the development of the offshore wind farm industry in Hull could lead to a spectacular revival of the city’s economy in the same way that oil turned Aberdeen into the energy capital of Europe, according to a Yorkshire businessman whose company is investing millions of pounds to capitalise on new opportunities presented by the sector.
Rory Clarke, a board director at JR Rix & Sons, the £350m-turnover petrol-to-shipping group, said the Government’s plans to create huge offshore sites in UK waters at Hornsea, Dogger Bank and Norfolk are “potentially transformational” for Hull.
The group is already working on a £3.5m development to capitalise on the increased demand for space around the city’s docks if Siemens, the engineering giant, goes ahead as expected with plans to build a manufacturing plant at Alexandra Dock.
Rix is building three 100,000 sq ft warehouses on a 23-acre site nearby. It bought the land from the receivers of a failed manufacturing business last year.
The group sealed the deal before January’s Siemens announcement in the belief “there was a strong likelihood there would be considerable amount of investment in Hull with the opportunity of at least servicing wind farms”, said Mr Clarke.
The Siemens plant will force the relocation of several businesses, including Rix’s shipping terminal, and Mr Clarke said his group’s development could help keep them in the city.
“There will be a higher demand for space either on dock or off dock,” Mr Clarke added. The group is using the first of the new warehouses for its own operations.
JR Rix & Sons is a fifth generation, family-owned business, founded by sea captain and Merchant Adventurer Robert Rix in the early 19th century.
Group operations now cover fuel distribution, petrol retailing, car sales, shipping, shipbuilding, stevedoring, transport and warehousing.
Its largest division is Rix Petroleum, led by Mr Clarke, which buys, transports and distributes fuel to the domestic home heating, agricultural, haulage, commercial and retail markets.
Rix also owns and operates the last shipbuilder in the Humber, Hepworths, which makes, converts and repairs small to medium-sized steel vessels.
The shipyard suffered during the downturn from the lack of finance for shipbuilding, which prompted its parent to commission a speculative ship at a cost of £4m.
The work saved 22 skilled jobs and kept the Humber’s last shipyard going, said Mr Clarke. He added: “Now there’s going to be huge demand for work boats to carry out maintenance for wind farms.”
To illustrate the point, it is thought that each of the 7,000 wind turbines planned for the North Sea will need two maintenance visits a month, creating a massive new market for shipbuilders like Hepworths.
Mr Clarke is proud of the group’s record during the recession. Through long-term prudent management, Rix has accumulated reserves which have helped it take advantage of opportunities when rivals might be constricted by lack of bank finance.
Mr Clarke said the group has spent £10m over the last 18-24 months on new opportunities.
For example, in late 2008, Rix bought the former premises of Cosalt Holiday Homes and invested £3.5m to reinstate the operation, with some backing from Hull council.
Victory Leisure Homes, a wholly owned subsidiary, is now sustaining 100 jobs, directly and indirectly, said Mr Clarke.
He added: “There is absolutely no doubt we created a significant number of jobs and saved quite a few others by the company’s willingness to take advantage of those opportunities.”
He is predicting a tough year ahead though as local and central Government spending cuts combine with a lack of bank finance. “2009 was tough,” he said. “This year is going to be almost as tough.”
However, Siemens’ announcement has had a positive ripple effect across the east of the region. It is thought that the deal, agreed with Associated British Ports, could create up to 10,000 jobs in an area blighted by high unemployment.
“The opportunities that the wind farms present for Hull are potentially transformational for the city in almost the same way that Aberdeen was transformed by the oil industry,” said Mr Clarke.
He added: “It’s a fantastic opportunity for us, both for our existing businesses and the new opportunities that will come along.”