Agenda item

Presentation by SBC Principal Officer (Business) – Economic Development, on the Business Gateway Service with input from Mr David Sanderson, Deputy Chairman of Hawick Cashmere Co. Ltd.

5.1    The Chairman welcomed Mr Jim Johnstone, SBC Principal Officer (Business) - Economic Development, and Mr David Sanderson, Deputy Chairman of Hawico Scotland (Hawick Cashmere Co) to the meeting.  Mr Johnstone gave a brief presentation on the background to Business Gateway, which had been established in 2001, and transferred to local authorities in 2007, moving in-house to Scottish Borders Council in October 2012.  Business Gateway had strategic links with the Scottish Government Economic Strategy, Ambitious for the Borders 2012, and the Scottish Borders Economic Strategy 2023.  Business Gateway offered a number of services including start up support and advice; growth support and advice; an enquiry fulfilment research service; workshops; access to public sector finance sources; and expert help for all businesses, not just start-ups.  There were currently 5,325 businesses registered in the Borders and 95-98% of these employed 2 people or less.

5.2    Mr David Sanderson then gave details of the history of Hawico Scotland which had started in 1874 as the Hawick Hosiery Company in Trinity Mills, Hawick, and changed its name to the Hawick Cashmere Company in 1991 when it was the subject of a buy-out.  In 1996 the Company employed 150 people, producing 90,000 units, and for a short time had operated from 3 sites.  Now, with the recent name change to Hawico Scotland, the company employed 70 people producing 70,000 units from one site.  Hawico was in private ownership with a £5m factory business size and had always been an exporter chasing hard currency.  In the last 30 years there had been a world-wide rise in the popularity and distribution of cashmere products.  Cashmere raw material all came from China and the Chinese had entered the market in 2004 (with costs 30% cheaper).  With retail price varying between £75 and £750 for a garment, Hawico had gone for the upper end market at £350; this market required garments to be well made, have provenance, style and presentation.  The company had chosen to supply eclectic retail shops but trade was declining so they had started their own retail distribution business, currently with 15 shops across the UK as well as in Switzerland, Germany, Japan and the United States.  In manufacture, there had been a revolution in knitting over the last 24 years, with 2 major technology shifts, making it possible now to produce whole garment knitting (previously 4 pieces had had to be stitched together, then the neck added).  This had allowed the company to maintain the direct cost, but had meant reducing staff.  The company was the technological leader in the UK at present.  In response to some questions, Mr Sanderson advised that the company had identified that, as it was supplying more to the consumer, it needed to get the message across to the consumer about products.  They had met with Business Gateway staff and produced a marketing plan, with Business Gateway providing 30% of photography costs.  The company intended to go interactive on the internet shortly, so superfast broadband would help, as they would be selling to customers around the globe.  In terms of markets, the Middle East was a tough market as it was so hot and customers there tended to buy particular brands, which was the same issue as China.  The company operated in the luxury sector so only wanted a certain part of that market.  They were trading well in Japan, and it was hoped this trend would continue in Asia.  For the last few years, the company had taken on apprentices but these tended to be 20 year olds as they had found that some 16 year olds they had employed previously had failed to turn up for work or were easily led.  There seemed to be a turning point for young people between the ages of 16 and 19 when they realised the commitment required in the world of work.  Hawico had an efficient, productive factory so at the moment there were no plans to increase the size, but the aim was to grow the retail and online business which may require a rethink.  Mr Raine commented on the importance of brand and ‘Made in the Scottish Borders’ label being synonymous with quality.  The Chairman thanked Mr Sanderson for attending the meeting and providing such a detailed insight into Hawico Scotland.      

DECISION

NOTED.