Insider Media Limited

Engineering giant Alstom UK is planning to plough its investment from the government's Regional Growth Fund (RGF) into a £44m Centre of Engineering Competence, located in Stafford. Speaking to Insider, Stephen Burgin, country president of Alstom UK, said the Alstom Grid venture would create 125 jobs over the next three years. The news came as Alstom revealed its global annual results for the year to 31 March 2011, in which the company registered sales of more than £18.4bn.

Burgin said he was "absolutely delighted" to have received £4m of funding through the £1.4bn RGF pot earlier this year. He said the centre would concentrate on research and development, and specialise in the development of advanced High Voltage Direct Current (HVDC) solutions.

It would also allow the connection of large scale renewable power generation projects, such as offshore wind farms, to electricity grids.

He said: "We are a very unique company because of the extent and diversity of the products we deliver – we specialise in onshore windfarms, turbines, and are looking to expand into offshore windfarms – we're currently looking at a number of sites across the UK to set up this venture."

Burgin said the company, which comprises power, transport and grid divisions, was currently in a "hiatus" period as it waits for the government to finalise its current packages of reform for the supply of electricity.

"The government needs to come up with market contracts to meet demand and its own climate change objectives," he said.

"We're taking the opportunity to finish off some ongoing projects, tightening the organisation and looking closely at any developments in the market. That way. we're fully prepared when the government announces its proposed contracts and changes to the current system."

The company posted sales of €20.9bn and an income from operations of €1.57bn. This corresponds to an operating margin of 7.5 per cent.

Patrick Kron, Alstom’s chairman and chief executive officer, said the second half of the year was characterised by "a strong commercial rebound with a fourth quarter higher than the third one".

He added: "This positive commercial evolution triggered a significant improvement of the cash generation in the second half of the year. The recovery in orders intake has been driven by numerous successes in emerging markets where demand is expected to continue to grow, while activity in the developed economies remains sluggish.

"During the year, Alstom continued to build up its industrial footprint in the BRIC countries and signed several strategic partnerships in these key markets, whilst capacity adjustment plans were launched in Europe and North America. Research and development expenses have been maintained at a high level to keep the lead in technology. Encouraged by the commercial recovery of the second half 2010/11, the group confirms that the operating margin of fiscal year 2011/12 should stay within the 7 per cent to 8 per cent bracket."

Burgin described the results as "very satisfactory". He added that the company's strategy to focus on innovation and skills helped it achieve "an encouraging performance during a particularly challenging economic period".