CBI wants factory space investment as defence firm opens

The Ajax armoured vehicle is only the first contract the firm hopes to bring to Merthyr

Ministers should invest in building factories to ensure Wales can attract the best companies, a leading business figure has said.

Chris Sutton, from business lobby group CBI Wales, spoke as General Dynamics (GD) opened its Merthyr Tydfil plant.

It will employ 250 people, assembling and testing the new fleet of Ajax armoured vehicles for the Army.

The Welsh government said it would continue to pursue opportunities to develop more industrial space.

But CBI Wales vice-chairman Mr Sutton said there were concerns over the shortage of factories available.

Aston Martin and Pinewood are among the companies which have taken over large sites.

At the end of December 2015, there was 11.39 million sq ft of floor space available across Wales.

This is a decrease of 9.7% over 12 months and a reduction of 43.5%, over three years according to global property firm JLL Research.

Mr Sutton, also the Welsh director of JLL, said companies looked for factories that are already built when deciding where to move so both the public and private sector should be involved in building them.

The Welsh government previously invested in developing business centres, called techniums, many of which closed as they failed to attract companies or create the jobs expected.

Mr Sutton was involved in the sale of the Merthyr site, a former forklift truck factory, to GD.

He said the building already had the right attributes, including a paint shop "which you can literally drive a tank into".

Mr Sutton said "grade A occupiers need grade A buildings" and unless the right facilities were available, there was a danger they would not be attracted to Wales.

"We need to look at a property strategy, to look forward to provide the right buildings and the right locations," he added.

"Sometimes the private sector will do this and sometimes in our more disadvantaged communities maybe the public sector has to do that.

"There's a real opportunity to generate more inward investment, not just industrial sector but also in the offices and services sector. But it needs the right buildings or indeed ready, developable sites."

A Welsh government spokesman said: "We are proud of the fact that factory space in Wales is fast filling up with high quality investments and good, skilled jobs.

"This underlines the incredible economic success of the last five years. We have worked hard to attract companies of the appropriate size to fill vacant industrial sites."

GD's expansion followed a £3.5bn contract from the UK government for a new fleet of 589 armoured vehicles.

It received a loan from the Welsh government to support the purchase of the facility, which will be named after the Welsh war hero, Sir Tasker Watkins VC, who was born nearby. His family will attend the opening ceremony.

The £390m defence contract for armoured fighting vehicles was announced by the prime minister last July.

Defence Minister Philip Dunne said: "It is another reminder of the importance of defence investment right across the UK: the Ajax programme alone is sustaining 2,800 jobs across the country, 550 of which are here in Wales."