Scotland - vying to be the chemicals hub of the future

By Anna Lewcock

- Last updated on GMT

Related tags Chemical industry

A delegation from the Scotland's chemicals industry descended on
the recent Informex trade show in New Orleans, determined to
convince the assembled industry representatives that the country
should be at the top of the list for firms seeking out a
competitive location for their business.

Scotland punches above its weight in the UK chemicals industry, contributing almost 10 per cent (£3.4bn ($6.7bn)) to the UK's output.

Chemicals are also Scotland's biggest export earner, generating around £1.3bn in manufacturing exports from a revenue stream worth £3.5bn.

The country, however, has ambitious plans to boost its profile further and establish itself as a destination of choice for the international chemicals industry.

Alongside a number of Scottish firms who made the trip over to the US for the Informex trade show, were representatives from Chemical Sciences Scotland, an organisation formed of chemical industry leaders, universities, and stakeholder groups supported by Scottish Enterprise and government, to lead an initiative whose main objective is "to ensure that a vibrant and competitive chemicals industry exists in Scotland in 20 years time."

"We want to attract new investment into Scotland because we believe we have the criteria and the opportunity to allow business to flourish," said Caroline Strain, head of the chemical sciences team at Scottish Enterprise.

The region, indeed, makes a strong case for itself.

A barrage of government incentives have been drawn up to lure outside investors, including not only tax incentives for R&D but also structural grants for companies looking to put in capital investment.

Alongside this, Scotland is currently the only country in the EU to offer a research and development grant for non-SMEs (small and medium sized enterprises), encouraging large companies to bring their R&D to the region.

"We have a full regime of grants available," said Strain.

"If a company is coming into Scotland, we work with them on a one-to-one basis to see how we can tailor the grant system to meet the needs of their development."

The chemicals industry in Scotland has been designated a 'priority industry' by Scottish Enterprise, singled out as of critical importance to the Scottish economy.

According to Strain, the pharma and biotech industries play a significant role in the success of the Scottish chemicals sector, with the region already established in basic chemicals and bulk commodities through to speciality chemicals and pharmaceuticals, alongside an active biotech sector.

However, given the current climate in the pharmaceutical industry and the tendency for firms to turn their backs on Europe and look to low-cost destinations in Asia to locate new operations, Scotland will have to fight hard to win the attention of potential investors and compete against cheaper markets.

Strain, however, believes that Scotland has enough going for it to make the region a real contender: "The industry is very aware that if you can't compete, you won't compete - and you're out of business," she commented to in-PharmaTechnologist.com. "

We're doing some benchmarking and base-lining at Scottish companies against other locations, and what we're finding is that in terms of R&D we're very competitive, but also in terms of manufacturing we remain competitive.

"[The Scottish] industry is very focused on safety, on confidentiality, on production - when they say they will produce, they will produce to the right quality, the efficacy, the specification and the timing - so we'd essentially say they're competing particularly on [those aspects]."

As well as this, Strain highlights the " huge " integrated supply chain that operates in the Scottish area, and the fact that there is support and communication with regulators to "make sure that people coming into Scotland can have competitive advantage by making sure they meet and exceed regulatory standards."

In the last 18 months investment in the Scottish chemicals sector has exceeded £150m, with a number of firms recently opting to locate or expand their business in the region.

INEOS, the world's third largest chemicals organisation, for example, has over 20 per cent of its assets based in the Scotland area, with GlaxoSmithKline, NPIL Pharma and a number of other large and small firms strengthening their presence in the region.

With decent transport links to European, US and Asian markets, and a surplus of qualified graduates from its many universities, Scotland may well be able to carve a place for itself in the ever-changing industry if the region can convince potential investors of the advantages it has over other more traditional or low-cost areas.

"We see Scotland as a gateway to the European markets," said Strain, " and we have the infrastructure and the people to support companies that are seeking to come."

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