UK Steel Enterprise helps entrepreneurs in areas affected by the decline of the steel industry to start their own businesses. Anne Clyde tells Peter Ranscombe how the company can provide investment, loans and facilities.
There are moments in Scotland’s history that we’ll all remember: when Pan Am flight 103 exploded above Lockerbie; when the Piper Alpha oil rig was engulfed in flames; and when the gasometer and cooling towers at the Ravenscraig steelworks in Motherwell were demolished, marking the end of a chapter in our nation’s industrial heritage.
Anne Clyde recalls exactly where she was shortly before 1pm on Sunday 28 July 1996: standing and watching with her family for the six seconds that it took for carefully-laid explosive charges to bring down the iconic blue gas holder and the witches’ cauldron-shaped towers, creating Europe’s largest brownfield site.
“I was there watching it – it was almost like a picnic,” Clyde remembers. “You couldn’t park in the area because everybody was out to watch it.
“It was quite a sad day. I think I did shed a tear, to be honest, when the towers came down, as many people did.”
The closure of Ravenscraig in 1992 marked a turning point in Clyde’s career. She had joined British Steel in 1979 as a commercial trainee on its apprenticeship scheme, spending three to six months in each department, trying her hand at a variety of jobs. After opting to work in finance, the firm put her on a day-release scheme to do her training and she later moved to the internal audit department, monitoring the output from the nationalised company’s sites in Scotland and the North of England.
As she was employed by the corporation’s head office in London, she carried on working at Ravenscraig for a further year after it closed until 1993, when the audit department was due to move to Wales.
Instead of heading south, Clyde applied to join a little-known part of the corporation – British Steel Industry (BSI) – which had been set up in 1975 to help create jobs in areas that had been affected by the nationalisation and then decline of the steel industry. As steelworks closed, BSI’s initial focus was on turning the empty workshops and plants into managed workplaces, giving steelworkers the chance to continue practising their trades and set up businesses.
By the time Clyde joined in 1993 as one of three regional executives covering Scotland, BSI had already expanded its remit to provide serviced offices and workshops like the Grovewood business centre on the Strathclyde business park in Lanarkshire.
When Corus was created in 1999 through the merger of British Steel and Dutch peer Koninklijke Hoogovens, BSI became UK Steel Enterprise (UKSE), the name under which the company still trades today as part of Indian steel giant Tata.
“Tata is a very philanthropic business in India and it sees UKSE as its corporate social responsibility (CSR) arm,” Clyde explains. “That’s what UKSE is really – a very early example of CSR.”
Reaching across her desk, Clyde produces a hardback book written by Paul Usher called “Putting Something Back”. Produced in 1989, the book records the early years of BSI, helping steelworkers to launch their own companies.
“Working in the internal audit office at Ravenscraig meant I got to go down to the blast furnace or the boss plant or the steel plant and I got to understand much more about the steel-making process than I would normally have done working in an office environment,” she says.
“There was great camaraderie. We all used to mix and use the staff canteen. It was a great group of people to work with.”
By the time Clyde joined the steel industry, rationalisation was already underway; steelworkers went out on strike the year after she arrived and the miners’ strike followed in 1984.
“My granddad had retired from the Dalziel steelworks and he asked me if I was sure I wanted to go into the steel industry,” Clyde remembers. “When Ravenscraig was closing in 1992, workers were still being offered a good redundancy package, with a lump sum that could help them set up their own business and up to two years of retraining. Some of the people I knew from the site went on to become doctors and lawyers.”
Clyde continued to develop her career at UKSE, becoming its area manager for Scotland in 2006 and then its regional manager for Scotland and the North of England in 2013. Since joining the company, she’s seen it expand the way in which it supports entrepreneurs.
UKSE offers unsecured loans of between £25,000 and £100,000 at a fixed rate of interest. Beyond the £100,000, it tends to invest with a mixture of debt and equity funding, all the way up to £1m, with the investor’s stake not rising above 25%.
“We don’t want to run companies, so we don’t take a seat on the board,” explains Clyde. “We’re backing management teams and letting them run their businesses.”
Clyde and her team have seen a sharp increase in demand for its services since the 2008 banking crisis and ensuing global recession, both in terms of debt and equity funding. “At the moment, we have offers on the table for three companies in which we may invest £400,000, £500,000 and £600,000 – five years ago, we would have been lucky to have one investment opportunity of that size each year,” Clyde comments.
Since it was launched in 1975, UKSE has supported 6,650 companies throughout the UK, including 1,500 in Scotland. Together, those businesses have created 77,000 jobs, with 17,500 of those posts based north of the Border.
UKSE has invested £91m through debt and equity for companies, with £25m having been spent in Scotland. Some 30% has gone to start-up and early-stage businesses, while 50% has been used to fuel expansion, with the rest spread between management buy-outs and buy-ins, acquisitions, restructuring and relocations.
At any one time, the investor can be working with between 100 and 150 businesses, with around 25 to 35 of those based in Scotland, although the total has risen above 40 in the past. Current Scottish clients include components supplier Martin Aerospace, engineering sub-contractor Thomson Pettie Group, and technology firm SST Sensing.
UKSE is also one of the partners for the Scottish Investment Bank’s co-investment fund, meaning the amounts invested can be doubled if requirements are met. As well as commercial investments, UKSE has also pumped £10m into community projects since the 1970s and plays a role in the wider entrepreneurial ecosystem, working with organisations such as Young Enterprise Scotland and running a “Dragons’ Den”-style competition over the summer for pupils from South Lanarkshire Council’s schools.
The third leg to UKSE’s stool is its ability to offer managed workspaces to companies. Grovewood business centre has 46,500sq ft split between 34 workshop units and 17 offices.
The centre is currently home to 36 tenants, ranging from architects and engineers to software developers and sales staff. Services on offer to companies based on the site include meeting rooms, super-fast broadband, and franking and photocopying.
“I think what really appeals to tenants is the ‘easy-in, easy-out’ leases,” adds Clyde. “They can take space for as little as three months if they just want to test the water or they can stay for 10 or more years.
“Two of the companies based at Grovewood arrived as two-man bands and they now each occupy whole corners of the building because we can rent them more space as they need it. We don’t see it as a bad thing when companies out-grow our site and move elsewhere – that’s a good thing because it means we’ve done our job right.”
UKSE’s operations in Scotland were initially clustered around Cambuslang, Glengarnock and Motherwell, but have since spread throughout Glasgow, Lanarkshire and much of Ayrshire, covering the wider area from which workers would have commuted to the steelworks. “The postcode is the key for us,” Clyde explains. “We see lots of good investment opportunities in the East of Scotland, but sadly they lie out-with our area.”
Three framed photographs hang on the wall of Clyde’s office in Grovewood: the first shows workers in the steelworks, the second features Ravenscraig’s gasometer and three chimneys, and the third is an aerial view of the whole site. The photos must serve as a reminder of both UKSE’s achievements so far, but also the work that lies ahead.
“While the unemployment rate in the former steel areas is still higher than in the rest of Scotland then there’s still work for us to do,” Clyde nods. Yet inspiration for the task at hand doesn’t just lie in the pictures.
“It’s always great to hear how the businesses we support go on to develop,” she adds. “We lent £25,000 to Tom Monaghan in the late 1990s to start Fastplas, a PVC cladding business based in Lanarkshire.
“He wrote to me about 10 years later to tell me his business had been so successful that he’d sold it. That’s really inspiring.”