Region sees drop in number of foreign investment projects

The figure fell to 35 in the 11 months to November 2010 from a high of 53 in 2009, although it was above the long-term average of 24 projects, according to data from fDi Intelligence.

The projects in 2010 created 1,801 jobs compared to 5,768 the previous year,

Most of the investment came from the US and Germany. The report highlighted German can and plastic container manufacturer Weidenhammer, which invested in a new production line in Bradford as part of a £2.5m investment to enable the factory to produce the Evocan.

Other investments included US-based Duchossois Industries, which invested in York with the opening of a new manufacturing plant for audio-visual specialist AMX.

Meanwhile, Denmark-based Arla Foods invested £6.7m to install a new bottle blow-moulding machine to increase production of Cravendale milk at its dairy in Stourton, Leeds.

Tata Group in India also expanded its manufacturing plant in Scunthorpe with a £1.3m new tower hub to process and distribute 200,000 tonnes of steel plate per year and expanded its workforce in Rotherham and Stocksbridge.

Theresa Lindsay, assistant director of business at Yorkshire Forward, said: “The US and European markets are consistently our biggest markets for Yorkshire and the Humber and that hasn’t changed. They are attracted by the strength of our sectors like advanced manufacturing and making medical devices and pharmaceuticals. The US in particular will remain one of our strongest markets going forward.”

In 2010 the World Bank ranked the UK as the best place in Europe for doing business. UK Trade and Investment said that attracting foreign money was central to the Government’s recovery plans.

A UKTI spokeswoman said: “Last year there were 1,619 inward investment projects in the UK, generating 94,000 jobs. Attracting inward investment is at the heart of the Government’s recovery plans and crucial to the UK economy because it stimulates growth and creates jobs.”

However, Ms Lindsay warned uncertainties over who would take over responsibility for inward investment once the regional development agencies (RDAs) close down next year was leading some overseas companies to consider investing outside the UK.

She said: “There has been a drop in new foreign direct investment enquiries over the last year, although we are still handling a lot of inquiries. Part of that is to do with confidence but also to do with the changes going on in terms of RDAs because the contacts we have got don’t know if they should still be dealing with us and we don’t know who will be dealing with it when we’re not here. We’re in quite a difficult position. That has had an impact.”

She added: “As soon as the question over who is leading that role is resolved the better it will be for businesses.”

Manufacturing accounted for the highest number of projects, with a total of 15, followed by sales, marketing and support with seven projects.

Ms Lindsay said: “Manufacturing has been very good for us over the last few years and we’re seeing increased levels of research and development but its still a very hard market at the moment because the financial incentives don’t exist at the moment, which is a very big obstacle.”

She added: “Our job is to make sure we are working with foreign investors to make sure they stay in the region. We haven’t lost any companies we are working with to another country but there is clearly an issue at the moment.

“Companies in Yorkshire have been under considerable pressure from their parent companies to restructure and look at the viability of their options and in European investment.”

With the exception of 2010, Yorkshire has experienced sustained growth in attracting overseas investment, from just eight projects in 2003.

A total of 154 overseas companies were recorded as investing in Yorkshire between 2003 and November 2010. Nestle in Switzerland topped the table with a total of five investment projects, followed by Siemens and Svenska Handelsbanken.

Looking to the rest of 2011, Ms Lindsay said: “It is going to be a tough year but as long as we can present the strengths of the region, we are in a good position to grow the economy.”

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