Engineering success is a major way ahead

Engineering success is a major way ahead

It’s reckoned that whatever your engineering need there will be a firm in the North East ready and able to meet it. There’s even a Geordie robot which has been developed by Automation Group of Gateshead...

A number of businesses throughout the UK are buying, and fortunately it does not seem to have displaced the workforce that creates it.

The resilience North East companies are capable of in adapting to change is well illustrated at Thomas Swan & Co, the Consett producer of fine chemicals. Started in 1926, it first made its name converting waste slag from the local steel plant to a road building material. Today it is a pioneer in the graphene and nanotechnology area, exporting to more than 80 countries.

Managing director Harry Swan, a Durham University graduate in biology described as one of the UK’s most inspirational manufacturers, wants to move towards plant derived chemicals.

Major attention for now though will probably be on Hitachi, whose initial assembly work is well under way at its Newton Aycliffe production centre. The first carriages of the first train could roll out any time from the start of 2016. By summer the initial train will be running on the rails in tests ahead of making its mainline service debut on the Great Western Line in summer 2017. It will enter East Coast service also, soon after.

Along with the region’s advances in graphene, printable electronics and nanotechnology, which are all expected to create commercial opportunity in the region -  Applied Graphene Materials, a Durham University spinout, is already so far on at Wilton as to have patent approval in Japan – there are instances of companies re-investigating past manufactures for new opportunity.

Close to the Hitachi work going on in Newton Aycliffe, family run Ebac, a leading maker for many years of dehumidifiers, has invested £7m to revive the UK’s earlier abandoned washing machine industry, and is looking also at moving into tumble dryers and fridge freezers.

Along the road at Spennymoor new aspects of manufacturing are seen at the Thorn operation of Austria’s Zumbotel Group, which employs 600 people. With its academy of light, it is a key player in the current diversification of lightmaking.

New initiative is seen in Newcastle where Reece Group, already manufacturing for defence, energy, power, construction, medical and subsea customers, has relocated within the city to a £20m transformation of Armstrong Works, widely regarded as the world’s first defence factory. There is has also taken a major stake in another local firm, Continuous Retorts Ltd, to produce food processing equipment. Elsewhere in the city, and indeed in six regional centres, British Engines employs 1,500 and is now creating a £10m subsea engineering centre of excellence.

Newer technologies are gaining ground, in digital for example, while Newcastle’s recognition as one of six UK science cities is seen in the centres of excellence that encourage the commercialisation of biotechnology and medicine.

Fast growing Quantum Pharma, a service-led niche pharmaceutical manufacturer, has launched a new range of up to seven in-licensed patented medical devices to ease side effects of cancer treatment. The company progressed further during 2015 also when its wholly owned subsidiary Colonis announced a €1.5m deal with a German firm.

E-Therapeutics plc too, situated both in Newcastle and Oxford, is working on cancer treatments, and by last August announced itself almost ready to license out its most promising projects as its commercial focus sharpened.

Shield Therapeutics at Gateshead, excelling in products for treatment of anaemia and kidney disease, is geared up for a stock exchange launch, while QuantuMDx prospers as it moves from Newcastle’s International Centre for Life to a new headquarters on the Quayside, bringing under its wing work previously outsourced. Its handheld diagnostic tool Q-Poc is expected to gain regulatory approval for its use in the NHS and extensively abroad.

In biotechnology, Newcells Biotech Ltd, a Newcastle University spinout, is pioneering reproduction of cells without need of embryonic stem cells. A growing number of firms in pharmaceuticals and biotechnology are spinouts from the region’s five universities, and senior academics are keen to see closer ties with business.

Professor Brian Turner, dean for university enterprise at Durham University, has pointed out that the total income for all English universities from the sale of licences or equity exits from spinout companies only brings in about £100m a year – a sum hardly changed after seven years.

He would like more spinouts created. Often, he says, it is hard even to establish a viable commercial management team – hard also to obtain the necessary investment even when the technology has clear commercial potential.

One Durham University spinout that is making serious advances is Kromek, which though still young has an £8m turnover in its provision of radiation detection for security, medical and nuclear markets. It operates from NETpark at Sedgefield, where 35% of the people employed at 25 firms there – 400 employees in all – have postgraduate qualifications.

Digital has great potential but Lee Perkins, managing director of Sage plc, has warned SMEs generally to take digital skills seriously in commerce or risk losing out, long term. That said, there are outstanding firms operating within the sector whose strengths are being more widely acknowledged, Mediaworks and Silverbean being only two. Nomad Digital is internationally renowned for its skills in equipping public transport travellers with interruption-free wi fi. Austrians are the latest to benefit.

Other tech teams capturing attention include Performance Horizon in Newcastle and True Potential, both of which have broken into Deloitte’sUK Technology Fast 50. The latter claims to be the only financial advice firm on that list.

The main talking point in the financial sector will of course be the launch of Atom Bank, challenging the high street operators. The foresight shown by serial financial entrepreneur Anthony Thomson in developing at Durham City the UK’s first branchless but digital bank, using voice, facial and fingerprint identification, has proved so impressive it has been listed eighth in the Fintech 100 even before it has opened for business.

There are 45,000 now earning a living in financial services in the North East. The 1,518 working for Utilitywise, company advisors in utility cost savings at North Tyneside, will soon be joined by 200 more  as the £70m turnover firm continues to grow at Cobalt Business Park, following its relocation from South Shields, where it had outgrown its premises.

Another upstart in the nicest possible way is Scott Logic, which Gary Scott established at Newcastle in 2005 following a successful IT career in investment banking. It operates as a software development partner in finance and now has four offices around the country.

Money isn’t everything of course, and food processing which became a vital staff of life particularly when the end of mining and steel forced thousands out of work in North West and East Durham, is now big business for the region, considered so important that a regional food hub has been set up at Teesside University to support and promote food professionals throughout the North East.

New opportunities are arising all the time, as we see at The Great Run Company, formerly Nova International, which under medal winning former athlete Brendan Foster gave birth to the famous Great North Run half marathon on Tyneside. It is now organising similar events in other parts of the country as keep fit shows no decline of enthusiasm.

To read more insights and views on the year ahead, take a look at the recently published BQ Yearbook.