August 2009

NEWS

London reports another successful year for FDI
Following June’s publication by UK Trade & Investment (UKTI), the government’s international business development organisation, of its 2008-09 Annual Inward Investment report, individual regions of the UK have been detailing the foreign direct investment (FDI) they have attracted over the past year. Think London, for example, the inward investment agency for London, reported 527 FDI projects between April 2008 and March 2009. These projects either created or safeguarded over 11,500 jobs, highlighting the resilience of the flow of FDI into the capital during the economic downturn.

London continues to drive FDI into the UK, accounting for 30 per cent of the national total. FDI accounts for more than a quarter of the city’s economy, generating more than $85 billion each year, while over half a million people in London work in overseas-owned firms. Michael Charlton, chief executive of Think London, said: “With office rents decreasing by almost 40 per cent, a depreciation of sterling by up to 30 per cent against the dollar in the last ten months and an even richer talent pool available, the global recession has opened a window of opportunity for overseas investment in London. The core values for business remain unchanged, making London a premium destination for foreign companies. Amidst the first encouraging signs of economic recovery, this window of opportunity may not remain open for much longer and so there has never been a better time for international businesses to set up and grow in London [than] right now.”

Significant inward investment projects completed in London in the past year include China Construction Bank, the second largest bank in the world by market capitalisation, which established an office in Canary Wharf in June 2009; Sony Computer Entertainment, which has set up and expanded its operations; Costco, the US-based wholesale corporation; Kingfisher Airlines of India, which launched its inaugural London-India flights in December; and Microsoft, which chose London as the location for its new European Search Technology Centre, creating 160 jobs in the process.

Another newcomer was US equity trader and hedge fund specialist BTIG, based in New York, which has ten US offices and bases in Hong Kong and Sydney. According to its CEO, Gary Hayes, establishing a base in Europe opened up an important new territory for the company, giving clients access to all key global markets and opening up a vast new European client base. BTIG opened its London office in January 2009 and within five months was exceeding its revenue, product launch and recruitment targets.

Hayes explained why the company decided to base itself in London: “London is the centre of the financial industry. It’s a professional, vibrant, cosmopolitan city. The talent pool has been a major factor too. There are many opportunities to bring in bright people. When we were planning to set up the markets were imploding globally, but we saw it as an ideal opportunity to get people to join us. We have recruited people from the big players such as Merrill Lynch and Goldman Sachs – quality staff that just wouldn’t have been available a while ago. Also, London rental is considerably more realistic now. Two years ago London was one of the most expensive cities in the world but now it’s affordable.”

English regions draw investors despite difficult conditions
Outside the capital, the English regions also continued to attract large amounts of FDI, often in a specific sector that reflects a local strength. The East of England, for example, won 105 overseas investment projects during the year, creating 1,280 new jobs and safeguarding 1,861 others. The region is home to one of Europe’s largest ICT and biotechnology clusters and also has the largest concentration of research and development (R&D) engineers per capita in the UK, with three times the national average spent on commercial R&D. Significant investments in the life sciences sector included Pfizer’s decision to set up a centre of excellence for stem cells in Cambridge, as well as its move to form Cyclofluidic, an emerging technology company that aims to improve the efficiency of drug discovery through the integration of chemistry and biology. Cyclofluidic, founded jointly by UCB and Pfizer, is based at BioPark, Hertfordshire and is supported by the UK Technology Strategy Board (TSB).

The North West remains the UK’s leading region for FDI outside London and the South East and last year recorded its highest ever number of inward investment projects, despite the difficult economic conditions. According to the Regional Development Agency (RDA) Northwest Regional Development Agency (NWDA), the region attracted 176 investment projects during 2008/09, an increase of 21 projects on the previous year and 64 more than in 2006/07. These projects created or safeguarded 11,436 jobs. FDI plays an important part in the region’s economy: a study by DTZ for the NWDA in 2008 found that over 17 per cent of regional gross value added (GVA) was accounted for by foreign-owned companies and that economic output per worker was almost 50 per cent higher in foreign-owned companies compared with the regional average.

Investors came from a range of sectors, including transport technologies, food and drink, financial and business services and ICT. David Wallace, international and innovation director for emda, said: “This has been an exceptionally difficult year for businesses, particularly those based in North America and Europe, traditionally the main source markets for the region. However, on the flip-side, we have also seen the highest ever number of new inward investment successes into the region from the Asia-Pacific region.”

New investors during the year included MBA Polymers UK, a venture established by MBA Polymers of the US and European Metal Recycling Limited in Worksop, Nottinghamshire, which uses new technology to provide sustainable plastics for the automotive and durable goods markets. China Translation and Publishing Corporation Ltd, which provides high-level translation services, has based itself in the Nottingham Business Centre and is aiming to create 80 jobs over the next three years.

Australian company MRX Technologies, which provides engineering and advanced technology services for the mining, rail and mineral exploration industries, has set up a UK business in Derby, resulting in 11 new jobs. Electronics manufacturer Dynex Semiconductor Ltd expanded its manufacturing operations in Lincoln, taking on 24 new workers, while electronics IT hardware company Ampy Metering expanded its R&D capabilities, employing 15 new staff. Punjab National Bank, a major state-owned Indian bank, has opened a UK branch in Leicester, its first outside London. Australian company Cork & Cheese Limited has set up a business in Northampton to distribute high-end Australian wines and cheese through its website. Also in Northamptonshire, Coca-Cola Enterprises (CCE) has set up a new distribution hub and has expanded its operations.

Yorkshire and Humber attracted a record 125 overseas investors during the year, according to RDA Yorkshire Forward, which was directly involved in over 65 per cent of the investments. The projects created over 1,270 new jobs, safeguarded an additional 3,683 and attracted over $1 billion of private investment. The US was the region’s top investor, followed closely by Japan and firms from across Europe. Despite challenging trading conditions, advanced engineering, food and drink, and manufacturing remained the leading sectors. Investors included Arla Foods of Denmark/Sweden, which is investing around $115 million to expand its dairy production facilities in Leeds, creating around 100 new jobs, and smaller, high-tech firms such as Portuguese-owned microelectronics company Tomorrow Options. A spin-out of the University of Porto specialising in the design and manufacture of innovative electronic devices for the healthcare industry, Tomorrow Options made its first UK investment at the Sheffield Bioincubator innovation hub.

North East England attracted 68 new inward investment projects in 2008/09, two more than the year before. These investments were expected to create nearly 2,600 new jobs and safeguard some 2,900 more. During the year, RDA One North East focused on developing links with potential investors in sectors such as manufacturing for new and renewable energy, automotive, healthcare, digital and advanced engineering. Investors included Indian telecommunications software services giant Tech Mahindra, which received $3.3 million in grant assistance from One North East to help create up to 500 jobs in Jarrow, South Tyneside, and Fabricom Offshore Services Ltd, a subsidiary of French/Belgian company Fabricom GDF Suez UK, which provides services for North Sea oil and gas companies.

South West England welcomed 41 projects during the year from companies in the US, Canada, Australia, New Zealand, China, Japan, India, France, Germany and Italy. Leading sectors for investment included ICT, biotechnology, aerospace, automotive, financial services and construction. Prominent investors included Spanish mobile marketing firm Unkasoft Advergaming, which has set up an office in Bristol, and Chinese automotive company Four Dimension, which has completed its takeover of UK firm Johnson Security Ltd and is making secure cash-in-transit vehicles for a variety of sectors.

Devolved regions celebrate diverse range of investment
The devolved regions – Scotland, Wales and Northern Ireland – also reported successful years. Wales recorded 16 inward investment projects from 10 different countries, led by the US and Germany. German companies were particularly active in the power sector, with new investments by Siemens Power Generation and RWE Npower in power stations in Newport and Pembroke respectively, and by RWE Npower Renewables in an offshore wind farm project at Llandudno, North Wales. US investors included Hawker Beechcraft Corporation, which expanded its aircraft paint facility at Broughton, and Henry Schein Inc, which acquired dental supplier Minerva Dental Ltd of Cardiff. Other investors included Algorithme Pharma of Canada, oil pump manufacturer Yamada of Japan (through its European subsidiary); software/IT companies Enex Testlab of Australia and Risc Group of France, and Irish biotechnology company IdentiGen.

In Northern Ireland, 14 new investments were announced during the year, with three companies apiece from the Republic of Ireland and Canada, two each from the US, France and India, and one each from Sweden and the Netherlands. Software and computer services was the leading sector, attracting Canadian firm BTI Systems to Belfast, along with US companies Bytemobile and Cybersource Ltd. Firstsource Solutions of India made two separate investments in the financial services sector, while Irish company The Global Email Company announced it would set up a call centre in the business services sector. Short Brothers of Canada made two investments in the aerospace sector, Intune Networks of Ireland invested in a manufacturing facility in the communications sector, and in the healthcare and medical sector Gambro of Sweden invested in a manufacturing and R&D operation.

BTI Systems, Bytemobile and Intune Networks all set up in Belfast.

In Scotland, investment agency Scottish Development International (SDI) helped to create or safeguard over 4,000 jobs during the year, including almost 2,000 high-value jobs. International companies committed more than $820 million to Scotland in capital expenditure and salaries. More than 80 per cent of jobs secured were from existing investors, highlighting Scotland’s reputation as a good location for companies to consolidate their operations, according to SDI. Organisations that have either located or expanded their operations in Scotland in the past year include Esure, Schering Plough, Shed Media and Doosan Babcock. The agency also helped more than 800 Scottish companies to internationalise, 100 more than in the previous year.

Recognising SDI’s achievements in attracting overseas investment, the World Bank in a recent survey ranked the agency sixth in the world amongst national and sub-national investment bodies for its work, outranking all other UK agencies. The World Bank report looked at the work of 181 countries in influencing foreign investors looking for new global locations, assessing each agency’s website along with two ‘mystery shopper’ projects. SDI was outperformed only by the inward investment agencies of Austria, Copenhagen, Sweden, Germany and Canada. Ranked immediately below Scotland were Manchester, the UK, Ireland, France and London. In addition, SDI was commended for its work in the areas of customer care and follow-up.


Government unveils ambitious low-carbon strategy for 2020
The Government has published a far-reaching plan to move the UK onto a permanent low-carbon footing and to maximise economic opportunities, growth and jobs. The UK Low Carbon Transition Plan details how the UK will meet the cut in emissions set out in the recent Budget of 34 per cent on 1990 levels by 2020. A 21 per cent reduction has already been delivered, according to ministers. By 2020, says the Government, more than 1.2 million people will be in ‘green’ jobs, more than 1.5 million households will be supported to produce their own clean energy and 40 per cent of electricity will come from low-carbon sources such as renewables, nuclear power and clean coal. The Transition Plan is claimed to be the most systematic response to climate change of any major developed economy and to set the standard for others in the run-up to the global climate talks in Copenhagen, Denmark this December.

Published alongside the plan was the UK Low Carbon Industrial Strategy, which sets out a series of government interventions to support industries critical to tackling climate change, including offshore wind, marine power and carbon capture and storage. This includes the first allocations from the $664.2 million funding for green industry and technology announced in the Budget. The initiative is supported by the Government’s Renewable Energy Strategy, which maps out how it plans to deliver the UK’s target of obtaining 15 per cent of all energy (electricity, heat and transport) from renewables by 2020, and the Low Carbon Transport Plan, which sets out how to reduce carbon emissions from domestic transport by up to 14 per cent over the next decade.

Energy and Climate Change Secretary Ed Miliband said: “Renewables, nuclear and clean fossil fuels are the trinity of low carbon and the future of energy in Britain. Under our plans we will get 40 per cent of our electricity from low-carbon energy by 2020 and more in the years afterwards.” Business Secretary Lord Mandelson added: “The UK is already the sixth largest economy for low-carbon goods and services, globally worth $4.9 trillion and growing, and today the Government is outlining how its support for the economy will ensure that our businesses and our workforce continue to lead the way. We must combine the dynamism of the private sector with a strategic role for government to deliver the benefits of innovation, growth and job creation in the UK.”

The UK is the first country in the world to set itself legally binding ‘carbon budgets’, calculated over successive five-year periods. The Transition Plan sets out how it can cut emissions from the main emitting sectors – power, homes, workplaces, transport and agriculture – on the way to achieving a reduction of at least 80 per cent by 2050. Every government department has been allocated its own carbon budget.

The Low Carbon Industrial Strategy identifies a range of low-carbon sectors with potential for job creation and growth – including wave and tidal power, civil nuclear power, offshore wind and ultra-low carbon vehicles. In the power sector, up to $9.8 million will be allocated to start development of a ‘smart grid’, including a policy road map due next spring. The Department of Energy and Climate Change (DECC) is to take direct responsibility from electricity and gas market regulator Ofgem for establishing a new grid access regime within 12 months. Within DECC, a new Office for Renewable Energy Deployment will be launched to speed up the growth of renewables in the UK. In addition, approval has been given for the UK’s largest biomass power station on Teesside, North East England.

Around 15 per cent of annual emissions cuts by 2020 will be achieved by making homes more efficient and supporting small-scale renewable energy. Ten per cent will be achieved through greater efficiencies in workplaces, and by 2050 offices, factories, schools and hospitals will need to reduce emissions to almost zero. New announcements under the strategy include up to $197 million from low-carbon investment funding announced in the Budget to significantly advance the UK’s offshore wind industry and up to $98.4 million to cement its position as a global leader in wave and tidal energy. This includes a further $16.4 million to make the South West the UK’s first Low Carbon Economic Area and a world centre for wave and tidal energy; a similar amount for testing facilities at the National Renewable Energy Centre in Northumberland; and up to $13 million for the European Marine Energy Centre in the Orkneys, Scotland.

In addition, there will be up to $36 million for a new Marine Renewables Proving Fund for the testing and demonstration of wave and tidal technologies; $11 million to explore areas of potential ‘hot rocks’ for geothermal energy; and a $6.6 million expansion of the Manufacturing Advisory Service, to provide specialist advice to manufacturers on competing for low-carbon opportunities, including support for suppliers for the civil nuclear industry. A new Nuclear Advanced Manufacturing Research Centre will be established to combine the expertise of around 30 manufacturing companies with the capabilities of universities in manufacturing, processes and skills. Other measures will be introduced to support the transport and agricultural sectors.

South West named first ‘Low Carbon Economic Area’
The Low Carbon Industrial Strategy will include $139.4 million of public investment to make South West England the UK’s first ‘Low Carbon Economic Area’ (LCEA), building on regional business opportunities and skills. This will include substantial support for alternative energy source projects in the region. Around $15.6 million of funding will be allocated for the Wave Hub sub-sea socket off the coast of Cornwall, which will be the world’s first large-scale wave energy farm, capable of generating up to 50 MW of renewable energy and offering a route to commercialisation for wave energy companies. There will be a further $16.4 million to support other strategic marine energy projects. The South West is a strong contender for the $8 million of funding available to explore geothermal energy, and further consultations will be carried out on potential tidal power schemes on the Severn Estuary.

In addition, the region will host a world-class centre of marine science and energy research, together with a new industry forum that will bring together academics, local stakeholders and public sector bodies to develop industry opportunities. There will be improvements to port infrastructure to allow devices to be assembled, transported and deployed locally. A network of innovation centres, science parks and business premises will be established to support innovative businesses in the sector, while Solutions for Business, the Government’s business support service, will be used to accelerate development.

The value of the ‘green’ sector to the region is predicted to rise from $14.1 billion to almost $21.3 billion over the next decade, despite the economic downturn, creating up to 30,000 jobs. Science and Innovation Minister Lord Drayson, who is responsible for implementing the Low Carbon Industrial Strategy, said: “The South West has an obvious marine resource and a high level of expertise in marine research, development and engineering. That’s why it’s been chosen to be our first low carbon economic area. The UK going green is good news for the South West region, which has the research base, facilities and characteristics to make the most of the green tech and energy business opportunities.”

Regions look to capitalise on green industry potential
Other regions of the UK are also looking to benefit from the new focus on low-carbon technologies. The East of England, for instance, already has 5,000 companies in the low-carbon environmental goods and services sector, employing more than 82,000 people and with sales of over $16 billion every year. The region accounts for 10 per cent of UK exports from the low-carbon sector. JDR Cables, a Cambridgeshire-based producer of transmission cabling for offshore wind farms, recently won a contract to supply the Wave Hub site in Cornwall. Business Minister Ian Lucas, visiting the company, commented: “Our investment in low-carbon industries is already bringing economic benefit to British-based firms and supporting the development of critical supply chains for these new industries.”

In the East Midlands, the East Midlands Development Agency (emda) is supporting the work of further education colleges and energy companies to attract young people to work in low-carbon industries through the Skills for Energy programme. Over the next two years, 1,200 training opportunities will be offered in technologies from biomass heating to hybrid electric vehicle maintenance. Sales of low-carbon goods and services in the region in 2007/08 were valued at $11.6 billion, with around 3,400 companies engaged in the sector employing 62,000 staff.

In the West Midlands, the low-carbon economy accounts for some $13.8 billion annually. There are 4,179 companies in the sector, with around 74,000 employees. The sector is expected to grow by around 4 per cent in the next year and employment in green industries is predicted to increase by up to 45 per cent by 2015. Energy and Climate Change Minister David Kidney said in a recent speech: “As a world leader in cutting-edge technology, the West Midlands needs to harness its legacy of ingenuity and entrepreneurship to play a role in the shift to low carbon. The region can play a key role in this transition as a hub for low-carbon manufacture, innovation and transport.”

An example of this in action is the region’s $131.2 million Low-Carbon Vehicles Programme, which supports West Midlands automotive companies to conduct R&D into low-carbon vehicle technologies. RDA Advantage West Midlands has contributed $49.2 million which, with additional support from Jaguar Land Rover, will be used to create a Low Carbon Vehicle Development and Proving Centre, which will link high-tech research with manufacturing. It will have a particular emphasis on developing new drive trains and lightweight structures and will link up with similar programmes elsewhere in the UK. It will also build on similar, successful programmes such as the Premium Automotive R&D programme based at Warwick University and the $20.5 million Centre of Excellence in Lightweight Vehicle Technologies announced earlier this summer.

The North West claims to be at the forefront of the UK’s shift to low carbon, with more renewable energy sites than any other part of the country. The region already has 140 sites generating renewable electricity, more than any other English region. There are potential sites for new nuclear and tidal projects that could generate up to 5 per cent of the UK’s electricity needs, if developed. Energy Minister Lord Hunt said: “There are big untapped wind and tidal resources in the North West. The North West is also home to four of the potential sites for new nuclear power stations. … With new money … to support the development of wave and tidal power, the North West’s estuaries could also start generating clean energy.” The low-carbon sector already provides 86,800 jobs in the region.

In another Government initiative, waste watchdog WRAP is making grants worth up to $3.3 million to increase mixed plastic recycling capacity in England, Northern Ireland and Wales. It is hoped that the initiative will boost plastic recycling by up to 40,000 tonnes a year. Currently, more than 180,000 tonnes worth of plastic bottles are collected for recycling across the UK each year, but WRAP’s research has shown that more than a million tonnes of other household plastic waste – such as margarine tubs, fruit trays and yoghurt pots – goes to landfill due to a lack of reprocessing facilities. WRAP is now looking to fund private, public or community sector recycling organisations to increase recycling capacity for this ‘mixed plastic’ waste. Grants can cover up to 30 per cent of the capital costs involved, either for expanding existing facilities or building new recycling plants. Applications for funding must be made by 10 September and successful proposals will be announced in October.


Scotland sets out its alternative energy credentials
In Scotland, funding of up to $13 million has been announced for the European Marine Energy Centre (EMEC) wave test site in the Orkney Islands, as part of the Low Carbon Transition Plan. The proposed investment will help provide Britain with an unparalleled marine energy testing, development and demonstration infrastructure, according to Secretary of State for Scotland Jim Murphy, and will help to cement its position as a global leader in wave and tidal stream energy. There are already 73,000 ‘green’ jobs in Scotland in sectors such as alternative fuels and renewable power, and these industries generate some $14 billion annually for the Scottish economy. “In just over ten years’ time, 40 per cent of the country’s electricity will come from low-carbon sources like marine renewables, and the transition is a massive job and growth opportunity for Scotland,” said Murphy.

A separate $23 million investment has been announced by the Scottish Government for projects based at the North Highland College UHI, in Thurso. The money will be used to develop research into marine energy and the environment, as well as creating a new Centre for Engineering Skills and a Centre for Energy and the Environment. One project that will benefit is the $6.6 million Marine Renewable Energy and the Environment (MaREE) research programme, which will focus on aspects of green energy such as grid constraints, environmental impacts and synergies between the oil and renewable industries. To support the project, $4.9 million will be spent on a new campus building. The planned Engineering Skills Centre will be a high-class training facility that will aim to become a hub of vocational skills for science and engineering developments across the North.

Meanwhile Scotland’s cool climate, ready access to renewable energy and skilled workforce make it the ideal location for a planned new generation of ‘green’ computer data centres. A number of developers are proposing schemes across the country, hoping to exploit the trend for companies to outsource computer operations to remote centres that can safely store and process data. Scotland is attractive because existing European hubs, such as London and Amsterdam, are expensive and are becoming overloaded. Because temperatures in Scotland are on average 2°C lower than in England, it is cheaper to keep the hundreds of servers that such centres contain cool. Data centres also tend to be situated far away from an organisation’s primary hub of business, in case disaster strikes.

Lockerbie Data Centres (LDC) has submitted an outline planning application to build a $1.3 billion development near the town of Lockerbie in south-west Scotland. The development includes a data storage centre and a business park, and promises to create up to 1,000 jobs. It would use local wind farms, a biomass plant and heat transfer from the data centre to provide renewable energy for more than 700 homes locally. LDC has purchased the 110-hectare site and is already negotiating with a large internet service provider and three banks interested in storing data.

Elsewhere, Internet Villages International (IVI), a Scottish property company, is proposing to build a ‘data farm’ at the town of Ecclefechan. It has formed a partnership with American Power Conversion, part of the French Schneider Electric group, which supplies equipment to the data centre industry. The company is aiming to attract $1.6 billion of investment and to employ more than 300 people at the site. IVI has also teamed up with a consortium to establish a data centre in Caithness, powered by tidal energy from the Pentland Firth, a stretch of water between the Scottish mainland and the Orkneys that has great marine energy potential. The tidal-powered centre is the idea of Atlantis Resources, a Singapore-based developer of tidal current turbines.


North East to lead development of low-carbon vehicles
In another green initiative, North East England has been named the UK’s first specialist region for low-carbon vehicles. The North East Low Carbon Economic Area (LCEA), led by RDA One North East, will aim to transform the automotive industry, providing support for innovation and demonstration, skills training and the clustering of manufacturing. The initiative will encompass companies with existing low-carbon expertise, including Nissan and Smith Electric Vehicles, and will also help existing companies to move into advanced and low-carbon manufacturing.

As part of the plan, the Government intends to establish a training centre, the first to specialise in the manufacture and maintenance of ultra-low carbon vehicles. It will also set up an R&D centre, housing researchers from the universities of Newcastle, Durham, Sunderland, Northumbria and Teesside, that will investigate areas such as power consumption and charging patterns, the range extension of all-electric and plug-in hybrid vehicles, and energy storage. In addition, there will be an open access test track to trial the use of new technologies, for cars and other vehicles. Over the next two years, 750 charging points for electric vehicles will be installed in a range of locations across the North East, including supermarkets, shopping centres, hospitals, universities, public buildings and domestic and business premises. The first points are currently being installed in Newcastle and Gateshead.

The LCEA announcement came as Japanese car manufacturing giant Nissan unveiled plans to invest more than $328 million over the next five years in a new battery factory in Sunderland, Tyne and Wear – a move that was welcomed by Prime Minister Gordon Brown and Business Secretary Peter Mandelson. The rechargeable lithium-ion battery plant, Nissan’s European Centre of Excellence for Battery Manufacturing, will create up to 350 direct jobs and will make Nissan Sunderland a contender for the manufacture of the company’s new ‘greener’ electric vehicles. The Government is supporting the investment by offering grants and loan guarantees to the company, including support through the Automotive Assistance Programme. One North East chairman Margaret Fay said: “The importance of Nissan’s commitment to the North East cannot be overstated. Nissan is playing a critical role in making the region the most attractive place in Europe to develop electric vehicles.”

Lord Mandelson remarked: “The North East has distinguished itself as the first specialised region for ultra-low carbon vehicles. This is good news not just for the North East, but for the whole of the UK, helping to attract foreign investment and securing the UK’s place as a global leader in high-tech manufacturing and automotive industries. The collaboration between local businesses, universities and colleges will create a hub of expertise to boost innovation and accelerate business growth in this important area of ‘green’ industry.”


Hybrid car initiatives point way to a cleaner future
Another Japanese-owned motor manufacturer, Toyota Motor Europe (TME), is to manufacture a full hybrid version of its C-segment hatchback, the Auris, at its plant in Burnaston, Derbyshire in the East Midlands. Production of the company’s first European-built full hybrid will start at Toyota Motor Manufacturing (UK) Ltd (TMUK) in mid-2010. Engines will be produced at TMUK’s facility in Deeside, North Wales. “Our decision to produce a full hybrid in the UK reflects both our confidence in the quality and commitment of the TMUK workforce and the strength of our longstanding partnership with the UK government. Today’s announcement is positive for Toyota, our UK suppliers and the local communities here,” commented Tadashi Arashima, CEO and President of TME.

Toyota has also renewed a contract with Ilika Technologies Ltd, a UK company based in Southampton on the south coast, to accelerate the development of high-performance battery materials. The collaboration began in February 2008, when Ilika was a small spin-out company from Southampton University with just nine employees. Now it has over 20 staff and is a highly innovative business, specialising in fuel cells and other advanced applications. Hiroshi Okajima, project manager at the Frontier and Advanced Engineering Strategy Department in Toyota’s R&D Management Centre, said. “Ilika’s high-throughput techniques are essential to overcome some of the technological barriers we face in the development of leading-edge technologies. The first project confirmed that Ilika is an innovative, professionally managed enterprise, and we are very pleased with their achievements in this period.”

Another trial in Coventry, West Midlands will see more than 40 environmentally friendly cars take to the streets after the local council and its partners won $12.3 million of funding from the TSB for a new initiative to prove that ultra-low-carbon vehicles can be used for everyday transport. Electric- and hydrogen fuel cell-powered cars will be trialled in the city for at least a year, starting early in 2010. Electric plug-in points will be fitted across Coventry and Birmingham at key locations and at testers’ homes. Coventry University will select the testers to ensure that the data reflects a range of users while RDM, a local company, will provide data loggers for the vehicles.

US electric vehicle manufacturer Tesla Motors has opened its first European store in London with the help of Think London, the capital’s FDI agency. The California-based company, which makes the Roadster, a high-performance electric sports car, has established a base for its European operations in Knightsbridge. Don Cochrane, UK sales and marketing director at Tesla, said: “London has always been a lead market for new products and innovations. Thanks to the Mayor of London’s commitment and forward planning of logistics and infrastructure, it was the obvious choice for us to launch our first European store.”

Tesla, American electric vehicle, now on sale in London.

Elsewhere, a research team has developed the first retro-fit system to convert existing vehicles, including large vans and buses, into fuel-saving and less polluting electric hybrids. The Addzev (affordable add-on zero emissions vehicle) is the work of experts from Cranfield University in southern England, the Millbrook Proving Ground, the Provector hybrid vehicle company and Oxford University, with specialist advice and financial backing from Europe’s Advanced Lead Acid Battery Consortium and the UK Department of Transport.

Using a standard Vauxhall Combo light delivery van, the development team retained the existing conventional front-wheel-drive diesel engine but added an electric drive powered by low-cost, advanced, lead acid batteries to the rear wheels. This transformed it into a hybrid vehicle capable of achieving an all-electric range of more than 12 miles from a single charge. Project leader Professor Nick Vaughan, head of automotive engineering at Cranfield University, explained: “In the current economic climate, relying on the gradual penetration of newly-built vehicles to reduce carbon emissions will not deliver much-needed carbon savings in the short term. Our target for Addzev was to demonstrate what could be achieved with the existing urban fleet.”

In a more conventional area of the UK automotive industry, a milestone has been reached with the one-and-a-half millionth new Mini leaving the production line at the company’s plant in Oxford, South East England. The Mini has been an iconic symbol in British culture since the British Motor Corporation started producing the car in 1959, eventually selling around 5.4 million units. Now owned by BMW of Germany, the brand was relaunched in 2001, with the larger, more powerful new Mini. The 1,500,000th vehicle left the Oxford plant to be dispatched to a British customer. BMW group board member Ian Robertson commented: “This is a great day for the plant and a wonderful milestone to reach in the 50th birthday year of the Mini.”

The company has been using VDC internally since early last year to cut costs and has been trialling it with selected customers over recent months. It hopes to launch VDC in the UK at the end of July, followed by launches in other European countries in the following months. Its biggest customers in Germany, Spain and France will be among the first to be offered the service. BT also intends to start offering VDC to its small-business customers at some point in the future, though cannot yet specify when this will happen. Pricing will depend on specific customer requirements.

“We’ve begun to deliver communications-as-a-service and hosted services for voice, unified communications and CRM, and we see a roadmap where people want to be able to provision an infrastructure end-to-end. We want to deliver those things as a service in a predictable and flexible manner,” said Neil Sutton, head of products at BT Global Services.

Meanwhile Northern Ireland is a step closer to being linked to North America via an under-sea telecommunications cable, after US transatlantic submarine cable provider Hibernia Atlantic landed a conduit at Portrush, Co Antrim in late June. The programme is part of a $41 million joint scheme known as Project Kelvin run by the Department of Enterprise, Trade and Investment in Belfast and its Dublin counterpart, the Department of Communications, Energy and Natural Resources, which aims to provide improved connections between North America and Europe.

Northern Ireland Enterprise Minister Arlene Foster said: “The new cable will connect Northern Ireland, for the first time, directly to North America and will greatly improve connectivity with Europe. When combined with the new terrestrial telecommunications infrastructure currently under construction across Northern Ireland, it will put us at the heart of the global economy.” She encouraged local businesses to make use of the cable, saying that the province would now have access to the same international telecommunications services as major cities such as London, Amsterdam and New York.

David Pickering of the Transport iNet – which is funded by East Midlands Development Agency (emda) and the European Regional Development Fund (ERDF) – said: “This is an internationally significant project that will contribute towards a reduction in carbon emissions and improve fuel efficiency across the whole of the transport industry in the future.” Dr Paul Cunningham of Loughborough University added: “The grant … will enable us to … research new manufacturing processes for 3D textiles. This is a unique opportunity for us to exploit existing technology and adapt it for use in the aerospace, automotive and marine sectors.” The initiative is expected to establish the East Midlands as a leader in low-cost manufacturing and technological innovation, as well as establishing a solid base for future collaborations between the two universities and M. Wright and Sons Ltd.

Separately, Loughborough University has agreed to collaborate with Caterpillar UK Ltd on research to investigate new technologies for future products. This will be the first such agreement in Europe and involves the creation of an Innovation and Research Centre at the university. The agreement builds on a successful relationship, forged over many years, in which Loughborough research teams have explored pioneering technologies under Caterpillar’s guidance. Through this research, Loughborough has supplied technologies to improve engine and machine performance, reduce exhaust emissions and provide more fuel-efficient operation. Professor Shirley Pearce, Vice-Chancellor and President of Loughborough University, said: “The work we have done with Caterpillar so far has been driven by many engineering challenges and has required a combination of the best academics, a history of achievement and the best of modern facilities. I am pleased we have managed to make such a positive contribution so far and am certain that this will continue as our relationship develops.”


Regional news
Trials have been conducted of a new high-speed train that will run on the Channel Tunnel line at up to 140mph and will reduce journey times between London and Kent, South East England by up to 43 minutes. The Javelin trains, built by Hitachi of Japan, have 338 seats and can carry up to 508 passengers. They will also be used to carry spectators from St Pancras to the 2012 Olympics site at Stratford, east London in seven minutes. It is expected that over 80 per cent of Olympic spectators will travel to and from the venues by rail.

Marketing communications company Engine Group has announced plans to expand its business in the UK under the US-based Marcoms Group. A team of over 140 people will work for the new Engine Business, which will run from offices in Washington DC, London and Edinburgh, Scotland. Engine Business already has a client base of over 200 companies generating an annual fee income of over $27.9 million. Peter Scott, chairman and joint chief executive of the Engine Group, said: “We are launching Engine Business from a position of great strength but with even greater ambition. Within 24 months we plan for Engine Business to be firmly in the corporate communications top 10 by size, and at the very top by reputation. We will be pushing forward a major expansion in this market, purchasing businesses to complement our existing strengths, establishing new teams and continuing our recruitment of the best talent from across the corporate communications market.”

A Japanese firm that develops Alzheimer’s drugs has opened its European headquarters in the UK. Eisai’s $164 million European Knowledge Centre (EKC), located at the Hatfield Business Park in Hatfield, Hertfordshire, Eastern England, includes a manufacturing plant, research laboratory, office building and shared facilities. The company is looking to employ 250 new staff to create a 500-strong workforce engaged in manufacturing, research and sales. Eisai develops drugs such as the Alzheimer’s treatment Aricept and has campaigned with another pharmaceutical company, Pfizer, to make the medication more widely available. The EKC will incorporate Eisai’s European regional headquarters, manufacturing subsidiary and UK clinical research and sales subsidiary.

US company IQMS, a pioneer in the design and development of Enterprise Resource Planning (ERP) software, has also opened its new European operations centre in Hertfordshire. The company will work from an office in Bishop’s Stortford as well as from its headquarters in Paso Robles, California and Illinois. The move will provide a direct sales channel to UK manufacturing businesses and will offer existing customers in the region more support. The company, which this year celebrates its 20th anniversary, has built up a solid reputation for providing ERP solutions that enhance supply chain efficiency and help manufacturers to achieve leaner, more cost-effective operations. It already has a number of established clients in the UK and Ireland and is looking to grow its customer base.

Thirteen food and drink companies in the East Midlands are currently benefiting from Innovation Support Grants (ISGs) offered through the region’s Food and Drink Innovation Network (iNet). A further 35 are engaged in the application and approval stages of the scheme. The Food and Drink iNet aims to foster innovation in the sector by encouraging businesses to turn new ideas into business through the development of new technologies and products. A total of $410,000 is available, and so far grants have enabled businesses to research healthier ingredients, create new products, introduce new software, develop franchise opportunities and gain industry accreditations. The Food and Drink iNet is based at Southglade Food Park, Nottingham, and covers Nottinghamshire, Lincolnshire, Leicestershire, Derbyshire, Northamptonshire and Rutland. It works with small and medium-sized businesses as well as larger companies, and to date has paid out more than $98,400 worth of funding to firms across the region.

Liverpool Science Park in North West England has opened its second landmark innovation centre for science and high-tech businesses, ic2, further boosting the city’s burgeoning knowledge economy after the opening of ic1 three years ago. The four-storey, 38,750 sq ft facility, which cost some $16 million to build, sits beside ic1 and provides high-spec, lab-compatible office space plus a range of support services. The first tenant has already moved in, while a third of the space has been optioned by a range of businesses. The facility is aiming to attract companies from outside the region and abroad in a range of knowledge-based sectors including the creative industries, pharmaceuticals, life sciences, ICT, software development and genetics. In particular, it is targeting China and Finland through its new ‘Soft Landing Centre’, which allows overseas businesses the chance to try out the UK market in a low-risk environment. Finnish automotive and aerospace firm Fastems is already one of the park’s tenants. Dr Sarah Tasker, Liverpool Science Park’s chief executive, said: “The Soft Landing Centre is an exciting opportunity for the city to target inward investment in the commercial knowledge sector. Our impressive new facility, ic2, is the perfect location for young knowledge-based companies looking for a first-class environment to test the UK market and to grow their companies.”

A project to build aeroplane wings in Northern Ireland is to receive $186 million of government funding. Northern Ireland ministers travelled to Brussels in April to lobby the European Commission to allow state aid for developing and building part of Bombardier’s new C Series aircraft in Belfast. The government has now been given the go-ahead by the EC to provide the repayable investment for the development of the Canadian firm’s composite wings. The money is part of an $820 million investment at the Belfast plant for the new regional jet, and the move follows a recommendation by the Department of the Environment Planning Service that Belfast City Council should back plans for a new 700,000 sq ft factory at Bombardier’s Airport Road West site, where the advanced composite wings will be manufactured. According to NI Enterprise Minister Arlene Foster, the approval was another step forward for the C-Series programme and for the whole aerospace sector in Northern Ireland. “That Bombardier has selected Northern Ireland as the location to undertake such work is a strong endorsement of the research, development and innovative capabilities in our aerospace sector,” she said.

US-based CyberSource, which specialises in supplying software to ensure secure payments for goods and services over the internet, has officially opened its new R&D centre in Belfast, with support from investment agency Invest Northern Ireland. The company has moved quickly to establish the facility, having announced the investment just a year ago. A staff of 56 at the new centre will work with colleagues at the firm’s research facilities in the US to carry out a variety of advanced software development. Bill McKiernan, chairman and CEO of CyberSource, said: “The Belfast R&D centre has already proven to be a valuable addition to our global R&D operations. With increasing global demand for our services and our commitment to developing the most advanced risk management and secure payment solutions available, this centre has helped us to meet the demands of our customers and further strengthen our reputation for technical innovation.”

US pharmaceuticals giant Schering-Plough is to invest more than $33 million in a research centre in Scotland. The company plans to invest a total of around $66 million in its three facilities – half of it in the former Organon Biosciences plant in Newhouse, Lanarkshire, with the rest being shared between two other bases in the Netherlands and the US. The Newhouse investment, which is being supported by a $6.7 million grant from the Scottish Government, will also involve an expansion to support research sites in Europe and will secure the long-term future of Schering-Plough in Scotland. The investment, which will be used for early drug discovery technologies, will underpin the company’s global R&D activities, while providing a massive boost to Scotland’s bioscience sector. “The company has a long-term commitment to its research activities in Scotland and recognises the important contribution our colleagues make,” said Ismail Kola, senior vice-president for discovery research at Schering-Plough.

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