A success story we'd like to keep

Sep 22 2010 by Andrew Hebden, The Journal

IT is not so long since we took the decision to rename The Journal’s daily listing of the share prices of North East plcs.

Formerly known as the North 40 Index, we were abandoned the ‘40’ due to the ever-decreasing number of listed companies based in the region.

Today there are just 27 businesses in the list, of which 25 have their head offices in the North East (Amec and GlaxoSmithKline have significant bases here but are headquartered outside the region).

Now it seems that the list may be about to shrink further as we learn that oil and gas pipeline specialist Wellstream is the subject of takeover interest from a number of potential suitors, all of which are thought to be based overseas.

Such interest is evidence of the success enjoyed by Wellstream in recent years and it is not hard to see why the innovative Walker-based company seems to be attractive, having recently announced some impressive contract wins.

Combining this manufacturing business with a company that installs the products which are made on the Tyne makes a lot of sense. And, in truth, even if Wellstream were to be snapped up it is likely that the North East facilities will be protected – and may even benefit from being part of a larger international business.

At a time when employment levels in the region are in a somewhat precarious state, the fate of the 400 or so staff employed by Wellstream in the North East is paramount.

But the loss of another plc headquartered in the region would be a blow to the prestige of the region’s business community, coming swiftly on the back of the de-listing of Arriva following its takeover by Deutsche Bahn for £1.6bn.

Even after a foreign takeover, these companies remain important businesses nominally based in the North East. But taking ultimate decision-making responsibility out of the region does introduce an element of risk about their long-term future.

Moreover, having successful plcs based here helps attract city investors to the region and supports well-paid executive jobs.

Wellstream is a great success story that the region should be proud of. But it would be great to think it could continue its impressive growth from within the North East.

Andrew Hebden - The Voice of nebusiness
andrew.hebden@ncjmedia.co.uk