The Economic Intelligence Bulletin for North West England: Summer 2007-Summer 2008.

Welcome to this 2007/8 edition of the Economic Intelligence Bulletin. A great deal has happened since the previous report which partly accounts for the length of the current Bulletin. As on earlier occasions I would emphasise that the contents reflect my own perceptions of what has been happening in the Region’s economy. Also, given the extent and range of activities within North West England, the developments and issues which I have highlighted represent no more than a cross-section. Nevertheless, I have sought to use some sort of a bench-mark in the second section of the Bulletin, paragraphs 28-84, where trend statistics more frequently appear. The Region has the considerable benefit of ONS staff based in the North West and this has, I know, proved very helpful to both individuals and organisations in the public and private sector alike. As we seek to make sense of rapidly changing times, both globally and within the Region, we are continually seeking out data. Given the need to respond positively and make critical decisions, robust data becomes even more essential. For that reason I have posed the question in the opening section “so what are the facts?” The Bulletin contains a number of individual stories about businesses within the Region. Many reflect high achieving companies operating in challenging economic conditions but, sadly, there is also mention of others less successful. The Bulletin does not attempt to side-step references to the economic challenges but, at the same time, provides a positive response to the “gloom and doom” merchants. If one were to select a characteristic running through the report then it would be the resilience and flexibility of the North West’s successful enterprises. The achievements of the Region’s Production Sector are deserving of an accolade. We are the UK’s leading Manufacturing Region and the reason for success is that we have moved forward. North West Manufacturing 2008 is even different from the 2000 model and certainly better focused, and more technologically leading-edge than anything before. Another characteristic that this Bulletin brings out is the strong inter-relationship between sectors and industries. This Region, the first in the world to experience an Industrial Revolution, is a leading area within a leading Nation in key fields such as the Knowledge economy, and crucial R+D, the very basis of success. Finally, what, hopefully, this Bulletin does achieve is to highlight the fact that the progress of any area is dependent on the drive, and enthusiasm of its people. Statistics can go someway to describing what is happening but the individual stories of perseverance, fortitude, passionate commitment, and achievement paint the real picture.

Brian Eaton.

BriNess Enterprises.

e-mail eaton.brian@btinternet.com.

Mobile 07850 216451.

6^th August 2008.

INDEX. PARAS.

So What are the Facts? 1-27.

What is Really Happening out there in the Big Wide World, and 28-84. How is North West England Performing?

Agriculture, Forestry, Fishing, Food & Drink. 85-183.

Engineering Sector. 184-232.

Automotive. 233-266.

Aerospace. 267-284.

Shipbuilding, Shiprepairing, Marine Engineering. 285-294.

Chemicals, Chemical Products,Energy, Environmental Products. 295-351.

Textiles, Textile Products, and Advanced Flexible Materials. 352-419.

Other Key Manufacturing Sectors. 420-438.

Construction and Building Sectors. 439-454.

Communications including Haulage, Roads, Rail, Ports, Airports. 455-470.

Further Strategic Sectors in the Advancing Economy. 471-540.

So what are the Facts?

1. The standard approach adopted in many reviews, be they economic-based or otherwise, is to identify what are considered to be key parameters and assess performance over the period. Indeed few, if any, experienced analysts would not endorse this methodology. Difficulties can arise, however, because of the varying degrees of robustness of the information. It is, therefore, fortunate that North West England, together with other regions, is now benefiting from the expert presence locally of Office for National Statistics (ONS) officials. Nevertheless the actual availability of reliable statistical and other data is dependent on a variety of factors. Recent years have seen increasing demands for facts and figures covering a range of activities. A perception has been that this demand has come from people as individuals as well as from wider groups and organisations. “Give us the facts!” they cry.

2. In terms of the UK business economy there was almost a plethora of hard data available in the three and a half decades after the Second World War. Nowadays the computer with its internet facilities has resulted in a considerable amount of information becoming more easily accessible. However, a keen sense of judgement is required to sort out “the wheat from the chaff”. This is not to deny that there is valuable material about. Nevertheless, despite modern technology, a recurring issue has been the time-lag between data collection/analysis and its public availability. This has implications for assessing with precision what is happening at the current moment. Albeit quite a few years ago, Harold Macmillan, British Prime Minister between 1957 and 1963, suggested that some data was about as useful as looking through an out of date edition of Bradshaw’s Railway Timetables in order to plan a journey!

3. Because of the various difficulties involved in undertaking fully comprehensive data collection the emphasis has tended towards the sample survey approach. This applies, for instance, to the official ONS Household Surveys which, to their credit, seek to cover a fairly impressive range of activities and, directed by professional statisticians, ensure a rigorous approach to stratified sampling. Surveys in general have, in recent years, enjoyed almost a halcyon period but this expansion has come from a wide variety of sources both public and private. The limited coverage of the sample and response rate, in a number of instances, precludes other than a very general response to a key question thereby failing to distinguish between different types of respondents. For example some industrial surveys ask individual companies whether there has been an increase or decline in their order book performance. The “yes”, “no”, or “same” responses camouflage a vast range of situations with, for instance, a company achieving an increase of £10,000 receiving the same weighting in the survey as one securing a £2 million improvement!

4. Interestingly the availability of statistical and other data was helped in the years following the end of World War Two by the emphasis in Government on a more “hands-on” approach to economic development. A by-product was a relative wealth of information relating to business, employment, and related issues. There was considerable focus on reviving the post-war economy with regionalism a key consideration. Measures took the form of both the “stick” and “carrot” approach. The chief example of the former was when businesses had to apply for industrial development certificates for projects over a certain size. The threat of Government refusal influenced companies in the “over-heated” parts of the Country, then largely London and the South East, and Eastern England, as well as the West Midlands, to consider alternative locations in those parts of the economy where unemployment was higher and new industry was required.

5. These “Development Areas” were widely spread, and later expanded further so that eventually there was a three-tier system of designation. Apart from the availability of labour, incentives to locate projects in these areas included, by historical standards, quite generous state-aid such as building and plant and machinery grants. Another Government incentive in particular areas of need was the building of advance factories. This was to facilitate the setting-up of new plants as quickly as possible, with allowance on the site for further expansion. These programmes were often introduced following the announcement of major redundancies including in industries such as coal-mining.

6. This very brief and piecemeal account of Government regional industrial policy provides at least a partial explanation of why this extended post-War period, at least in terms of the business economy, was relatively data-friendly. The more direct involvement by the Government in economic/industrial development resulted in a considerable amount of collected data as well as softer but valuable qualitative information. Under the circumstances the necessary inter-relationship between Government and Industry aided key follow-up assessment. This resulted in valuable analysis, with policy implications, emanating from both within and without the Government service. These included reports/reviews such as “The Movement of Manufacturing Industry in the UK, 1945-65” by R S (Bob) Howard, Board of Trade, in 1968; “Regional Economic Policy and the Movement of Manufacturing Firms to Development Areas” by Barry Moore, and John Rhodes, Cambridge University, in 1976; and “The Effect of Regional Policy on Manufacturing Investment and Capital Stock within the UK between 1959 and 1978” by RD (David) Rees and RHC Miall, published in “Regional Studies” in December 1981.

7. Subsequently there were also a growing number of national Industry schemes covering sectors as varied as Textiles and Red Meat Slaughter House activities. As an example read “The Clothing Industry Scheme: an assessment of the effects of selective assistance under the Industry Act (1972)” by J T Lambert, DTI, GES Working Paper number 61, 1983.In addition to their core function aimed at benefiting the economy these schemes also enabled a closer dialogue between business and Government to develop.

8. The present political and economic climate is different from this earlier period and Governments of whatever party persuasion are, now, less amenable to this type of legislation. In addition the UK is a member of the European Union (EU) and wider consideration must be given to measures to ensure that they are not anti-competitive. There is, also, a considerable resistance on the part of Industry and Commerce, particularly amongst SMEs, against form-filling and data provision unless there appears to be fairly immediate beneficial results. These sentiments should be respected especially as local companies need to concentrate their energies on competing in highly challenging global conditions. However, hopefully, there is also a middle way which seeks to minimise business time and involvement yet extract key data for industry’s ultimate benefit.

9. According to official sources the impact on UK business of ONS statistics was estimated at just under £40 million in 2005. This was only 0.3% of the “total burden of Government regulation”. ONS has signed up to a 2010 target to reduce those impacts over which it has some discretion by 25% or £7.5 million. In the first couple of years since the targets were set ONS has reduced the annual burden of its business surveys by £6 million. There are, however, quite reasonable new demands from the European Union (EU) for member states to improve the quality of regional and service sector statistics. Meeting these new demands, and simultaneously minimising costs to businesses, can be facilitated by ONS using some of the administrative data already held by Government.

10. The positive news is that under the Statistics and Registration Services Act 2007 information-sharing agreements can take place between the newly created Statistics Board and other public authorities, subject to Parliamentary approval. From 1^st April 2008 ONS became an executive statistical office operating under the supervision of the Statistics Board, headed by Sir Michael Scholar and answering directly to Parliament rather than to Government ministers. In late 2007 ONS had announced an additional £40 million investment. This was to enhance statistical outputs partly funded through efficiencies. Recently independent reviewers from other European Statistical Institutes have rated ONS highly for its implementation of the European Statistics Code of Practice. The ONS are to be applauded for their emphasis on consultation with users of data including those in the regions. The North West Regional team ran a launch event with the NWDA Regional Intelligence Unit (RIU) at the Reebok Stadium in September 2007. Over 140 people attended and feedback suggested that over 90% of delegates would welcome similar meetings in the future.

11. Despite these useful advances it is, hopefully, more than sheer nostalgia that harks back to an earlier period when a number of particularly good data sources were available. What happened to the extremely informative Employment Records One and Two produced by the then Ministry of Labour and its successor, the Department of Employment and Productivity? These included listings, in each local office area, of the leading employers together with their business activities and employment. Especially valuable was an overview of the area, (eg Birkenhead, Burnley, Carlisle, Oldham etc), incorporating both statistical and qualitative data. Those records going back to the War years even highlighted the extent and impact of bombing raids on the local community! In much more recent times one can remember the valuable input of Department of Employment’s Regional Manpower Intelligence Units both through their interpretation of data and valuable local background knowledge.

12. One notable more recent development, a few years ago, was the decision to establish Home Office research staff in the regional Government Offices. This helped to strengthen the inputs of teams drawn from the police, probationary, and drugs agencies to enable a broader approach to local economic development to be undertaken. Similarly there were key contributions from other bodies including Health. Sadly, this had come after the effective demise of the regional research teams of the then Department of Trade and Industry (DTI), and Department of Environment (DOE). These had included professionals drawn primarily from economics and geography backgrounds supported by executive and clerical staff.

13. The short-lived Department of Economic Affairs (DEA) of the second half of the 1960’s was another example of the utilisation of regional research personnel. These regional research teams benefited from access to a considerable amount of original data which, for instance, in the case of DTI resulted in papers on topics ranging from the impact of mobile industry on the regional economy to an assessment of branch-plant development in manufacturing industry; from a detailed floor space per worker analysis by industrial sector to an impact study on overseas investment; from individual Industry background papers to the incidence and impact of plant closures and redundancies on the local economy etc.

14. As well as being part of a national Departmental research body with fairly regular inter-regional meetings including at London HQ, the research teams were also integrated into the Regional Office. The latter situation enabled a valuable cross-fertilisation of ideas with administrative staff responsible for operating policy as well as involvement in ministerial briefing. Particularly valuable was the priceless situation of being able to touch base with industry and appreciate the challenges and opportunities at the “coal face”. This helped to put more qualitative “flesh” on the statistical “bones” by, through a micro-economic approach, focusing on developments at unit plant level.

15. At the organisational level regionalism underwent significant changes in 1994 with the introduction of Government Offices in each English Region. These were the brain-child of then Deputy Prime Minister Michael Heseltine and were integrated regional offices concentrating separate Government Departments as well as a number of other activities within the same organisation. Economic Intelligence work continued, albeit in a changing format, and benefited from a closer integration of Departments. It should be noted, however, that even in the pre-Government Offices era there had, in most regions, been close liaison and collaboration between the then separate regional offices covering Industry, Employment, Housing, Local Government, Transport, Environment etc.

16. Under the Government Office regime fairly regular inter-regional meetings began to be held with all the regional intelligence teams attending and with an important input from ONS. This particular approach, however, was, again, subject to change. There has, however, been an important impetus from the Regional Development Agencies with that of the North West playing a particularly positive role with its Regional Intelligence Unit (RIU). The latter is one of nine Regional Observatories which have been developed in the English regions to support regional policy making. This is through the provision of focused information and analysis. One of its many admirable roles is to help disseminate and widen access to intelligence. The Northwest Regional Development Agency (NWDA) website, www.nwda.co.uk, is an automatic “must see” source of information. It is highly practical in that it includes reference to the major funding streams and initiatives that it is involved with which range from economic regeneration to crime, from tourism to rural issues, from business finance to the New Single Regional Strategy. Details about the latter embracing all key aspects of Regional life is especially relevant.

17. Both North West England and the UK are competing in a global economy. Hence an integral part of performance is to be able to make comparisons with as wide a field as possible. In this respect there has been a positive contribution in the more recent period by such super-national organisations as Eurostat and the Organisation for Economic Co-operation & Development (OECD). Any set of statistics or data, however, is only as good as its contributors. As well as difficulties in agreeing and ensuring comparability of data there is, inevitably, varying levels of response, compliance etc between different nation states. Total economy figures, on a broadly comparable basis, are easier to secure than those relating to individual sectors. Hence, for instance, much is made in the media about the UK’s relative position amongst trade rivals in terms of overall productivity. This camouflages a range of performances, including those which would probably show the UK in better light. These, it should be mentioned, include a number of Manufacturing sectors or sub-sectors whose vital contribution to both the North West England and National economy should not be under-estimated.

18. A vital contribution to understanding and interpreting what is happening in the regional economy and elsewhere is through detailed original research. This can often fill the vacuum where no regular series of reliable indicators are available. It is in this field that the North West is well placed through the existence of higher educational excellence and cutting-edge economic research. This is available in key establishments in locations ranging from Liverpool to Manchester, and from Lancaster to Preston in Central Lancashire, and including the North West’s newest University in Cumbria. A prime example of excellence is Manchester Business School (MBS) which in its original form, was founded in 1965 at the same time as the London Business School. The present MBS was developed in 2004 taking in additional facilities and benefiting from the expanded new University of Manchester which included the former UMIST and its School of Management. Both Manchester and Lancaster are highly placed in the UK in the very latest Financial Times ranking of the world’s leading business schools.

19. A very good example of knowledge in action is “Manchester: Knowledge Capital” which was established in 2002 and is a partnership of all ten Greater Manchester authorities; the four universities of Bolton, Salford, Manchester, and Manchester Metropolitan; the strategic health authority; as well as other key public agencies and leading businesses. This body seeks to make a difference through stimulating and supporting increased business innovation from research, science, and knowledge; engaging with the people in Manchester in securing this future through dialogue, debate, education, and employment; supporting the growth of a city-region environment which helps business success, provides a high quality of life, and is open to all; and through championing and trying new ideas as well as new ways of living and working. The progress and success of this partnership relies on a number of features not least of which is the provision of key data and analysis.

20. The North West is well served by its local authorities. This is certainly the case in the field of key data relating to the local economy. For instance, a visit to the Lancashire County website, www.lancashire.gov.uk, is well worth the time particularly when the Economic Intelligence Team is located. This contains expert analysis on a range of crucial topics from area profiles to GVA, from unemployment to longevity of local companies, from industry assessments to the Index of Multiple Deprivation. Combined together are a range of need to know statistics with an in-depth and extremely interesting overview that meets the needs of policy-makers and general observers alike.

21. The Merseyside Economic Review for 2007, as with previous editions, contains a wealth of detailed analysis ranging from GVA per capita to People and Skills; from Inward Investment to Environment Quality Indicators; from Life Expectancy to Household Income. This appears under the heading of The Mersey Partnership, website www.merseyside.org.uk, which is recognised as one of the foremost examples of private and public sector working. As elsewhere in the North West there is a sharp practical edge to its activities. With a membership of almost five-hundred the Mersey Partnership is firmly committed to forward progress in the key areas of economic development; Investment; and Tourism.

22. Although Greater Manchester ceased to operate as a Metropolitan County in 1986 there was, subsequently, a fairly lengthy period when the Oldham-based Greater Manchester Research performed the vital role as the strategic research and information bureau of the Association of Greater Manchester Authorities (AGMA). A highly impressive stock of information was assembled ranging from regional competitiveness indicators to labour market and retail statistics; from deprivation indices to property values and transactions; from land use change statistics to education and training; from major employment trends to earnings. In later years Greater Manchester Research initiated a Sub –Regional Economic Intelligence Network which brought together a useful cross-section of experience including representation, for instance, from activities such as the business development side of Marketing Manchester; Salford University’s Market Intelligence arm; Business Link; Government Office North West; and MIDAS, now Greater Manchester’s Investment Agency.

23. Although Greater Manchester Research is no longer in operation an extremely valuable role is performed by the Policy and Research Team of Manchester Enterprises. The latter was established in its original form in 1999 and is the economic development agency for Greater Manchester with a strategic remit to deliver economic growth and improve the prosperity of local people. The body also has a key responsibility for economic analysis and prides itself that its approach is interpretive as well as, crucially, focusing on actionable results. The type of work undertaken includes a vast range but includes such areas as benchmarking and strategy development studies; labour market intelligence; employer/business surveys including sector analyses; frameworks for key performance indicators and measurement; customer/staff satisfaction surveys; social audit; brand/product research, see website www.manchester-enterprises.com/research.htm for further details.

24. Amongst a number of important contributions made by Manchester Enterprises Policy and Research Team is through the high profile Manchester Independent Economic Review. Early this year a full economic baseline study had been completed, with additional research from Greater Manchester Chamber of Commerce, providing an overview of recent key economic trends at national, regional, and sub-regional level. The very distinguished Manchester Independent Economic Review Team consists of Chairman Sir Tom McKilop of the Royal Bank of Scotland Group, and formerly chief executive of Pharmaceutical giant AstraZeneca; Jim O’Neil, head of global economic research at Goldman Sachs; Edward Glaeser, Economics Professor at Harvard University; Dr Diane Coyle, managing director of Enlightenment Economics, a consultancy set-up in 2001 to assess the impacts of globalisation and new technology; and Jonathan Kestenbaum, chief executive of The National Endowment for Science, Technology, and the Arts (NESTA).

25. The £1.35 million Manchester Independent Economic Review was officially launched at Old Trafford on 2^nd June 2008 by the Chancellor of the Exchequer Alistair Darling. It is due to be completed by the end of this year and aims to assist the forward progress of the City Region by building up a new evidence base to inform future policy. Research is covering a wide range of crucial indicators such as contributions of inward and indigenous investment; industry sectors and clusters; the innovation system; economic connectivity; trade etc. The study, and the depth in which it is being undertaken with respect to city-regions, is unique amongst similar areas in the UK. Readers may wish to explore the website www.manchester-review.org.uk for current and future developments.

26. An important contributor in the information process is the Media in all its various forms. In 1988 Bob Waterhouse edited the short-lived “North West Times” newspaper. Undaunted by the demise of this earlier publication he also edited the “North West Enquirer” which ran on a weekly basis in 2006 between 27^th April and 21^st September. The approach was highly laudable seeking to provide a quality, investigative, and analytical North West Regional paper. Sadly target figures were difficult to attain and problems with a potential funding package led to the newspaper going into administration. Despite this the North West contains a number of local newspapers where the reporting of local developments provides a fund of useful information not readily available elsewhere. The quality and balance of the reporting often compares favourably with some of the more nationally-based Media. Indeed amongst the latter, criticism can be made that more emphasis is given to “entertainment value” and a “dramatic story” rather than a thorough in-depth analysis.

27. Even in a world of robust statistical and other data there would still be the challenge of how the information should be weighted, and, crucially, what to include and exclude. As with previous editions, this current “Economic Intelligence Report” seeks to balance its approach providing, hopefully, appropriate statistical data together with a fairly lengthy account of what is happening at the “coal-face” of Industry and Commerce. Statistics, caveats and all, can go part of the way towards providing broad information on the current situation. However, it is the individual business experiences, with their stories of commitment and passion, yet also incorporating both the achievements and the struggles, which really explain and colour in the picture. As in earlier years, especially given the diversity and complexity of the economy, the Bulletin does not claim to be any more than an idiosyncratic reporting and analysis of events. What is, however, beyond dispute is that North West England is a major UK Region with a valuable role to play. Hopefully, the following text will illustrate that assertion.

What is Really Happening out There in the Big Wide World and How is North West England Performing?

28. The great economist John Maynard Keynes (1883-1946) made reference to the influence of the “herd instinct” on a number of key situations. Already before the end of 2007 there were warnings echoed in many parts of the Media and elsewhere that there would be a slowing down in the global economy, some observers even went further suggesting a deeper recession. Given our important trade links with the USA it would have been extremely naive and unrealistic to ignore the various warning signs which were already indicating a slowing-down in the world’s major economy. However, an unfortunate trait in some quarters, both regionally and nationally, has been to talk down not only our achievements but our capabilities and resilience to the extent that we are, almost automatically, anticipating a “doom and gloom” scenario.

29. One of the fascinations of Economics is its unpredictability. In Chemistry, provided that the correct constituents are used and procedures followed, then results are capable of being correctly predicted. Hence when Water is added to Sulphur Dioxide then Sulphuric Acid should result. The world economy, however, does not exist in a vacuum but inter-acts with a multiplicity of other situations ranging from political to environmental, from climatic to health-related, from geographically-spread to more localised but critical issues. Even those activities identified fairly closely with economic development, ranging from innovation and technological advance to changing consumer preferences, are not always capable of being predicted with any degree of exactitude. Last year’s Economic Intelligence Bulletin highlighted just some of the world’s trade agreements, as well as disparities in key areas such as customs and excise procedures, the very existence of which make it more difficult to predict future trade figures, certainly not with any degree of precision.

30. Professor George Shackle (1903-1992) was an eminent, indeed pioneering, Post-Keynesian who was amongst the very first economists to insist on the importance of uncertainty and time in Economics. An admirer of the work of Keynes he also took a great interest in the contributions of Karl Gunnar Myrdal (1888-1987), whose analyses covered such crucial issues as the interdependence of Economics, social, and institutional phenomena. Myrdal’s experience, during his long life, included that of a Social Democrat Member of the Swedish Parliament as well as a fourteen year period as Professor at the famous Stockholm School of Economics. George Shackle empathised with Myrdal’s approach and challenged the conventional role of probability in Economics contending that it failed to allow for “surprising events”.

31. During the Second World War George Shackle served as a member of Winston Churchill’s inner team of economists in Statistical Branch. Subsequently he became the Brunner Professor of Economic Science at the University of Liverpool between 1951 and 1969. In a number of discussions and interviews he was quick to emphasise that Economics was not a Science. Indeed, in the course of his lectures, he likened it to the sport of cricket. One may know about the laws of the game, its history, and have some knowledge of tactics and strategy relating to captaincy as well as how to execute the various techniques in batting, bowling, and fielding. However, even if one possessed this information it would have decided limitations in predicting how many runs Lancashire County Cricket Club would score at Old Trafford on a specific day, or any day for that matter, during the season.

32. With partial hindsight as we reach the beginning of August 2008 we can at least note that, whilst there have been some cut-backs amongst North West businesses, there have also been a number of very determined success stories. Despite justifiable concerns about market demand it is no exaggeration to suggest that the North West is now in a much better position than even ten years ago and certainly twenty years ago to withstand these pressures. Outside of the London and South Eastern complex we are the largest UK Region in a number of key parameters and in some actually in the lead. What is important to stress is that, over recent years, more of our businesses have heeded the warning to look at cost structures and levels of efficiency in order to ensure a longer-term future.

33. At the beginning of August 2008 the Trafford Park-based Manufacturing Institute announced that since the Manufacturing Advisory Service (MAS) had been launched in the North West in April 2002 it had helped to achieve over £491 million of financial savings including increased productivity and efficiency. From April 2005, with further funding from the NWDA and the European Regional Development Fund (ERDF), backed by the Manufacturing Institute’s own charitable resources, companies have benefited from an extended range of support under the Agenda for Change programme. This has provided an additional £218 million of financial savings for North West Manufacturers, providing some £709 million of support over six years as well as creating or safe-guarding over 5,700 jobs.

34. A necessary, indeed vital, component to inject into any assessment of world trends is the growing importance of the emerging economies. For instance, an earlier report by the World Bank covering “Global Economic Prospects” expected USA growth to slow to around 1% in the first half of 2008 but to have experienced recovery by 2009. Industrialised countries were expected to record higher percentage increases whilst China was expected to grow by in excess of 10% over the next couple of years. India’s performance was expected to be “not far behind”. China’s exports of goods in 2007, according to the General Administration of Customs, broke the $ 1 trillion barrier, representing an advance of around 26% on the previous year, with imports rising by about 21%. The annual trade surplus was estimated as in excess of $260 billion a rise of around 48% on 2006. As long ago as January 2005 industry expert Jim Pinto in his article on “The China Manufacturing Syndrome” in “Automation World” suggested that China was already producing 50% of the world’s cameras; 30% of air conditioners and televisions; 25% of washing machines; and 20% of refrigerators. It was suggested then that “one private Chinese company manufactures 40% of all microwave ovens sold in Europe”. The explosive growth in China’s Textiles and Apparel industries was detailed in the previous Economic Intelligence Bulletin for North West England.

35. The world economy has undergone tremendous changes in a relatively few years. This has obvious implications on immediate and future trade patterns. Although, for a number of years, the USA was the world’s leading exporter of merchandised goods this position was lost in 2003 to Germany who was still top in 2007 with an equivalent figure of $1.6 trillion exports according to the Federal Statistics Office. By end 2008 there is a strong possibility that China, already exporting the equivalent of $1.4 trillion of goods in 2007, will have leaped ahead which will put the USA into third position. Latest detailed WTO figures for 2006 then had Germany ahead on $1.1 trillion, the USA on $ 1.0 trillion, and China on $968.9 billion. The UK was in 7^th position with $448.3 billion of exports of merchandised goods. However, the latter’s share of world exports of goods had declined from around 9% in 1953 to about 4% in 2006.

36. Trade patterns are, however, extremely complex. For instance, if one includes all types of exports including Commercial Services, then the USA is still, very much in the lead accounting for around 10% of the world total. The USA’s Commercial Services exports totalled around $388.8 billion in 2006, some 10.7% of the world total. The UK, however, also recorded an impressive figure in this field, second only to the USA, of $227.5 billion or 8.3% of the global figure. In fact, despite considerable challenges, the UK has continued to compete in a wide variety of markets. This has been not only through the production of an impressive array of manufactured goods but, also, in other profitable lines.

37. This was well illustrated in a paper entitled “Trading in Ideas and Knowledge” published in June 2007 and produced by Ian Brinkley. The latter is the director of the knowledge economy programme undertaken by The Work Foundation, a not-for-profit organisation that aims to “provide answers to practical problems for UK PLC and the Public Sector”. On the basis of official trade figures, from the Government’s “Pink Book”, the paper suggested that in 1995 the UK exported £28 billion of “knowledge services” which by 2005 had reached a total of £75 billion, a 170% increase, accounting for some 6.3% of GDP and about a Quarter of all UK exports. This proportion was stated to be “significantly more than any other major economy”. Ian Brinkley contends that Britain trades on ideas, knowledge, and technology-related industries much more than is the case in other large nations. These cover areas such as R+D; Engineering and Technical Services; creative and cultural industries; computer, information and communication services; financial services; consulting, advertising services; income form royalties, intellectual property etc.

38. The UK can claim to be Europe’s top R+D location. Furthermore the Government has set itself a target of increasing R+D spend from 1.9% of GDP to 2.5% by 2014. This encompasses both the public sector and the commercial world with the aim of strengthening the position of the UK as a global R+D hub. Accountancy firm KPMG has recently undertaken a study of thirty-five cities within some ten countries analysing tax costs. The conclusion is that Manchester is in fourth position, but first in Europe, in terms of the most attractive location for R+D. Worldwide, amongst the areas investigated, only the Canadian cities of Montreal, Vancouver, and Toronto were rated ahead of Manchester.

39. Colin Sinclair, from MIDAS, indicated that Manchester is particularly attractive for R+D because of its graduate talent pool, its highly skilled workforce, good transport links, and connectivity. Chris Fry, head of Tax at KPMG in Manchester, suggested that Manchester and the UK generally benefits from a positive Government attitude towards R+D. Ironically, there are still companies not claiming R+D tax relief that could actually benefit especially with further changes beneficial to SMEs now coming into force.

40. Interestingly this “knowledge service” expansion has been facilitated and developed by the sophistication of the Manufacturing Sector from which many of them derive. As well as high quality design and innovation, there are technical and trade related services, not forgetting royalties and licence fees emanating from the UK’s Manufacturing capabilities. North West England is a leading region in this sphere with more than one R+D facility that is a global player. The much publicised Saudi Arabian Al Yamamah contract awarded to what is now BAE Systems in 1985 was one of the largest export orders ever received in this Country. Within twenty years it was estimated that in excess of £22 billion had been secured from the contract. However, the programme not only consisted of a large provision of “hard” equipment for the Royal Saudi Air Force and Navy but, also, with on-going maintenance and logistics support, and technical training etc.

41. Difficulties arise in seeking to allocate the UK’s export figures for all activities between its regions. However, UKtradeinfo is able to provide some useful information on exported goods. This data confirms the important position of North West England in the export field. For instance, in the calendar year 2007 the North West accounted for some £21.0 billion of goods exported or 11.1% of the total for all UK regions. UKtradeinfo was able to allocate £188.8 billion of UK exported goods to individual regions but was unable to allocate a further £30.9 billion. Amongst other regions only South East England, with some £33.5 billion exported goods, and London, £22.5 billion, exceeded the North West total.

42. A feature of the North West, supported later in this Bulletin with detailed anecdotal evidence, is the diversity of its product range and overseas market involvement. For instance, in terms of exports of goods to other parts of the EU, the North West, with £11.3 billion, although still in third place regionally, was actually ahead of London on £8.6 billion. It should, also, be noted that the contribution of the North West’s Production Industries to the Nation’s exporting performance is understated. There are a large number of companies in businesses ranging from automotive components to textile weaving; from composites to metal pressings, that act as sub-contractors to UK-based enterprises who, in turn, are key exporters.

43. Most recent available figures provided by UKtradeinfo on exported goods indicate that the North West, together with all other regions actually recorded an improved performance in the 1^st Quarter 2008 compared with the same period last year. The North West increased its export of goods to both the EU and the rest of the world. The total Q1 2008 figure of £5.5 billion represented a 9.6% increase on Q1 2007 compared with an overall UK regional increase of 9.4%. On the basis of these Q1 2008 figures it was suggested that the North West had over 1,600 exporters accounting for £3.1 billion of exported goods to the EU25, and over 4,100 exporters accounting for £2.4 billion to the rest of the world. There will, however, be a number of these exporters that trade with countries in both areas.

44. A tremendous strength of the North West economy is its range of activities and, together with emphasis on quality and profit-orientated innovation, this has helped to provide an intro into a growing number of overseas markets from continental Europe to the Far East. A read through the individual sections of this Bulletin will reveal success stories covering a rich diversity of products and activities. These vary from synthetic horse-racing tracks to flooring products; from fighter and commercial aircraft to electric blanket components; from antibiotics to defence and security apparel; from sealing products to gas turbines.

45. There has been much comment in the American press on falling house prices in the States and crippled credit markets together with job losses and contraction in the business sector. Private Sector Services account for nearly 70% of the USA’s economic output and has, in many respects, been the engine of growth during the present Century. Indeed recent years have seen an increased movement of manufacturing activity to foreign locations. Business has had to be especially combative in the States during 2007/8 and in January 2008 the Federal Reserve, the USA Central Bank, reduced interest rates from 4.25% to 3.5%, the largest decrease in twenty-five years. By April the rate had dropped to 2.0% its current level. By July 2008 unemployment in the States had risen to 5.7%. Jobs had been shed in areas such as Government Service, and Construction, with some Manufacturing, and Retail employment also going. However, there had been growth in sectors such as Education and Health, Professional and Business Services, and Leisure and Hospitality.

46. It might surprise some observers to note that just under 10% of all USA employment is within the Manufacturing Sector compared with around 11% in the UK, and between 12% and 13% in North West England. The USA Bureau of Labor Statistics suggests that seasonally-adjusted Manufacturing employment peaked at 19.5 million in June 1979 but by September 2007 had fallen to just under 14 million. Keith Hall, Commissioner at the Bureau, indicated in March 2008 that Manufacturing in the States had shed almost 300,000 jobs over the past 12 months. It was estimated in October 2007 that of the USA’s expected trade deficit of $725 billion some $ 540 billion, approaching 75%, was in Manufactured Goods. Despite impressive productivity performance in USA Manufacturing industries over the years industry and technology guru Dick Morley has expressed concern that negative attitudes and actions such as alleged “high taxes, strict zoning regulations, and excruciating bureaucracy” was driving production offshore.

47. The JP Morgan Global Manufacturing PMI survey suggests that global manufacturing is currently at a five year low as weaker demand and higher cost inflation impacts adversely on orders and production levels. In essence, it was felt that a combination of weakening demand, falling orders, and rising costs was creating conditions of stagflation. The Eurozone recently announced the highest levels of inflation since recording began in 1996. This prompted the decision in July 2008 to increase interest rates from 4.0% to 4.25% despite concerns about falling demand. Recent months have seen differing levels of performance within the Eurozone with, for instance, France and Italy experience useful small increases in growth during the spring whilst Germany suffered a slight fall. In the UK, in the last 12 months, there has been a steady reduction in interest rates by the Bank of England. On 5^th July 2007 the Committee had agreed a rate of 5.75% which by 6^th December 2007 had been lowered to 5.50%. By April 2008 the rate had been lowered further to 5.0% where it is currently lodged following the last meeting on 10^th July.

48. As this Economic Intelligence Bulletin nears completion there are just about a couple of days before Mervyn King, the Governor of the Bank of England, and the Monetary Policy Committee meet again in August to review the rate. Although many experts predict that the rate will remain unchanged at 5.0% other observers have pointed out that inflation is currently running at 3.8%, almost double its 2% target, and likely to increase further in coming months. This in itself has prevented a lowering of rates recently with pressures more inclined to at least a slight rise to counter inflation. The latest Regional Trends survey published by the CBI and Experian suggests that business confidence has fallen influenced at least partly by cost of raw materials and energy. However, the volume of new orders picked-up and investment intentions have been less downbeat here in the North West than for the Country as a whole. Both nationally, and Regionally, the Manufacturing Sector is benefiting by the relative weakness of the £ against the Euro which is helping exports.

49. The Chairman of EEF, Martin Edwards, has pointed to recent experience of British manufacturers. He indicated that this Nation’s top performing sectors were enjoying stronger growth rates than firms in France and Germany. This was being facilitated by the introduction of innovative production methods, and producing an increasingly high value Industry that was competing successfully across the globe. Martin added that what was especially notable was “the diversity of activities that are thriving”. Alongside the well-known success stories of Aerospace and Pharmaceuticals are “sectors producing scientific instruments, mechanical appliances and basic metals” as well as many others.

50. Currency exchange rates are, of course, an absolutely key issue. In this context general concern remains over the continuing weakness of the USA $. For instance on 1^st August 2006 the $ exchanged against the £ at 1.8520, by 1^st August 2007 it had weakened further to 2.03120. More recently there has been a slight strengthening and on 1^st August 2008 the figure was 1.98180. Within the two year band between 1^st August 2006 and 1^st August 2008 the $/£ exchange rate ranged from 1.85160 to 2.11610. The USA $ has weakened considerably against the Euro from 1.27620 on 1^st August 2006 to 1.37050 on 1^st August 2007 to 1.560 on 1^st August 2008. This is on the basis of historical exchange rate data from www.aonda.com. Despite this a number of businesses in North West England, especially those in niche markets, have managed to achieve useful orders in the States. There are also some companies based in this Region that operate facilities, including subsidiaries, in the USA.

51. North West companies have continued to develop market contacts globally including in continental Europe where the Euro has actually strengthened against the £. At 1^st August 2006 the Euro exchanged against the £ at 1.46180, weakening to 1.48220 by 1^st August 2007. However, by 1st August 2008 the Euro had strengthened considerably to 1.27040. Fifteen of the twenty seven member states of the EU are now in the Eurozone including Cyprus and Malta who joined on 1^st January 2008. Amongst the other nations in the Eurozone are the large economies of Germany, France, and Italy.

52. Although unemployment is only one indicator amongst many both the UK and North West England have, consistently, recorded lower rates of unemployment than the Eurozone. At around May 2008 the latter, according to EUROSTAT comparable data had an unemployment rate of 7.2% whilst, amongst individual countries, both France and Germany recorded a figure of 7.4%. The average unemployment rate for the EU27 was 6.8% ranging from 10.5% in the Slovak Republic to 2.7% in Denmark and 2.9% in the Netherlands. The approximate UK comparison was 5.2% whilst the North West with some 206,000 unemployed had a rate of 6.1%.

53. Productivity remains a perennial topic of discussion. Official statistics suggests that the UK has seen a relative improvement in its performance in recent years especially in relation to major trading rivals. For instance, assuming UK=100, then on the basis of ONS current purchasing power parity data, the UK has considerably reduced disparities with a number of competitors in terms of Gross Domestic Product (GDP) per worker. If one compares with the G7 Countries minus the UK then the ratio between 1991 and 2006 was reduced from 127 to 112. The USA reduction was from 139 to 128, whilst comparison with Italy was more dramatic from 133 to 104, and also impressive compared with France from 129 to 110. The contrast with Germany was from 118 to parity at 100, whilst there was a marked improvement against Japan from 109 to 90. Interestingly, at 1991, in terms of GDP per hour worked the USA, French, and German ratios, compared with UK=100, each stood at 135. By 2006 the USA disparity had been reduced to 117 and both France and Germany to 117. Italy had reduced from 124 to 97, whilst Japan, already less than the UK at 97 in 1991 had fallen still further, in relative terms, to 84 in 2006. The G7 ratio had reduced from 121 to 108. Russia is the most recent addition to what is now the G8, the other members being Canada, France, Germany, Italy, Japan, UK, and USA.

54. ONS also provides GDP per worker analyses on the basis of constant purchasing power parity. This data is especially revealing in that in terms of both GDP per worker and GDP per hour worked the UK achieved greater relative improvement than key trade rivals. Assuming all countries to =100 at 1991, GDP per worker had risen in the UK to 138, ahead of the USA on 132, G7 minus the UK on 127, Germany 124, France 120, Japan 119, and Italy 116. The UK also dominated in GDP per hour worked, a figure of 146 in 2006 contrasting with 134 which was recorded by G7excluding the UK, USA, and Germany, with Japan increasing by almost a similar amount to 133. The figures for France and Italy were, respectively, 130 and 122. It should be emphasised that these figures relate to relative improvement and, impressive as they are, should not be a reason for complacency especially in an intensely competitive world environment.

55. ONS provides comparative UK regional data on productivity on the basis of Gross Value Added (GVA) per filled job; GVA per hour worked; and GVA per head. In 2006, on the benchmark of UK=100, North West England stood at 90.5 in terms of per filled job; 90.8 per hour worked; and 86.5 per head. It has been mentioned in past Bulletins that this Region is the largest in the UK in terms of population and employment outside of the major London and South East complex. It is unrealistic, however, under a number of headings, to directly compare performance levels with this latter mega “extended conurbation” which houses major institutions and extensive development associated with a capital city/entrepot and its environs. Examples of this weighting is demonstrated by reference to the London index for GVA per filled job of 129.3; per hour worked at 123.1; per head at 154.7. The equivalent South East England figures were also high at, respectively, 107.1; 108.3; and 109.8.

56. Mention was made earlier of the impressive improvements made on the productivity front through the MAS programme administered by the Manufacturing Institute. Even in the period between 1996 and 2004 inclusive, the latest official figures available, the North West experienced an increase in GVA per Manufacturing workforce job of over 27% to a figure of £41,900. The actual figure is worth noting because it indicates the high value of the Production industries. By contrast, for instance, the figure for All Industries and Services in this Region, at 2004, was £30,100. There is, however, a strong inter-dependency between sectors especially in a highly sophisticated economy such as the North West.

57. In February 2008 EUROSTAT published Regional GDP figures as at 2005 for the EU27. On a purchasing power parity basis North West England had a GDP per inhabitant figure equivalent to 23,335 Euros compared with the EU 27 average of 22,400. On the comparator EU27=100 this suggested an index for the North West of 104.2. Within the Region both Cheshire, with an index of 132.8, and Greater Manchester, 110.0, were both above the EU27 average. In addition Lancashire, on 97.2, was fairly close to the average whilst Cumbria recoded an index of 90.2, and Merseyside 84.8. Of the 35 sub-regions (NUTS Level 2) Areas for which data was available in the UK Cheshire, with 29,744 Euros, recorded the fifth largest figure only behind Inner London, 67,798 Euros; Berkshire, Buckinghamshire & Oxfordshire, 168.0 Euros; Bedfordshire & Hertfordshire, 136.1 Euros; and Gloucestershire, Wiltshire, & Bristol/Bath area, 133.9 Euros. Greater Manchester was in thirteenth position.

58. Amongst a number of positive features relating to North West England are its size and its diversity. Both are decided assets although, ironically, its size renders it difficult, on the statistical front, to rapidly “improve” on performance. In essence it requires substantial absolute increases in employment, output, investment etc, to bring about a significant percentage change. The Region itself covers an impressive range of geographical landscape and activities from the bustling market town areas near the Scottish border to the revitalised Automotive Industry in Crewe.

59. The latest official ONS Regional Accounts, which became available on 14^th December 2007, illustrate the complexity of our Region. Headline GVA at current basic prices in 2006 was provisionally quoted as £111.3 billion for the North West. This represented 9.9% of the UK figure, third only to London on £196.8 billion, and South East England on £177.2 billion. The only other region to reach the £100 billion mark was East of England with £109.9.The North West’s GVA per head figure at £16,234 compared with the UK average of £18,631. On a comparator of UK =100 this results in a North West index of 87. In the last five years for which figures are available, 2002-2006 inclusive, this Region’s index has been either 87 or 88. Nevertheless between 2002 and 2006 North West GVA has increased by £2.6 billion or 18.8% at the same time as London has seen a £5.6 billion increase or 25.7%.

60. Within the North West there are thirteen NUTS Level 3 areas whose Headline GVA per head index, compared with UK=100, ranges from 115 at both Greater Manchester South, and Halton and Warrington, to 57 on the Wirral. There are even contrasts between locations in close proximity. For instance, whilst Greater Manchester South, on 115, has the relatively prosperous Cheshire County Council area to the South with an index of 106, to its North is Greater Manchester North on 68. Even within the NUTS 3 areas there are considerable variations. As an example Greater Manchester South, whilst containing many very positive, high growth activities also contains a number of hard core areas of deprivation.

61. If a company is to succeed in a challenging market-place then a policy of focused investment is a priority if a leading edge position is to be maintained. An important aspect of this is an attention to profit-orientated innovation. ONS provides useful data on a regular basis highlighting expenditure on R+D performed in UK businesses. In the last six years for which statistics are available, between 2001 and 2006 inclusive, the North West has, consistently, been in third place behind the South East, and East of England. In 2006 the North West was responsible for £1.6 billion R+D expenditure or 11.4% of the UK total, whilst for the 2001-2006 period combined this Region undertook some £10 billion worth of R+D or 12.9% of the UK figure. ONS has recently also provided more detailed data on R+D performed in UK Manufacturing Businesses. Again, only the South East and East of England were ahead of the North West which in 2006 recorded a figure of £1.5 billion or 14.2% of the UK total.

62. As with most set of statistics care needs to taken in interpreting the actual figures. In this context, on the wider aspects of innovation including R+D the reader will find it useful to refer to a discussion paper, produced in May 2006, entitled “The Use and Limitations of Indicators in the Context of City-Regions Development Strategy” which was prepared for “Manchester: Knowledge Capital” by the Manchester Business School. The appropriate reference is on page 44 of that document under the heading “Review of innovation indicators and their usefulness at the regional level”. Amongst a range of issues is the fact that “hard-nosed market-winning” innovation is more than just R+D. This is well brought out when visiting a number of companies in the North West. There is often evidence of businesses incorporating a seemingly low key improvement such as readapting various machinery and equipment and securing notable improvements in quality and/or productivity.

63. An anticipated event during the year is the Government’s Budget Statement which has implications for all parts of the community and particularly the Business Sector. Since New Labour came to power in 1997 at least some of the mystique and uncertainty has been removed by the introduction of the pre-Budget Report some months in advance. Most Budgets in recent years have tended towards a “steady as she goes/stability” approach. Whilst this tends to attract a level of cautious approval there are also voices demanding a more vigorous support of Industry and Commerce. Both these type of sentiments were displayed following the 2008 Budget which was delivered to the House of Commons on 12^th March by the Chancellor of the Exchequer Alistair Darling.

64. Andrew Semple, the North West spokesman for the Manufacturers organisation the EEF, welcomed the package of “innovative” measures contained in the Enterprise White Paper but wished that there had been some announcement on the future direction of business tax strategy. Amongst a number of mixed responses was that of Christine Hewson, tax partner at KPMG in Manchester. She acknowledged that the Chancellor had mentioned initiatives such as an increase in the Small Firms Loan Guarantee Scheme which has been extended to all SMEs. However, Ms Hewson was concerned that SMEs were “going to be hit by a tax hike next year when the rate of Corporation Tax is increased by three per cent”. Other views from around the Region varied. For instance, there was muted approval relating to national plans to invest £12.5 million to boost the number of female entrepreneurs. On the negative side there were concerns over road pricing and fuel duties. There was, however, better news in July 2008 when the Chancellor announced that the 2p rise in fuel duty, due to take effect in October, had been postponed. It was hoped that this decision would help “motorists and businesses get through what is a difficult time for everyone”.

65. The Chancellor expected the economy to grow by between 2.25% and 2.75% in 2009 compared with the 2.5% to 3% anticipated six months previously This adjustment was made as the effects of the credit crunch that began in the USA last year continue. Inflation was expected to rise before returning to its 2% target in 2009. The overall sentiment expressed in the Budget speech, however, was one of optimism for the long-term future of UK business. The North West has a significant presence of large enterprises within its boundaries but it also has an immense number of both small and medium-sized operations that are making important contributions to the competitive economy. In this respect it is good to record the commitment to improving the ability of small firms to access Government contracts. A target figure of 30% of total is welcome. Launched in 2006 www.supply2.gov.uk aims to open up the public procurement market to all types of business, especially SMEs. This is by giving them the facility to search, be alerted to and view open low-value contract opportunities, including R+D, across the Public Sector. In order to assist SMEs in accessing contracts the Government were to introduce a free three month trial period for new firms registering on supply2gov. The Government also intended to do more to encourage Public Sector buyers to register and post opportunities on the site.

66. The Government is providing the National Council for Graduate Entrepreneurship (NCGE) with additional funding to establish university enterprise networks. The NWDA is very supportive of the development of a network of entrepreneurial universities and will be working in the Region to drive forward this initiative. It is felt that this initiative will not only provide support for businesses across the North West but has the potential to extend its influence to include schools, Further Education colleges, and the wider community. The continuous development of digital technologies is transforming most sectors. Regional Development Agencies have recognised their importance and sought to strengthen local capacity through the development of centres of excellence notably Media City at Salford Quays. This combines access to North West leading academic institutions and a cluster of creative firms around the projected new BBC complex.

67. The central platform of the North West’s business advance is its people from the most senior chief executive to the most recent junior member of staff. The enhancement of the Region’s skills base has always been crucial to the prosperity of the area and, in the context of fierce global competition, this is a priority. The considerable variety of activities undertaken by North West businesses necessitates an impressive range of expertise and capabilities. Almost whole new sectors or sub-sectors have emerged in recent years from specialty including Ethnic foods to innovative responses from suppliers to the Transportation industries.

68. Mention of key contributions from the Ethnic communities provides an opportunity to emphasise the very positive impact generally of people from abroad. This has not only been in terms of entrepreneurship but also in becoming a valued part of the Region’s work-people. For instance, last year the Defra-funded research for Voluntary Action Cumbria found that employers in South Lakeland were almost unanimous in their praise for overseas workers. The North West has benefited immeasurably throughout its history from the influx of people from other locations and this is continuing today. Ernst & Young’s ITEM Club has indicated that Britain, as a whole, would have suffered slower growth and higher inflation and interest rates but for the new arrivals.

69. Productivity improvements have masked the existence of both current and future skill shortages. A disturbing feature is the relatively high average age of time-served engineers as well as such skilled people as sewing machinists. The North West has major sheep and cattle –rearing activities yet here again the average age of farming personnel continues upwards. Other shortages become apparent when a business seeks to expand with the dawning realisation that there is a gap in the middle-management structure. The intensification of globalisation and North West’s overseas market involvement demands a greater language-learning culture. Considerable local publicity was given recently to a Greater Manchester school that failed to secure a single GCSE in modern languages due to the fact that no pupil sat the exams. Singling out individual cases is not always helpful but it has tended to fuel criticism over the Government’s decision in 2004 to remove foreign languages from the list of compulsory GCSE subjects.

70. Government policy has, nationally, sought to see an increase in people going onto Further Education especially at universities. However, a number of employers have commented adversely on low numeracy and literacy skills of some potential recruits. The National Literacy Trust has stated that, for every company employing over fifty employees, the average yearly loss is £165,000 in poor quality control, lost orders, and poor communications. A local Enterprise organisation has suggested that poor basic skills could well cost UK Industry around £ 5 billion a year.

71. The previous Economic Intelligence Bulletin indicated that the North West had the highest number of long-term sick amongst UK regions. Figures for March-May 2008 suggest that the North West had an Employment rate of 72.5% compared with the UK average of 74.9%. The North West was only 8^th out of the 12 UK regions, including 10^th in terms of Male Employment rate and 6^th in terms of Females. The Chancellor has highlighted £ 60 million to be available over three years to boost skills of those entering the labour market. As part of the Government’s “Enterprise Strategy” a National Enterprise Academy, scheduled to open in September 2009, is to be built in Greater Manchester. The £8 million centre, funded by the Government and Peter Jones of TV “Dragon’s Den” fame, has the backing of Manchester Business School. New NVQ qualifications in enterprise will be offered to people between 16 and 19 years of age giving students skills for the workplace or for starting their own business.

72. The central contribution that training makes toward overall progress and prosperity cannot be over-emphasised and was given considerable coverage in the final report of the Leitch Review of Skills. It is important that the Region and its businesses take advantage of training opportunities including the finance that is available. For instance, Government Skills Minister, John Denham, expressed concern this June that, nationally, around £115 million had been transferred from the “Train to Gain” programme to other budgets because it had not all been taken up. A local article in the press suggested that since its launch in 2006 “Train to Gain” had “enabled almost 40,000 employees in the North West to undertake training”.

73. Mention has been made already of the contribution of the North West Manufacturing Institute towards increasing productivity performance amongst companies. A study of that organisation’s website www.manufacturinginstitute.co.uk should form a regular part of business activity. The Institute is an independent charity, designed by manufacturers for manufacturers, and also plays a significant role in the skills agenda. As well as a firm commitment to apprenticeship training, the Trafford Park body runs key courses ranging from the MSc in Manufacturing Leadership to the Accelerated Route to Lean Manufacturing. Every event is highly focused and key to Industry’s needs.

74. A useful document to access appears on the NWDA website, www.nwda.co.uk, and relates to the North West Employment & Skills Evidence Base which was published on 11^th July 2008. The report was produced by Regeneris Consultancy on behalf of the North West Learning Skills Council (LSC) and NWDA. The primary purpose of the report is to identify the critical employment and skills issues that the Single Regional Strategy and the Regional Skills Strategy will need to address.

75. Latest official ONS data indicates that the North West is the third largest employer in GB after London and the South East. It is also the third largest in the UK but directly comparable data was not readily available for Northern Ireland. At March 2008 the North West’s 3.0 million employee jobs accounted for about 11.3% of the GB total. Collectively London with 4.0 million employee jobs, the South East, 3.7 million, and North West, 3.0 million, accounted for over 40% of the GB total of 26.4 million.

76. Although Manufacturing employs less people than formerly its importance should not be under-estimated. As indicated earlier there is a strong inter-relationship with other sectors. A number of jobs allocated to other parts of the economy are highly dependent on the success of Manufacturing. A good example of this is BAE Systems in Central Lancashire and BNFL in West Cumbria where the local supplier, catering, retail and allied trades would suffer considerably without this important Multiplier effect. AstraZeneca is another example, only recently provided figures on the multiplier effect in the North West.

77. The North West, however, is firmly in the number one position in the UK in terms of employee jobs in Manufacturing. Official ONS data for March 2008 indicated a North West figure of 368,000 or about 13.1% of GB. The Region closest to the North West in terms of Manufacturing employee jobs was the West Midlands, albeit some 32,000 less on 336,000. The only two other UK regions employing 300,000 or more, at March 2008, in this key Sector were the South East with 317,000 and Yorkshire & the Humber with 302,000.

78. In the period between March 2007 and March 2008 the North West experienced a marginal net decline of 6,000 employee jobs in All Industries and Services. This represented a fall of 0.2%. In the same period North West Manufacturing jobs fell by 5,000 or 1.3%. However, this represented a considerable flattening out in that between the March months of 2006 and 2007 North West Manufacturing employee jobs had suffered a net decline of 7,000 or 1.8%, and in the previous 12 months to March 2006 had fallen by 30,000 or 7.3%. These figures represent something of an achievement for North West Industry especially in view of the highly competitive conditions globally affecting cost structures. In addition there have been notable productivity improvements that have reduced costs and include an element of labour saving.

79. The North West has a proud heritage in terms of its diversity of businesses including a number of high value enterprises securing major orders both at home and overseas in very demanding markets. This could only have been achieved through its people with their inventiveness, expertise, and determination. In the real world level playing fields are hard to find as indeed are models of perfect competition. As a result dedication does not always secure its true rewards with many companies fighting hard to secure profit margins. A valuable approach has been the Government policy of a National Minimum Wage. From October 2008 the adult rate is scheduled to increase by 21p an hour to £5.73. Even here, however, there can be difficulties in that there are differing profit levels between individual companies and, indeed, sectors. Some firms, for instance, have indicated that further extension of the minimum level tends to erode away payment differentials awarded to the quicker workers.

80. A subject that is seldom off the agenda is global warming and climate change. This is a subject that continues to generate considerable discussion and policy suggestions at all geographical levels. On 12^th July 2007 the Manufacturing Institute hosted the “Manufacturing Energy Conference 2007” at Salford Quays. This keynote Event included a good mix of speakers including from individuals companies and sectors. Prominent amongst the speakers was Ian Fells, Emeritus Professor of Energy Conversion at the University of Newcastle –Upon- Tyne. The Professor has published over two-hundred papers on a range of subjects from environmental protection to rocket energy and has appeared on numerous TV and Radio programmes. In addition he has advised high power bodies both within the UK and worldwide including Governments and the EU on Energy, Environment, and related issues.

81. A healthy feature of the Event was that it did not spin-off into “Blue Skies” suggestions. In fact, the central theme was one of pragmatism with individual businesses explaining how environmental awareness could result in significant cost-savings. One carpet manufacturer from the Midlands explained that without the benefits of Energy projects undertaken over the previous 24 months they would have been spending almost £140,000 more on Energy. This actually excluded the value of Climate Change Levy exemption which was then in the order of £98,000 per annum. Energy-saving projects ranged from compressor-control to voltage reduction.

82. Before the Bulletin moves into a more detailed analysis of individual sectors it might be useful to quote some recent overall good news that demonstrates the Region’s capabilities in attracting investment. According to data from UK Trade & Investment the North West succeeded in securing around 155 inward investment projects in 2007/8 creating or safe-guarding approximately 14,600 jobs. This represented 18 more projects than in 2006/7 and 7,100 more jobs. The 155 projects this year compared with the 91 in 2004/5.

83. The growing sophistication of Industry and Commerce both here in North West England and elsewhere makes it difficult sometimes to allocate a precise sector for a number of firms and organisations. This is as one would expect given the emergence of a number of enterprises that have sought to identify key market opportunities rather than become over-engrossed in specific one product development. New technology can considerably aid this approach as indicated in an article in the Summer 2008 edition of “Research Intelligence”, a Quarterly newsletter published by the university of Liverpool. On page 14 under the heading “Borrowing from Biology” the observation is made that it is well over sixty years since engineers realised that “biology might have the potential to suggest novel engineering solutions. This insight has led to biomimetics as diverse as cat’s eyes reflectors, VELCRO®, and smart fabric modelled on pine cones that adjust to ambient temperature changes.”

84. UK researchers joined forces in 2002 setting-up the National Carbon-Based Electronics Consortium, an initiative conceived and managed by the University of Liverpool. Today members of the University’s Biomems, Organic & Silicons Electronics Research Group are also devising ways to integrate silicon, polymers, and biomolecules to create new technologies and new devices in applications overlooked by the microelectronics industry. Professor Dan Nicolau, a chemical engineer in Liverpool’s Department of Electrical Engineering & Electronics, believes that Bioengineering has the potential to help consolidate the high added value of Europe’s biomedical, advanced manufacturing, and IT industries through the development of cross-field applications. For further details see www.liverpool.ac.uk/researchintelligence/issue35/biologyhtm.

Agriculture, Forestry, Fishing, Food, & Drink.

85. Agriculture covers a significant part of the North West England land mass and, given the wide and complex challenges that it faces, provides considerable evidence of the Region’s spirit of resolve in achieving successful outcomes in a very competitive environment. The summer of 2007 was disappointing and, as this Bulletin “goes to press” in late July 2008, this summer so far has been unpredictable to say the least! Sadly, for instance, the Royal Lancashire Show at Bilsborrow was cancelled to the public in July after torrential rain had turned the new show ground into a quagmire. The Event had also been washed-out in 2007 when it was to have been held at Samlesbury. In this context an interesting development has been the work of the Oxford University –based UK Climate Impacts Programme (UKCIP) which has been seeking to predict future climatic conditions. On the basis of research undertaken UKCIP suggests that there will be a tendency to drier and warmer summers and wetter winters but, surprise, surprise, there is expected to be a greater warming in the South East than the North West! The Government has launched a new information hub, part of the Defra website at www.defra.gov.uk/adaptation, which will offer easy access to the most comprehensive collection of resources on adapting to climate change.

86. In 2001 the North West especially Cumbria suffered considerably from the outbreak of Foot and Mouth Disease. Fortunately the problems which arose from Pirbright in South East England in autumn 2007 were not long-lasting. Nevertheless, the disruptive effect in the midst of a particularly busy period was a matter for concern. At least one local Cumbrian uphill farmer, speaking in September 2007, was incensed over the restriction of movement that had left his sheep stranded unable to go to market. Wages and other costs had been paid out but this dislocation was going to prevent any immediate pay-back. Indeed it was suggested that unless proper precautions were set in place then local farmers might struggle to recover from such set-backs. From a health viewpoint attention has also been focused on other parts of the world especially in connection with bird flu or avian influenza. The UK has not been completely free although it is now some months since the last case was confirmed.

87. Considerable discussion has taken place in the North West and elsewhere over the tardy receipt of Single Payment cheques. The latter were, at least partly, devised as a simplification of the then headage and deficiency payment system. It has been suggested, for instance, that these area-based Single Payments allow the farmers to manage the land in an environmentally-friendly manner whilst adapting to market forces. There have, however, been a number of complaints over the new system relating chiefly to bureaucracy and timeliness of the Payments to the recipients. However, sheepdog breeder Robin Dean, who also runs some six hundred ewes at Chipping in Lancashire, made a very profound comment in the “Farmers Guardian” of 7^th March 2008. He indicated that we are now beginning to see the results of fewer cattle and sheep in the uplands which was having a negative effect on the environment. Indeed before long he felt that schemes would have to be introduced to reverse this trend.

88. There has been considerable discussion over the Rural Payment Agency’s targets. Just as a snap-shot example the Rural Payments Agency had, by early May 2008, paid out to English farmers £1.26 billion of Single Payments. This represented 86.5% of the estimated total fund of £1.45 billion. Almost 92% of claimant farmers, a figure of 97,800 in England, had received a full SPS payment. However, the comment was made at the time that this still left around 9,000 farmers awaiting payments totalling £190 million, many of whom were based in the North. The Country Land and Business Association (CLA) had been receiving pleas for assistance from “desperate members facing a cash-flow crisis”. The “Farmers Guardian” was, however, recording concerned comments particularly from the National Farmers Union (NFU) about payment targets for 2008/9 which, it was suggested, left farmers in England “trailing behind their EU counterparts”.

89. On the wider policy field North West farmers, as elsewhere in the Country, are keen to see a more level playing field achieved across Europe. The development and administering of the EU Common Agricultural Policy (CAP) has been a “bone of contention” for a considerable time. Agricultural Commissioner, Marian Fischer Boel, stated in late May 2008 that the recently announced CAP Health Check proposals were a continuation of the 2003 reforms. They presented, in her opinion, an opportunity to move towards removing subsidies that were out-dated and instead focus expenditure on challenges such as climate change, biofuels, water management, and protection of biodiversity.

90. The UK Government, through Hilary Benn, expressed support for an approach that would see funding re-directed from production subsidies to “targeted measures that would improve our landscape and biodiversity”. NFU President Peter Kendall commented that, although the proposals were in the right direction they did not do enough to ”eliminate the potential for different treatment of farmers across Europe”. It was noted, however, that the French Agriculture Minister had recently urged the EU to consider the importance of subsidies in the face of the global food crisis. World Trade Organisation (WTO) talks collapsed in Geneva at the end of July 2008. This was not unwelcome to a number of EU members who had feared that a deal would have resulted in “ a surge of cheap imports onto the continent”. During a visit to the farm of NFU President, Peter Kendall, the Chancellor of the Exchequer, Alistair Darling, reiterated his commitment to CAP reform and removing barriers to production. He emphasised that the decisions taken by farmers should be driven by market demand and not subsidies.

91. The April Budget evoked some concern from the Agricultural community. The situation relating to fuel was particularly crucial especially given the dependence of the local farmer on transport. Country people rely on transport as a means of quickly getting from “A” to “B” including use of 4x4s which, because of their relatively high polluting were to face large increases in duty. The Country Land and Business Association President, Henry Aubrey-Fletcher, suggested that the Budget would set in motion “a damaging increase in corporation tax from 19% to 21% for small, unincorporated agricultural businesses”.

92. The Northwest Regional Development Agency (NWDA) makes an important contribution to the Region’s Rural economy. As an example on 16^th July 2008 it announced a £75 million funding programme to support the North West’s rural areas. This is being made available through the Rural Development Programme for England (RDPE) jointly funded by Defra and the EU, and managed by NWDA. It consists of three parts, namely £38 million towards improving the competitiveness of the farming and forestry sectors; £37 million towards improving the rural quality of life and helping in the diversification of the rural economy; and as a third strand a method of delivery through local “LEADER” groups which would draw upon some of the monies allocated to the first two activities.

93. In Queen Victoria’s reign, (1837-1901), much of the food consumed in most parts of Britain came from within a fairly small radius. Today the position could not be more different with lamb from New Zealand, beef from Argentina, oranges from Florida, cranberries from Canada to quote just a few examples. The global farm trade has in fact boomed. For instance in 2002 the UK export market in meat was about £514 million and by 2005 had risen still further, by around 42%, to £728 million. There is, however, a still vibrant industry on the doorstep that can be fostered. This has been emphasised by the Making Local Food Work (MLFW) project which brings together the Soil Association, The National Farmers’ Retail and Markets Association (FARMA), Food Links UK, Sustain, and other key bodies, with the aim of promoting local food around the country. The programme will support 650 sustainable community enterprises across England including farmers’ markets, community-owned shops, and community-supported agricultural schemes. A major aim is to re-establish village shops as a sales channel for local producers. There is also an intention to see the creation of new consumer-led buying groups.

94. Agriculture plays a much larger part in the life of North West England and the UK as a whole than, sadly, many people realise. Certainly in the North West not far short of 80% of the land area is woodland, grassland, forest, and/or agricultural etc. The urban part is actually in the minority! Indeed it was only a few years ago that Cumbria’s Agriculture Sector was estimated as contributing around 8% of her total output from all industries and services. There is, fortunately, a determined effort in various quarters to explain the importance of this vital Industry to the wider community. For instance, The Cumbria Farmer Network (Rural Futures) seeks to promote public understanding of farming lives and operations. As will be explained later this is only part of their wider remit but a recent example of their activities is worth noting.

95. Last winter the Network selected two local farms to appear on a video in order to illustrate the rich diversity of agriculture in the area. One was Tilberthwaite Farm at Coniston which is now controlled by the National Trust and is part of the estate that was once owned by renowned children’s author Beatrix Potter. It is a condition of tenancy, as with other farms that were formerly held by Ms Potter, that a hefted flock of Herdwick sheep is maintained on the farm. This is a very high rainfall area with well over 100 inches annually and, in any case as tenant farmer Glenn Wilkinson has commented, the Herdwicks are the only breed that could cope with the conditions. Apart from the sheep, which includes a few Swaledales also, the farm runs a small Limousin-based suckler herd of around twenty spring calving cows. The other farm selected for the attentions of the video diary, also within the Lake District National Park, was Deepdale Hall a 160 acre unit run by the Brown family. Stock comprised about 600 breeding ewes including 500 Swaledales, and 100 Herdwicks with 250 replacement gimmer hogs. Chris Brown is involved with Penrith and District Farmers Market and he and his family also link up with a local wool craft business that uses some of their fleeces in blankets. Tourism also plays an important role and has often subsidised the farm.

96. In addition to making video diaries to help educate the general public, Cumbria Farmer Network undertakes technical farm demonstrations and workshops. They had, also, held fifteen farm demonstrations up to around end January 2008 in a joint project with Cumbria Farm Link in a catchment sensitive farming project. Other activities had included running a farm assistants scheme; starting the Hills Alive project to find out how other areas are facing the future; establishing a carcase disposal scheme in time for the 2008 lambing season; as well as, amongst other achievements, collecting 125 tonnes for the Farm Plastic Recycling Scheme. The organisation, which seeks to meet change and secure farmers and rural futures, has seen a 42% rise in membership since August 2007.

97. Lancashire Rural Futures have also been prominent in the life of the Agricultural community. John Welbank, Programme manager at LRF, speaking in March 2008, indicated that since 1999 his organisation had delivered over 1,200 new and safeguarded jobs whilst more than 17,000 hectares of land had been placed under some form of positive environmental management. Through both their business and environmental support they had facilitated over £26 million of investment into rural Lancashire. LRF had played a key role in helping to establish successful businesses such as Bowland Fresh, Bowland Forest Foods, and Growing with Nature. This was in addition to sterling work on behalf of smaller farm enterprises including diversification. Unfortunately, however, new money, through the Government’s Rural Development Plan England, is not expected until next January. This has created a funding void and, unless other alternatives occur, the immediate implications were staff redundancies with John Welbank and a small admin team remaining for a few months to complete existing contracts.

98. Stock-rearing features prominently in any evaluation of the North West’s Agricultural Sector. Not surprisingly milk prices still continue to feature strongly. In March 2008 EU Agriculture ministers agreed a 2% quota increase for 1^st April to help meet growing global demand for milk. In theory a further 2.8 million tonnes of milk could be produced annually across the EU. However, a number of countries including the UK are not meeting their national allocations. The NFU has supported phased increases in quota as the best means of unwinding the regime. The contention is that the most sensible approach is while markets are strong but what must be avoided is an increased level of milk supplies that leads to a fall in prices.

99. There was much debate last year following the report of the Office of Fair Trading (OFT) in which dairy pricing had featured. The development of farm shops, farmers’ markets, box schemes, and other direct and local outlets have been important providing a number of profitable outlets. The fact remains, however, that the giant supermarkets of Tesco; Asda; Sainsbury’s; and Morrisons account for around 75% of the UK’s grocery market and, therefore, a good relationship with the farming community is essential. However, on a positive note, the major supermarkets have developed the concept of having dedicated milk suppliers. The Asda-Arla partnership has been established for some time, and Tesco has its dedicated supply arrangement in place. It is also fairly recently that Sainsbury’s announced that it was setting-up a Dairy Development Group that would see it source the 430 million litres of liquid milk that it sells annually from the direct groups of processors Robert Wiseman Dairies and Dairy Crest.

100. As readers of previous editions of this Economic Intelligence Bulletin will know the North West has its own very high quality, hands-on, retailer namely Booths who are Britain’s oldest family-owned grocery business. This enterprise has played a significant role in developing a firm relationship with the local Agricultural community. Even by 2007 it was estimated that at least 25% of its store products were locally produced. Items stocked ranged from Bowland Fresh Milk to award-winning cow and goat cheeses. Booths embrace a diverse range of local produce and have certainly enhanced the life of former Hong Kong based banking lawyer Tony Fox. Told to “take it easy” following a heart attack a few years ago he subsequently settled in Eskdale in West Cumbria with his wife and family and began rearing British Saddleback pigs. Booths were so impressed that they decided to buy the pigs on a deadweight arrangement, the first time that they had worked with a producer in this way. The products resulting include a roast ham, pork chops, and sausages.

101. Developments in the North West’s Agricultural Industry link in closely with other sectors. A notable case occurred in October 2007 when press reports indicated that Clitheroe-based Farmhouse Fare were to purchase from the Bowland Fresh Milk company for use in their dedicated pudding-making operation. It was suggested that the contract had the firm approval of key customers, Co-op and Morrisons supermarkets, in their capacity as supporters of locally-sourced milk. Bowland Fresh Milk is a company formed in 2001 by farmers from the Forest of Bowland to develop their own brand. Because of their control of key elements of the supply chain this ensures a better milk price at the farm gate. Milk and cream from the farmer-run operation was to be used in Farmhouse Fare’s bread and butter, sticky toffee, and chocolate puddings. William Slinger, director at Bowland Fresh, indicated that contracts such as this were crucial to the “ongoing survival of many dairy farms” in the area. Other key contract arrangements have included supplying Booths, and Asda as well as Lancashire cheesemakers such as Singletons and Dew-Lay.

102. Late autumn 2007 saw the fifth anniversary of the Plumgarth local food hub near Kendal. In the early stages Plumgarths Lakelands Food Park, opened by farmer John Geldard and his family, provided a hub for local producers including a farm shop and high quality production units. Giant supermarket Asda later joined forces and this saw the initiative being extended to an increasing number of its stores. John Geldard is pleased with the results from working with Asda. As he states “we discuss, negotiate, and together find workable solutions”. A distinct feature of the Kendal store has been the way in which local produce, rather than being placed separately, has been displayed alongside similar products on the shelves. Asda’s operations director Sally Hopson has emphasised that this is an essential part in the strategy to grow local sales. It is also dependent on critical volumes of each type of product being available.

103. Given this practical commitment and success it was no great surprise that John Geldard and the Plumgarths Hub have won the DWF accolade for the “Most Outstanding Contribution within the North West” as part of the 2008 Food Northwest Awards. His 210-hectare farm at Low Foulshaw, with 80 acres of additional rented grazing, is a traditional livestock business with cattle, sheep, and free range layers. As indicated earlier the Plumgarths Hub works within the local food chain to deliver traceable, high quality produce to meet demand and links regional producers with major chains such as Asda. Amongst other Award winners was Singleton’s Dairy in Preston who during June received a visit from the Queen; Delemere Dairy at Knutsford; The Contented Cow Company at Nantwich; and Gibsons Foods at Ellesmere Port.

104. Partnership to achieve the best for the Industry and its customers might almost be a by-word in the North West. Food businessman Howey Hegarty regards milk produced on the Fylde in Lancashire as something special in terms of quality and taste. For that reason, together with well-known local dairy farmers John Sanderson and Philip Critchley, set-up Fylde Dairies head-quartered at Bamber Bridge near Preston. The ultimate aim is that the farmers supplying the milk will receive one of the best, in not the best, prices in the UK. The intention is to continue to build a sustainable business, not undermined by disconcerting fluctuations especially in price, and is helped by Mr Hegarty’s background in sales and logistics. He was actually able to bring into the operation a customer portfolio of more than 180 with a further 230 joining within the first three months of trading.

105. Fylde Dairies continue to seek new farming suppliers but, crucially, no-one will be taken on unless they can be guaranteed long-term commitment and competitive price security. Amongst various arrangements is one that Fylde Dairies has with local cheesemaker J J Sandham who, in turn, supplies both Booths and Asda supermarket retailers. The customer base also includes food service, schools, the Ministry of Defence, hospitals, ice cream manufacture, cafes, and a range of retailers. The broad spread of customers provides the business with flexibility including operating without concerns over seasonality. Towards the end of 2007 the split of milk usage was about 60% into poly bottles and 30% to cheese and ice-cream manufacture.

106. There was considerable delight in October 2007. This was when Ian and Sally Macalpine, who run a 200-cow pedigree Ribblesdale herd on their 68 hectare grass farm at Clitheroe in Lancashire, were presented with the UK’s most prestigious dairy award the NMR/RABDF Gold Cup. The Macalpines restocked with Jersey cows after the 2001 Foot and Mouth outbreak to produce a value-added milk rather than continue to sell into a commodity market. Ian and Sally also won the Lillyhill Cup for the third year running. This is awarded to the highest placed Jersey herd in the Gold Cup competition. The North West features strongly and, indeed, in the previous year of 2006 Grosvenor Farms’ Hatton Heath dairy unit at Alford in Cheshire won the coveted RABDF/NMR Gold Cup. The operation was amongst the top five volume producers in the UK with 14 million litres from four herds. It was, also, a large mixed unit business maintaining a profitable balance between arable operations and milk production. The strong environmental approach, managed within commercial constraints, dates way back to the 1970’s.

107. Amongst a number of authoritative agricultural bodies is the British Blonde Society which every other year names its best commercial herd. The most recent winner, announced in March 2008, was Sleddale Hall at Shap in Cumbria which is tenanted from United Utilities by the Harrison family. Mike Harrison and his parents, Henry and Joyce, have been using Blondes for around two decades breeding both pedigree and commercial cattle. It has been found that the breed is particularly suitable on the traditional Lees Favoured Area unit where input costs are closely monitored and labour is kept to a minimum. Stocking numbers are required to meet requirements of the Lake District Environmentally Sensitive Area scheme and, therefore, Mike Harrison runs 1,100 ewes, mostly Swaledale and Texel crosses, and 150 beef cows. Numbers also include the twelve cow pedigree Shafell Blonde herd founded some twenty years ago after the family had used a Blonde bull commercially and were impressed with the resulting long, lean calves. Mike has commented that the latter are currently in big demand in the recently re-opened export market.

108. Grant aid for capital investment from the NWDA –funded programme Farming Connect Cumbria has considerably facilitated the forward development plans of Malcolm and Nigel Dockeray, dairy farmers at Kelsick, Abbeytown near Wigton. The funding has helped them divide the 460-acre family farming partnership to allow better prospects for the next generation. The grants have enabled more modern, as opposed to second-hand, equipment to be purchased and, crucially, get the herd up and running and carry out further investments much quicker. The spending has left the brothers and their families each with modern facilities on two 200-acre ring-fenced farms along with rented ground. Malcolm and Nigel still run a contracting business together and the brothers have each invested in a complete diet feeder in order to increase efficiency. Following free advice, because Kelsick is in a catchment sensitive area, fertiliser use has been reduced to two-thirds of what it was originally.

109. The above story may serve to temper at least some of the concerns of those pundits who fear that the Industry is not retaining or encouraging future generations. Also firmly in this mode is Kath Daley whose family farm is a 175 acre owner-occupied business at Calveley near Tarporley in Cheshire supplemented by 30 acres rented land. On 18^th February 2008 the farm was the venue for a Lely Dairy open day. Kath has recently referred to her family’s decision to invest money in a modern dairy complex as “investing for the fifth generation”. The latter is represented by a four year old granddaughter and a year old grandson. The first sod for the new complex was actually cut in January 2006 and eventually came into use in October of that year. A considerable forward-looking innovation is the use of robotic systems. Although some observers may be surprised to find robotic milking on an organic unit it is more logical than fixed milking times as the cows are milked when they want to give milk.

110. The Foot and Mouth epidemic of 2001 devastated many farmers. These included Carlisle-based Richard Fisher who lost his dairy herd but was back milking by December of that year after acquiring 280 cows from three herds in Lancashire. By March 2008 Richard’s 480-acre Mellguards Farm at Carlisle was supporting 270 pedigree Holsteins plus young stock. There were further plans to move to 330 cows short-term and even around 400 in the future. A critical approach has been through helping to increase fertility and has moved forward through adoption of the Genus ABS Reproductive Management System (RMS) which Richard Fisher uses across the whole herd. This is very much about establishing a regime that increases the likelihood of getting cows in calf. This ranges from increasing the ease of feeding to more effective heat detection. Reproductive performance has increased from a low 10% pregnancy rate to around 22% which is well above the national average.

111. There were numerous “twists and turns” in the unfolding saga of the Ronald Akkerman Cumbrian dairy. After various announcements and proposals the news came in early December 2007 that the West Lakes Dairy Park at Carlisle had been launched. In excess of two hundred Cumbrian farmers attended the event at which Dutch Dairy Industry entrepreneur Ronald Akkerman outlined his then plans for the 20 acre site. He suggested that it would be around twelve months, and “a lot of money to be spent” before the new diary would be receiving milk. It was intended that cheese would then be going out of the facility in spring 2009. The situation had, however, changed dramatically by New Year 2008. Mr Akkerman decided to withdraw from his cheese factory venture and in January the West Lakes Dairy Park share capital was acquired by Chester-based Meadow Foods. The latter had commenced in 1992 as a farmer-backed dairy trading enterprise before merging with Bodfari three years later.

112. The acquisition by Meadow Foods almost doubled its milk field including not far short of 200 million litres from 150 Cumbrian farmers. The latter were the producers who had signed-up to the earlier scheme and only a dozen or so had tendered their resignation following the collapse of the Akkerman proposals. Meadow Foods have guaranteed the milk price, previously offered by Akkerman, of around 27.5 p per litre for the 1^st Quarter of 2008. The project had, however, promised more than just an attractive price. It had provided the opportunity to be involved with a business that would process milk locally. Meadow Foods managing director Paul Deakin indicated, however, that his company had no intention of taking on the £70 million development of the cheese factory. He indicated that the mix of food ingredients and liquid skim sales, that were the basis of Meadow Foods business, were well placed to compete with and even surpass the returns that could have been expected from the medium-term cheese market.

113. With an annual turnover of £250 million this deal consolidated the position of Meadow Foods as a leading UK independent dairy ingredients business supplying to big names such as Nestle and Thorntons. It is the UK’s largest cream processing business and the only independent manufacturer of sweetened dairy products. It was subsequently announced this July that Pamela Harrison, operations manager at Meadow Foods, had won Food North West’s Industry Rising Star of the Year Award. Ms Harrison introduced new farmer payment systems and quality control procedures following her company’s acquisition of the West Lakes Dairy Park. The systems proved themselves by resulting in quicker payments for farmers.

114. Singleton’s Dairy in Longridge near Preston received a visit from Queen Elizabeth II in July. Accompanied by the company’s managing director, Bill Riding, Her Majesty saw cheese being made. In 2005 the Dairy received the “Food from Britain Exporter of Chilled Food Award”. Singleton’s has sent produce worldwide exporting flagship cheeses, Grandma Singleton’s and Beacon Fell, to almost thirty countries. There has been local success with Parlick Fell ewes’ milk cheese and Charlie’s children’s cheeses.

115. It was announced in April 2008 that the Cheshire-based independent cheese-maker, Joseph Heller, had acquired the majority share-holding in Malvern Cheese-wrights of Worcester. This move was aimed at providing Heller’s with new product development and packaging solutions that would give it access to niche, added value, cheese markets. Joseph Heller produces around 15,000 tonnes of cheese annually and is a noted producer in an activity where competition for milk supply is intense. The company also indicated at the time that they were expecting increased energy and fuel costs of around £250,000 this year.

116. April was quite a propitious month for the Food Industry in the North West. Some 750,000 tonnes of UK-grown wheat had begun moving through Cargill’s redeveloped sweeteners plant in Manchester, completely replacing imported maize for the process. The company’s new and extended processing facilities, brought about by a £75 million investment over three years, consolidates Cargill’s UK starch and sweeteners operations on one site. The plant is converting a daily intake of around 2,000 tonnes of wheat into products, mainly glucose syrups, for the Food and Pharmaceutical Sectors. There are also important by-products for Industry, Fish Farming, and Agriculture. Of value to stock farmers is the approximately 320,000 tonnes of moist, protein and energy-rich, feed which is sold under the Trafford Gold label.

117. In November 2007 a range of Cumbrian Cheddar cheeses was launched by First Milk’s new Lake District Cheese Company. The new range was produced at its creamery in Aspatria in West Cumbria and was believed to be the first time that the former Dairy Crest creamery had ever produced chesses bearing the Lake District name. The range included mature, extra mature, and the Cumbrian Smokey which is smoked over chipped oak. Initial distribution was being focused on specialist outlets locally.

118. Asda has stocked Cheshire-based Delamere Dairy goat’s milk for about two years thereby playing a positive role in its progress in the UK market. Consumer demand has been buoyant but increasing feed costs are affecting most producers. Delamere Dairy obtains its milk from across the UK and has appealed to retailers to back this extremely worthwhile sector by increasing their prices. Asda has maintained its supportive role by being amongst the first of the retailers to offer a higher price.

119. A theme running through the economic development of North West England and, indeed, any major location is that only through flexibility and focus on changing market patterns and demands can a successful business expect to thrive. The Walton family farming enterprise trading as Stockley Partners at Stockley Farm in Arley in Cheshire is an excellent example of initiative flair. Currently 700 acres, it was originally run as a mixed farm but with dairying as a core business. When the then existing milking facilities were replaced around 1987 a glass-faced gallery was installed overlooking the milking parlour. Although originally just for farm use the tourist possibilities were foreseen. With the backing of the nearby Arley Hall stately home transport was run from the latter’s car park to Stockley at milking time. Farm livestock on show now includes dairy cattle, horses, sheep, goats, and pigs, making it an ideal attraction for the schools and family tourism market. While the open farm is the public face of Stockley Farm it is, however, still very much a commercially run organic farming business taking in arable, beef, and dairy enterprises with a small flock of free-range laying hens. The 200-cow commercial Holstein dairy herd, for instance, calves all year round and currently averages 7,000 litres of milk.

120. The benefits of the Farming Connect Cumbria programme have already been mentioned earlier. This initiative draws to a close this year and, according to an article in the 15^th February 2008 “Farmers Guardian” had already, since its inception in 2004, injected almost £7.5 million of capital, as well as technical advisory work. It has played an important part at the Bateson family’s Rigg House Farm in Branthwaite in Workington in which a crucial new building has been constructed. To quote one of the partners, Adrian Bateson, “without the grant the building would not have gone up so quickly and if it had not been built last winter I doubt if it ever would have following last year’s poor prices for lambs”. This latter development can house up to 800 ewes for two months pre-lambing, thereby relieving grazing ground and improving management and feeding efficiency. The building was completed in five months, just in time for housing the ewes last year. Apart from the lambing period last year the modern building was also used to contract finish 1,400 bacon pigs.

121. Success in the North West Farming Industry requires an impressive array of abilities and knowledge. This has been displayed by Rob and Tabitha Wilson who have owned Scales Farm near Penrith in Cumbria since 2000. The couple have transformed their business from a low lambing unit to one where considerably more lambs per ewe are achieved not only with better weights but also more quickly. The couple initially lost their 600 Swaledale ewes and 90 suckler cows in the Foot and Mouth epidemic within six months of moving in. Although restocking as swiftly as possible the Wilsons were disconcerted by the high level of abortions. The examining vet identified tick-borne fever. The problem had arisen because, unlike the sheep that had been culled, the incoming stock was not immune from this particular virus. In future it was decided to isolate non-home born stock until properly tested. Sheep welfare including lameness is tackled by measures including a zinc sulphate footbath.

122. For a couple of years after the original re-stock Rob Wilson was unhappy with the very low production rate of the ewes including barren cases. After conducting blood tests a massive deficiency in minerals and trace elements were identified necessitating the introduction of selenium injections and cobalt bullets. Although this reduced the number of barren ewes there was still a high proportion of single births only. Ironically further blood tests revealed a low level of iodine which is linked to selenium absorption! Iodine injections were, therefore, introduced three times a year as sheep are unable to retain this chemical in their bodies. Ultimately this detailed, highly professional, approach has brought dividends. From the same number of ewes the business subsequently achieved 350 more lambs. Towards the end of 2007 the Wilson’s Scales Farm operation had some 1,900 ewes, 600 ewe lambs and 60 sucklers. Cow numbers were expected to reach 100.Lambs are finished all year round and, reluctant to have buildings empty, Rob Wilson also rears both dairy cross beef calves and Christmas turkeys on contract.

123. March 2008 saw the launch of a new range of premium quality beef and lamb. Northern Gold Premium Beef and Lamb has been created by Clifton Quality Meats working in partnership with local farms. The beef is extra matured to enhance flavour and eating quality. Managing director Stephen Helliwell has indicated that the business is based on the principle of best industry practices throughout the supply chain. Clifton Quality Meats opened in Blackpool in 1973 and now operates three sites including one in Leeds in West Yorkshire and has a customer base from the borders of Scotland down to the Home counties. Both the Northern Gold beef and lamb are certified with the Eblex Quality Standard Mark.

124. A definite strength of the North West, whatever the Sector involved, is the range of businesses and activities as well as, crucially, the spread of locations. The “Farmers Guardian” of 3^rd August 2007 included an incisive article by Neil Ryder on the valuable assistance and advice given by the St Helens Chamber of Commerce on Merseyside. As Neil Ryder himself commented the mention of St Helens would cause most people to envisage an urbanised, industrial area noted for its innovative Glass Industry. What not a lot of people know, however, is that St Helens also includes some of the most fertile agricultural land in Britain. The Chamber itself, regarded as a national leader, has its own business advocacy system including one for farming and rural matters. This has been of help, for instance, to Mr Chris Foster of Shoots Delph Farm in St Helens which is a 130-acre organic beef and sheep unit producing beef and lamb for direct sales through farmers’ markets and other outlets. The Farm is actually run in conjunction with a second operation at Haigh near Wigan. Planning issues such as access and signage have been crucial and this is where the Chamber’s advocacy system has been of help. The Chamber also has retailing know-how which is valuable. To quote Chris Forster “the biggest advantage (of the Chamber) is simply having someone there to turn to”.

125. Merseyside’s contribution to Agriculture and the Food Industry is also well illustrated by the achievements of Ms Adrienne Taylor the founder of internet business www.goodfoodstore.co.uk. Already by late 2007 the business was building up a comprehensive range of mainly local suppliers many of which were small farm-based businesses. Adrienne believes that there is a role for both farmers’ markets and her own good food store approach. The former, she suggests, can be a stimulating yet leisure-orientated experience with people spending time wandering around and buying food. In contrast, Ms Taylor’s website on line ordering approach enables good, largely local, food to be delivered to people who are unable to spend the time out and about.

126. Summer 2007 saw the launch of a new web-based farmers supply business promising quality products “direct from original manufacturer at the lowest possible prices”. The business, www.farmertofarmer.co.uk, was thought out by John Loftus and his daughter Alison who run a herd of Holstein cattle at Weeton just outside Blackpool. The business intention was to cut out all the “irritating and avoidable” costs of farm input buying such as salesmen, commission, cars, telesales, bad debts/late payments, brochures, stocks, advertising, and middlemen. The aim was to deal with farmers who know what they want and want to be confident that they have paid the lowest possible price without the need to shop around negotiating small percentages of a supplier’s margin.

127. Initially the main trade of “farmer to farmer” was to in bull semen from the UK, North America, Ireland, and France at a “fraction of the normal price”. To this would be added goat semen from France as well as a range of dairy consumables. John Loftus has commented that the Farming Industry has, too often, bought from PLCs and sold to PLCs. This new business is run by farmers for farmers. Importantly, Mr Loftus has contended, “we are able top offer most of our products at a maximum margin of 10% over wholesale prices for those who order directly off the website to cover our business costs”.

128. Environmental considerations feature in all aspects of Regional and National life, and certainly the Farming Industry in the North West and elsewhere is not exempt. As an example measures introduced by the Government in December 2002 to cut nitrate losses from Agriculture have still not fully achieved their environmental objectives. Additional waters affected by nitrate pollution have been identified resulting in Defra increasing the Nitrate Vulnerable Zones (NVZ) areas in England from around 55% to 70% of the land mass. Cumbrian farmer Tom Fisher recently hosted a joint Milk Development Council (MDC) and Cumbria Farming & Wildlife Advisory Group (FWAG) open day on 650-acre Low Geltbridge Farm near Brampton. This was part of a national series looking at environmental challenges and opportunities and was particularly appropriate given that part of the farm was within a NVZ with the remainder likely to follow.

129. Mr Fisher’s operation has benefited from his focused investment including upgrading of the waste systems. A FWAG assessment indicated that key cost savings had already been achieved. Importantly this included lower phosphate and potash fertiliser expenditure through prudent use of manures whilst marginal land and features had been entered into agri-environment schemes. Amongst other savings a Farming Connect Cumbria grant had facilitated the installation of a slurry separator which had reduced storage requirements by 20%.

130. The Milk Development Council has now been replaced by Dairy Co which also promotes sustainable development. The Farming & Wildlife Advisory Group is an independent registered charity there to provide assistance to people who manage the countryside. This is through the charity’s environmental management expertise. It is hoped that as a result food produced in the UK, the excellent countryside, and wildlife, can be improved and protected for future generations.

131. A number of farmers have seized the opportunity to diversify to help improve incomes. Rural Lancashire funding has helped to transform a redundant agricultural building at Westby Hall, Ballam Road, near Lytham into a caravan and mobile home repair facility whilst nearby stables have been extended to provide an equine retraining centre. This has enabled Andrew Taylor to run his farming business alongside this new activity. Clients in the stored caravan market include some as far afield as Australasia and the Ballam Road unit is considered one of the best in the UK.

132. Rural Lancashire Development Grant aid has also assisted Richard Drinkall at his Backbridge Farm in Waddington, two miles North West of Clitheroe. When the farm was at its peak 130 dairy cows were being milked whilst beef cattle and sheep were also being reared. However, post 2001 Foot and Mouth Richard sought to strengthen his business base by diversifying. This led to the setting-up of Backridge Rural Workshops starting with a candle-maker so that, well before the end of 2007, there were eighteen small businesses on site including a beautician, furniture maker, toy shop, and hairdressers. At the same time Richard still has 80 beef cattle on the farm.

133. The Stamper family occupy Wellington farm in Cockermouth in Cumbria where they are reaping the fruits of a highly focused diversification policy. Leigh Stamper claims that he is probably adding ten times more value to his Jersey milk by using it to make ice-cream rather than selling it via his milk contract. His family had a tradition of milking black and white cows, but following Foot and Mouth in 2001, decided to restock with Jerseys. This was for the purpose of producing home-made ice-cream and marketing it direct to the public through a tea-room and farmshop. Some 110 pedigree Jersey in-calf heifers were bought from Denmark in February 2003 followed by a further 30 imported females and one bull. By May 2008 the herd consisted of 185 milkers. Currently 9,000 of the annual 1 million litres are used for ice-cream production with the rest sold to Dairy Farmers of Britain on a non-Jersey contract. Seedsman David Baldwin advised the Stamper family on the high sugar grass leys. “Every time the field is grazed we have been seeing an extra 150 litres a day”.

134. The entrepreneurial spirit and enterprise within the North West has helped to drive forward a number of forward-looking businesses. One such company is WhyNotAlpacas run by farm owners Robin and Caroline Sandys-Clarke at Gyllas farm in Sedbergh in Cumbria. The name derives from their herd of alpacas which are, more traditionally, associated with the snowy Andes mountains in South America. The company claim that the alpaca wool is second only to silk as the world’s strongest natural fibre. Indeed from gloves and scarves to jumpers and duvets the herd produces enough wool to keep a steady supply of clothing going to an increasing customer base. Initially Robin and Caroline Sandys-Clarke took the alpacas to shows and sold the clothing from there. New clients became aware of the warmth and strength of these products and quickly spread the good news by word of mouth.

135. The alpaca herd is clipped once a year, typically in early June. The fleece is sent to the processors and the wool is used to make a variety of products, some knitted at home by Caroline and others by specialist manufacturers. WhyNotAlpacas products are unique not only in their make-up but also in design. For instance, designer Anni Howard has been brought into the team designing exclusively for the business. Not only is the fleece very light as well as very warm it is also hypo-allergenic so it is particularly useful for asthma sufferers. The local herd is brightly coloured and with twenty-two fleece colours ranging from white to fawns, from browns to black, there is little need to dye the clothing. The business has seen considerable growth over the last twelve months or so with the product range expanding. There are more opportunities in the pipeline and Robin is keen to exploit the internet to enable customers to buy online.

136. Initiative, technical skill, forward-thinking, providing quality products for the customer, hard work, and persistence are just some of the qualities displayed by Bill and Freda Neale. This determined couple have been farming in West Lancashire for over forty years and have, between them, over seventy years experience of arable farming. Deservedly, in 2008, they have been recognised by North West Fine Foods for their achievements. They have been voted “Lancashire Producer of the Year”; winners of the best fruit, vegetable, herb category for their Lady Christal potatoes; and also received awards for their fennel, Romanesco cauliflower, and lemon curd.

137. Bill and Freda Neale are quick to highlight a notable turning point in their farming career. This happened around eight years ago when they realised the potential of redundant land which was located just across the road from them in Burscough .A formerly outworn stable has become the family home whilst a large 18^th Century barn now operates as a tearoom and farm shop on the ground floor and a bed and breakfast business upstairs. Outside there are around eighty surrounding acres of crops ranging from cereals and potatoes to beetroot and cabbages. The farm also contains 700 hens, 60 ducks, and a further 46 acres is rented nearby. Bill runs the farm with his son David, whilst Freda has taken-on the more recent activities with daughter Cathy. When, earlier in their career, the couple were tenant farmers they supplied mainly to the wholesale trade. Poor returns, however, influenced them to sell directly to the public and nowadays they are regulars at around eleven farmers’ markets. To quote Bill “Word of mouth and reputation goes a long way and that’s all we want”.

138. Diversity remains a key strength in the North West both through innovative practices as well as from the welcome contributions of newcomers to the Region. This is demonstrated by the achievements of Danish-born Dorthe Pratt who is married to a farmer in the Dales. She runs the impressive Sedburgh Soap Company producing, on the family farm, a range of natural soaps which are manufactured using pure essential oils. Natural herbs and flowers grown on the farm provide the natural colouring.

139. North West England is noted for the excellence of its Higher Educational Institutions. This certainly applies to the Agricultural Sector. Reaseheath at Nantwich in Cheshire is officially recognised as the UK’s premier specialist land-based college and is aiming for world class status with an ambitious new build programme. A £36 million investment over the next three years will transform the college estate bringing 21^st Century resources to all departments. A cutting-edge animal management centre was opened by celebrity vet Steve Leonard and this was part of a £3.5 million upgrade which will also include a new aquatics and exotics centre and a mammal house.

140. Reaseheath was awarded “top grade in every area” in its recent Ofsted inspection. This was an achievement unprecedented among land-based college. In order to meet the needs of rural industries and communities Reaseheath works with local, regional, and national partners, and, indeed, is just one of twenty nationwide to be awarded the Learning Skills Council New Standard quality kite mark for its work with employers. The Cheshire College’s food technology department has been made Network Champion for Dairy within the National Skills Academy for Food and Drink. The department is also a Centre of Vocational Excellence for Food Chain Technology. The College is specifically investing in the future of Agriculture with an extensive upgrade of its farm. Central to the farm renovation is a state-of-the-art, 32/32 rapid exit milking parlour for the onsite Genus MOET dairy herd. The replacement parlour will allow for an expansion in the milking herd from 170 to 250 and will provide industry standard practical teaching facilities.

141. Wood Park Farm has been owned by the University of Liverpool for approaching half a Century. Until recently it had been run as a unit for almost a hundred cows, initially on a self-feed and later on a TMR feeding system. Average yield from the pedigree Holstein herd had been around the 10,000 litre mark. The University’s Leahurst Veterinary Field Station on the Wirral has recently invested £1 million in modernising and upgrading this unit in order to provide better facilities for teaching animal veterinary medicine. As well as achieving the latter purpose it is also to be run commercially aiming to make a profit. Farm veterinary students are to be taught about farms and the business beyond the farm gate. In this context the faculty could also look towards milk processing and retailing, possibly through a farm shop.

142. Investment in the Food Industry continues to be an essential feature. The “Distinctly Cumbrian” organisation was established in 2001 to regenerate and strengthen the rural economy of Cumbria by supporting the production, distribution, and marketing of local produce. It is funded by the NWDA, and the European Rural Development Fund, and managed by the Cumbria Rural Enterprise Agency (CREA). As part of this regeneration programme a new Food Technology Centre is being constructed at Redhills near Penrith. At the heart of this £1.5 million development are five commercial kitchen units as well as a distribution hub for tenants and other local food businesses. Pauline Herbert of “Distinctly Cumbrian” indicated that probably some businesses would relocate into the Centre full-time whilst other units would be available on a flexible basis. This would be for, say, seasonal production or to deal with peak demand orders.

143. In July 2008 the NWDA announced a funding package of £6.6 million to boost livestock businesses in the North West. This is within Defra’s Rural Development Programme for England and this initial amount is part of a wider £18 million to improve the efficiency, focusing on resource and nutrient management, as well as on animal health and welfare issues. Applicants were now being invited who were interested in running projects in the Region.

144. The Region’s Fishing Industry has had to exhibit a determined and combative spirit in order to survive. The long-distance fishing associated with Icelandic waters has long since gone and the focus is now on much more localised catches. The Port of Fleetwood in Lancashire has felt this impact also in connection with associated jobs that have been lost. However, there has been considerable resilience in the local area and the regular Roll-on/ Roll-off trade has been of considerable value. Local fishermen are concerned, however, about diminishing stocks of fish particularly cod. Because of this situation the International Council for the Exploration of the Sea (ICES) recommended, last year, that there should be a zero catch extending to West of Scotland, Rockall, and the Celtic Sea. Ken Moran, secretary of the Fleetwood Fish Producers’ Organisation has claimed that the Irish Sea is suffering because bigger vessels are catching the fish before it arrives here. Steve Walsh, chairman of the association, indicated that Fleetwood boats had been concentrating on plaice, roker, and prawns rather than cod. At least one local boat owner had tied up his vessel and gone to work in the North Sea.

145. It was sad to learn this July that Fred Riding, skipper-owner of the vessel “Inspiration”, is likely to move on later this year. Fred, one of Fleetwood’s few surviving, single-handed, in-shore fishermen, has made his living fishing for plaice, brill, and turbot out in Morecambe Bay. He has been in the Industry for more than forty years and is concerned that rising fuel costs, and the static price obtained from fish sales are making the situation “tougher than ever”. Fred is particularly concerned that all the skills and traditions will soon be lost forever. He urges greater backing for the UK Fishing Industry claiming that other EU countries provide much greater support.

146. According to recent press reports Fleetwood’s historic fish dock could be reduced to half its current size by the end of this year. Associated British Ports (ABP) plan to transform part of the dock area into an extension of the existing Marina with around 150 new berths for yachts where, it is felt, the future lies. There are just nine working fishing vessels left in the Port. In its heyday Fleetwood was packed with trawlers but after the final Cod War in the late 1970’s they were banned from Icelandic waters. ABP has stated that there will still be room for some fishing vessels including Fleetwood’s heritage vessel “Jacinta”. Fred Riding added that he was hopeful that ABP would allocate a few berths for the small boats in the Fleetwood Inshore Fishing Group.

147. A sign of strength is the ability to respond positively to market demands, enhancing already high standards of quality and service. The North West’s Food and Drink Sector certainly meets these challenging criteria and the diversity of the Region’s manufacturers is certainly impressive. These range from Farmhouse Fare’s “deliciously decadent traditional puddings” at Clitheroe to Cumbrian Seafoods amazing variety of fresh fish, shell-fish, coated and added value seafood products at Maryport. The successful companies are those that do not rest on their laurels but continue to advance.

148. Such an enterprise is the £12 million Tangerine Group, head-quartered in Lytham near Blackpool, and, with an impressive reputation in the field of animal health feed supplements, one of the Nation’s fastest growing firms. The company founder and chairman, David Haythornthwaite, was in 2007 named Entrepreneur of the Year in the North West Society of Chartered Accountants Awards. The judges were impressed with his vision and leadership in building up the company into a multi-million pound global operation. The Group incorporates thirteen companies and specialises in the manufacture and supply of animal feed supplements and veterinary nutraceuticals. In the 12 months to 30^th June 2008 turnover was £12.1 million, an increase of around 10% on the previous year, whilst pre-tax profits of £1.7 million represented a record. David Haythornthwaite has highlighted the Group’s streamlined management team. He has also commented that the growth plan is into new sectors relatively untapped by the Industry, indicating a good future ahead.

149. The Tangerine Group has grown both organically and through strategic acquisitions and Tony Haythornthwaite sees this trend continuing. Two of the Group’s animal feeds/supplements subsidiaries, including one producing horse care products, have had their “by Royal Appointment” status confirmed. Tangerine’s Lytham-based VetPlus manufacturing operation has established an office presence in South Africa following similar developments in Ireland and Spain. New distribution outlets have been opened in Finland and Sweden because of the relatively large population of dogs there. VetPlus distributors are in a growing number of countries ranging from Belgium to Latvia, from Greece to Hong Kong. The company is a leader in the production of nutraceuticals for animals and was the first company to develop and patent a joint supplement for dogs, SYNOQUIN ® which is now the number one joint supplement recommended by UK veterinarians.

150. VetPlus in its very early days outsourced production but subsequently, as it always intended, has manufactured in-house. Tony Haythornthwaite is quick to stress the advantages of this policy in terms of flexibility and quality control. Many of their overseas customers are small and require labelling and packaging in different languages. The Lytham operation achieves a turnaround within three weeks. Reputation and performance owes much to a pipeline of new and innovative products, keen emphasis on R+D including four PhD experts, working with the Higher Educational Institutions, and undertaking strict clinical tests to confirm the efficacy of the products.

151. Part of the Tangerine Group is also Lytham-based Day, Son, and Hewitt. This company has won the British Equestrian Trade Association (Beta) Innovation Award 2008 in the “Feed and Supplements” category. The judges described the award-winning supplement range as a “refreshingly different presentation”. Paul Morgan, who is the brand manager for Day, Son, and Hewitt commented that the Beta Show is an extremely prestigious event and that the company won against very tough competition.

152. In addition to there being a market for feed supplements in the field of animal welfare there is also keen demand on the human front for food supplements. Liverpool-based Vitaflo has seen recent growth of over 20% in its nutrient-packed products business. The later have proved invaluable to people recovering from major illnesses or with disorders that prevent food being digested efficiently. Managing director Tony Partington has commented that his company’s products are used in most UK hospitals. The business is very much innovation-led and the products contain minerals, vitamins, and amino acids which are the building blocks of protein.

153. Dew-Lay of Garstang in Lancashire has launched a complete range of Halal cheese for the first time since it commenced operations in 1957. The company combines the most modern technology available with traditional hand crafted methods of production which results in the cheese achieving its highly distinctive flavour. The UK Halal market has increased by 30% in the last year and there is also further demand in continental Europe. Dew-Lay have now been awarded a licence from the Halal Food Authority (HFA). This is for formulating and processing Halal named varieties of cheese for the retail and catering trade with permissible ingredients and approved methods of manufacture. The company’s marketing manager, Ian Coggin, expressed delight at the HFA approval and welcomed the opportunity for the Muslim community to benefit from a vast range of noted chesses ranging from mild and mature Cheddar to Lancashire Tasty, and from Crumbly Red Leicester to Double Gloucester.

154. October 2007 was very special in the life of another Lancashire-based Food manufacturer. During that month the family-run business of Laila’s Fine Foods officially opened their £3.4 million new factory in Moor Park Avenue at Bispham in Blackpool. This is the third move of the company since it established a couple of decades ago. The original location was the family home in nearby Lytham. Managing director is Mrs Laila Remtulla whilst her husband Nazir is executive director. Daughters Zera and Rishma, respectively with degrees in computer science and hospitality management, have brought skills and ideas to the business conducive to further growth and development.

155. Laila’s Fine Foods approximately 140 product range serves superstores, pub groups, and wholesalers across the UK. However, three of the products are going further afield as the company have won their first continental European order from Carrefour, the French hypermarket chain. Laila was inspired to start the business in the 1980’s because of the lack of authenticity of a number of food lines, such as bhajis and samosas, in local outlets. The managing director devises every dish herself, including Indian, continental European, and British. She is, in addition, now working with Lindon Bennison, previously head chef at the prestigious White Tower Restaurant, to perfect the recipes. Some 100,000 ready-made meals are produced each week and the business was employing around fifty people before the end of 2007. Laila insists on the very finest ingredients, sourcing as much locally as possible, and using traditional cooking methods to bring out the full flavour of the food.

156. A highly successful business that receives the right advice can only become even more of a success. That has proved to be the case in Cumbria at the Cartmel Sticky Toffee Pudding company. This family enterprise, from modest beginnings, has become one of the UK’s chief suppliers of quality sticky pudding employing thirty-five people and with an annual turnover approaching £1.2 million. Amongst a number of high profile retail clients are Harvey Nichols, Selfridges, Fortnum and Mason, Booths, and Waitrose. Avid fans of the product include TV chefs Nigella Lawson and Antony Worrall Thompson. The further stimulus to success, however, has been through joining the UK Trade and Investment Passport to Export programme. The company used the latter to help design a new international version of their website compatible with European search engines. Key professional advice enabled them to set-up international bank accounts, a price list, and make new warehouse and freight arrangements. Passport funding was further invaluable in providing an exhibition stand at buyers’ markets and trade shows.

157. The proof of the pudding really is in the eating! Cartmel Sticky Toffee Pudding is now breaking into the dessert market in locations such as Belgium, France, Switzerland, and Italy. Indeed Clive Drinkwater, regional director at UK Trade and Investment, recently visited the Cartmel HQ to experience the business at first hand. Charlotte White, the company’s operations manager, was fervent in her praise for the Passport programme which she indicated also provided an insight into different cultures and ways of doing business. She added that the home market had already been busy necessitating the building of a new bakery. However, the increased capacity pointed towards attracting still more customers and it seemed “a natural step to move into the international market”.

158. So Baby, a business located at Newton by Tattenhall in Chester, was only founded as recently as September 2005 by partners Chris Larkin and Sarah Dennison. However, this organic baby food manufacturer has quickly been acknowledged as a quality producer. In 2006 the new business received a Gold Medal at the Soil Association Organic Foods Awards. The judges were particularly impressed with the Moroccan Lamb with Cous Cous and hailed the company as the best organic baby food manufacturer in the UK. In October 2007 So Baby followed-up this success by winning the “Best New Business” title at the Morgan Foundation Awards at Liverpool’s waterfront Crowne Plaza Hotel. The company makes hand-made frozen organic meals for babies between six months to two years of age and the two partners have been commended for their determination to be trail-blazers in their field.

159. Tangerine is both a famous colour and a famous name in the Blackpool area. It is worn with pride by the town’s upbeat soccer team who are staunchly protecting their highly deserved and newly recovered status in the Championship. Tangerine is, as already noted, the name of a rapidly growing nutrients firm. It is also the name of another but unrelated business, namely Tangerine Confectionery, which has its head-quarters in Marton in Blackpool. This thriving enterprise employs some 650 personnel in Blackpool, Liverpool, and Poole and its well-known brands include Princess, Marshmallows, Taverners, and MOJO. The privately-owned business was formed as the result of a management buy-out of part of Danish company Tom’s Grupen. Even before it became part of Tom’s it had won acclaim as Daintee’s, its origins dating back to 1928.

160. Mention was made of February 2008 and this, indeed, has been a period that has helped to transform Tangerine Confectionery. Formal agreement was reached with chocolate giant Cadbury Schweppes for the take-over of the latter’s subsidiary the Yorkshire-based Monkhill Confectionery who make and sell the Butterkist popcorn brand, Barratt Sherbet Fountains, and Jamesons chocolate confectionery. The latter also produced a range of branded boiled sweets, gums, and jellies. The acquisition now means that the enlarged Tangerine Confectionery will contain around 1,500 employees with a turnover of £150 million. Back in August 2006 Tangerine had secured the confectionery arm of Burton’s Foods which, even then, made it the UK’s largest independent confectionery operation. Steven Joseph, the Tangerine chairman, has commented favourably on the enhanced selling power involving a much wider product offering.

161. Northern Foods employs around 11,000 personnel in UK businesses. Within the Group is Fox’s Biscuits manufacturing factory at Kirkham in Lancashire which employs some 450 people. A spokesman for the company commented in late July that the Fylde coast plant had “proven to be very successful”. Both the workforce and the facilities are considered to be “top of the range” and the state-of-the-art premises are what the company needs to strive forward. Fox’s Biscuits was founded in 1853 at Batley in West Yorkshire and has been part of Northern Foods since 1977. It now operates from three sites namely Kirkham, Batley, and Uttoxeter in Staffordshire. Northern indicated that Fox’s share of the market increased from 9.2% to 10% in the 1^st Quarter with an additional 1.1 million shoppers purchasing its product. The Group indicated that it wanted to reduce its three manufacturing sites into two world-class facilities. It already has one such factory here at Kirkham and will, therefore, review the future of the factories at Batley, which has 1,200 employees, and Uttoxeter, which has 950.

162. Wrights Pies continue to be a manufacturing success story because of their close attention to the market and their innovative response through a range of quality products. The company employs around 400 personnel in South Cheshire and North Staffordshire including 160 at its pie-making facility at Weston Road in Crewe. Last year Wrights had already announced their intention of not only increasing the number of their stores but also aiming at eventually doubling annual turnover which then stood at just under £20 million. Products include sausage rolls, pasties, pies, cakes, doughnuts, and scones. A new cold-storage facility at Crewe was intended to grow the wholesale side of the business which supplies companies such as Domino’s Pizza and Butlins.

163. In addition to its growing strength in the domestic market, Wrights exports to around twenty countries. New product-orientation has included a focus on the healthy-eating market such as wraps and pasta pots. The company’s retail operations manager has indicated that whilst traditional demand has come from the C and D income categories the market is showing signs of change. For that reason attempts are being made to widen appeal to include those in the B income group. These cover, for instance, 25-40 year olds who go out and buy their lunch around three times a week.

164. Goodlife, the Warrington-based vegetarian meal manufacturer, announced in 2007 that it had secured some £350,000 funding from Bank of Scotland Corporate. This investment was to help the business expand in response to an ever-increasing demand from supermarkets and other retailers for healthier foods. The business, founded in 1992 and now with a turnover of around £5 million annually, has about fifty staff employed at its “dedicated meat-free” facility at Warrington. The diverse product range covers such items as Glamorgan leek and cheese sausages, nut cutlets, falafel, and asparagus risotto. Research firm Mintel has estimated that the UK market for meat-free foods will reach £780 million per annum by 2009.Scientists from Manchester Metropolitan University have been working closely with Goodlife on the development and marketing of new products, nutrition, and hygiene standards. Chief executive Nick Hamlett has contended that this relationship has played an important role on a number of fronts including increase in sales. The collaboration between MMU and Goodlife has been named in the top ten best university link-ups at the annual “Knowledge Transfer Partnership Awards” run by the Technology Strategy Board.

165. It was announced in the local press in May 2008 that building work was underway at Gregg’s new £16 million bakery at Openshaw in Manchester. The new facility should be ready by September with all production eventually locating there by March 2009. Mouth-watering products being made there will range from doughnuts to cakes, tarts, and bread. As well as safe-guarding some 300 jobs the new production unit will replace Gregg’s existing base at Clayton. Ian Pegg, managing director of Gregg’s North West, has pointed to this development as a milestone in the company’s regional expansion strategy. The move is an example of public and private sector working together for the benefit of the local community. Damien Bourke, policy and partnerships manager at NWDA, who are part-funding the development, commented that the development will not only safe-guard employment but also help to create new skilled jobs in East Manchester.

166. A short while after last year’s “Economic Intelligence Bulletin “ was produced a particularly upbeat Gala Foods Northwest Awards dinner was held at the Midlands Hotel in Manchester on 28^th June 2007. Mention has been made of the rich diversity of this Region’s Industry and Commerce not only in terms of products but in terms of the vast range of company size and dates of establishment. It was highly fitting that the DWF Award for the most outstanding contribution within the Region should go to Warburtons of Bolton. The company has come a long way since commencing as a grocery shop in 1876 and by 2007 could claim to be running thirteen bakeries and ten depots across Britain producing in excess of two million loaves, rolls, and crumpets daily.

167. Speaking in May 2008 company chairman Jonathan Warburton indicated that, whereas around six years ago this impressive Food Group employed 2,000 staff now the figure exceeded 4,700. More than £100 million has been invested in developing its national presence over the last four years. Accounts for 2006 pointed to a turnover of £373 million with profits of £43 million. Warburton’s chairman commented that, even during challenging economic conditions, their high quality, premium, brands tended to perform better than lower quality rivals. Price increases are inevitable especially given the rising cost of wheat which has doubled in the last 12 months alone. The situation has been affected by rocketing demand, particularly from China where income levels are increasing, as well as declines in global wheat stocks, and low rainfall in Australia that has affected the harvest in the last three years.

168. HJ Heinz is a major North American-based multinational. However, it has an important association with North West England. This includes a long-standing presence in Wigan where at Kitt Green some 1,400 persons are employed in Europe’s largest food canning plant. It was, therefore, appropriate that the factory secured the North West Health and Food Task Force Award for its “Significant Contribution to the Healthy Eating Agenda”. This was as a result of adding omega 3 fatty acids to its pasta shapes and mini-meals range.

169. The Bank of Ireland offered an Award for the Most Innovative Product. This actually went to a company that at the time of the presentations had only been in business for just over a year and a half. This excellent manufacturer is Butterfly Snacks of Blackburn and owes its establishment to a situation within the family. A young female relative of the founder, Mr Mohammed Malik, was diagnosed with coeliac, an auto-immune disease that causes the body to produce antibodies that attack its own tissues. In the case of coeliacs the attack is triggered by gluten, a protein found in wheat, rye, barley, with some suffers also reacting adversely to oats. The girl’s mother developed wheat-free recipes to compensate for this problem and the family quickly realised the business opportunities. A range of gluten-free savoury snacks were produced. These included samosas, chicken and vegetable spring rolls and chicken filets as well as snacks containing wheat. The business was able to sell its products through the East Lancashire Coeliac Society as well as through a number of shops and cash and carry outlets. Discussions were also taking place with food chains and the NHS. There is further market potential in that in the UK alone there are around 125,000 people who have been diagnosed with coeliac disease. Experts suggest that the actual figure for sufferers is probably nearly half a million more than this given that 1% of the population are estimated to have the ailment.

170. The year 2007 was notable in many respects for Patak’s Foods of Leigh, who are reputed to be the “largest curry factory in the world”. Firstly, last year was the company’s 50^th Anniversary and secondly during that summer it was announced that Associated British Foods would buy the family-owned enterprise. It was felt that, with its immense experience in the international food sector, ABF would be the ideal strategic partner for the company. Patak Foods has built-up an enviable reputation in the field of ready-to-use sauces, pastes, pickles, naan breads, meal kits, and frozen ready meals. This is in addition to its own brand products for major retail chains. Patak’s factory in Leigh employs over 300 people and is the flagship site for the enterprise which has an annual turnover of £80 million. The company celebrated 2007 in further style in that they won two key prizes at the Food Northwest Event. These were the Improve Award for Skills, and the UKTI Award for International Trade. In 2006 this dynamic family business had decided to invest in a new international business programme with a focus on foreign language skills. New products such as meal kits were produced in single foreign language kits thereby seeking to demystify Indian cooking and, importantly, expand market coverage. The strategy quickly led to significant sales growth particularly abroad.

171. Glisten PLC, the noted snacks food producer, employs almost 700 people across its seven UK sites. The latter includes its confectionery operation at Hill Street in Blackburn where such popular brands as Chicago Joes and Pop Watsons are produced. The company has achieved its growth by steady, natural expansion as well as by a number of astute acquisitions. This has included an emphasis on health-conscious lines such as corn, rice and potato-based savoury snacks which are low-fat and calorie-controlled. There has been valuable investment in Glisten’s Blackburn facility in recent years.

172. It would be misleading and lacking in critical awareness if no mention was made of the challenges to the Food and Drink Sector. The very nature of the Industry contributes to continual ebbs and flows. Some activities appear tempting to enter given relatively low initial costs, whilst changes in eating habits, such as health-orientated products, together with keen brand competition, can quickly affect company performance. Initially in July 2007 Duke Street Capital, the private equity company that had acquired Burtons Foods in March 2007, had announced that it planned to close the latter’s factory on Moreton on the Wirral, with the loss of 820 jobs. The site, noted for its production of the Wagon Wheels and Jamie Dodger biscuits, received something of a reprieve soon afterwards following a rescue package, agreed with the TGWU, in which it was hoped at least 430 jobs would be saved.

173. There has, however, been much more positive news relating to the Burtons Foods operation on Devonshire Road in Blackpool. This was, also, acquired by Duke Street Capital last year and has been known, in the past, by various high profile names such as BB Biscuits, Symbol Biscuits, and the Horizon Biscuit Company Ltd. It was announced, in March 2008, that £1 million was being invested in installing a new plant line for the production of Cadbury’s Fingers resulting in extra jobs. The bakery, noted for the manufacture of its Maryland Cookies, the UK’s number one brand in the field, already employs some 450 people there.

174. The acquisition of RHM by Premier Foods, whilst leading to “significant investment” especially in preserves and spreads production, will also threaten jobs in a number of North West locations. Reports in the press suggested that sites at Middlewich, Droylsden, and Wythenshawe, with a collective employment of 660 are scheduled to close by early 2009. However, around 450 jobs are expected to be saved at Inter Link Foods, the Blackburn-based cake manufacturer. Sadly, this formerly upbeat firm had run into debt but had been acquired by McCambridge of Ireland. The Inter Link brands will be retained but will trade under the new Parent’s name.

175. Success can, however, be achieved out of the ashes of tragedy, sometimes almost literally! Lancashire Tea at Newton-le –Willows was set-up in April 2006 by Paul Needham and Lyn Hitchen. They were former managers of Kirkby-based Gold Crown, on Merseyside, whose premises had been destroyed by fire in summer 2005. Their new company uses a very high quality blend of twelve teas from Kenya, Malawi, Rwanda, and Sumatra, producing a very strong colour and a very smooth taste. Kenya accounts for 70% of the blend and, despite recent political turmoil there, supplies have been guaranteed. Lancashire Tea is now available in every supermarket chain in the North West as well as in a number of hotels, cafes, farm shops, and tourism outlets. Sainsbury’s, for instance, agreed to stock the product in almost 400 stores nationwide. Annual turnover, currently around £600,000, could well go through the £1 million barrier this year.

176. Director Paul Needham is strongly convinced of the quality and distinctive flavour of Lancashire Tea but recognises that there is the need to step-up sales in a market that also includes competitors such as PG Tips, Tetley, Yorkshire Tea, and Twinings. In an attempt to promote the brand the company is opening a chain of tea shops in the Region and, as well as producing tea bags, has also started producing loose leaf tea as well as the launch of a coffee brand entitled “Eclipse”. The site occupied at Newton-le-Willows has not, so far, had its capabilities stretched. It has the capacity, if required, to produce the equivalent of 2,000 tea bags per minute.

177. In 2002 Cains Brewery in Liverpool, despite its then 150 year plus distinguished history, was in considerable financial difficulties. It was then that the company was acquired by the brothers Sudarghara and Ajmail Dusanj when prospects started to improve. Amongst a number of achievements it was announced in May 2008 that Cains had won a national supermarket deal for its Finest lager with Morrisons. This meant that by the end of the month Cains premium lager brew would be available in 342 stores throughout the Country. Cain’s also benefited from the EU decision to allow the UK to retain imperial measurements. The Merseyside company then responded by creating the first one-pint can of British ale. As from January many Asda stores were beginning to stock the Cains FA (Formidable Ale) cans. Chief executive Sudarghara Dusanj commented that the pint is a cornerstone of British culture and as one of the UK’s leading craft brewers they were determined to celebrate this great British tradition.

178. The Brewing Industry, however, has had to tackle a number of competitive issues and this has affected even an innovative company such as Cains. In summer 2007 the company secured a £37 million reverse take-over of the Preston-based pubs operator Honeycombe. It was felt that this would be advantageous for Cains to use Honeycombe’s network to promote their quality products such as Formidable Ale. Cains, however, have been the subject of a winding-up order from HM Customs & Excise for unpaid tax, and had also announced losses of £4.6 million in the six months to April 2008.

179. Roy Morris, the company chairman, has commented that Cains are a company with a future but have had to combat a decline in consumer confidence with beer sales falling generally. It has also been claimed that the smoking ban in public places including pubs has had an adverse effect. The company felt, nevertheless, that they could successfully respond including through more food provision. The rise in input costs has been a further challenge. As the Bulletin goes to press there was news that Cains were determined to fight on. Unfortunately, shares were suspended on the AIM when it was announced in early August that their financiers, the Bank of Scotland, would not be willing to support their proposed turn-around plans. Cains now await a High Court hearing on 12^th August to face a winding-up petition from HM Revenue & Customs.

180. Daniel Thwaites Brewery in Blackburn announced last year that it was investing over £6 million on improving and refurbishing a number of its public houses. The company has also announced its intention to increase business on a global scale. This year has seen a further continuation in the progress made by the East Lancashire enterprise following a successful 200^th Anniversary Year in 2007.

181. At the other end of the time spectrum the Tirril Brewery of Chris and Alison Tomlinson was only established in 1999. Yet in that period buoyant demand has compelled the couple to move their production facility from Tirril near Penrith in Cumbria firstly to Eamont Bridge and then to current location at Long Marton near Appleby. This has meant renovating a Grade11 listed barn to satisfy market demand for their real ale.

182. Another new small brewery that is prospering is Hornbeam Brewery which is based in Denton’s Old Hat factory in Manchester. Set-up, with a £50,000 loan, in June 2007 by former teacher Kevin Rothwell, the business is competing despite the cost of hops rising by 40% and the price of malt doubling. The company’s attraction is that it brews five ales and numerous guest beers and is highly-customer focused achievement an “exactly right” blend. Hornbeam Brewery by April 2008 was producing 2,880 pints a week of Hornbeam bitter, Top Hop bitter, Black Coral stout, and Golden Wraith pale ale. Seasonal beers are also produced and Kevin is determined to see turnover grow further. Over the past year JD Wetherspoons as well as numerous independent pubs have been supplied. Quality has been recognised by the “Best Beer Award” at the Leeds Beer Festival for Hornbeam Brewery’s Dark Domination seasonal beer.

183. In 1908 John Noel Nichols created, in Manchester, the first Vim Tonic which later became known as Vimto. This year, In addition to such features as a limited edition Vimto Centenary bottles, the company will hold their own celebrations in September when at Salford’s Imperial War Museum the building will be lit-up in purple! The company, however, are very much in forward-looking mode. The Newton-le-Willows-based Nichols announced in March this year that it was in the “advanced stages” of preparing to enter the Chinese market as well as looking at Turkey. The company already sells Vimto to around sixty-five countries and strong overseas sales helped them to secure an increase in profits in 2007. Interim results for the half year to end June 2008 were also favourable with pre-tax profits rising by 15.5% to £3.2 million. Vimto is extremely popular in the Middle East during Ramadan when it is drunk after the end of Muslims’ daily fasts. The company has, also, performed well in Africa and in late 2007 achieved a major launch in Senegal of locally manufactured carbonated Vimto in plastic bottles.

Engineering Sector.

184. A consistent, indeed persistent, feature amongst a number of resilient North West businesses is their adaptability, often in very challenging circumstances. This is particularly true in the case of Ferranti a name which evokes a great multinational enterprise with a distinguished North West England presence. Located at Cairo Mill, Waterhead, in Oldham, is Ferranti Technologies which, as Ferranti Computer Systems, was within the Electronics Division of Ferranti International. In its heyday in the 1970’s the Oldham facility employed 1,150 persons with annual sales of £40 million. When the Parent went into receivership in 1993 the Group was broken-up and the Oldham-based business was acquired by a management team led by Trevor Tuckly who, in turn sold it to another team, led by current Ferranti Technologies managing director Terry Scuoler, in 1999. This latter arrangement involved an £8 million deal backed by private equity investor ABN Amro who then took a 65% stake.

185. Terry Scuoler, an economics and business graduate from Glasgow University, had, following a brief spell as a graduate trainee at Johnson & Johnson, spent a number of years on active service in the British Army. He then resumed a career in Industry including at Royal Ordnance as European sales and marketing manager. After BAE Systems acquired the latter company in 1988 Terry eventually rose to become head of divisional procurement and saw development opportunities at Ferranti who were one of BAE’s suppliers. At this time Ferranti was struggling, indeed barely profitable, with costs a problem and an allegedly, haphazard, almost “scattergun” approach to markets. Under ABN Amro ownership and Terry Scuoler’s leadership beginning in 1999 a rigorous reorganisation programme was undertaken including an overhaul of the management team. As a result total employee numbers were reduced from 210 to 150. Performance levels improved but were then adversely affected by the 9/11 bombings and its impact on commercial aerospace orders.

186. The company’s fortunes have, however, been restored following the £15 million take-over of Ferranti by the Israeli-based Defence Electronics giant Elbit Systems. The latter is listed on the Tel Aviv and New York stock exchanges, has retained the inspirational Terry Scuoler as managing director, and is keen to use Ferranti Technologies as a conduit to drive sales of its products in the UK and Continental Europe. This includes its night vision goggles for pilots of military helicopters. Although the Oldham operation is part of Elbit’s Aerospace Division it is run autonomously and Terry Scouler has commented that the new relationship is proving very successful. The investment being put in means that the company can continue to grow, and develop the skills and capabilities of the local employees. Current employment of 189 is expected to expand to 200 by the end of the year. There has been a strong start to 2008 and the Oldham manufacturer is on course to achieve sales of £24 million this year which will be up from £20 million in 2007. The latter figure actually took the company back to its 1994 levels of attainment.

187. The future for the Cairo Mill operation at Waterhead in Oldham is exciting. Currently Ferranti Technologies designs and manufactures technology for the Defence, Aerospace, and Rail sectors and generates 90% of its revenues from UK customers such as BAE Systems, Ministry of Defence, and Qinetiq. However, increasingly the focus is on expanding sales in mainland Europe. The company’s engineers and technicians work on power conversion, distribution and instrumentation systems for executive and fighter jets, tanks, submarines, destroyers, other commercial and military vehicles, and for trains.

188. A company can only achieve success if there is commitment and drive from its personnel. Another example of this can be found in the on-going success of Biofield Fluidpower of Middleton in Manchester. This dynamic enterprise has as its inspirational leader Gary Jacobson. The latter, with a master’s degree in materials and a considerable “hands-on” record with businesses such as Vickers, Brown & Root, and BICC, saw an excellent opportunity for his entrepreneurial skills when he joined Biofield in 2001 as managing director. Within a few months he had organised a management buy-out, since when annual turnover has risen from £3 million to £15 million with prospects of £20 million later this year combined with pre-tax profits of £5 million. The company’s roots date back to 1880 when it was then established in Wigan to make miners’ lamps and valves for steamships. Now at Middleton high quality manufacture is undertaken on valves and pumps for use on oil and gas rigs at refineries and in pipeline. The company has an international reputation with 95% of sales going for export.

189. Oil prices rises are beneficial to Biofield as increased demand brings more investment and hence more business for the Middleton operation. Gary Jacobson has long been impressed with the strong technical expertise of the company with good designs and products being produced by a very effective, committed workforce. The global sweep of the company is indicated by an office presence in Houston in Texas as well as in Singapore. In 2006 Marshalsea Hydraulics of Taunton in Somerset was purchased. The managing director is spending almost £4 million on his factories and is quick to emphasise the importance of lean manufacturing principles on his forward progress. In October 2007 Gary himself secured the National title of “Business Products Entrepreneur of the Year” at the Ernst & Young’s Awards Event in London. This followed earlier accolades when he had been acknowledged as an “exceptional example of an entrepreneur who has successfully leveraged his existing assets and at the same time moved into new markets which have opened up substantial global opportunities”.

190. It was announced in March 2008 that Mechan Controls of Skelmersdale, manufacturers of electronic safety switches, had purchased the Staffordshire-based company of Nirvana Engineering, a company which supplies products to the reserve battery power industry. This acquisition, increasing annual turnover from just under £1 million to nearly £3 million, is significant in that it will enable Mechan to extend geographically as well as in its product range within the safety and security products market. The North West company was founded in 1971 to design and manufacture electronic safety switches and has amongst its global clients such enterprises as Mars, Nestle, and Heinz. The switches, which are capable of operating in challenging conditions such as high temperatures, vibration, various chemicals, etc, are designed to safeguard workers from injury by stopping a machine from operating. In June 2007 Mechan announced a 57% rise in gross annual profits representing its sixth consecutive double digit increase.

191. Tronic is a leading producer of sub-sea power and data connection systems used in the oil and gas industry. At spring 2008 the international company employed around 260 personnel in the Ulverston area of Furness in Cumbria. However, at the same time it was announced that work would start on a new multi-million £ base at Low Mill which would open next summer. The site is to feature two state-of-the-art buildings for production, research, development, testing facilities, and offices, with enough space for 450 employees. Mark Jones, general manager at Tronic, has commented that this significant investment reflects the growth in the business and the predicted substantial growth in the sub-sea market.

192. The Furness success story does not end there! For instance, it was announced in March 2008 that Acrastyle Limited, also in Ulverston, had secured a key £5 million order from the Middle East. The company have been operating in the Furness area for some forty-five years and manufacture protection and control panels for power systems, such as the National Grid, worldwide. This new order is for substations in Al Kudmi and Jubail in Saudi Arabia and will see Acrastyle’s workforce increase from 130 to 140. A spokesman for the company further indicated that they are also currently working on £1 million orders for Northern Ireland Electricity and Scottish Power.

193. In 1942, on the instructions of the then UK Ministry of Aircraft Production, Freddy Oxley moved his company to Ulverston. A prolific inventor who died in 1988 with over 150 patents to his name, Freddy Oxley was a great believer in building up a team of creative people who would support his ideas of innovation, quality production, and manufacturing excellence. Although around 80% of production from Oxley Developments goes abroad it is still an important supplier to the home market. A catalogue of the company’s accomplishments over the years would fill a large book. Amongst these is the production of a lighting system for the helicopter desk on the USA high-speed vessel HSV XI Joint Venture. This has proved a great success in extensive night landing trials. In the UK Oxley has secured a production order to supply LED displays for use in rail side electronics equipment on the London Underground. The aircraft upgrades undertaken by Oxley Developments are used globally on military aircraft as varied as the Jaguar, the Eurofighter, the F18, the MI 24, and the AS 365.

194. Another field where Oxley have a worldwide reputation is in the area of automatic identification technology with the e-tag. The latter contain an electronic chip which can store a tremendous amount of information about the item the tag is attached to. For instance a tag 10mm in diameter can store what would otherwise take around 200 paper A4 pages. The Oxley e-tag has a proven technology and locally it is felt that the Ministry of Defence could be considering buying more of these tags for use on the two new aircraft carriers.

195. Amongst a number of North West manufacturing companies on the expansion trail is Booth Dispensers Limited at Bispham in Blackpool. The business is one of only two in the UK to manufacture cooling and carbonation equipment for the vending, soft drinks, water and beer dispensing market. A fairly recent estimate suggested that the company produces more than 20,000 refrigerated systems annually with about 40% being exported abroad. Press reports in April 2008 indicated that Booths had taken-over Brandels, the Rotherham brewing equipment firm. This has resulted in the decision to close-down the South Yorkshire site which had supplied regional and micro breweries in the North of England. However, all the manufacturing and distribution is to be concentrated on Booth’s Bispham facility with positive job implications for the North West factory. Booth Dispensers was established in St Annes just outside Blackpool in 1981 before more recently moving to Bispham. Since the firm restructured in 2000 following a management buyout they have continued to “develop and grow in many areas”.

196. Vindon Healthcare, the AIM-listed business, has overgrown its premises at Diggle in Oldham. As a result a contract was signed with Wilson Bowden, the developers, for the construction of a purpose-built factory on Rochdale’s Kingsway Business Park. The company has built-up an impressive reputation in the production of blood banks, plant and drug storage chambers, fridges and freezers for pharmaceutical, food, and life science businesses. Vindon, whose client base includes AstraZeneca, GlaxoSmithKline, and Pftzer, has indicated that the new site should be ready by this autumn. The enhanced facility will provide a platform for growth enabling Vindon to increase manufacturing capacity. Crucially the company has the capability for providing a storage and recovery service for Pharmaceutical and Biotech companies across Europe.

197. Vindon has, however, demonstrated its ability to be flexible and respond to further market possibilities and developments. This AIM-listed company has also branched-out into other product areas involving the storing of items such as toothpaste, vitamins, make-up, and perfume, as well as chocolates, and the Fisherman’s Friend lozenges produced by Lofthouse of Fleetwood. Even more diverse Vindon has secured an order from the Tate to store works of art, books, and old films not on display. These developments together with, for instance, Vindon’s first sales into the USA and Belgium, helped the company to achieve a 30% rise in sales during 2007 to a figure of about £5 million, with pre-tax profits increasing by 37.5% to £1.34 million. This has been achieved with an employment of around fifty personnel. In order to cater for increasing demand, such as more capacity to manufacture blood storage banks for hospitals and chambers for growing plants in research laboratories, the company is to move, later this year, to a purpose-built site on Rochdale’s Kingsway Business Park.

198. Vindon’s chairman Liam Ferguson has commented that the company has made a good start in 2008 and the board is pleased with the order book position and new business inquiry levels. He has indicated that the business is robust capable of substantial growth built on a solid financial platform, possessing an enviable, and growing, client list, and driven forward by expert and loyal staff. Vindon is benefiting from the trend towards outsourcing in the Pharmaceutical, Medical, and Healthcare sectors. It is also benefiting from increasing life expectancy which gives rise to greater demand for drugs to treat illnesses and for cosmetic purposes. Anne Crow, analyst at broker WH Ireland, indicated during March 2008 that Vindon’s results were ahead of expectations. Revising forecasts for 2008 she was predicting profits of about £1.7 million on a turnover of £5.9 million.

199. In November 2007 a prestigious Awards ceremony of the North West Society of Chartered Accountants was held at Ribby Hall Village near Wrea Green in Lancashire. Amongst the winners was Helical Technology Ltd of Lytham who secured the Yorkshire Bank “Business of the Year” title. The company, who employ 130 staff at their engineering base in Dock Road in Lytham, are an independent business, founded in 1962, and engaged in the design, development, and manufacture of actuators for turbochargers and exhaust gas recirculation systems; valve rotators for large diesel and gas engines; and piston seal rings for turbochargers.

200. Helical Technology Ltd manufactures, annually, around two million actuators and 1.5 million valve rotators. These products play an important role in reducing engine emissions and improving fuel consumption and can be found on many modern road vehicles, heavy industrial diesel engines, and marine engines. About 95% of production goes abroad in exports. Machinery is sold to well-known international companies such as Hyundai, Caterpillar, the American-based General Electric, and Japanese-based Mitsubishi. Helical-Funwick, a joint-venture in Kunshan near Shanghai in China, assembles and supplies actuators to the Asian market. Another joint-venture was also being set-up in Pune in India in 2007. June 2007 saw the Lytham company being presented with the Queen’s Award for Enterprise by Lord Shuttleworth, Lord-Lieutenant of Lancashire. This was in recognition of an outstanding achievement on the international trade front.

201. The Greater China Business Award 2008 for the North West of England was won by Zetex Semiconductors of Oldham. Organised by UKTI and supported by NWDA, and the China-Britain Business Council, the Award recognises companies that have made significant contribution to developing business links with mainland China, Hong Kong, and Taiwan. Zetex has had a presence in Greater China since 1989 when it first established a regional office in Hong Kong. The company then entered into a joint venture manufacturing operation in Chengdu City, China, in 1995. It has since opened design support centres in Shenzen in China, and Taipei in Taiwan.

202. Elcometer of Droylsden in Manchester is certainly a business that has not only stood the test of time but has responded vigorously to new demands in the market place. The company’s roots reach back to 1780 when the first great Industrial Revolution was in full flow and some nine years before the bloodshed and mayhem of a different kind of Revolution took place over the Channel in France. At that time the business was in cement manufacture but now the products are of a different variety. They include instruments to test and inspect paint and coatings on cars, bridges, cosmetics, foodstuffs, and white goods. Elcometer’s products have been used in projects such as the City of Manchester Stadium, the Humber Bridge, and Channel Tunnel, although about 85% of orders derive from abroad. Turnover is now around £10 million annually with “double –digit sales growth over the past few years”.

203. Evidence from this “Economic Intelligence Bulletin” so far should confirm not only the wide ranging technical expertise available within North West England but, also, the vast geographical coverage of the markets served. Amongst the contributors to this very positive reputation is Pennine Vibropiling Ltd of Bacup which was acquired by the Balfour Beatty Group in August 2005. Pennine has built-up a high reputation as a UK contractor offering a complete design and installation process for ground improvement and pilling systems to provide solutions for all types of buildings and civil engineering structures. Direct contracting is also undertaken in various parts of the world usually as a joint venture with local specialists. However, even before moving into contracting, Pennine had been long established as manufacturers of specialist ground improvement equipment. Indeed, as recently as January 2008, they completed a £700,000 contract to underpin a section of road on a new Formula One racing track in the Spanish city of Valencia.

204. Pennine is also noted for manufacturing bespoke piling rigs and, in a series of deals worth a total of £3.2 million, has been commissioned to build seven rigs this year compared with three in 2007. In addition there are further orders for another seven rigs in 2009. Demand overseas has increased and the economy has succeeded in improving efficiency and reducing production times. Chris Gillibrand, director of rig manufacturing, has indicated that Pennine’s 34 engineers are able to construct a bespoke rig within fourteen weeks. Subsurface Constructors of St Louis, Missouri, has bought four rigs fitted with Pennine’s Data Logger monitoring systems over the last couple of years and another rig was being shipped out in late March 2008. The company will also be constructing rigs for the multi-million £ Palm Tree scheme in Dubai. There is also a particularly healthy demand for building new rigs to meet UK and European demand. This includes replacements for some of the older rigs in order to bring the average age down to less than seven years.

205. North West England was at the forefront of the Industrial Revolution. It is fitting, therefore, that this Region of seven million people is driving forward leading edge technology in the 21^st Century. An excellent example of this innovative approach is Liverpool-based ATMOS Technologies. The company covers the field of radiation detectors where simple, robust, inexpensive diodes can be mass produced cost effectively by the process of flame spraying the various oxides onto readily available substrates. Applications for the company’s technology are immense in that these low cost radiation sensors are capable of being fitted not only in airports and other strategic areas but to military vehicles. Extensive, successful tests have been undertaken including at the University of Louvaine-La-Neuve. The results of the latter tests, undertaken late last year in Belgium, are highly significant suggesting the development of “The Universal Detector”. The carbon footprint effect arising from the production of ATMOS detectors is, crucially, only a fraction of that arising from current alternative devices.

206. Jeff Boardman, the inventor behind ATMOS Technologies, has seen another of his businesses, namely 2D Heat, win an award for its innovation in tackling climate change. A flame-spraying heating element has been developed as an energy-efficient way to heat hobs and cookers. It replaces the separate coiled wire or strip heating elements thereby allowing the new element to be sprayed directly onto the article that requires to be heated such as the hob. Importantly this saves carbon at the production and heating stages. The company will be going forward to compete in the national final of the Shell Springboard Awards.

207. Whenever awards and accolades are being distributed the Region’s Engineering Sector deservedly receives acknowledgement. Amongst the winners of the prestigious 2008 Queen’s Awards for Enterprise was Fort Vale Engineering Ltd who employ 240 people and at the time were well advanced on their expansion move from Nelson to a custom-built plant at Simonstone in Burnley. The Royal accolade recognised the excellent performance of the company in the field of International Trade. Similar Queen’s Awards for exporting had been secured in 1981 and 1986. Fort Vale has achieved an incredible 99% in exports over the last six years. The company’s yearly export sales are around £110 million. Founded in 1967 by current chairman Ted Fort OBE they are recognised as a world leader in the manufacture of valves, manways, and ancillaries for the international transport and storage of bulk liquids, gases, and powders. A particular specialisation is valves and accessories for ISO container tanks. In fact they have an 85% global market share of the 14,000 tankers which are currently manufactured annually. The company’s main overseas market is China, followed by South Africa, Belgium, and the Netherlands.

208. Fort Vale’s already impressive distribution network covers locations from the Far East and Russia to the USA and is expanding. A manufacturing plant also operates from Shanghai in China. Managing director Ian Wilson indicated that the company’s achievements have been in the context of trading conditions that have been considerably tougher in recent years. There has been an unprecedented increase in the price of raw materials and energy costs as well as complications in major world currency situations. Fort Vale Engineering has, however, sought to constantly address manufacturing efficiency, is a strong advocate of continuous improvement, and, in addition, to prioritising good customer relations, has maintained high levels of capital expenditure and in-house training.

209. The Fort Vale Group embraces six other companies. Amongst the latter is Bestabite Hydraulics Ltd which, since the mid-1960’s, has been manufacturing quality, competitive, high volume, high pressure tube fittings and valves for the hydraulic, gas, automotive, chemical, and nuclear industries in its Manor Park Runcorn factory. Another Group member is Francis Searchlights Ltd who, from its 18,000 sq ft premises in Bolton, designs and manufactures innovative, high quality lighting products. There is a particularly growing market in the security sector including prisons. Locations in which contracts have been secured include Iraq and Afghanistan where bullet-proof provisions have been incorporated. Prestige work undertaken includes at the Eiffel Tower and L’Arc de Triomph in Paris, Lloyds Buildings of London, and an entire fleet of fire-engines in Malaysia.

210. Weir Pumps Europe Ltd was another Queen’s Award for Enterprise winner in 2008. As with Fort Vale Engineering the recognition was for conspicuous achievement in International Trade. The company, part of the Weir Group, is located in the Lancashire part of Todmorden, and has 340 employees. Products manufactured include abrasion and corrosion-resistant pumps, valves, hydro-cyclones, and wear-resistant linings for the mining, mineral-processing, power, and other industries. Their export market is extensive covering around fifty countries. Since 2004 Weir Minerals Europe has increased its exports by 60% reaching the impressive annual figure of £116 million. Amongst leading market areas in recent years has been Germany and the USA, each of which account for 15% of Weir Europe’s overseas sales, followed by Russia with 10%. A strong feature of the last three years has been the development of new markets in locations such as Sweden, Serbia, USA, and Kazakhstan.

211. Comment has been made earlier about the close relationship between the Production industries and other sectors. This is well-illustrated by yet another North West winner of the Queen’s Awards for Enterprise in 2008. The company, who were recognised in the Innovation category, are Trinity Integrated Systems Ltd of Sale. Their presentation was for developing a unique software translation tool for safety engineers. The programming work undertaken is increasing efficiency and programming times with replications for the oil, gas, and nuclear industries.

212. The tremendous variety of the North West’s Engineering Industry never ceases to amaze. The important aspect of this, however, is the high success rate in a number of strategic market areas both existing and emerging. ATG Access of Warrington, a firm that designs and manufactures security bollards, has seen its international business increase more than ten-fold since seeking assistance from UK Trade & Investment. The original enterprise was established in 1989 when the founder developed an idea to manufacture manual bollards after his neighbour’s car was stolen from the drive. After a period of rapid growth the firm was acquired by the AT Group in 1995 and then subject to a management buy-out two years ago.

213. ATG Access produces a wide range of static and telescopic security posts. These range from bollards to protect homes to high-tech, anti-terrorist bollards that safeguard the Houses of Parliament, embassies, football stadiums, and airports. The firm has recently secured the largest export order in its history. This has been to design and install thirty-six high-security automatic bollards to protect the office of the Malaysian prime minister. Despite, fairly quickly, becoming a UK market leader exporting was only begun a relatively few years ago. This coincided with the arrival of new managing director Glenn Cooper who saw the potential for overseas business. ATG Access now exports to fifteen countries with largest markets in Belgium, the Netherlands, Malaysia, and the United Arab Republic. There is also business in areas ranging from Australia to Hong Kong, and from Saudi Arabia to India, South Africa, and the USA.

214. Gavin Hepburn, ATG’s business development manager, has been very enthusiastic about the help received from UK Trade & Investment. He pointed out that as part of the Passport to Export programme, matched funding was received to visit Malaysia to carry out market research. This lead to the winning of the major contract. The Overseas Market Introduction Service (OMIS) was used to identify potential distributors in South Africa when Gavin went there last October, and, as well as helping provide a number of interested companies, saved an “enormous amount of time and money”. ATG commissioned an OMIS report on Japan to gauge trading opportunities there before visiting this July. Indeed the firm is now looking to develop products specifically for export and is hoping to target both Japan and South Korea this year.

215. WFEL at Heaton Chapel are manufacturers of bridges for the USA and British armies as well as for other NATO allies. Formerly known as Fairey Engineering they are owned by private equity company Dunedin Capital. The good news is that WFEL are recruiting for staff amidst strong global demand. The company topped its target for 2007 as it saw annual sales rise from £25 million to £27.8 million and record profits of £5.7 million achieved. Turnover for 2008 is expected to come in at £31.4 million. During 2007 the USA Department of Defense, its largest client, ordered five of its Dry Support Bridge systems plus twelve additional optional systems. This year’s USA sales will amount to around £20 million. Unlike some other companies in similar activities WFEL has not been hit by the surge in commodity prices despite being a major aluminium user. In order to face this challenge as well as the weakness of the USA $ the Heaton Chapel company hedges its costs particularly through the use of fixed-price contracts for the duration of the order. If the USA, for instance, wishes to buy more units then under the terms of their options with WFEL the latter have price adjustment clauses which allow for $ movements as well as for the price of aluminium.

216. Oakwood Engineering in Eccles was founded by current managing director Harry Brown in 1981 and has, in its relatively short history, achieved a number of notable contracts. These have ranged from the Pleasure Beach in Blackpool to work on the new Wembley Stadium, from projects for blue chip companies such as BP to work on the Chill Factor near the Trafford Centre, and London’s Canary Wharf. Now this family-owned business has secured a prestigious contract to design steelwork for the Shard London Bridge, a 1,000 foot skyscraper believed to be the tallest building in Western Europe. The company has also won an order to produce drawings for 20,000 tonnes of steelwork to be used in a £770 million scheme. This will see the construction of a bridge linking the M74 and M8 ahead of the 2014 Commonwealth Games in Glasgow.

217. Bodycote International PLC is a global Group whose heat treatment technology is used to strengthen metal for coatings. This brief description, however, does not adequately convey the wide range of services provided and the company’s vital contributions in strategic and growing markets. Bodycote, head-quartered in Macclesfield, is the world’s largest and most respected supplier of testing and thermal processing services including materials testing, healthcare services, engineering and technical, environmental, measurement services, heat transfer and metal joinings, and hot isostatic pressings and metallurgical coatings. In the six months to 30^th June 2008 the Group reported a 5% rise in profits compared to the same period last year. The figure of £44.7 million compared with £42.6 million in 2007. Sales rose in the 1^st Half of 2008 by 20.5% to a figure of £382.6 million. Last year Bodycote rejected a £1 billion take-over from the Swiss-based Sulzer Group.

218. Bodycote’s Chief Executive John Hubbard has indicated that all of the company’s markets remain resilient with the exception of North America particularly Automotive. Further new business is anticipated as customers continue to outsource. The Chief Executive feels comfortable that a full yearly turnover figure of £89 million will be attained. Acquisitions target for 2008 is around £50 million with some £32 million already achieved through eight take-overs and also investment in associated business. Amongst recent examples has been Plasma & Thermal Coatings Ltd on Newport in South Wales; NPE Innotek Ltd, a precision engineering company in Neath, also in South Wales; and Greenhey Engineering Services of Skelmersdale here in North West England. As well as offering state-of-the-art thermal spray, Greenhey’s facilities cover ceramic coatings, and a machine shop equipped with the latest CNC lathes and milling machines together with grinding and finishing capability.

219. A company dubbed the “RAC of Industry” continues to prosper. Manchester-based Brammer has unveiled record profits as it moves towards becoming a £500 million plus turnover company. Some six businesses were acquired in 2007 helping sales towards almost £380 million. The business was founded in 1920, with £3,000 of authorised capital, by Harry Brammer and the first factory was in Kirkstall Road, Leeds in West Yorkshire. Now the registered office and HQ is in Wythenshawe in Manchester. Harry was a gifted inventor who could quickly see the potential of a range of materials. For instance he took waste pieces of leather and turned them into a toe strap to keep cyclists’ feet firmly attached to the pedals. This became the Brammer Toe Strap. Another early invention was the leather linked “V” belt.

220. It is an old adage but from small acorns great oak trees grow. This has, certainly, been the case with Brammer who can boast a Pan-European presence in almost three-hundred locations in some fifteen countries. The company is now Europe’s leading supplier of Maintenance, Repair, and Operations (MRO) for Manufacturing companies covering everything from gearboxes to bearings, further enhanced by the highest quality of technical expertise advice supported by a focused IT and Logistics operation.

221. Brammer has undertaken a 2008 Engineering Survey covering over 330 Manufacturers in ten European countries which makes interesting, if disturbing, reading. The results suggest that manufacturing companies across Europe are failing to capitalise on more than 13 billion Euros of potential energy savings equivalent over the EU 27 to around 90.5 million tons of CO2. Manufacturers were “acutely aware” of the importance of energy savings and many are developing and implementing plans but few are exploiting or are even aware of the full potential savings that could be made. Data from the Survey indicated that the considerable potential energy savings from Mechanical Power Transmissions products (MPT) such as motors, bearings, and belts, which are used throughout manufacturing plants across Europe are being overlooked.

222. Brammer found that over three-quarters of respondents agreed that energy saving was an important issue for their plant, although only 6% believed that they have already made all the savings possible. At the time of the Survey most respondents, some 60%, were in the process of planning or implementing energy savings. Crucially, however, few were including Mechanical Power Transmission products in these plans, and this is where, Brammer contends, the most substantial savings can be made. This has a profound bearing on total energy savings throughout the EU27 as Industry is estimated to account for 41% of electricity usage and 37% of natural gas.

223. A very useful indication of the economic situation can be gained by studying activity levels of companies such as Renold PLC whose HQ is at Wythenshawe in Manchester. This long-established engineering business produces chains, gears, and couplings for a vast range of uses in sectors such as industrial, transportation, energy, steel, mining, and also the leisure industry in activities such as theme park rides. Results for the year ending 31^st March 2008 show that sales had increased by 8.3% to £172.6 million, whilst pre-tax profits, before exceptional items, increased by 24.7% to £9.1 million. Out of a worldwide employment force of 3,000 some 525 are located in Greater Manchester. However, the company is avidly pursuing the acquisition trail and last year, for instance, secured a 90% stake in China’s Hangzhou Shanshui. Renold is expecting to secure the ownership of India’s LGB chain unit and if this materialises then around 46% of the Group’s global employment will be in lower cost locations compared with about 3% a couple of years ago. Although the company indicated that there was a need to temper optimism with caution in the context of global trends it was noted that this May the order book situation was 27% better than the same month last year. Commenting again at the end of July it was stated that the order book was now 32% better than the same time in 2007!

224. Stephen Broomhead, Chief Executive at NWDA, expressed sorrow at the decision of Rolls-Royce to close down its gas turbine manufacturing plant at the Dunnings Bridge Road site at Netherton in Liverpool. The factory has been a valuable supplier, for instance, to the aviation and oil rig sectors. About a couple of years ago some 600 people worked on the site but when Rolls-Royce announced the closure this February the figure was just over 200. The Corporate HQ indicated the need to reduce overheads, as well as issues such as the unfavourable exchange rate with the $, which has led the Group to relocate the Netherton work to Mount Vernon in Ohio. Union representatives indicated that the Merseyside factory had a good order book but a spokesman for Rolls-Royce rejected the claim that there was sufficient work to sustain both Netherton and Mount Vernon. The final closure of the former is expected to be around March 2009.

225. In January 2008 administrators were called in at food processing equipment manufacturers Spooner Vicars of Newton-le-Willows. The company dates back to the middle of the 19^th Century but was acquired by USA-based Stewart Systems last year. The administrators indicated that a decline in new orders had placed pressure on the cash-flow situation, and in the context of wider global uncertainty, felt that there was no future for the plant. Forty of the one-hundred employees in the workforce were dismissed with no prospect of on-going employment for the remaining sixty personnel. Also in January Promethean announced that around forty jobs would have to go at its Blackburn plant. The company, famous for its interactive whiteboards, indicated that the decision had been driven by overseas cost competition. Although more production was being concentrated in China the Blackburn site was regarded as important to the company’s global aspirations. As a result some thirty jobs would be created in an enhanced R+D activity.

226. Comments have already been made about the size and diversity of the North West Region. Despite the job losses detailed above, this range and versatility continues to stand it in good stead as a magnet for new industry. A very recent example has been the decision of the German renewable energy firm Steibel Eltron to open a UK base at Wirral Business Park in Bromborough. The Group was set-up in 1924 and manufactures green water heating, ventilation, and air-conditioning systems, although initially sixteen jobs will be created more are expected. Bromborough was selected because of the relative ease of servicing a large customer base in Ireland, the excellent transport links, a skilled and flexible workforce, and a location with the potential for expansion. Steibel Eltron has Group sales of 400 million Euros and a global employment of around 3,000.

227. The North West greatly benefits from its quality manufacturers who produce to the highest standards. Such a company is Velden Engineering (UK) Ltd who has occupied premises at Bedford Street in Bolton for a number of years. The business is described by its management as a UK competitive, award-winning jobbing shop. Velden offers a virtual one-stop best practice component manufacturing, design and assembly service. Practical experience gained over three decades has ensured that the company is lean and agile. Work has been successfully undertaken for many sectors including Automotive, Medical, Defence, Switchgear, Power, Food, and Electrical. In addition to core sub-contract activities Velden has diversified into a range of own products that include landfill pumps, electric golf buggies and trolleys, and electric bike conversion kits.

228. The development of the electric golf buggies and trolleys has been a subject close to the heart of Velden’s charismatic managing director Alex Kitchen. This came to the fore very recently in January 2008 when Alex recorded a tribute on the company website following the death of Sir John Harvey-Jones. The latter, a former chairman of ICI, appeared on the TV programme “Trouble-Shooter” in the 1990’s when he offered advice to companies. It was in 1995 that he appeared with Alex Kitchen at the Bolton plant. Not only did Sir John purchase a golf buggy for his daughter but he, subsequently, purchased a further two for himself and his wife.

229. SAL Abrasives Technologies Group of Drumhead Road in Chorley has been in operation for some forty years. The company has made its name through manufacturing and distributing abrasive products and machinery. Recently, following the departure of Simon Parkinson to Australia, Janet Handley and David Parkinson, with help from the Royal Bank of Scotland, have engineered a management buy-out. Janet, who had formerly been the production director for twenty years, now steps into the role of managing director. Ms Handley is enthusiastic about the growth prospects of the company and the Industry and sees the current reorganisation as an opportunity to take the business further forward supported by a skilled and dedicated workforce. SAL Abrasives manufactures its own abrasive range of products such as belts, discs, and rolls that are used for abrasive operations in cutting, polishing, de-burring and grinding by clients in sectors such as aerospace, automotive, and metalwork.

230. Last year Thos Storey Fabrications of Openshaw won the “Manchester Evening News” Business of the Year Award for firms in the £10 million to £25 million turnover category. The firm’s last full year results saw turnover rise from £21 million to £27.5 million. This dynamic Greater Manchester enterprise manufactures high quality steel fabrications and supplies equipment makers in public transport, construction, agriculture, and specialist vehicle fields. Global conditions have, however, begun to impinge despite a relatively strong First Half. Operations Director John Higgins suggested that, compared with vigorous growth in recent years, conditions have now become tougher. The company produces chassis for “yellow goods” such as diggers, JCBs, and back-hoe loaders which are particularly Construction-focused. On the positive side, however, business with the manufacturers of public transport and waste management vehicles is more robust.

231. John Higgins and managing director Fred Ellis rescued and revived the current business some twelve years ago. This was when they acquired the fabrication activities of Stockport-based Thos Storey Engineering. Only for this move the fabrication side would have shut-down. At that time sales were £3.5 million per annum and employees totalled around 80 compared with the current 250. On the positive side John Higgins has drawn attention to the reduction of the £ against the Euro thereby making UK Manufacturing more competitive against Continental rivals.

232. Pete Waterman is known to many people as an astute Music guru and entrepreneur who has guided the careers of Kyle Minogue, Rick Astley, and Steps. However, despite these achievements he is ever more than that. In addition to being a passionate advocate for apprenticeship schemes he owns London & NW Railway, and London & NW Railway Heritage in Crewe. The former undertakes maintenance and repairs on diesel and electric trains for fleet operators whilst the latter operation performs maintenance and repairs on steam engines. Mention was made a couple of paragraphs ago about the adverse impact on parts of the Construction Trade. Sadly, one of the results of this has been declared redundancies by JCB affecting the South Cheshire/ North Staffordshire area. However, Pete Waterman has offered posts for around 65 of the 500 people affected in his Crewe factories where he is confident that their skills can be put to good use.

Automotive Sector.

233. Most experienced pundits would acknowledge that the Automotive Sector is one of the most challenging, and competitive industries worldwide. Given that context the performance of the North West’s firms from main frame producers to key materials and components manufacturers and suppliers is worthy of praise. Key contributions to this Industry are made by many firms who provide essential, high quality materials, and are more often classified to other product descriptions. These range from automotive glass manufacture to tyre production, from airbag manufacture to complex electronic systems.

234. As suggested in last year’s edition of the “Economic Intelligence Bulletin” the date 17^th April 2007 will remain firmly etched in the memories not only of the local workforce but even further afield. It was then that Vauxhall’s car production plant at Ellesmere Port was announced as one of five that would be assembling the new sixth generation of the Astra. The other four manufacturing sites are in Germany, Sweden, and Poland. It was believed that if Ellesmere Port had not secured this work then the plant would have had to close. Although General Motors, Vauxhall’s USA-based Parent Group, has two manufacturing plants in the UK, the Luton facility in Southern England produces Vivaro medium-sized vans for sale under the Vauxhall, Opel, Nissan, and Renault brands. Car production ceased in the Luton area in 2002 after some ninety seven years. Hence Ellesmere Port, in North West Cheshire, is General Motors’ only UK car manufacturing operation.

235. The Vauxhall company itself developed from the Vauxhall Iron Works, located at Vauxhall in London, in 1857 when it built pumps and marine engines. The first car was not produced until 1903 and the move to Luton took place about two years later. General Motors of the USA purchased the then British company for around $25 million in 1925. Future expansion included the setting-up of the Ellesmere Port facility in the early 1960’s and many people will remember, with affection, the extremely serviceable and driver-friendly Vauxhall Viva of those succeeding years before its demise in 1979. No longer produced on the shop-floor but of such robust quality that it was still being seen on the Nation’s motorways and streets well into the late 1980’s!

236. Amongst an imposing list of achievements at Ellesmere Port was the opening of the £193 million V6 engine plant in 1992. Three years later a £300 million investment plan was announced in a comprehensive modernisation of facilities. By the turn of the new Century in 2001 Ellesmere Port had secured around £200 million of investment to become a “Flex” plant building the new Vectra alongside the Astra. The production of the then new Astra began in 2004 and the year following saw Ellesmere Port achieve record output figures. The period of uncertainty of just over a year ago has now been replaced by greater optimism since the selection of the site for the new generation of the Astra. The facilities are recognised as being one of the most modern in Europe and currently produced is the 5-door Astra and Astravan for Vauxhall and Opel.

237. In difficult and competitive conditions Vauxhall’s production figures at Ellesmere Port experienced a 13% fall between 2006 and 2007 to a total of 127,962, with exports falling by 11% to 73,703. However, the 1^st Quarter of 2008 has shown a distinct improvement on the same period last year. Production figures at the Cheshire site have risen by 5% to 36,574, with exports growing by an impressive 54% to a figure of 14,245.The Luton Vivaro medium-sized van production facility produced some 95,030 in 2007 whilst the 1^st Quarter 2008 figures of 26,662 indicated an almost 3% improvement on the same time last year. At end March 2008 the Ellesmere Port plant employed some 2,200 personnel, whilst Luton accounted for nearly 1,600 staff. Carl-Peter Forster, President of GM Europe, saw the British Prime Minister Gordon Brown recently. After discussions the President commented that GM were “seriously considering” utilising the skills of the Ellesmere Port workforce to produce the company’s innovative Chevrolet Volt electric car.

238. In addition to its contribution towards car production Vauxhall’s Ellesmere Port plant has demonstrated considerable environmental awareness. For instance, in 1995 it became the world’s first vehicle manufacturing facility to be certified to the then new BS 7750 standard for environmental management systems by BSI. In 1996 it was the first to implement a formal environmental management system. Much more recently in June 2007 Ellesmere Port has been recognised by the EEAS. Since 2003 the plant has halved the amount of energy needs to manufacture each vehicle. Total site energy consumption has fallen by 30% despite an increase, over the period, in production volumes.

239. Developments have moved on apace at Ford’s Halewood factory on Merseyside. In early December 2007 the three contenders to buy Jaguar and Land Rover from Ford submitted their final bids. Two of the organisations involved were the giant Indian enterprises of Tata, and Mahindra & Mahindra, whilst the third body involved was One Equity Partners, the American private equity group. Even at that stage Tata was being spoken of as the likely winner. In addition to its Tata Motors involvement the Group owned Tetley Tea and former British Steel company Corus whilst Tata Consultancy Services had been operating in the UK since 1975. By the beginning of January 2008 Tata had moved to become preferred bidder and towards the end of March it was confirmed that they would be buying Jaguar land Rover (JLR) from Ford’s. The £1.17 billion deal was then completed on 2^nd June.

240. Jaguar can trace its beginnings to Blackpool where it was established as the Swallow Sidecar Company in September 1922 with the help of a £1,000 bank loan. The founders were William Lyons, who was later knighted, and William Walmsley. However, shortage of sufficient numbers of appropriately skilled labour influenced a move to Coventry in the Midlands in 1928. By 1945 the name of the company had been changed to Jaguar and the luxury cars produced became a by-word in quality, speed, and excellence. Following a somewhat chequered history of ownership Jaguar, in 1989, became part of the USA multinational Ford Motor Group. Despite its quality the car has not enjoyed profitability for a number of years. However, when production of the Ford Escort ended at the Halewood plant on Merseyside in 2000 it was decided to launch a new “Baby Jaguar” X-type there the following year.

241. The Halewood plant is acknowledged by Ford for its efficiency but sales of the Jaguar generally have been difficult in a highly competitive market. It was announced in October 2007 that the company would stop exporting its Halewood-built X-type cars to the USA by spring 2008. The decline in sales there pre-dated the weakening position of the $ against the £. However, there were plans to offset the effects of the withdrawal from the USA market by seeking to increase sales elsewhere including in Eastern Europe. During autumn 2007 a number of useful sales were recorded to countries such as Russia and also the United Arab Emirates. Even so when launched it was anticipated that sales of the X-type would average around 90,000 a year whereas the reality has been about 30,000.

242. In July 2008.however, press reports suggested that the latest version of Halewood’s Jaguar X-type had generated the biggest UK sales growth for the model since its launch in April 2001. Sales of the sophisticated latest version, which includes nearly 500 new components, has increased by 41% on 2007 levels since it reached the showrooms in March this year. It was claimed that previous volumes at Halewood had fallen due to the late introduction of an X-type diesel on the market. However, the new look model is said to have reversed the situation. Thomas Klein, Halewood’s plant director, has indicated that the package of revisions, particularly the automatic transmission in the 2.2 diesel, presents the Jaguar dealers with an excellent opportunity. This means that, as well as existing customers, new clients can also be targeted. The new X-type is also attracting attention in continental European markets.

243. In recent times a notable feature of the Halewood site, where around 2,000 personnel are employed, has been the introduction of the Freelander 2 Land Rover. This is produced on the same production line as the Jaguar and has proved a success. In fact, this new version is considered to be so in advance of the Freelander 1 model that it is “almost a totally different car”. In its first full year of production the new 4 x 4 achieved worldwide sales of over 65,300 including sales in the UK of almost 19,000. Ratan Tata, chairman of the new owners, has gone on record to emphasise his strong commitment to the Jaguar and Land Rover brands. Tata has also indicated that it proposes to purchase gearbox systems from Getrag Ford who are also located at Halewood. This transmissions plant has been a winner of “Best Engineering Plant in Britain” run by Cranfield University and Works Management magazine.

244. Bentley Motors at Crewe has been a Regional success story. Volkswagen AG of Germany acquired Bentley in 1998 and commenced an investment programme approaching £500 million to improve factory facilities and support future product development. This expenditure has been translated into solid commercial achievement. In 2003 around 1,000 luxury cars were sold worldwide but this was increased to the impressive figure of 6,500 in 2004. The momentum was maintained with 8,500 cars sold in 2005, and some 9,200 the following year in 2006. Not content even with this rapid increase in demand Bentley heralded yet another record year in 2007 when sales of over 10,000 worldwide were achieved. Despite the difficult economic climate a figure of nearly 4,200, which represented a 4% increase on the previous year, was recorded for North America. The sales figure for Continental Europe was around 2,170. Within the UK the total of 2,079 was a record. Emerging markets were noteworthy with an 18% rise in the Asia Pacific region. Sales to China had almost doubled to reach 338, whilst the brand new Korean market received around 100 sales.

245. When the above results were announced Stuart McCullough, Bentley’s Sales and Marketing, indicated that overseas income from export business was in excess of £745 million. Some five or six years ago employment at the company’s Crewe site was just above 2,000 now with a workforce of 3,800 and a 500 strong engineering team progress continues apace. Whilst the record sales for 2007 were helped by the success of the Continental GT, also known as the ”Baby Bentley”, it is the larger cars, such as the £300,000 plus stretch versions of the Arnage and Continental Flying Spur, that have created an especial interest in the Far East market. From a financial viewpoint Bentley’s turnover in 2007 reached a record £1.07 billion, an increase of 2.7% on the previous year. Operating profits actually increased by 13% to £121.7 million.

246. The emphasis given to a highly skilled and flexible workforce should be further strengthened by the announcement in January 2008 of Bentley’s new online recruitment scheme. This was launched in partnership with Stepstone’s i-grasp system which will enhance the company’s ability to attract top quality engineering recruits worldwide. The levels of craftsmanship and dedication can be appreciated by reference to the company’s detailed website. As an example every single component of a Bentley is filed on computer in minute detail and can be tracked back through each stage of its development. Last year Bentley out-sold the more expensive and less extensive range of its Rolls-Royce rival by about ten to one in terms of cars sold. The latter is now owned by BMW and produced in Southern England although for many years it was produced here in Crewe alongside the Bentley.

247. Bentley’s performance should be seen in the context of a slowing down in spending levels. Hence, within the UK the company sold 1,072 cars in the 1^st half of 2008 compared with 1,237 in the same period last year. This 13% fall, however, compares with a 19.6% fall in the sale of luxury cars generally, with rivals Aston Martin falling by 21.6% and Porshe by 26.5%. Bentley can, also, to have sold almost all of the 550 Brooklands that they launched earlier in the year. It should not be forgotten, however, that last year’s performance was boosted by the launch of the much awaited GTC Continental and strong GTC Convertible sales. On the positive side there has been a 131% increase in sales in China, and 13% in the Middle East with sales in Russia also performing well. Whereas about five years ago only 1,000 Bentleys were being sold annually last year’s record figure, worldwide, was 10,014. It was indicated in March this year that all Bentleys, across the range, will be running on renewable fuel by 2012.

248. In June 2008 it was announced that the most powerful four-door Bentley ever produced had been unveiled. This was the new 200 mph Bentley Continental Flying Spur Speed which is designed and manufactured in Crewe. The car is powered by a 600 horse power, 12-cylinder engine resulting in a zero to 60 mph speed being achieved in 4.6 seconds. The company is keen to maintain the momentum of success and has applied for planning permission for two new parts warehouses. As always human skills and ingenuity play the key role in this forward progress. For that reason Bentley are seeking to recruit for a further 102 new posts. Some twenty have so far being appointed but the recruitment process is likely to continue till the end of the year or possibly early 2009. There are around fifteen graduate engineering jobs not requiring experience but the remaining posts are for experienced engineers. Although the company would be pleased to take-on local candidates there is a general shortage of automotive engineers and, therefore, advertisement will be on a national basis.

249. Following the departure of sports car manufacturer TVR from Blackpool it was hoped that Midlands businessman William Riley might fill something of the vacuum with a similar operation. Unfortunately this has not borne fruit. TVR had gone into administration just before Christmas 2006 and, at that time, the question was could the 260 local employees see their jobs saved through a management buy-out. Surprisingly, Russian-born Nikolai Smolenski, the company’s recent owner, bought it back from the administrators in February 2007 but indicating that any future for the business lay elsewhere. There did appear prospects, for a while, that another sports car operation might locate in Blackpool providing employment for at least some of the ex-TVR workers. Automotive entrepreneur William Riley had bought the MG Sports and Racing brand, once part of MG/Rover, from administrators PriceWaterhouseCoopers for an undisclosed sum. Subsequent press articles suggested that Blackpool could be the location of a “new Riley sports car manufacturing facility”. The development remained in the Midlands and, sadly, Blackpool did not, after all, feature.

250. Despite what has happened the iconic reputation of TVR sports cars will remain. This was brought home on 6^th June 2008 when Trevor Wilkinson, the founder of the original company, died at the age of eighty-five. Together with Jack Picard he set-up premises in a former wheelwright’s garage in Blackpool. There were many tributes to the automotive visionary who launched his first model in 1947 in the form of the two-seater Alvis Firebird. Subsequent TVR models owed much to Trevor’s innovative design. The latter included a multi-tubular steel chassis and springs in the front suspension. TVRs appeared at Le Mans and, indeed, gained Hollywood recognition in a John Travolta film not so many years ago. This drive for technical excellence was carried forward by people such as Martin Lilley and Peter Wheeler at TVR and the brand still remains much prized.

251. It is not only the large companies that are capable of achieving progress in this very demanding Sector. At Astley near Bolton the Keating Supercar has been designed with an estimated speed of 275 mph. It has been the brain-child of Anthony Keating at his Electromech Engineering Services company and the ZeeWax Car wax brands. Anthony and his team have created an ultra-modern prototype. The advanced composite carbon chassis was developed by an industry leader in Italy, whilst the high quality body-work was sourced to a company in the Philippines. However, it has been assembled by experienced craftsmen at Astley.

252. Crewe has more than just one vehicle manufacturer! This became apparent when a local new item in August 2008 indicated that tailor-made ice-cream vans and tricycles produced by Whitby Morrison were selling particularly well. This dynamic company employs about 55 people at Crewe Gates Industrial Estate and, although about 90% of output is for the home market, they have customers in more than fifty countries. These even include the USA, Australia, China, the Caribbean, and, more recently, the small Danish island of Svaneke. The company builds almost two-hundred ice –cream vans a year. Each one is built and crafted by hand with no two alike.

253. The founder of the company was Bryan Whitby in 1962. His grand-son, production manager Ed Whitby, commented that the traditional vans were produced between January and June in readiness for the season. Almost “out of impulse” the tricycles were produced in the period from mid-March to end of September. They have also caught on and the company can claim a range of orders from a Land Rover ice cream van capable of working on sand to tricycles for Covent Gardens to keep stars refreshed at this year’s BAFTA Awards.

254. The 12^th April 2008 was one of a number of “Red Letter Days” in the history of Lancashire-based Leyland Trucks, designers and manufacturers of light and medium weight trucks under the DAF brand. That date marked the completion of the 300,000th truck to be produced at the assembly plant in its thirty years of operation. The 65 tonne truck, a top of the range DAF XF 105 model was destined for Mark Armstrong Transport Ltd at Carlisle. Leyland, a subsidiary of the North American PACCAR Group, operates on a 710,000 sq ft site which contains one of the world’s most efficient truck manufacturing factories. DAFs produced there include the LF, CF, and XF models. Widely different markets are catered for and are dispatched to customers in the UK, Continental Europe, Australia, South Africa, and North America. There has been a significant increase in demand for DAFs both at home and on the Continent and the company can claim a 27% market share in the UK. Production is running at 27,500 per annum.

255. The success at Leyland Trucks has been driven by a highly focused team ethic supported by the Parent Group PACCAR who has invested some £75 million on the plant in the last five years. The achievement does not end there, however, because 26^th June 2008 proved to be yet another good day for the company. It was then that Leyland Trucks were presented, at London’s Dorchester Hotel, with the IMech E Award for Best Financial Management and the Warwick Manufacturing Group Award for Logistics and Resource Efficiency.

256. Darwen Holdings PLC, based in Lower Philips Road, Blackburn, is a new name on the local industrial landscape. However it is one that is likely to assume some considerable importance. This enterprise was evolved by entrepreneur Roy Stanley the chief executive of electrical vehicle manufacturer The Tanfield Group PLC. The latter is located in North East England in Tyne and Wear. In August 2007 the then newly-formed Darwen Group purchased Blackburn-based East Lancashire Coachbuilders. The take-over also involved another Blackburn operation, namely North West Bus and Coach Repairs. This development took place after both of the Blackburn businesses, employing a combined 360 persons at their two sites, went into administration.

257. In November 2007 Darwen Holdings acquired Leyland Products Developments, a specialist design, manufacturing, and product development consultancy. According to comments made by chief executive Andrew Brian the turnover of the two businesses, which were brought together on one site, was expected to be around £30 million this year. Up to £8 million was being invested in the manufacturing facilities. It was, also, indicated that the Group was floating on the Alternative Investment Market (AIM) in order to raise public and investor awareness. The company has been working with London Transport on a hybrid low-emissions vehicle. Darwen Holdings anticipate growth in line with the UK Government’s strategy to increase the use of public transport. In June 2008 it was announced that the Group had undertaken a deal to acquire Jamesstan Investment Ltd, the holding company of the Optare Group.

258. The role of high quality component and material providers is crucial to the future of the Automotive Sector. Amongst a number of key businesses is auto-coatings specialist Electron Technical Solution (Electron TS) of Runcorn in Cheshire. The company, located on Astmoor Industrial Estate, was named Northwest Automotive Company of the Year in November 2007 by the Northwest Automotive Alliance. This was followed, a few days later, with further good news when the company secured a £100,000 order from a client in Yorkshire. The history of the business provides an excellent example of what can be achieved even when sales falter. Electron TS was only founded in 2002 but subsequently saw annual sales fall from £4 million to £1.8 million. An overhaul of the company’s processes was undertaken as well as the introduction of lean manufacturing principles. As a result Electron was predicting turnover to reach £4.2 million. The fifty staff business applies technical and decorative coatings to plastic and rubber substrates using wet-spray painting and assembly operations. Customers have included Land Rover, Honda, Bentley, BMW Mini, Jaguar, and Aston Martin.

259. Despite challenging economic conditions there are a number of companies that are seeking to recruit. This applies to the wider Engineering, including Automotive, Sector where, in various industries, the demand for skilled workers is actually out-stripping supply. Amongst expanding businesses is the Chell Engineering company who took on another production unit at the Brookhouse Industrial Estate at Cheadle in South Cheshire last year. The business has an annual turnover of £1.5 million and a workforce of twenty-eight. In addition to supplying the Automotive Industry including, for instance, JCB, it also supplies the Oil Sector. They have been keen to increase their revenue from their quality fabrication. However, progress had been stalled through difficulties in obtaining a qualified machine operator.

260. Crewe-based CHK, another progressive firm, has been training young people on the job. However, in March 2008 they indicated that they were taking-on eight welders from Poland, having failed to find local candidates suitably qualified. The company has been in a recruitment mode for some time. In October 2007, for instance, they had been seeking to recruit people with sheet metal and fabrication skills in order to take-up brake press operator and welding roles. Managing director Alan Pinkney took the opportunity to suggest that recently redundant workers from the Congleton-based Boalloy Group, which manufactured bodies for commercial vehicles, might consider applying. Boalloy had gone into administration in October 2007 with more than 160 personnel losing their jobs at Boalloy Industries and Boalloy Fastrick.

261. CHK provides a fine example of how a business can successfully diversify. Indeed, the company cannot be confined to a purely “automotive supplier” classification. The origins of CHK date back to 1964 and they have a high volume capability in CNC laser cutting, punching, forming, and robotic welding systems. This has been enhanced by continuous investment in leading edge technology. This has placed it at the forefront of high quality fabricated steel component manufacture. Whilst the company is an important supplier to the commercial vehicle sector it also secures contracts in areas such as CCTV, Telecoms, Defence and Security, Agriculture and Construction machinery and switchgear. Amongst a number of capabilities is the provision of manufacturing conversion kits for snowboards and innovative agricultural machinery.

262. An indication of the continuing progress of CHK is the impressive performance of the “Walton Eclipse” hay-stacker. The latter was invented by John Walton of Northallerton in North Yorkshire but CHK has sole manufacturing rights for the product. Orders from across Europe have helped generate sales of around £500,000 in a matter of months. As well as being sold to UK farmers the hay-stacker has been shipped as far afield as Bulgaria, Denmark, Russia, and Kazakhstan. It is believed to be the first of its kind to allow the stacking of different sized bales. Straw remains an important commodity for its role in helping to bed down cattle. However, demand has been boosted by the fact that straw is increasingly being used to make biofuels, a particularly flourishing market. CHK also manufactures a hay-spreading machine. Through a continually forward-looking strategy with focus on diversification and marketing CHK has seen annual turnover reach some £7.5 million. Success has been achieved despite accelerated rises in the price of steel. Sales director Brian Billings indicated in June 2008 that the price of steel had risen by almost 50% in the previous 12 months from £440 per tonne to £650.

263. In August 2007 the London-based Klarius Group acquired the assets of the European Components subsidiary of the USA Automotive company Arvin Meritor. The European arm had around 1,000 staff at locations such as Cheadle, Glasson Dock, and Blackpool, as well as in operations in France and Italy. As well as supplying Kwik Fit, Unipart, and other distributors in the exhaust sector, the acquired business supplied exhausts for top marques including Ferrari, Lamborghini, Maserati, and Ducati. In late May 2008 Klarius chairman Tony Wilson indicated that he would be investing in emission reduction technology. As well as having implications for the North West this is a key growth area in the context of environmental considerations and global warming.

264. The North West contains a large number of businesses supplying not only the local Automotive Industry but, also, further afield. Amongst these companies is the highly innovative Business Lines Ltd of Kirby Lonsdale in Cumbria. Around fifteen or sixteen years ago director Mike Marczynski invented a safety indicator called Checkpoint which is fitted, in a set pattern, to a vehicle’s wheel nuts, and has seen demand go from strength to strength. Checkpoint has a range of applications. This stretches from military vehicles to trailers, from railway to agricultural vehicles and even caters for civil engineering requirements. Mike Marczynski commented recently that around three years ago one in three Heavy Goods Vehicles and buses were fitted with Checkpoint. Now the proportion is about one in two! This key safety indicator is used on fleet vehicles by several supermarket chains including Sainsbury’s, Tesco, and Asda. In particular export sales have grown and Business Lines expects to sell six million this year.

265. The Automotive Sector provides opportunities but is also challenging. In this context it was sad to learn of the closure of Accrington firm Applied Technologies (AAT). Originally founded as Textile Mouldings Ltd in 1951 the business, which manufactured interior and exterior trims for the car industry, ran into difficulties in 2005 after the collapse of MG Rover. At one time 50% of its turnover had been dependent on this one customer. The company appeared to have been saved when the Midlands-based Meba Limited took them over in early 2007. Following a cash crisis the administrators were called in with more than 130 jobs said to be affected. The decision was then made to close the company down.

266. Despite competitive pressures a number of companies have demonstrated an ability to respond positively to even the more challenging situations. The successful realignment of Leyland Trucks from the ashes of Leyland DAF in the 1990’s is an excellent example of this. The story of Imperial Multipart is worth noting. Multipart was formed in 1993 when it secured the afterparts division of Leyland DAF. Subsequently purchased by Lex Services in 1994 to form Lex Multiparts. In 2006 secured by South African firm to become Imperial Multiparts. Build-up a reputation in logistics and related fields servicing Automotive trade including MoD and even TVR amongst customers. Current management now buying-out from South African parent moving into wider, including public utility, fields.

Aerospace Sector.

267. Major multinational Defence Group BAE Systems has an approximately 16,000 employee presence in North West England. This forms an important and strategic part of this global giant’s international workforce of 97,500 and covers key locations such as Furness, Central Lancashire, Chadderton in Greater Manchester, and Woodford in Cheshire. Activities covered are immense and range from fighter aircraft to nuclear submarine production. Worldwide at end 2007 BAE Systems had an order book of £38.6 billion which represented a rise of 22% year on year. Sales in 2007 rose by 14% to £15.7 billion. Group spend on R+D is around £1.4 billion. BAE Systems is the third largest global Defence company, and, with increased holdings in North America over recent years, the sixth largest Defence operation in the USA. Upbeat performance has continued through this year so far. BAE Systems announced impressive financial figures for the six month period to end of June 2008. Headline sales rose by 12% to £7.75 billion, whilst pre-tax profit rose by over 20% to £791 million. The results are the last to be presented by Chief Executive Mike Turner who retires this August and will be succeeded by Ian King, the current Chief Operations Officer.

268. The importance of BAE Systems to the economy of North West England is crucial. This point was strongly emphasised this summer when Richard Lambert, Director General of the CBI, visited the company’s Samlesbury facility in Lancashire. He commented that BAE places around £320 million worth of orders annually with, according to independent estimates, around 1,200 suppliers in the North West. In addition he was quick to acknowledge the high quality of job provision. He recognised that one in eight “knowledge intensive” jobs in this Region are generated by BAE Systems. The company places considerable emphasis on its people, its greatest asset, and this policy involves development and training in the latest skills and technology.

269. BAE has been keen to demonstrate, pro-actively, the advantage of a career in Aerospace. As a result this has included such events as “Open Days” on the premises. 2008 also saw BAE in the third year of its Schools Roadshow which, after last year’s visits, prompted 60% of children questioned to state that they would consider a career in Engineering. The company are seeking to recruit around 1,000 people with skills in engineering, procurement, and project management. Meanwhile Warton-based engineer 21 year old Rachael Hoyle has been named “Advanced Apprentice of the Year” by the Learning and Skills Council (LSC).Rachael works on the Typhoon programme including monitoring stresses and their affect on aircraft during flight. This talented professional firmly recommends the opportunities available through the apprenticeship route and hopes that her Award will help to provide a greater awareness of the Industry.

270. Work continues apace on the F-35 Lightning 11, also known as the Joint Strike Fighter (JSF). North West personnel are heavily involved in work on the aft fuselage of what will be the world’s first stealth-supersonic, multi-role fighter aircraft. The F-35 is being developed for the USA Air Force Navy, and Marine Corps. It is also strategic to the UK Royal Air Force and Royal Navy as replacements for the Harrier GR9 and Sea Harrier. An important landmark on the project was achieved in April 2008. This was when engineers made the “opening cut” for the aft fuselage of the aircraft at its Manchester site. Staff at BAE’s Warton plant on the Fylde design parts whilst further work is undertaken at Samlesbury. The parts are then shipped across to Lockheed Martin’s site in Texas for final assembly. Three variants of the F-35 are being developed to meet the different requirements of the USA and UK armed forces.

271. May 2008 heralded further good news for BAE’s North West England operations. A £43 million five year deal was agreed involving work on the RAF’s VC10 tanker and transport fleet. This latest contract, part of the successful Joint Approach to VC10 Engineering and Logistics Integration (JAVELIN) signed in 2003, has been developed in partnership with the MoD’s Defence Equipment and Support organisation. Although maintenance work will be carried-out at the aircraft’s Brize Norton based in Oxfordshire the project is wholly managed out of BAE’s Warton site.

272. The VC10 contract further strengthens other military projects including the new Tornado ATTAC programme which is also managed from Warton. Although the last Tornado F3 left the Fylde coast site this May the local Tornado UK team will remain heavily involved in supporting the RAF’s fleet of F3’s through to the 2011 out-of-service date. This aircraft was the first to be fitted with the short-range MBDA ASRAAM air-to-air missile which entered service in January 2001. The F3’s test flight duties will now be taken on by its Warton-built counterpart the Eurofighter Typhoon. Indeed production of the latter has now reached a stage which allows other Typhoons to act as main “chase” aircraft during test flights.

273. BAE Systems chief executive Mike Turner has commented favourably on not only the expertise but the pioneering spirit of the company and its personnel. During the earlier part of 2008 he indicated that the transformation of the business “is well under way and the company is being established as the leading through-life capability partner for the UK armed forces”. In terms of the Eurofighter Typhoon programme a total of 53 had then been delivered to the RAF and 84 to other European nations. Mike Turner also pointed to contracts agreed with Saudi Arabia in September 2007 and known as Project Salam. The contract involves some 72 Typhoon aircraft to be delivered in the coming years. The Typhoon is now in active service with air force squadrons based not only in the UK but also in Germany, Italy, and Spain. The fleet passed its 34,000 flying hour mark in March 2008. Interestingly, Austria, the first export customer for the Typhoon, indicated that one of its uses would be for air surveillance at the Euro 2008 Soccer matches.

274. In December 2007 BAE Warton staff, working at the Samlesbury plant, began building the airframe for the Taranis project. BAE Systems is the industry lead and prime contractor for a project to develop a world-class Unmanned Air Vehicle Technology Demonstrator called Taranis after the Celtic God of Thunder. This £124 million, four year programme, is part of the UK Government’s Strategic Unmanned Air Vehicle Experiment (SUAVE) to develop an aircraft with fully integrated autonomous systems and low observable features. The project is being led from within the Autonomous Systems and Future Capability Business Unit at BAE Systems Warton with support from other BAE operations in the UK and in Australia. Partners include Rolls-Royce, QinetiQ, and Smith Aerospace.

275. By its very size and structure, the Aerospace Industry is one that involves numerous key parts and components and overall costs are high. In that context it is important to win large orders on a fairly regular basis. Recently, following a review of its Engineering Facilities and Capabilities, BAE Systems announced in early April 2008 that over 580 jobs would need to go in two of its factories. Some 450 of these were scheduled to go at Brough in the Yorkshire & Humber Region whilst a further 134 were to disappear from Woodford in the North West Region. It was reported in April that after the latter cutbacks this would leave more than 600 staff at Woodford working on the production of the Nimrod MRA4 programme.

276. Mention has been made in earlier North West England Economic Intelligence Bulletins, and also in this present one, about the considerable impact made on the economy by the huge £43 billion Al-Yamamah contract, the first phase of which was signed in 1985. This exceptional order, the largest export order in the UK’s history, covers not only military aircraft and equipment but associated logistical, technical, and training support. Its value to the North West, not only directly but, also, through the Multiplier effect on local businesses, services etc is immense. There has, therefore, been considerable concern that recently questions have again been raised about the background to the order. In November 2004 the UK Serious Fraud Office (SFO) announced that BAE Systems and two other companies were being investigated over accounting procedures relating to Defence contracts held by the Saudi Arabian Government. In December 2006 the Attorney General Lord Goldsmith announced that the SFO was discontinuing its investigation citing issues relating to national security.

277. The position was complicated further when in June 2007 BAE Systems announced that it was under similar scrutiny by the US Department of Justice. In November 2007campaign groups secured permission for a judicial review into the SFO’s decision to end its probe. However, following a subsequent critical statement by the High Court the SFO has been granted leave to appeal that it acted unlawfully in discontinuing its own investigation. There have been suggestions that an intensive judicial review might result in Saudi Arabia cancelling last year’s deal to purchase some 72 Eurofighter Typhoon jets. A very detailed review of BAE practices was undertaken by Lord Woolf, the former Lord Chief Justice, during 2007-8. The recommendations were, however, stated to be equally pertinent to any large multinational company and BAE has expressed willingness to follow these through. In July 2008 it was announced that the SFO had won its Law Lords appeal against a court ruling that it had acted unlawfully. The QC for the SFO indicated that the Director had made a legal and appropriate decision to stop the inquiry in late 2006 following representations from the Saudi Arabian Government involving the withholding of cooperation on critical issues of anti-terrorism.

278. North West England’s Aerospace Sector benefits considerably from developments marginally “over the border” in North Wales. It is in the latter locality that Airbus has a major wing-making facility which provides valuable spin-off work for this Region’s quality sub-contractors and component manufacturers and suppliers. According to local press reports in early 2008 Airbus was anticipating air passenger traffic growing by an average of 5% per annum over the next twenty years. A key feature is expected to be aircraft size with Airbus well positioned with its A380 super jumbo jet. The latter is designed to seat well over five-hundred passengers. Louis Gallois, Chief Executive of EADS, the parent of Airbus, has claimed the A380 as the most energy-efficient aeroplane in the world. Despite fierce competition from the American Boeing company Airbus had a record year in terms of overall orders in 2007.

279. In early March 2008 it was announced that the USA Air Force had awarded a $35 billion order for 179 KC-45A in-flight refuelling aircraft to a consortium consisting of Airbus Parent Group European Aeronautic Defence and Space Company, and USA contractor Northrop Grumman. Brian Fleet, a former apprentice at the Broughton plant in North Wales and now an Airbus senior vice president, suggested that more orders were expected to follow. In June, however, it was announced that Boeing would be appealing against the decision. Nevertheless Airbus Parent EADS had had good news again in March when its consortium had won a $26.4 billion order to replace the RAF’s fleet of mid-air refuelling tankers. This follows success in Australia, Saudi Arabia, and the UAE.

280. There is a certain irony in that whilst energy prices are rising, with oil approaching $150 a barrel by mid-July 2008, this has not had a totally negative impact on the Aerospace Sector. The Middle East states gaining from the oil situation have had more cash to spend and this has benefited both Boeing and Airbus. The former has received “a raft of orders from the Gulf States” whilst, at the recent Farnborough International Air Show, Airbus was able to sell eight A330’s to Saudi Arabia Airlines.

281. Amongst a number of quality plants benefiting from aircraft orders has been Rolls-Royce at Barnoldswick. It is here that the highly-skilled workforce produces the key component wide-chord fan blades. For instance, in October 2007 British Airways announced that Trent engines would be powering its fleet of new Dreamliner super jumbos with the blades being produced at Barnoldswick. In December it was announced that China Airlines, based in Taiwan, had signed a letter of intent for twenty new Airbus 350-390 aircraft with an important contribution from Rolls-Royce’s East Lancashire operation.

282. The North West’s Aerospace Sector shares similarities with the Automotive industries in that, in addition to mainframe producers, it contains an array of high quality sub-contract businesses. Amongst the latter is APPH, which in turn is part of the London head-quartered BBA Aviation. APPH designs and manufactures hydraulic systems and landing gears for the world’s aircraft. This includes hydraulic equipment for a wide variety of aircraft from military helicopters to fighter jets, and from civil airlines to commercial jets. The company has an important presence in the North West at Runcorn and Westhoughton. Both these locations are to benefit from a combined £1.1 million Ministry of Defence contract. APPH Runcorn is to repair and overhaul the undercarriage and associated equipment on jetstream, Nimrod, Bulldog, and Dominie aircraft. APPH’s Westhoughton site is to supply spares for hydraulic equipment for Nimrods. Both contracts will run until March 2012.

283. In June 2008 it was announced that Brookhouse Holdings of India Mills in Darwen in East Lancashire had been bought by the Karman Aerospace Group which is part of Karman Corporation based in Connecticut, USA. Brookhouse was founded in 1951 and since April 2004 had been part of a private equity business. It is a valued supplier to the UK Aerospace Sector and employs around 465 people on 240,000 sq ft of production space. The new American owners purchased Brookhouse for around $85 million and are, themselves, producers of aircraft structures and components for commercial and military aircraft. They regard the East Lancashire business as a leading edge technology composite supplier with solid growth prospects.

284. Press reports in March 2008 indicated that A & G Precision were to spend £400,000 on expanding their HQ at Preesall in the Over Wyre part of Lancashire. A &G provide engineering services for some the UK’s largest Aerospace companies including work at BAE Systems. The business, which employs around thirty personnel, was established in 1989 by current managing director Arthur Pinder. The expansion will increase shop-floor capacity and increase manufacturing effectiveness. Further machine tool investment is planned this year and there is a possibility of increased staffing levels as the company seeks to win further orders.

Shipbuilding, Shipreparing, and Marine Industries.

285. “That Industry will never come back, we just cannot compete, it is lost for ever. You will never see people working there again.” This quotation could be taken from a range of situations in which gloom and doom has been spread about the future, or rather the alleged lack of future, of some major industrial activity. The UK Shipbuilding and Repairing Sector has, indeed, been subject to statements of this kind. Employment levels cannot be compared with some of those in the past but, certainly here in North West England, what a change, noticeably for the better, has occurred in the recent past!

286. BAE Systems Submarine Solutions employs around 4,000 employees at its Barrow-in-Furness shipyard to produce “fantastic fighting ships”, namely some of the quietest nuclear powered submarines in the world. The 169 acre site is the only one in the UK with a licence is produce this type of advanced warship. BAE are producing the Astute class of submarine, the first of which was launched in June 2007. It was also announced in the local press in May 2008 that the Ministry of Defence intended to spend £4 billion to produce two aircraft carriers in the UK, the HMS Queen Elizabeth, and the HMS Prince of Wales. They would be built by a consortium of BAE Systems and VT Group, at Barrow, Portsmouth, Glasgow, and Rosyth. BAE would be involved in mega blocks construction representing a return to surface warship building for the first time since 2004.

287. When Murray Easton was appointed managing director at the BAE, former “Vickers” shipyard at Barrow in 2003 he was the tenth appointee to that position in almost as many years. However, his inspirational leadership supported by a highly dedicated and skilled staff has seen a dramatic change in fortunes. Indeed in the 2008 New Year’s Honours Murray was a very worthy recipient of the CBE. This recent period has witnessed major innovation in the submarine building process. Included here has been modular construction and vertical outfitting. The latest Astute class of nuclear powered submarine being produced is the most capable and widely deployable vessel of its type that the Royal Navy has ordered. In the words of Murray Easton “building a nuclear powered submarine is, arguably, the most complex Engineering task in the world”.

288. The high quality activity undertaken at the Barrow shipyard results in vital spin-off and associated work. Subconsult, Orwelco, and Optech Fibres are working in a partnership deal with the American Armetek company. It was, therefore, excellent news when it was announced towards the end of July 2008 that planning permission had been granted for a new 28,000 sq ft factory next to Walney Channel on Furness Business Park. The plant will, amongst various activities, be involved in the assembly of complex communication cable arrays with moulded connections. These are used for the exterior of Astute class nuclear powered submarines. Six Northern England contractors are bidding to build the new plant which will harness some green energy including solar panels and possibly wind turbines. Fifteen people are already employed in Barrow based at Orwelco in Park Road. When the new factory is completed they will move to this new site where up to twenty more jobs will be created with anticipated work on UK and Spanish submarines, and for the German Oil and Gas Industry.

289. The increasingly vibrant shipyard of Northwest Shiprepairers & Shipbuilders (NSL) at Birkenhead is due to take-up the iconic name of Cammell Laird. The company actually occupies the former dry docks of the latter business that went into administration in 2001. This will be pleasing to managing director John Syvret who held the same position with the earlier Cammell Laird and who now owns NSL with Peel Ports. A record annual turnover of £41.7 million was achieved by NSL last year compared with sales of £18.7 million in the previous year. 2007 saw a pre-tax profit recorded of £4.3 million. Probably the first really notable good news in 2008 was the signing of a £28 million contract for the Ministry of Defence safeguarding 350 jobs and involving the overhaul of the Royal Fleet Auxiliary (RFA) ship Fort Rosalie. This contract followed the £20 million refurbishment of RFA Diligence in 2007.

290. Even better news has followed NSL later in 2008. It was announced at the beginning of July that an initial contract of £180 million over five years had been agreed with the Ministry of Defence. This involved responsibility for the service and maintenance of eleven Royal Fleet Auxiliary ships. The latter are used by the Royal Navy to convey supplies around the world in various capacities such as fuel tankers, munitions, hospital ships, servicing the Royal Navy’s fleet of warships. NSL has been carrying out a number of ad hoc contracts for the Navy for several years but this major order provides much needed stability. John Syvret also indicated that, whilst BAE Systems and the VT Group would be leading the construction of the UK’s next generation of aircraft carriers, the Birkenhead yard was to be a crucial “second tier” supplier. The main contract involves two 55,000 tonnes vessels, the HMS Queen Elizabeth, and the HMS Prince of Wales.

291. The resurgence in demand in the Sector has, however, put pressure on recruitment. When Cammell Laird was closed-down in 2001 a number of experienced personnel left the area. In addition, there are workers approaching retirement age. As an interim measure recruitment from Poland has been undertaken. However, NSL/Cammell Laird’s long term plans are firmly involved in training local people and in partnership with the Maritime & Engineering College are launching an apprenticeship programme.

292. The Region’s Marine Industry is considerably more diverse than many observers appreciate. In February 2008 in the USA a survey was undertaken of outdoor specialist retailers with total market coverage of around $3 billion. From responses received it was indicated that Pyranha Kayaks had been voted best Whitewater brand in the USA. This was very good news as Pyranha’a HQ factory is at Preston Brook in Runcorn in Cheshire. The business is not “just another canoe and kayak company”. They are run by enthusiasts and experts in the field and utilise the latest competitive programmes and technical know-how. More than that they claim to be the first kayak company to recognise the needs for different sizes of products for different sizes of paddlers.

293. Logically and deservedly attention has been focused on locations such as Birkenhead and Furness when discussing the Region’s Marine Sector. However, Middlewich, although landlocked can claim to be the location of an enterprising business producing crafted boats that are subsequently sent some fifty miles away to sea. The company in question is sunshinemarine.co.uk and is run by Mr Vern McEwan who had a boat dealership business before embarking on manufacturing. He insists that being located in an industrial area has assisted the company in sourcing materials. The first boat, the Endeavour 500, was produced by Vern’s small team of skilled workers in 2007.

294. There was considerable shock way back in 1967 when the great Donald Campbell was killed trying to break his own water-speed record. This occurred at Coniston in the Lake District and his wrecked jet-powered boat Bluebird was not found until 2001. The present, however, has come to the rescue of the past. PDS Engineering of Nelson has, painstakingly and with considerable skill, rebuilt this amazing and much cherished speed boat. PDS specialises in record-breaking vehicles. Indeed the company has worked on land-speed record-breaking car Thrust2 as well as Richard Branson’s round-the-world hot air balloon. Originally PDS had been asked by Bill Smith, the amateur diver who found the wrecked craft, to rebuild just the back part of Bluebird’s frame. However, the company’s work was so impressive that PDS were asked to complete the task with, ultimately, the boat being put on display at the Ruskin Museum in Coniston.

The Chemicals,Chemical Products Sectors, Energy, and Environmental Products.

295. North West England’s Chemical Industry never ceases to amaze in terms of the diversity of its activities and impact on global markets. This view has been substantiated by Dr Jenny Clucas, the newly appointed chief executive of Chemicals Northwest. The latter is the public sector organisation which supports and promotes this vital and upbeat group of industries. Dr Clucas, earlier in her career, spent nearly a decade working in Widnes at Solvay and Laporte Chemicals. In fact, in the last twelve years she has featured as a consultant in a number of leading Chemical companies. This added insight places considerable importance to Dr Clucas’ statement that Chemicals are “vital to life and vital to the North West economy”. She has, also, emphasised that she will seek to ensure that “Chemicals Northwest continues to be a dynamic organisation supporting the interests and activities of the Chemical-using Industry”.

296. The North West Chemical Industry is Nationally and Internationally significant and by its diversity and response to market demand has demonstrated that it is very much a 21^st Century Sector. The Region’s businesses cover activities from pharmaceuticals to paints, from soap products to fuel cells, from biofuels to plastics, from photographic materials to shampoos. The North West’s Chemicals and related products find their way into a multitude of end-uses and, importantly, both home and overseas markets where the North West is a major contributor.

297. British Vita PLC provides a particularly good example of this diversity. Indeed it is very difficult to categorise this dynamic enterprise with full confidence as its activities and influence extend into every other major mainstream activity from Textiles and Textile Products to Transportation and Medical. Amazingly this world-class player was set-up, in 1949, with £100 from its astute, and innovative founder the late Norman Grimshaw. The initial factory was Vitafoam in Oldham and in the early days the primary business was the making of foam cushions and mattresses. Subsequently the company expanded further into Greater Manchester and Lancashire including through focused acquisitions. Progress covered the UK and overseas and now the company is a truly global operation producing cellular and industrial polymers, engineered thermoplastic sheet and nonwovens.

298. British Vita was, itself, acquired by the Texas Pacific Group, through TPG Springs (UK), for some £667 million in 2005. However, the extent of Vita’s market coverage is phenomenal ranging from transportation to healthcare. As an example the company’s elastomers find their way into medical and hygiene applications as well as, for instance, the toy and furniture industries. Vita’s reticulated foams have applications as diverse as ink-jet printers and jet aircraft. Their needle-felt is used in product areas as varied as automotive and filtration industries. The Apparel Sector also benefits from the company’s thermal insulation provided by high performance materials.

299. Further demonstration of British Vita’s versatility is provided by the achievements of just one of its key businesses in the North West, namely Caligen Foam acquired in 1978. Caligen Creative Foam Technology at Accrington includes the manufacture of an ever-increasing range of high specification foam products used in Automotive, Footwear, Medical, and Industrial markets. As an example the company is the European leader in diaper foam and other specifications including femcare, and other hygiene applications as well as medical. The latter includes spool-wound rolls that are over ten times the length of normal straight –wound rolls. In the Automotive field Caligen is the leading global supplier of automotive polyurethane foam for interior trims and engineered components. The company’s reticulated foams find vital usage in batteries, furniture, cosmetics, ceramic filters, pond filters, air humidifiers and conditioners, filters for transportation industries, inkjet components. Since 2006 the company has shared its site with the famous Rossendale Combining company who relocated from Rossendale and had been part of the British Vita family since 1989.

300. Production has commenced at personal care products manufacturer PZ Cussons new UK facility in Agecroft in Salford. Full transfer of activities from nearby Kersal Vale to the £26 million factory is expected by the end of this year. Work on the new Innovation Centre has also started with considerable expectations from the key R+D facilities that will assist increased sales. During the last financial year in 2007 Cussons increased UK sales by 10%. Strong brands included Imperial Leather, Carex, Original Source, and Charles Worthington. This year’s results were ahead of expectations. Pre-tax earnings for the 12 months to 31^st May 2008 were up by 12% to £76.5 million with sales increasing by 14% to £660.9 million. Growth was strong all-round especially in Nigeria. The company featured prominently at the 2007 Manufacturing Institute’s Business Awards Event. For the second year in succession they were voted the “Business of the Year” as well as winning the “Developing People” Award and being highly commended in the “Champions of Best Practice”.

301. March 2008 saw a take-over and merger that provides distinct prospects. There had been concern in the summer of 2007 when a take-over by Eckart of Germany spelled the eventual end of metallic pigments production at the Wolstenholme International site at Darwen in East Lancashire. The Group managing director Calvin Lord has, however, provided some hope for the future. He has brought together Darwen-based Ronald Britton which supplies plastic shapes and confetti to schools with Brian Clegg Educational Products at Rochdale which makes ready-mixed and powder paints and PVA glues for the Education Sector. Both operations are to be located at Rochdale. Ronald Britton also provides metal powders for coatings in the Aerospace and Automotive Industries. Calvin Lord has indicated that the plan is to invest in the enlarged Group, bring in further new management, add to the product range, and consider further acquisitions.

302. In February 2008 Swedish Chemical Specialities Group Perstorp officially secured the caprolactones business of the multinational Solvay Group in a deal worth almost £150 million following clearance from the European Commission. This has important and positive implications for the North West in that it involves the take-over of the former Solvay caprolactones plant at Warrington, which had an annual turnover of almost £45 million in 2006. These particular chemicals are utilised in various sectors including paint, adhesives, automotive, aerospace, medical, and footwear. Even prior to the acquisition the Warrington facility, which employs some 65 people, was already claimed to be the world leader in terms of caprolactones production. Plans by the new owners involve a long-term commitment in this market involving an increase in site capacity. Basic engineering activities related to the expansion were expected to be completed by the 2^nd Quarter 2008 with the new capacity to be on stream in the first half of 2010.

303. The 3^rd January 2008 was a momentous day in the history of the British Chemical Industry. On that day ICI de-listed from the London Stock Exchange, also having been one of the original FTSE 100 Index companies in 1984, and previously an inaugural member of the FT30 in 1935. The company, once a major employer in the North West, ended 82 years of independence in January when, as a result of an £8 billion take-over, it officially became part of the Netherlands-based Akzo Nobel Group. The merger was allowed to go ahead provided that the Group reduced its holdings on its domestic paints front.

304. The situation relating to paints has had implications in the North West in that Akzo Nobel already had a Crown Paints factory at Darwen. The decorative paints operation at this site accounted for some 540 jobs at the factory. A company spokesman, speaking in November 2007, heralded this operation as a “big success story” with 2007 “a great year” which meant that the division could be sold as a “strong competitive business”. Initially Akzo had decided to move the other part of its Darwen activity, namely its retained industrial finishing production involving 109 jobs, to Sweden by the end of the year. There has, however, been vigorous opposition from the local GMB, and Unite trades unions. This has involved presenting a robust case to Akzo HQ at Amsterdam. As a result, the unions have indicated that various products that Akzo Nobel was going to discontinue are now to be sold to Crown Paints at Hollins Road in Darwen for a nominal fee. This will create opportunities for a number of employees to stay on the site. Some operations on the industrial finishes side including sales and administration will relocate to the site on Shadsworth Industrial Estate in Blackburn providing the opportunity for some personnel to transfer. The outcome of all this, according to a union spokesman, is that about a quarter of the 109 jobs look likely to be saved.

305. An article in the “Manchester Evening News” on 4^th August 2008 suggested that the Crown Paints management, led by managing director Howard Luft, is now close to sealing a deal with Akzo Nobel to take-over the Lancashire business. Crown Paints is being backed by private equity firm Endless Investments. The latter are said to be ready to invest in Crown’s production facilities and redevelop more than one-hundred Crown Decorating Centre paint outlets.

306. Despite changes taking place the influence of ICI on the North West economy is still apparent. This takes the form of businesses that have developed originally from ICI offshoots such as giant Pharmacutical company AstraZeneca in Cheshire and the global impact of a key R+D enterprise such as Avecia in the Manchester area. The former Hillhouse site in the Thornton/Fleetwood part of Lancashire evokes more than just memories of its former occupation by ICI. Amongst current businesses located here is Victrex, manufacturers of the famous PEEK polymer. The company has a policy statement of “PASSION-INNOVATION-PERFORMANCE” and is the leading global manufacturer of Polyaryletherketones, exceptionally high quality polymers which are sold under the brand names of VICTREX® PEEK tm polymer, APTIV tm, and VICOTE®. A very high proportion of output is exported and the applications are immense covering sectors as diverse as transportation and medical, offshore and communications, from semi-conductors to food processing, from defence industries to textile machinery.

307. The middle word of the mission statement of Victrex is “INNOVATION” and the company more than lives up to this claim. For instance, on 27^th May 2008 it was announced that recent technical enhancements in the APTIV tm film portfolio had led to significant increased market penetration for the already innovative VICTREX ® PEEK tm polymer-based film. As customer industries face increasingly difficult environmental/physical conditions such as high temperatures this has pushed demand. Included here is film format to be used in thermoforming applications ranging from complex gaskets for semiconductor wafer reticle pods, electronic chip package enclosures, audio speaker diaphragms, to aerospace panels and medical trays. John Getz, Commercial Leader Film at Victrex PLC, has commented that the versatility of APTIV tm has opened up newer market area from Brazil to Australasia, as well as seeing demand driven in applications as varied as acoustics and medical and dental appliances.

308. Kutting Ltd are a leading independent manufacturer of fully compliant hoses for the Offshore Industry who, in May 2008, unveiled a new range of “PEEKline” hoses incorporating liner tubes made from VICTREX® PEEKtm polymer. The company were impressed with the latter’s high mechanical properties, the fact that they maximise chemical, thermal, and permeation resistance as well as meeting the strictest requirements of the Oil and Gas Offshore Industry. Sung Hyoung Precision are a leading system provider of technological innovation and in April of this year announced that they were adopting VICOTE Coatings, powder, and liquid dispersions, based on VICTREX® PEEK tm polymer as the coatings solution for its golf ball core mould. The exceptional scratch and wear resistance is estimated to extend the service life of the core mould by up to six times.

309. The secret of the success and, indeed, continuing rapid progress of Victrex is its relevance to a growing list of requirements. For instance, in March 2008, it was stated that DIGMESA AG of Ipsach in Switzerland, a global leader in engineering and electronic control systems production for aqueous media, was implementing VICTREX PEEK polymer in its latest precision flowmeter designed for very demanding food processing applications. As a complete contrast in February Victrex announced that its VICOTE Coatings, powder and liquid dispersions, had been adopted by Simula Tech, Inc on the slide hinge component for a range of phones such as mobile, PDA, and smart. Crane Aerospace & Electronics is a major supplier of systems for critical aerospace applications and has been developing a new tyre pressure monitoring system for the landing gear of Boeing 777 aircraft. In December last the key components producer specified VICTREX PEEK for the hubcaps containing the system because of the materials’ high temperature resistance and considerable mechanical strength. This was in addition to its chemical resistance to the caustic affects found on the runway.

310. Asahi Glass Company (AGC) Chemicals Europe Ltd are also located on the former ICI Hillhouse site at Thornton/Fleetwood in Lancashire and are part of a multinational Japanese Group with worldwide annual sales of over $14 billion. The Fylde coast subsidiary is Asahi’s largest operation outside Japan and has made its name in the production and supply of polytetrafluoroethylene (PTFE). This diverse product has a vast range of applications from coated cookware to gaskets and diaphragms in chemical process industries, from anti scuff agents in ink and paint to textile membranes, from aerospace and automotive applications including fuel hoses to ski wax.

311. The Asahi Parent Group has built a reputation in a wide raft of activities and has benefited from the growth in demand, possibly running at 5% per annum, for ethylene tetrafluoroethylene (EFTE) or Fluor. The latter is a fluorocarbon polymer with exceptional properties such as chemical, heat resistance, electrical, and mechanical strength. Applications are particularly appropriate in the construction industry although additional uses include for wire and cable insulation for the transportation sector, production of films, and as materials for the semi-conductor industry. In order to take pressure of demand of its Asian plants and also to cater for Western European growth Asahi decided to set-up a new EFTE facility alongside its existing PTFE plant in Lancashire. This was officially opened and came on stream in April 2007 involving an expenditure of £15 million and providing some fifteen extra jobs alongside the current workforce of 135. There was valuable help on the planning side process from Wyre Borough, Lancashire Economic Partnership, NWDA, and Chemicals Northwest.

312. This is already proving a valuable local investment and on 8^th November 2007 the Hillhouse facility received, amongst its visitors, Mr Yoshiji Nogami the Japanese ambassador, who expressed the hope that the plant will make a valuable contribution to the 2012 London Olympics as well as at a number of stadia being built worldwide. The plant has already received publicity for its supply of ETFE film for the roof of the new National Stadium for the Beijing Olympics in China. It has also been involved in 300,000 sq metres of film for the National Aquatic Centre at Beijing, also part of the Olympics.

313. McBride, with its UK HQ at Middleton near Manchester, provides a classic example of a company that has diversified its product range with considerable success. Its origins were in 1927 in North Manchester when it supplied chemical processing products to the Lancashire Cotton Industry. By 1945 the business had moved to its present location in Middleton producing bleach which was delivered in glass bottles to local corner shops. Now with fifteen factories in six countries, McBride supply own-label household and personal care products to retailers across Europe. The range of goods includes dishwasher tablets, fabric conditioner, soap, air fresheners, mouthwash, shampoo, and deodorants. In the six months to end December 2007 the company, who had undertaken useful acquisitions in UK and continental Europe, secured a 23% increase in revenues which totalled around £343 million. Huge rises in raw material costs resulted in a 28% decline in half year profits to £11.2 million.

314. McBride’s chief executive Miles Robert has emphasised the improved efficiency and purchasing policies being undertaken by the company. This approach has gone part of the way to countering soaring costs. An additional feature has been the recovery of some of the cost from customers. Half year revenues in the UK actually rose 13% to £152 million with demand increasing for deodorants, liquid soap, mouthwash, and skincare products. Amongst other market areas Eastern Europe exhibited notable growth albeit from a lower base. In the New Year the company continues resilient in a challenging market scenario.

315. There is already ample evidence from the contents of this Economic Intelligence Bulletin that businesses in North West England have a highly deserved reputation as innovators. Yet another example of this ability is provided by recent developments at Kay’s soap manufacturers in Ramsbottom. The company has been working in partnership with Lush, the leading cosmetics business, to produce the world’s first commercially available palm oil-free “soap base”. This development is decidedly eco-friendly in that global demand for palm oil, a major component in soaps and cosmetics, is accelerating the clearing of the rainforests in areas such as Indonesia and Malaysia. It was announced in December 2007 that Lush was then about to place the new type of palm-free soap, called Greenwatch, throughout its approximately ninety UK shops. There were also plans to use Kay’s new soap base across other ranges. Kay’s family-owned business, which has been in the same premises since 1885, was the first UK company to produce “vegetarian” soap in 1970.

316. Successful innovation depends on the skill and ingenuity of talented individuals. The North West has a deserved reputation for providing the location for not only local people but, also, for newcomers to develop their ideas into practical reality. A recent example of this is the achievement of Danish-born Dorthe Pratt who is the wife of a farmer in the Cumbrian Dales. Dorthe runs the impressive Sedbergh Soap Company on the family farm and it is there that she manufactures a range of natural soaps that are produced using pure essential oils. Natural herbs and flowers actually grown at the farm provide the natural colouring. Observant readers will remember this development from the earlier “Agriculture, Food, and Drink” Section of the Bulletin!

317. England’s North West has secured useful investment from many parts of the world. Australian fuel cell specialist Ceramic Fuel Cells has invested around £3 million in the Wirral where it has occupied the former Candy factory. Observers suggest that some forty jobs are likely from the project. The company produces zircons powder for use in a highly efficient fuel cell for the next generation of domestic gas boilers. This could reduce carbon emissions by half. The material can also be used in a new catalyst for diesel engines. This is far from the end of the story as the new powder plant could be in line for further expansion.

318. Valuable contributions have been made through local management buy-outs. Amongst these has been Harman Technologies of Mobberley in Cheshire which was formed in 2004 following the receivership of Ilford Imaging. As part of the buy-out Harman acquired the rights to the ILFORD brand for the Black and White film and paper products. More than 85% of Harman’s products are sold abroad and in 2006 a turnover of £29 million was achieved. The company have had to face material and energy costs as well as a weak $ in the key USA market. Despite this the company, who employ around 370 in Cheshire, were resilient and expected only a slight change in annual results. In October 2007 an important acquisition was made involving Kentmere Photographic of Staveley in the Lake District. This latter £5 million business specialises in wide format inkjet media products which was complimentary to Harman’s own inkjet business. In addition, it was felt that the Kentmere brand would also benefit from Harman’s expertise, investment capability, and access to international markets.

319. Another enterprise created by a management buy-out and performing impressively is Pentagon Chemicals. The background story is a very interesting one. Since its formation in 1975 Pentagon of Workington in Cumbria has been transformed from a fairly basic business into one of the UK’s fastest growing manufacturers of speciality chemicals. The company had a spell under the ownership of the USA giant Dow Group and traded briefly as Haltermann. Chief Executive Allan Laing led an MBO in 2002 of the Workington site at Northside and created Pentagon Chemical Specialities. The latter is noted for the production of a number of intermediates serving sectors as varied as Pharmaceuticals, Flavour and Fragrances, Oil Fields, Fuel Additives, and the Polyurethane industries.

320. The next step by the MBO Team, following Workington, was to acquire the Halebank site in Widnes in 2003. This had stared life in 1939 as Ward Blenkinsop manufacturing anaesthetics and antibiotics. This site now operates under the title of Pentagon Fine Chemicals and serves the Pharmaceutical, Agrochemical, and Specialities industries. Combined turnover at the two plants had reached £40 million by 2006 with a combined employment of about 200. Pentagon has also grown the contract market servicing a number of blue-chip companies. The business is entering into a joint-venture with Saudi firm Global Chemtec to take one of its paper chemical products Alkenyl Succinic Anhydride (ASA) to be manufactured in the Gulf. ASA is used in paper making to change the surface properties of the paper to make printing more manageable.

321. An excellent example of diversity and growth is Precision Polymer Engineering Ltd (PPE) of Greenbank Road in Blackburn. This dynamic, award-winning, company bestrides the conventional sector definitions and can, equally be described as an Advanced Flexible Materials manufacturer. Indeed it operates at the forefront of elastomer component design manufacturing and supplying high performance moulded rubber seals to various industries around the world. The product range is from standard and non-standard O-rings operating in extreme temperatures and chemically aggressive environments to bespoke custom-designed technical mouldings in high specification materials. As for the customer base, where does it end?! Aerospace, Automotive, Defence, Chemical Process Industries, Pharmaceuticals, Hydraulics, Bio-analytical, Food, Water, Power Generation, Nuclear, Offshore Oil and Gas to name the most obvious.

322. Around 2007 PPE indicated that it had experienced annual growth of at least 25% in the previous five years with more than 80% of its products exported. An indication of quality and success is the securing of key Awards. This includes in 2006 the Queen’s Award for Enterprise for Innovation, and then in 2007 for Export Achievement. Investment in both plant and people has been an integral part of this progress. Expenditure has continued throughout 2008 with the commencement of a building programme to increase production by 80%. There is also work being undertaken on a dedicated Administration and Customer Training Centre.

323. During 2007 the LDC management and private equity company acquired British Salt of Middlewich from US Salt Holdings, its American parent. The latter had secured British Salt from Staveley Industries in March 2000 for £80 million but put it on the market in 2006. After completing a £100 million buy-out of the Cheshire operation LDC has now announced its development plans. British Salt produces almost 500,000 tonnes a year serving a wide market demand. This includes foodstuffs such as bread and canned vegetables, animal feeds, chemical production, water softening, hide and skin processing etc. The business produces about half of the UK’s pure salt and achieved sales of £30 million in 2006. LDC has indicated that British Salt, which has in excess of two hundred years of salt reserves, is well placed to capitalise on opportunities in fast-growing markets. This includes the manufacture of saline drips for hospital patients, whilst, in geographical terms, there are strong possibilities through focusing on the emerging economies such as China and elsewhere in the Far East.

324. In July 2007 it was announced that Iota NanoSolutions Ltd of Liverpool had beaten-off strong competition to win not one but two high prestige awards. These were the NWDA Science and Technology Business of the Year Award at the Daily Post Regional Business Event as well as the Merseyside Innovation Award for the development of revolutionary nanotechnology. The judges were particularly impressed with Iota’s relationship with the Liverpool School of Tropical Medicine for the development of anti-malarial treatments. The company, founded in June 2005, specialises in the enhanced formulation of insoluble compounds for next generation products. In essence this involves the conversion of water-soluble hydrophobic organic materials to a dry solid format that rapidly forms nanoparticulate dispersions when added to water. This novel particle formation technology can be applied, on a large scale, to a wider range of materials used in pharmaceuticals, nutraceuticals, foods, cosmetics, consumer/household products, agrochemicals, inks, and coatings. IotaNano Solutions has access to an advisory network of leading scientists including Professor Andrew Cooper, University of Liverpool, who was one of the co-founders.

325. Another extremely innovative firm is Collyhurst, Manchester-based Byotrol which was spun-out of HMG Paints and floated on the AIM in July 2005. This dynamic young enterprise has developed technology for wipes, sprays, mousses, and other products to combat the spread of “bugs” such as MRSA, e-coli, listeria, and salmonella. During the 12 months to end March 2008 sales at Byotrol rose more than 40% to almost £950,000. In the final month alone orders exceeded £400,000. This sales performance was, however, associated with a loss-making situation. Nonetheless the management feels confidence for the future. Byotrol’s technology has found application in hygiene products for hospitals, children’s nurseries, food processing factories, and even in the construction industry. The advantage of its use in the latter sector is that it is more effective than sandblasting and has no detrimental effect on stone buildings. In summer 2007 the Colyhurst business was approached by civic leaders in Venice to conduct trials to remove the algae, mould, and mildew which plague this historic Italian city.

326. During spring 2008 came the announcement that the Chester Pharmaceutical company Maelor was acquiring Swiss-based Speciality European Pharma International (SEPI) which it felt would provide a foothold in the USA market. The Group has now been renamed IS Pharma (International Speciality Pharmaceuticals) to reflect its expanded business. Chief executive Tim Wright has commented that, post-acquisition, as well as selling direct to UK hospitals, they have benefited from a strong distribution network across Europe, a presence in developing markets, and a crucial first step in North America. SEPI’s key product is Haemopressin which is used to stop oesophageal bleeding and in the treatment of liver diseases.

327. In its Maelor format prior to the merger the Chester-based company reported a pre-tax profit of £1.18 million on turnover of about £7 million in the 12 months to 31^st March 2008. This compares with a loss of £32,630 the previous financial year when turnover was £2.8 million. Chief executive Tim Wright points to the successful acquisition and rapid integration last year of Pharmaceutical business Acurus. IS Pharma is now “an earnings-focused international Pharmaceutical company with a broad portfolio of launched and later-stage brands”. The commercial team is delivering strong organic growth from existing as well as newly-acquired brands in the UK, as well as replicating this in international markets. There is further expansion envisaged with four products set to be launched.

328. The Pharmaceutical Sector is an exceptionally challenging one where only the very highest quality performers can expect to achieve continued success. Considerable expenditure is needed to bring products to the market especially in such a highly sensitive and crucial field as Healthcare. There is also the perennial problem of copycat versions appearing of brands that have taken considerable ingenuity and research to produce. The Sector is, at the same time, both challenging and yet also filled with endless possibilities in terms of new break-throughs and developments.

329. In 2007 there was considerable local concern when Ashton Pharmaceuticals at Ashton under Lyne went into administration. The company had manufactured and developed dry powder inhalers, sterile and injectable products, and solid dose tablets/capsules, and blister packaging at its 150,000 sq ft facility on a 7.3 acre site. Fortunately, the business was saved through the intervention and take-over by the Recipharm company of Stockholm in Sweden. The President of the latter enterprise, Thomas Eldered, commented favourably on the abilities of the 280 staff at the Ashton under Lyne factory whose annual turnover of around £28 million serves markets at home and abroad from continental Europe to North America and Asia. The Swedish Parent saw the new acquisition as complimentary to their existing operations. They felt that it would provide them with a much enlarged customer base and technologies in a strategically important market. Crucially it was indicated that the Ashton under Lyne plant, re-named Recipharm Ashton, was to receive “millions of £s” of investment to grow the business, develop new products, and undertake further modernisation.

330. Prior to the administration situation at what is now called Recipharm Ashton it had briefly been part of Inyx, a New York Pharmaceutical company. At about the same time another Inyx subsidiary, Inyx Pharma of Runcorn, was also placed in administration. However, in September 2007, this business was sold to Pharmaserve, which is owned by Liverpool-based holding company OBG Pharmaceuticals, thereby securing the 100 jobs at the plant. This former Inyx subsidiary serves markets in Europe, the Middle East, and Asia from its 60,000 sq ft manufacturing facility and 15,000 sq ft laboratory site. Specialisation is in the development and production of metered dose inhalers, nasal and oral sprays, saline and tropical sprays, and hydrocarbon foam pharmaceutical products. Kevin Bacon, CEO at Pharmaserve, commented that, whereas previously the business had been carrying substantial overheads, it was now being run as a small business with no overheads and was profitable.

331. A major Pharmaceutical enterprise was created in 1996 when two Swiss companies with an international reputation and presence merged. The two businesses were Ciba Geigy and Sandoz who formed Novartis AG with a combined expertise in the fields of Pharmaceuticals, Vaccines & Diagnostics, Generics, and Consumer Health fields. With its HQ in Basel this Mega Group now employs around 100,000 people worldwide. Novartis is of considerable importance to North West England in that, in 2005, it acquired the business of Chiron Vaccines whose holdings included a large site at Speke on Merseyside. It was announced that in 2007 the Speke operation achieved a record production of 50 million influenza vaccines compared with around 30 million in 2006 and 14 million in 2005. The vaccine, Fluvirin, is predominantly for the USA market, whilst trials are also being undertaken for a vaccine for the bird flu virus.

332. Lord Digby Wolfe visited the local Novartis plant last October and was impressed by the expansion project taking shape. This involves a new 240,000 sq ft facility with some £100 million of expenditure being undertaken. It has been indicated that it will be possible to produce around 100 million doses of the influenza vaccine as a result of this modernisation and expansion. As part of a Group-wide savings of around 2,500 jobs some 130 will need to go at the Merseyside plant which, currently, employs around 800 personnel. The Group is determined to achieve worldwide cost savings of £800 million by 2010. This is in the face of considerable generic competition in the Industry.

333. In April 1999 another significant merger took place on the Pharmaceutical world stage. This was when Astra AB of Sweden combined with Zeneca Group PLC of the UK to form AstraZeneca. Some six years prior to this ICI had de-merged three of its businesses to create Zeneca. The current AstraZeneca Group, which has a major presence in North West England in Cheshire at Macclesfield and Alderley Park, achieved in 2007 a turnover of $29.6 billion, operating profits of £1.9 billion, and R+D of around £5 billion. Given the demanding economic conditions the recent financial figures for the Group as a whole are highly satisfactory. In the 1^st Quarter of 2008 turnover at AstraZeneca was $7.7 billion which represented an increase of 10.2% on the same period in 2007. Operating profit was $2.3 billion, an increase of 4.0%. A feature of the sales performance was improvement in every key area both in established locations and newer emerging markets. As examples USA sales rose by 5.2% to $3.4 billion; Western European sales increased 9.3% to $2.4 billion; and overall emerging markets experienced a rise of 20.5% to $981 million. Within the latter China saw a 44.6% rise to $133 million.

334. Around 7,000 of AstraZeneca’s 65,000 worldwide employees are located in this Region. The Group is well represented in the North West in most key activities from manufacturing to R+D, indeed amongst an impressive list of medication developed here has been Arimidex, a post-menopausal cancer drug, and Diprivan, a renowned intravenous anaesthetic. However, given the Industry’s challenges especially competition from cheaper copycat drugs when patents expire, AstraZeneca has been compelled to undertake a cost restructuring programme. In February 2007 it was announced that 700 jobs would have to go over a three year period at the Macclesfield factory. However, the company emphasised the importance with which they regard the North West and were investing £63.5 million in an R+D laboratory which was expected to open in 2009. It was announced in February 2008 that some 300 jobs would need to go at the Alderley Park R+D facility. This was, according to reports, in order to focus on the more commercially viable projects that had greater prospects for the customer.

335. Generis Consulting Ltd published in 2007 “The Economic Contribution of AstraZeneca to the UK and its Regions”. This suggested that, including indirect impacts, AstraZeneca, in 2004, accounted for about £1.2 billion of the North West’s GVA and about 12,000 jobs. It was also estimated that £1 in every £3 of Business R+D in the North West was undertaken by the company, and, even if R+D by Government bodies and Universities is included, the figure is still high at £1 in every £4.

336. GlaxoSmithKline’s Ulverston factory in Cumbria manufactures antibiotics which are used to treat 10 million patients annually. There were considerable shock waves when it was announced in February 2008 that some 330 of the 540 jobs at the plant were to disappear. In addition the actual site area was to be reduced from 57 acres to closer to 30 acres over the next couple of years. The company has been renewing ways in which to keep the business sustainable and competitive. Challenges have had to be faced particularly since 2002 when the patent ran-out on the plant’s world-class antibiotics. This saw competition intensify from lower-cost producers from abroad with an employment figure of around 1,000 at the Ulverston factory subsequently reduced by nearly half. Site manager Richard Parmeter has indicated that any subsequent changes will preserve the high quality production and service but that must be undertaken at a cost that is attractive to customers. In June it was indicated that there had already been 100 volunteers for the 330 redundancies.

337. In January 2008 it was announced that European Metal Recycling Limited (EMR) of Warrington and MBA Polymers Inc (MBA) of Richmond, California were to form a joint venture company to build and operate a state-of-the-art plastics recycling facility in the UK. The joint venture plans to begin operation of a 60,000 ton per year processing plant by early 2009. EMR, with its International HQ at Warrington, is a leader in metals recycling and the collaboration with MBA will take it into a prominent position in the field of plastics.

338. EMR handles over 10 million tonnes a year of materials from consumers, industry, and demolition works and produces over 100 grades of recycled products. Global turnover was £1.7 billion in 2006. David Ireland, EMR’s Director of Technical Services, commented that the new investment would allow them to recover the previously untapped plastic in the materials that they recycle. As well as diverting materials from landfill and generating significant CO2 savings it will also help EMR in other key areas. This particularly includes meeting the very demanding recycling targets set under producer responsibility regimes in vehicles and electronics.

339. Advanced Biofuels Limited, located on Red Marsh Industrial Estate at Thornton near Blackpool, announced in late 2007 that it had secured new equipment that would enable it to treble production. By processes such as recycling cooking fat from fast food outlets the company manufactures bio-diesel. An investment of £150,000 in new machinery was expected to enable the business to produce up to 199,000 litres a week. The funding came from Lloyds TSB Business. As well as the environmental benefits, the company’s products, which are sold mainly to local hauliers, are roughly 10p per litre cheaper than conventional diesel.

340. Woods Waste Limited, located at Westby on the Fylde coast, announced in February that it had invested £500,000 in new machinery to help reduce the strain on the local area’s landfill sites. This had involved the purchase of equipment that enabled it to screen and recycle a larger percentage of rubble. Also purchased were tools to increase packaging and waste recycling capacity by 10%. The company was seeking to recycle 95% of the 80,000 tonnes it processes annually from its 40 acre site. This includes metals, plastics, cardboard, and other commercial and industrial waste. The increased recycling capacity was expected to bring important cost savings benefits. They would also contribute towards Government targets of recycling or compositing 40% of household waste and 53% of municipal waste within the next two years. After the maximum amount is recycled, Woods Waste Limited sells treated materials such as pipe bedding, stone and soils to the construction industry, landscape gardeners, and the general public.

341. The North West has been at the forefront of the UK’s Nuclear Fuel Industry with a major presence particularly in West Cumbria and Central Lancashire. In addition to the actual job provision over many years has been the important multiplier effect. This includes not only more directly associated construction and related employment but also jobs in retail and catering etc. There was, therefore, a positive response from the Sector following the announcement in January 2008 by John Hutton, Secretary of State for BERR. He informed MPs that the Government had given formal backing to a new generation of nuclear power stations in the UK. This approach would provide a safe and affordable way of securing the UK’s future energy supplies whilst combating climate change. Ministers had felt that a decision on nuclear power was necessary now as many nuclear and coal-fired power stations were due to close within twenty years. The Nuclear Industry believes that it can get the first new plant on-stream by 2017.

342. In July 2008 John Hutton announced a Masterplan to invest £2 billion and create 16,000 Energy jobs in West Cumbria to enhance and develop the local area as an “Energy Coast”. The economy is to be boosted by a new reactor at Sellafield together with a National Nuclear Laboratory. This represents, however, only part of the overall picture as it is also the intention to regenerate the local economy through investment in schools, academies, as well as in an acute hospital in West Cumbria. Ongoing investment includes £80 million in housing improvement and some £30 million involving work on the A66 linking the M6 and West Cumbria. There is also expenditure of £50 million on Education and Sport.

343. West Cumbria holds a special place in the Energy Sector as the site of the world’s first commercial nuclear power operation. Sellafield is one of the most complex and compact nuclear sites with activities focused on remediation and decommissioning on behalf of the Nuclear Decommissioning Authority (NDA). The site also contains the Thorp and Magnox reprocessing plants, the Sellafield MOX plant, and a wide range of waste management and effluent treatment facilities. Mention should also be made of the famous Capenhurst site in Cheshire which is split into two parts. One of these is owned by the NDA and operated on its behalf by Sellafield Ltd, whilst the other is under the ownership of Urenco Capenhurst Ltd. The decommissioning side consists of a former uranium enrichment facility which was closed down in 1982.

344. Lancashire can claim the noted Westinghouse Springfield site at Salwick near Preston. This facility has manufactured nuclear fuel since the 1940’s and employs around 1,400 personnel. Now owned by the Japanese Toshiba company the plant handles contracts for supplying fuel from around the globe. For instance, in April 2008, it was announced that a multi-million £ contract had been signed with Spanish energy supplier ENUSA. As well as safeguarding jobs the contract will guarantee the production of Uranium Dioxide conversion services at Salwick until 2012. This latest agreement secures a continuation of powder export to Spain for a further four years. Uranium Dioxide powder is an intermediate product used in the production of Light Water Reactor (LWR) fuel. The powder produced on the Springfields site is made into fuel pellets by ENUSA for use in the LWR reactors.

345. In late May press reports acknowledged the success of the Springfields site when they were named as an accredited engineering training facility for the National Skills Academy Nuclear (NSAN). The accolade ensures that Springfields is an integral part of a quality assured network of organisations providing training to meet the nationally agreed Academy standards. Head of Skills Development, Sarah Smith, commented that Springfields Engineering Apprentice Training Centre will be a key focus for delivering Engineering training for the North West, geared to meet a changing nuclear industry including any nuclear build programme. Jean Llewellyn, NSAN Chief Executive, has emphasised that Springfields is the first employer-based quality supplier to gain accreditation.

346. Earlier in February 2008 it was announced that the Centre for Nuclear Energy Technology, a new £25 million extension to the Dalton Institute in Manchester, will be an important focus for PhD and Masters students as well as undertaking research into both the design and management of nuclear power stations. It was reported earlier that Sellafield had been strengthening its academic links with the Dalton Institute. Heather Moore, a key member of Sellafield’s decommissioning strategy, is involved in PhD work. This involves undertaking research into a new type of business model that can be used for the entire decommissioning process.

347. West Lakes Renaissance, the Urban Regeneration Company for Furness and West Cumbria, and Cumbria Vision, the County’s Economic Development Agency, welcomed the announcement by the Nuclear Decommissioning Authority (NDA) on 6^th March 2008 that development proposals were being invited at Sellafield, Calder Hall, Windscale, and the Low Level Waste Repository facility at Drigg. The NDA was willing to consider any development at the four sites provided that it gave value to the UK taxpayer. West Lakes Renaissance and Cumbria Vision considered this an important step in attracting the interest of companies who are considering building a new nuclear power station in West Cumbria. In July 2008 the NDA indicated that a consortium including Amec had been granted preferred bidder status for the Sellafied Nuclear site development.

348.