Y Pwyllgor Cyfrifon Cyhoeddus | Public Accounts Committee PAC(4)-08-16 PTN6 Grwp yr Economi, Sgiliau a Chyfoeth Naturiol Economy, Skills and Natural Resources Group
Dirprwy Ysgrifennydd Parhaol • Deputy Permanent Secretary
Darren Millar AM Chair, Public Accounts Committee National Assembly for Wales
24 February 2016
The Welsh Government’s Acquisition and Ownership of Cardiff Airport
Dear Mr Millar,
During my evidence to Public Accounts Committee on 11 February, I undertook to provide a note on a number of matters. I address each point in turn and hope that the Committee find this additional information helpful.
A list of the Anchor Companies in Wales together with the criteria required to be an Anchor Company:
An Anchor Company is generally considered as:
a company which is a global or international organisation; a company that has Welsh Head-Quarters or significant corporate presence in Wales.
I attach a brochure which outlines the Welsh Government’s Anchor Company programme and gives examples of many of the companies with which we work.
Further information, including a list of Anchor Companies is also available on the Welsh Government website at: http://gov.wales/topics/businessandeconomy/sector/anchor/?lang=en
Canolfan QED ● QED Centre Y Brif Rodfa ● Main Avenue Ffôn ● Tel 02920 826646 Trefforest ● Treforest [email protected] Pontypridd, CF37 5YR Gwefan ● website: www.wales.gov.uk
A note of the passenger figures over the last 25 years:
By the end of 1992 annual passenger numbers at Cardiff Airport stood at 743,219. The 1990s were a significant growth period, with annual passenger numbers doubling by the end of the decade, and 1 million passengers a year was achieved for the first time in 1994- 95.
The list below provides annual passenger numbers for every year since 1997; information prior to 1997 concerning passenger numbers at Cardiff Airport, flights and other data is available at the Civil Aviation Authority website - https://www.caa.co.uk/Data-and- analysis/UK-aviation-market/Airports/Datasets/UK-Airport-data/Airport-1983---1997/ .
Year Pass. No
1997 1.15m 1998 1.26m 1999 1.33m 2000 1.51m 2001 1.54m 2002 1.42m 2003 1.91m 2004 1.88m 2005 1.77m 2006 2.02m 2007 2.11m 2008 1.99m 2009 1.63m 2010 1.40m 2011 1.20m 2012 1.01m 2013 1.07m 2014 1.02m 2015 1.16m
A plan and inventory of what the Welsh Government acquired:
The Welsh Government acquisition included all of the share-holding, assets and operations of Cardiff Airport. These matters are covered in some detail in the Auditor General for Wales Report. A map of the Cardiff Airport site, in addition to potential ideas of what can be done to maximise its economic impact, is included within the recent report by Public Policy Institute Wales – (http://ppiw.org.uk/files/2016/01/PPIW-Report-Maximising-the-Economic- Benefits-of-Airports.pdf).
An explanation of the urgency as to why the purchase had to be completed within a short timeframe and why the S128 procedure contained within the Government of Wales Act 2006 was used:
The Auditor General for Wales Report indicates how Abertis envisaged two phases to the sale process and set this out in their ‘Process Letter’ dated 3 December 2012. This indicated that phase one (formal non-binding offer) would need to be completed by 14 December 2012. Acceptance of a formal non-binding offer would enable exclusivity to continue. Abertis required phase two (due diligence) and the sale process to be completed by end March 2013.
Full details of the various valuations carried out prior to the acquisition; confirmation as to whether the original land value was carried out on the site as an airport or the Residual Land Value of the airport site prior to the time of purchase; if the calculations on the Residual Land Value are available?
The process of commercial and public asset valuations, the methodology used and the impact of varying assumptions on values is outlined by the Auditor General in his Report. Having re-read the report, I have no further detailed information to add =.
A note on which valuation method is used to value the assets in the Holdco annual accounts:
As part of the annual process of filing the audited accounts of WG Hold Co, a value is placed upon Cardiff Airport. I understand that the latest audited Hold Co accounts prepared by Grant Thornton LLP place a current value on Cardiff Airport of £55 million. Grant Thornton relied upon discounted cash flow of projected EBITDA as a basis for their audit opinion of the airport’s value. This was cross referenced to the earnings multiple that broadly came out in line with the discounted cash-flow valuation.
Yours sincerely
James Price
Engaging our Anchor Companies The Welsh Government’s Anchor They promote all aspects of Corporate Company programme is all about Social Responsibility and have strong working with key companies to links with their local communities. create jobs, growth and wealth Anchor Companies are role models within the Welsh economy. for other employers and companies Anchor Companies are major employers looking to locate here and the Welsh with a focus on research, development Government values the close two-way and innovation that create and underpin relationship we have with them. growth in their various sectors. At a local I am committed to continuing and level, their presence generates knock-on strengthening our partnerships with effects that benefit the local economy all Anchor Companies and building and supports smaller enterprises, thereby close relationships at the highest level strengthening Welsh supply chains. both in Wales and with head offices As major employers, Anchor Companies overseas. By working together we can foster high levels of employee deliver our shared objectives of creating engagement and invest in staff training. economic growth and jobs in Wales. Their apprenticeship and training programmes provide opportunities for talent to thrive and their decision to locate in Wales demonstrates their confidence in the level of skills Edwina Hart MBE CStJ AM Minister and capability available here. for Economy, Science and Transport Introduction 1 // Our promise to you Support 3 // What is an Anchor Company, and what support will I receive? Sectors 7 // Advanced Materials & Manufacturing; Construction; Creative Industries; Energy & Environment; Financial & Professional Services; Food & Drink; Information & Communications Technology; Life Sciences Success 28 // Why businesses come, stay and prosper in Wales
1 Welsh Government considers Anchor Companies of key strategic importance to the economy of Wales. Introduction
As one of our Anchor Companies, As an Anchor Company we will take we will work with you to develop every opportunity to promote your your business in Wales and beyond business in and outside Wales. We based on a partnership approach. ask that you work with us to help As an Anchor Company, your business promote and showcase Wales in your can access a range of products, financial business activities and that you work and non financial and a personally with other Anchor Companies to help focussed one to one service. create a network of sharing expertise, solutions and best practice. We will We will provide you with an Account facilitate you as a community, enabling Director and an Account Manager, a linkages, so that together we can dedicated Welsh Government team confidently take Wales forward. who will work closely to ensure that you receive tailored packages of support, and benefit from a whole Government approach – enabling your company to achieve its objectives.
2 What is an Anchor Company and what support will I receive? Support
The Welsh Government considers Access to Ministers an Anchor Company to be: As an Anchor Company you will • A company which is a global or benefit from fast and easy access to international organisation Welsh Government and Ministers, and you will have the opportunity to • Has Welsh headquarters or significant input into policy in development. corporate presence in Wales • A company committed to people development and innovation • A company that wants to work with us to develop the Welsh business environment We will make a joint investment in the Welsh economy We will actively seek opportunities to work with each Anchor Company, or group of Anchor Companies, to further the economy of Wales, and the company’s wider objectives here. This could include, for example: • Work to develop and strengthen supply chains • Pooling of skills development • Showcasing best practice • Supporting CSR programmes The Senedd (the National Assembly building), Cardiff Bay.
3
One to One Account Management service We will work with you to support You will have an Account Director – your operation in Wales within the a senior contact in the Welsh context of your wider parent or Government who will work with your group management structure. senior management and an Account Anchor Company Network Manager who will manage day to day As part of the Welsh Anchor Company business with your company. With you Network you will be invited to meet they will deliver a jointly agreed account with fellow Anchor Companies and plan and put in place regular meetings input into regular Anchor Company including a formal annual review. meetings and events to share your best Your Account Manager will develop a practice and expertise, network and deep understanding of your company, benefit from expert business speakers. and can spend dedicated time with you We will keep you up to date to ensure immersing themselves in your business that you are aware of changes that if you would find this of value. may affect your business, and we will Tailored package of support involve you in policy development We will develop a package of support through timely consultations, tailored to your company needs, subject formal informal discussions. always to our legal powers, state aid Measuring your satisfaction regulations and value for money criteria. In order to continuously improve Support can vary from financial assistance our service to you we will undertake on major capital projects; advice and an Anchor Company Customer assistance with property and land Satisfaction Survey. This will allow us transactions; skills and training advice to continuously seek to improve our and support; supply chain optimisation; Account Management service. We will facilitating access to all parts of the listen to you and align our service to Welsh Government, and appropriate your feedback, to maximise the benefits specialists and experts. The package of to you of being an Anchor Company. support developed with your Account Manager will enable you to pursue your business objectives whilst working to benefit the Welsh economy.
5 Other Anchor Companies Control Techniques Drives Ltd Ford Motor Company Ltd Meritor Heavy Vehicle Braking Systems UK Ltd Qioptiq Ltd Zodiac Seats (UK) Ltd
A380 wing production, Airbus, Broughton. Advanced Materials & Manufacturing Our companies and universities are collaborating to develop advanced materials for a range of sectors including aerospace and defence and automotive, Sectors produced at some of the world’s most advanced manufacturing facilities.
Global players have major • Airbus has delivered more than bases here, from Ford, who has 8,600 aircraft to 369 customers produced 18 million engines in worldwide and boasts a healthy Wales, to Airbus which has the backlog of more than 5,800 aircraft biggest aerospace manufacturing for delivery over coming years. operation in the UK right here. British Airways Engineering South Wales In addition, British Airways, GE British Airways is especially committed Aviation, Marshall Aviation Services, to Welsh expertise, with three dedicated Nordam and Toyota have all facilities across a 50 km radius: recognised just how productively • BA Avionics provides end-to-end they can manufacture in Wales. maintenance of electrical, electronic Airbus Operations Ltd and electro-mechanical components. Airbus is a leading aircraft • BA Interiors carries out advanced manufacturer with the most modern, maintenance works on cabin interiors comprehensive family of airliners and safety equipment, as well as on the market, ranging in capacity working with manufacturers on from 100 to more than 500 seats. new product developments. Airbus is a global company, • Located at Cardiff Airport, British headquartered in Toulouse, with Airways Maintenance Cardiff handles design and manufacturing facilities major maintenance and cabin interior in France, Germany, the UK and Spain conversions for BA’s entire long haul as well as subsidiaries in the U.S., fleet. Set in one of the largest facilities China, Japan and in the Middle East. of its kind, expert teams overhaul, • Airbus champions innovative repair, modify, test and inspect BA’s technologies and offers some Boeing 747, 767 and B777-300 aircraft. of the world’s most fuel efficient and quiet aircraft.
7 BAMC St Athan – Cardiff Airport Enterprise Zone.
Celsa Manufacturing (UK) Ltd The facility based in Nantgarw, just Acquired in 2003, Celsa Steel UK is the North of Cardiff, is an example of a largest producer of reinforcement in global business with a successful Welsh the United Kingdom and one of the operation that innovates to succeed. largest manufacturers of other steel long Occupying over 1.2 million square products. Its facilities in Cardiff produce feet of workshop space, it has around 1.2 million tonnes of finished two state-of-the-art engine test product each year. The facilities consist of facilities and employs a highly skilled a state of the art melt shop built in 2006, workforce of over 1,200 people. and two production facilities: one for reinforcing products and wire rod, the With a turnover in excess of $2 billion, other for merchant bar and light sections. the company services over 450 engines a The company employs over 500 staff year. Since the acquisition of the General directly and several hundred through Electric Company site in 1991 and with their supply chain. support from the Welsh Government GE Aviation has continued its inward GE Aircraft Engine Services Ltd investment and funding, ensuring GE Aviation Wales specialises in the business growth, securing new product overhaul, repair and maintenance introduction and the creation of several on a range of jet engines, providing Centre of Excellences, and has firmly maintenance, repair and operations established its position as a global leader. (MRO) services for more than 90 customers worldwide. JCB JCB is the third largest construction Chris Doherty, Human Resources leader equipment manufacturer in the world says “As one of the largest aircraft by volume and is market leader in the engine maintenance facilities in the UK, Europe, Russia and India. It is a world, GE Aviation employs a highly family-owned company with 22 plants skilled workforce to work on some of the worldwide and a global workforce of most complex engines in the industry”.
8 Tata Steel – finished strip steel rolls.
12,000. JCB manufactures over 300 our physical environment. Through different machines, including the world- relationships with the higher education famous JCB backhoe loader and Loadall sector and research bodies Tata innovates telescopic handler, as well as a range of to develop new products, processes and compact and heavy excavators. collaborations to maintain a competitive JCB has been manufacturing in Wales edge on the international stage. since 1979 and now has two factories on Toyota Motor Manufacturing (UK) Ltd the Wrexham Industrial Estate making Toyota Manufacturing UK established gearboxes and axles, which are used its engine production facility in in over 80% of the machines that it Deeside, North Wales in 1992 and manufactures in Staffordshire. employs around 570 staff. As the first Tata Steel Europe overseas plant to produce Toyota’s Tata Steel is the second largest class leading hybrid engines, the 115 steelmaker in Europe. The Wales-based acre Deeside site manufactures over operations form a critical community of 230,000 petrol and hybrid petrol operations with a network of business engines annually. These are built for partners. Part of the UK’s largest the British market, and for export to manufacturing group, Tata Steel’s Toyota production centres overseas. operations are largely focused on strip Toyota’s production processes include steel applications: serving dynamic aluminium casting, machining and markets in the automotive, engineering, assembly before final inspection lifting & excavation, construction, energy and despatch to vehicle plants. & power and consumer products sectors. Over the years Toyota has been As an Anchor Company, Tata works supported by the Welsh Government with the Welsh Government for mutual with a dedicated account management benefit supporting the development service which has enabled investment in of the economy, community and plant, machinery and staff development.
9 Construction Wales’ construction industry plays a vital role in delivering a vibrant economy and a quality environment. Sectors
In Wales there are approximately Pont y Ddraig, Rhyl. 13,000 companies involved within the sector, employing more than 130,000 people. This includes professionals such as planners, architects, surveyors and building engineers as well as the traditional construction companies responsible for ‘new build’, maintenance and upkeep of our historic and heritage buildings. Recent Office of National Statistics (ONS) figures, published in January 2014, show currently with a further 1,300 employees that Wales is outperforming the sector in West Africa. Group turnover grew in the UK as a whole. In addition, the from £2m in 2002 to £206m in 2013. Construction Industry Training Board The company embarked on its first (CITB) predicts that nearly 18,000 new overseas project (iron ore mining) in construction jobs are expected to be 2010 and the success in delivering created in Wales over the next five years. international projects was recognised Dawnus Group by the award of the Queen’s Award Dawnus is an international civil for Enterprise in 2014, for outstanding engineering and building company achievement in International Trade. with headquarters in Swansea. Since Dawnus has based all its operations its establishment in 2001 it has grown on the principle of direct works to deliver projects across the whole delivery, employing an in-house labour of Wales and England, as well as force of operatives and tradesmen, undertaking major civil engineering and maintaining significant plant schemes in West Africa. Its staff numbers holdings, which are used to deliver have consistently grown year on year; the majority of their projects. with the number of UK employees increasing from 240 in 2005 to1,024
10 The company aims to employ on a career Redrow PLC basis, rather than only for the length Celebrating its 40th anniversary in 2014, of a project, and provides training and Redrow is one of the country’s largest development opportunities to allow and most respected house builders, with employees to develop their careers. a reputation for quality and innovation. Nuaire Ltd Redrow was founded in 1974. The firm Nuaire prides itself on being at the moved into house building in 1982, forefront of innovation in ventilation building its first new homes in Denbigh, technology. The company employs over North Wales. A year later, with 1,500 446 staff at its 250,000 square foot employees, Redrow opened new offices complex in Caerphilly including a team in Alltami, not far from the present-day of over 20 engineers in its research and St David’s Park headquarters in Flintshire. development unit. It has the largest Today Redrow employs around 1,300 and most advanced air movement test people, with 11 operating divisions facility in the UK. Nuaire’s systems are to across England and Wales, including be found in most iconic British buildings a rapidly expanding London business. constructed in recent years including Redrow currently has 17 developments multi-million pound landmarks such as in Wales and is the lead developer the Wales Millennium Centre on the for the Plasdwr development, North Cardiff Bay waterfront. West of Cardiff, which will become the The green mission is very important to largest new community in Wales. the company and Nuaire’s technology is With a strong emphasis on high quality making great contributions towards the family housing in prime locations, achievement of zero carbon buildings. Redrow has won numerous awards over With a supply chain largely located in the years, including most recently, the Wales and ultralow energy machinery, 2014 Building Awards ‘Housebuilder of its own carbon footprint is among the the Year’. Redrow was also awarded lowest for a firm of its kind. for the fourth consecutive year the Five Star rating for Customer Satisfaction by the Home Builders Federation (HBF).
Redrow. Redrow.
11 Creative Industries Welsh creative companies span software and app development, TV and film production, games, music, digital marketing and more, employing over 49,000 Sectors people in over 4,685 enterprises with a further 25,000 in creative occupations outside the sector and generating over £1.6 billion annual turnover.
With some 11,500 more working in creative roles in other sectors, there is a strong commitment at Government level to education and skills development. Every year our Welsh universities feed the sector with some 5,000 graduates who bring really diverse skills, from scriptwriting and visual effects to digital and mobile technology development, including gaming, coding and animation. Around 68% of the talented Creative Industries workforce hold a Bachelor’s degree or higher. Success Wales is home to internationally significant creative content production companies such as Tinopolis and Boom Cymru, two of the UK’s largest independent production groups outside © Crown Copyright (2014) Wales Screen. London. Ron Jones, Executive Chairman, Tinopolis and Chair of the Creative Industries Sector Panel states “Wales is full of Other Anchor Companies creative people..we want to engage with Boom Cymru these companies and creative talents Pinewood Studios Group to make sure we are offering them a Tinopolis PLC support package that works for them”.
12 Pinewood Studio Wales of two 20,000 square foot stages and The Pinewood Studios Group is a leading an additional 30,000 square foot multi provider of studio and related services to use shooting floor. Office space and the global film and television industry. production support facilities are also Synonymous with world class British and available on site. international productions, the impressive Situated near Cardiff Bay, Pinewood heritage of its UK-based Pinewood and Studio Wales is ideally located for its Shepperton Studios, home to some of proximity to stunning natural scenery, the most successful feature films and TV heritage and national parks in addition shows ever made, dates back to the early to transport links, via the motorway 20th Century. and Cardiff Central Railway Station, to Pinewood Studio Wales is a TV, film and international airports including Cardiff, entertainment studio complex comprised Bristol and Birmingham.
13 Other Anchor Companies Sharp Manufacturing Company UPM Shotton Photograph courtesy of RWE Innogy. Energy & Environment Wales’s natural assets plus our longstanding skills and experience in the Energy and Environment sector stretch back to the industrial era of coal Sectors and other fossil fuels.
Wales is looking forward to British Gas the future by developing clean, British Gas, the UK’s largest energy efficient energy generation and provider, supplies gas and electricity to by taking specialist environmental 375,000 homes and 50,000 businesses technologies across the world. in Wales. It employs more than 2,200 Innovation is the key as companies people in Wales – 1,300 at its award strive to work smarter, while new winning contact centre in Cardiff. projects demand advanced materials More than 600 British Gas engineers and supply chain support. The Welsh work across Wales, keeping homes Energy and Environment sector warm and safe, and smart energy employs 58,000 people within 2,100 apprentices are trained at the companies and generates over British Gas Academy in Tredegar. £4.8 billion in sales per annum. British Gas manages Nest – the Welsh Utility companies are investing in new Government scheme working to help sites to help the transition to more reduce the number of households sustainable energy sources. The whole in fuel poverty and make Welsh nation is working to eliminate landfill homes warmer and more energy by 2050. The Welsh Government has efficient through free home energy pledged to make Wales a Low Carbon improvements, advice and support. Economy – to maximise energy and environmental investment and bring British Gas. economic benefits to our businesses and communities. Our universities are creating centres of excellence, working with industry partners to develop new technologies and establishing Wales as a test-bed for innovative ideas in sustainability.
15 total RWE has over 500 direct employees in Wales and a Welsh supply chain supporting many thousands of jobs. RWE is committed to helping vulnerable customers manage their energy costs. It provides over £3 million for energy efficiency measures through the Welsh Government’s Arbed initiative as Pembroke Power Station, Europe’s largest and most efficient combined cycle gas turbine. well as helping a further 5,000 Welsh households install correct heating and insulation in their homes through the ^ Dwr Cymru Welsh Water RWE Health Through Warmth Scheme. Dwr^ Cymru Welsh Water aims to provide SSE over three million people with a reliable SSE is a FTSE 100 company, employing source of high quality tap water whilst 20,000 staff and investing £4m per also protecting public health and the day in the UK and Ireland’s energy environment in their care by removing infrastructure. SSE is the largest wastewater safely and responsibly. With generator of renewable energy in the no shareholders, the Dwr^ Cymru Welsh UK, maintaining and operating energy Water unique ownership model in the network businesses, as well as providing water industry in England and Wales industry-leading customer service enables all gains to go to its customers. through its retail arm. SSE has a proud Its work with key stakeholders, such history in Wales, serving over 1 million as the Welsh Government, is crucial Welsh customers through the retail in helping the company to ensure brand SWALEC. The Enterprise business that they maintain and improve provides comprehensive business-to- their services both for today’s business support, including electricity, customers and future generations. gas, contracting, and communications RWE solutions. SSE has partnered with RWE supplies electricity and energy Welsh Government on a number of services to over 130,000 households and projects in recent years, from training 6,000 businesses across Wales, including to boost the skills of our 1,500 Wales- major customers such as TATA steel and based staff, to energy efficiency ^ Dwr Cymru Welsh Water. RWE recently projects which help customers save invested over £3 billion in Wales to money and reduce CO2 emissions. create a diverse portfolio of power Valero generation. These include including Valero’s Pembroke refinery is one of the highly efficient coal fired power the leading employers in South Wales station at Aberthaw; Europe’s largest, and is one of Europe’s largest and most most efficient combined cycle gas power complex refineries. Valero Energy Ltd, a station at Pembroke; major off shore subsidiary of Valero Energy Corporation, wind warms at Gwynt y Môr, Rhyl Flats markets fuel in the UK and Ireland and North Hoyle and also numerous on under the Texaco brand. There are shore wind and hydro stations with many around 800 Texaco-branded service more in the development pipeline. In
16 stations in the UK and 230 Texaco- connected 11,000 new homes to their branded service stations in Ireland. gas network through the Warm Home Valero Energy Corporation, through Assistance scheme, offering savings of its subsidiaries, is an international more than £500 a year in fuel bills. manufacturer and marketer of Western Power Distribution transportation fuels, other petrochemical Western Power Distribution (WPD) is the products and power. Valero electricity distribution business for South subsidiaries employ approximately and West Wales, where over 900 staff 10,000 people, and assets include 15 serve around one million customers. petroleum refineries with a combined It is responsible for ensuring the power throughput capacity of approximately network of poles and pylons, cables, 2.9 million barrels per day, 11 ethanol wires and substations – the infrastructure plants with a combined production that we all rely upon to live our lives capacity of 1.3 billion gallons per to the full – and delivers electricity to year, a 50-megawatt wind farm, and homes and businesses around-the-clock. renewable diesel production from a joint venture. Through subsidiaries, WPD invests many millions of pounds Valero owns the general partner of annually to operate and maintain Valero Energy Partners LP (NYSE: VLP), its Welsh infrastructure effectively, a midstream master limited partnership. while also actively pushing forward Approximately 7,400 outlets carry the the boundaries of innovation as Valero, Diamond Shamrock, Shamrock it strives to develop a network in and Beacon brands in the United States harmony with a low carbon future. and the Caribbean; Ultramar in Canada; To this end, initiatives like its South and Texaco in the United Kingdom Wales Network Templates project are and Ireland. Valero is a Fortune 500 designed to help the UK power industry company based in San Antonio, Texas. plan, develop and operate networks Wales & West Utilities for the years ahead. The project has Wales & West Utilities (WWU) manages involved working closely with the and maintains the gas network Welsh Government and others, and it throughout Wales and the south evaluated the impact of low carbon, west of England. To make sure WWU demand-side technologies as they are delivers outstanding levels of gas safety, connected to a low voltage network. reliability and customer service, they WPD is widely regarded as its industry’s continually look for ways to improve leader, particularly in terms of supply standards for the 7.5 million people reliability and customer service they serve every day. A partnership with excellence. Recognised for its efficiency, Welsh Government is helping WWU to it is also the only UK gas or electricity develop relationships with a number of distribution business to be fast- organisations so that they can deliver tracked through Ofgem’s demanding on this, offering customers sustainable regulatory business planning process. energy both now and for the future. This includes a focus on making energy more affordable. Last year WWU
17 Other Anchor Companies Deloitte Moneysupermarket.com Group PLC Principality Building Society Ltd. Royal Bank of Scotland Admiral.
17 Financial & Professional Services Wales’ Financial Services sector has an impressive foundation in retail banking and general insurance. The growth in asset finance, wealth management, Sectors life insurance and pensions and advisory services has broadened the sector more recently.
The Professional Services sector Deloitte includes Legal, Accountancy and Deloitte is one of the world’s largest Corporate Services. They are professional services firms, providing increasingly working in different ways audit, consulting, financial advisory, risk to respond to regulatory and market management, tax, and related services changes through the deployment of to clients across the globe. In Wales, the advanced technological solutions. Cardiff office has been working with This fast-growing sector already clients for over 100 years. More recently, employs over 135,000 talented Deloitte has started to centralise some individuals in Wales, and is looking of their core business functions in Cardiff to increase this to 200,000 by 2021. alongside client facing teams. This proved very successful so Deloitte has Admiral Group PLC replicated the business model to create Admiral insurance came to Wales in other teams supporting other parts of 1993 and started without a customer the firm and clients. Deloitte in the UK base and just 57 staff. Working with the has ambitious strategic growth plans Welsh Government from the beginning, and sees the expansion of operations in Admiral had no problem finding hard- Cardiff as a key enabler for those plans. working, enthusiastic people. Admiral’s They have therefore formally established Group HR Manager Ceri Assiratti says the Cardiff Delivery Centre which is this was a key factor “One of the reasons expected to create several hundred we’re committed to Wales is the calibre new jobs. Most of these roles will be of the staff. Where are we now? We’ve different from traditional graduate and almost 3 million customers worldwide accountancy pathways, enabling Deloitte and 4,500 staff here in Wales.”Admiral to offer rewarding careers to people continues to find good people. A training who might not otherwise have pursued programme, created in partnership with opportunities with Deloitte. Why Cardiff the Welsh Government, is equipping and Wales? Ross Flanigan, Director in people with job-ready skills. charge of Deloitte’s Cardiff Delivery Centre says that mostly it is due to the
19 people here. “The local universities, around the globe, as well as servicing business schools and further education the organisation’s UK Business Banking establishments are prolific and there is customers. It also houses a Complaints a large network of businesses in the FS and an Advised Mortgage Department, sector. Our experience is that we have and specialist teams assessing HSBC’s access to a large, capable and loyal risk across its UK operations. workforce who quite simply do a very John Trace, Contact Centre Director at good job for us, delivering high quality Swansea says “I have found the Welsh work. For our people, good transport Government to be very proactive and links, the city infrastructure and quality positive in terms of keeping us in the of life locally make a difference. Support loop on any new support initiatives from the Welsh Government has helped and training opportunities open to us. I us offer our colleagues extra training have worked in similar roles across the and qualifications, building their skills world, from India & Brunei in Asia, to and the collective capability of the local The Netherlands & Eire in Europe, and workforce. Combine all this with the all over the UK in terms of support and chance to work in a great environment satisfaction, nothing beats Swansea”. with Deloitte, as part of a thriving team helping the best clients, and it Lloyds Banking Group all adds up to a pretty good outcome Lloyds Banking Group is one of the UK’s for us, our staff and for Wales.” largest financial services brands, and has a significant presence across Wales. One HSBC of the Group’s largest operations in the HSBC is one of the largest and most region is St William House in Cardiff, trusted banking and financial service which houses staff from a variety of its organisations in the world, with an brands including Consumer Finance, international network extending Corporate and Wealth and International. to 9,500 offices in 85 countries As a well established financial services and territories. Swansea is HSBC’s base, Cardiff offers a rich source of International Banking Centre, and talented and well trained individuals services the bank’s Premier Customers with strong sector experience.
20 Food & Farming The Food and Farming sector encompasses producers, processors, retailers and consumers. Sectors
The food and drink supply chain is us invest in and develop our businesses important to the Welsh economy in in Wales when opportunities arise.” terms of employment, income and the “Food is a priority for the Welsh contribution it makes to tourism. Government and we are supporting ‘The Welsh Food and Drink Skills Project’, the industry to develop and move in conducted in collaboration with the positive new directions, embracing Sector Skills Councils and industry technology and advancements in partners, estimates that the supply chain research and development to put Wales makes up around 18% of the total Welsh at the forefront of food production. workforce equating to around 230,000 Towards Sustainable Growth – An Action people and 27,515 local business units. Plan for the Food and Drinks Industry Boparan Holdings Ltd 2014-2020, aims to grow output for the Boparan Holdings Ltd., the parent industry by 30% and increase the profile company for 2 Sisters Food Group Ltd., and reputation of Welsh food and drink. processes and supplies chicken The Welsh Government is committed products to the retail, food service and to supporting the industry to take manufacturing sectors. Ranjit Singh, CEO, advantage of the natural and human 2 Sisters Food Group said: “Our skilled resources that we have, with unrivalled workforce and specialist production sites business and technical support.” in Wales are very important to 2 Sisters Edwina Hart MBE CStJ AM, Minister and we’re proud to be a Welsh Anchor for Economy, Science and Transport Company. Having a strong presence in Wales delivers a number of benefits for our business. We have poultry, red meat and ready meal sites, along with a strong agricultural base and all of this gives us a strategic foothold that strengthens the supply chain and supports our Anchor Companies wider business in Wales and beyond. Boparan Holdings Ltd Welsh Anchor status has also helped
21 Other Anchor Companies British Telecommunications PLC General Dynamics UK IR Newport Ltd Pure Wafer PLC SPTS Technologies Ltd Photography courtesy of IQE. ICT Some 25,000 people in Wales work in the ICT sector, contributing over £2 billion a year to the Welsh economy, with thousands more professionals Sectors performing technical roles within other sectors.
Every year, 3,500 graduates leave our CGI eight universities and 16 FE Colleges CGI is the 5th largest independent IT with qualifications in Computer Services company in the world and one Science and other ICT-related of the largest ICT employers in Wales. disciplines. And the IT and Telecoms CGI delivers a range of outsourcing, industry alone contributes in excess of application services and infrastructure £1.2 billion or 5% of the Welsh GVA. services to clients in the public and Airbus Defence and Space commercial sectors across the UK from Airbus Defence and Space is a Division of South Wales. Airbus Group formed by combining the CGI’s Waterton based Service Desk is business activities of Cassidian, Astrium recognised for its extremely high levels and Airbus Military. The new Division is of client service. It has received 5 star Europe’s number one defence and space accreditation from the Service Desk enterprise, the second largest space Institute – the first 5 star to be awarded business worldwide, the second largest in the world. It was awarded Best defence company in the UK and among Outsourced Contact Centre at the Welsh the top ten global defence enterprises. Contact Centre Forum Awards in 2014. It employs some 40,000 employees CGI’s Welsh team is at the heart of generating revenues of approximately delivering cutting edge services to their € 14 billion per year, with 4,500 highly clients to help them become more skilled employees in the UK generating efficient and focus on growing their £1.2bn revenue per annum. It has a businesses. This includes CGI’s Secure significant operation in Newport, south Government Cloud and Commercial Wales, which manages the UK MoD’s cloud services, the new Cyber Security Defence Information Infrastructure (DII) Operations Centre and developing global secure network to deliver network mobility solutions, healthcare and smart services to over 300,000 defence users meter technology. world-wide. It also provides network security for the UK Houses of Parliament CGI has benefited from significant to protect against cyber attack. funding from the Welsh Government’s
23 ‘Skills Growth Wales’ programme to assist in the continued development of their highly skilled workforce, helping CGI to continue to grow its business in Wales. IQE PLC With manufacturing sites now also in the USA and Singapore, IQE first set up in Wales in 1988. Today, with a global customer base of chip manufacturers, its advanced semiconductor wafers end up in a range of high-end technical products including smartphones, tablets and lasers for DVD and Blu-ray players all over Sony UK Technology Centre. the world. IQE’s product for inclusion in wireless components is world-leading, Using its link to universities in south with around 60% of the global market. Wales, the business incubation centre offers graduates who are Chris Meadows, IQE advises that looking to start their own company Government support with establishing a start up centre where Sony can the Welsh site was key to choosing share knowledge and support. Cardiff as the company’s UK location, but wasn’t the only reason… In 2013 Sony won the Best Factory Award. Managing Director, Steve “Proximity to the universities – the Dalton, says: “We were overjoyed to chemistry and physics departments have win the Best Factory Award for 2013. a lot of technology relevant to IQE’s It’s fantastic to become the first Welsh work. Between 30% and 40% of our organisation to have won the award as staff are graduates and about half of it demonstrates how we are excelling those have higher level degrees such in our manufacturing techniques. as PhDs. There is also the infrastructure As technology has changed, we’ve for exporting: being on the M4 corridor learned to diversify our manufacturing gives us good access to Heathrow which techniques too. Before, we were told is still the major hub for distributing our what to make and when. Now, with products worldwide.” the support of the Welsh Government, Sony UK Technology Centre we have been able to expand our The Sony Centre initially specialised manufacturing into new markets and in colour television and cathode ray expand our operations at Pencoed to tube manufacturing before the rise take on new clients. The support we in flat screen technology. Now, it has have received, and continue to receive, remodelled the entire business by from the Welsh Government is vital to embracing diversification and innovation. us and is one of the key reasons why Sony has embraced four main activities Wales is a great place to do business.” at the UK Technology Centre in Pencoed; manufacturing broadcast equipment, third-party manufacturing, business incubation and product service.
24 Life Sciences Wales is the only nation with a £100m dedicated Life Sciences Fund plus world-leading academic expertise, a talent-drawing £50m initiative and Sectors a Life Sciences Hub based in Cardiff.
The Hub provides a central GE Healthcare Government-backed resource for the GE Healthcare, a £10bn unit of General whole sector in Wales, connecting Electric, has its Life Sciences International commercial, academic, clinical and Centre of Excellence for Consumables in funding organisations. Our devolved south Wales, with a 430-strong workforce National Health Service means that providing medical technologies and clinical trials here can access over services used around the world. Its 3 million people with a single, co- Cardiff location is the company’s chosen ordinated permissions process. international centre for ground-breaking Welsh researchers are leading the work in stem cell technologies for new world in areas including wound drug discovery. healing, stem cells, neurosciences, The Consumables business, managed e-health, in vitro diagnostics, from Cardiff, also includes operations medical devices among others. based in Kent, Germany and China. GE Behind every thriving Life Sciences Healthcare has further strengthened sector there’s always a strong academic its Cardiff facility through growth and network – collaborating, researching with the relocation of some production and training a new generation. Welsh from Oxfordshire and the US, plus some universities are home to almost 160,000 employees relocating from overseas. students – 12,000 of these in Life One location had to be selected as GE Sciences – and participate in all kinds of Healthcare’s global Consumables Centre research and technology projects. They of Excellence – and several factors led to have excellent knowledge transfer and that being Wales, with skills having the commercialisation capabilities, and offer deciding vote. attractive partnering opportunities for Ortho Clinical Diagnostics (OCD) Life Sciences businesses with potential to Recent years have seen Ortho Clinical access considerable European funding. Diagnostics’ flagship diagnostics centre in Pencoed, Bridgend becoming a key location within its global network.
25 Other Anchor Companies Biomet UK Ltd Norgine Ltd Packaging Coordinators Inc Siemens Healthcare Diagnostics Products Ltd GE Healthcare. Ortho Clinical Diagnostics’ flagship diagnostics centre.
To help secure output growth of 80% Matthew West, General Manager since 2007, OCD has worked closely with UK Operations at OCD explains how the Welsh Government and has received important this relationship was when advice, funding, and backing for skills they needed to move site. development. The company’s move to “In 2005 the decision was taken to invest Pencoed from its previous Cardiff base in a new site. Locations were discussed in 2010 represented a major vote of across the globe, and many in the confidence in Wales. OCD particularly company were all for relocating abroad. valued the skills and commitment of its However, our roots were in Wales and, workforce and the highly productive when we considered the strong case working relationships it had forged with put forward by the Welsh Government local universities. to stay, along with the knowledge and The extraordinary reach of the Ortho expertise of our staff and our links with Clinical Diagnostics is underlined by the local organisations, particularly Cardiff fact that almost every blood transfusion University, we decided our future lay in in the world is touched in some way by Wales. There is no doubt in my mind that one of its products. Its ‘total solutions’ the Welsh Government played a pivotal help ensure that every patient receives role in this decision – their support and blood that’s safe. enthusiasm was impressive.”
27 Wales is already home to thriving global, international and national companies as well as a myriad of local innovators. Success Our Anchor Companies include...
28 Success
TOYOTA MOTOR MANUFACTURING (UK) LTD
29 For more information contact the Welsh Government Email: [email protected] Tel: +44 (0)3000 6 03000 Web: business.wales.gov.uk
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