"A lot of base chemicals manufactured within Teeside will migrate through the supply chain"

"A lot of base chemicals manufactured within Teeside will migrate through the supply chain"

Michael Kendall is an inward investment manager at Tees Valley Unlimited, the Local Enterprise Partnership for Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland as well Stockton on Tees. He talked to Simon Warburton at the SMMT's recent 'Meet the Funder' day near Birmingham.
He has worked to promote Tees Valley as the preferred business location for inward investment for more than six years supporting potential investors across all sectors from initial enquiry, to identifying sites and infrastructure connections, securing funding for capital investment, training support and ultimately providing an investor aftercare service to ensure the company is successfully embedded into the area. 
Prior to joining Tees valley Unlimited, Michael was inward investment manager at Scottish Enterprise in Lanarkshire and has more than four years experience as a senior consultant at OCO Consulting in Belfast.

Tees Valley is a region of North East England known for its petrochemical industry, but which has been looking to attract suppliers wanting to do business in this area of the UK that is proving increasingly a hotbed of automotive skills.

The region and the wider North East, have gone from a virtual standing start 25 years ago, to being the site of Nissan production to hosting a plethora of suppliers in a regional cluster.

Tees Valley recently formed part of a group of exhibitors at the Society of Motor Manufacturers and Traders (SMMT) annual Meet the Funder day near Birmingham, designed to bring suppliers and UK financial institutions together.

j-a: What relationship do you have with the SMMT, as well as the Automotive Council and how encouraging has the response been to Tees Valley?

MK: We have been developing contacts within the Automotive Council - within the Supply Chain Grouping. We held a workshop looking at barriers to entry on behalf of the North East.

There were four workshops across the UK and we were one of those - that fed into the industrial strategy.

We have been target [ing] awareness around Tees Valley and the North East. It is very high on the SMMT's agenda in terms of showcasing the support.

[The] SMMT embraced us with open arms because clearly they want to push the opportunity out. They realise people on the ground had contacts and we meet companies on a regular basis.

We are a Local Enterprise Partnership of five local authorities and it is a model that has not been too painful in terms of establishment.

j-a: Has there been much OEM activity that has triggered component activity in Tees Valley?

MK: OEM investments were creating investment at a supply chain level. Things were happening on our own patch, which at an economic development level, were creating change.

There is a responsibility to be cohesive and to ensure we involved in responding to opportunity, maybe [by] bringing other SMEs.

j-a: How many companies is Tees Valley in contact with?

MK: There are 120 core companies we deal with and we deal with smaller entities alongside that and linking Tees Valley to the national agenda.

j-a: How does Tees Valley secure further interest in its role?

MK: We are looking at these events [Meet the Funder] to make sure there is awareness at a local level. We are showing willingness to get involved with the Advanced Manufacturing Supply Chain Initiative arrangements - it is building momentum around it.

We [also] benefit from national schemes such as the automotive zones enhanced capital allowance sites [tax relief] with plant and machinery.

j-a: What are some of the key industries in Tees Valley that relate to the automotive sector?

MK: Nissan is very much the notable name in the North East and we see other benefits for the region as part of that.

A lot of base chemicals manufactured within Teeside will migrate through the supply chain - there is an underpinning aspect to that - it is critical. Chemicals is key for us as it underpins the automotive industry in the UK.

j-a: How does Tees Valley compete for business with the Sunderland region just up the road?

MK: We want to support them [Sunderland]. Companies do not see local boundaries - they see supply chains.

We have got a working relationship with Sunderland, because we recognise the economic value of that relationship.

j-a: How does Tees Valley cooperate with government in London?

MK: Within the Department for Business, Innovation & Skills, we are seen as a model because of what we have managed to achieve. We have been quite successful.

Some of that has happened gradually and some of that has happened because of our own efforts.

Key companies in Tees Valley that are involved with the automotive sector include: Caterpillar; Gestamp Tallent; Nifco; Millfield Composites; TMD Friction Group; Paragon Rapid Technologies; Katmex; Cummins; Esco; ElringKlinger and Esterline.

The UK government has committed more than GBP316m (US$507m) to automotive sector projects through the Regional Growth Fund (RGF), almost GBP80m of public and private investment through the Advanced Manufacturing Supply Chain Initiative (AMSCI) and more than GBP180m to support collaborative R&D through the Technology Strategy Board.

Businesses based in the Tees Valley can apply for short-term finance to fund performance and warranty bonds from the GBP10m Tees Valley Catalyst Fund. 
The Fund helps Tees Valley businesses bid for new contracts by providing short-term debt investments from GBP100,000 to GBP2m to fund short-term advanced payment guarantees, performance and warranty bonds as well as extend existing bond facilities. Finance will typically be available for up to 24 months.

There is also the North East Growth Plus Fund, which can structure deals between GBP350,000 and GBP1.25m in a single round in SMEs based in the North East of England, namely, Northumberland, Tyne and Wear, Durham and the Tees Valley.


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