing business in the UK.

The report was the culmination of a year-long partnership between the World Economic Forum and financial institutions, academic scholars, industry practitioners and other experts. Nouriel Roubini, Professor of Economics and International Business at New York University and chairman of Roubini Global Economics Monitor, was the lead academic on the project. He said: “The Index is an invaluable tool in understanding the strengths and weaknesses of different countries’ financial systems – and how to improve them to drive economic growth.”


Government unveils fresh strategy for manufacturing sector
The UK government has unveiled a new strategy for the country’s manufacturing sector, in response to industry demands for greater support. The ‘New Challenges, New Opportunities’ strategy, developed by the Department for Business (BERR) and the Department for Innovation, Universities and Skills (DIUS), brings together almost $270 million of medium-term support, and sets out the government’s view of what manufacturing needs to do to succeed in the long term, and how it can take advantage of changing global trends in manufacturing.

Business Secretary John Hutton said: “Manufacturing is central to the success of the UK economy and it is vital the sector has the right foundations to endure the current economic slowdown and emerge stronger and fitter than ever. We are the world’s sixth largest manufacturer – the industry accounts for over half our exports, contributes $270 billion to the economy and around three million jobs. But we need to recognise that the global landscape is changing so we can help UK manufacturers stay ahead of the game.”

Skills Secretary John Denham added: “We want to support innovation in UK manufacturing by maintaining a world-class research and development infrastructure, through intelligent use of government procurement and regulation to stimulate markets and the growth of innovative business, and to build world-class skills.”

The strategy includes capitalising on opportunities in low-carbon industries, an issue that will be addressed next year with a low-carbon industrial strategy for manufacturers. Specifically, the Office of Nuclear Development will work with industry partners to develop the nuclear supply chain and maximise high-value-added work captured by UK manufacturers from a planned $36 billion capital expenditure on nuclear energy. A new Office for Renewable Energy Deployment will also be established. The government believes that nuclear and renewables could create up to 260,000 jobs over the next ten years.

The UK attracts more manufacturing FDI than any other country in Europe, and globally is second only the US. UK Trade & Investment (UKTI), which promotes exports and inward investment, will allocate additional resources to target a package of new support for 600 UK companies, to identify manufacturing value chain opportunities in India and China. UK technology and expertise frequently contribute high-value components for products made overseas, and high-technology products account for a significantly higher proportion of overseas sales than they do in the US, France or Germany.

Skills training will be supported with a new focus on apprenticeships. This will see 1,500 new manufacturing apprenticeships in addition to the 9,000 places announced earlier this year, increasing the total number of manufacturing apprenticeships by over 10 per cent. There will be a one-stop shop to make it easier for employers with skills shortages to draw on government support. A new body, ‘Manufacturing Insight’, will be created to raise the public profile of manufacturing and to promote careers in manufacturing to young people.

Technology networks will also be improved. In addition to the existing Manufacturing Technology Centre in Yorkshire and the one currently being built in Glasgow, there will be a new MTC in Coventry, in the West Midlands, offering industrial-scale pre-production and demonstration facilities. In addition, the Technology Strategy Board will invest $43.2 million in research related to high value-added manufacturing. Moreover, the science budget will increase from $6.1 billion per year this year to almost $7.2 billion per year by 2010/11, taking government support for the UK’s research base to its highest level ever. The UK is second only to the US in global scientific excellence (as measured by citations), while collaboration between researchers and business continues to grow ever stronger.

Overall, the manufacturing sector accounts for three-quarters of all business investment in R&D in the UK economy. Although global competition has increased rapidly, productivity levels have risen by 50 per cent over the past decade, at a much faster rate than the rest of the economy. There have been job losses, but mainly in production processes, while the numbers of people employed further up the value chain have remained constant or risen. The proportion of employees with university degrees has almost doubled. Additionally, manufacturing investment in intangible assets – such as R&D, design and training – is now thought to be much higher than spending on factories and other fixed assets.

Aerospace industry builds on world-class expertise
TAerospace industry builds on world-class expertise
One manufacturing sector in which the UK excels is aerospace, an industry which has an important cluster of businesses in South West England. Nine of the largest aerospace companies in the UK are based there, along with a supply chain of up to 800 companies. The region recently saw a landmark investment with the transfer of manufacturing assets between Airbus UK at Filton, Bristol, and GKN, which has been a strategic supplier to Airbus for over twenty years. The investment, initiated by Airbus’s Power 8 restructuring and cost reduction programme, has made GKN the third largest engineering company in the UK after BAE Systems and Rolls-Royce.

GKN has ambitions to create a globally competitive centre of excellence for the design and manufacture of composite aircraft wing structures at Filton. In addition to a purchase price of $270 million, the company plans a further investment of up to $225 million at the site to manufacture components for the Airbus A350XWB (Extra Wide Body) aircraft. With its expertise in the manufacture of lightweight composite components, it also plans to expand its business by becoming a preferred supplier of primary composite wing structures for Boeing and other companies in due course.

The transfer of manufacturing capabilities from Airbus to GKN will protect up to 1,500 jobs at Filton, as well as potentially creating an additional 400. In addition, the South West Regional Development Agency has recently approved an investment of $14.4 million in the Airbus-led Next Generation Composite Wing (NGCW) project, in which GKN will play a leading part. The government has agreed, in principle, to support GKN with a repayable launch investment of $108 million for the development of the rear spar and trailing edge for the aircraft. The Department for Business (BERR) has agreed to make an additional $90 million available over the next five years for research and technology to further bolster the UK’s position as a leading wing supplier.

Elsewhere in the aerospace industry, the Northwest Regional Development Agency (NWDA) has awarded UK company CML Group Ltd a Selective Finance for Investment (SFIE) grant of $1.1 million, creating 34 additional jobs in Birkenhead, near Liverpool. The CML Group has produced components and assemblies for the aerospace industry for almost 60 years, for customers such as Airbus UK and BAE Systems. Over this period, it has developed its capabilities to comprise machining, composites, sheet metal and surface treatments. The company is now looking to invest in new equipment to capitalise on the increasing use of composites and to increase its penetration into the military and business jet sectors. By 2011 its sales are forecast to grow by $10 million to $33.8 million, and it will expand its workforce by 34 to 220.


Longbridge back in business as car firms boost investment
MG-branded cars produced at the Longbridge plant in Birmingham, West Midlands have gone on sale at dealers across the UK for the first time since 2005. The plant’s new owner, Shanghai Automotive (SAIC), hopes to produce 700 of its MGTF model by the end of the year, with the car retailing at around $29,700. The designation LE500 will be given to the first 500 individually-numbered cars to leave the production line. SAIC acquired the Longbridge plant from Nanjing Automobile Corporation in 2007, following the collapse of British-owned MG Rover in 2005. Longbridge was first opened in 1905, and over the years has produced cars such as the iconic Mini and the popular Metro and Rover 200 models.

Also in Wales, a research collaboration between the University of Glamorgan and UK and international firms has seen the creation of a triple hybrid technology vehicle. Powered by hydrogen, electric batteries and ultra capacitors, the Hydrogen Bus has a top speed of 55mph and a range of 150 miles, and can carry up to 16 passengers. According to Jonathan Williams, lead researcher on the project, current types of non-combustion power systems all have disadvantages, so the developers chose to combine the three best technologies. “This vehicle will put Wales on the world map as a leader in the field of development of non-CO2 technologies. We have ambitious plans for this technology and hope that our work can pave the way for further advances,” he said. The university worked with companies including Hydrogenics from Canada, Maxwell Technologies of San Diego and Japan’s GS-Yuasa, with funding from the Energy Saving Trust and support from the Welsh Assembly.

IT firm INCAT, part of India’s Tata Group, has opened a new office at the Coventry University Design Hub, in the West Midlands, to support its growing business in the region’s automotive industry. As part of a new contract, the firm will help to reconfigure IT systems at Jaguar Land Rover, which was acquired by the Tata Group earlier this year. The firm already has offices in the UK in Bristol and at Luton Airport. According to regional development agency Advantage West Midlands, the region’s automotive sector has a turnover of $23.4 billion a year and is the largest cluster in the UK, accounting for 28 per cent of the country’s total automotive output.

Gatwick up for sale as freight volumes continue to grow

BAA, the owner of London Gatwick, the second largest airport in the UK, has put the facility up for sale, following pressure from the Competition Commission, which is calling for the break-up of the UK airports group. Potential buyers include Manchester Airport Group, the largest UK-owned airport operator; Global Infrastructure Partners, a joint venture between Credit Suisse and General Electric, which already owns a 50 per cent stake in London City airport; German construction group and airport owner Hochtief; and Sir Richard Branson’s Virgin group. According to analysts, the sale of Gatwick could be worth more than $3.6 billion. A BAA spokesman said: “We are confident that despite the difficult financial conditions there will not be a shortage of interest.” Last year Gatwick, which is the busiest single-runway airport in the world, was used by 35 million passengers. BAA’s strategy for its development was focused on expanding it as a single-runway, two-terminal airport that would be able to handle around 40 million passengers a year by 2010/11. A planning inquiry is due to begin next year into the group’s application to build a second runway and terminal at another of its airports, Stansted. BAA has been owned since mid-2006 by Airport Development and Investment, a consortium headed by Spain’s Ferrovial. The Department for Transport (DfT) has published the third edition of its Road Freight Statistics report. The 2007 edition shows that freight moved by GB-registered heavy goods vehicles within Great Britain increased by 4 per cent between 2006 and 2007, from 156 billion tonne-kilometres to 161 billion tonne-kilometres. There was an 8 per cent increase between 1997 and 2007 in total freight moved, but this was less than the rise in GDP over the same period (32 per cent).

Articulated vehicles over 33 tonnes gross weight continue to account for an increasing share of all goods moved: 73 per cent of total tonne-kilometres in 2007, compared with 65 per cent in 1997. The amount of freight lifted in 2007 (1,869 million tonnes) was 3 per cent higher than in 2006 (1,813 million tonnes) and 14 per cent more than in 1997. There has been a long-term increase in the average length of haul, from 68km in 1980 to 86km in 2007, peaking at 95km in 1999. Just over half of all goods (52 per cent) were lifted on a trip of 50km or less in 2007.

The total number of road goods vehicles of all nationalities travelling to mainland Europe was 2,940,000, 5 per cent more than in 2006 and 56 per cent more than in 1997. Powered vehicles accounted for 2,129,000 of this total, an increase of 5 per cent since 2006 and 86 per cent since 1997. The remaining vehicles were unaccompanied trailers; 811,000 of these travelled to mainland Europe in 2007, a 3 per cent increase over 2006 and a 10 per cent increase since 1997. UK-registered vehicles accounted for 19 per cent of all powered vehicles in 2007, compared with 20 per cent in 2006 and 48 per cent in 1997. The majority of powered vehicles use the Dover Straits, either by ferry or Channel Tunnel. Of UK-registered vehicles, 80 per cent used the Dover Straits in 2007 compared with 77 per cent in 1997.

The number of goods vehicle operators has fallen over the past 10 years from 115,000 in 1996/97 to 100,000 in 2006/07. At the end of 2007 there were some 446,000 goods vehicles over 3.5 tonnes registered in Great Britain, with 73 per cent being rigid vehicles. Greenhouse gas emissions from road freight transport rose by 2.5 per cent between 1996 and 2006. However, this was lower than the 5.8 per cent increase in the amount of goods moved and the 11.4 per cent increase in goods lifted over the same period. In the second quarter of 2008, 759,000 goods vehicles travelled from the UK to mainland Europe, a 4 per cent increase on the same quarter in 2007.

The DfT has also released its latest maritime statistics on port freight traffic in the UK. These show that UK ports handled 582 million tonnes (Mt) in 2007, just under 2 Mt lower than in 2006, but 23 Mt more than in 1997. Inwards traffic fell by 7 Mt (2 per cent) compared with 2006 to 358 Mt, while outwards traffic rose by 5 Mt (2 per cent) to 224 Mt. Liquid bulk traffic accounted for 43 per cent of the total, dry bulks 23 per cent, container and roll-on/roll-off (ro-ro) traffic 29 per cent and other cargo 5 per cent. Container and ro-ro traffic was 5 per cent higher than in 2006 and 29 per cent up on 1997.

New initiatives boost renewable energy sector
Linking in with its new manufacturing strategy, the government has pledged its maximum support for the construction of new nuclear power stations in the UK. Speaking at the first meeting of the new Nuclear Development Forum, Business Secretary John Hutton said that energy from new nuclear generators was absolutely indispensable for reducing dependency on foreign oil and gas and cutting carbon emissions. The Forum, consisting of leading figures from the nuclear industry, advises the new Office for Nuclear Development (part of the Department for Business) on creating the right conditions for new nuclear power stations to be built in the UK as soon as possible. The OND’s brief also includes making the UK the best market in the world for companies to invest in the nuclear industry.

During the meeting, Hutton emphasised the huge opportunity for British manufacturers, with potentially $36 billion of private sector investment and 100,000 jobs to be generated by the government’s plans for new nuclear power stations. He said: “I’m determined to press all the buttons to get nuclear built in this country at the earliest opportunity – not only because it’s a no-brainer for our energy security, but also because it’s good for jobs and our economy.”

One international nuclear power company, Westinghouse of the US, is positioning itself to take advantage of the opportunities, having recently opened a regional office at Preston Docklands in North East England. The company is increasingly focusing on the UK as part of its overall plans for global growth, and the new base will form the headquarters of its UK Growth Team. Although still small, this team is expected to expand over the next two years and to develop much stronger links with the nuclear fuel manufacturing site at nearby Springfields. It is hoped that this will ultimately lead to additional business and jobs for the Springfields site.

German-based energy firm E.ON plans to set up a $7.2 billion nuclear power plant in Gloucestershire, South West England by 2020, having applied to the National Grid to connect a 1,600 MW nuclear station in Oldbury-on-Severn. The company has previously stated that it plans to recreate a French design at two bases in Britain. The news followed an announcement from the Nuclear Decommissioning Authority (NDA) that it was putting the Oldbury site up for sale, along with other sites at Wylfa, on Anglesey, Wales and Bradwell in Essex.

In addition, E.ON intends to invest around $540 million to build one of the UK’s largest biomass power stations at the port of Bristol, also in the South West. The development will generate 150 MW of electricity, enough to power more than 200,000 homes. Dr Paul Golby, chief executive of E.ON UK, said: “This scheme would be one of the largest biomass power stations ever built in the UK and would make a considerable contribution to helping the government meet its renewable energy targets.” E.ON is currently involved in a number of other energy projects in the UK, including the 180 MW Robin Rigg offshore wind farm in the Solway Firth in Scotland, one of the world’s largest gas-fired combined heat and power plants in Kent and the 1,200 MW Drakelow combined cycle gas turbine in Derbyshire. Recently, it joined forces with DONG Energy to buy out Shell’s stake in the London Array offshore wind farm, which will be the largest development of its kind in the world.

A Danish renewable energy firm is planning to open a new R&D base on the Isle of Wight, off the south coast of England. Vestas Wind Systems has proposed a new wind turbine blade technology centre at its manufacturing plant on the island. The centre will allow the firm to locate its engineering team in specialist facilities for creating prototype blades at the plant, and is expected to open in the first half of 2010. In addition, the company revealed its plans to shift production at its Isle of Wight base to create more turbine blades, to be used in the UK’s renewable energy programme.

A new energy park planned for Peterborough, Eastern England will include a centre of excellence specialising in waste management. Peterborough Renewable Energy Limited (PREL), the company behind the development, said that an R&D centre examining issues surrounding waste-to-energy technology would be established at the park. The park will work across three areas: mechanical recycling – separating and preparing waste for the recycling and energy recovery processes; energy conversion – via biomass combustion in an oxygen-reduced atmosphere; and the use of plasma vitrification chambers, providing a route for glass, metals, inorganic and importantly the air pollution control residues. This last part of the process leaves no waste left to be landfilled. A hydrogen gas mix is produced that can be used in the combustion process as fuel, and which can also be used in the production of clean ethanol/hydrogen as sustainable transport fuel.

When completed, the $450 million energy park will be able to process 650,000 tonnes of rubbish each year, using it to generate enough electricity to power 60,000 homes. PREL says that the new facility will save 614,000 tonnes of CO2 each year and will provide enough renewable power for 60,000 homes. The plant will employ 109 people, at least 60 per cent of whom will be graduates.

High-tech greenhouse project stakes out green credentials
Seven high-tech greenhouses – each one covering land equivalent to about 10 football pitches – are being constructed at a cost of $144 million on a 91-hectare site in Thanet in Kent, South East England. The project is a joint venture between the UK’s biggest fresh produce supplier, the Fresca Group, and three major specialist Netherlands companies: Rainbow Growers (peppers), A&A (cucumbers) and Red Star Trading (tomatoes). The project – named Thanet Earth – is driven by the UK’s growing demand for salad vegetables all year round.

Until now, produce has been transported to UK supermarkets from other countries in Europe or further afield. The Thanet Earth plan will help to reduce ‘food miles’, according to Fresca, and will also mean that produce is fresher. Each of the computer-controlled, 140-metre-long greenhouses is equipped with environmentally approved combined heat and power (CHP) units instead of conventional boilers, and these will provide surplus electricity to supply 50,000 homes (half the local requirement) via the national grid. Seven reservoirs holding 50 million gallons of water are being constructed, and will collect rainwater and excess water from the growing operation, which will be cleaned and recycled. Worker bees will be released into the greenhouses to pollinate the plants, and natural predators such as wasps will be used to deal with pests such as aphids and mites.

Next-generation internet promises to drive business growth
A review of the UK’s telecoms market claims that it can deliver next-generation access (NGA) in broadband and maintain the country’s position as a leading online economy, but warns that the government and industry regulator Ofcom need to be vigilant and play an active leadership role. The review was jointly commissioned by the Department for Business (BERR) and HM Treasury and was carried out by consultant Francesco Caio, whose CV includes stints as CEO of Cable & Wireless and chief executive of Merloni Elettrodomestici, as well as being founder of the European business telecommunications and internet service provider Netscalibur.

NGA is the next major step forward in the evolution of broadband, and promises to deliver faster services to homes and small and medium-sized businesses. In his report, ‘The next phase of broadband UK; action now for long term success’, Caio highlighted promising signs of investment by major players such as Virgin Media and BT and, at a more local level, by communities experimenting with new deployment methods. He commented: “The UK and its consumers and businesses benefit from a competitive broadband industry and a rich choice of digital communications and entertainment platforms. Although demand for bandwidth and internet traffic continues to exhibit strong growth … the case for a public intervention at this time is weak at best. But it is the right time to create the conditions that will deliver a competitive NGA infrastructure in the next five years.”

The report recommends an active role for the government in monitoring the development of new networks and supporting their roll-out through measures to reduce costs, without distorting the market. These include supporting the development of local access networks by helping them organise and develop common standards; allowing NGA to be delivered over new overhead lines; working with the construction industry to ensure that all new homes have next-generation broadband; and supporting Ofcom to ensure that spectrum auctions take place soon. Other recommendations include launching ten specific initiatives that will provide further momentum and remove obstacles to the deployment of NGA; establishing a permanent benchmarking process to monitor the development of NGA in the UK in relation to other countries; and investing time and resources to identify remedies to adopt in case the market fails to deliver the required investments.

Business Secretary John Hutton said: “This technology will touch almost every part of the economy; it is a vital tool for the future, supporting innovation and economic success. We will consider [Mr Caio’s] recommendations as we plan how to make sure the UK remains one of the world’s leading internet economies.”

Over the past ten years, massive investment by companies has led to a rapid development in broadband services. In 1997 less than 10 per cent of the population had used the internet but by the end of last year 70 per cent of the population were internet users and more than half of all homes had broadband. UK users spend an average of 34.4 hours online per month, at home or work, compared with an average of 24 hours in Europe and 31.4 hours in the US. The UK has the largest online retail market in Europe, with sales worth $83.9 billion in 2007, comprising 15 per cent of overall retail sales. It also has the highest level of internet advertising per head in the G7, and internet advertising spend makes up a far higher proportion of total advertising spend compared with other G7 countries. Consumers are also using more online services as part of their everyday lives: for example, some 21 million UK consumers currently use online banking.

At the same time, Chinese telecommunications and information technology firms are investing in the UK to help their international expansions. Tony Collingridge, head of the Asia-Pacific team at the government agency UK Trade & Investment (UKTI), told the South China Morning Post recently: “Chinese [ICT] investments have risen from a negligible number in the late 1990s to about 59 projects in our 2007/08 financial year. Furthermore, over 300 firms from China’s ICT industry, including China Mobile, Huawei Technologies and China Netcom Group Corp, have made the UK their base for European expansion.”

Henry Ge, China Mobile’s chief representative for European and Africa business, said that easy access to markets, a skilled workforce and a “welcoming investment environment” made the UK attractive to his firm. In August Think London, the foreign direct investment agency for the UK capital, held an event to promote the benefits of the city to Chinese telecoms firms. Prime Minister Gordon Brown and Chinese Premier Wen Jiabao have set a target for increased trade in goods and services between the two countries to reach $60 billion by 2010.


Healthcare initiatives to investigate wide range of conditions
Two new partnerships between National Health Service (NHS) organisations and leading universities are to undertake research into a wide range of health conditions. The National Institute for Health Research Collaborations (NIHR) for Health Research and Care in Nottinghamshire in the East Midlands, and a similar project in Cambridgeshire and Peterborough in Eastern England, will receive a total of $32.4 million in funding. The projects will look into conditions such as depression, dementia, strokes and childhood obesity. Projects to be carried out by the Nottinghamshire NIRC will include ways to improve NHS clinical practice in stroke rehabilitation and the delivery of local services to people with serious mental illness and personality disorders. The Cambridgeshire and Peterborough collaboration will look at ways to support mental health in the older population and addressing the needs of people with developmental conditions. Earlier this year, seven other collaborations in areas including the West Midlands, Leeds and Manchester granted a total of $113.4 million to develop advances in care for patients.

Also in the East Midlands, a new Healthcare and Bioscience iHub has been launched to support innovation in the healthcare sector. The iHub, which operates from the BioCity facility in Nottingham, will provide a base for the Healthcare and Bioscience iNet established by the East Midlands Development Agency (emda), providing office accommodation, meeting facilities and exhibition space. The iNet was launched in April this year, and is a partnership between businesses, universities and public sector organisations from across the region. It is one of four sector-specific industry networks that are being developed to support innovation and improve the competitiveness of businesses in the East Midlands (the others are food and drink, sustainable construction and transport equipment), backed by total funding of $36 million.

Since launching in April, advisors from the Healthcare and Bioscience iNet have provided support to over 100 businesses in the East Midlands. Darren Clark, chief executive of Medilink East Midlands, which manages the iNet, commented: “The iNet team is providing a range of services to businesses, including facilitating collaborations between companies and universities, assisting with funding and training requirements and providing bespoke support to help businesses grow and develop. The iHub is an invaluable resource for the iNet, as it will provide a permanent base from where our advisors can carry out their work.” In addition to emda, the other partners in the initiative include BioCity, bioKneX, East Midlands NHS Innovation Hub and a number of local universities. The iNet also has national linkages through the Health Technologies Knowledge Transfer Network (KTN) and the Medilink network.

London embarks on four-year journey to 2012 Olympics
The extinguishing of the Olympic flame in Beijing this summer was the signal for the start of a major initiative by FDI agency Think London, which will encourage Chinese businesses to invest in the UK capital before the next Olympic Games open in the city in 2012. Following the closing ceremony in Beijing, a branded London taxi set off for a three-month tour of 12 Chinese cities, taking the message to companies that London is open for business and is the ideal location for Chinese companies wishing to globalise. The Road to London campaign is being sponsored by Deloitte, and Think London’s primary partner is the China Council for the Promotion of International Trade.

Michael Charlton, chief executive of Think London, said: “By the time the Olympic flame is re-ignited in London in 2012, we want to have brought 30 new Chinese companies to the capital. There is a tremendous history of cooperation between the UK and China, and London represents a wealth of opportunity for Chinese companies. Growth in London is forecast at $80 billion over the next four years, with the 2012 Games contributing $8 billion.”

At the Beijing launch event, two leading Chinese companies announced that they would be establishing bases in London. One was GEONG International, a leading provider of enterprise content management (ECM) software products; its executive chairman, Henry Tse, and London Mayor Boris Johnson signed a letter of intent announcing the move. Tse said: “Since its inception, our company has striven to be a truly international enterprise. Investing in London is an important step to achieve this vision. In the 2009 fiscal year, we will strengthen our momentum in internationalisation and will expand our presence in Europe and North America.”

Also coming to London is Alibaba.com Limited, the world’s leading B2B e-commerce company. The UK is Alibaba.com’s largest and most important market in Europe. The company’s three websites – for global trade, domestic trade in mainland China and trade with Japan – collectively form a business community of more than 30 million registered users from over 240 countries and regions.
 

Regional news
One of Nigeria’s leading financial institutions has opened its first European subsidiary in London as part of its global expansion plans. Intercontinental Bank, which merged with Equity, Gateway and Global banks in 2005, said that gaining a presence in the City was a key move in operating in the international financial markets. Dr Erastus Akingbola, group chief executive, said the move would allow “seamless financial transactions” to take place. He added: “The opening of Intercontinental Bank’s London office – the first outside of the African continent – signals our continued commitment to emerging as one of the top 100 banks in the world.” The London office will offer wholesale banking services to the UK, including structuring and funding of structured trade, project finance transactions and letters of credit.

A new study has claimed that the Thames Valley is one of the most innovative business locations in Europe. The report, commissioned by the Thames Valley Economic Partnership (TVEP), found that 17 of the world’s 50 most innovative firms have a presence in the area, while 65 of the 250 highest spenders on R&D in the world are based there. The report highlighted the region’s talent pool, transport links and proximity to London as being among its main attractions. Educational establishments such the University of Reading and Thames Valley University and research bases such as the Atomic Weapons Establishment were also highlighted. One in three adults in the region is educated to degree level.

South East England has gained a new university with the official opening of the University for the Creative Arts. The institution, which has campuses at Rochester in Kent and Farnham in Surrey, was formed following the merger of three South East-based colleges, the Surrey Institute of Art and Design, University College and the Kent Institute for Art and Design. It has 6,500 students studying more than 80 courses, and counts amongst its graduates Turner Prize winner Tracy Emin, Oscar winner Susie Templeton and fashion designer Zandra Rhodes. The university’s Vice-Chancellor, Professor Elaine Thomas, said: “Although we are technically the newest university in Britain, we have a heritage spanning almost 150 years through our founder institutions.”

Online research agency Creatests of France has invested in new premises in Dartford, Kent in South East England, from where it plans to expand its UK client base under a new name, Marketest. The company, which set up its office with the help of investment agency Locate in Kent, has headquarters in Lille, France and reportedly plans to expand to Paris by 2009. Meanwhile, a new $18 million office complex is planned at Eureka Park in Ashford in Kent and is expected to create up to 350 jobs. The development is part of the town’s drive to attract more inward investment, ahead of the 2009 launch of high-speed domestic rail services between Ashford and London. The complex is due to open in December.

The East of England has overtaken other areas to become the country’s top location for R&D, according to Barbara Follett, minister for the region. The East of England Development Agency (EEDA) plans to launch a revolving loan fund of $9 million to support early-stage ventures with debt finance. It is also launching a $4.7 million enhanced manufacturing, design and innovation service over three years and intends to develop a low-carbon venture capital fund in the near future. With private finance, this new fund should make $54 million available for investment in high-growth, clean-technology companies. Follett said: “The East of England plays a vitally important part in the economy of the UK as a whole. Our ports currently account for 53 per cent of its container capacity and more than 20 per cent of its port employment. When the planned expansions at Felixstowe South, Bathside Bay and London Gateway are fully operational, the East of England will have over 70 per cent of the UK’s container capacity.”

A new science park building in Nottingham, East Midlands is claimed by its developers to set new standards for design and environmentally sustainable development. The 45,000 sq ft No.1 Nottingham Science Park building is the focal point of a $90 million, 12-acre extension to the city’s existing Science Park. It is the biggest speculative development of its kind in Nottingham, and is designed for research-based businesses wanting space from 1,000 sq ft upwards on flexible terms. The site’s close proximity to the University of Nottingham gives an opportunity for a two-way flow of research and jobs for graduates. The building has been designed to catch the attention of the property world and to stimulate interest in ‘green’ construction. Its green features include a biomass heating system, sustainable materials and a sustainable urban drainage system. Built on reclaimed contaminated brownfield land, it is set in a boardwalk of giant wooden lily pads, suspended over a wetland habitat. Businesses from sectors including IT and the internet, medical science, product design, and health are in discussions to take space in the building, or on adjacent design-and-build land.

Tsubakimoto UK Limited, a subsidiary of Tsubakimoto Chain Company of Japan, is to invest almost $1.3 million over the next year to expand its factory at Sherwood Park, Annesley in Nottinghamshire, East Midlands. The company, which manufactures industrial roller chain and automotive timing systems, will install tensioner assembly machines to develop its assembly facilities for automotive components. The investment, which is supported by an SFIE grant of $175,000 from East Midlands Development Agency (emda), will create six new full-time jobs. Over the past five years, Tsubakimoto has invested substantially in assembly facilities at Annesley, increasing its sales turnover by 275 per cent to $43.2 million and doubling its workforce to 70. Managing director Bart Mellink commented: “The particular project supported by the SFIE grant has provided us with greater flexibility to make direct responses to car manufacturers’ requests.”

The universities of Birmingham and Warwick in the West Midlands have been awarded $18 million to boost their research into advanced materials. The Science City Advanced Materials programme, which has received the funding from RDA Advantage West Midlands and the European Research Development Fund, will establish a virtual research base for the creation and development of new materials. The centre will concentrate on areas such as more efficient materials for batteries, increased data storage capacity for computers and biodegradable materials that can help bone and tissue to regrow. Sectors including healthcare, energy, aerospace and environmental technologies are likely to benefit from the research. The programme is being funded as part of the Birmingham Science City initiative, which aims to support research in the city and build links between academia and industry.
 

The NWDA is also to invest almost $720,000 in the region’s advanced flexible materials (AFM) sector. AFM materials are widely viewed as a ‘platform technology’ – a base upon which other important clusters such as aerospace, automotive, chemicals, construction, biomedical, environmental technology, maritime and sport depend. North West England has arguably the highest concentration of AFM companies in the world, according to the agency, with excellent prospects for future growth. This new project, worth over $1 million in total, will help to develop skills in product development and outsourcing. Working with partners at NWtexnet, the North West regional cluster organisation for the AFM sector, it will provide training modules, train trainers and evaluate the results. Training courses consisting of three days’ ‘classroom’ learning plus two days of in-company coaching will be available from spring 2009, and will be aimed at employees with responsibility for developing new products or purchasing outsourced goods.

Early next year the NWDA is to launch a $252 million venture capital loan fund as part of a $360 million drive to help businesses in the North West beat the credit crunch. The fund, which will be part-financed by the European Regional Development Fund, is designed to plug the equity gap for small and medium-sized businesses and will help companies to invest and grow. Steven Broomhead, chief executive of the NWDA, said it would form a key plank of a recovery package aimed at helping the region’s firms overcome the economic slowdown. A further $72 million has been earmarked to help firms invest in skills development and training, while $18 million will be made available to provide support and coaching to 1,000 business that demonstrate the best growth potential. The region will also introduce a $7.2 million Innovation Voucher scheme along the lines of a successful pilot scheme held in the West Midlands. Mr Broomhead said: “Businesses are now telling us that access to finance is their number one priority and we are making sure our services reflect that need.”

German-owned snack food manufacturer Intersnack Limited is investing more than $5.4 million in a new specialist production line at its premises in Stanley, County Durham in North East England. The expansion at its Tanfield Lea Industrial Estate North site will create 45 new jobs and is being supported by a $441,000 Selective Finance for Investment in England (SFIE) grant from RDA One NorthEast. The group is looking to develop new products at its County Durham factory and to become a market leader in healthier baked snacks. Its existing product line-up includes well-established brands such as Penn State pretzels.

CaridianBCT, a US-based manufacturer of medical devices, is to invest $28.8 million over the next three years to expand its facilities in Larne, County Antrim in Northern Ireland. The investment, which includes $3 million in funding from Invest Northern Ireland, will create more than 235 jobs at the company, which manufactures blood collection and processing systems. The expansion will expand the role of the Larne plant in the assembly and delivery of the company’s Atreus whole blood processing system. Craig Rinehardt, senior vice president of operations, commented: “The Larne site offers a proximity to important European markets such as Germany and Spain, where certain customers have already begun using our new Atreus technology, and from here we will continue to maximise our global reach.” This is the second such investment by CaridianBCT in its Northern Ireland operations. In 2004, the company – then known as Gambro BCT – acquired Ivex Pharmaceuticals in Larne. The latest investment will bring total employment at the Larne site to 425.
 

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