MANY of the North East's biggest success stories have their headquarters outside the region, but they are still a crucial part of our Top 200 league of the region's biggest businesses by turnover, writes Brian Nicholls.
You might wonder why a company that was originally a military arsenal, founded in 1689 to produce muskets for the Swedish Army, now has a thriving manufacturing plant in one of the North East’s “new” towns.
The fact is, Husqvarna, among other things now makes lawn mowers and other gardening equipment, and has found Newton Aycliffe a sound location for its UK business.
Something that will strike readers on seeing the new list of North East Top 200 Companies, which will be published in The Journal on November 8, is the large number of firms that are based outside the North East, Husqvarna being one if it gains a place.
The influx is a notable development since the list first appeared in The Journal in 1979. Familiar names dominated most of the upper echelons of the league like Binns, Hinton and Cowie that predominated. True, Procter & Gamble finished second place and it, of course, is American.
Nor does it appear any more, prosperous though it remains in the North East, and fills the criteria of having a significant decision-making base in the region. However, it will be surprising indeed if this time round the list doesn’t feature quite a number of companies which have their roots in other countries or other parts of the UK: Sembcorp Utilities for example (Singapore), Grundfos (Denmark), Fuji Films (Japan), Piramal and Shasun Pharma Solutions (India), Liebherr (Switzerland) and Saica Pack (Spain).
Even Arriva, sprung out of Sir Tom Cowie’s Sunderland-based motor empire, now carries the name DB Arriva, signifying its transfer of control to Germany.
Businesses which are based in other parts of the UK have also been considered, such as Carillion, which although based in Wolverhampton has a significant North East presence since buying Newcastle-based eaga plc for £300m last year as the basis for Carillion Energy Services.
Control of Cleveland Potash switches to the Israelis, and Spartan, the Gateshead steel roller to Ukraine. Politico-economists must have asked before now: if overseas firms can come here and add value to our companies, and with our workforces, why didn’t British managements try harder in the first place?
Thai company SSI, which bought Teesside Cast Products from Indian company Tata last year, obviously believe they’ll prove there’s a sound future for heavy industry in this region. Firms from outside the region can often bring in new ideas and new techniques that can revive businesses which may have become staid.
Probably the main reasons for a high overseas presence in the North East list now lie in our motor manufacturing, our chemical and our offshore industries, and our membership of the European Union which has torn down business barriers.
Since ICI, once Europe’s biggest chemical complex, faded from the region, big foreign businesses have moved in: Lotte Chemical (South Korea), Tioxide Europe (USA), Sabic UK (Saudi Arabia), Du Pont Teijin Film (USA), to name but a few. And when Nissan and Komatsu, looking over from Japan, and Caterpillar, from the USA, saw Sunderland, Birtley, Peterlee and Teesside as choice spots from which to manufacture cars and heavy offroad vehicles, they encouraged a whole train of foreign suppliers in their wake. Tallent of Newton Aycliffe (its blood British, German and Spanish), Unipres of Sunderland (USA) and Hashimoto of Boldon (Japan) are just three examples.
The globalisation of offshore industries brought in the like of Heerema (Holland) and Duco (France), while the UK’s breaking down of boundaries facilitated an entry to the North East of GDF Suez (also France). Germany of course has its North East links through firms such as Draeger, the safety equipment manufacturer at Blyth and many more firms besides, including more recently Intersnack at Derwentside.
Other Japanese manufacturers such as Daikin seem pleased with their air filter manufacturing at AAF in Cramlington and New Zealand with its Formica factory making laminates at North Shields.
The foreign contribution to North East business is so much to be valued that the top five inbound companies are annually accorded special mention in the North East Top 200. This year’s outstanding performers could be any of the companies mentioned above, or even one or two not mentioned. Checking the outcome should be interesting indeed.
John Marshall, senior partner at Top 200 sponsor Dickinson Dees, said: “We’re renowned in the North East for our ability to attract major brands and business into the region, from Nissan to Sabic.
“Often registered outside the region, either in London or internationally, the inbound business from these sorts of organisations working in the North East, plays a vital role in contributing to growth and employment in our regional economy. We’re delighted to count a number of these companies as our clients.”
Joanne Pratt, fund manager at FW Capital, said “FW Capital is a regional investor with a successful track record of investing in SMEs. We target established businesses and are passionate about creating the right funding package to help them achieve their growth potential. As one of the North East’s newest fund managers we are delighted to sponsor the Top 200 and urge ambitious businesses to think hard about investing in their future.”