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1
LGC Privatisation and Development
Dr Derek Craston Managing Director, Science and Technology, LGC Government Chemist
February 2013
2
Agenda
• History • Current • Key Facts on LGC Today • Enablers • Other important factors • Summary
3
LGC history
Origins dating back to 1842 as customs laboratory protecting excise duty payable on tobacco importation into the UK
Company established in 1996 on privatisation from government agency
Science organisation focused in providing quality solutions in areas relating to safety and public good
4
LGC in 1994
Director, Resources Director, Biosciences & Innovation
Director, Analytical Quality
Specialised Techniques
Analytical Quality
Reference Materials
VAM Unit
VAM Business Management
Quality Manager
Forensic & Food Analysis
Questioned Documents
Food Imports & Exports
Drugs
Food Composition & Nutritional Surveys
Fertilisers & Feeding Stuffs
Food Analysis for MoD
Forensic Business Development
Biosciences
Microbiology
Analytical Molecular Biology
Government Chemist referee analysis under
the Food Safety Act 1990
BDG Business Development
IP Innovation Programmes
MT Materials Technology
SRU Research
Marketing
Computing Services
Technical Services
Accounting & Finance
Human Resources
THE GOVERNMENT CHEMIST
Environmental & General Analysis
Environmental & General
Chemical
Consumer & Transportation
Safety
Pesticides
New Projects
Safety & Environment
Project Management (LGC Safety
Officer)
Tobacco Products
5
Remaining in 2013
THE GOVERNMENT CHEMIST
Specialised Techniques
Reference Materials
VAM Unit
VAM Business Management
Quality Manager
Questioned Documents
Food Imports & Exports
Food Composition & Nutritional Surveys
Fertilisers & Feeding Stuffs
Biosciences
Analytical Molecular Biology
Government Chemist referee analysis under
the Food Safety Act 1990
BDG Business Development
IP Innovation Programmes
SRU Research
Marketing
Computing Services
Environmental & General Analysis
Environmental & General
Chemical
Pesticides
Forensic & Food Analysis
Drugs
Technical Services
Forensic Business Development
Accounting & Finance
Human Resources
Consumer & Transportation
Safety
New Projects
Director, Resources Director, Biosciences & Innovation
Director, Analytical Quality
Food Analysis for MoD
Microbiology
MT Materials Technology
Safety & Environment
Project Management (LGC Safety
Officer)
Tobacco Products
Analytical Quality
LGC Today
6
The genesis of today’s business
THE GOVERNMENT CHEMIST
Reference Materials
Specialised Techniques
Forensic Business Development
Director, Resources Director, Biosciences & Innovation
Director, Analytical Quality
Analytical Quality
VAM Unit
VAM Business Management
Quality Manager
Forensic & Food Analysis
Questioned Documents
Food Imports & Exports
Drugs
Food Composition & Nutritional Surveys
Fertilisers & Feeding Stuffs
Food Analysis for MoD
Biosciences
Microbiology
Analytical Molecular Biology
Government Chemist referee analysis under
the Food Safety Act 1990
BDG Business Development
IP Innovation Programmes
MT Materials Technology
SRU Research
Marketing
Computing Services
Technical Services
Accounting & Finance
Human Resources
Environmental & General Analysis
Environmental & General
Chemical
Consumer & Transportation
Safety
Pesticides
New Projects
Safety & Environment
Project Management (LGC Safety
Officer)
Tobacco Products
LGC Standards
7
The genesis of today’s business
Biosciences
THE GOVERNMENT CHEMIST
LGC Genomics
Analytical Molecular Biology
Forensic Business Development
Microbiology Microbiology
Director, Resources Director, Biosciences & Innovation
Director, Analytical Quality
BDG Business Development
IP Innovation Programmes
MT Materials Technology
SRU Research
Marketing
Analytical Quality
Specialised Techniques
Reference Materials
VAM Unit
VAM Business Management
Quality Manager
Forensic & Food Analysis
Food Imports & Exports
Drugs
Questioned Documents
Food Composition & Nutritional Surveys
Fertilisers & Feeding Stuffs
Food Analysis for MoD
Government Chemist referee analysis under
the Food Safety Act 1990
Computing Services
Technical Services
Accounting & Finance
Human Resources
Environmental & General Analysis
Environmental & General
Chemical
Consumer & Transportation
Safety
Pesticides
New Projects
Safety & Environment
Project Management (LGC Safety
Officer)
Tobacco Products
8
The genesis of today’s business
THE GOVERNMENT CHEMIST
LGC Forensics
Forensic & Food Analysis
Drugs
Questioned Documents
Forensic Business Development
Analytical Molecular Biology
Microbiology
Biosciences
Director, Resources
Food Imports & Exports
Government Chemist referee analysis under
the Food Safety Act 1990
Director, Analytical Quality Director, Biosciences & Innovation
BDG Business Development
IP Innovation Programmes
MT Materials Technology
SRU Research
Marketing
Analytical Quality
Specialised Techniques
Reference Materials
VAM Unit
VAM Business Management
Quality Manager
Food Composition & Nutritional Surveys
Fertilisers & Feeding Stuffs
Food Analysis for MoD
Computing Services
Technical Services
Accounting & Finance
Human Resources
Environmental & General Analysis
Environmental & General
Chemical
Consumer & Transportation
Safety
Pesticides
New Projects
Safety & Environment
Project Management (LGC Safety
Officer)
Tobacco Products
9
The genesis of today’s business
THE GOVERNMENT CHEMIST
Food Composition & Nutritional Surveys
Fertilisers & Feeding Stuffs
Forensic & Food Analysis
Food Imports & Exports
Pesticides
Consumer & Transportation
Safety
Drugs
Director, Analytical Quality
Questioned Documents
Director, Resources Director, Biosciences & Innovation
Specialised Techniques
Analytical Quality
Reference Materials
VAM Unit
VAM Business Management
Quality Manager Food Analysis for MoD
Forensic Business Development
Biosciences
Microbiology
Analytical Molecular Biology
Government Chemist referee analysis under
the Food Safety Act 1990
BDG Business Development
IP Innovation Programmes
MT Materials Technology
SRU Research
Marketing
Computing Services
Technical Services
Accounting & Finance
Human Resources
Environmental & General Analysis
Environmental & General
Chemical
New Projects
Safety & Environment
Project Management (LGC Safety
Officer)
Tobacco Products
LGC Health Sciences
10
LGC today
LGC Forensics • Full-service
forensics • Crime scenes • Pathology • Drugs • Occupational drug
testing • Toxicology • Fluids, marks, stains • Fire investigation • Documents • DNA profiling • Firearms • Computers &
phones • Archaeology
LGC Genomics • SNP genotyping services
& instrumentation • Sanger sequencing • Next generation
sequencing • DNA extraction kits &
services • RNA extraction services • Enzymes & PCR mix • DNA shearing
instruments • Microtitre plate sealers • Thermal cyclers • Assay dispensers • Workflow management
software
LGC Standards • Reference material
production • Cell lines &
microbiol. products • Proficiency testing
schemes • Custom reference
materials • Reference material
distribution • Outsourcing of in-
house reference standards groups
• Analytical training courses
• Government Chemist • Regulatory laboratory outsourcing, MHRA and BP • Regulatory monitoring, e.g. environment and BSE • External science programme management • Training & consultancy
LGC Health Sciences • Food, pharma,
sport & consumer products
• Occupational drug and banned substance testing
• Characterisation of impurities, contaminants & residues
• Foreign particulates, extractables & leachables
• Nutritional biomarkers • Nutritional testing • Trace metals
• National Measurement Institute • Calibration services • Production of certified reference materials • Contract research
LGC Science & Technology
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Facts 1: Ownership and shareholder value
• Privatised as a management led buy-out – RSC, 3i and management and staff as equal shareholders
• Change in ownership in 2004 to Legal and General Ventures – Many staff remained shareholders – Phantom shares
• Now owned by Bridgepoint – Transaction completed in 2010 – Management + phantom shares
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Facts 2: Performance
● Revenue has increased from £15m in FY96 to £170m in FY12
● Profitability has more than trebled since 2004
● Full time employee numbers have risen seven-fold since privatisation
● Science quality retained and has been an important ingredient of our success
SWEDEN
Borås
FINLAND Turku
Berlin Luckenwalde
Almere
Wesel Cologne
Lomianki
Brno
Szentendre Cluj-Napoca
Molsheim GERMANY
CZECH REPUBLIC
POLAND
HUNGARY ROMANIA
ITALY
FRANCE
BULGARIA Sofia
Milan
Barcelona
SPAIN
NETHERLANDS
RUSSIA St Petersburg
CHINA
Beijing
Shanghai
TURKEY
Istanbul
Dubai INDIA
UAE Delhi
Ahmadabad
Mumbai
Goa Bangalore
Hyderabad
Edinburgh
Wakefield Leeds
Bury Runcorn
Risley
Tamworth
UK
Culham
Exeter Sandwich
Hoddesdon St Neots
Belfast
N. IRELAND
IRELAND
Fordham
Twickenham Teddington
Beverly USA Lexington Denver
Manchester
Sao Paulo
SOUTH AMERICA
Johannesburg
SOUTH AFRICA
Facts 3: Geographic Expansion
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Enablers 1: Leadership and People
• Visionary leadership was critical – without organisation look very different now
• Recruitment of industrial experience – Market knowledge and expertise – New skills/competencies – Relationships
• Investment in people from outset – Ashridge training – Internally generated programmes
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Enablers 2: Investment • Acquisition
– LGC Standards (Promochem Group; Mikromol; QM / Aquacheck, Breitländer; Cardiff Bioanalytical Services; Industrial Analytical (SA); Analytical Reference Materials International (ARMI: USA); VHG Labs Inc; Bio Senate)
– LGC Forensics (Forensic Alliance; Institut für Blutgruppenforschung (IfB); Focus Forensics; Kalagate)
– LGC Genomics (AGOWA; Kbioscience) – LGC Health Sciences (HFL Sport Science;
Quotient Bioanalytical Sciences)
• Organic Growth – Science and instrumentation – Infrastructure (new sites, IT)
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Enablers 3: Change management
• Essential in the early years and continue through to the present
• Key areas needing addressing were: – Customer focus (at all levels of the organisation).
Commercial and financial skills – Science – Operational efficiency and excellence – Brand development – People (as in previous slide)
• Central initiatives and teams created to address these – “Pentagon” – Process and Operational Efficiency Team
• Continually needs refreshing
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Other important considerations
• Government guarantees and a reasonably positive economic environment in the late 90’s and early 2000’s were helpful to success
• While there can be complexities of hosting critical government functions in privatised organisations; for LGC (and Government) benefits have outweighed governance requirements
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Conclusions
• LGC successfully transitioned to the private sector and has created value from its capabilities and science investment whilst delivering greater efficiency in its Government work
• Science institutions in government should: – Deliver government remit efficiently and meet evolving
requirements – Generate commercial value from the science generated through
the public purse
…. for LGC privatisation provided the freedoms and backing to do this ….. but beware of direct read across
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