Asia Pacific

Asia Pacific is flying high – time for Irish companies to get on board

Tom Cusack, regional director for Asia Pacific at Enterprise Ireland, explains what Irish exporters can gain by exploring opportunities in the region.

“Always listen,” advised Dicky Yip, non-executive director of Chinese insurance giant PingAn and former chief executive of HSBC China, during his keynote speech at Enterprise Ireland’s Routes to Growth Asia Pacific, a major conference which brought together more than 400 Irish and international business people to explore export opportunities in the region.

“It takes time to understand each area’s cultural differences”, explained Yip.

The inaugural Routes to Growth Asia Pacific event offered a unique opportunity for networking and peer-learning to current and first-time exporters, with more than 100 potential buyers travelling to attend. Enterprise Ireland’s entire Asia Pacific team assisted companies with export plans and on-the-ground experience. Enterprise Ireland also launched a series of business guides to help companies better prepare for market entry.

Asia Pacific is home to two of the world’s three biggest economies

Stretching from Australia to India and China, Asia Pacific is home to half of the world’s population and two of its three biggest economies. By 2025, it will account for more than half of the world’s economic output. Similar trends are evident with growth rates, which range from 5% to 9%, compared to the 2-3% global average. Australia, in particular, has enjoyed over 25 years of continuous growth.

More than 600 Irish companies are currently doing business in the region, worth €2 billion annually.

Irish exports more than doubled in the last five years since breaking the €1 billion mark in 2012, delivering double-digit growth for Enterprise Ireland-supported companies in 2016, with an impressive 16% year-on year-gain. As the second-fastest growing region for Enterprise Ireland-backed companies, a 50% increase in exports is targeted by 2020. Opportunities for Irish businesses in sectors including aviation, fintech, international education, and construction and engineering are particularly promising.

“Ireland has emerged as one of the greatest global aviation hubs in recent times,” commented Dermot Mannion, former deputy chairman of Royal Brunei Airlines and former Aer Lingus CEO. “That is happening at a time when Asia Pacific is by far and away the fastest growing region for aviation. Over the next twenty years, the number of aircraft going into Asia Pacific will be equal to North America and Europe combined. We are very well positioned to take advantage of that.”

One example of Irish success in the sector is CAE Parc Aviation, who first began doing business there almost three decades ago, explained chief executive, Frank Collins. Today 45% of its worldwide business comes from Asian companies. CAE Parc has seven offices spread across five AsiaPac countries. In all, “it’s a massive market for us,” Collins said.

Speakers recommended reaching out to Enterprise Ireland for assistance and tapping into the Irish diaspora.

Work with Enterprise Ireland to expand in Asia Pacific

“You need to get out there on the ground, so use Enterprise Ireland and the Department of Foreign Affairs. There is always someone who can give you introductions,” said Paul Costigan, chief sales and marketing officer at Decawave.

Barry Napier, CEO of Cubic Telecom, first discussed the possibility of entering the region with Enterprise Ireland in 2010 and benefited from Irish embassies in the region. “Regulation is very different in every market. A key thing we leveraged from Enterprise Ireland was about laws and regulations, and how to work within the market,” said Napier.

Ireland’s connectivity to the Asia Pacific region will see a big boost in June 2018 with the launch of a direct flight between Dublin and Hong Kong with Cathay Pacific, the first ever direct flight from Ireland to the Asian mainland.

“Don’t underestimate the impact of having ‘Dublin’ on departure boards in Hong Kong will have,” said Mannion. “It will create a dynamic where companies in that part of the world will be interested, because it will be easier to do business here.”

That the Routes to Growth event was organised in partnership with Cathay Pacific is fitting. There is no doubt that the AsiaPac region is flying high. For Irish companies, it is time to get on board.

Visit our markets section for insights on Singapore and China and the opportunities for Irish companies.

This article was originally published in the Sunday Independent.

Linesight Maximises Data Centre Opportunity in the Netherlands

“We had started doing a lot of data centre projects for US multinationals in Ireland so we decided to look at the Netherlands as Amsterdam is a hub of activity for data centres.” – Paul Butler, director, Linesight

 

 

 

Key Takeouts:

  • Enterprise Ireland trade missions and market introductions a key success factor.
  • Excellence in service and personnel a key differentiator and competitive advantage.
  • Dutch data centre business a bridgehead for growing other sectors and European markets.

Case Study: Linesight

Five years ago Dublin-headquartered firm Linesight decided to go on fact-finding missions to the Netherlands with the help of Enterprise Ireland. It was a move which has led to around 70% growth in its fee base in that market since then and an increase in its team based there from four to 30 people.

Linesight provides professional services and strategic support to the global construction industry. Projects span a range of industry sectors including commercial, data centres, life sciences, healthcare, transportation and infrastructure and retail.

Originally established in 1974 as Bruce Shaw, Linesight rebranded in 2016 with a view to having a name that could be owned in all markets. The name Linesight was inspired by the company having its clients’ goals in their direct line of sight from initial concept through to successful project completion.

With staff located across Europe, the Middle East, Asia Pacific, and North America, Linesight increased its global headcount by 135 and recorded turnover of about €60m for the group in 2016. It now has 17 offices around the world and has delivered projects in 40 countries.

Linesight’s growth in the first 30 years or so was mainly focused on Ireland and the UK where it established a number of offices. When the recession hit in 2008, it had built up a 25% market share in the domestic market for professional services to the construction industry. It had also generated a limited amount of international business.

The downturn in construction at home prompted the company to look at international markets more keenly and the Benelux region – and the Netherlands in particular – seemed a promising area to focus on. It had worked on five or six small projects there, but further to building up expertise and skills in data centre projects it saw an opportunity.

“We had started doing a lot of data centre projects for US multinationals in Ireland so we decided to look at the Netherlands as Amsterdam is a hub of activity for data centres,” says Linesight director Paul Butler.

“In addition, a lot of pharmaceutical multinationals were starting to set up subsidiary plants in the Benelux region. We recognised that we had the relevant in-house expertise and key staff delivering professional services in these areas. We wanted to retain that staff and the Netherlands was of particular interest to us.”

 

Linesights’s Partnership with Enterprise Ireland:

  • Attended a series of Enterprise Ireland workshops on data centres.
  • Benefitted from introductions to the market/local contractors organised by Enterprise Ireland.
  • Participated in Taoiseach’s trade mission to the Netherlands and Germany.

To see how Enterprise Ireland has enabled Linesight’s success, click here.

Competitive advantage through people

Over the years Linesight had established a partnership approach with clients based on consistency and clarity, and it has a proven track record in terms of quality and timely delivery of projects. This stood to the company when it came to building business in the Netherlands.

“For some of our clients developing projects in the Dutch market we were preferred bidders and travelled there with them as part of their team, offering the same service as we had in the Irish market,” Butler explains.

“Other projects involved competitive bidding as companies may have had their own in-house auditing functions – but we were also very competitive in winning that work.”

Some multinational clients even requested that certain individuals from Linesight work on projects with them in the Netherlands, Butler adds, “Our people are key in terms of generating repeat business. Senior project managers see projects through from cradle to grave and directors oversee projects on a 24/7 basis. The personal relationships built up over time have been very important.”

The Netherlands has been a relatively easy market for Linesight to enter as English is widely spoken and its framework in terms of contracting is similar to Ireland’s. “Being fluent contractually is a different thing than being able to speak a language. In other European countries language can be a barrier in this respect. We demand that contractors deal with us in English in the Netherlands,” says Butler.

That being said, once Linesight started to focus on the Dutch market, it invested a lot of time in ensuring it had the right contractors and partners to deliver projects to the standard required. It also had to get to grips with different regulations in relation to construction, planning codes and timeframes.

“Even within the Netherlands different regions are more regulated in terms of construction. For example, near the German border there is still a lot of heavy industry, which contrasts with the Amsterdam area,” says Butler.

“We had to stretch our web of contractors beyond the Amsterdam area. Now we have a high level of tried and trusted partners in the Netherlands that we know will deliver for us.”

Now that Linesight is established in the Dutch market it is looking at new opportunities within its existing client base, such as in the retail and pharmaceutical sectors. It also wants to take advantage of some new areas, in particular in relation to the local supply chain and newly built logistics centres.

“There are some very good companies competing with us for business. What differentiates us, in addition to our people, is the fact that we are an all-in company that can provide cost management, project management and risk assessment. This is vital for a lot of big multinationals,” notes Butler.

“A significant proportion of our people have backgrounds in civil, electrical or mechanical engineering – so our service is not just about number crunching, they can understand the design. They can go through drawings with clients in great detail and are fluent in engineering language.”

Gaining a foothold in the Netherlands has led to Linesight building business in Germany and Belgium. Once clients’ projects are completed in the Netherlands, it has extended its network to continue working with them in other locations.

“They want the consistent, clean approach of dealing with us, rather than having to educate a new local provider in their needs and ways. The flexibility of our people and operation has been key to our success.”

Top Tips for Exporting to Europe:

  • Be flexible and adapt to the needs of major multinational customers.
  • Build a strong local presence to really be successful in a market.
  • Harness the Irish mentality of ‘getting the job done’.

For more details, click here.

BFree Foods Pioneers Gluten Free Innovation to Drive Export Growth

“We started with two products and we now have 15. We are constantly working on our products to improve them. We are also working on ways to extend the shelf life of our products without sacrificing flavour – this is very important in markets such as Scandinavia.”
Alex Murphy, BFree Foods

Key Takeouts:

  • Enterprise Ireland’s food innovation supports helped BFree research an alternative to gluten in bread.
  • Research revealed a growing lifestyle market for gluten- and wheat-free bread products.
  • Their gluten-free wraps won several awards, and have a 10% share of the Australian wrap market.

Case Study: BFree Foods

Established in 2011 by Cuisine de France founder Ronan McNamee, BFree Foods has grown to take a significant slice of the domestic market in the “free-from” bread category, and has increased export sales rapidly in the US, the UK, Scandinavia and Australia.

The business has been built around research and innovation from the very start with the aim to be the best. “UCC has an incubator for the brewing and baking industries. We worked with PhD students there on our first product, a loaf of bread. The problem is that gluten does so much for bread – it is the scaffolding that gives it structure, taste and the crisp golden crust. Without it, the bread just falls apart and doesn’t taste very good. We had to solve that, and deliver something that gave us the edge versus the competition. We did a lot of market research at the same time.”

That research revealed a growing lifestyle market for gluten- and wheat-free bread products. “When we launched our first products it was very much with a healthy lifestyle message”, Murphy adds. “We assured consumers that we’ve done the research for them and have created a product that tastes great and is nutritionally good for you.”

Solving the gluten problem proved interesting. “We use various ingredients such as apples, potatoes, peas, sweet potato, even bamboo, to add flavour and replicate the gluten”, she says.

The company launched its first two products on the market in 2012 to a very positive response. “We were producing fresh, tasty and nutritious bread, not long-life products, which can often be full of preservatives.”

Listings in all the major multiples followed and then it was time to look further afield. “We always intended it to be an export product and our next move was into the UK”, Murphy explains. “Innovation is a big selling point there. There are so many people playing in the gluten-free market you have to be able to offer something different. We did some very, very basic consumer research among people with coeliac disease and wheat intolerance, and what they told us was they missed out on family meals; family members ate one thing and they had to eat something else.”

That led the company to develop gluten-free wraps, which tasted just as good and folded as well as the standard product. “Our wraps won several awards for quality and there was no other offer like this in that category and that got recognised among the UK multiples.”

So successful have the company’s wraps been that BFree now commands a 10% share of the total Australian wrap market – both standard and free-from.

Success in the US quickly followed, with Walmart, Costco and KROGER among BFree’s key customers. “We supply 5,500 outlets in the US and it is now our largest market.”

Innovation has been key to the company’s growth and success. “We started with two products and we now have 15”, Murphy points out. “We are constantly working on our products to improve them. We no longer use eggs as an ingredient and this has made our products suitable for vegans. We are also working on ways to extend the shelf life of our products without sacrificing flavour – this is very important in markets such as Scandinavia.”

This activity has been supported by Enterprise Ireland over the years.

“As a start-up, we worked with the universities and then we engaged with the fabulous team in Enterprise Ireland, who helped us with research, development and innovation as well as with expanding internationally. BFree now employs 40 people in Dublin and Enterprise Ireland also helped us establish an innovation hub here in Dublin, where we have four researchers working on new product development and innovation. We are now looking at extending into different categories as well and that will be very exciting.”

 

 

Learn how Enterprise Ireland invest in R&I with its innovation supports.

Arralis

“The fact that Enterprise Ireland delivered the European Space agency was incredible. That was instrumental. That is where it all started.”

Barry Lunn – CEO & Founder

Who

Arralis is a rapidly scaling technology company providing world leading expertise in RF, micro and millimetre-wave technology.

How

Enterprise Ireland helped Arralis break into the American, Chinese and Russian markets and, most importantly, introduced them to the European Space Agency.

Result

Arralis are now a world leader in their field working with six of the top ten aerospace companies. In 2016 they opened new offices in China and the USA.

See How We Helped Arralis

Cartoon Saloon draws audiences with creative magic

“We have a creation and design part, but we also have a production and commercial part. Those things must marry and live side by side.”

– Gerry Shirren, Managing Director, Cartoon Saloon

Key Takeouts:

  • International recognition early on set the course for success.
  • Creative talent went hand-in-hand with strong business practice.
  • Feasibility funding from Enterprise Ireland facilitated the exploration of new platforms and market opportunities.
  • Joint venture with a Canadian company set to promote expansion.

Case Study: Cartoon Saloon

An animated fairy tale provided an unexpected twist in the story of Kilkenny-based animation studio Cartoon Saloon. The company’s 2009 film, The Secret of Kells, in which the unfinished Book of Kells is imperilled by Viking invaders and entrusted to the hands of a young hero, was nominated for an Academy Award – a remarkable achievement for the studio’s first production.

“The nomination was a surprise to everyone and it broke completely new ground,” says managing director, Gerry Shirren. He attributes success to the studio’s uniquely strong visual style. Since then, Cartoon Saloon has garnered another Academy Award nomination for its feature Song of the Sea and enjoyed commercial success with productions such as Puffin Rock. Two seasons, totalling 39 episodes, of the seven-minute cartoon were first screened on pre-school channels RTÉjr and Nick Jr in May 2015, and subsequently picked up by Netflix for worldwide streaming the following September.

The studio clearly has outstanding creative talent but it’s also a for-profit business. “We call it a creative enterprise,” says Shirren.

“We have a creation and design part, but we also have a production and commercial part. Those things must marry and live side by side.”

It’s been a successful pairing. Puffin Rock was launched in China by a leading streaming service in August 2017 and has since had a streaming rate of more than one million views per day.

Cartoon Saloon has always innovated, creatively and technically. “We moved really quickly to digital delivery about five years ago when broadcasters were still looking for physical delivery. Now digital is the norm,” explains Shirren.

Early on, the company received RD&I grant assistance from Enterprise Ireland to evaluate and implement a digital management pipeline. This proved essential for efficient production. “We were looking at customisable software which needed to be heavily modified for our own processes,” says Shirren.

“The funding brought us into the realm of digital management systems which we hadn’t used before.”

It was another step on the path to a more professional, streamlined production process. “When funds are in short supply, that sort of support makes a difference. I don’t think we would have got through the implementation of the visual system without it,” adds Shirren.

More recently, the studio received a grant from Enterprise Ireland to embark on a small feasibility study, a sort of voyage into the unknown. “We wanted to find out whether we could port over to a virtual reality environment,” explains Shirren. A showcase piece was created, based on a virtual reality world inspired by Song of the Sea, and is now available for VR and Gear VR mobile platform, both free to download from the Oculus Store.

“It was a speculative project and we couldn’t have done it without support,” Shirren continues. “We learnt an awful lot from the process.” Anyone who has an Oculus Rift headset can now experience the studio’s creation.

Cartoon Saloon’s latest film, The Breadwinner, was launched at the Toronto International Film Festival in September 2017, and a new film, Wolfwalkers, is currently in production. The studio has also formed a joint venture, Lighthouse Studios, with Canada’s Mercury Filmworks to do third-party service work which may involve animations for big hitters such as Amazon and Disney. “In about twelve months, Lighthouse could be as big as Cartoon Saloon,” says Shirren. “That means Kilkenny could have two animation studios with perhaps 100 employees each, making the city a magnet for talent.”

 

Learn how Enterprise Ireland can support your R&I ambition with dedicated innovation funding.

Game-changing brewing technology boosts brand value for Marco Beverage Systems

“People sometimes see an R&D grant as something to get a product to market, but a reputation for innovation also increases your brand value and drives sales all by itself.”

– Paul Stack, Operations Director, Marco Beverage Systems.

Key Takeouts:

  • Enterprise Ireland’s funding helped drive culture of innovation.
  • Leading-edge technology transformed brand awareness and opened new markets. R&D for one product generated platform technologies that could be used in others.

Case Study: Marco Beverage Systems

“It’s important as an SME to be able to afford to continually innovate,” says Paul Stack. “In our business, we generally get about a seven-to-ten-year product lifetime, so innovation is key to replacing and renewing products.” Stack is Operations Director at Marco Beverage Systems, a hot water delivery systems company, headquartered in Dublin.

The company, which provides systems for coffee and tea brewing in the food and beverage industry, is a recipient of Enterprise Ireland’s RD&I funding.

Its range of products includes water boilers and coffee brewers. Marco has manufacturing plants in Dublin and China, and distribution offices in America, Europe, the Middle East and China, giving the company global reach.

80 per cent of Marco’s products are exported: an increase from 68 per cent only three years ago. It has just under 100 employees globally, with approximately 60 based in Ireland, and its products can be seen in significant coffee, tea and catering locations, including familiar names like Starbucks, Bewley’s and Costa Coffee.

The company’s success is fuelled by its emphasis on innovation. This focus, and a desire to expand it, led the company to apply for RD&I funding from Enterprise Ireland back in 2004. “The main considerations for our design team are energy efficiency, beverage excellence and design excellence, incorporating user experience and aesthetics,” says Stack.

“Energy efficiency has been a major success for us in terms of cutting-edge design. Over 50 per cent of the energy footprint associated with a cup of tea or coffee is in brewing it,” Stack points out. “Our R&D department has significantly reduced the amount of energy our products use, and one of our products is 70 per cent more energy-efficient than anything else on the market globally, which is a great selling point.”

One example of a product that has benefitted from the Marco Beverage Systems R&D program is the Uber Boiler, launched in 2009. This one-cup coffee brewing station has replaced more traditional bulk coffee systems in many cafés and restaurants. It allows baristas to have more control over a recipe and brings them closer to the front of the shop to interact with customers.

The Uber Boiler and similar systems are now a common sight in coffee shops, but when the company first developed this product it had a big effect on the industry. “The product completely changed how our brand was seen in the marketplace as it was so innovative. It opened doors for us, especially in new regions like America. People came to us because of the popularity of the technology,” says Stack.

The company has also found that R&D for one product can generate platform technologies that can be used in others. A separate research project for a different product resulted in innovations that contributed to an automatic version of the Uber Boiler, the SP9, demonstrating the types of cross-pollination that an R&D program can produce.

“People sometimes see an R&D grant as something to get a product to market, but a reputation for innovation also increases your brand value and drives sales all by itself. R&D drives a whole culture of innovation in your business, which keeps you relevant and sets you apart from competitors,” explains Stack. “I wouldn’t just suggest that other Irish SMEs conduct R&D – I consider it absolutely critical. Enterprise Ireland’s funding can really drive this forward.”

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.

Don’t Be Put Off by Chinese Whispers – Demand is Unmet in Many Sectors

You could be forgiven for thinking China’s economy is running into trouble, if you believed some of what you read.

But a recent World Bank report paints a more accurate picture. It points to growth of over 6pc this year and next, a healthy inflation rate of over 2pc and employment market capacity. China is establishing, “a gradual shift to slower, more sustainable growth”, the Bank says.

So Irish businesses thinking of entering the world’s second largest economy should not be put off by Chinese whispers. There’s business to be done here, provided you are geared up for the challenges.

More than 300 million people have increasing purchasing power in China and a taste for western goods and services. And Chinese businesses have a growing appetite for technology, systems and infrastructure that cannot be satisfied domestically.

Food is Ireland’s major export to China but for the last few years, prospects have been developing for Irish businesses in: aviation, education, ICT, healthcare, industrial, financial services, clean technologies and agritech. Companies like Movidius, Arralis, Cubic Telecom and Aerogen have broken through in recent years and our educational institutions are also active in China.

Of course, that’s not to say that businesses outside those sectors cannot also succeed. A company with strong innovative technology addressing a real gap can do well.

Advice for Irish companies exporting to China

Generally, the Chinese have limited knowledge of Ireland. Nevertheless, the Irish Embassy and State agencies have been developing awareness of our capability across key sectors. Already, we are known for our high-quality food and dairy and are developing our reputation across the aforementioned sectors.

To avail of these opportunities, the wise business needs to prepare carefully and be patient in more ways than one. There are still a few hurdles to overcome.

For some sectors, ensuring compatibility or obtaining necessary licences can be slow – which is the way with many aspects of business here. Getting the first sale therefore takes time and can be resource consuming. Frequent visits – or better still, staff on the ground – are a must. That means having the finance to make a sustained commitment.

But if Irish companies offer something the Chinese cannot yet provide, they will be welcomed.

China’s private sector is more open with regard to the origin of a product or service. But the Chinese government tends to prefer local services in some sectors, notably pharmaceutical engineering, which requires foreign companies to partner with a local design firm.

The Chinese concern when considering smaller, foreign partners is responsiveness, flexibility and smoothness of communication compared to their Chinese counterparts. If you can assure your potential customer that these are not barriers, you will have a better chance of winning contracts.

Partnership can bring a number of crucial advantages; for instance, tapping into established networks, access to resources that can be critical in winning sales, or even enabling bidding for projects that are closed to foreign companies.

For example, the partnership between small Irish cleantech company MicroGen Biotech and a subsidiary of the largest cleantech conglomerate in China, CECEP Dadi, enabled the Irish firm apply their technology to (otherwise unreachable) state-funded contracts.

But just as a good partnership opens doors, bad ones close them. Do your due diligence. Before you commit to any partnership, be certain it matches your long-term objectives.

So my advice to anyone thinking China for export, is prepare then commit – you cannot flip-flop your way to success in China. Ensure you are adequately resourced, willing to invest time to get a return, and finally, be open to the cultural differences. The Chinese are quite an indirect people and remember that in business, relationships are often more important than words on a page.

David Byrne is Enterprise Ireland director for Greater China, and is based in Shanghai

This article originally appeared in the Sunday Independent

Top 10 Tips for Exporting to Asia

Asia is one of the fastest growing markets for Enterprise Ireland clients with companies such as Corvil, Fexco, Cubic Telecom, Dublin Aerospace and Arralis succeeding in areas such as Fintech, ICT and Aerospace. It may be the biggest and most populous continent in the world, with the strongest emerging markets, but its scale can be addressed by choosing the right base to diversify into other markets.

One

Preparation: Possibly the most important tip before entering Asian markets. Being well informed on the different rules and policies of the investment destination is vital. For example, doing business in mainland China can sometimes be complicated and bureaucratic, with vaguely written regulations interpreted differently by different bureaus. Exporters should be aware that setting up a company takes several months and requires a 12-month office lease to be secured at the initial stages. Companies should prepare for the cost involved. Singapore and Hong Kong are comparatively easier. A company can be set up within a few days or weeks. However, these regions have their own obstacles so research and seeking local advice is recommended.

Two

Local Practices: Business practices in Asia are vastly different from Ireland. In most regions, especially China and India, relationships are key. Deals with locals are usually determined by how well you know the counterparty. Many smaller local businesses (eg suppliers) might be uncomfortable dealing with a foreign business and change their prices accordingly. Knowledge of local languages and practices is key. Having trusted local employees certainly smooths things over when dealing with suppliers and clients.

Three

Recruitment and Labour Law: Recruitment of local staff requires care. Online platforms and agencies can help but always check the background of candidates. Be aware that labour law in China is biased towards the worker so ensure an employment contract in Chinese is signed by all staff, with strict internal rules backed up by a staff handbook. Also, ensure Income Tax and Social Insurance are withheld and paid by all employees.

Four

Don’t assume operating to be easy: This is especially true for China, India and Vietnam, with the latter two becoming increasingly popular. Despite the high level of risk that has always been perceived by foreign investors in India, recent policies aimed at improving ease of doing business could represent an attractive change. The recently liberalised FDI caps, the presence of a skilled and low-cost labour force and high English literacy in the country are advantages for foreign investors.

Nevertheless, particular attention must still be paid to the Indian environment. Opening companies in the country can be lengthy and complicated and assistance could be needed. The choice of the location is fundamental due to the numerous regional differences in terms of business licences, overhead costs and consumer behaviours.

Vietnam represents an attractive business environment for foreign investors when compared to other Asian countries. They have a relatively stable government; increasing consumer confidence and domestic consumption; extremely cheap labour force and facilities; and abundant natural resources. However, Vietnam often ranks low in ease of doing business. The complexity of legal processes and the presence of several state-owned enterprises should alert investors to look for professional assistance whenever entering the market.

The country is becoming one of the biggest manufacturing hubs in the world and many investors are still unaware of the great potential of the local consumer market, with one of the fastest growing middle classes in South East Asia.

Five

Corporate responsibility: When doing business in China, make sure you choose a reliable and trustworthy legal representative. They will have full access to the company, cash and capital; and can enter into contracts on behalf of the company.

Six

Banking: Ensure the chosen bank has experience dealing with foreign companies and handles matters such as currency exchange and profit remittance regularly. In Hong Kong, many banks have implemented a ‘know-your-client’ scheme in which it is no longer possible to set up a corporate account remotely or with a proxy. Therefore all directors/shareholders must be present in the bank at time of opening an account.

Seven

Address/Capital/Scope/Name: The four core pieces of registered information for a Chinese company are business name, address, scope and registered capital. Each should be thought out thoroughly prior to investment as changes are time-consuming, costly and would almost certainly interrupt business operations.

Eight

Offshore status: Apply for Offshore Status, if applicable. A company in Hong Kong can be established without substance, that is, with no office or staff, and can be operated remotely. Currently, if all the income is sourced from abroad then a Hong Kong company may not liable for local tax.

Nine

Taxes: Be aware of taxes due. Despite recent reforms, China’s tax system is very convoluted and rates are quite high. Corporate Tax is 25% and VAT rates vary. Hong Kong’s Corporate Tax rate 16.5% and Singapore’s are 8.5% and 17%.

Ten

Due Diligence: No matter what part of the region you are investing in, if a major deal is being made with a local company, or equity is being purchased for a merger, always perform a full corporate health check and due diligence to ensure no liabilities are assumed. Hiring a professional consultant is crucial and can help avoid bad debt or tax liabilities being unknowingly transferred. Any company that refuses an investigation should not be dealt with.

Innovation Is the Future of Irish Business in Australia

Australia’s buoyant economy offers an important post-Brexit solution for Irish companies seeking to diversify globally and can act as a gateway for entry into the wider Asia Pacific region. Developing these opportunities was a key driver behind the trade and investment programme organised in the context of President Michael D. Higgins’s State Visit to Australia. The former Tánaiste and Minister for Business, Enterprise and Innovation, Frances Fitzgerald TD, also joined the programme aimed at strengthening economic and export opportunities between Australia and Ireland.

Over the course of 8 days, 2 cities, 14 events and 170 meetings with Australian buyers, new business opportunities were sought for 55 Irish companies, 27 of which had yet to export to Australia, and 16 of which were heavily Brexit exposed.

Strong export performance is critical to the Irish economy. Despite previous economic contraction, Ireland increased its exports by 40% and Ireland’s export performance continues to be responsible for our sustained economic growth. With Britain’s decision to leave the EU, expanding Ireland’s export footprint beyond the UK is more urgent for Irish business.

Increasingly, Irish businesses are looking to Australia as a key export market. In 2016, more than 300 Enterprise Ireland backed companies exported goods worth €256 million to Australia, 14 percent more than the previous year. Australia is also a gateway to the Asia Pacific region which delivered double-digit growth for Enterprise Ireland companies in 2016.  An impressive 16% year on year gain made it the second-fastest growing region for these companies in 2016.

The recent trade mission was the largest programme Enterprise Ireland has ever undertaken in the region. The companies that participated on the programme are reflective of a dynamic Ireland that is known the world over for its innovation. During the Australian trade mission, 14 Enterprise Ireland clients signed significant deals and reached major milestones with Australian partners.

Irish company Brightflag signed a multi-year contract with Telstra the biggest telco in Australia, affirming that Australian companies are forward thinking and embrace new technologies which bring value to their business.  Cubic Telecom signed a €20 million deal also with Telstra and Portwest acquired a second Australian workwear company for close to €10 million. Combilift secured a AUS €1 million contract with an Australian construction company, while Akari Software signed €5 million worth of deals with Australian universities and the Irish startup WeBringg became the new logistics arm for Menulog, the largest food-ordering platform in Australia.

Meanwhile, four Enterprise Ireland-backed companies Prodigy Learning, WeBringg, GECKO Governance and Poppulo announced plans to open new offices in Australia.

These successes demonstrate that innovation is central to Irish companies’ success internationally. Alex Kelly, President and co-founder of Irish company Brightflag affirmed its importance in Australia, saying:

“From our experience Australian companies are forward thinking and embrace new technologies which bring value to their business”.

For the past two years Ireland has been Europe’s fastest growing economy, a growth that has been innovation-driven. The European Commission’s 2017 Innovation Scorecard ranked Irish SMEs number one. A long-term economic strategy has helped Ireland to build a reputation as an ‘innovation island’. With global markets undergoing historic change, innovation can help contain the impacts of market volatility and provide long-term benefits. As Enterprise Ireland helps Irish businesses prepare for Brexit, innovation is the heart of our strategy. With global markets undergoing historic change, innovation can help contain the impacts of market volatility and provide long-term benefits.

Like Australia, Ireland must be globally competitive in export markets to sustain economic growth. While Australia is beginning a journey with the launch of its Innovation Agenda, Ireland’s innovation strategy is deeply embedded and will continue to thrive as we encourage homegrown companies to diversify and expand to bright horizons. Finding new markets is now a major challenge to the continued success of Irish business. Deepening commercial partnerships between Australia and Ireland will contributing to the future success of all our enterprises.

Mary Kinnane is Enterprise Ireland director for Australia & New Zealand

Discover Enterprise Ireland’s Market Insights here

This article was originally published in the Sunday Independent

Rising market for quality goods in the East offers opportunity to Irish exporters

Irish companies should look east to find a rising marketplace for quality goods and services. Increased middle-class income has transformed dynamics in the Chinese market. Until recently, competing on price was a serious barrier for Irish exporters targeting China. But a shift in consumer preferences has expanded opportunities for overseas businesses. With the reviews and comments section of e-commerce websites increasingly influencing purchasing decisions, price is no longer the c onsumer’s main priority. Product quality has become almost as important. This shift in consumer behaviour has created opportunities for Irish exporters to invest in e-commerce and serve a growing taste for quality goods. Irish companies and brands already have the advantage of being perceived by Chinese consumers as supplying premium products and services, associated with a high level of quality.

One such exporter, Felim Meade, MD of Emerald Green Baby, describes the commercial landscape that attracted his company to the region,

“Everyone knows the Chinese market has huge potential. With the government’s five-year plan for 6.5% annual growth and its ‘Belt and Road’ initiative driving connectivity between Eurasian countries, the opportunities for growth are endless.”

“The challenge lies in accessing China’s potential in a cost-effective way. Emerald Green Baby has been selling in China for three years but spent years researching how to sell there. China is a very sophisticated and dynamic market, far more advanced than what we are used to in Europe and America. The potential for e-commerce is clear when you see that 51% of goods are bought online and 80% of online sales are done on a mobile phone in China.”

China has now overtaken the US to become the world’s number one online shopping market, accounting for over 40% of global e-commerce retail sales. Two of China’s biggest e-commerce players played a major part in that growth. In 2016, Alibaba and Tencent delivered record-breaking profits, signalling how healthy China’s consumer market is. Alibaba’s profit almost doubled to $2.1 billion and Tencent’s grew 70% to $2.7 billion.

The cross-border e-commerce market is expected to reach a 7.5 trillion RMB volume (€1 trillion approx.)  in 2017 (Source: Walk the Chat), demonstrating how appealing foreign brands are for local consumers. This year, the Chinese government announced that they plan to establish more cross-border e-commerce pilot zones to support international companies gain access to the Chinese market. While China’s regulatory environment can still pose a challenge to leveraging cross-border opportunities, these pilots are an example of how the situation has relaxed in recent years.

Enterprise Ireland has increased supports to encourage more companies to capitalise on the opportunities presented by the Chinese e-commerce market in 2018. Several Enterprise Ireland client companies, including Emerald Green Baby, Ovelle, Irish Breeze and Clevamama already sell on e-commerce platforms in China. Irish companies considering China are encouraged to conduct diligent market research and visit the region to ensure they understand consumer preferences in their sector before committing to a plan. Market research will also help companies to determine which e-commerce platform best suits their offering. While some local platforms are not well known outside China, that doesn’t make them any less important within the market itself. Enterprise Ireland’s Market Research Centre is ready to assist companies considering e-commerce expansion to China.

When visiting the region, Irish companies should also aim to meet potential partners and distributors to get a practical sense of the market and explore the need for their products or services. Relationship building is essential to doing business in China and often must be done face-to-face. Many businesses credit their interpersonal relationships as key to successful business in China. In some markets, personal connections can still outweigh other commercial considerations. Contact Enterprise Ireland in China for expert help with building those connections and growing your business in the region.

This article was originally published in the Sunday Independent

Guest Blog: Ireland’s International Traders Remain Optimistic for 2016

Commenting on HSBC’s 2016 Trade Confidence Survey, CEO of HSBC Ireland, Alan Duffy, says that Irish businesses remain optimistic about trade prospects but have more confidence in the local than the global outlook.

It is a measure of how far we have come as an economy that HSBC’s 2016 Trade Confidence Survey of 24 global markets saw Ireland at the top end of the rankings for positivity around its local economic outlook.

We have all seen that the combination of wage restraint during the crisis years and the exchange rate effects of the ECB’s programme of Quantitative Easing have both provided a lift to Irish competitiveness.

Whilst the outlook was inevitably moderate as the value of the euro eventually normalised, an economic recovery in advanced economies across the world likely helped sustain a robust performance for Ireland’s export sector. In particular, Irish exporters are well positioned to benefit from solid performances by the UK and US.

Longer term, Irish exports will benefit from growing levels of disposable income in emerging markets, and China will likely become one of our top export destinations in decades to come. In the near term, the advanced economies of Western Europe and the United States continue to be our biggest sources of export demand. As such, Ireland is relatively well placed to withstand any headwinds coming from a slowdown in emerging markets.

Despite these positives, overall exporter optimism had actually eased somewhat in Ireland. This was reflective of reduced optimism in the performance of the global economy. Irish companies expected the global economy to worsen slightly during that period. This slip in confidence levels reflected the deterioration in the global trade environment. World trade growth had slowed sharply that year, with import volumes in leading emerging markets, such as China, Russia and Brazil, weakening significantly.

However, the recent downturn appeared more cyclical than structural in nature. As many of these economies benefit from strong economic fundamentals, they are likely to be an important driver of global economic growth and trade over the medium term.

Perhaps aligned to such caution over the global economy, currency and commodity price volatility had emerged as the top financial risks anticipated by Irish companies. With this in mind, many were looking at strategies to overcome these risks such as negotiating better terms with trade partners and internal cost cutting.

Across Europe, stronger competition is the single most dominant challenge for businesses trading internationally. In line with rising cost pressures and anecdotal reports that companies are reaching the limit on the amount of cost increases they are able to swallow before passing them onto consumers, the emergence of competitors who compete solely on price is outlined as the biggest challenge, with the majority of Irish firms also highlighting it as their main worry.

With such competition becoming a concern, differentiation becomes increasingly important. That is why many Irish corporates are focusing on improving customer satisfaction and employee skill sets as their main objectives for the next six months.