Port assets go forth
- 3 June 2011
- From the section Scotland
Forth Ports: no more.
The last of the British dock companies has gone the way of ProStrakan, leading light of Scotland's life science sector, and of Venture Production and Dana Petroleum.
Headquarters operations have been lost from Scotland, not through their failure, inefficiency or other shortcomings, but because of their success.
These were companies that looked attractive to others, either for the assets and expertise they built up or because they were under-priced.
Shares in Forth Ports ceased trading this morning, having gone through the legal process of buy-out by Arcus European Investment Fund for nearly £750m.
That means, of course, we'll be able to find out far less about its operations, which matters quite a bit when you consider this is a vital strategic asset for the economy.
Somewhere inside a faceless, unaccountable investment house, the decisions will be made about the controversial plans for a very large biomass plant, for infrastructure to support offshore renewable power, for the future development of Edinburgh's shorefront, for the capital's capacity for handling cruise liners, which is very constrained at present, and even for a large expanse of seabed around Leith Docks which is not owned by the Crown Estate but by Forth Ports new owners.
And that's just the Edinburgh assets. There are similar stories for Grangemouth, the Fife ports and Dundee, with the big prize for Arcus being the giant Tilbury Docks, which serve as gateway to east London.
This doesn't seem to be about asset stripping. Some buy-outs provide the capital to grow a company in a way it could not have done on its own.
You could argue that's the story to be told by Venture Production, under the ownership of Centrica.
But while Forth Ports' operational headquarters is to remain on the dockside in Leith, the corporate headquarters clout is being lost to London.
That means fewer spin-off contracts for business services, such as lawyers and accountants, as we've seen in spades with the departure of the HBOS headquarters from Edinburgh.
That HBOS takeover by Lloyds TSB - so controversial in so many ways - was the last time a headquarters loss created any kind of stushie in Scotland. And given the state of its lending book, it was perhaps the wrong horse to back.
But as veteran observer of the Scottish corporate scene Alf Young pointed out on Good Morning Scotland today, there is barely a murmur as corporate headquarters are lost from Scotland, recalling by contrast "the tartan defence" that used to be played, most notably when the Royal Bank was being stalked by the Hong Kong and Shanghai Bank.
A fuss is made in other countries as power over strategically-significant assets is sold or moved abroad, even while home-grown acquiring companies benefit from the open market ability to buy wherever there's value to be had.
The USA, for instance, highlighted not only the strategic economic value of its docks, but the security considerations, when - five years ago - Congress fended off an attempt by a Dubai sovereign investment company to buy up much of America's key port capacity.
With a touch of irony, just as Forth Ports has de-listed in London, Dubai ports, known as DP World, was listed there from this week.
And yes, even in London's financial sector, they've woken up to the possibility that punitive banker-bashing taxes could lose it not just hedge funds but giant corporate headquarters such as HSBC and Standard Chartered.
And in the globalised hub by the banks of the Thames, they've realised that could hurt.