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£24.5m to secure £350m inward investment

Published: 23/02/2024

Sumitomo Electric UK Power Cables Ltd plans to establish major operations in the region, supplying high voltage cables to the growing offshore wind energy sector.

A funding package has been agreed to secure an estimated £350m in inward investment for Scotland, based in the Highlands.

Sumitomo Electric UK Power Cables Ltd (SEUK), a subsidiary of Japanese company Sumitomo Electric Industries Ltd (SEI) is planning to establish major operations in the region, supplying high voltage cables to the growing offshore wind energy sector.

The Scottish Government, Highlands and Islands Enterprise (HIE) and Scottish Enterprise (SE) have approved up to £24.5m in public sector support to secure the project. This comprises £19.37m in Scottish Government funding, £4.6m from HIE and £0.53m from SE.

The project includes plant and equipment investment, construction of a new purpose-built factory, and long-term land leasing and associated costs.

It will stimulate significant economic activity across industry supply chains at regional, Scotland and UK levels. This includes creating around 330 jobs in Scotland over the next ten years, 265 of which will be in the Highlands and Islands including 156 well paid manufacturing jobs on site.

Market demand for high voltage cables has increased in the wake of ScotWind and other developments in the UK sector of the North Sea as well as off the EU coast and Baltic. This new factory will help reduce lead times for the supply of sub-sea cables and strengthen energy security.

On 17 January, The Highland Council approved a planning application from SEUK for a 57,500 sq m factory on a 15-hectare site close to the Port of Nigg yard in Easter Ross. Offices, a warehouse and external laydown areas are included in the proposals.

The recently designated Inverness and Cromarty Firth Green Freeport was a key factor in the company’s decision to invest in the Highlands.

Speaking ahead of a speech to business leaders today (Friday) in Edinburgh, Wellbeing Economy, Net Zero and Energy Secretary Màiri McAllan, said:

“This major investment in the Highlands will support the delivery of the First Minister’s flagship commitment of up to £500 million over five years to anchor our offshore wind supply chain and create good, green jobs.

“The Nigg project is a significant milestone in bringing the infrastructure and manufacturing facilities critical to the growth of our world-leading offshore wind sector – and an important step towards our vision for Scotland’s net zero economy.

“My predecessor Neil Gray visited Sumitomo last year during a trade visit to Japan, so I am delighted that we have now reached this significant milestone. It comes as a further three major projects progress through the Strategic Investment Model with the potential to boost Scotland’s offshore wind supply chain.

“Supported by our public and private sector partners, the Scottish Government’s wider five-year investment will help to create a highly innovative and competitive economy, providing thousands of highly-skilled jobs.”

Stuart Black, chief executive of HIE said:

“This is one of the biggest ever inward investment projects for the Highlands and Islands and is a fantastic opportunity for the region, and for the country as a whole. We expect to see hundreds of high-quality employment opportunities created during the construction phase and beyond, including opportunities throughout the supply chain.

“The new factory will play an important part in our transition to a net zero economy, enabling more enterprises and communities to capitalise on opportunities around low carbon and adding to the region’s growing reputation as an excellent location for business and inward investment.

“The Inverness and Cromarty Firth Green Freeport has played a significant part in attracting Sumitomo to the region. It’s been a great example of the strength of the local partnership and what this can achieve. I’m delighted we have got to this stage and look forward to continuing to work with Sumitomo and our partners to establish the new factory.”

SE’s international arm, Scottish Development International (SDI), has been working with Sumitomo over a number of years to showcase Scotland’s leadership in renewable energy.

Adrian Gillespie SE chief executive said:

“Sumitomo’s decision to locate in Scotland is good news, both for the Highland region and because it adds another critical capability to Scotland’s supply chain offering in offshore wind.

“Scottish Enterprise’s new approach to working with companies includes our energy transition mission, which aims to accelerate technology innovation, supply chain capability and investment in manufacturing and key infrastructure. Sumitomo is a great example of this in action and, alongside our Team Scotland partners, we’ll continue to work closely with the company as it expands its operations here.”

Yasuyuki Shibata, chairman of Sumitomo Electric U.K. Power Cables Ltd, said:

“Sumitomo Electric Industries is a forerunner in the global offshore power cable manufacturing market.

“Establishment of a Sumitomo cable making facility, producing state of the art cable, in the United Kingdom, specifically Scotland and the Highlands, is testament to the support received from all stakeholders involved in the project.

“We are particularly thankful for the backing received from the UK and Scottish governments, Highlands and Islands Enterprise and Scottish Development International in this venture - Sumitomo’s first cable manufacturing facility located in the western hemisphere.

“We look forward to actively contributing to the local economy, through direct and indirect job creation, and to becoming an integral and active member of the Highland community. Product from our factory will not only be of the highest quality but will form a vital contribution to the supply chain, as Scotland and the UK deliver their net zero energy ambitions.”

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