Farnborough Air Show

Invest Northern Ireland Extolls Virtues of Province’s Burgeoning Aerospace Ecosystem

 - July 18, 2018, 10:00 AM
Reigning as Northern Ireland’s top population center, Belfast thrives after the “peace dividend” resulting from the end of “the Troubles” in the late 1990s. Aerospace has been a top beneficiary.

Peter Harbinson, executive director communications at Invest NI, told AIN that the province of Northern Ireland—part of the UK since 1921—has a population of 1.8 million, which is “one of the youngest and fastest growing in the UK.” The main population center is Belfast. Some 98 percent of companies have fewer than 50 employees, he added, with a strong focus on “private companies and inward investment.”

The latest strategy was signed off and endorsed by ministers before the Northern Ireland Executive “collapsed” last year, so, despite power being devolved back to Westminster (London), Invest NI has been carrying on under its mandate. “And we have our business strategy 2017-2021. We’ve just completed our first year of that,” said Harbinson. One concern has been that NI is “quite reliant on a small number of companies for exports,” so there is a focus on opening export markets for more companies. And within this the Invest NI team is “focused on a number of key sectors” including financial services, digital technology, along with advanced manufacturing, materials, and engineering.”

In Belfast itself, there has been lots of regeneration, which some might call the “Peace Dividend” since “the Troubles” ended following the signing of the Good Friday Agreement on April 10, 1998. At the moment, there is a strong push, with many hotels being built—£1.3 billion (US$1.71 billion) in regeneration projects, with tourism a major focus—Titanic Belfast, near Belfast City Airport, is a big draw, along with the Giant’s Causeway and places where various television shows and films have been set; the most recent of which is Game of Thrones.

“The biggest challenge is getting more companies to export more,” said Harbinson, who said Invest NI teams in Asia and the Middle East, in particular, are looking for opportunities and offering support and advice. Its network of overseas offices includes its U.S. HQ in Boston, a regional HQ in Dubai, and another in Singapore. “We’ve opened 10 new international offices within the last year, a lot co-located with DIT [the UK Department of International Trade],” said Harbinson. The locations now include Johannesburg, Los Angeles, Toronto, Madrid, and Manchester for a total of 22 now, plus “contractors who can help with market entry and to develop opportunities.” An example of a recent success was “our first inward investment from Qatar,” he said.

“The U.S. is one of the major target markets,” said Harbinson, “as is the Republic of Ireland.” He noted that Dublin is “a bit like London—a very expensive location,” which has prompted some companies to opt for Belfast. In terms of Brexit and relations with the EU, Harbinson would only say, “We’re watching what happens on that front.”

Air connectivity is another major focus for the Province, and in 2014 it hosted the Routes Europe conference, which was a major win for NI. “Both of our two main airports [Aldergrove International and Belfast City] spend a lot of time working on increasing their networks and connectivity,” he said, “And the International airport is looking to increase long-haul connections. We have had direct connectivity to the U.S. on and off.” But as Harbinson pointed out, connectivity from Dublin is excellent, and Dublin is very easy to get to from Belfast, being only a 1.5-hour drive on the motorway. But already, airlines such as Norwegian fly out of Belfast, he added, and Belfast is on London Heathrow’s list of hubs it wants to connect to more.

Sector Leader

Jeremy Fitch, executive director of Invest NI’s Business & Sector Development Group, said, “Our remit is to grow the economy, but really the businesses do that. So how do we help businesses become more competitive so that they can win business?”

He said, under him, Michael Polson, client manager for aerospace and advanced materials, and William McGuinness, manager, aerospace, and defense, “have portfolios of clients. They are ‘go-to’ people. For example, Polson is the account manager for Denroy Plastics. They look at opportunities and threats and offer solutions.”

Fitch said, “Aerospace is a really important sector to us, especially Bombardier.” Polson noted that the Bombardier C Series wing plant had been “the largest ever single investment, £520 million (US$686 million) and 800 jobs. The total UK investment in that was £135 million (US$178 million), in partly repayable launch investment and some grants.”

“At the time it was a massive win for us—it could have gone to a number of different places,” said Fitch.

Polson added, “One in four of the world’s aircraft seats is made in Kilkeel, a sleepy fishing village in the Mountains of Mourne [south of Belfast]." B/E Aerospace was bought by Rockwell Collins in October 2016.

Fitch noted, “It’s difficult if Northern Ireland firms get acquired, but four out of five times, companies are happy with what they find, and they increase investment, rather than us losing out because of consolidation.” He also said the UK government sees the Northern Ireland aerospace industry as a key component of UK industry, with more than 90 companies employing some 10,000 skilled workers, and an annual turnover of £1.3-1.4 billion. “Of those, there are only six large businesses: Rockwell Collins, Thales, Magellan Aerospace, Bombardier, and Thomson Aero Seating (owned by AVIC of China). Magellan purchased John Huddleston Engineering, a precision engineering company based in Greyabbey, in 2012 and produces wing ribs for various Airbus types there. Other companies include RLC, a UK aerospace manufacturer with three facilities in Northern Ireland and one in the Isle of Man, which specializes in everything from ejection seat work for Martin Baker to work on Pratt & Whitney GTF engine guide vanes and JSF engine components.

French company Thales bought the Shorts missile business in 2001 and now employs 600 people at its plant in east Belfast, plus 200 at Templecombe in Somerset, UK. The Starstreak missile is one product.

In October 2016, British astronaut Tim Peake opened the new Thales electric Space Propulsion Integration Centre, the first of its kind in the UK. It is also working on Spacebus, a European Space Agency satellite, along with Thales’s plant in Cannes, France, with an R&D grant that Invest NI contributed to.

Polson noted that many of the initiatives bringing investment to Northern Ireland have been supported by ADS. “We helped form ADS [the NI branch of it] back in 2010. Before that, there was no regional trade body for aerospace. We supported it for two years and since then it has been self-sufficient.” He noted that of the 1,000 or so ADS members, Northern Ireland accounts for almost 10 percent, even though it only has 2.7 percent of the UK population.

He said in the province’s aerospace industry strategy laid down in 2014 had two key targets, first, to double revenue from £1 to £2 billion (US$1.32 billion to US$2.64 billion) in 10 years (by 2024); and second, to increase employment from 8,000 to 12,000. “So we’re well ahead of target.”

He added that “ten years ago [the industry in NI] was over 90 percent Bombardier, but now it is under 25 percent,” so the sector has managed to diversify while recognizing Bombardier’s critical role in starting and supporting the process.

Fitch said of Invest NI, “We aim to be a wider resource, not just somewhere to go for a grant—so we can help with R&D, skills, and market access.” He noted the example of Causeway Aero, which has developed a new galley system. Invest NI is helping the company find venture capital support. He also said there is a “gap” in Northern Ireland. “We think a systems integrator could complement the existing industry but not damage [the existing industry]…but it’s a tough challenge,” said Fitch.

Fitch said that NI has to compete for business, for example, RLC was looking at setting up in Singapore, but NI made its case and won the business, “talent and skills” and the supply chain being key factors. “We have a very strong engineering heritage.”

McGuinness said, “Bombardier plays an enormous part, and is by a significant way the biggest company. They operate from six sites around Belfast…and the C Series represents the crown jewels” with the wings, center fuselage, and central wing box being manufactured at its City Airport plant. This represents around one-third of the value of each aircraft, he added. “They have had workshare on all Bombardier aircraft apart from the water bombers.”

Meanwhile, with Boeing and the UK government signing a “prosperity agreement” at Farnborough 2016 to double the U.S. manufacturer’s UK footprint by 2025, NI is also looking for opportunities. Boeing has set up an Office of UK Capability, based in Seattle.

Supply chain competitiveness is “our key focus” in NI, said Fitch, as it takes a lot of persuading Airbus and Boeing to outsource after issues they have experienced in the past in other parts of the world.