Birmingham & Black Country

Is NEC's private sector future bright?

Image copyright PA
Image caption Ticketing for the Rolling Stones gig at Hyde Park in 2013 was handled by part of the NEC Group

The NEC group is up for sale as its owner, Birmingham City Council, faces a £1.1bn bill for equal pay settlements.

But what will the group be able to do as a private company that it cannot do under council ownership?

"I think people [in the West Midlands] will see more activity and in years to come they'll ask why we didn't do this sooner."

So says Paul Thandi, chief executive officer of the NEC group, which is now looking at a future as a private company.

As well as the National Exhibition Centre, the group incorporates the International Convention Centre, the LG Arena and the National Indoor Arena.

The council is seeking buyers for the NEC Group, which also includes national ticketing agency the Ticket Factory, hospitality company Amplify and its catering arm, Amadeus.

Mr Thandi believes that being a private company will allow the group to acquire new businesses and expand its operations abroad, taking its expertise in venue management and ticketing into expanding markets such as China.

It is used to handling major events, such as the Rolling Stones concert in Hyde Park in 2013 which was handled by the Ticket Factory.

"We've gone out and looked in China and there are a bunch of businesses out there we'd like to be involved in," he said.

"To grow our business you have to manage risk," he said.

"These opportunities are more in tune with private sector ownership - the investment levels and managed risk are much more commonplace."

Image caption The BBC Good Food Shows and BBC Gardeners’ World Live have been staged at the NEC for more than 20 years

Exhibition and conference centres are prime ways to generate economic growth and the company can export its skills at running them, he said.

The group currently already runs a convention centre in Dublin.

Professor Richard Taffler, professor of finance and accounting at Warwick Business School, said that as a commercial outfit the group would be able to raise capital in ways the council could not.

But he warned: "The problem with selling such a major driver of economic activity is that a private sector business would not be running the NEC group for the benefit of the broader community, but for its own shareholders and to maximise profits.

"The private sector has very different goals to the city council."

That is not a view shared by Mr Thandi: "If we want to grow the bottom line we have to have more economic growth."

Image copyright Reuters
Image caption 21,000 dogs, including 2.500 from abroad, take part in the Crufts dog show, held at the NEC

One of the NEC's major annual events is the Crufts dog show, which has been based at the venue since 1991.

Chairman Gerald King said it had been assured by the council that current uses of the NEC would be "maintained".

"They believe that private ownership will allow the NEC Group to develop further and faster which has to be good news for Crufts," he added.

The BBC Good Food Shows and BBC Gardeners' World Live have been staged at the NEC for 20 years.

Laura Biggs, managing director of the company that promotes the event, said it was looking forward to "the next stage of developments for the venue".

"It's an exciting time for the NEC Group, who will be able realise their full ambitions with new ownership," she added

Mr Thandi is convinced that this is the right time for the group to enter the private sector.

"We're coming out of recession and the timing couldn't be better - and the man in the street will see fantastic world class shows."

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