The Cogent Plus Sectors

1. Oil and Gas Extraction

The main activities of the industry are:

Operating companies licensed by Government to explore for and produce oil and gas in UK waters.
Drilling contractors sub-contracted by the operating companies to undertake drilling operations and to supply personnel and equipment for these operations
Contract Services undertaking a wide variety of specialized roles required to prepare for and maintain operations in areas such as well services.

Facts and Figures:

• Accounts for 85% of UK’s energy production
• Provides employment for 170,700 employees
• Has invested over £150 bn over last 25 years
• Has paid £150 bn in taxes since 1979
• Adds £4 bn a year to balance of payments
• Accounts for 1/5 of UK annual investments

Key Skills Issues:

• Skills shortages: needs 35,000 new engineering entrants each year, currently attracting 50% + potential shortfall of 500 technicians over next 5 years
• Ageing workforce: 65% of workforce are aged between 40-65
• Resource drift as more contractors expand into international markets and diversify in UK Market
• Cyclical nature of industry resulting in low investment in training and development and loss of experienced workers
• Fragmented approach to workforce development
• Need for tailored business  solutions to meet needs of
Industry
• Assuring contractor competence

Geographical Concentrations and Regional Activity:

NE:   6%                          NW: 5%   Northern Ireland: 1% 
WM:  7%                          EM:  7%
EAnglia: 5%                     Y&h: 8%                       
SW: 2%                           Scotland: 31% 
SE + London: 26%           Wales: 2%

The four main regions include North East Scotland, Liverpool, East Anglia, Humberside.
 

2. Chemicals Manufacturing

The main activities of the industry are:

Commodity chemicals: the basic chemicals which are manufactured from raw materials such as oil and gas, to provide source materials for the wider industry. Products include industrial chemicals such as acids, solvents and polymers. Commodity chemicals tend to be produced in large volumes, and are supplied to a broad customer base.
Speciality Chemicals: consist of higher value-added chemicals, often manufactured for a specific customer base rather than as a generic product. Consequently, volumes tend to be lower, but with higher unit value. Typical Speciality Chemicals include adhesives, catalysts and fine organic chemicals used in pharmaceutical products.
Consumer Products: include cosmetics, paints and detergents, and are mostly defined by brand.

Facts and Figures:

• 3230 companies –
• 170,000 employees
• contributes 2% GDP and 7% of manufacturing GVA
• invested 2.8bn in capital and 2.5 bn in R & D
• UK’s top manufacturing export earner with a trading surplus of £4.6 bn on sales of £34 bn

Key Skills Issues

• Companies focusing on high value added products
• UK productivity low compared with overseas
• Ageing workforce and seen as unattractive to new entrants
• Filling its skills gaps and upskilling to worldclass
• Declining no of students in chemistry, chemical engineering giving concern over supply of future skilled workers
• UK Chemical companies train on average 5 days per year compared with 12 days in world class

Geographical Concentrations and Regional Activity

NE + Y & H:  18%                     Scotland: 6%
NW:  21%                                  Wales: 5%
Midlands: 14%                         
SE, E + London: 32%
SW:5%

Main regions include Scotland, Wales, North East and North West, London and South East, Merseyside, Humberside, East Anglia, Midlands.
 

3. Petroleum

The refining of crude oil to produce a range of products for other industries, such as Naphtha for use in medicines, plastics, paints, cosmetics and clothing, Petrol for use in cars Kerosene for aviation fuel, Lubricating Oils for waxes and polishes, Fuel oil for domestic heating systems, Bitumen for road surfacing and roofing materials.

The four main industry areas are:

• Stabilising, Refining and Manufacturing
• Storage, Blending and Distribution
• Heating Services
• Forecourt Retail.

Facts and Figures

• Uk has 11 major stabilising/refining plants in the UK and a refining capacity of 88.5m tonnes of crude oil
• There are 40 storage terminals across the UK
• Annual sales are £40bn with £26 bn VAT generated
• Industry exports to the value of £750m
• Has approximately 6,000 companies and 150,000 employees

Key Skills Issues:

• Ageing workforce and high turnover rates
• Environmental concerns and new legislation are impacting on working practices and products
• Inability to attract the right calibre of young people
• 22% of employers report gaps in specific job-related technical and practical skills
• Skills shortages: technical skills, ADR for drivers, communication skills
• Less customer loyalty with price driven customer decisions and low barriers to entry except for refining

Regional Activity and Geographical Concentrations:

NE:   6%                    E Anglia: 14% 
NW: 11%                   Y & H: 10%
EM:   8%                    Scotland: 8%
WM:  4%                    Wales: 9%
SE + London: 17%    Northern Ireland:7%
SW: 7%

The six main regions include North East and North West, South Wales, Forth Valley, Thames Estuary and South Coast.
 
4. Polymers

The sector covers the conversion of raw polymer (plastics and rubber) materials into products and/or components from polymer/product design, innovation and application to processing/finishing.  The industry is more than just the processing of polymers.  It is clearly integrated into the raw materials/technology base and end/users applications.  The sector covers a distinct group of processes which supply products and components to underpin a broad range of key end use markets, many of which are placing greater demands on the sector for increased innovation and design.

Facts and Figures:

• 7,730 industry companies in the UK in 2002.
• Industry turnover of £19.6bn in 2001.
• Majority of companies employ less than 10 people.
• 233,000 employees in 2001.
• Key plastics industry markets are packaging, construction and electrical/electronic.

Key skills Issues:

• Difficulty in recruiting the right calibre of staff. Both lack of experience and lack of qualifications/skills of applicants are factors, as is the general lack of applicants to the industry.
• There are key gaps in training provision available to the industry, especially geographical. Certain areas of training are only available at a few establishments nationwide.
• There are a relatively small number of 16-19 year olds working in the industry, which may in part be caused by the general very low involvement with schools.
• There is a general lack of knowledge of learning and skills related initiatives within the industry.

Geographical Concentrations and Regional Activity:

NE     3.9%   Lon 6.0%
NW   12.8%   SE  13.5%
Y/H   8.8%   SW  9.0%
EM   10.1%   Wal  5.5%
WM  12.2%   Sco  4.5%
East 10.7%   NI  3.1%

5. Nuclear and Radiological Engineering

The nuclear engineering sector consists of those organisations engaged with:
• The nuclear fuel cycle;
• Power generation from nuclear heat;
• Nuclear propulsion and the nuclear deterrent in support of UK Defence Policy;
• Decommissioning and environmental clean up arising from these activities;
• The supply chain for these activities;
• Safety and environmental regulation of these activities; and
• Education and training of specialist skills and technologies.

Close links also exist with those engaged in conventional electricity generation, those that apply radiological technology as a secondary purpose (secondary users: eg non destructive examination, pharmaceuticals) and those that apply radiological technology in the health sector.  A distinction can be made between the medical diagnosticians and therapists, and the medical physicists and clinical scientists that support them, many synergies existing between the latter group of scientists and the engineers and physical scientists in nuclear engineering sector.

Facts and Figures:

• Over 20% of the UK’s electricity is generated from nuclear.
• Nuclear submarines and deterrence remain a key part of UK defence policy.
• The employer’s annual turnover is around £6B, including exports.
• A £50B / 50+ year programme is forecast for clean up of the UK’s nuclear sites.
• The sector has approx. 90,000 employees in over 200 companies/organisations.

Key skills Issues:

• Spread of occupations skewed towards professional / higher technical skills.
• Image:  sector focus changing from operation to clean up.
• 28,000 recruits required over next 15 years, including 15,000 graduates.
• Increasingly difficult to recruit right calibre of person, reflecting declining popularity of engineering and physical sciences.
• Delivery of higher education and modern apprenticeships is fragile.
• Shortages exist of people with specialist skills such as safety case production, health physics and criticality expertise.
• Contractor competence & transferability of skills is a key issue.

Geographical Concentrations and Regional Activity
NE, Y&H:   4%  SE & Lon: 19%  Scotland: 14%
NW:  34%  SW:  15%  Wales:   4%
EM & WM:   4%  E of Eng:   6%  

The principal activity is in four regions: Scotland (Dounreay & Faslane), North West England (Windscale/Sellafied), South West England (Winfrith, Devonport & Severn Estuary) and South East England (Harwell & Aldermaston).  Power stations are also sited in Wales, the NE and East of England, and engineering support is provided from the NW, NE and SE regions.