Turmoil for the North-East’s biggest business

Jan 15 2008 By The Journal

NORTHERN Rock was undoubtedly the biggest story of not only the quarter but the year in the North-East. The Newcastle bank’s request for an emergency loan from the Bank of England heralded turmoil for the region’s biggest company and put the jobs of nearly 6,000 North-Easterners into doubt

It was also the biggest victim of the freeze on loans between financial institutions and a spur to a crisis in confidence across the financial markets worldwide.

As Vision went to press Richard Branson’s Virgin consortium was confirmed as the preferred bidder for the troubled bank, with plans to inject £1.3bn into the group and pay back £11bn of the £20bn-plus loan from the Bank of England.

But this is a story which changes daily and Virgin still has to overcome the opposition of small shareholders before it wins out in the race to run a bank which has seen its share price plunge from more than £12 to less than £1 in the last year.

This is not the place to detail every twist in the story but The Journal has campaigned to save the bank, keep the Northern Rock Foundation running and save as many as possible of the workers’ jobs.

Hopefully by the time you are reading this there will be some more certainty for a North-East institution that has given a great deal to the region.

Other stories in recent months include:

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A TEESSIDE tyre and exhaust company said it was set to recruit 300 staff as it looked to double the size of its business. Middlesbrough-based North Eastern Tyre and Exhausts (NETE) will create the jobs as it rolls out its seven-strong chain of retail outlets throughout the North-East and North Yorkshire. The family firm, which has built up its business around the supply of tyres and exhausts, is now looking to expand in the retail sector.

NETE already expects to increase its revenue from £33m in 2006 to £40m this year, after introducing cafes in its existing retail outlets.

The company believes improving existing sites and opening new branches will help it increase its turnover by another 50% in two years.

The 36-year-old business is also planning to focus more on providing MOT services to customers at its branches.

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A TEESSIDE pub company was snapped up in a £32.6m deal. Brewer and pubs operator Greene King confirmed the acquisition of Billingham-based New Century Inns – which consists of 49 tenanted and leased pubs.

New Century Inns was set up in 1999 by the former directors of Century Inns – Alistair Arkley, Brian Lowe and Barry Whitehead. Billingham-firm Century was bought out by drinks industry giant Enterprise Inns in a lightning hostile takeover in 1999. Mr Arkley has been a leading figure in the Tees Valley since becoming managing director of the Camerons Brewery in Hartlepool in 1985. He went on to raise £30m to establish Century Inns which floated in 1995. He said: “We felt this was the right time for everyone involved - including our staff, most of whom are shareholders themselves – and tenants to see the New Century Inns business benefit from being part of a larger organisation such as Greene King.”

Mr Arkley said the New Century identity would continue on Teesside – albeit in a new guise. New Century Enterprises now takes in the Passionate Pub Company and Chameleon Pubs, which both have Mr Arkley as chairman.

A£60m biomass power station was officially opened at Wilton. SembCorp Utilities’ 100% wood-to-energy power plant is the first of its kind in the UK and was opened by energy minister Malcolm Wicks, who said he was impressed by the development of a “critical form of renewable energy” on Teesside. He said: “As a centre of excellence in terms of power generation and chemicals, Wilton is a natural site for this kind of new development.”

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IT was confirmed Teesside University would provide the base for a National Skills Academy for the Process Industries. The Academy, which will be vital in overcoming desperate skills shortages in the sector, will benefit from the vast experience of process industry employers in the region, coupled with the university’s academic and vocational approach to engineering and science.

The £10m Academy aims to deliver up to 8,000 extra NVQ qualifications and train an extra 800-900 apprentices across the region. Craig Crowther, chief executive of the National Skills Academy for the Process Industries, said 14 people will be employed by the Academy, eight of whom will be based at Teesside University with the other six in industrial centres around the UK.

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STEEL from Teesside is being used to construct one of the deepest pipelines in the world. Hartlepool-based Corus Tubes said it had won the contract to manufacture and deliver almost 200 miles of pipe for the Perdido Norte project in the Gulf of Mexico. Pipes will be laid in depths ranging from 3,500ft to 8,300ft. Although Corus would not give a value for the contract, it said it was a “multi-million pound” deal. Corus Tubes will produce 312km – about 77,000 tonnes – of steel linepipe which is expected to be laid early next year.

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A DRUG discovery company said it plans to float on the stock exchange to fund its expansion and help reduce the risks associated with human testing. Newcastle-based e-Therapeutics announced that it will place its shares on the alternative investment market (AIM) in order to raise an initial £3m to improve the speed and accuracy with which it tests new drugs.

The six-year-old business will be valued at £35m on its flotation at the end of this month. It has not yet established an opening share price. It has delayed its float due to the global credit crunch but is expected to join the market in December.

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THE Engineering Business was crowned as the fastest growing company in the North-East for 2007. The offshore, marine and renewable industry engineering specialist walked off with the title at the Ward Hadaway Fastest 50 Awards at the Baltic Centre for Contemporary Art in Gateshead.

The company, based at Riding Mill near Hexham in the Tyne Valley with operations in Stocksfield and Wallsend, was named as the fastest growing large business as well as winning the overall title for its phenomenal expansion over the past two years.

Another business in the offshore sector – Newcastle-based Shepherd Offshore Services – won the title for fastest growing small business while temperature and pressure sensor specialist Controle Mesure Regulation (UK) Ltd of North Tyneside was named fastest growing medium-sized business.

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ONE of the best known names in the region’s motor industry is set to disappear after being sold to a Scottish car sales giant.

Patterson Motor Group, which is headquartered on Newcastle’s Scotswood Road and employs 370 people, been sold for an undisclosed fee to Arnold Clark Automobiles. Staff have been told there will be no redundancies within the Patterson group.

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JOHN CLOUGH became the toast of the region’s business world after scooping the North East Business Executive of the Year Award.

The chief executive and founder of energy efficiency company eaga triumphed at the 2007 awards after a spectacular year for the company which saw it float on the stock market, get into the FTSE 250 and expand its business dramatically.

In 1990, he pledged he would build his own company to compensate for the 300 jobs lost when the coke works he managed in South Tyneside closed. Today eaga has centres in the UK, Ireland, India and Canada.

It is an FTSE 250 company worth £500m and with a £500m turnover.

Eaga is in the minority of British partnership companies that are more than half-owned by employees. It has improved life in more than five million vulnerable homes in the UK alone and saved 500,000 tonnes of carbon emissions in 15 years. Mr Clough is an MBE.

Mark Berriman, 27, managing director of online pet supermarket and presentation drinks company Viverdi, won the 2007 North East Young Business Person of the Year Award. The Lifetime Achievement Award went to lawyer Robert Dickinson.

Mr Dickinson, 73, made his reputation as senior partner of family firm Dickinson Dees from 1987 to 1997.

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BUILDING services and supplies company Northern Bear announced plans to double its annual sales in a year after making its latest multi-million pound acquisition.

The County Durham group made its first foray outside the North-East by snapping up Leeds-based Jennings Roofings for around £5m.

And the rapidly-growing firm expects to acquire two North-East construction businesses by February as it aims to double annual revenue to £80m by November 2008.

North East Business Executive of the Year John Clough, of eaga. Malcolm Young, chief executive of e-Therapeutics which is planning a flotation. Tony Trapp of The Engineering Business, the North-East’s fastest growing company. Ashley Winter, managing director of Patterson, which has been sold to a Scottish motor group.