A COMPANY history that stretches back 124 years, and a Hornby model train, helped a builder in Darlington to land the contract for Hitachi’s European train plant. Business Editor Andy Richardson talks to Shepherd Construction’s Neil Matthias, and Steve Joyce about a job that will bring train-building back to its County Durham birthplace.

JOINER Frederick Shepherd launched his building firm in 1890, a year of railway landmarks, which included the opening of both the Forth Rail Bridge, and London Underground’s Northern Line.

The York-based family construction group, which still bears his name, is now leading the project to revive North-East train-building.

When Shepherd, one of the largest wholly family-owned private companies in the UK, was named lead contractor to construct Hitachi Rail Europe’s factory on the outskirts of Newton Aycliffe, it pledged to hand as much work as possible to local suppliers.

“We are probably about 75 per cent through the procurement and pretty much everybody is based within a 50 mile radius,” explains Neil Matthias, Shepherd’s senior project manager for the Hitachi factory.

Mr Matthias is no stranger to landmark North-East projects. In 2010, he was named construction manager of the year for his work on luxury hotel Rockliffe Hall, in Hurworth, near Darlington. His team also worked on the National Renewable Energy Centre (Narec) in Blyth, which pipped the London 2012 Olympic Park and The Shard skyscraper to Construction News’ project of the year award.

“I've always been in the North-East, and I'm a North-East lad at heart,” says Mr Matthias. “We are a family-run firm. We have been in Darlington since the 1960s. All too often you see these big contractors come in and do a job and once it’s done they shut it down and move on.

“Darlington is very close to our hearts,” he says, from the boardroom of the firm’s West Park offices. “That was why I was so pleased that we got the Hitachi job. It was why we made the commitment to use our supply chain of locally-based firms, rather than national contractors who might ferry people in from outside the region.”

Shepherd’s base in Darlington dates from its buy-out in 1962 of George Dougill & Sons. Its influence on the North-East landscape has been vast, with everything from the Byker Wall to Darlington College bearing the firm’s imprint.

So, when the landmark Hitachi deal was put out to tender, was it something that Shepherd felt it had to win?

“No it wasn't,” insists regional director Steve Joyce. “The difficulty you have with projects like this is that you risk becoming really passionate about them because they are on your doorstep. What you have to realise is that whatever job you do you have got to make a profit out of it. You must be conscious about how you tender jobs and what your out-turn costs are going to be.

“What we decided to do was look for the best way to win it, and design and build it in the most economical way.

“We pulled a team away from their day jobs really early on and got everybody focused on the front end to find solutions across all aspects of the job.”

Mr Matthias adds: “What Steve is reinforcing is that we have the knowledge and expertise as a company with a range of skills across the whole group that we can bring to a job.

“With some bids you might have independent people who join up whereas we brought a total solution. That is what Hitachi saw. “We have a group structure but we are one big company. On a complex technical project of this nature it makes sense to join forces.

“We did a lot of research to try and understand Hitachi’s business, so they had the confidence in a contractor who could deliver. You need to be in a position where everything they talk about is something you have already researched.

“This facility in Newton Aycliffe is unique. It's the first one for Hitachi in the UK. But there are similar sites in the UK, such as maintenance depots where we could go on fact-finding missions to make sure that we had the ultimate solution.”

Mr Joyce continues: “Our bid team bought a Hornby train model of a Hitachi train, took it to the interview, and said: ‘This is what it is all about.’ I think that left a real impression.

“Our big thing is understanding the client's needs and giving them what they want.

“Once we got through to preferred bidder status we sent guys over to Japan to look at their facilities and meet all of the people. We learned a bit about the culture, so when they come over and visit us we all know what the correct etiquette is,” he adds.

“I have had the conversation with Hitachi about what made Shepherd special to them,” says Mr Matthias.

“There is a lot of integration between us and Hitachi on the project. That meant our values were important.

“What you find with Hitachi is that their employees live the company. Whenever they talk about anything it's Hitachi first, their staff even introduce themselves to you as ‘Hitachi’ followed by their own name.

“I was an apprentice with Shepherd, so I have come right through for 26 years. The team we have on site has people like Vince (Elrington, build manager) who has been with the firm for on 45 years, my design manager has 35 years, and Steve (Joyce) started on the tools with Shepherd 23 years ago.

“They have been with Shepherd as men and boys and have our company values as part of their DNA. That is very unusual in the industry these days. If you are employing a company and see people with that longevity you get the reassurance that they are going to give their heart and soul for a job.”

Mr Matthias is determined to continue the firm’s tradition for supporting apprentices.

“We have taken on two apprentices and a management trainee to work on Hitachi. We also have the commitment from the supply chain that they will recruit apprentices, and we are working with Durham County Council on traineeships.

“Wherever possible we want his to have a positive and long term impact that gives back to the local community,” adds Mr Matthias.

Shepherd will have up to 400 workers on site when the factory build hits its peak this summer. It will be a welcome sign that construction work in the region is starting to recover from the downturn, says Mr Matthias.

“The London market has never seen a recession, whereas the North-East has been hit hard,” he adds.

“We are a company that plans to be here tomorrow. We have some great people and systems, we are financially sound, all of which is why we have been here a long time.”

The company employs about 225 staff across the north. Mr Joyce says: “Over the difficult years we maintained the same staff base but we had to look for work outside the region. Hitachi is one of the projects that will bring the hourly-paid people back to the North-East, specifically on the services side.

“We had to spread our wings a bit, but now we are bringing people back to our home area.”

Developers Merchant Place hope that Hitachi’s factory becomes the catalyst for more firms to move onto adjacent land. Shepherd is determined to be involved in any future building work.

As Mr Joyce explains: “Once we get those cabins on site we want to be there for the long run. We don't want someone coming from down south and taking our work.”