UK Super Deduction: How it affects your UK customers

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As part of the 2021 UK budget, the British government has introduced the largest tax incentive on plant and equipment capital investments in their history.

This incentive, known as the super deduction, allows UK companies to claim 130% capital allowances on qualifying plant and machinery investments. This is an increase on the 18% ordinary relief prior and came into effect on 1st April 2021 running until the end of March 2023.

Alongside the super deduction, the UK government also introduced a 50% first year allowance (FYA) on for special rate assets until 31 March, up from a 6% allowance previously. These changes make the UK capital allowance regime more internationally competitive, lifting the net present value of UK plant and machinery allowances from 30th to 1st in the OECD.

What does this mean for you and your UK customers?

This incentive reduces the effective cost of equipment for UK manufacturers, thus making plant and machinery investments more attractive.

For example, under current rules, if a company invests £100,000 in a piece of equipment they can write off the cost of that equipment against their tax bill. i.e. Since 19% of £100,000 is £19,000, the effective cost of their equipment is £81,000.

With the new super deduction, you can write off 130% of your investment in “plant and machinery” against your tax bill. i.e. 130% of £100,000 is £130,000, which at the 19% corporate tax rate allows you to write off £24,700. This means the effective cost of your equipment is now £75,300. Therefore, companies are incentivised to move forward or make additional capital investments.

This is necessary as investment has dropped significantly due to the pandemic in the UK which was on top of historically low business investment relative to the UK’s peers. Chancellor Rishi Sunak reiterated this need for increased investment “With the lowest corporation tax in the G7, we need to do even more to encourage businesses to invest – for decades we have lagged behind our international peers”.

It is expected that these incentives should act as a catalyst to the return of capital investment in the UK post pandemic with Stephen Phipson of MAKE UK (The UK manufacturer’s association) stating that the super deduction should “turbocharge investment”.

For many manufacturers in the UK investment cycles have stalled or been delayed due to Covid-19 and Brexit and may now be looking at capital investments for the first time in several years. According to a MAKE UK survey following the budget announcement, almost a quarter (22.6%) of manufacturers stated plans to increase investments in response to the super deduction. Furthermore, 28.1% of those surveyed said they will bring forward planned investments in response.

This indicates the impact that these incentives will have on investments in 2021 and beyond, potentially making your customer base more receptive to your offering.

This is one of the first major supports brought in for manufacturers since the UK industrial strategy was axed earlier this year and it is expected that there is further supports to come for UK manufacturers. There has been calls for an overarching plan for business to replace the industrial strategy, bringing together policies around sustainability, skills and trade, but it is uncertain whether such a plan will be put in place.

Nevertheless, the introduction of incentives like the super deduction are sure to be welcomed by manufacturers in the UK and Irish companies should ensure they are up to date with any supports their customers may be receiving for their product/service. To learn more about Tax super deduction visit www.gov.uk.

Stay up to date with Enterprise Ireland UK on LinkedIn or get in touch here.

Ready for a New World: How Modubuild grew during the Covid-19 crisis 

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Never has there been more need for advice, guidance, reassurance and fresh ideas for Irish companies facing the unprecedented challenges that 2020 has brought, which is why the theme for Enterprise Ireland’s International Markets Week (IMW) 2020 was“Ready for a New World”.

One of the keynote speakers at this year’s IMW event was Kevin Brennan, the co-founder and managing director at Modubuild, a company that has enjoyed phenomenal growth thanks to large-scale projects throughout Northern Europe. Understandably, the company has faced project delays and postponements thanks to the effects of the Covid-19 pandemic but is still expecting strong growth this year.

“The way we look at it is that Covid has been a problem but it’s just one of the many problems that you encounter as an international business on a day-to-day or year-to-year basis,” says Kevin. “Our main message would be to remain positive, communicate with your people and continue to service your clients. We don’t see Covid as an excuse not to deliver. It may be more difficult but the world continues on.”

From small beginnings to big contracts

Modubuild was set up initially as a small company by Kevin and his business partner John Comerford to take advantage of an opportunity around modular construction, specifically in the area of specialist fire and explosion protection. Clients included Dublin Airport and Limerick Tunnel, as well as some pharmaceutical companies like Eli Lilly, Pfizer & Amgen. The company quickly became specialists in this area and were well poised to deliver solutions for the burgeoning data centre industry that experienced strong growth in the last decade.

Our first data centre job in Ireland was around 2012, and in 2015, we won our first big international contract, an €8 million contract for a data centre in the Netherlands for the same client. At the time, it was one of the biggest data centre projects in Europe. From then on, the company has skyrocketed in growth, averaging 60% year on year since then. Current year revenue will be somewhere north of €34 million, so all going well, we’d be expecting to go past the €50 million mark next year.”

Throughout their growth, Modubuild has been supported by Enterprise Ireland, both in terms of grants and advice as they expanded into new countries. “Enterprise Ireland helped us out a lot since we initially branched out into the Netherlands, leading us through issues like tax compliance and putting us in contact with local suppliers, opportunities etc. We also received two rounds of funding to help recruit people. We’ve found them really beneficial in terms of PR; our first office outside Ireland was in Amsterdam, and Enterprise Ireland arranged for Kevin Kelly, Ireland’s ambassador to the Netherlands, to open the office, which attracted a significant amount of PR. The fact that you have an entity like Enterprise Ireland promoting us as an international company alongside some other very successful companies can only be beneficial in raising our profile.”

Today, the company is headquartered in Kilkenny City, with a manufacturing plant in Castlecomer and offices in Amsterdam, Brussels, Manchester, Stockholm and Helsinki. “Our business is mostly in North Europe, following our clients as they require our services. Lots of data centre activity is located in Northern Europe – our clients tend to roll out different projects across Europe and ask us to come on the journey with them. We’re in the process of setting up in Spain in the next year because data centre activity is increasing there and we are also looking at opportunities in other countries.”

The plant in Castlecomer is another side to the business. “In Castlecomer, we design and manufacture high-tech modular buildings and can then ship them throughout the world. For example, we’ve just delivered a large turn-key design and build vaccine laboratory for a Global BioPharma customer. We designed, built and tested the entire facility in our factory, while the client was getting planning and preparing the site. We then shipped it to site in large modules and re-assembled the building on site in 10 days, this means our client can have a lifesaving vaccine ready for market around one year earlier than it would normally take.”

Tackling 2020’s challenges

Modubuild was in a strong position coming into 2020, which helped the company navigate the two major challenges of 2020 – Brexit and Covid. Brexit, explains Kevin, was something they had prepared for well in advance. “One of the things we did when Brexit first came on the scene was to set up a separate company that operated within the UK. We also took the foot off the pedal somewhat in the UK as it’s a very competitive market and instead focused our attentions elsewhere in Europe – and it’s been a very successful strategy for us.”

Covid, on the other hand, was a different story. “Covid was something that nobody saw coming. For us, we had seen huge growth coming into the crisis, and we were extremely busy with almost full order books. The biggest impact probably was the temporary closure of some projects, particularly in Ireland because of lockdowns, and that hit our Q2 turnover probably to the tune of 25%. But overall, we’re still projecting strong growth this year, perhaps not at the same level as before Covid, but possibly somewhere north of 30%.

“We’re lucky that the sectors we work in are all seen as essential – for instance, many of our clients are looking to develop vaccines for Covid and need rapid delivery of vaccine laboratories, which we can build in Castlecomer. Then the data centre industry is continuing its growth at pace, if anything, Covid has meant there is an even greater need for data centres due to video conferencing, remote working etc.”

Like most other companies, remote working and staying in contact with employees during lockdowns have been challenging. “A lot of our people are mobile and working in different locations so we were well used to communicating through video chat etc, but probably our biggest challenge was missing the interaction of working and collaborating in an office environment. We’ve tried to keep people connected by having regular Town Hall meetings online and doing various other activities online to keep people involved, virtual coffee meetings etc. There was huge uncertainty back in March/April, we noticed many people and businesses around us were panicking, so one of the first things we did as a company was to send a clear out a clear message to our people that we were in a strong position, peoples jobs were secure and we weren’t going to put people on reduced hours, furlough, forced holidays etc. In fact, we stated that we were going to keep recruiting – and that’s what we’ve done, we have continued to grow team significantly to ensure we were ready to take on new and larger projects.”

In addition, having boots on the ground in Europe has proved beneficial. “We had a couple of hundred people located on projects throughout Europe, and most of them made the decision to stay in those countries during the pandemic rather than travelling back to Ireland every week or two weeks as they would have done pre-Covid. This meant that all our projects stayed operational throughout the crisis, in fact, we actually started a couple of new projects in Europe right in the middle of the pandemic.”

 

Click here to watch the opening of Enterprise Ireland’s International Markets Week 2020, featuring Kevin Brennan.

Geowox - innovation vouchers

Geowox – Innovating Home Buying Through Technology

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“We speed up the home buying process by providing a home valuation that can be done in one hour. Our business is designed to solve a problem. With the Enterprise Ireland Innovation Voucher Scheme our goal was to do more research and development on satellite and aerial imaging to further develop our platform and we achieved this” – Stefano Francavilla CEO and Founder, Geowox.

Property tech start-up Geowox has completely revolutionised the process of home buying. Traditionally valuations are completed by surveyors manually which can be slow and sometimes not fully accurate and when dealing with large asset books not very feasible. Geowox has changed all this, creating scaled, fast and accurate valuations using open data, automation and machine learning.

The company is very much on the radar as one of the first tech companies in Europe to receive direct investment from the EU – €1.6million in 2021. They’re on a trajectory to success and as part of their continuing growth availed of the Enterprise Ireland Innovation Voucher scheme to work on refining and improving some of their imaging methods and this proved to be really successful for them.

“We set up the company to digitize the mortgage process and enable a fast track valuation through automated property valuation solutions”, explains Stefano Francavilla who founded the company in late 2017 with Paul van Bommel and Marco Giardina. With the help of Enterprise Ireland’s Innovation vouchers Geowox worked with Trinity College Dublin to look at applied satellite and aerial imagery and discovered how accurate object recognition is to increase their automated valuation model coverage.

Geowox leverages three components – open, licensed and proprietary data which includes data extracted from aerial images and this was the core of the work that they used the innovation vouchers for. The information they gleaned through their research and development with TCD and the workflow they have built now enables them to further refine and adjust and they aim to expand into new markets.

So how did Geowox become aware of the Innovation voucher scheme? “Enterprise Ireland has done a great job in supporting business start ups. I was being kept informed of all of their supports and then saw the innovation supports and felt that it was a big fit for us at this stage in our growth”, says Stefano.

The innovation voucher allowed the company to look at what was available in aerial imaging and satellite images when it came to detecting lot size of properties. “We went to the Adapt Centre at TCD with this broad idea. We gave them the initial idea and then asked them to expand on it and they brought in their expertise and we got a lot of promising results. The end result was a presentation and baseline and we ended up setting up a team and now have a roadmap.”

Stefano and his team found the process straightforward and they now have a resource within the company working specifically on this topic and solutions for recognising lot size with a higher degree of accuracy for properties in Ireland. They have achieved what they wanted to with this baseline. He advises companies to engage as early as possible with the innovation voucher process. “Start building the relationship with Enterprise Ireland and get early feedback and have your goal in mind. They have the knowledge and industry experience. Have your clear questions ready and go to them with a goal in mind so that they can help you at an early stage.”

To take your next step towards Innovation visit Innovation Vouchers.

Net Zero webinar - How, When & Why

Net Zero UK – Why, When and How – Webinar

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The net zero challenge facing the UK will reform the ways in which business is done. To help Irish exporters understand how these changes will affect their sector and growth, Enterprise Ireland UK and UK net zero experts hosted the webinar Net Zero UK Overview, Why, When and How? 

The webinar examines

  • The major industry and policy drivers that will accelerate the UK economy towards net zero emissions

  • The impact of the UK’S Sixth Carbon Budget, Green Industrial Strategy and individual corporate net zero plans

  • Key sectoral updates

  • Enterprise Ireland’s organisational climate action strategy

  • Green initiatives such as the €10 million Climate Enterprise Action Fund

Gain key business insights with our on-demand UK webinar series

 

Net Zero UK – The UK Energy Market & the Net Zero Challenge – Webinar

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This webinar explores the major changes both underway and planned as the UK seeks to transition to a fully decarbonised energy system.

From the increasing role of renewable energy, to the decarbonisation of the heating and transport sectors, this Enterprise Ireland UK webinar invites experts and industry leaders to understand the timelines, technologies and innovation required for the UK energy system to achieve net zero.

Speakers:

  • Andrew Lever, Director of Programmes & Innovation, The Carbon Trust

  • Cian McLeavey Reville, Market Strategy Manager, National Grid ESO

  • Jon Slowe, Founding Director, Delta EE

    Gain key business insights with our on-demand UK webinar series

      Aeriel shot of a large boat with containers in a port

      Incoterms – Defining the responsibilities between buyer and seller

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       Now that the UK is a third country, there is an extra administration burden on those who trade between the EU and the UK. Import and export declarations now have to be completed for all shipments, and duties may have to be paid. But who is responsible for carrying this extra burden and cost? Is it the buyer or the seller? This is where Incoterms come in.

      What are Incoterms?

      International commercial terms, or ‘Incoterms’ as they are often called, define where the responsibility lies between the buyer and the seller. Incoterms set rules for the delivery of goods between trading partners and are recognised globally. These rules help to clarify; who is responsible for the costs involved in the delivery of goods, such costs include insurance, freight/shipping and duty and who is responsible for the import/ export declarations and the associated filing costs.

       

      Negotiating Incoterms

      Companies should try to negotiate the best terms, ensuring that they strike the right balance of keeping buyers satisfied while also ensuring that they are not taking on any extra expenses which they cannot afford or that would make their sales unprofitable. It is important to consider how you will process any declarations and if you can afford to take on the extra costs associated with any of the methods available.

      When agreeing on Incoterms, it can often be the case that the buyer has the greatest say and may dictate the terms. Some companies may take on responsibility for the declarations and duties in order to avoid passing the burden on to their end customer especially where it could be easy to find an alternative supplier locally.

       

      Incoterms in Practice

      There are currently 11 categories of Incoterms but we will look at two to understand how they work in practice.

      EX Works (EXW) typically involves the buyer taking on the majority of the risk and costs involved. The seller agrees to have the goods available for collection at an agreed location. The buyer collects the goods and is responsible for both export and import declarations, shipping costs and the payment of duties.

      Take for example, a French car manufacturer selling cars to a UK car dealership, under the term ‘Ex Works Paris’. The car manufacturer (the seller) will have the goods available for collection at their factory in Paris. The UK dealership (the buyer) will collect these goods. They will bring them to the port, ensure that they have the correct export documentation submitted. They must pay for the shipping and insurance cost. When they reach the UK, they are responsible for having the correct import documentation completed and that duties are paid. Finally, the UK dealership must pay for the transport from the point of entry at the port to their premises.

      Delivered Duty Paid (DDP) is another term that is used regularly. Many large supermarket chains, for example, have stipulated to their suppliers that they must continue to supply goods under DDP terms post- Brexit. This term requires that the seller accepts all responsibility and costs for delivering the goods to the named place of destination. The seller must pay for both the export and import declarations along with taxes, duties, insurance and transport costs.

      Take for example, an Irish vegetable producer supplying a supermarket in the UK under the term ‘DDP Birmingham’. The Irish supplier will now have to submit an export declaration for the goods to leave the country. They will have to pay for transport costs and insurance to get the goods to the UK. In order for the goods to be allowed into the UK, the supplier must ensure that they have the correct import documentation and that all duties and taxes have been paid. Once the goods have been imported, the Irish supplier must deliver the goods to the premises of the supermarket (the buyer) in Birmingham.

      It is important that all companies are aware of the potential impact and extra cost that an Incoterm may have on their business before agreeing terms with their supplier or buyer.

      For companies that feel that their customers could easily find an alternative supplier, it is vital that they take the necessary steps to increase their competitive advantage. Through continued innovation and engagement with their UK customers, companies can ensure that they provide not only a superior product but also better quality service than that of their competitors, making customers less likely to switch.

      Further information on incoterms can be found on the International Chamber of Commerce’s website.

      Europe is our future

      Eurozone: Why trading in the Eurozone equals more profits and less risk for SMEs

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      As an exporting nation, Ireland really couldn’t be in a better place. We have a strong and enduring relationship with both the US and the UK markets, but we also are a pivotal part of the Eurozone, a huge market that is incredibly open to ambitious Irish companies. 

      Anne Lanigan, Regional Director, Eurozone, at Enterprise Ireland believes that the Eurozone represents a huge opportunity for Irish companies, particularly at this time of recovery.

       

      “The market in the Eurozone is five times that of the UK, yet, Irish industry exports from Enterprise Ireland supported companies are just 80% of what they are to the UK. That highlights the opportunity in Europe – we have really only just scratched the surface. It’s a huge market and it’s an easy market in terms of the lack of infrastructure barriers.” says Lanigan

      “In general, Europe is very open to working with Irish companies, not just because we’re Irish but also because we’re innovative, we’re very flexible and friendly to work with, and we are very good at customising our product to suit the customer – and that is very much valued in Europe. We’re pushing an open door in Europe. The challenge is in our own mindset.”

       

      Fewer overheads, more profit

      But the most attractive part of trading in the Eurozone is the fact that we are operating in the same currency. Investment and financial advisor John Power says that the positives of the single currency cannot be underestimated for SMEs. “When you bring it down to brass tacks, for SMEs, anything that requires intervention, eg if you have to manage currency, is an overhead. I think that some smaller companies often forget that managing a currency is an overhead, and removing an overhead is always going to have an immediate effect on your profits.”

      Language is often cited as a barrier to Irish companies trading in Europe, but the positives of dealing in the single currency override any such barriers. “Language is a barrier but we think that habit might play a part too,” says Anne. “Irish companies know how to deal with currency as we have traded with the UK and with the US for years, but even if you have the capability to deal with currency, it is still an overhead. It’s a good thing that our companies are able to deal with currency issues, as the UK, the US and other countries are very important markets for us, but Europe does offer a market that removes this overhead, so your profitability is higher when you’re dealing in the same currency as your customers and your suppliers.”

      There is a second reason why the single currency is invaluable for Irish SMEs – the volatility of exchange rates. “When Brexit was voted upon, we saw the volatility of sterling and the damage that it did to Irish companies,” explains John. “We saw massive margin erosion and margin uncertainty. We saw that margin uncertainty happened throughout the sales cycle, so the margin that a company thought they would get at the start of the sales cycle could be completely eroded by the end of it. It was then that we saw the real damage that currency volatility can do.

      “When you’re an SME working in international markets, the more risk you can eliminate, the better. One of those risks is currency and as an asset class, it’s probably the most volatile. If you can eliminate that, it has to be a huge positive because you’re eliminating a huge overhead and a risk at the same time.” explains Power

       

      Lack of barriers

      But there are plenty of other advantages to trading within the Eurozone. For one thing, the lack of barriers in the European Single Market means that trading is quick and straightforward. “Mainland Europe operates much like the States in terms of there’s no real land borders to trade between member countries,” says John. “Our traditional trading relationship with the UK and the US may have resulted in us partly ignoring the opportunities in the Eurozone, yet it’s possibly the nearest and the easiest trading relationship we have.

      “We are the only English-speaking nation in the EU, we have a great position on the edge of Europe and we share the single currency. This puts us at a unique trading advantage right now.”

      And, financial transactions are fast and easier too, John explains. “We are also members of SEPA, the Single Euro Payments Area, which significantly reduces transaction costs and the time it takes to make a payment. Along with the single currency, this make it far easier for small companies to forecast revenue, and to receive and make payments.”

      All these financial factors have the potential to transform profitability for Irish SMEs, at a time when revenues and profits are in danger of being squeezed. Luckily for us too, Europe welcomes products and solutions from Irish companies, and we have a great reputation in the most in-demand sectors right now.

      “We have companies excelling across a wide range of sectors,” says Anne. “The most important right now would be high-tech construction, ICT – which fits into every sector – agritech & agriculture engineering, automotive and life sciences. But broadly speaking, we have companies providing solutions for every sector in Europe.”

      Put simply, the Eurozone is a huge market full of opportunity for Ireland – and a market that actively welcoming Irish companies. Time, then, to think European.

       

      Enterprise Ireland and the Institute of International and European Affairs (IIEA) presented at three part series; Europe is our future. Watch the final webinar from Sept 24th below:

       

       

      VRAI team

      VRAI: Promoting gender balance in leadership roles to gain an edge in the technology sector

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      Pioneering Irish businesses are rapidly discovering the business benefits of seeking gender balance in leadership roles, especially in sectors that are traditionally dominated by men. This was a key aim identified by Enterprise Ireland in its 2020 Women in Business strategy, and already the leadership gender balance strategy is paying off for those businesses that have worked hard to increase the number of women in senior management and leadership positions.

      Fast-growing tech firm VRAI, a leader in the field of data driven VR simulation training, specialising in training for “risky, remote and rare” activities such as working on off-shore wind turbines. Not surprisingly, this sector is overwhelmingly dominated by men, so achieving gender balance in any part of the business, much less in leadership roles, is quite a challenge.

      “Our sector is technology and we would be hiring software developers, data engineers, 3D artists etc,” explains VRAI co-founder and managing director, Pat O’Connor. “If I was doing straightforward hiring, for instance through LinkedIn, it would be about 80% male. It’s even more challenging as you get to higher level roles. The question is, what do you do about it? We’re trying to change things, and for a number of reasons. There’s the ethical reason, that it doesn’t seem fair or right; it seems that systemically women are not getting the same opportunities in what is a very exciting industry.

      “But there’s also a strategic reason – what we are trying to do is really complex, in an emerging market. One of the ways to mitigate that complexity is having diversity of mindset in the senior team. We’re already doing something that’s very hard, and it would be a lot harder trying to do it with a mono-mindset team. So we’re doing it for business reasons as well as ethical ones.”

       

      Deeds not words

      Pat agrees that more people are realising the importance of gender balance in business – the big question is though, are we doing enough on a practical level? “I think people are thinking about it, but what’s important are deeds, not just words, it’s about doing something to change the situation. Thanks to our own strategy, I feel that more people are engaging with us to learn about diversity on a business level, to see how they can do it in their own businesses.”

      Pat and the VRAI team have created a practical strategy to promote gender balance in every part of their business. “As a business, we have adopted a triple bottom line. In real terms, this means that as a director of the company, you have a responsibility not just for profit but also for people and the planet. We are striving to create a more meaningful workplace, where we’re achieving something else, not just earning profit. As part of this, we are committed to a gender-balanced workforce.

      “We set out to be a gender-balanced company and we set out a number of milestones. At VRAI 10 (when we had ten employees), we had gender parity.” says O’Connor.

      “As we got bigger though – we now have 18 employees – that figure has altered somewhat, we’re now 66-33 toward men. That has predominantly been driven by hiring more senior people, and we’ve found that there are even fewer women applying for these roles. Our aim is to get back to gender parity by VRAI 30.

      “Early on in the business, we put in a number of strategies at a junior level to achieve gender balance. We committed to a gender-balanced shortlist for every job, which means we take much longer to recruit but it’s the right thing to do. We also sponsored Ireland’s first-ever female-only tech apprenticeship – in fact our apprentice is coming to the end of her two years. In this scheme, our apprentice spends part of her work in college and part in the office with us.

      “Now we need to address the issue at a senior level. Our first strategy is to look at non-traditional hires. For instance, if someone has been working at a high level in an adjacent industry, they very likely can bring a lot of experience to this industry too. For example, one of the members of our management team came from a film background, working in production, but because she’s an outstanding performer, she’s able to make a huge contribution to the business.

      “Another way is by role modelling people, showing others that it’s possible to get into these roles, even if you’re not in technology now. And finally, it’s providing some sort of flexibility. It’s a big cost to introduce enhanced maternity benefits, for instance, but we felt it was the right thing to do both ethically and for the business.”

       

      Highlighting the issue

      At every opportunity, VRAI tries to highlight the issue, and is a great advocate of The Level Project, Enterprise Ireland’s campaign to highlight the benefits of gender balance in leadership and management teams.

      “We’re trying to highlight the issue, be advocates for gender balance, so we try to talk about it in the media, and we try to make sure we are using the right language in our recruitment ads, etc.

      “Part of The Level Project is the introduction of an online Action Planning Toolkit, which is brilliant because a lot of people want to do something but they mightn’t know where to start.” says O’Connor.

      “When you’re a start-up, you tend to prioritise the urgent; but giving yourself time to look at these fundamental issues is hugely important, and this toolkit takes you away from the fudgy, talking-about-it stage to doing something really practical to help the situation.”

       

      Start improving gender balance in your company with The Level Project Toolkit.

      Organico: Turning online retail into a healthy business during Covid-19

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      Online trading has become a lifeline for retail businesses that have had to close during the recent Covid-19 lockdowns.

      Even when things eventually get back to normal, it’s widely predicted that the gains in online business will continue as consumers become accustomed to this way of shopping. Enterprise Ireland’s Online Retail Scheme is designed to help smaller Irish retailers develop their online offering – and those who availed of it pre- and during the pandemic have been reaping the rewards that a good ecommerce site can offer during difficult times.

      One such business is Organico, a West Cork family-run healthfood business, which was founded in 1992 by Alan Dare and currently run by his daughters, Hannah and Rachel. The original bricks and mortar store was joined over time by a café and a bakery, and about a decade ago, by an online shop too.

      “In West Cork there’s always been a strong interest in health, as a lot of people would have relocated here because they wanted to escape the mainstream,” explains Hannah. “As a result, we had a good customer base from the start. However, even though our customer base is spread out over all of West Cork and in the summer we would have benefited from the tourist trade, it’s still a limited market. So going online was an obvious move for us to expand our business.

      “We first went online about ten years ago, when we had to choose between another bricks and mortar store and a website.

      “We started out with just niche products on a WordPress site; now we have around 3,000 live products, and possibly another 1,000 products that either come and go or are in the pipeline to be added.” says Hannah

       

      Expanding the business

      For Organico, an online shop was a challenge as they offer such a wide range of products. Building this kind of ecommerce shop requires a lot of expertise, technology and funding, as a system needs to be put in place with such sophisticated functions as integrated stock levels to make order fulfilment as easy as possible for the company and for the business to be viable with less manual work. So before the company enhanced their online offering, Hannah and Rachel applied for funding from Enterprise Ireland’s Online Retail Scheme.

      “We’ve had two rounds of the Online Retail Scheme, and Enterprise Ireland has been incredibly helpful,” says Hannah. “We received the first funding last year, and we applied because we wanted to upgrade the online shop software – which is a huge investment. 

      “For us, the funding was hugely helpful, as to get the expertise and the work of good ecommerce specialists would be out of our budget otherwise.”

      “We also work with a digital marketing company who specialise in helping smaller companies. When you’re a small business it’s all about word of mouth; online was a completely different experience for us and you’re using a whole load of platforms you’re not familiar with. The scheme helped us access the right support for marketing our online offerings.

      “The scheme has allowed us to access support companies, and I believe that is the scheme’s big benefit – to lift smaller retailers and allow them to compete with bigger companies.”

       

      Overcoming Covid-19 and Brexit issues

      For Organico, the funding couldn’t have come at a better time. “We were incredibly lucky because the funding came in before Covid-19 hit. We had a very busy Christmas with hampers in 2019, and we had to ramp up our production as a result. Then we had a little breather before the lockdown came in. But, by then, our new online shop was ready and we were able to take advantage of the opportunities afforded by lockdown to build our online business.”

      As Organico is considered an essential retailer, their shop is still trading – that said, online is currently playing a massive role in the company’s operations. “Right now, it’s nearly 50/50 between online and the main business because of lockdown. During the last lockdown we got so busy that we had to temporarily turn the website off; this lockdown, we’ve built that online business even further. This time we’ve also had local people buying online, which is new for us.”

      Any boost is welcome for businesses in these tricky times, especially for retail businesses like Organico, who also have Brexit to deal with. “We’ve had time to prepare for Brexit, to source products directly from Europe,” says Hannah. “There has been a lot of improvements in labelling over the last few years, which has allowed us look for goods from places like Holland. That said, because of the nature of the deal, our preparations didn’t translate into a smooth transition and we’ve had a couple of issues, such as organic certification and foods of animal origin, which affects even supplements containing fish oil.”

      Alongside dealing with these issues, Hannah is keep to set up the right structure to service their clients even better post-lockdown. “Right now, we’re hiring to strengthen our online team, and we’re having to expand the physical space too, to cope with the online business. We’ve decided not to reopen the café as it’s a big space and although we’d be busy in the summer, it’s too big a space for most of the year. We’re currently using it as a warehouse for online, but our long-term plan is to expand the shop to make it safer for shoppers post-lockdown, and to make it more efficient for picking up online orders. Good service for both online and in-person customers is important for success in the future.”

      Learn how the Covid-19 Online Retail Scheme can support your retail business online growth.

      4Oceans – Examining our shared ocean legacy

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      4Oceans

      Professor Poul Holm

       

      “Quote TBC”

      Professor Poul Holm (title TBC)

      Key Takeouts:

      • TBC

      Case Study: 4Oceans

      *Please note: There are two principal researchers and this banner may need to be redesigned to include both depending on the content of the interview.

       

      Main Copy, to be interspersed with pull quotes in blue:

      “Quote TBC,” says X.

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      James Maloney of Enterprise Ireland_Centre_ presenting Paddy Casey of “Target Fertilisers” and Oliver Kiernan of “Brandon Bioscience”

      Innovation Arena Awards: collaboration & sustainability solutions are winners in 2021

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      An important area for innovation in Ireland is agritech. Not surprisingly for a country that produces some of the world’s best-quality meat, dairy products and produce, our industry is constantly coming up with excellent products to improve and optimise the agriculture sector. Many of these solutions are featured in the annual Innovation Arena Awards, held by Enterprise Ireland in conjunction with the Ploughing Championships.

      “We have an excellent reputation for product robust technologies that have been tested and proven in a farm setting,” says James Maloney, Senior Regional Development Executive

      “The science and R&D behind these really give us the edge, as well as our reputation as a high-quality food producer. With over 250,000 people employed in agriculture in Ireland, and the sector being such a huge beacon for regional development, it’s a very important area for us. It’s significant that most of the winners of this year’s awards are from different counties around Ireland, including Kerry, Kildare, Cork and Laois.”

       

      This year’s winners

      Now in its 11th year, the Innovation Arena Awards seek to celebrate and promote those entrepreneurs with a ground-breaking agri-related prototype or product. The awards traditionally take place at the Innovation Area during the Ploughing Championships; however, due to Covid-related restrictions, both the 2020 and the 2021 awards moved online, with shortlisted entrants pitching their idea to the panel of judges via a virtual platform.

      “We had approximately 57 entries this year, similar to last year, and nearly every applicant had something to do with sustainability or efficiency,” says James. “This came through in a few ways – for instance as management software or IoT products, where companies were highlighting areas where efficiency could be improved.

      “We also saw a lot of collaborations as well this year between traditional industry and other companies or universities. An excellent example of this is marine biotech company Brandon Bioscience in Tralee, who won the Sustainable Agriculture Award and was crowned Overall Winner. They teamed up with Target Fertiliser to develop a new fertiliser product using extracts from common brown seaweed. This product can reduce nitrogen use on farms by up to 20%. If you look at the Ag Climatise document and the Agriculture European Green Deal, we have to reduce our fertiliser use on the farms by 20%, so this product can deliver the same results thanks to the biostimulant properties. This is a European and a global issue, so the potential for this product is huge.”

       

      New awards

      The growth in veterinary innovation was reflected in a new award introduced this year, the Vet Technology Award, which recognises innovations made within healthcare in agriculture. This was won by EquiTrace, a product that reflects Ireland’s long and proud history as a leader in the equine industry. EquiTrace was also the winner of the Best Overall Start-Up Award.

      “EquiTrace is a little microchip scanner that provides accurate data on your horse, such as temperature, location, medicine dosages and time and the horse’s whole medical record – getting this sort of data  was a big issue with high-value horses in the past. But EquiTrace lets you run a scanner over the microchip’s location and all the data is then available through an app on your phone. Ireland is about third in the world for bloodstock sales, so a product like this is simply cementing our position as sector leaders.”

      The Innovation Arena also welcomed two new partners this year. Ifac partnered on the Best Newcomer Award, which went to Moonsyst International, a smart monitoring system that collects real time data from livestock to help farmers increase productivity, detect disease earlier and monitor heat, water intake and movement. UCD Lyons also partnered on the Agritech Award, which was presented to FodderBox in Cork, a novel hydroponic system that creates efficiency in fodder growth. As the winner of this award, FodderBox will also be taking part in the new AgTechUCD Agcelerator Programme in UCD, an intensive 12-week programme that includes business development workshops, investor readiness training, mentoring from experts and advisers, and introductions to VC and angel networks. AgTechUCD was funded through the Regional Enterprise Development Fund administered by Enterprise Ireland.

       

      Great publicity

      A big reason why the Innovation Arena Awards attracts so many entries is the publicity each product receives. “Traditionally we would have had about 300,000 people at the Ploughing Championships, many of whom are buyers,” says James. “Last year we had to go online because of the pandemic, but the companies still got a huge amount of exposure. For example, last year’s overall winners, Malone Farm Machinery in Mayo, got about 17,000 views on YouTube in the first week for their compact 16-bale trailer; their sales guys said their phone was off the hook the next morning with enquiries. When you’re coming to the Innovation Arena, you’re really announcing that you have a product ready.”

      All these winners are further underlining our strength in the world of agritech, a growing industry across Europe and the world – and an excellent way for Irish SMEs to flourish and prosper in the future.

       

      For more information on the Innovation Arena, and other supports available to ambitious agritech companies, please see www.enterprise-ireland.com

       

      Delivery driver with customer signing VAT form

      Key considerations for managing customs procedures

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      For a huge number of Irish companies, the UK’s departure from the EU meant a first encounter with customs procedures, or if not an entirely new experience, an unfamiliar one to say the least.

      Two figures give some idea of the scale of the issue. Approx 1.6 million customs declarations are made to Revenue each year with this figure expected to rise to more than 20 million by 2023.

      This massive increase is creating difficulties not just for importers and exporters but is also puting pressure on the logistics sector, customs agents, and the ports, which are already working at capacity. Faced with this situation, many Irish companies have little option but to attempt to deal with the customs processes themselves.

       

      Handling customs procedures in-house

      And this will entail a rather steep learning curve. “There is a general lack of knowledge of the customs process,” says Derek Dunne, director of customs formalities and compliance specialist at Manifests Ireland. “We have been spoiled since the establishment of the Single Market in 1992 when didn’t have to make customs declarations for trade with other EU countries. A whole new generation of firms grew up with the advantage of the Single Market.”

      “The other problem is that where the knowledge does exist in the logistics industry and customs brokers, the capacity simply doesn’t exist to deal with the anticipated increase in the volume of declarations,” he adds. “All the customs brokers are exceptionally busy already and they are not really able to take a chance on bringing new people in and training them up. SMEs can’t depend on brokers and logistics partners. As good and efficient as they are, they just don’t have the capacity.”

      Taking control of the process themselves could be the way to go for many SMEs, he advises. He explains that this may well be the best course of action even if the company can find an external partner to handle the work. “If a broker or logistics company is already looking after 27,000 different products for a lot of other clients, they may find it quite difficult to pay adequate attention to a few products for an SME. In these cases, the SME may be more comfortable handling it themselves.”

       

      EORI number

      The procedures are very clear for companies who wish to make declarations directly to Revenue. “They have to know who you are, what you are importing or exporting, and you have to be able to make the declarations electronically,” Dunne explains. “This means companies need an EORI (Economic Operators Registration and Identification) number. This is a European Union registration and identification number for businesses which undertake the import or export of goods in or out of the EU. You can register for a number through Revenue’s EORI online registration service.”

       

      Online customs declarations

      Making declarations online is known as Direct Trader Input (DTI) and requires importers, exporters or their agents to have dedicated software making electronic declarations to the Automated Entry Processing system (AEP). “You also need to register with Revenue and get a digital certificate from them to make declarations to the system,” says Dunne.

      Fortunately, there is a range of software products on the market to handle electronic declarations. “There are around half a dozen providers out there and it’s a bit like mobile phone offers: they all have different features and benefits, so it is best to weigh them up to see which package best suits the needs of an individual firm. Many of them also have the ability to integrate and interact with existing software systems such as ERP and management information and financial systems. They can export and import data to them – that’s an important thing to check.”

      The software will make the process quite straightforward for the majority of firms. “Most companies will be importing or exporting the same products time and again,” he says. “You need to spend time setting up the system and entering the information, such as commodity codes. The software will make life much easier for that. The packages allow you to create templates which can be replicated time and again. All you need then is the information on when and where and how it’s moving. You might need the assistance of a customs expert when setting it up, but most firms should be able to manage it quite well.”

       

      Customs declarations – outsource or complete internally?

      He believes the decision on whether to outsource customs procedures should be based on a solid business case. “It’s quite a simple calculation really”, he says. “While the software providers have different pricing schemes it usually works out that you shouldn’t pay more than €7 to €8 per declaration when using their packages. On the other hand, you’ll pay €50 to €60 when using a broker.”

      This may sound like a compelling case for carrying it out internally but that isn’t necessarily so. Dunne explains that a company with very small volumes of declarations may find the expense of training staff and the additional administrative burden mean that outsourcing is the better option.

      “If you just deal in one or two products quite often you will get to know the processes involved quite quickly and it will be better to do it in-house”, he adds. “But with small volumes less often it is probably better to try to retain a broker. Also, if you are dealing in unusual products it could be hard to track down their commodity codes so it might be best to have an expert do that. In the end, it’s a fairly straightforward business decision based on available resources and the volume of declarations involved.”

       

      Working with a broker

      For those who see outsourcing as a necessity he says finding a broker will be the issue. “Revenue estimates that there are about 330 brokers in Ireland,” he notes. “These range from large logistics companies to very small brokers. There is no centralised database. You need to talk to them, assess their capacity to take on your business, and their commitment to your company. That’s really the way to go if you want to outsource.”

       

      Preparing to do customs processes in-house

      For those companies which wish to handle the process internally or haven’t decided yet, Dunne says training is key. For companies interested in building the capability internally, there are many customs training courses available to give an overview of customs procedures and train staff how to fill in customs documentation.