While a trip to the acclaimed land of song won’t necessarily include a recital of uplifting melodic harmonies, there is an optimism in the nature of Welsh industry that takes centuries of adversity in its stride. Tim Brown reports
Key facts and figures
● Approximately 130,000 people employed in manufacturing in Wales, contributing 13.4% of Wales’ GDP
● Big international companies such as: Biomet; Airbus; ConvaTec; GE Healthcare, GE Aviation; EADS; Sony; Logica; BAE; Nordam; Siemens; Ford, Toyota and Dow Corning
● Wales has one of the UK’s best established sustainable technologies sectors, worth £3.2bn Welsh productivity in areas including biomedical and advanced engineering and materials (automotive, aerospace, chemicals) is 8.6% above the UK average
● Welsh Assembly Government supports academic industrial collaborations such as:
● £50m Institute of Life Sciences by IBM £30m Institute for Advanced telecommunications
● £25m Centre of Excellence for Technical and Industrial Collaboration programme connecting companies to the latest developments on science, engineering and technology
● The long industrial heritage of Wales is the backbone to its engineering knowledge base – now supplemented by 30,000 graduates a year coming out of its universities, keen to apply their new-found skills with forward-looking businesses.
Through a cohesive and responsive approach industry leaders along with political representatives are working to improve Welsh manufacturing strengths. But restoring and surpassing the current industrial strength of the area is, of course, not likely to prove easy. In 1997, manufacturing in Wales was responsible for 28% of gross value add. This declined over the subsequent decade to hit a low of 10% in 2006.
Today, the total Welsh GVA contribution is approximately £44.5bn with manufacturing making up 17.5% (£7.8bn) — a sizeable increase in five years. Although, according to 2009 figures, the Welsh manufacturing contribution is the third smallest after Northern Ireland and the North-East of England, its contribution to the local area’s total input is significantly above the national average of 12.4%. This figure is encouraging in terms of the importance of manufacturing but belies the larger issue of the overall status of the Welsh economy. GVA per head of population here is only £14,842 – 25% less than the UK average. This per capita disparity has increased 10% over the last decade and recently saw Bridgend council leader Jeff Jones label Wales as the ‘basket case’ of the UK. On the flip side of the coin, following the announcement of a £14million contract that will bring 22 new jobs to the JCB factory in Wrexham, Chancellor George Osborne said on February 10 that he believes the region’s private sector will grow in 2011.
From the middle of the 19th century until the post-war era, the mining and export of coal was the dominant industry in Wales. At its peak of production in 1913, nearly 233,000 men and women were employed in the South Wales coalfields, mining 56 million tonnes of coal. Cardiff was once the largest coal-exporting port in the world but from the mid 1970s the Welsh economy faced massive restructuring. Most of the mines closed during the 1980’s.
Since then, jobs in traditional heavy industries have been replaced by new ones in light industry and services. Although the move to a more serviced based economy is typical of many advanced countries, due its dependence on coal, when the industry collapsed the Welsh economy suffered greatly. This sudden economic decline, coupled with the lack of a national banking sector, such as in Scotland and particularly England, has meant a heightened difficulty in accessing finance.
Today, with 130,000 people working in manufacturing in Wales, the strength of the sector is seen as a vital component of the Welsh economy. Major international companies along with SMEs in important industries like automotive, sustainable technologies, biomedical and aerospace litter the region, with many located in the vicinity of the capital.
Capitalising on its micro-political climate and the vested interest of actual manufacturers representing industry bodies such as EEF, Welsh manufacturers have achieved a high level of buy-in from local government on manufacturing issues. As a result the local decision makers tend to be more responsive and forthcoming in progressing business initiatives than their counterparts in Westminster.
Welsh Assembly Government support has resulted in the successful implementation of initiatives such as the automotive supply chain scheme, Accelerate, which was first commissioned in Wales. Likewise the recession proofing Proact regime was developed by industry groups in conjunction with the Welsh Manufacturers Forum and supported by government.
The scheme was developed to assist the fortification of the Welsh manufacturing industry against the impact of the recession and help it emerge even stronger. The Welsh Assembly used European fund money to offer cash to companies suffering declining sales to retain staff by putting them through training courses rather than downsizing.
The Welsh assembly has also passed favour on a number of academic-industrial collaborations including: the £50m Institute of Life Sciences by IBM; the £30m Institute for Advanced Telecommunications; and the Centre of Excellence for Technical and Industrial Collaboration programme. The latter was designed to perform the important task of connecting companies with the latest developments in science, engineering and technology.
Gareth M Jenkins Chairman of Wales Council, EEF
Currently Managing Director of FSG Tool & Die Ltd in South Wales, the UK’s leading design and manufacture Toolmaking Company. The former President of EEF Western and Chairman of the Wales Council is also a main board Director of EEF. During his 38 year career in manufacturing he has always been passionate about the development of young people. In particular as a former apprentice himself he has championed Modern Apprenticeships on behalf of the Sector Skills Council, the Welsh Assembly and the Wales Manufacturing Forum. He has been actively involved in the creation of ProAct, Skills for Growth Wales, Pathways to Apprenticeship, Young Recruits, and World of Work Initiatives in the Principality.
Gareth Jenkins is managing director of automotive manufacturer FSG Tool & Die and is also chairman of the Welsh branch of the manufacturer’s organisation EEF. He has also recently been appointed to chair the Sector Panel for Advanced Materials and Manufacturing for the Welsh Assembly Government.
He says that the manufacturing community in Wales is undoubtedly facing many issues in the short and medium term. “In meeting these challenges, clarity of the level and nature of government assistance is vital. In addition to transparency regarding support, we are clearly looking to government to be a good partner to business.
In our ongoing discussions with the Welsh Assembly Government, we have highlighted that the availability of skills, access to affordable finance, and assistance for export sales for SMEs need close consideration as part of the economic renewal programme for Wales.” Jenkins says that as a member of industry and a business owner himself he welcomes the recent announcement regarding the ongoing funding for apprenticeships in Wales. Yet Jenkins goes on to asser that further clarity is required on the funding position for skills growth within companies that are key to Welsh manufacturing: “We have achieved a great deal in the past two years in very difficult circumstances. Now is the time to build on these achievements, so that manufacturing can grow, and achieve its full potential.”
Facing up to the future
Despite a good level of input from local government there seems to be a consensus in Wales that there must be more comprehension by the national legislature of the challenges facing manufacturing, both in Wales and elsewhere in the UK. Recent issues such as the abolition of the default retirement age and the introduction of more flexible paternity laws (see paternity article on page 42) are burdens that will likely impact on the small and medium sized businesses that are already suffering the most.
In a boost to the private sector credentials of the new business support model the Welsh assembly last month announced the creation of six sector teams which will advise the Government on the economic development of Wales. The sector panels are made up of business people from outside government who have an established record in their field. Each will advise on the best opportunities of the six key sectors identified by Ministers as having the best opportunity to grow the Welsh economy.
The panels were set up following the announcement of the Assembly Government’s new economic policy – ‘Economic Renewal: a new direction’ – which sets out the role devolved government will play to support the private sector and the economy of Wales.
One to watch
The Royal Mint
The Royal Mint is the world’s leading export mint, making coins and medals for an average of 60 countries every year. However, its first responsibility is to make and distribute United Kingdom coins as well as to supply blanks and official medals.
The Royal Mint’s Chief Executive is Adam Lawrence and the Ministry of Defence Police oversee the security of the 35-acre site, which operates round-the-clock for 52 weeks a year.
The Royal Mint can produce 90 million coins and blanks a week – almost five billion coins a year. Recently the Royal Mint revealed the official design of the £5 Alderney coin commemorating the engagement of Prince William to Catherine Middleton and has also been awarded the contract to produce athletes’ medals for the London 2012 Olympics. To celebrate the London Olympics, the Royal Mint has also created 29 different 50p collector coins depicting the sports of the Olympic and Paralympic Games.
This year the Royal Mint will complete a £16.5m development project which will see the construction of an onsite effluent plant and the addition of two new nickel plating production facilities. This will double the organisation’s nickel plating production capacity.
Each of these sectors will have their own panel, made up of five private sector business people, including the chair. It will be their job to provide advice to Ministers on the opportunities and needs of the different sectors. As mentioned earlier in this article, Gareth Jenkins has been announced as chair Advanced Materials and Manufacturing sector. Other advisers include one of the UK’s most successful biotechnology entrepreneurs, Sir Christopher Evans (Life Sciences); Chief Technical Officer at RWE nPower, Kevin McCullough (Energy and Environment); Founding partner at Capital Law, Chris Nott (Financial and Professional Services); and managing director of Logicalis, Thomas Kelly (ICT).
The appointments will be for an initial period of three years (providing the member remains a sector practitioner) and will be renewable, subject to satisfactory review, for up to a maximum of 10 years. Initially their priority will be to map out the shape of the sectors and work with businesses of all sizes in order to identify opportunities. As Welsh industry looks to grasp back some of the ground lost following the demise of the region’s mining sector – this link between business and industry will hopefully assist in making the region a more favourable place for business. With manufacturing providing an improved contribution to the Welsh economy, such an environment may indeed result in further growth in the engineering sector.
Paul Byard, Head External Affairs Wales, EEF
Paul has 30 years’ design, manufacturing and general management experience within Welsh companies and in the consultancy and business support environment. His appointment with EEF represents a new development role to ensure the voice of industry is understood and translated into credible long term sustainable support for business growth. Prior to EEF Paul was Managing Director of ProGen and has extensive experience in providing practical support to manufacturing businesses throughout Wales.
He has helped businesses identify and prioritise improvement opportunities, introduced them to international best practices and provided ‘hands on’ support to deliver significant tangible performance gains. This was achieved by holding the position of Chief Executive for the Manufacturing Advisory Service for Wales for almost 4 years.
One to watch
Ford Bridgend Engine Plant
The engines that Ford manufactures in Bridgend, Wales, are being exported around the world. The engines power the new generation of Ford vehicles that are designed to be sold globally. Ford’s UK manufacturing plants (Bridgend and Dagenham) are gearedup to produce two million engines a year as well as transmissions and commercial vehicles.
In late 2009, the Bridgend plant made its 15 millionth engine and many more milestones are likely to be reached at the site.
Ford Bridgend in Wales is now producing the new 1.6-litre Ford EcoBoost petrol engine, which offers CO2 and fuel savings of up to 20% compared with conventional petrolengine technology. The engine will make its debut in the new Ford C-MAX range this autumn.
The Welsh automotive supply chain comprises significant OEMs, international tier one manufacturers and a growing group of technology companies with strengths in materials, electronics and engineering.
Made up of a total of 268 companies including 40 international automotive players such as Ford and Toyota, the sector employs a workforce of over 25,000. This includes 4000 workers at Corus which makes steel products, manufactured by parent company Tata Steel, used in vehicle manufacture.
The sector alone contributes approximately £3bn to GDP which accounts for about one third of the manufacturing contribution for the area. Wales is focusing on future technologies and is recognised as a European leader in research and development of low-emissions technology.
The Welsh Automotive Forum represents component suppliers in Wales who provide parts for the world’s vehicle makers. The Forum showcases its member’s products and abilities at international events and campaigns or lobbies on their behalf on local, national and international platforms. It also works with the Automotive Council to further the business interests of members and its website features a comprehensive directory of member companies and products.
Comprised of 160 Companies including Tier 1-4, the aerospace sector in Wales employs more than 22,000 people. Key players in the market include GE Aviation which contributes £1.1bn, as well as Airbus, Babcock (see interview with Mike Turner on page 30) and British Airways. Overall the hightechnology and highly skilled sector contributes £4bn to GDP.
Wales is a centre of excellence for aerospace and in particular maintenance, repair and operations related activities. State-of-the-art facilities now manufacture, supply, maintain, repair and overhaul, civil and military aircraft from around the world. The aerospace sector in Wales is a dynamic growth industry operating using best practice techniques, and is supported directly by Team Wales (Welsh Assembly Government and the Aerospace Wales Forum).
Situated in Denbighshire, north Wales, Qioptiq is a specialist in the design, development and manufacture of modules and components for the military, aerospace, civil and industrial markets.
It employs over 450 people, of whom a high percentage are qualified engineers and a number acknowledged world experts in their specialist area.
News in brief
As Ford of Britain enters its centenary year – marking 100 years in the UK – it is celebrating 34 consecutive years of car sales leadership and an astonishing 45 years of UK commercial vehicle sales leadership. Ford’s top-selling vehicle range secured almost 15% of the UK’s total 2010 market for the blue oval.
GE Aviation will create 100 aircraft engineer jobs at its facility in Nantgarw, Cardiff. The jobs are being created to fulfil increasing demand for servicing of the GE90 engine – one of the world’s most powerful engines, fitted to the Boeing 777 aircraft. The Nantgarw servicing facility already employs 1,100 people and has an annual turnover of nearly £1.25bn. Over 100 apprentices and interns work at the site. Adrian Button, managing director of GE Aviation Nantgarw, said: “GE has continued to invest in technology and jobs at GE Aviation Wales.”
MORE than 4,000 people visited the Airbus factory in Broughton in February to find out more about careers in engineering. The company’s annual apprentice open day was held at the West Factory during National Apprenticeship Week.
Visitors had the chance to talk to recruiters and training managers about how to become an apprentice at Airbus and the qualifications they can receive once training is completed. Mark Stewart, human resources director manager, said: “The number of visitors shows that people recognise an apprenticeship can offer a path to a challenging and rewarding career. (Source: Ellesmere Port Pioneer).
Competing on a global stage, the life sciences industry features companies and world leading universities driving research to create new technologies. Wales is also home to leading players in the medical arena such as GE Healthcare, Biomet, Invacare (see profile on 158), Pelican Healthcare (see profile on 155) and ZooBiotic. The industry is further supported by contract research organisations such as Biotec Services and Penn Pharma. There are approximately 330 life science companies in Wales which employ 15,000 people between them and contributes more than £1.3 billion to the Welsh GDP.
Invacare’s UK operations were founded in 1856 and the company now employs over 200 people.
Based in South Wales, the company is ideally placed to provide the UK healthcare market with a range of products and services that meet the demands of both the public and private sectors.
Over the years Invacare UK has selected and merged with a number of UK based manufacturers in order to offer a selection of wheelchairs, scooters, beds, bathing, mattress and cushion products.
Invacare’s commitment to product design and quality has resulted in a comprehensive range of solutions for independence and mobility.
One to watch
With over 90 years in the ventilation industry, Caerphilly-based Nuaire has developed a strong market presence in the UK and globally.
Over the course of the downturn the company has made some important investments to allow it to emerge from the recession in the strongest possible position. Perhaps most importantly has been its investment in IT which has included a sophisticated and integrated selection and design system. The company hopes that the system, which allows quotes to be given almost immediately and also cuts lead times down by 75%, will facilitate considerable growth over the next 24 months.