< Previous East Midlands Business Link www.eastmidlandsbusinesslink.co.uk COMMERCIAL PROPERTY and within a 4.5 hour HGV drive time of around 85% of the UK population. “The success of the first two phases of Mountpark Bardon has demonstrated the high demand for large logistics facilities along the M1 corridor,” said Tom Kilmister, senior development director at Mountpark UK & Ireland. “By making sure detailed planning permission is in place, we can offer customers certainty of delivery to meet tight operational deadlines.” Concurrently, The Drummond Estate, a local family trust, and partners Landchain, are making their way through the planning process for a £200 million logistics hub close to junction 21 of the M1, submitting additional information for the scheme last month. The site is allocated in Blaby District Council’s adopted Local Plan for employment use and is the only single large site capable of meeting the Council’s employment land requirements fully and responding to the pressing need for strategic logistics space. The proposals would create approximately 2,000 new jobs and a breadth of opportunities in the employment training sectors. It would deliver 106,830 sq m of advanced warehouse and distribution space with integral offices, offering the ability to sub-divide plots to provide flexibility to satisfy a wide range of demand. It also includes a specialised Logistics Training Centre, which would assist in plugging the growing skills-gap for high-tech logistics employees across the region. Moreover a major extension to Markham Vale North, granted by Chesterfield Borough Council in December last year, has now been approved by Bolsover Council. A significant milestone for the project, the decision follows three years of extensive discussions with both councils and the local community. HBD, the developer behind Markham Vale, will work with Devonshire Property Group to bring the new scheme forward, with the potential to create up to 800 new jobs. David Wells, director at HBD, said: “It’s great to be able to move forward with this project – it will allow us to meet established demand for superior sustainable and well-located industrial stock, while continuing to attract vital inward investment into the region. We look forward to working alongside Devonshire Property Group to bring the scheme forward.” With the first quarter of the year not even coming to a close yet, there is much to be excited about in the industrial & logistics property market in 2023. 18-21.qxp_Layout 1 07/03/2023 09:20 Page 3www.eastmidlandsbusinesslink.co.uk East Midlands Business Link COMMERCIAL PROPERTY Enderby Hub 18-21.qxp_Layout 1 07/03/2023 09:20 Page 4 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk PETROCHEMICAL SPOTLIGHT © stock.adobe.com/Yellow Boat 22-25.qxp_Layout 1 07/03/2023 09:22 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link PETROCHEMICAL SPOTLIGHT E arly 2023 indicators suggest that ethylene is likely to account for a substantial market share in the petrochemicals industry from now until 2028. The success of ethylene is linked to the continued growth of the construction, packaging and transportation industries – which heavily utilise ethylene as antifreeze, external cladding, and a cheaper glass alternative. The global population is anticipated to increase to 9.7 billion by 2050 and as such, governments are making significant investment in public infrastructure to meet the anticipated housing, commercial and industrial construction requirements of this increasing population. This has similarly had an impact on the polypropylene segment of the petrochemicals industry. Polypropylene is widely used in the automotive and electronic industries. The demand for everyday objects such as tvs, computers, and mobile phones likewise increases with the population. Furthermore, the continued Western trend for working from home since the Covid-19 pandemic means that the number of devices per person has increased. Ironically, the increased investment in electric vehicles over traditional cars also increases the demand for hard plastics. Additional thermal insulation is needed in electric cars, both to prevent cooling of the cars’ interior and to protect the substantially larger batteries from temperature changes. It seems that in the case of certain petrochemicals, the market is not just stable, but thriving, due to continued insatiable demand for the latest technology. Yet, this success is not necessarily reflective of the industry as a whole, or of its long term future. In 2022, oil and gas made up more than 50% of the global energy supply – more than the finite resources can accommodate. In fact, the imbalance between supply and demand grew by 2% during last year. This imbalance will only grow as resources deplete. This has caused an apparent dichotomy between the ever growing profits of petrochemical companies despite diminishing reserves. The primary reason for a lack of immediate practical solution to this is the historic investment in petrochemicals, with core infrastructure being based around them. Not only would switching require significant investment in research and development, as well as potential down time, there is no easy replacement for the diversity and practicality of petrochemical applications. Further research is still required both into scaling up renewable energy sources (such as wind and solar) and complex, durable and affordable solutions to petrochemically- derived plastics. This is perfectly exemplified in the transportation industry, which is particularly dependent on liquid fossil fuels, making up approximately 94% of the sector’s energy demand. Petrochemicals are The future for petrochemicals Global demand for petrochemicals has risen in the face of concerted efforts from European governments to reduce reliance on them. 24 Á The future for petrochemicals 22-25.qxp_Layout 1 07/03/2023 09:22 Page 2 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk PETROCHEMICAL SPOTLIGHT incredibly energy-dense and contain high amounts of energy per unit of volume. There is currently no widespread clean solution that can facilitate the distance and speed required by long haul vehicles. Furthermore, petrochemicals are easy to transport and store, disincentivising companies from investing in other, renewable sources. Given the extraordinary growth of the sector due to (amongst others) the popularity of home delivery services, it is imperative that a solution is found. This is especially important in UK regions such as the Midlands, where transportation and warehousing comprise a large portion of regional revenue due to the centralised location. This paints a seemingly bleak vision of the future for petrochemicals. In the face of depleting resources, one fast and easy way to boost supplies involves increasing production from existing brownfield sites rather than legacy wells. Existing wells contain plenty of oil, whereas legacy wells containing tight formations decline much more quickly, leading to the constant chasing of new wells. It is estimated that reservoirs hold two thirds of original crude oil after primary and secondary recovery efforts are made. Ultimately, the short-term future seems secure for the petrochemicals industry. A current lack of other viable options leaves industry and governments alike reliant on fossil fuels. Energy suppliers are likely to see continued demand from inland European countries, who’s infrastructure heavily relies on piped or 22-25.qxp_Layout 1 07/03/2023 09:22 Page 3www.eastmidlandsbusinesslink.co.uk East Midlands Business Link PETROCHEMICAL SPOTLIGHT shipped petrochemicals from resource rich countries. However, the Russian invasion of Ukraine is likely to alter this. As of February 2023, the UK and EU countries have banned imports of crude and refined oil from Russia. As a key energy distributor across the EU, this has hit countries like France and Germany hard, as their modern infrastructure is largely built around Russian petrochemicals. Several European countries continue to rely on Russian gas, although this is also likely to change. This means that alternative solutions are being sought fast. This spells danger for the wider petrochemicals industry, as there are now multiple political motives for governments to move closer to banning these substances outright. A closer threat is that the Russian sanctions could cause petrochemical prices to plummet. Russian oil is currently trading at $40 USD a barrel, which is a comparatively low price. This means that other oil companies could be forced to lower their prices in order to compete. Whilst this will still result in a profit, it is unlikely to reach the heady heights that oil companies have experienced over the past year. Now is the time to make long term investments in brownfield sites rather than chasing new leads, and establishing relationships with technology companies who continue to rely on petrochemicals to make devices. This will create long term sustainability for the industry, rather than chasing ever greater profits, then heading for a fall. © stock.adobe.com/tomas 22-25.qxp_Layout 1 07/03/2023 09:22 Page 4 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk TAX Why would you want to spend more time with your accountant? James Pinchbeck, partner at Streets Chartered Accountants, shares the benefits of arranging more frequent visits with your accountant. F or many in business the idea of spending more time with their external accountant may sound a bit alien. It certainly is not untypical for most business owners and their accountants to only meet once a year to review the annual accounts and to discuss the tax returns. Invariably, most can then be forgiven for thinking that there is little to be gained from frequent contact. More and more businesses, especially owner managed businesses, entrepreneurial start-ups and scale-ups, have a lot to gain from being in touch and meeting with their accountant more frequently, say at least once a quarter or even more often. Certainly, accountants in practice advocate a closer working relationship with their clients. They too feel that their work is much more than undertaking annual compliance assurance and that they have a key role in providing support and guidance as their clients’ trusted adviser. In contrast to much of an accountant’s work focusing on looking back at historical figures to produce your annual accounts, there is much to be gained from a review of the in year management accounts – a role which your external adviser is certainly well placed to do by bringing their broader experience and commercial insights to bare on the numbers. Also, if you don’t have the resources they may even assist with management accounts production. In focusing on the in year numbers, businesses can look to address any emerging issues and challenges around profitability, cost control, working capital requirements, capital investment decisions and even potential tax issues. In an increasingly digital world, not least in terms of financial reporting, being able to tap in to the knowledge of your adviser can be a real asset ensuring your systems are set up and running correctly. This also provides the unique and informal chance to help support and train in house team members and answer any queries they may have. Like many other firms of accountants, Streets endeavours to ensure clients are informed and updated of legislative changes and other factors affecting their business. Busy working lives often means such information gets overlooked. However, more regular and structured contact helps to ensure clients are kept up to date of changes and issues that may affect them. Finally, when it comes to your financial year-end, as a result of contact throughout the year, this should be a smooth and seamless process. It should also be one with little or no surprises and that provides time for well thought out year-end tax and financial planning - an outcome which will no doubt harbour a better and more worthwhile relationship between client and accountant alike. 26-27.qxp_Layout 1 07/03/2023 09:23 Page 126-27.qxp_Layout 1 07/03/2023 09:23 Page 2 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk FREIGHT, STORAGE AND MOVEMENT A s the UK seeks to become more independent in terms of trade and supply, there is a predictable necessity for greater infrastructure surrounding freight movement and storage within the country. The roads in our regions are already at max capacity in many cases, and badly damaged in others, and the rail systems in place, while functional, are nothing to write home about. Transport Secretary Mark Harper has spoken recently about the need to “take politics out of railways.” The plan, first proposed in 2021, would see the formation of a new body called Great British Railways (GBR) which Mark Harper has assured will be an arm’s length body, and not Network Rail 2.0. GBR would own the infrastructure, receive money in terms of fares, and contract private partners to run trains and provide services. While a lot of GBR’s plans are indeed set for rail by way of passengers, Mark Harper did go onto mention his excitement for expanded freight opportunities, and how sending more goods by rail would greatly reduce the carbon footprint and environmental impact of a similar number of HGVs on the roads. The benefits of improved rail systems are obvious but the costs involved might be more problematic. The UK’s existing infrastructure is limited, both in rail and by road, and the regions in the midlands and the north suffer especially from poor quality roads dotted with potholes and in need of repair. Similarly, existing rail lines are very old and often require repair and maintenance of their own. The Govt has drawn parallels to Japan for how integrated, The future of rail The UK’s railways are old and outdated, and yet ambitious new plans could see a revitalization for the rail industry – if they come to fruition. 30 Á 28-30.qxp_Layout 1 07/03/2023 09:24 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link FREIGHT, STORAGE AND MOVEMENT 28-30.qxp_Layout 1 07/03/2023 09:24 Page 2Next >