2008: Quarterly review

Business highlights and lowlights of the year so far.

JANUARY

AROUND 200 workers faced redundancy after a leading North-East packaging company went into administration.

Jaycare’s collapse came less than a month after more than 20 staff were made redundant at the North Tyneside plant, which the company explained as necessary because it had lost a major contract after 10 years.

The company’s roots go back nearly 120 years and it has operated as Jaycare on Tyneside for 17 years. The last seven years have been tumultuous for the business with a management buy-out in 2000 followed four years later with its purchase by a venture capitalist.

Its annual turnover had been around £18m in recent years, but its profits had peaked at £4.9m in the year to April 2004 and halved to £2.3m the next year, before plunging £426,000 into the red in the 12 months to April 2006, the last year for which accounts are available.

BREWER Scottish & Newcastle entered talks with its European suitors over a possible £7.8bn offer for the company.

The brewer finally agreed to discussions with Carlsberg and Heineken after the duo’s fourth proposal since their pursuit began in October.

The potential 800p a share approach is subject to conditions including limited due diligence, S&N said.

The brewer, which also makes John Smith’s and Kronenbourg 1664, had previously spurned three approaches of 720p, 750p and 780p, accusing the European giants of attempting to pick up the company on the cheap.

Karl Watkin

SERIAL entrepreneur Karl Watkin further boosted his green credentials with a $150m environmental joint venture in China.

The North-East businessman, who has a number of gold and copper interests in China, announced his role in a three-way partnership setting up a mining waste reprocessing factory in GejiuJinchan City in South-West China.

Alchemviro Ltd has joined forces with the Gejiu government and the GejiuJinchan Science and Technology Co Ltd in the initiative, which aims to produce 200,000 tons of iron ore and precious metals annually from mining waste.

Alchemviro, which will own 70% of the new plant and is registered as a Northumberland-based business, is the first overseas company to invest in Gejiu.

PAGE TWO: February

FEBRUARY

NEWCASTLE Building Society announced a 52% surge in annual profits despite tough trading conditions and said it is recruiting former Northern Rock staff who have jumped ship.

Despite the turmoil in the global credit market, the society saw profits soar to £17.6m in the year to December 31, 2007, while the number of people employed at the firm climbed by 200 to 1,200 in the same period. Meanwhile, the group, which last year announced plans to create 500 jobs on Tyneside by 2012, saw its assets rise by 9% to £4.8bn.

The company said it had already taken on around 20 management-level former Northern Rock employees who have left the lender since September. The firm said it would be keen to take on more Northern Rock workers should staff be axed following the nationalisation of the bank.

Chief executive Darren Kell, left, and chairman Roy Stanley of the Tanfield Group

ELECTRIC vehicle maker Tanfield said it was confident of creating 300 jobs this year at a new North East factory because of soaring orders globally.

Tanfield chairman Roy Stanley is in final negotiations with regional development agency One NorthEast for a £1m-plus grant which he said would guarantee the creation of the factory, which will need 300 staff immediately but have room for 500.

He plans to invest up to £10m in the plant, the latest expansion of the fast-growing Washington-based business which already has 1,300 staff, half of which are in the North East.

Stanley said the grant talks for the new plant were “very positive” and was confident it would be built this year. It will be the new base for the vehicle making side of Tanfield with the current headquarters continuing to be home for its electric platform, boom and mast manufacture.

ONE of the first businesses attracted to Consett after the closure of its steelworks in 1982 announced plans to expand.

Electrical distribution company Electrak, based on the town’s No 1 Industrial Estate, has seen its turnover rise by 65% to £15m in just two years.

Now it is looking at a multi-million pound expansion onto adjoining land.

The construction boom in the South East fuelled by the rapid growth of the financial services sector has help the company’s expansion.

Finance director Tony Holden said: “We added around an extra 10,000sqft to the original 25,000sqft to cope with demand and we are currently involved in talks to expand the factory further to cope with our continued growth. We employ 165 people full time and this has grown in relation to turnover as the company has grown.”

PAGE THREE: MARCH

MARCH

Northern Rock

NORTHERN Rock announced plans to make a third of its workforce redundant. At least 2,000 staff will be axed over the next three years as the bank changes to conform with European Union rules on state aid.

A rapid response unit was set up tasked with finding employment for the workforce as quickly as possible.

The Treasury asked regional development agency boss Alan Clarke to head up the unit, working alongside a variety of Government bodies including Jobcentre Plus and the Learning and Skills Council.

Ron Sandler, appointed executive chairman at the Rock after it was nationalised last month, announces measures to “slim down” the bank as part of a business plan submitted to the Treasury. The plan has to comply with strict European competition rules which prevent the Government giving one business an unfair advantage.

THE Scottish tycoon who bought the Peter Barratt’s garden centre group last year acquired a second North East chain in a multi-million pound deal.

Sir Tom Hunter – Scotland’s richest entrepreneur – acquired Heighley Gate garden centre in Morpeth in the latest expansion of his Wyedale group.

The sale of the £9m-a-year business, which employs 190 people, brought to an end a 45-year era for the Lishman family who set up the business on a small pig and poultry farm in 1963.

Founder David Lishman said the deal was an ideal opportunity to ensure the ongoing success of his family’s firm. He said: “The business was never put up for sale but after a number of approaches by Wyevale it was decided that the timing was right.”

THE only five star hotel in the North East, Seaham Hall, was sold in a multi-million pound deal.

Owners Tom and Jocelyn Maxfield agreed a deal to sell both Seaham Hall and their Lake District hotel The Samling to Somerset-based Von Essen Hotels.

The timing of the deal has taken the property market by surprise, with several North East agents expressing amazement that it has been completed when many property prices are dropping.

Von Essen operates some of the UK’s most exclusive hotels including Cliveden in Berkshire and The Royal Crescent in Bath.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer