Chanelle

Tenacity and R&D Drive Chanelle Group Growth in the EU

“The EU accounts for a much larger percentage of the total global veterinary pharmaceutical market – making up around 36% of the €23bn total, compared to 14-16% in South America.”– Michael Burke, Managing Director

 

Key Takeouts

  • Higher prices and stable markets made EU the priority export market.
  • Concerted and strategic R&D investment has been a key driver of growth.
  • Enterprise Ireland supports have helped develop innovation and production capacity.

Case Study: Chanelle

Chanelle Group’s success in Europe has been largely based on founder Michael Burke’s long-term vision and awareness of the need to take time to develop markets which he believed held potential for the company.

A qualified veterinary surgeon, he decided to give up his practice in the mid-1980s as he had spotted an opportunity to manufacture generic pharmaceutical products for animal health.

In 1985 he bought a seven-acre site in Loughrea, Co Galway and started out with just two staff manufacturing products in a 40,000 sq ft warehouse for the Irish and export markets. “It was a small beginning, but we grew organically every year since as we learned,” he says.

Nowadays, Chanelle is the largest Irish-owned manufacturer of pharmaceuticals in Ireland, employing 395 people and exporting to 80 countries worldwide, with key markets in the EU, Australia, New Zealand, Japan, South Africa and the Middle East.

The group supplies ten of the top 12 multinationals in the world in both the human and veterinary pharmaceuticals sectors, with a product range including anthelmintics, anaesthetics and antibiotics that have come off patent. Sales growth in the past three years has been 30%, reaching around €100m in 2016.

Burke was named Visionary CEO of the Year in the 2016 Animal Pharm Awards in January. Animal Pharm is a worldwide animal health publication in existence for over 30 years. Chanelle also won the Exporter of the Year 2016 award at the Irish Exporters Association’s annual awards.

Top Tips for Exporting to Europe:

  • Perseverance and persistence are the keys to successful product registration.
  • Clear and simple strategy and goals enable organic growth.
  • Strong sales depend on continuous innovation.

For more detail, click here

Exporting strategy

When Chanelle started out as an exporter it concentrated on South America and the Far East as it was easier to get product licences in those regions, according to Burke. “Europe, and the UK, was exceptionally difficult in terms of registering products. These markets were protectionist at the time, only wanting to grant licences to local companies operating in our sector,” he notes.

However, in 1996 Burke took the strategic decision to pull out of South America and redirect his focus onto the EU as he felt there were better long-term opportunities there and it was a higher price market.

“The EU accounts for a much larger percentage of the total global veterinary pharmaceutical market – making up around 36% of the €23bn total, compared to 14-16% in South America,” says Burke.

“The first few years in Europe were very difficult but we just had to live with it. You could have a product registration application submitted for two or three years in any one market before you would even get a reply from the authorities – they just weren’t interested in registering foreign products.”

Burke was undeterred and believed that patience would pay off in the EU after his experience of cracking the Japanese market. “We were the first company to introduce generic veterinary pharmaceutical products in Japan and it took us six years to gain a foothold there, with the help of the Irish ambassador at the time,” he recalls.

“It’s a different ball game in Europe now. Everything is much easier from a regulatory perspective. Things changed in 2003/4 – now as a pharmaceutical manufacturer you just have to meet the necessary requirements and will get a product registered in about a year and a half.”

Chanelle was required to register its products in each country in Europe individually. Once it had managed to get product licences the markets were open to dealing with the company and it was easy to get distributors, according to Burke – who makes a point of visiting all the company’s international customers personally at least once a year.

Now, Chanelle Group has over 1,700 animal health licences registered in the EU and 500 in the rest of the world – the largest number of registered veterinary licences of any company in Europe. It holds over 800 product licences for human health products worldwide.

About 83% of Chanelle’s business is in the EU at the moment. The veterinary side of the group has grown by 326% in the past ten years and by 236% in the past five years. Growth rates on the human side have been similar, having come from nothing in 2000.

Chanelle’s approach in Europe was to start with the UK, followed by Spain and Germany. It set up a dedicated UK subsidiary, Chanelle Animal Health UK, in 1992 and in 2000 established Chanelle Medical, which focused on human generic pharmaceutical manufacturing.

“The building of a new facility in the mid-1990s in Loughrea gave us the impetus to diversify,” says Burke. “We have totally different distributors, sales staff, regulatory staff and research and development [R&D] departments for the two sides of the business.”

Focus on R&D

The group as a whole is very focused on R&D as a way of differentiating its offering and dealing with competition. This has been a key driver of its growth. It has over 70 people working in R&D now, including 40 people at its R&D laboratory in Amman, Jordan. Chanelle Group also has sales offices in the UK and India.

“We invest over €8m annually in R&D and this investment will continue as we launch 75 new products over the next five years in both human and veterinary pharmaceuticals,” says Burke.

“We try to pick products for our pipeline that other companies may not be picking. This is an art in itself. For example, on the veterinary side we are developing ten ‘super generic’ products, one of which we have launched. There is nothing similar to these products on the market – other products may have the same active ingredients, but not the same formulation.” The super generic product launched was Rheumocam Granules, which treat musculoskeletal disorders such as arthritis in horses.

Chanelle is in the process of completing a 30,000 sq ft expansion of its 300,000 sq ft facility in Loughrea as part of a €70m investment programme supported by Enterprise Ireland. This will double production capacity at the site and lead to the creation of 175 new jobs over the next five years.

“One of the keys to our success has been our people, 60% of whom are third-level graduates,” notes Burke. “This will continue to be the case as we look ahead to expansion into new markets including the US. We expect revenues to increase by 65% over the next five years.”

Chanelle’s Partnership with Enterprise Ireland:

  • Availed of various supports including overseas advice and R&D supports.
  • Enterprise Ireland Lean programmes have helped drive operational excellence.
  • Completing a major expansion of its Loughrea facility as part of a €70m investment programme supported by Enterprise Ireland.

To see how Enterprise Ireland has supported Chanelle from day one, click here.

R&D lights the way to LED sales spike

“Thanks to Enterprise Ireland’s RD&I grants, we do the knowledge-economy part in Ireland now. This has created jobs and been a great success for us.”

– Pat Kelly, Research, Development and Innovation Director, LED Group

 

Case Study: LED Group

Innovation in its ROBUS brand is a crucial driver of growth for the LED Group, a leading provider of LED lighting technologies, founded in 1984.

Its products, sold mainly via electrical wholesalers worldwide, offer energy savings, a long life and ease of maintenance. “Traditionally, customers put halogen fittings in their homes, but now there’s an array of LED products to choose from with far longer lifespans,” says marketing manager Deirdre Howard.

In 2014, the company set up a team focused exclusively on research, development and innovation (RD&I), underpinned by grants from Enterprise Ireland. This allowed it to win market share abroad and strategically exit manufacturing in China.

“When I came in as a research, development and innovation director in early 2014,” says Pat Kelly, “we had a relatively small share of the residential downlight market in Britain.” Kelly, who arrived at the company with a physics and engineering background, initiated a project that incorporated new state-of-the-art knowledge into a downlight: driver-on-board technology.

The grant funding allowed the company to test around 20 prototypes of the new technology before achieving a breakthrough.

“We introduced a product called Triumph Activate that substantially expanded our share of the market. It allowed us to tender in new areas because of its reliability, and its sales have put a significant amount of money on our topline too.”

KEY TAKEOUTS

  • Product reliability substantially increased market share and opened new areas for tender.
  • Adapting products for foreign markets created rapid growth and built brand perception.
  • Enterprise Ireland’s RD&I funding provided a safety net against risk and helped seed investment

When LED light fittings are powered by mains electricity, the current has to pass through a special electronic device called a driver. Often separate from the light fitting itself, this device is based on old capacitor technology and contains bulky components that must be soldered together. As a result, it’s often the first point of failure.

LED Group developed driver-on-board circuitry that can be included in the light itself. It’s essentially a pod that can be dropped into the light fitting, making the system much more efficient and reliable, improving its longevity, and requiring less power. All components are placed by machine, minimizing the potential for human error.

The company launched a version adapted for the Australian market; it only entered this market in 2010 but has already seen rapid growth there. “Introducing products such as Triumph Activate gets people talking and is a really positive force in building brand perception,” says Howard.

Another RD&I project saw the company convert one of its range of small fluorescent outdoor lights to LED, then move the technology to bigger lights for car parks and develop a patented retrofit capability for them. “We can retrofit not just our own fitting, but those of 16 other manufacturers,” points out Kelly.

LED Group is also part of LEDLUM, a European-funded project which aims to reduce the weight of the LED driver by 90 per cent and increase its lifetime. “This enables us to play senior hurling on the research stage,” quips Kelly. He hopes it will ultimately enable the company to offer a ten-year warranty on fittings by 2020.

Another ambitious goal that Enterprise Ireland’s RD&I funding supports is the development of ‘human-centric lighting’. This will bring outdoor light quality indoors, replicating natural light by tuning the blue content that our eyes use to set our body clock. “The lighting behaves as if it’s morning or afternoon,” explains Howard. “We hope to launch products in universities, schools and hospitals next year.”

Click here to learn more about Enterprise Ireland’s Innovation supports.

Ding credits innovation for growth

“We looked at ways of automating our day-to-day operations so as much of the business as possible is focused on R&D and creating new features & products.”

– David Shackleton, CEO, Ding

KEY TAKEOUTS

  • Developing proprietary technologies led to huge competitive advantage.
  • New products and improved technology enhanced user experience and drove success.
  • Enterprise Ireland offices abroad enabled rapid expansion into foreign markets.

Case Study: Ding

Irish SME Ding offers consumers an easy way to deliver mobile top-ups to friends and family in over 130 countries. People can add data or minutes using the Ding app or website, or by walking into one of 600,000 stores worldwide.

The company allows users to deliver credit to phones from over 400 different operators, with a reach of four billion phones.

“It’s a simple idea, but the complexity becomes a huge challenge when you do it at scale,” explains Ding CEO, David Shackleton.

The company started selling phone top-ups in 2006, but with just a little marketing new customers quickly came on board.

“Back then we had a pretty clunky technology platform, but as people realised they could use this service to provide a gift in another country, word quickly spread,” recalls Shackleton. Ding is especially popular among expats with links to Africa, Asia and the Caribbean.

Ding received RD&I grants from Enterprise Ireland that were particularly crucial in its early days. “We were able to invest and build up proprietary technologies and push the envelope in terms of the platform’s scale, which has given us a massive competitive advantage,” says Shackleton.

The three major corridors for Ding’s business are currently North America to Latin and Central America, Europe to Africa, and the Middle East to Asia. With 190 employees, 130 of them in Ireland, the company had gross revenues last year of half a billion dollars. It continues to enhance the user experience by improving its technology. Shackleton believes that: “every pre-paid phone in the world – which is 85 per cent of phones – should have an app that’s able to do top-ups. That’s a huge opportunity.”

One project supported by an Enterprise Ireland grant illustrates how solving a complex problem can simplify life for consumers. A customer can walk into a shop, ask to put €5 onto a mobile phone number elsewhere in the world, and Ding handles the rest. “We developed a piece of technology that allows us to predict from somebody’s phone number which mobile operator they use,” says Shackleton.

“It’s a really nice, seamless experience for the user, but behind the scenes there’s a lot of complexity involved in doing it.”

The Enterprise Ireland funding pushed the company to think about what represented business as usual and what was innovative. “Recently, we looked a lot at ways of automating our day-to-day operations so as much of the business as possible is focused on R&D and creating new features,” explains Shackleton. Ding often releases over 20 updates in a single week, such as support for new mobile operators, improved user flow on Ding’s website, or improved content on the app. “You could develop an app for €10,000 but to be truly world-class and operate at scale, the backend system needs to be sophisticated, which takes millions of euros and years upon years of learning and development.”

The core platform runs hundreds of transactions every second, with a surge at peak times on Friday nights and Saturdays. The company also runs deep learning algorithms and machine learning to manage and monitor fraud, and underpin digital marketing initiatives. According to Shackleton: “We can do a reasonably accurate prediction of what a customer might be worth to us over time, which enables us to spend confidently in terms of digital marketing.”

Headquartered in Dublin, the company has regional offices in Miami, Dubai, Barcelona, San Salvador, Bucharest and Dhaka. Shackleton credits Enterprise Ireland offices abroad with allowing the company to expand to markets as diverse as Russia, Vietnam, Indonesia and Saudi Arabia: “we couldn’t have done business in all those countries without their help.”

Ceramicx – Using Technology Transfer for New Product Development

“Licensing new technology has enabled Ceramicx to develop cutting-edge innovation that will power the company’s latest wave of international growth.”

The Aston Martin BD9 touring car contains aluminium panels alongside fibre-reinforced plastic panels that are bound together with super-strength adhesive, developed by Irish company Ceramicx through an infrared heating process.

The West Cork-based company is now announcing a world-first in launching the Herschel, a machine that measures and maps infrared heating.

“Infrared is invisible, of course, so it’s a hard thing to quantify. Usually people measure infrared output as the heat produced as a secondary reaction, but the Herschel maps the output of an emitter in watts [power] per cm2,” explains Cathal Wilson, director at Ceramicx.

The technology, first pioneered at Trinity College Dublin’s Manufacturing Research Facility, is named after William Herschel, the German-born astronomer who moved to Britain in the eighteenth century and became famous for his large telescopes. He also discovered infrared radiation and the planet Uranus.

The licensing deal with Ceramicx and subsequent process of technology transfer was the fruit of an Innovation Partnership, part funded by Enterprise Ireland. In turn, it has unleashed a new avenue for international sales for the West Cork company.

Ceramicx is up-skilling its staff of 63 and preparing to double its floor space, adding further labs, offices and manufacturing capacity. The Ballydehob firm is no newbie, though. The company has been perfecting its infrared heat work for 25 years, and it exports to 65 countries, with key markets being China, Germany, UK and the US.

Ceramicx will use the breakthrough technology to further refine the infrared heaters and ovens it develops in-house for food and other manufacturers. But the company also expects demand for Herschel as a test instrument for large companies that rely on infrared energy in manufacturing.

Like baking a cake, there is a heat recipe in every material, and there are a number of variables that must be controlled to get the best, most efficient and most cost-effective solution. The Herschel will allow manufacturers to refine the dial on their heat recipe with amazing precision.

“There are probably five or six major companies in the world that would be interested in this new technology,” Wilson says. These include the likes of Corning Glass, European Aerospace, Boeing and leading-edge tech companies serving likes of NASA.

The company came to realise the need for a machine like Herschel after it had worked through a challenging assignment developing a finished oven for Corning Inc., the makers of the Gorilla Glass used in mobile devices such as the Apple and Samsung smartphones. A curved piece of glass 0.7mm-thick was required, and the initial calculation and trial stages of the glass finishing project engaged five Ceramicx engineers for over a week. “If I had been able to put the problem in front of the Herschel, I could essentially have had the figures immediately,” Wilson explains.

Within its own processes, the machine is enabling Ceramicx to create more energy efficient thermoforming machines for industry.

Another application is in the production of energy efficient ovens for manufacturers of foods such as biscuits, cereals and pizzas. Ceramicx has developed 12 food-industry related patents for Black and Decker, and the Irish company holds the commercial rights for the application of these patents in industrial-scale projects in Europe.

In the case of the Aston Martin BD9, Ceramicx designed and built not only a radiant infrared emitter, but it came up with the best possible solution so that the energy would be adequately absorbed, and the cure would take place in sympathy with the best chemical and mechanical characteristic of the bond. The result is an adhesive bond stronger than a weld, explains Wilson.

Commenting on the impact of Herschel, Cathal’s father, Ceramicx founder and managing director Frank Wilson observes: “For thousands of years, man has played with steel, trying out various heat works to it to make it suitable for certain jobs. In recent years, the plastics industry and other materials sectors have begun to realise that there is a whole range of heat work that can also be applied to improve the performance these materials also.” For these industries, he says, the benefits will be immeasurable.