The process industry is the beating heart of the North East economy. And a new national skills academy has now made the region a world-leading centre for the sector – as
YOU can’t ignore the facts – the process industry is a major driver of the North East economy. Pharmaceutical, biotechnology, speciality, petrochemical and commodity chemical companies in the region pump £8bn into the national economy and account for a quarter of the North East’s industrial base.
The sector employs 34,000 people directly and impacts indirectly on the incomes of a further 280,000.
The chemical process industry is now Britain’s only net manufacturing export sector, according to Government statistics and it has sales approaching £70bn and exports of £37.3bn.
But the sector faces serious skills challenges. Without intervention, it is expected to be short of 20,000 workers by 2014.
So the eyes of the world’s process sector are now firmly fixed on Teesside thanks to the launch of the £10m National Skills Academy for the Process Industries.
The Government’s fifth Skills Academy is based at Teesside University and is being supported by seven regional hubs across the UK and is backed by the Cogent Sector Skills Council.
To date, it has raised more than £1m from employers to deliver more than 1,000 learners in its first year.
Professionals working from the university are combining advice and feedback from employers on their skills needs, with existing training organisations, such as South Bank-based TTE, the Technical Training Group, and colleges and universities, to deliver industry-led solutions to the skills problem.
The academy’s arrival comes at a time of major development and investment in Teesside’s process sector. A massive £7bn is already being ploughed into industry by big names including Sabic, Sembcorp, Ensus, and Progressive Energy.
London-based development company Sonhoe recently announced it had secured £200m in oil contracts to enable it to move forward with plans for a £2bn crude oil refinery at Wilton.
The massive project will create up to 2,500 construction jobs, 500 permanent jobs and about 1,500 spin-off jobs.
Craig Crowther, interim chief executive of the academy believes the organisation will mean more investment for Teesside as the region becomes a world-leading centre of excellence for the sector.
“With the skills academy based on Teesside, more people will see there is a good reason to bring investment here, and that’s what we’ve got to be about from a regional and national perspective,” he said.
“Helping the sector grow is vital, because it is too important on a national scale for it to disappear.
“Teesside is already recognised for its skills and experience in the sector and I am confident there will be a number of future investments in the process industry on the back of the skills academy being based here.”
Although an important driver to the North East economy, the process sector is even more crucial to Teesside. About 60% of Tees Valley’s economy is dependent on the process
industry.
Skills Minister David Lammy said the academy was vital to enable a key sector to move forward.
“The national skills academy is hugely important for this key industry within our economy,” he said.
“The process sector is a phenomenal sector for this country and we want to ensure we have future new recruits and key businesses in the industry can move forward.”
The sector’s value, to the North East is clear according to the North East Process Industry Cluster – which represents more than 200 companies across the region.
“Across the whole population, the value created for each person living in the region is £14,000,” said Stan Higgins, chief executive of Nepic.
“If we just do the calculation based on the working population, it becomes £35,000 generated by those in work. In the process sector each person employed generates £74,000, making it the most important industrial income to the region.”
And bringing the National Skills Academy for the Process Industries to Teesside could make it worth even more in years to come. “The National Skills Academy will undoubtedly raise our profile nationally as a place of excellence for the sector,” he added.
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What is the process industry worth?
:: 35% of the UK’s pharmaceutical GDP is produced in the North East.
:: 58% of the UK’s petrochemical industry is based in the North East.
:: 70% of Teesport trade is in goods from the process sector.
:: More than 500 companies are engaged in the process industries across the North East, employing 34,000 people directly and impacting indirectly on the incomes of a further 280,000.
:: 92% of UK chemicals were exported in 2004, 61% to the EU.
:: Chemicals account for 11% of the value added by all UK manufacturing.
:: The process industry is the top manufacturing earner, contributing a surplus approaching £6bn.
:: The industry spends nearly £2bn annually on new capital investment.