Contribution to just transition
- Creating sustainable jobs at all supply chain tiers
- Enabling renewable infrastructure
- Promoting skills and workforce development
- Regional economic regeneration
- Creating drivers for investments at Tier 2 and 3 levels of clean energy supply chain
- Increased energy security
Regional/local heritage
The Cromarty Firth region has a long-standing industrial and maritime legacy, including oil & gas fabrication, shipbuilding, and port logistics. The area is now evolving into a centre for offshore renewable energy, supported by its recent designation as a Green Freeport.
Benefits to the local area/Scotland
Employment
- We are actively promoting local employment through attendance at careers fairs, partnerships with recruitment agencies, and use of our own recruitment platform.
- We maintain strong links with Skills Development Scotland (SDS) and local universities and colleges such as the University of the Highlands and Islands (UHI) to align training.
- Our apprenticeship programme, launched this year, will continue to play a key role in enhancing skills and creating opportunities within the community
Local supply chain development
- To start with we have the factory build wherein the instruction is to consider local suppliers first and then increase our search radius dependant on availability. Of the project build to date, we confirm that 100% has been placed within the UK and Ireland. Of that 100%; 72% is placed with Scottish sub-contractors and suppliers and further, of the 72%, 55% of the spend is with sub-contractors and suppliers based in The Highlands whilst the balance 45% is within Scotland.
- The above modus operandi is also applicable to supply chain and support services that will be employed once the cable factory is in operation.
Becoming a domestic supply chain anchor
Sumitomo Electric UK Power Cables (SEUK-CL) successfully hosted by invitation only supplier workshop days in October 2024, to be repeated in 2025. The idea behind the workshops was, and is, to showcase the requirements for the operation of the manufacturing facility at Nigg.
In hosting the events, SEUK-CL continues to cultivate relationships with Tier 2 and Tier 3 potential suppliers, not only in Scotland but throughout the UK. In identified examples, a specific raw material supplier has indicated that, if a long-term supply agreement with SEUK-CL could be agreed, they are willing to construct a facility ‘in the area’ to support incoming raw material requirements. Note that SEUK-UK would need to have the corresponding long-term commitments from its customers to be able to give such commitments to its suppliers.
Second, an existing tape supplier, located within Scotland, has suggested that whist it currently would not be able to deliver specific products for consumption by SEUK-CK, it could, for a relatively small capex investment and subject to a medium term supply contract with SEUK-CL, modify current facilities to enable the required product/s to be manufactured locally. Note that procurement of such products from local suppliers may require re-qualification of products supplied by SEI to its customers and may therefore only be possible for future contracts and production.
SEUK-CL’s drive will continue along the above lines so as to establish a local supply chain that will support the factory in the medium to long-term.
Lessons learned
- Local supply is key to realisation of grid and offshore wind investments
- Public-private partnership effectiveness; working with Transmission Operators
- Difficult to get Tier 2 and 3 suppliers to invest in Scotland and UK, unless Tier 1 suppliers have customer commitments and can provide off-take guarantees.
- While the manufacturing of power cables itself relies on established technologies, the industry did not exist in the region. Therefore, although there is a manufacturing history globally, power cable production represents a new industrial activity locally. As such, the potential for direct skill transfer from legacy industries, such as oil and gas, is extremely limited.
- While we have not specifically targeted the oil and gas sector for recruitment at this moment, it is possible that some positions will be filled by candidates from that background, given the overlap in certain engineering and precision operation skills. Indeed, some of our confirmed operator hires have previously worked in the sector.
The specialist skillsets required for the production phase of the project are not currently available in the UK, and we are therefore training the initial operators at our own facilities in Japan. These operators will subsequently transfer to the Port of Nigg to deliver training to teams of operators and trainers under a ‘train-the-trainer’ model.
Constraints and challenges
- Securing commercial orders is essential to underpin investment, scale operations effectively, and demonstrate long-term project viability.
- Workforce development
- Public Transportation and living accommodation close to site
Replication and scaling
The more critical question for a very large scale Tier 1 investment is less whether another Tier 1 supplier of the same product could be created in Scotland, and more whether Tier 2 and Tier 3 investments can be attracted building a deeper and resilient UK and Scottish supply chain.
- Tier 1 suppliers depend on Tier 2/3 suppliers for resilience and, in particular in strategic mission critical products (such as HVDC cables), building a full supply chain is therefore more important for long term economic success and for supply and energy security, than a having additional Tier 1 manufacturing plants that all rely on imported materials to operate.
- This being said, the SEI project at Nigg is replicable in principle, especially in other industrial port areas, by parties with a proven technology and know-how, provided that the investor has the required technology track record. However, as there at most 4 or 5 suppliers globally with the required technology and track record, and almost all of these manufacturers have substantial manufacturing capacity in the European region, additional entry beyond perhaps one operator appears unlikely in this specific product category.
- Also because, a replication project would likely need to have a combined product portfolio up to 525kv HVDC to meet UK demand patterns, and grid developers in particular set very high standards for reliability and quality greenfield entry is difficult.
- Last, because of the national security and energy security implications of having reliable grid and generation capacity, there would be significant concerns relying on technology from strategic adversaries of the United Kingdom.
Working conditions and fair work practices
Featured organisations and initiatives were asked to supply the following information regarding working conditions:
- Alignment with Scottish Government Fair Work First criteria
- If they have gone beyond Fair Work First by incorporating broader values on fair work
- For larger organisations, whether a union recognition agreement is in place.
This did not apply to co-operatives structures and membership-based initiatives, though all projects and initiatives were given room to provide any detail on fair work practices deemed relevant.
The following information was provided:
- Payment of Real Living Wage
- Promotion of inclusive hiring practices
- Commitment to health and safety standards exceeding regulatory requirements
- Investment in long-term employment and skills training
- Collaboration with local education providers and employment initiatives
We have signed up to the Inverness and Cromarty Green Freeport Fair Work Charter, demonstrating our commitment to fair employment practices. While we will be operating within the Freeport, our cable manufacturing business differs from typical offshore operations and aligns more closely with general manufacturing sector labour standards.
As Sumitomo Electric Group’s manufacturing facility in Scotland, we are committed to becoming an employer of choice locally and beyond, and we place great value on this ambition. We regard our employees as key stakeholders and have a strong culture of investing in employee development. Our approach to recruitment and workforce development has been outlined previously.
