Costain boss bullish over Teesside business

May 12 2010 by Sue Scott, Evening Gazette

THE divisional boss in charge of engineering and construction giant Costain’s £100m turnover Energy and Process division gave a ringing endorsement today to the Teesside cluster.

Charles Sweeney, who opened the group’s first North-east office in Stockton last month, said despite a "tough period" for the area’s process industries, there was no other region "as much on the front foot, pushing and promoting" itself to inward investors as the North-east.

His words will cheer those working to reverse a threatened spiral of decline in the fortunes of former ICI companies hit by a series of closures last year.

Only one so far - the Artenius, now Lotte Chemicals, plant at Wilton - has reopened.

Mr Sweeney was speaking after Costain revealed secured forward orders for 2010 of £950m, having closed 2009 on a record turnover of £2.6bn, despite a severe decline in its Middle East business where Mr Sweeney said investment was now returning at a "sustainable level".

The company, which recently set out a strategy for targeting "organisations with committed spending plans", including big hitters in the oil, gas and nuclear sectors such as Westinghouse, Centrica and BP, is already working on a £30m environmental project with Conoco Phillips on Teesside.

Emissions control would become a growing part of Costain’s portfolio locally, said Mr Sweeney, while underground gas storage - a way of insulating the UK against future energy shortages, supported by Conservatives - would bring new investment to the east coast.

"Underground gas storage has appeared as an area of expansion in the UK. France and Germany have something like 100 to 120 days’ gas storage - we have around 14.

"In the past we have turned the valve on from the North Sea. That has become a precarious situation, so there are plans under way to try to encourage investment in underground gas storage some onshore some offshore - a lot of that will be in the southern North Sea."

Hinting that the Stockton office was close to securing its first major contract, Mr Sweeney said: "We have picked up some work which will develop into a second stage of activity that will be far more significant within the next couple of months."

He said Costain had been attracted to Teesside by a potential customer base of blue chip organisation. Having a physical presence on Teesside would help attract similar sized businesses to the area, he said.

"The third (reason) was the resource pool - the area has skilled and highly qualified workers, specifically in the professional white collar energy and design capability," said Mr Sweeney.

Costain’s aim was to become a "major employer" on Teesside within in two years, he said, although he declined to set a target.

"Teesside very much has the potential to be the best chemical cluster in the UK," he added.

"Although we know it’s been a tough period, does it mean the area has potential? Absolutely it does. There are so many people there who have a desire to drive the business in the North-east, it’s an attractive proposition for why you should come."