UK Steel Enterprise (UKSE), a wholly owned subsidiary of Tata Steel, has been
working since 1975 to improve the economies of areas in England, Scotland and
Wales that have been most affected by changes in the steel industry. In over
35 years, it has invested more than £78 million and supported more than 4,800
businesses that are estimated to have created over 70,000 new jobs. Additionally
it has provided over £8 million in supporting community projects.
“Our objective is to create new job opportunities in the steel areas of the
UK,” says Stuart Green, managing director, UKSE. “We assist in regeneration
of the areas by providing finance and workspace to growth businesses and supporting
the wider community in its endeavours to regenerate itself.”
 The
organisation began with a funding of £50 million from British Steel Corporation
and Europe but is now self-sufficient. Income is generated from a loan and investment
portfolio, as well as rents received from small business tenants using its innovation
and business centres; the money is reinvested in new and growing enterprises
as well as community projects.
UKSE has offices in four regions — Scotland, North England, Yorkshire Humberside
and the Midlands, and Wales — and operates in 14 areas within these regions.
A small tight-knit organisation with just 27 people, UKSE follows a three-pronged
approach when selecting applications for funding: the business must be small
or medium sized and be able to add significantly to job opportunities in steel
areas; it must have a sound business plan; it must be based in or moving into
any of the 14 areas that UKSE works in. The organisation offers different options
for financing businesses — loans (secured, unsecured and EFG — Enterprise Finance
Guarantee) and investment through share capital.
Says Keith Williams, regional manager, UKSE, “In terms of business support,
we look primarily at investing in good quality management teams rather than
a company that has great products but a poor management team, because the former
is more likely to survive and prosper.” Some of the companies in which UKSE
has equity investments are Macalloy (tension rod systems [see box]), Hardmetal
Products (carbide tungsten cutting tips), ACM Bearings (composite bearings)
and Bolton Surgical (medical instruments).
The success stories of the organisations supported by UKSE are many and varied
— a heating and plumbing company in Redcar that is now expanding into the renewable
energy market; Glasgow-based Safehinge which has developed an award-winning,
child-safe door hinge system; EnPlus Solutions, a supplies company in Tees Valley
in North England that provides recyclable and compostable products.
“Our primary aim is to reach out to businesses and individuals who are affected
by the changes in the steel industry, helping them set up new businesses or
grow existing businesses so that new jobs continue to be created,” says Mr Green.
Macalloy
 Macalloy,
a 60-year-old trade name, is currently a global leader in the design,
manufacture and supply of threaded bar systems, with 75 percent of its
turnover coming from exports. Its products and engineering skills have
contributed to some very prestigious projects including the Millennium
Bridge in London and Changi Airport in Singapore.
Peter Hoy, managing director
of Macalloy, says, “Our experience in this field has helped us introduce
new products and offer unique solutions to meet the growing demands of
the construction industry.”
UKSE has been associated with
Macalloy since 2003 when it invested in equity as the company was going
through a management buyout. What made UKSE decide to invest in Macalloy
was basically the management team. “While we look at the company, its
product, its marketplace and its potential to expand, the quality of the
management team is the most important aspect of taking a decision. And
we were impressed with Macalloy’s team,” says Keith Williams, regional
manager, UKSE. Another reason for supporting management buyouts is so
that the area in which the company is based will continue to reap economic
benefits.
In 2006, additional funding
was loaned to Macalloy to help build a new manufacturing facility. “The
one we had was too big for us and we were paying a lot of rent for that
big space. This [current] space fits our needs,” says Mr Hoy.
Today, the company has a turnover
of £12 million and provides employment to 80 people. While there are challenges
ahead in terms of competition from China, rising steel prices and currency
volatility, Mr Hoy is very positive about future business growth. “Macalloy
has probably got to the stage where it does not need any more funding
from us but we are pleased to have helped it on its growth journey,” says
Mr Williams. |
UKSE also provides support to local community initiatives and enterprises
with small loan and grant schemes. A case in point is the Kickstart Fund set
up in 2009 in Rotherham, Black Country, Sheffield (Stocksbridge) and Scunthorpe
to help new and fledgling micro businesses. Over 480 businesses have been
assisted in these areas. These business-focused initiatives are enhanced with
charitable support provided to local community programmes such as young entrepreneur
initiatives, organisations dealing with drug or alcohol abuse, and projects
for youngsters with learning difficulties.
 A
current example of its targeted assistance is the approach taken to mitigate
the impact of 1,200 job losses anticipated in Tata Steel’s plant in Scunthorpe.
UKSE is working with Tata Steel in discussions with local authority councillors
and MPs on how best to help the affected workers and their families, and UKSE
sits on the Government’s Economic Response Task Force. The support that UKSE
has already announced includes setting up a new UKSE Kickstart Fund that will
provide grants and small loans for micro businesses and the provision of low-cost
loans (£25,000) for companies that will create jobs, as well as additional
commitment from their community support fund for local regeneration projects.
Managed workspaces
 The
Sheffield Innovation Centre is a hub of activity. Walking around the four
floors of the modern-designed glass-fronted building within the Sheffield
University campus, you can see young entrepreneurs hard at work. The business
activities range from information and communication technologies, software,
bio-science technology and medical, to design and multimedia, and not-for-profit.
Nearly 30 tenants occupy the 33,000 sq ft space.
Innovation centres such as
this one, a unique offering from UKSE, provide a
state-of-the-art working environment to support the needs of new and developing
businesses.
One of the major constraints
of a new business is investment in premises. The innovation centres provide
space, depending on the requirements, with the advantage of a flexible
contract and options to expand, if necessary. “The spaces are well-designed
and equipped so you can actually start your business from day one,” says
Keith Williams, regional manager, UKSE.
 The
centres offer all the conveniences and infrastructure of a large business
organisation without the headache of managing it — a reception area, meeting
rooms, switchboard, broadband, parking space and canteen are some of the
facilities that entrepreneurs can access.
UKSE has set up four innovation
centres in Hartlepool, Sheffield, Ebbw Vale and Kirkletheam. It also has
one in Cardiff Bay and two in Scotland (in Grovewood and Coatbank). The
business centres provide office and workshop space, and are suitable for
both light manufacturing and technology-based businesses.
The organisation has invested
£32 million in the managed workspace area which has supported over 2,200
businesses since 1979. |
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