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COM(79)377
Vol.1979/0136

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COMMISSION
OFVHE
EUROPEAN COMMUNITIES
GeneralSecretariatCOM(79)377final
Brussels,16thJuly1979
FOROFFICIAL USEONLY
REQUESTFORASSENT,PURSUANT TOARTICLE56.2aOF
THEECSCTREATYTOGRANTING ARECONVERSION
LOANTOJ.W.CAMERON&Co.Ltd.,
UNITEDKINGDOM
(Communication fromtheCommission totheCouncil)
COM(79)377final

COMMISSION
OFTHE
EUROPEAN COMMUNITIES
INTERNAL DOCUMENT
COMMUNICATION TOTHECOUNCIL
Subject:Requestforassent,pursuanttoArticle56.2aoftheECSCTreaty
tograntingareconversion loantoJ.W.Cameron&Co.Ltd.,
UnitedKingdom.
I.ESSENTIAL INFORMATION
Applicant
Beneficiary
Project
.Location
111 1"""■ j
4
Investment
Loanrequested
Jobscreated
InterestreductionJ.W.CameronSCo.Ltd.,UK
Same
Expansionofbeerandlagerproduction
anddistribution facilities
Hartlepool,Cleveland,NorthernRegion
b1,858,885 (+2,886,252 EUA)
b900,000 C+1,397,411 EUA)
52
30,000EUAperyearforfiveyears.
II.CONFORMITY WITHARTICLE56OFTHEECSCTREATY
Theinvestment programmeforwhichECSCassistanceissought,willbe
carriedoutatHartlepool,Cleveland-*partoftheNorthernRegionwhich
coversthecountiesofTyneandWear,Cleveland,Northumberland ,Durhamand
Cumbria(excludingtheFurnessarea).TheRegionhasapopulation of3.2m
andaworkforceof1.3m(approximately 5%oftheinsuredworkingpopulation
oftheUK).Ithasahistoryofdependence upontraditional heavyindustries-
coal-mining,shipbuilding ,heavyelectrical andmarineengineering anda
metalmanufacture,allofwhichhavesufferedadramaticdeclineinthepast
25years.Hartlepool'seconomyhasbeenbasedonironandsteelmaking,
heavyengineering andportactivities associated withtheexportofcoaland
cokeandtheimportofironoreandtimber.InFebruary1979,thenumberun–
employedintheRegionwas118,627(including85,384males),apercentage
rateof9%(10.5%males)comparedwiththenationalaverageof5.9%
(7.1%males).Unemployment isparticularly severeatHartlepool,with13.1%
(15.3%males)oftheworkingpopulation unemployed.
■••/•••
Piovif,ir*noiaddress :RuedelaLoi200,B–1040Brussels–Telephone350040-358040Télégraphieadd'ess:«COMEURBrussels»–
Telex:•COMEURBRIJ 2)877.

-2-
Hartlepool'sdeep-seated unemployment problemhasbeenexacerbated by
theclosureinDecember1977oftheironandsteelworksatHartlepool
bytheBritishSteelCorporation,affecting1,900malejobs.Thecoke
ovensatHartlepoolatwhich250menareemployedarealsoscheduledto
closeinthenearfuture,whenthenewcokeovensatthemoderniron
andsteelworksatRedcar,Cleveland,comeonstream.
Thehighlevelofunemployment intheRegioningeneral,andHartlepool
inparticular,underlinetheneedforpromotingandassistingprojects,
suchasthatproposedbytheapplicant,whichwillcreatejobopportunities
forredundantsteelworkersandencouragefurtherdevelopment.
III.THEUNDERTAKING
J.U.CameronSCo.Limitedisalimitedliabilitycompanyincorporated
in1894.
TheregisteredofficeisatGreenbankOffices,LionBrewery,
Hartlepool,Cleveland(alsotheheadadministrative office).
ι
Thecompanywasacquiredin1975byEllermanLinesLimitedwhichnow
own100%oftheOrdinaryShares(b12m)and64%oftheCumulative
Preference Sharesofb0.553mintotal.
ThetradingactivitiesofJ.W.CameronBCo.,Limitedincludethemanufacture,
wholesaling andretailingofbeers,lager>mineralwaters,winesandspirits.
Thecompanyalsofactorsawiderangeofalcoholicbeverages.
Thetotalnumberofemployeesis2,354whichincludes1,135part-time
workers.
•■■/•■•

THEPROJECT
TheLoanapplication involvesbothanewgaragecomplexanda
newfermentation andmaturationblock.Bothprojectsaresituated
inHartlepool.Construction workcommencedinearly-1978.Thenew
plantisexpectedtocomeonstreaminAugust1979.Thefermentation/
maturationblockisbeinginstalledwithintheboundariesofthe
existingbrewery.Thegaragecomplexissituatedapproximately 450yards
fromthebrewery.
I.Thenewgaragecomplexconsistsofworkshopsforthemaintenance
ofdeliveryvehiclesandcompanycars,andawalledcompoundfor
thestoringofdeliveryvehicles.Thedimensionsare1)workshops
andgaragearea21,345sq.ft;2)vehiclecompound,35,865sq.ft.
Costofproject:
II.Thefermentation/maturationblockprojectistoincreasebeerand
lagerstoragefacilitiesatthebrewerytomeetthecontinuing
riseindemandforCameron'sproducts.Theschemeistoinstall
8vesselsof960barrelcapacityeachand7vesselsof320barrel
capacityeach.Thisinstallation willincreasethecurrentstorage
facilityby57%from17,220barrelsto27,200barrelswhichwill,as
Cameronestimates,beadequateuntil1983.Bythentheywillagain
reachcapacityaccordingtotheirproductionforecasts.Thetotal
areacoveredbytheprojectis3,822sq.ft.
Costofproject:
Land b20,000
Building b262,935
PlantandEquipment b980,100Land
BuiIdingsb49,000
b546,850
b595,850
b1,263,035
EMPLOYMENT
Thefollowingjobswillbecomeavailableasaresultofthedescribed
projects:

-4-
Type Number Qualifications
Motormechanics 5 Normalmechanicalqualifications
Tradesmen 7 Normalmechanicalqualifications
Deliverymen 10 HeavyGoodsLicenceHolders
Processworkers 30 None
52
Recruitmentwillbecompletedby1982.Detailedtraining,particularly in
thecaseofprocessworkers,wouldbegiventhroughanon-sitetraining
programme.
Thecompanyisincontactwiththeindustrialco-ordinator (Northern)for
theBritishSteelCorporation.Hehasalreadybeenmadeawareofthe
likelylabourrequirements asaresultoftheprojectsdescribed.
VI.ENVIRONMENTAL ASPECTS
φ
Therewillbenosolid,liquidorgaseouspollutanteffluentasaresult
ofthetwoprojects.
Themainmarketinwhichtheoutputofthenewoperationswillhaveto
competeisthatoflager.Itisthecompany'sintentiontomarketanew
lagerlaterin1979whichwillbeofacontinentaloriginandwhich,if
successful,willcontinuethetrendawayfromtraditional beerstowards
lagers.Fromthecompany'sviewpointitisdesirabletoencouragethis
swingtowardslagerasthisisamoreprofitablesector.However,lager
doestieupcapitalinitsrequirementforlongermaturationperiodsand
is,therefore,amajorcontribution tothecurrentrequirementformore
storagecapacity.
Thecompany'sareaoftradingismainlytheNorthEast.Itisnowseeking
deeperpenetration inTyneandWearandSouthYorkshire.Theexpansionwill
increaseproductioncapacityfromaround350,000barrelsto1/2million
barrelsperannum.
J.W.Cameron'sshareofthetotalUKmarketiscurrently0.89%.Itsgrowth
rateinrecentyearshasconsiderably out-performed thebrewingindustry
asawholeintheUKand,whilethistrendisexpectedtocontinueat
around5%peryear,theeffectonitsshareofthetotalmarketwillnotbe
significant.VII.MARKET

-5-
VIII.FINANCING
a)Costofprojects: inbm
CapitalCost 1.9m
WorkingCapital 1.0m
TradeLoans 2.5m
5.4m
b)Sourcesoffinance:
ECSCLoan 0.9m
ExternalFinance 1.6m
InternalFinance 2.9m
5.4m
Plantandequipmentisbeingfinancedbyaleasingarrangement .The
Commissionproposestofinancethenon-leasedelementupto50percentofthe
overallcapitalcosts,i.e.includingtheleasedelementinthetotalfor
thispurpose.IntheCameroncasefixedcapitalcostsareb1.9m,
50percentofwhichareb0/95m;butsinceb1.0mareleasedaloan
ofonlyb0.9mwouldbepermissible.
IX.CONCLUSION
TheCommissionconsidersthattherequestcomplieswithArticle56(2a)of
theECSCTreatyandthattheproposedinvestmentiseconomically sound.
Inconsequence theCommissionhasapprovedaloantoJ.W.Cameron&Co.Ltd.
foritsprojectsatHartlepool,Clevelandforamaximumamountofb900,000
(+1,397,411 EUA)oritsequivalent amount.Interestistobereducedby
30,000EUAperyearforthefirstfiveyearsafterthepaymentorpayments
oftheloan.
TheCommissioninvitestheCounciltogiveitsassenttotheforegoing
decision.