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ANNUAL

REPORT 2017
ISSUED NOVEMBER 2017

www.nepic.co.uk
www.nepic.co.uk
AnnualReport2017|TheNorthEastProcessIndustryCluster

CONTENTS

INTRODUCTION
Chairmans Statement 05
Chief Executives Statement 09
About Us 13
Vision, Mission & Values 15

BUSINESS REVIEW
Economic Landscape 17
Our Year 19
Growth Programmes 29

BUSINESS OPERATION
Financial Statements 33
Board of Directors 36
The NEPIC Team 37

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NEPIC ANNUAL REPORT 2016 | Introduction

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AnnualReport2017|TheNorthEastProcessIndustryCluster

CHAIRMANS
STATEMENT
I am pleased to introduce accompanying the team on
another Annual Report for the the Indian visit in 2014. A former
North East Process Industries minister he was serving as a
cluster. 2017 has proved to be high profile chair of the
a transition year for the influential Business, Energy and
organisation. Industrial Strategy Select
Committee. Iain decided to
Our long term Chief Executive, stand down at the General
Stan Higgins, left in mid year for Election and we were
a well earned retirement. Stan delighted when he agreed to
is known throughout the take over as Chief Executive.
industry and has been a major He has a passion for the region
contributor to a number of and the industry and has
companies through his career made an excellent start in the
both at home and abroad. role.

For the last 12 years he has Brexit continues to dominate


been Chief Executive of NEPIC on the political front and
and taken the organisation negotiations are proceeding
from a relatively small, low slowly. Life is unlikely to
impact cluster to the successful continue as before and I know
organisation of today. Stan that members are making
was rightly recognised in 2015 contingency plans. It is
as European cluster manager gratifying to know that growth
of the year and can be very in turnover and employment
proud of his contribution. I continues and our new survey
know our members wish him shows that members are
well and he continues to be generally optimistic about the
active in the sector in various future.
ways.
As I write the government is
Replacing Stan was no easy about to publish a new
task and strangely enough fate industrial strategy and I know it
intervened when Theresa May will contain strong support for
called the General Election for both the process industries
June 8th. Iain Wright, MP for sector and the importance of
Hartlepool, had been a long clustering.
term friend of NEPIC including

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On Teesside, there are already I hope that all members will


huge investments being made have a good year in 2018 and
by Sabic, MGT and Sirius. We continue to support our
have recently seen the launch outstanding cluster.
of the South Tees Development

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Corporation Master Plan. This
covers a vast brown field area
south of the Tees and sets out
ambitious plans to attract
investment. There is already Ian Swales
great interest from potential Chairman
investors and many of these
are in the process and energy
sectors. Along with potential
developments at Wilton the
sector looks set for significant
growth.

Pharmaceutical businesses
across the region report strong
performance with highlights
including major investment by
Glaxo Smith Kline and rapid
growth by Fujifilm Diosynth and
Arcinova.

NEPIC staff have been very


active in helping organisations,
holding events and lobbying
on behalf of members. I want
to pay tribute to them for the
enormous amount they do and
for helping to smooth the
transition to a new Chief
Executive.

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CHIEF EXECUTIVES
STATEMENT
It is a privilege for me to write reputation as being a strong
my first statement for NEPICs voice for the industry. Much of
Annual Report. this reputation has been down
to the personality and
Standing down from leadership provided by my
Parliament earlier this year, I predecessor as Chief
wanted the next phase of my Executive, Stan Higgins. Stan
career to develop my twin built up NEPIC from the smallest
professional passions: beginnings to an award-
championing the North East as winning cluster and the
a great arguably the greatest accolade of European cluster
region with a superb history, manager of the year. He
culture and people; and deserves to be recognised as a
championing industry as a great champion of his industry.
means of creating wealth,
raising living standards and From a personal point of view,
providing people with he has shown nothing but
rewarding careers. kindness and generosity to me
since I took over from him in
Im grateful to Ian Swales and the summer. I wish him and his
the Leadership Team, for giving wife Cath a long and
me this great opportunity and enjoyable retirement.
for providing NEPIC with strong
strategic purpose. Ians Coming into the industry, it
chairmanship and guidance seems that the sector is on the
has been personally helpful to cusp of a new phase in its
me and positive for NEPICs history. As with all new phases,
reputation. Id like to thank Ian there is no likelihood that any
and the Leadership Team for potential scenarios will
the work they do on behalf of materialise. Brexit and ongoing,
members, the industry and the if not growing, uncertainty
region. regarding Britains trading and
regulatory relationship with the
Leading NEPIC is a fantastic rest of Europe has undoubtedly
opportunity to be able do this, affected investment decisions.
to champion the region and The General Election has
industry. In Parliament, the resulted in a minority
organisation has a great government and undermined

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the Prime Ministers political The quarterly members 2017 was a period of change
authority, which stymies economic survey I introduced and transition for NEPIC. But
decision making in Whitehall into NEPIC in the summer, 2018 looks set to be our busiest
and challenges the execution which I hope will be a regular yet. I want to see NEPIC reflect
of a long-term economic feature, showed a high level of and articulate industrys needs
roadmap for the country. optimism amongst members, to ensure that the North East
intent on delivering their and its chemical, process and
And yet, for all the fog of products and services to new industrial sectors thrive.
uncertainty making it difficult markets.

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for firms to navigate, a genuine
sense of optimism seems to be Throughout this, I am focused
emerging. Companies seem to on ensuring that NEPIC
regard and accept the provides its members with
economic and political strong service. Id like to thank Iain Wright
uncertainty as the new normal: the growing number of NEPIC Chief Executive
they have lived with such members who are contributing
uncertainty since at least the to the clusters successes. From
financial crash of a decade a personal point of view, Id
ago, and will continue to live also like to thank members
with it for the foreseeable who have made me feel so
future. If not actively brushing welcome and who have given
off Brexit, ambitious firms with a up their time to talk to me and
sense of purpose and let me know what they like
impressive, competitive goods about NEPIC and how they
and services to sell are not would like to see it develop. I
allowing the uncertainties to will never lose sight of the fact
stop them from achieving. that the cluster is a members
organisation, run for the benefit
The election of a Mayor in the of members.
Tees Valley has provided the
next stage in devolution, The real strength of NEPIC,
providing a closer link between which I have heard time and
locally-based companies and time again from members
the decisions which affect since I became Chief
them on things like transport Executive, is the opportunities it
and skills. The South Tees provides for networking and
Development Corporation collaboration, showcasing
Master Plan articulates the prospects and providing a co-
possibility of 20,000 additional ordinated voice to an
jobs on the site of the old SSI economically vital but often
steelworks and heralds what fragmented sector. Such work
could be the single biggest could not be done without the
industrial and manufacturing great rapport between NEPIC
opportunity for the United members and its staff. NEPICs
Kingdom since the Second true assets lie in the
World War. Investments by knowledge, experience and
Sabic, Sirius and Fujifilm passion of its employees, who
Diosynth all NEPIC members are keen to see firms in the
raises confidence levels and chemicals and process sectors
provides opportunities in the thrive, and who will work hard
supply chain for local to make this happen.
companies.

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Annual Report 2017 | The North East Process Industry Cluster

ABOUT US
NEPIC is an award-winning region, and the P&S Cluster
membership cluster who worked with the
organisation working with the pharmaceutical and life
chemical-using industries in the science businesses that were
North East of England. We predominately based towards
cover a broad sweep of the north.
chemistry focused industries
including petrochemicals, Steered by Michael Porters
polymers and materials, fine theory of clustering for
and speciality chemicals, competitive advantage,
pharmaceuticals, NEPICs remit was clear
biotechnology and reconnect the fragmented
renewables. industrial sectors a result of
ICIs exit from the region in the
Together with our member late 90s and create an
companies, we work to build industrial powerhouse to rival
upon the already powerful all other global locations.
industrial base located here
and make this region one of In 2014, NEPIC was the first UK
the most competitive and cluster to receive the GOLD
successful chemical-processing standard ESCA accreditation
locations in Europe. for cluster excellence and in
2016, we reported 3.5 billion
Privately-owned and led by of Gross Value Added to the
industry, NEPIC works to region through our activities
support cluster members to since the firms inception.
become successful and
sustainable organisations, in a
collaborative business
environment that helps them
to grow.

Formed in 2004, NEPIC was the


result of the merger of two
industry bodies the Teesside
Chemical Initiative, who
represented the heavy base
chemical in the south of the

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VISION
MISSION &
VALUES

Our vision is for the North East


of England to be the most
competitive, sustainable and
successful chemical-processing
location in Europe.

Our mission is to support cluster


members to become
successful and sustainable
organisations, in a
collaborative business
environment that helps them
to grow.

Our values guide our


behaviour and are the
principles by which we make
decisions: Accountability;
Collaboration; Integrity;
Communication & Ambition.

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ECONOMIC
LANDSCAPE

The overall economic growth value of exports have


rate is weakening as the EU exit increased.
approaches. Higher inflation,
weak wage growth and Amongst small and medium
uncertainty is weighing on sized enterprises, the outlook is
consumers in spite of high perhaps more positive. Health
employment. Manufacturers indicators, including capacity,
across the board continue to employment, revenue and
benefit from the weak pound business costs, are improving
and stronger external demand, and a falling number of
which should help net exports business bankruptcies and
to make a positive contribution increased lending to SMEs
to GDP growth in 2018. have had a particularly
Weakening business positive impact.
investment continues to be of
high concern. Persistently low Accounting for some 99 per
productivity in the UK relative cent of the total number of
to our major competitors businesses within the private
remains one of the most sector, SMEs in the North East
pressing economic challenges. took the top spot for the first
time in regional health check
Despite the gloomy economic rankings [2], with increased
picture, in the UK, strong gains lending and a solid
in chemical production have improvement in capacity,
continued during 2017. The suggesting high demand.
Chemical Industrial Association
recently reported a sturdy Brexit uncertainty remains the
growth trend in chemicals biggest growth threat amongst
production [1] and an UK manufacturers and is
encouraging return to growth significantly impacting upon
in pharmaceutical production. increased concerns around
Similarly, exports are on the rise; regulatory costs. Disruption to
however, it is difficult to free and frictionless trade with
deduce a real volume effect the EU is a key risk, along with
from the pound depreciation concerns regarding the impact
as both output prices and the

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AnnualReport2017|TheNorthEastProcessIndustryCluster

Brexit is having on investment Overall, the economic


into the UK. landscape remains somewhat
volatile and uncertain but
Businesses continue to urge there are encouragingly bright
Government to provide clarity spots of optimism within the
on a transitional agreement, as industry and region.
talks about how good and
services will flow between
Britain and the European Union
after Brexit in March 2019 make
slow progress.

Despite the challenges,


business confidence amongst
NEPIC member companies
remains high. Following a mid-
year survey conducted by
NEPIC, eighty per cent of
respondents reported an
elevated level of optimism,
with winning new domestic
orders at the heart of this
positive outlook, along with the
development of new products
and services.

Talent attraction and retention


remains the biggest challenge
for local companies, coupled
[1]
EconomicandChemicalSectorOutlook,
with intense competition from issuedNovember2017,Compliedby
ChemicalIndustryAssociation
emerging markets. Other
www.cia.org.uk
highlighted challenges include
Brexit and political disruption; [2]
SMEHealthCheckIndex,issued
managing cash flow; ability to September2017,CompiledbyCebrin
innovate and expanding client associationwithCYBGwww.cybg.com
bases.

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AnnualReport2017|TheNorthEastProcessIndustryCluster

OUR
YEAR
At NEPIC, 2017 commenced combined membership figures
with the announcement that stand at 422.
long-standing chief executive,
Dr. Stan Higgins, was to retire. NEPIC is seen as an important
On June 1st, the Board feature of the North East
confirmed that, following a industrial ecosystem. It
five-month search, it had commands respect, the basis
selected Iain Wright to of which stems from the
succeed him. unrivalled knowledge and
technical expertise of NEPIC
Iain, who served as a staff and enhanced by the
prominent Labour MP for close personal professional
Hartlepool and Chair of the connections between staff
Business, Energy and Industrial and senior local industrial
Strategy Select Committee, personnel. This provides the
brings with him a breadth of means by which the cluster
business and industry can speak with authority on
experience, along with a matters affecting industry, as
passion for the region, its well as provide networking
people and long-term connections between
prosperity. members.

Membership & Engagement Indeed, the opportunities


During the course of 2017, provided to members through
NEPIC saw a 16 per cent networking and the provision
increase in membership, of events where companies
demonstrating a confidence in can meet, learn from each
the benefits that we offer, other and collaborate, are the
coupled with a continued and key activity NEPIC provides
positive desire to collaborate which members and
During the and forge strong connections prospective members value
course of 2017, within the Clusters footprint. the most.

NEPIC saw a 16 In addition, we welcomed a Over the past 12 months,


further 84 companies through NEPIC have delivered 56
per cent the delivery of NEPICs two events and welcomed some
increase in ERDF-funded SME programmes 2,175 guests. The 2017 event
- see Growth Programmes for calendar incorporated a
membership. further details. Current breadth of business and
industry related topics with

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knowledge sharing, and identify the key business chief executive, Iain Wright -
collaboration and networking challenges facing firms. providing many fantastic
at the heart. promotional opportunities.
Results showed that business
The largest of our events, Meet confidence amongst our To support and showcase
the Members, took place in member companies remains member news and important
June, attracting a record high. Eighty per cent of sector updates, traditional
number of delegates totaling respondents reported an NEPIC print products, including
530 and a sold-out exhibition to elevated level of optimism, the Annual Directory and Focal
Wynyard Halls Grand with winning new domestic Point magazine, remain
Marquee. Despite torrential orders at the heart of this popular and continue to be
downpours throughout the positive outlook, along with the well received by members and
day, the event was very well development of new products stakeholders. However, as
received and generated much and services. companies move away from
positive feedback. print advertising (a key funding
Talent attraction and retention stream in the production of
We once again attracted a remains the biggest challenge these titles) toward digital, so
strong line-up of industry for local companies, coupled must the NEPIC
speakers focusing on with intense competition from communications team.
investment and growth emerging markets. Other
opportunities, along with highlighted challenges include In March, NEPIC launched the
important business updates. Brexit and political disruption; new on-line members hub,
Furthermore, the event managing cash flow; ability to developed to provide member
facilitated 138 one-2-one innovate and expanding client companies with a digital
meetings between our SME bases. destination to connect and
community and dedicated promote. Members Hub has a
team of industry mentors. As Members have requested wealth of features to help
the conference moves further and more refined maximise membership and
forward, improvements relating networking opportunities, such most importantly, maximise
to a stronger presence from as delivering more specific engagement with fellow
buyers and major sector and meet-the-buyer members. The site offers the
manufacturers has been events. These will be offered in ability to showcase news
noted, along with the need for 2018. stories, promote events and
more physical space to allow broadcast member-to-
the event to continue to grow. Communications member offers - as well as
At NEPIC, everything we do is offering access to membership
The CONNECT brand, pushing to help our members, documents and NEPIC
launched in 2015, continues to and the powerful industrial updates. Additional
gain momentum also. Further base located here, to thrive development and
to monthly Cluster CONNECT and prosper. Through our engagement activities are
networking meetings, we have communication efforts, we are planned for 2018.
seen the addition of Pharma continually seeking to support
CONNECT and more recently, members by championing The demand for digital
Engineering CONNECT. Whilst the businesses that you are, marketing services - in addition
Cluster CONNECT continues to promoting the fine region in to those provided through
provide a platform for relaxed, which we are based, membership continues to
informal networking and highlighting the challenges increase also. To ensure NEPIC
updates, Pharma CONNECT that are upon us and providing can provide support for
and Engineering CONNECT the opportunities to showcase member companies, both
combine these traditional positive news. small and large, the team
benefits with sector focused revisited our offering in this
mentoring and sales support. During 2017, NEPIC have area and launched a new
maintained our longstanding pick and mix style marketing
Continual assessment relationships with the local solution incorporating print,
During the summer, and in-line media and trade press and digital, design and event
with the appointment of a new received much coverage for services.
chief executive, NEPIC the region and sector. The
conducted a survey to better chief executive recruitment Finally, to further our efforts in
understand from our members process sparked a lot of media the area, work began late-
what we do well, where attention for both outgoing 2017 to establish a North East
improvements can be made CEO, Stan Higgins, and current communications network for

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the sector. The objective of the delegation from the China stimulate networking, identify
network is to create aligned Petroleum and Chemical business opportunities for
communications and Industry Federation at SABICs collaboration and growth
promotional plans, whilst L&D area in the Wilton Centre between European SMEs,
offering important networking, to hear presentations from clusters and UK based SME
best practice sharing and SABIC, Sembcorp, Falck, PD businesses. The audience
professional development Ports, Tees Valley Combined heard of business collaboration
opportunities for in-house Authority and NEPIC. opportunities in France, Finland
communicators. and Germany, spanning a
KDPMA visited the Department range of sectors and feedback
International Relations of Applied Sciences at the received was very positive
NEPIC once again, in University of Northumbria and indeed.
conjunction with Department toured the facilities, alongside
for International Trade, led a attending presentations from In addition, during the course
market visit to India in 2017 the Knowledge Transfer of 2017, NEPIC has sought to
focusing upon pharmaceutical Network. KDPMA met with CPI further build upon its European
sector, chemical process at its facilities at NetPark in network through the
industry and their associated Sedgefield and the Advanced identification of additional
supply chains, R&D and Biologics Centre in Darlington. cluster development
innovation capability. NEPIC hosted a dinner for the opportunities in Saudi Arabia,
delegation, funded by the Kuwait, China and Italy.
With a clear emphasis on trade Department for International
opportunities, together with Trade, with the Mayor of Tees Industrial Strategy
promoting investment into the Valley attending and The Government launched its
UK, given that the Indian addressing the companies Green Paper on Industrial
pharmaceutical sector present. Strategy in January 2017. At
particularly in the region of the time of writing, it is
Karnataka is growing at 12% Both ICC and KDPMA expected that a finalised
per annum, the mission attended NEPICs Meet the Industrial Strategy will be
attracted firms both small and Members event, with published in late November
large. representatives providing a 2017.
summary of their priorities and
The primary objective of the activities. NEPIC has been The Green Paper proposed ten
visit was to help UK businesses invited to participate at the strategic pillars for a UK
understand the dynamics of trade show and conference of industrial strategy, consisting of:
the country and its markets both groups in India in
and most importantly, identify February 2018. Investing in science,
new potential business research and innovation
opportunities, thereby In August, a roundtable Developing skills
ultimately developing new member discussion on Upgrading infrastructure
exports for the regions. potential export opportunities Supporting businesses to
to Mexico in conjunction with start and grow
Through many visits to India, DTI took place. There is scope Improving procurement
NEPIC has established for member companies to take Encouraging trade and
unrivalled access to key advantage of the opening of inward investment policy
decision makers throughout the market to foreign suppliers, Delivering affordable
the pharmaceutical and as part of the implementation energy and clean growth
process chemical industry of the 2013 Energy Reform and Cultivating world-leading
sectors. The mission will run the subsequent removal of the sectors
once more in February 2018. historic monopoly of national Driving growth across the
oil company Pemex. We whole country
In June, NEPIC hosted a received excellent feedback Creating the right
delegation from the Indian from members in addition to institutions to bring together
Chemical Council (ICC) and identification of potential sectors and places
the Karnataka Drugs and opportunities for UK private
Pharmaceutical companies to participate in In addition to the strategic
Manufacturers Association storage projects in Mexico. pillars, the Government offered
(KDPMA). The ICC conducted industry the opportunity to
visits to the Wilton 11 plant and Most recently, NEPIC held the strike new sector deals, aiming
Northumbrian Waters Bran European Business Opportunity to address sector-specific
Sands facility. They joined a Showcase Event to help challenges and opportunities.

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Such a sector deal is key to the The last two initiatives and other northern institutions
future of the chemical industry particularly play to the existing including Durham and Teesside
in the UK; the Chemistry strengths of the North East Universities, the Materials
Growth Partnership, with economy and strategic Processing Institute, the Centre
significant input from NEPIC ambitions of the Tees Valley for Process Innovation, the
members such as Harry Swan Combined Authority. NEPIC will Welding Institute and NEPIC.
and Paul Booth, are work to lobby decision makers
negotiating with Government in Whitehall and Westminster of The SIA is one of twelve such
a sector deal aimed at dealing the unique competitive audits commissioned by the
with regulatory barriers, advantage of the North East to Department for Business,
innovation, investment and capture value and Energy and Industrial Strategy.
growth and trade and employment through the low The audit supports the
investment deals to increase carbon economy and to Governments Strategy for
exports as well as securing a ensure that commercial Chemistry-Fuelled Growth
stronger supply chain. opportunities arising from such which aims to grow the
Government announcements contribution of the chemical
Clean Growth Strategy are made available to local and process industries to the
In conjunction with the firms. UK economy from 195 billion a
Industrial Strategy, the year to 300 billion by 2030.
Government published its Carbon, Capture,
Clean Growth Strategy. There is Storage & Utilisation Brexit
considerable scope for the NEPIC continues to be active in Brexit, and the accompanying
North East economy to take supporting the development of uncertainty regarding the
advantage of some of the Industrial Carbon Capture, negotiations, any subsequent
proposals contained within the Storage & Utilisation
transitionary period and the
Strategy. It is estimated that particularly through the
nature of our future trading
the low carbon economy Teesside Collective project,
and regulatory arrangements
could grow 11 per cent per including supporting the
year between 2015 and 2030 collective response to with the European Union,
faster than the rest of the questions from Richard continue to dominate the
economy. Harrington MP, Minister for political and economic
Energy and Industry, following landscape.
Measures contained within the a letter of support from Simon
Clean Growth Strategy, which Clark MP for Middlesbrough The end of Britains
could be beneficial for North South and East Cleveland. membership of the Single
East based firms, particularly European Market could have
those within the chemicals and Following a period of inertia profound consequences for
process industries, include: awaiting the release of the inward investment decisions,
Governments Clean Growth
particularly for multinational
up to 10 million for Strategy, engagement has
companies, who will seek to
innovations that provide resumed. It is hoped that a
further supportive have access to the largest
low carbon heat in
domestic and commercial announcement will be made possible number of customers
buildings; in the near future. and frictionless borders, as well
up to 10 million for as regulatory harmonisation. In
innovation that improve the Science & Innovation Audit these circumstances, it is vital
energy efficiency of existing During October, NEPIC was that the region and this sector
buildings; named as a member of the pull together in a collaborative
an additional 14 million for core project delivery group and co-ordinated fashion to
the Energy Entrepreneurs selected by the Government secure as much investment
Fund; to undertake a Science and into the chemicals and process
up to 20 million to support Innovation Audit (SIA) to
industries in the North East as
clean technology early establish the Northern
possible.
stage funding; Powerhouse as a globally
up to 20 million to competitive location for the
demonstrate the viability of chemical and process sector. The Chemical Industries
switching to low carbon Association have signalled
fuels for industry; and Led by Tees Valley Combined three broad priorities for the UK
up to 20 million in a Authority, the Northern Government to negotiate for
Carbon Capture and Powerhouse Chemicals and the chemicals and process
Utilisation demonstration Process Consortium, is made sector to maintain growth:
programme. up of experts from Tees Valley

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Frictionless tariff-free trade business leaders, including a significant powers to promote


60 per cent of UK chemicals large number of economic regeneration. By
exports travel to the European representatives from NEPIC converting assets in the South
Union. Three-quarters of all UK members, to discuss the Tees area, covering almost
chemicals imports come from practical implications of the 4,500 acres and incorporating
the European Union. The report The Free Ports the former SSI zone, into
imposition of tariffs and Opportunity: how Brexit could industrial opportunities for
perhaps even worse non- boost trade, manufacturing business investment, it has the
tariff barriers such as border and the North, authored by potential contribute an
controls and excessive Rishi Sunak, Member of additional 1 billion per annum
bureaucracy causing delays, Parliament for Richmond. to the local economy once
could adversely impact on fully developed.
trade. A free port or free zone (FTZ)
would be an area inside the UK The vision of the Development
Regulatory consistency geographically, but legally Corporation will see the area
The industry is highly regulated outside of the UK customs transformed into a hotbed of
to ensure confidence in health territory, whereby goods can new industry with sustained
and safety and environmental be imported, manufactured or economic growth and
protection for employees, re-exported inside the FTZ prosperity for the region. The
customers and communities. without incurring domestic opportunity alone stands to
The industry is not arguing for customs duties or taxes. create 20,000 new jobs in
lower regulatory standards but skilled sectors with good
alignment and consistency to The meeting discussed the salaries and is heavily focused
ensure continued and potential types of free zone on the areas key priorities in
harmonised access to the that might be adopted manufacturing innovation and
market place. including geographically advanced technologies.
defined zone and the
Access to skilled people alternative approach now NEPIC fully supports the South
The chemical industry is global, made possible by technology Tees Development
employing skilled people from is the "virtual" zone, linking Corporations long-term vision
around the world. The North elements of a supply chain or and ambition, which has the
East chemical and process manufacturing process potential to transform the
industry is owned by wherever located within the entire local economy,
companies from across the UK. It was concluded that providing substantial numbers
globe, utilising talent from the there is merit from a North-East of well-paid jobs and modern
home country with local skills. regional perspective in and innovative manufacturing
Restrictions on access to skilled pressing the case for FTZs, both facilities that could compete
people may deter future geographical and virtual as a with anywhere on earth.
foreign investment and lead to credible response and perhaps
growing skills shortages, as a practical necessity in the Following the launch of the
undermining the event of a "hard" Brexit. Masterplan in October 2017,
competitiveness of UK-based NEPIC will work with member
industry. South Tees Development companies to ensure they are
Corporation informed about the prospects
NEPIC has a deep and The South Tees Development and work together to influence
growing relationship with the Corporation is an exciting new the consultation to help make
CIA. We play a significant role enterprise that is crucial to the most of these opportunities
in provide local evidence to promoting the economic and shape the future for the
the national association. We development on the South region.
are fully aligned to the CIAs Tees site in Redcar and
priorities and will continue to represents an international
work closely with them. opportunity to grow the
regions economy.
Free Ports
In June, Womble Bond It is the first Mayoral
Dickinson hosted a round table Development Corporation
meeting of political and outside of Greater London with

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WERE
GROWING

422
members &
programme
participants

162
industry
56
events &
workshops
welcoming
mentors over
2,100 guests

15 team
members

3,500
Unique

4 funded projects
supporting growth &
sustainability
monthly web
visitors

6,500
industry contacts
2,210 followers

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GROWTH
PROGRAMMES

NEPIC is currently undertaking are from County Durham, a


four projects that secured key sub-region for
funding during 2016/17, development, and totaling
incorporating innovation, 32% of all sign-ups against an
business growth, supply chain initial target of 20%.
connectivity, integration and
low carbon developments. An Two of three planned series of
overview of each, along with a Sales and Marketing workshops
summary of the most recent have been successfully
activity, is provided here. delivered and incorporated
key growth themes addressing
SME Growth Programme area such as pitching, selling
The three-year, ERDF match into the sector and exporting,
funded SME Growth along with practical assistance
Programme works to assist to help tackle selling at a
small and medium-sized higher level and social media.
businesses across Durham, Tyne The third and final series will be
& Wear and Northumberland delivered in Q2 2018.
by providing business growth Furthermore, SMEs have been
support to those wishing to supported through one-2-one
become established suppliers mentoring, involvement in
within the regions chemical EngineeringCONNECT and
processing industry. other group mentoring sessions.

The programme, which is a During 2018, emphasis will


direct spin-off from BASME, move from project recruitment
utilises the clusters extensive and SME help to SME help and
knowledge and network to conversion to NEPIC
mentor companies into new membership and a project
business and assist with energy specific BDM recruited to make
management for growth. Over sure project targets are met. To
the life-time of the programme, date, project claims have
NEPIC will seek to support 120 been paid up to and including
companies and in turn Q2 2017.
generate 75 new jobs. To date,
85 SMEs have been signed up
to the programme, 27 of which Continues

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AnnualReport2017|TheNorthEastProcessIndustryCluster

innovate TEES VALLEY engineering experts from from another. The approach
The match-funded ERDF chemical and pharmaceutical that underpins SHAREBOX,
innovate TEES VALLEY was manufacturers together with centres upon logical work flow
established to help Teessides SMES with a digital offer that spans from the
small business community exploring the opportunities and identification of new symbiotic
achieve ambition and growth barriers to adoption of synergies to optimised
via service and product technological solutions to connections among
innovation. Through innovate information managements and companies and organisations
TEES VALLEYs network of optimisation of process in established symbiotic
experts, we are working to help efficiencies. An innovation relationships.
businesses take an idea planning workshop took place
forward, overcome growth in November, providing SMEs The project has 6 distinct
barriers and seek success both with the tools and techniques phases:
here and overseas. to evaluate the future market
opportunity and benchmark Identify industry
The programme, launched in their innovation strategy. requirements
June 2016, supports a range of Further events are planned for Methodologies for Industrial
business sectors and combines 2018. Symbiosis and
the knowledge, expertise and Mathematical tools for
resource of partners Teesside Participating firms are already flexible energy use and
University, the Materials reaping the benefits of their material flow integration
Processing Institute, DigitalCity commitment to the SHAREBOX platform
and NEPIC. programme. Intasite, a remote architecture definition and
induction provider, made their software development.
Supporting chemical-using and first sale into the process Industrial Symbiosis
associated supply chain firms, industry following a NEPIC demonstration sites
NEPIC have recruited over 40 introduction to mentor firm, Development of the
companies to the programme. Sirius Minerals. Micropore have Business Model
Whilst engagement with new developed a new product for Networking, dissemination
organisations continues, our the pharmaceutical sector of the results and
focus moves towards delivery. and Industrial Thinking are now standardization
To date, eight companies working with Lloyds Register
have successfully completed GMT Ltd at Wilton to prove the The project is now entering
the programme, whilst support capability of their cloud based phase 4, in which North East
for a further 20 is underway. innovative approach for England, via NEPIC, will be one
management of laboratory of the Industrial Symbiosis
Engineering, HSE and HR generated data. Detailed demonstration sites. This
managers from the process case studies will be released in provides an opportunity for
industry have mentored SMEs early 2018. NEPIC members to be directly
through regular CONNECT involved in the development
events and at Meet the Project SHAREBOX and feedback for the platform.
Members, allowing companies SHAREBOX is a four-year, H2020 It is envisaged that NEPIC
to develop, adapt and hone funded project that focused members will have
their offer for the process upon the major economic demonstration access and
industry sector. Bespoke opportunities that resource feedback options during the
brainstorming sessions have efficiency offers to the first quarter of 2018.
been held to identify new European chemical and
applications and routes to processing industry. Low Carbon Action Plan
market for new products and Commencing August 2015, The Tees Valley Combined
services, along with a review of NEPIC is one of 15 project Authority have appointed
business innovation strategy to partners spanning Europe, KPMG, e4tech and NEPIC to
identify technology gaps and seeking major cost saving support the development of a
collaboration opportunities. potential, along with Tees Valley Low Carbon
opportunities to offer low Industrial Strategy.
In addition to mentoring carbon products and services.
support, the programme has The Tees Valley is a key area
delivered several sector- Industrial Symbiosis is classically for export-orientated energy
focused innovation events and defined as the use by one intensive industrial activity.
workshops. In June 2017, the company or sector of by- Teesport is a strategic UK port
project held an Industry 4.0 products, including energy, in terms of materials and
event which brought IT and water, logistics and materials, tonnage. The region is one of

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AnnualReport2017|TheNorthEastProcessIndustryCluster

the highest per capita emitting employment, investment,


regions in the UK and and business growth
particularly vulnerable to prospects as well as
climate change policies, robustness to change.
including carbon price
mechanisms. Increasing Supporting implementation
demands for lower carbon of the Tees Valley Strategic
production from customers is Economic Plan.
also impacting supply chains,
whilst creating both The key focus for NEPIC to date
commercial challenges and has been engaging with and
opportunities. interviewing senior
management of key local
The strategy will identify the industrial businesses. They have
areas of the low-carbon asked to provide a view of the
economy where the region short, medium and long-term
could have the greatest future for their organisation in
competitive advantage, the Tees Valley, in a low-
allowing it to drive long term carbon context.
growth as well as reduce
emissions. As part of this work, A high-level analysis of this
cost benefit analysis will be work is due to be published
conducted based on a small and in the public domain by
number of deployment the end of Q1 2018.
scenarios. The work will
compare the regional emission
reductions of each scenario
with reductions implied by
national targets, potentially
building a case for regional
targets to allow economic
goals to be met. Based on this
analysis, a commercial
assessment will look to identify
the potential for early stage NEPIC provided an
projects, and to identify opportunity that has since
barriers that need to be
addressed. created a long-lasting
relationship with one
This project will complement of our biggest clients.
central Government initiatives,
particularly its Clean Growth
Plan, and will allow the region INTASITE, innovate TEES VALLEY
to position itself as a programme participant
frontrunner in implementing the
Industrial Strategy.

Key objectives of this work


include:

Promoting the regions


contribution to national
targets and policies as well
as demonstrating the
case/need for innovation.

Developing a set of
scenarios to illustrate how a
decarbonised budget
could be achieved and
analysed in terms of

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AnnualReport2017|TheNorthEastProcessIndustryCluster

FINANCIAL
STATEMENTS
INCOME & EXPENDITURE ACCOUNT
FOR THE YEAR ENDED MARCH 2017
2017 2016

Turnover 902,485 1,068,997
Cost of sales 209,864 309,589
GROSS PROFIT FROM BUSINESS ACTIVITY 692,621 759,408

Other income
Dividend income 53,913 -
NI allowance received 3,000 2,000
Exchange gains - 1,271
Bank interest receivable - 234
GROSS INCOME (A) 749,534 762,913

Expenditure
Admin costs & expenditure 743,359 733,327
Finance costs (bank charges) 1,151 1,062
Depreciation 4,288 4,053
GROSS EXPENDITURE (B) 748,798 738,442
NET PROFIT 736 23,931

BALANCE SHEET
FOR THE YEAR ENDED MARCH 2017

2017 2016

Fixed assets
Tangible assets 9,845 12,107

Current assets
Debtors 357,292 145,298
Cash in the bank & in hand 271,412 511,303
628,704 656,601
Creditors
Amounts falling due within 1 year 376,983 408,198
Net Current Assets 251,721 248,403
Total assets less current liabilities 261,566 260,510

Reserves
Profit & loss account 261,566 260,510
261,566 260,510

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AnnualReport2017|TheNorthEastProcessIndustryCluster

The Company Secretary comments on the audited accounts:

The statements show a surplus of 23,931, which is unchanged from the


management accounts for the period. The only revision concerns the
inclusion of a tax provision of 4,892, meaning that 19,039 to be transferred
to reserves. Total reserves as at 31 March 2017 amount to 260,256.

Turnover for the 2016/17 financial year was 1,068,997. This amount was down
by 34 per cent from the previous year due to public projects coming to an
end. In the short term, financial risks arising from the loss of some project
income were mitigated by project staff leaving as their projects came to
end. In the medium to longer term, in the light of an ending to European-
funded projects, there is an acute need to adapt to a new business and
financial model to maintain current operational levels. This is recognised by
management and the Leadership Team. It will be achieved through a
combination of greater budgetary cost control and reduction, increasing
membership income through higher numbers of members and deriving more
revenue through events and some consultancy work. Further work on this is
ongoing and will be developed in the first quarter of 2018.

The audit of the Financial Statements is complete and the auditors have
issued an unqualified opinion.

The full report of the Directors & Financial Statements for the Year Ended 31
March 2017 for the North East of England Process Industry Cluster Limited is
available within the official Annual General Meeting notification.

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AnnualReport2017|TheNorthEastProcessIndustryCluster

BOARD OF
DIRECTORS

IAN SWALES, CHAIRMAN


Partner at AIJ Partners & former Member of Parliament for Redcar

MARK KENRICK, VICE CHAIRMAN


Chief Executive Officer at px Group

RICHARD SMITH, VICE CHAIRMAN


Managing Director at Surfachem Ltd (2M Group)

IAIN WRIGHT, DIRECTOR


Chief Executive at NEPIC

STEVE BAGSHAW, DIRECTOR


Chief Executive at Fujifilm Diosynth Biotechnologies

MARTIN INSKIP, DIRECTOR


Consultant & former Site Director at MSD

STAN HIGGINS, DIRECTOR


Consultant & former Chief Executive at NEPIC

MARTIN PORTON, COMPANY SECRETARY


Financial Director at RTC North

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AnnualReport2017|TheNorthEastProcessIndustryCluster

THE
NEPIC TEAM

PHILIP ALDRIDGE LYNNE AUNGIERS KATH BIRKIN


Project Manager, Office Manager & Project
Pharmaceuticals & Biotechnology PA to the Chief Executive Administrator
philip.aldridge@nepic.co.uk lynne.aungiers@nepic.co.uk kath.birkin@nepic.co.uk

JOHN BRADY LOUISE GWYNNE-JONES DAWN HUNTROD


Director of PR & Communications Business Development
Projects, Industry Manager Manager SME Growth
john.brady@nepic.co.uk louise.gwynne-jones@nepic.co.uk dawn.huntrod@nepic.co.uk

EBBA MCGUIGAN FELIX OHARE VICTORIA PEPPER


Membership & Director of Projects, Senior
Engagement Manager SMEs & Supply Chain Graphic Designer
ebba.mcguigan@nepic.co.uk felix.ohare@nepic.co.uk victoria.pepper@nepic.co.uk

DAVE ROBSON LIZ ROONEY JOANNE ROUT


Project Manager, SME Growth Project Project Manager,
& Innovate Tees Valley Associate Industry & Academia
dave.robson@nepic.co.uk liz.rooney@nepic.co.uk jooanne.rout@nepic.co.uk

JUSTIN WILKINSON IAIN WRIGHT


Marketing Chief
Systems Executive Executive
justin.wilkinson@nepic.co.uk iain.wright@nepic.co.uk

37
NORTH EAST OF ENGLAND PROCESS
INDUSTRY CLUSTER LTD.
The Wilton Centre, Wilton, Redcar
TS10 4RF United Kingdom

+44(0)1642 442560 www.nepic.co.uk

Copyright North East of England Process


Industry Cluster (NEPIC) 2017

38