Member Article

NEPIC's work generates £2 billion for UK economy

The North East Process Industry cluster says it has contributed £2 billion gross value added per annum to the UK economy.

On visit to Westminster, the cluster body addressed some twenty senior industrialists and ten North East MPs, who had gathered in London to discuss future growth tactics.

NEPIC CEO, Dr. Stan Higgins, described the 83 significant investments captured and 4000 jobs supported that had contributed toward reaching the milestone £2 billion figure.

NEPIC, an industry collaboration supported by UK public sector since 2005, only announced breaking through the £1 Billion GVA barrier some 36 months ago in January 2011 – achieving the same amount again in half the time.

This success has been made possible due to the clusters’ collaborative programmes, such as BASME – it’s Business Acceleration for SMEs programme.

The project, which commenced in 2012, has already helped to create some 350 jobs within the industry’s supply chain - with this number expected to reach 1000 by mid-2015.

Since 2005, NEPIC has received industry in-kind contributions of £18 Million, together with £6 Million of support from various public sector programmes.

Dr Higgins said: “In generating more than £2 billion GVA from £6 million of public-monies – that’s a return of 332%. Has there ever been a better yield on investment for the tax payer?”

Following the announcement attending industrialists raised a number of issues that are of an on-going concern over future competiveness – with the main topics of discussion surrounding level playing fields; clarity and consistency opposite policy; and continuing fragmentation.

In terms of a level playing field, industrialists referred to energy pricing across Europe and the way in which manufacturing is supported and energy costs implemented. Discussions led onto energy supply security, with Industrialists sharing thoughts regarding the implementation of shale gas and underground coal gasification technology.

With the USA clearly benefiting from an enormous boom in shale gas-driven investment, the general consensus is that the UK has been too slow implementing such technologies and that benefits and opportunities for UK manufacturing have been missed.

Conversations then focused upon UK Government policy. Whilst the region has already delivered a number of low carbon projects, if is felt that there is now a clear opportunity, through a range of new technologies, to turn such significant potential into reality.

However, in order for this to be achieved there has to be clarity and consistency in UK Government policy - be it electricity or heat generation, production of renewable fuels or the impact of carbon taxation.

Attentions later turned to the ongoing fragmentation of the UK process industry, which continues to impact the long-term efficiency and productivity of the sector. Representatives from NEPIC shared their ambitions to seek out public sector support for a programme of work that aims to increase economic value through targeted, increased process integration.

This work would incorporate the principles of verbund - a German word meaning ‘linked’ or ‘integrated’ to the maximum degree. In the coming decades, megatrends will reshape global demand and production in virtually every sector. The chemical process industry has to undertake fundamental changes in response to these megatrends – and with competitive locations elsewhere in the world, including Europe, already having verbund policies and models in place, the UK must act.

NEPIC chairman and SABIC senior executive, Paul Booth, commented: “As usual we were able to share some good news with our local Parliamentarians, as well as raising a number of areas where we our industry really needs their help. The new LEP structure is beginning to work - as well as the formation of the Chemistry using Industry’s Growth Council within BIS. However, policy changes seem at times to be constant and some companies need help with these matters today.”

Ian Swales MP for Redcar, who helped chair the meeting and also chairs the All Parliamentary Group for the Chemical Industry, explained: “Myself and my fellow MP’s are keen to understand the issues that are of concern to our local biggest industry sector. At times, national policies don’t help at local level and we need to understand industrial issues more deeply if we are to properly represent our constituent’s interests.

“How energy policies and changes in regulation impact on these high energy using and capital intensive industries really needs to be understood better by Ministers, politicians and civil servants alike. We need more of these industries to be located in the UK and sometimes the UK parliamentary system works against longer term investment plans in these capital intensive sectors.”

Ian concluded: “I am pleased that government has recognised the need for greater understanding of the industry and recently launched chemical industry growth partnership. Michael Fallon MP, the Minister in both BIS and DECC, will jointly chair this partnership.”

Dr. Stan Higgins, CEO of NEPIC, added: “This annual meeting continues to be well supported from both sides and we thank our MPs and industrialists for taking the time from their busy schedules to discuss industry-wide issues that individual companies alone cannot impact.

“I am constantly reminded that it is rare to see so many MPs in the same room but we have always had great support from those representing all political persuasions and both houses in our region.”

This was posted in Bdaily's Members' News section by Tom Keighley .