Many investors and business leaders are today operating with varying caution in a pre-Brexit Britain, and in the midst of a general election scrum, yet there’s one industry giant in Lincoln that has no hesitation in moving forward.
Managing Director of Siemens in Lincoln Neil Corner has told Lincolnshire Business that booming markets across the globe in the company’s Industrial Turbomachinery arm have propelled the company into pursuing plans for expansion in its flagship Teal Park site in North Hykeham.
As reported yesterday, Siemens is investing £35 million in purchasing its Teal Park site and moving its storage and servicing facility into a new state-of-the-art building there.
Works, currently based at Freeman Road, will be transferred to the new 7,000 square metre Global Service Operations Centre. Building work is set to begin in May and completed by January.
All the roles at Freeman Road have been secured and around 40 members of staff will be transferred to the new facility. The business also plans in the near future to increase headcount in the expanded facility with a number of new hires within around a year.
The Freeman Road unit will close. No other sites will be affected by the move.
The project has been 18 months in planning and began with the purchase of the company’s Fielden House facility, which was opened in 2013.
Lincoln is Siemens’ largest UK manufacturing site. The city operation exports more than 90% of its products and services around the world, with a strong presence in Middle East, Africa, American and EU markets.
Neil Corner said the new facility would be bigger in capability and more efficient, investment will also go into the newly-designed kitting out inside, such as modern high-rise racking, storage facilities and carousels.
“It’s not just a warehouse. It does contain parts which we ship around the world, but we also operate our gas turbine products services there for emergencies for customers and we do some reconfiguration work of those engines in the shop. We also operate our spare parts and tooling kitting in there.
“The Freeman Road facility does all of this today but we will be expanding that slightly in the new facility.
“We’ve created it with a view of the future.
“We’ve looked at the gas turbines that we’re expecting to sell in the next 10 and 20 years and what that means in terms of the facility that we need to support them.”
Is Brexit good for business?
In the months before the EU referendum in 2016, Siemens was vocal as a company in its campaign for the UK to remain a member of the union. Neil Corner said the business accepts and respects the vote, and added the looming elections and Brexit negotiations had not had an impact on the business’ growth.
“Our service business here has a long-term future in my view and this investment shows we are here to stay.
“We have installed over 1,700 gas turbines and we sell more every year. We are on a growth path and this is the global hub for that service support. Those turbines operate for many years so we expect to be here.
“It’s no secret the statements that the company made before the referendum. However the vote was made and the company absolutely respects it. We carry on with our business under the new conditions that will be created.
“What we’re looking for is good business conditions, good trade and relationships to continue with the EU, and we hope that the negotiations bring that in sooner rather than later.
“The business in Lincoln is global and we are exporting all over the world. A big proportion of that is outside of the EU. From a business perspective we’ve not noticed any impact.
“The depreciation of the pound has a double-edged sword. The goods we buy from outside of the UK are now more expensive to us, but the product that we offer to our customers in sterling is cheaper for them to buy. The net result is a lower cost product.”
“We need clarity over funding”
Neil added that he wanted to see assurances from the new government that EU Research and Development funding would not fade out in Brexit negotiations: “Siemens funds a lot of R&D within its own resources but we are always interested in tuning into any support channels. I think that is a a topic that it’s really important that we get early clarity on so that institutions in the UK can still access EU funding.
“We will have been involved in projects in the past that have received funding through the EU, but in general it would be quite a small proportion.
“We want to keep open trading terms with the EU and we really want to see no change and continue our business with EU countries.”