Norfolk and Suffolk businesses urged to act now to join the supply chain
14:33 29 February 2012
The potential energy boom will bring opportunities for businesses. In the third part of a special series on the region’s energy sector, Annabelle Dickson looks at why developing and promoting small and medium-sized companies will be key to attracting inward investment
Windfarm workers tuck into local steaks
Offshore windfarm construction workers living on board the “flotel” anchored off Wells were tucking into local steaks this week after fresh produce was locally sourced from the town’s butcher, Arthur Howell.
The Sheringham Shoal Offshore Wind Farm will comprise of 88 wind turbines by the end of this summer, with 29 already erected.
The flotel is home to about 100 skilled windfarm personnel and 40 crew.
With 15 different nations represented, the specially adapted ferry has become a sort of floating League of Nations.
This is the first time in a generation that Mr Howell has delivered by sea, from the quay at the end of the street where his butcher, bakery and delicatessen shops are sited.
He said: “The last time my family took meat to the quay for delivery was in the 1970s and 1980s. In those days we used to provide hinds of beef for the old coasters for their crews to cook as they made their deliveries around the coast.”
Besides three butcher’s shops and an abattoir, Mr Howell took on the bakery in Wells last year and this year changed the second Wells butcher’s shop into a thriving delicatessen.
He said: “We were thrilled to be given this work. Our being given this work is a wonderful example of Sheringham Shoal, which represents a very new and global industry, working with local, established family run businesses.
My staff have already adjusted to deliver the extra orders and we are just delighted to think of everyone living offshore eating fresh locally produced food.”
From now on Sheringham Shoal will be sourcing much of the food supplies locally, with fruit and vegetables supplied from Peter Hancock at Barsby Produce.
Sit in a bar in the region for long enough and you will hear complaints that local people are missing out on the energy riches with foreign companies taking jobs and profit.
Yes, foreign companies are operating – and where skills are missing they import workers with experience – but what is often forgotten is there are many ambitious, innovative and successful Norfolk and Suffolk-born companies working not only on our coastline, but also around the world.
But with a potential £50bn of projects – at least – in the pipeline there is more to be done to develop our indigenous supply chain and experts say it is not just preferable, but vital.
A new energy supply chain strategy document for Norfolk and Suffolk has warned: “Lack of existence (or mainly a lack of awareness and expansive capacity) of engineering and manufacturing capability will also hinder industry and may deter businesses from entering the region, choosing other areas with better understood supply chains instead.”
So what can be done?
Jonathan Reynolds, business development director at Orbis Energy and author of the supply chain report, believes businesses can take advantage of opportunities but must act now to be prepared for the big contracts.
“These companies are not going to wait around for us to get our act together. We have got to act now to support the future,” he said.
And that includes development of the supply chain.
“It is challenging to engage small companies to employ lots of people, extend facilities when they haven’t won contracts. They cannot afford to invest in those facilities until they have work in the order book. It is a challenge to educate and raise awareness in advance of potential contracts.”
He said companies should be trying to win existing contracts elsewhere in the UK and Europe to build their capabilities so they can take advantage of potential projects like Sizewell C.
“Energy is a global industry,” he said. “What we are looking at is how we establish that capability in Norfolk and Suffolk.”
Ann Steward, Norfolk County Council cabinet member for economic development, said the difficulty many firms faced was uncertainty, with many of the major operators having not yet made decisions.
But she said many of the companies were active in the oil and gas sector.
“For most of them it will be a nice bonus and when it comes along they will adapt their capacity. This is not an industry waiting for these opportunities to come along,” she said.
But she said the scale of the round three windfarm plans were bigger than anything that had been done before.
“I keep hearing there aren’t enough ships in existence and not enough people, but it is not all needed tomorrow. The industry is gearing itself up for the opportunities.
“It is such a big opportunity. The playing field has been levelled again.”
The East of England Energy Group has won European money to help small and medium sized businesses to take advantage of the potential energy boom.
Eeegr will be rolling out the programme – part funded by the European Regional Development Fund (ERDF) – to promote the region’s businesses and seize opportunities to help improve the supply chain in this part of the world.
Businesses across the low carbon energy industries in the East of England, including gas, renewables and nuclear, will be able to take part in conferences and promotion events, business to business networking and the money will also help them to access market information.
Innovation centre Orbis Energy holds a database of more than 9,000 businesses based in Norfolk and Suffolk. Of these, 1,688 companies have been identified with the existing or potential capability and/or capacity to operate within the energy sectors.
These businesses range from specialist companies with the potential to supply to local industries, to those already offering services to the global energy industry. This number represents 19pc of the two counties’ total number of businesses.
And these numbers do not take into account business categories such as catering companies and hotels which also have the potential to offer services to the industry.
But as well as engineering capabilities, there are also opportunities for companies which may not seem directly involved with installation, operations and maintenance.
Norwich-based solicitors Howes Percival have recently gained new clients in the energy sector and have recruited lawyer Nicola Butterworth, who has previously advised companies operating in the sector, when based in Scotland.
Andrew Barnes, managing partner, said “The region’s energy industry is very special – it really is developing into a global focal point in the sector. Four of us attended all the days of the Offshore Europe Conference in Aberdeen last September and it was terrific to see the strong influence that the East of England has upon the industry worldwide. It is clear that there are many exciting opportunities for those businesses in the supply chain who have a real commitment to the energy sector and to the Region.
“While energy companies have many of the same needs as any other organisation, there are specific requirements and key differences which suppliers need to be aware of and to be able to service with specialist staff. Also, rapidly growing companies tend to generate very different types of needs. Consequently, you have to combine sector knowledge with your own expertise and business development insight to add real value to the industry.”
Currently Scira and Statoil, the companies behind the Sheringham Shoal Offshore Wind Farm have said they are keen on establishing good relationships with local suppliers.
And Wells harbour has also got a new lease of life.
Harbourmaster Robert Smith said: “The harbour commissioners have been supporters of Scira’s offshore plans from the start because we have been aware of their objective for the operations to benefit the local town’s people and businesses. It is great that what was initially promised is now becoming a reality. From our side, Wells harbour is now operating commercially again as well as being a leisure port with many local jobs being created.”
Yes, there are contracts which local companies do not have the capability for, but it can be done and the message is that firms must start thinking now if they are to be in a position to win contracts in the future.
As the eyes of the energy industry turn to Norwich for the Southern North Sea conference tomorrow, the EDP will have an exclusive interview with energy industry figure and former BP chairman Lord Browne.