Our friends in the north offer opportunities for Irish companies

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Marina Donohoe, Director UK & Northern Europe at Enterprise Ireland, describes how the UK’s Northern Powerhouse project is creating opportunities for Irish companies.

The north of England is engaged in a historic transformation from an industrial past to a bright future that connects vibrant cities and globally competitive commercial activities. The scale of those activities should not be underestimated.

Growing faster than anywhere else in the UK, if the north of England was a country, it would be the 10th largest economy in Europe, exporting €56.4 billion worth of goods each year and accounting for nearly 20% of the UK’s overall gross value add (GVA).

 

The UK potential

The opportunities set out in Enterprise Ireland’s recent Northern Powerhouse report play to the strengths of Irish companies, particularly in the construction, life sciences, and digital sectors.

Northern Powerhouse is a government initiative that aims to rebalance the UK’s economy, by maximising the combined potential of the north of England’s cities and regions, including Leeds, Manchester, Liverpool, Newcastle, Sheffield and Tees Valley, an area of approximately 14,400 square miles with a population of 14.9 million people. The goal is to create a collection of modern cities sufficiently close to each other that ‘combined they can take on the world’.

The initiative, first launched in 2016, is delivering substantial public investment, with a focus on improving transport infrastructure between cities in the north of England and supporting economic activities around emerging capabilities. As a result, Northern Powerhouse is creating a wide range of business opportunities suited to the strengths of Irish exporters.

 

Trading Partnerships

Theresa Grant, CEO of Trafford Council, comments, “Irish companies are long-standing trading partners to the north of England, contributing to its robust economy and reaffirming Ireland’s successful relationship to this part of the UK. With rail links like HS2 and HS3 and improved worldwide air connectivity opening up, enabling the cities in the Northern Powerhouse to grow and prosper, we anticipate the Anglo/Irish partnership will grow even stronger, as major opportunities to continue to work together and collaborate present themselves.”

The most significant opportunities are likely to arise from new economic activities and clusters, which are largely based on science and innovation. With the European Commission’s 2017 Innovation Scorecard ranking Irish SMEs first for innovation, Irish companies have a leading position internationally.

 

Significant growth for Irish companies

Brian Crowley, CEO of TTM Healthcare, says, “Since 2012, the TTM Group has been working with NHS trusts, private hospitals and charitable organisations across the north of England, supporting more than twenty clients and employing 110 permanent and temporary staff. We see this region as of one of the fastest in growth terms for TTM, as we work with amazingly innovative and progressive healthcare organisations. Through the support of Enterprise Ireland and Northern Powerhouse, Irish Small and Medium Enterprises can provide modern, innovative and high-quality services across several industries which enhance the growth of the economy in the north of England.”

Ardmac, a construction specialist that works with leading companies across the pharma and technology sectors, has an office in Manchester and a portfolio of clients across the north of England. Ronan Quinn, CEO of Ardmac, comments, “Our business has seen considerable growth in the region in recent years. A significant amount of that business has come from building a shared vision of what our clients want to achieve. The ease of travel between the north of England and our offices mean that we can be face to face with a client within an hour – a key benefit for those working across multiple territories.”

Notwithstanding the threat of Brexit, the UK’s economy is in growth mode and remains Ireland’s most significant export market. Enterprise Ireland is focused on supporting Irish companies to consolidate and grow exports to the UK market, while also supporting them to diversify their export markets across the globe.

Companies interested in exploring opportunities should begin by downloading the Northern Powerhouse report.

This article was originally published in the Sunday Independent.

Irish construction

Digital ambition driving Irish construction to international scale

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John Hunt, senior market advisor for the construction sector at Enterprise Ireland, describes how Irish construction companies are gaining competitive advantage by investing in digitisation.

For construction companies in Ireland, investment in digitisation was once hampered by uncertainty about cost and the likelihood of generating an immediate return on investment (ROI). Disruption from digital is, however, high on the international agenda. Globally, the sector is undergoing a digital transition, particularly evident with the increasing adoption of Building Information Modelling (BIM). Today, ROI is often understood by the sector to mean the potential cost of doing nothing, or the ‘Return On Inactivity’.

BIM, an innovative 3D digital process, gives construction professionals insights and tools to design, construct and manage projects more effectively. Irish companies have moved ahead of international competitors in the adoption of digital technologies, with Enterprise Ireland delivering targeted BIM capability programmes for SMEs since 2013.

A number of recent announcements further support Irish companies to compete in the evolving international marketplace, delivering an advantage at a time when there is much to gain from winning overseas opportunities.

As a major client of construction services, the government’s commitment to a four-year adoption of digital technologies across its public capital programme is an important milestone. A digital procurement directive was signed by the Minister for Public Expenditure and Reform, Paschal Donohoe TD and the Minister of State for Public Procurement, Open Government and eGovernment, Patrick O’Donovan TD.

The government announced its approval of the National BIM Council’s ‘Roadmap to Digital Transition’, the first digital strategy for the industry in Ireland, published in December. The Roadmap reports that Irish companies are aware that the adoption of international best practice positions them best for growth and do not wish to ‘reinvent the wheel’. The Roadmap’s strategy is aligned to support the needs of the SME community that makes up almost 95% of the sector in Ireland and across the European Union.

Research shows that Irish companies are well positioned to benefit from increasing demand for digitisation internationally. The third survey to benchmark levels of BIM adoption in Ireland reports that 76% of professionals are confident they possess the skills and knowledge required to deliver BIM, an increase of 9% on the 2015 figure. Research revealed a growing demand for BIM, with one company reporting, “We have hired 2 BIM modellers to work in the office and have started the process of becoming BIM enabled with a grant from Enterprise Ireland.”

The combination of increased government support and the strategy described in the Roadmap presents an opportunity for more Irish companies to become leaders in implementing common standards and guidelines to international best practice in BIM. It is essential that Irish companies use supports available to respond to demand and keep pace with international competition.

A number of designers, contractors and manufacturers lead the way in overseas markets across sectors. Scott Tallon Walker, Grafton Architects, Jones Engineering, and EPS are BIM exemplars that specialise in healthcare, education, data centre and water-related projects. Cork-based EDC were the first mechanical and electrical consultancy in the UK and Ireland to receive BIM Level 2 accreditation. As a BIM early adopter, the company capitalised on opportunities from the UK’s digital transition and developed a strong team of more than 15 employees in their London office. The progressive engineering company has delivered design work further afield. Earlier this year, EDC completed the detailed design for a $150 million commercial project in Lagos, Nigeria. Managing Director Richard O’Farrell says, “BIM enabled us to engage in a wider package of design works and a far deeper level of detailing than would have been possible before, opening up many opportunities.”

The work Enterprise Ireland has done to promote BIM to support the Construction 2020 Strategy and the recent Action Plan for Jobs 2017 has received wide industry support. These initiatives are timely and urgent, given the industry’s importance to the national economy. One in ten jobs in Ireland is employed by the construction sector. The push to digital best practice will give our companies more productive ways of working that improve competitiveness at home and overseas.

This article was originally published in the Sunday Independent.

Data centre Irish companies Sweden nordics

Data centre surge connects Irish companies to Sweden

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Karin Angus, senior market adviser based in Enterprise Ireland’s Stockholm office, explains how Irish companies can power the Nordics’ expanding data centre construction sector.

With the estimation that, by 2021, 95% of data centre traffic will come from the cloud, compared with 88% today, a projected increase in demand is promising for Irish high-tech construction and engineering companies, who are already partnering in the development of the most innovative and large-scale data centres in Sweden today.

Major Swedish projects driven by Irish construction and engineering companies include the Digiplex facility in Upplands Väsby, and three Amazon Web Services facilities in Katrineholm, Eskilstuna and Västerås.

In March, Enterprise Ireland held a seminar on the construction sector at the World Trade Center in Stockholm, at which forty Irish and Swedish companies participated. Attendees received presentations from Thomas O’Connor, Director of Irish company Collen Construction, and representatives from Business Sweden, the Swedish Construction Federation, the Swedish Transport Administration, the Swedish Association of Public Housing Companies, Enterprise Ireland, and from the 16 Irish companies that attended. Ireland’s ambassador to Sweden, Dympna Hayes, and Ireland’s Minister for Culture, Josepha Madigan, also attended.

Ireland’s geographic location, on the western edge of the Atlantic, has helped it to become one of the most important hubs for global technology giants, including Microsoft, Amazon, Google, Dell EMC, IBM, HP, Facebook, Equinix, InterXion, and Digital Realty.

Speaker Tomas Sokolnicki from Business Sweden discussed why construction in the Nordics has accelerated since Google opened a data centre in Finnish Hamina in 2009. Sweden’s cool climate reduces the energy required to cool down data centres, one reason why it ranks as the third most suitable country in the world in which to locate them. A stable electricity supply, enabled by a production mix of hydro and nuclear power, also makes it a favourable location for data centre construction.

Two Irish companies, Hanley Energy and Kirby Engineering, announced the expansion of operations in Sweden at the seminar, having recently won a number of significant new projects.

Power management specialist Hanley Energy plays a key role in protecting data centres from problems caused by power supply issues and will open an office in Torshälla in Sweden.

Edward Pepper, Head of Operations at Hanley Energy, said, “Sweden is an important market for data centre building. An establishment in the Swedish market, together with our new office, not only supports our growth plans, but also shows our commitment to our customers who expect support around the clock for 365 days a year. Customer demand is central to us, and our expansion in Sweden is part of the implementation of our vision, Global Competence Center.”

With a turnover of €165m, Kirby was founded in 1964, and currently directly employs over 700 highly-skilled professionals.

Commenting on the expansion into Sweden, Dave McNamara Associate Director for Kirby in Europe said, “Although Kirby is relatively new to Sweden, we are positive about our growth and success in the market. This positive outlook is backed by our success so far in securing a number of high-profile projects, with more projects in the pipeline. Expanding our operations further in the Nordics region is a progressive step for the company both from a strategic and development standpoint, especially given the growth in the mechanical, electrical, and plumbing construction sector.”

For Irish construction companies interested in opportunities in the Nordics, it is important to be familiar with local labour laws, follow union regulations, and listen to local advice. Take the opportunity to explore market intelligence and potential introductions with Enterprise Ireland. Staff in the region will assist you with local knowledge and contacts.

Enterprise Ireland recently published the Future Data Centre white paper, in collaboration with Data Center Dynamics, analysing major changes that will impact design and construction trends over the next five years. The white paper can be downloaded from the Irish Advantage website and offers a snapshot of the data centre construction landscape, major changes impacting design and build processes, regulatory and technological drivers of change, and strategies for smart design and construction.

This article was originally published in the Sunday Independent.

Critical Healthcare MD

How Critical Healthcare Makes a Difference to Medical Emergency Services

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 “Our research found that that organisations were suffering from a lack of purchasing control, resulting in maverick buying, excessive supplier costs, endemic overstocking.”

 

 

Key Takeouts:

  • Critical Healthcare’s search for a competitive edge led to in-depth field research, including discussions with both procurement and ambulance teams.
  • Research inspired them to develop a managed service that streamlines procurement and stock management processes while eliminating risk.
  • Enterprise Ireland awarded the company a €150,000 Business Innovation grant to assist with the further development of the system.

Case Study: Critical Healthcare

Based in Kilbeggan, Co. Westmeath, Critical Healthcare was established 18 years ago with the aim of becoming the first choice for the emergency medical services in Ireland. Having become specialists in the market, Critical Healthcare identified further opportunities to enhance their offering and disrupt the expanding niche further afield.

“We started out supplying everything from bandages to airways, nebulisers, nasal cannulas and stretchers,” says managing director Anne Cusack. “Our customers were the emergency medical services, like the National Ambulance Service, fire service, and other rescue services. Back in those early days we were only operating in the Irish market.”

As the recession drove the market to become ever more competitive, Critical Healthcare decided it needed to examine its value proposition in full.

“Back in 2012, we were only supplying products to our customers, and we felt that we needed to move beyond that,” says Cusack. “We couldn’t continue to compete on price alone. We needed to find a way to add value to our customer offering, which would not only assist with their procurement processes, but also enable us to become part of their procurement solution.”

Successful search for competitive edge

The company’s search for a competitive edge led to in-depth field research, including discussions with both the procurement and ambulance teams within the National Ambulance Service, which uncovered potential opportunities.
Cusack explains, “Our research found that organisations were suffering from a lack of purchasing control, resulting in maverick buying, excessive supplier costs, endemic overstocking. As a result, many products were going out of date and there was poor visibility of which supplies were being used, and where. Manual purchasing processes across multiple locations were time-consuming, prone to error, and costly. Paper can be lost and manual data entry leaves room for mistakes. Increased volume of supplier queries can swamp finance departments.”

Understanding these issues inspired Critical Healthcare to develop a managed service, which provides a highly flexible solution that streamlines procurement and stock management processes, eliminates risk, improves productivity, and reduces costs.

The resulting Medlogistix Software as a Service (SaaS) system is specifically tailored to the needs of the healthcare sector. When it was piloted in the National Ambulance Service in 2012, it demonstrated savings of up to 37% on annual spend. After this success, Critical Healthcare won a tender in 2013 to implement Medlogistix across all 102 National Ambulance Service stations in Ireland, followed by contracts with Dublin Fire Brigade and the Irish Coastguard. But even that was just the beginning.

Support for becoming internationally competitive

“We knew we had something that was equally relevant to the emergency services markets internationally,” Cusack recalls. “We started looking at the UK, Scandinavian, and German markets. That’s where Enterprise Ireland enters our story. We had built the original system in-house but recognised we needed assistance to develop it further, to ensure the scalability and reliability it needed to be internationally competitive.”

Enterprise Ireland awarded the company a €150,000 Business Innovation grant in 2015, to assist with the further development of the system.

Cusack says, “We spent a year working with a development company, scoping out the needs of the system and writing the software. 2016 was spent finalising and user-testing the system, and it went live across our existing customers in 2017.”

Medlogistix, a business intelligence software package, incorporates e-procurement, stock management, and a reporting dashboard, all backed by a managed service for a traditionally manual paper-based sector.

Competing for and winning the largest international contracts

International success was already assured, due to a contract won in 2015 with Falck, the UK’s largest private ambulance service provider, thanks to the Enterprise Ireland development support.
“Falck is the largest private ambulance service provider in the world,” says Cusack. “They are headquartered in Denmark and have operations in 55 countries. We were able to compete for and win the contract in the UK because we were able to demonstrate the savings the package could offer across all elements of the procurement process and we were able to tell them what the new system would look like. Falck has been one of our biggest international advocates since.”

The next step for Critical Healthcare is expansion into continental Europe. Industry observers see strong underlying market growth for Emergency Medical Services in the EU, driven by trends including demographic shifts. In the UK, for example, the use of ambulance services has increased by 59% over a decade. The share of citizens aged 65 and older is expected to grow from 19% to 24% from 2015 to 2030 across the EU, with the number of transports required much higher for older citizens.

“The new system is working fantastically well and has made us competitive in international markets,” Cusack notes. “We are now in the next phase of its development, which we are funding ourselves. We are talking to Falck in Denmark and putting together a case for the system’s roll-out in other European countries. Our business is growing strongly. We currently employ 22 people in Kilbeggan, with forecasts to increase that to 30 over the next five years. Our turnover target for this year is €6.4 million and our goal is to grow that to €10 million in 2020.”

Learn more about Enterprise Ireland’s Competitiveness supports here.

Improved Competitiveness Drives Growth in Every Sense for Phonovation

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 “I knew that there must be a better way of working and I went to Enterprise Ireland and said we had an excellent team, but we weren’t changing fast enough. They said there was only one answer: to go LEAN.”

 

Key Takeouts:

  • Automated voice and business SMS provider Phonovation undertook the LEAN transformation programme in 2015.
  • Profits have increased year-on-year since completing the programme: 150% in 2015, 240% in 2016, and 140% in 2017.
  • Phonovation’s growth shows no signs of stopping, with over 200 million messages a year going through their software each year.

Case Study: Phonovation

In 2015, automated voice and business SMS provider Phonovation decided it needed to change in order to become more competitive. That’s what led the company to begin working with Enterprise Ireland on a LEAN transformation programme.

Phonovation was already the leader in its field in Ireland, but Chief Executive Gavin Carpenter believed a step up in performance was necessary.

“I had completed a masters in management in UCD in 2013,” he explains. “I knew that there must be a better way of working and I went to Enterprise Ireland and said we had an excellent team, but we weren’t changing fast enough. They said there was only one answer: to go LEAN. A development adviser came out to us and explained it. There was complete buy-in to the concept from everyone here.”

Implementing LEAN drives dramatic growth

Growth since then has been little short of dramatic, with profits climbing by hundreds of percent since 2015.

“It has been incredibly powerful for us,” Carpenter says. “Profits increased by 150% in 2015, 240% in 2016, and 140% in 2017. We have also increased staff numbers from 16 to 26 in that time. We have grown in every sense thanks to our improved competitiveness.”

Phonovation was the first company in Ireland to provide premium-rate telephone services for TV, delivering services for popular programmes like Where in the World and The Late Late Show.

“We started to roll out business offerings in 2005,” says Carpenter. “Running premium-rate services for TV shows and so on gave us the ability to handle very large volumes of calls. We could run the service for TV in the evenings and offer business services during the day. We quickly became the largest SMS application to person (A2P) provider in Ireland. When your bin company texts you to let you know when your collection is due to take place, that’s A2P. Over 200 million messages go through our software each year.”

While consumers may be sending fewer text messages, SMS has seen year-on-year growth every year since 2011, mainly due to increased business usage.

“SMS is very effective at generating reaction and response,” Carpenter explains. “There is a 95% reaction rate for SMS, as opposed to 15-20% for email. It’s expected to continue to grow until the mid-2020s. During the winter storms, we were sending one million messages a day to parents around the country, letting them know about school closures and reopenings. It’s an essential service these days.”

Working with Enterprise Ireland on LEAN

Working with Enterprise Ireland on the LEAN programme brought about considerable efficiency improvements.

“It taught us how to identify and attack waste in the business. There are seven types of waste and each of them feeds into each other. Overprocessing is typical in IT, for example. You might build a website for a customer that does seven things when the customer only wants five. 20% of the time is spent doing things that are not needed. Waste is anything that doesn’t deliver value to customers.”

And the elimination of waste has delivered enhanced competitiveness.

“When we talk about competitiveness, we talk about delivering value to customers while still making a profit. Every sale we make is based on return on investment. That makes us very competitive. We tell customers how much they will save, or how much additional revenue they will generate, as a result of using our solution. One of our largest customers has a return on investment of seven to one from our solution – for every €100,000 they spend with us they make €700,000 in additional revenue. It makes it very easy to close deals. We put a huge amount of effort into delivering the maximum return on investment for customers.”

The future will see a mix of domestic and international growth as well as new product introductions. “We are going to grow overseas, mainly through Irish customers with international footprints. We have also developed a fintech product, which is a security solution for SMSs sent by banks. It is used by one banking customer in Ireland already and we were recently in Frankfurt with Enterprise Ireland presenting it to banks there.”

Learn more about Enterprise Ireland’s Competitiveness supports here.

How Focusing on Competitiveness Drives Innovation in vStream

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 “Because we are selling something innovative we have to be as efficient as possible in order to get the value out of what we charge clients. That’s very important when you are creating ‘world firsts’, as we often are.”

 

Key Takeouts:

  • The recession in 2008 prompted vStream to develop a presence in the UK sooner than planned.
  • 70% of vStream’s revenues come from outside Ireland, including international sports teams and global software developers.
  • Management worked closely with Enterprise Ireland to develop an operational strategy, as efficiency is key for a creative agency.

Case Study: vStream

By boosting its competitiveness Dublin-based vStream is spending more time innovating and less time administrating.
The award-winning experiential technology company creates immersive consumer experiences for big-brand customers.

Set up in 2007, one of vStream’s first Irish commissions was a 3D rugby and soccer fan experience created for Dublin’s Aviva Stadium. The personalised, stereoscopic adventure allows visitors to the stadium to be individually called up to play for Ireland, and to do so ‘virtually’.

In 2008, the recession prompted vStream to focus on competitiveness and develop a presence in the UK sooner than planned. It paid off, resulting in a major commission from the Westfield Shopping Centre group to create world-first experiences, from ‘5D for Christmas’ to clickable video content for Spring-Summer shoppers, launching in Westfield Stratford City, one of Europe’s largest shopping centres.

Commissions from further afield followed, including work for the San Francisco 49ers – an American Football team – and the US Super Bowl.

Today, 70% of vStream’s revenues come from outside Ireland. The company has worked with global brands such as Formula One teams McLaren and Mercedes F1, and enterprise software maker SAP, using leading-edge technologies, such as Augmented and Mixed Reality and gestural holographic interfaces, the kind found in Tom Cruise movies.

Using Microsoft HoloLens, vStream recently created a holographic, interactive tour guide named Simone to demonstrate one of carmaker Audi’s newest high-tech models, a world first.

At vStream’s core are the complementary skills of co-founders Niall O’Driscoll, a creative director, and Andrew Jenkinson, a technologist.

Working with Enterprise Ireland to boost operational excellence

“What we do has always been very different and big brands are always trying to tell their story in a new way,” says O’Driscoll.

It’s a competitive space, however. Management at vStream has worked closely with Enterprise Ireland to implement operational excellence. “There are other companies in our area. They don’t look exactly like us but we cross over a number of different competitors,” says O’Driscoll.

Creativity drives innovation at the company and if the technology required to deliver an experience doesn’t exist, “we build our own”, he says. To ensure vStream has the resources to do so, operational efficiencies are vital.

“Because we are selling something innovative we have to be as efficient as possible in order to get the value out of what we charge clients. That’s very important when you are creating ‘world firsts’, as we often are.”

vStream drives competitiveness from concept through to delivery

The company recently introduced 10,000ft, a resource management and time-tracking software programme. “It allows us to track hours and integrates with our accounts process. We are trialling it as part of changes to our internal management processes designed to boost efficiencies and drive competitiveness across the board, from concept through to delivery.”

The company has also introduced cloud-based collaboration tool Slack. “Email is unwieldy, especially long chains of emails. Slack allows us to organise our communications much more efficiently.”

Much of vStream’s intellectual property has been patented and future revenues will increasingly come from licensing its technology around the world. Here, too, Enterprise Ireland funding has helped.

“We had created all this value but had realised only a small amount from our IP. We have done the R&D, proved our product in the market, now it’s about taking it out to compete in as many markets as possible. Future growth will come from exploiting that IP commercially and we are hiring someone now to help us make that move from being a projects-based to a services-and-products-based-company,” says O’Driscoll.

vStream drives competitiveness from concept through to delivery

He knows that to win in a global market no company can afford to carry excess weight.

“You need the flexibility to be able to diversify as we did during the recession,” he says. “The market shifts and changes all the time and to compete you have to be efficient and innovative enough to turn on a dime.”

Learn more about Enterprise Ireland’s Competitiveness supports here.

Irish CEOs Asia Pacific

Stories from the road – Irish CEOs in Asia Pacific

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Winning business in AsiaPac is a marathon, not a sprint, for Irish fintech company Fenergo.

“We’re asking banks for between €30 million and €50 million, so these are big ticket deals. You don’t just walk up and ask for that kind of money. For us, closing deals is the equivalent of running a marathon, in that there are 26 units of work to be done, and it takes us between nine and 12 months to complete,” explained Marc Murphy, CEO of Fenergo.

He was speaking onstage at Routes to Growth Asia Pacific, a major conference organised by Enterprise Ireland at Dublin’s Aviva Stadium.

Even in a fast-paced sector like fintech, don’t expect speedy results, he cautioned. “For all we talk of digital revolutions, it’s still a pedestrian pace for big institutions. To get people to put their career on the line to back you is a big, elongated process. It’s about old-fashioned feet on the street. They want to see roots, they want to see you hiring locally, putting investment and commitment in.”

Asia currently represents 35% of Fenergo’s business. “Our beachhead in the region was Australia,” he explained. “We now have five of the largest Australian banks. From there we went after Singapore, we now have three of four local domestic banks there. We also have a presence in Tokyo, and in the next quarter we will have signed three of the large five Japanese banks.”

One of the ways Fenergo made inroads into China was via the overseas branches of banks such as Bank of China and ICBC, “they are giving us the opportunity to go into mainland China,” he said.

Certain steps can help your progress, such as using the Irish embassy for a launch, as Fenergo did in Singapore. Making key industry hires who are known locally is also helpful.

The company currently employs 90 people across AsiaPac, and has invested around €7 million in the region.

“The basics that we do in London and New York, we will do in Singapore and Tokyo too. There might be cultural differences, such as, in Tokyo, the C-Suite will only talk to the C-Suite, so you find out the customs of each society, but the principles of how we do business are no different whether it’s Toronto or Singapore.”

CAE Parc Aviation

CAE Parc Aviation first began doing business in the region almost three decades ago, said chief executive, Frank Collins. Today, 45% of its worldwide business comes from Asian companies. Moreover, 25% of its business is with Irish companies whose own customers are in Asia. All in all, “it’s a massive market for us,” he said. Parc now has seven offices spread across five AsiaPac countries.

Opening its first office in Tokyo, in 2006, proved pivotal, enabling it to develop deeper relationships. It now has three offices in China and employs 15 people in the region in total.

“Our experience was that though we found we could grow really fast – because of the growth in aviation – the hard part would have been to deliver. So we hauled back and decided to concentrate on three or four of the main airlines there and deliver a really satisfying product.”

Expansion can bring constraints for any company. “For us cash flow has not really been an issue. Our experience has been excellent in terms of getting paid,” said Collins.

“For us, it was just the length of time it took, and the regulation involved, in supplying pilots. Between the time you find a pilot and the time you have them fly, it can be months in certain Asian countries, so you’ve got to be prepared to have people on the ground, working through that, before you earn a penny. That’s the real investment, time and resources. But if you are not prepared to put in the time, and the people on the ground, don’t bother, you just won’t win.”

Cubic Telecom

Barry Napier, CEO of Cubic Telecom, first discussed the possibility of entering the region with Enterprise Ireland in 2010. Its initial market was Hong Kong, followed by Australia and New Zealand, Singapore and Japan.

Cubic Telecom also benefited from Irish embassies in the region. “Regulation is very different in every market. A key thing we leveraged from Enterprise Ireland was an introduction to the local ambassadors. They know about the laws and the regulations, and how to work within the community. It’s about networking, use that abroad,” said Napier.

Douglas Proctor is Director of UCD’s International office. The university currently has 5,000 students from the region studying at its campus, plus a further 5,000 studying in partnership arrangements in countries such as China, Singapore, Hong Kong, Sri Lanka, and Malaysia. “One of the key things universities can offer is to act as a broker for Irish industry in terms of partnerships and R&D in the region,” he said.

UCD has around 20,000 alumni living and working in the region, which “if you map that across the seven universities in the country, means there are Irish people trained and working and ready to support your export aspirations in the region,” he said.

Thinking of the market in terms of clusters, rather than geographies, helped Fenergo tackled what is a vast region.

“In our market, banks all move together. We have all the Australian banks, for example, and we get them together, which can take two or three years,” said Mark Murphy.

“Divide your market into sub-segments and go after them like they are clusters. Put every resource you can against one of those sub-segments – call it a beachhead in terms of how you tackle them – and overwhelm them with customer service. Overwhelm them with delivery. Make them feel like you are bigger and better than Apple and Microsoft, and all the other big brands out there.”

“That has been our real formula for success as we’ve gone after new markets and it has proven to be our success in Asia too.”

Asia Pacific

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

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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.

US flag - exporting to the US

Top 10 Tips for Exporting to The USA

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Ireland enjoys a unique advantage in trading with the US because of our deep historical links. Relations between the two governments are exceptional; and cooperation at an institutional level is excellent including in areas such as research, innovation and education.

There is, without doubt, huge opportunity in the US. Around 700 Enterprise Ireland client companies are exporting there and companies like Aerogen, Fenergo, Cylon Controls, Candidate Manager and Rubicoin have set up offices and accelerated exports in the past 24 months. To date, over 20 clients have won contracts worth over €500,000.

1. Preparation

Before entering the US market, extensive research at home is strongly advised. Make contact with State agencies, relevant support organisations and companies who currently export to the US, if possible. Targeting the US usually requires additional financial and human resources, so to keep costs and operations manageable in such as geographically big country, first-time entrants are advised to segment the market and target a particular region or state. Give careful consideration to the resources needed to serve the selected market, for instance, will the operation use a direct or indirect sales channel. Some companies hire locally and others (often in the early stages) put a C-level member of the team in the market for a short period to get things off the ground.

2. Legal

Corporate – Confirm your corporate structure. Typically setting up a US subsidiary makes sense both for tax and liability reasons. Your US subsidiary also will need to appoint a registered agent, and “qualify to do business” in every state in which you have an office or similar presence.

Intellectual Property – Address US trademark issues defensively (confirming that no one else has prior registered or unregistered rights in respect of name and key brands); and offensively (by filing a US trademark application). Patent issues may need addressed depending on the business.

Contractual Terms and Conditions – These must be converted to the laws of a US state, for legal and commercial reasons.

Employment – Get professional employment advice locally. Most US employees do not have employment contracts but employers are bound by offer-letter terms, employee manuals and other undertakings. Also, ensure confidentiality and IP assignment agreements with all employees are established.

3. Tax Structuring and Compliance

Establish appropriate arm’s-length arrangements between the Irish parent and US subsidiary to separate taxable income. This is particularly important because US corporate tax rates (federal and state), totalling about 40% are typically three times the level in Ireland. Have appropriate compliance procedures in place to address federal and state corporate income tax, as well as other potentially relevant tax regimes (sales tax, personal property tax, etc.), particularly at the state and local level.

4. Trends

US import trends indicate high potential for Irish exporters. Meat imports were valued at €9.4bn which was the second fastest-growing import; while dairy went up over 40% to €2.8 billion. The US also imports pharmaceuticals worth $86.1 billion; medical and technical equipment worth $78.3 billion and organic chemicals worth $52.1 billion. These are all among the top 10 Irish exports by category. It is also a big importer in sectors such as aviation and aerospace, mechanical and electronic equipment, insurance and ICT services – all of which are growing in Ireland.

5. Banking

It can be difficult for a non-US company to set up banking for its US subsidiary. Some banks are particularly focused on banking high-growth companies on a trans-Atlantic basis, which can help ease the process.

6. Immigration

Most Irish companies exporting to the US find it critical to establish a presence in the market. This is particularly true in software and high-tech. An estimated 65% of Irish exporters to the US have a full-time presence, ranging from a single-person sales office to manufacturing operations with thousands of employees. Route-to-market decisions are crucial and the role of agents and distributors cannot be ignored. Buyers rarely purchase directly from manufacturers, particularly those from overseas. So fulfilment centres have become increasingly important in the supply-chain, especially since the growth of e-business. This approach is better suited to non-perishable items and consumer products.

7. Insurance

The US is a high-risk environment. Get an insurance broker with trans-Atlantic experience to advise on types of cover, terms and limits.

8. Recruitment

The most difficult aspect of setting up in the US is finding the right people. Obtaining recommendations from trusted people including investors and advisors is often the best way. Otherwise get professional support (especially with sales people). Consider outsourcing for book-keeping, employee tax withholding, HR and mandatory employee insurance and benefits, and similar matters. Also note that visas permitting Irish personnel deployed in the US to work are needed. Allow three to four months to sort this out.

9. Offices

Get professional advice on office space and other properties such as co-working spaces (like WeWork), accommodation offices (like Regus) or renting an individual premises.

10. Incentives and Supports

US supports should not be overlooked. Federal, state and local development agencies and international chambers of commerce can provide very useful support. State and local incentives for investment and job creation also may be available.

 

Unlocking Europe’s Great Engineering Markets

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Taoglas tunes into Germany and France

Established in 2004, Taoglas provides advanced antenna and RF (radio frequency) solutions to the world’s leading wireless and Internet of Things (IoT) companies. Over the last decade, the company has gained a reputation for innovation built on its world-class design, support and test centres based in Ireland, Germany, Taiwan and the USA. Since 2015, Taoglas has launched over 100 new products onto the market.

The County Wexford-based business works with its customers to provide solutions for their unique antenna and RF challenges. In-house manufacturing takes place in its Taiwan and USA facilities, and company expertise and experience applies across different wireless and IoT use cases, from LTE to GNSS, DSRC, and NFC and beyond to 5G, gaining it success stories in telematics, automotive, metering, smart grid, wearables, medical devices, remote monitoring and high-speed video broadcasting.

Taoglas has recently established offices in France. French sales manager Sam McCarthy explains that the decision to establish a presence in France isn’t related to Brexit but rather builds on the success the company has enjoyed in the German market since setting up an office in Munich in 2015.

For an Irish engineering company looking to this market, a flair for the cutting edge needs to be at the heart of the offering, he adds. “For the engineering sector, in particular, you need to have innovation on your side. There are a lot of French companies that are very good at what they do and, if you are just good at doing something, you’ll find you have plenty of competition here.”

In France, the company is targeting particular opportunities in the smart metering market, as well as the automotive and digital signage sectors. The French office was opened in mid-2016 and McCarthy says the step of putting someone on the ground is a potentially transformative one for any ambitious Irish company looking to grow there. “The fact of having someone here, as opposed to managing the market from Ireland, is the difference between night and day. Customers here don’t learn about the company in the same way unless they have someone in front of them and, equally, the company can’t gain the same understanding of the marketplace without a presence on the ground.”

Establishing that presence requires both fluent French and a strong grounding in French business culture: “Formality is at the heart of the French way of doing business. It’s important to understand the subtleties of this as you set out to build relationships,” he told The Market.

While France is famous for a certain level of bureaucracy around employment, he adds that establishing an office need not be an onerous decision. “As long as the company presence is focused on sales, things don’t need to get complicated. As we grow and expand here, it will become a more sophisticated operation, but our experience is that for any company looking to set up a sales presence, there are solutions providers that eliminate the need to worry about excessive costs or paperwork.”

Kerry Abrasives expands out from Germany, Switzerland and Austria

A precision manufacturer of engineered abrasives, Kerry Abrasives was established in 1998 in Listowel by co-founders Liam Brosnan and Peter Mc Kenzie-Vass. The company’s diverse client base includes aerospace, automotive, cutlery and hand tools, bearings and medical device, bringing a natural international focus to its activities. Sales and marketing manager Ina Baumann explains that the very diversity of its portfolio has to be factored into its growth and development strategy.

“Being in so many individual industries can be challenging in terms of focus. We tend to work by product or industry sector and develop markets both from a product focus and a geographic base.”

The Kerry headquartered business is in the somewhat unusual position of having its more established markets in central Europe, particularly Germany, Switzerland and Austria, and seeing the UK as more of a development opportunity.

Using a reseller model to sell to specific clients, the company is developing a distribution network to extend its reach in Central Europe, targeting growth particularly in Slovakia, Slovenia, Hungary and Poland, over the coming years.

Baumann says that the business leverages its standing in Germany through participation in events such as GrindTec, a flagship event for the industry. “GrindTec is the main industry trade event, and it attracts a lot of interest from Eastern Europe businesses who want to see the latest development. It isn’t just the large companies with manufacturing facilities that are there; smaller indigenous companies also attend. They are looking to Germany and western Europe for new ideas,” she told The Market.

“The level we play at is a little above the normal abrasive. Our products are customised, and we go the extra step to deliver a better finish and real life efficiencies. If you can deliver that you can hold your customer; price is not the issue.”

While Brexit is creating uncertainty for some, Baumann says that for a company already focused on the Eurozone, “it’s very much business as usual. You have to put in effort with a new client, in terms of testing, modifying and getting approval, but growth is happening, and we are positive.”

Mergon targets Central Europe’s massive manufacturing base

Established in 1981, Mergon is an Irish company with operations in Ireland, the Czech Republic and the US. Recognised internationally in the area of technical moulding, the company designs, manufactures and assembles components for clients in the automotive, industrial and healthcare sectors. Mergon made headlines in the 2014 World Cup when it was revealed that the 79,000 seats in Rio’s Maracana stadium had been manufactured by the company, both at its Castlepollard plant in Co Westmeath and its facility in Brno, Czech Republic. In 2016, the company confirmed its standing as an international player with the opening of the Mergon Innovation Centre in Castlepollard.

Sales and manufacturing director Tom Mullen explains that the opening of the facility in Czech Republic in 2004 has been instrumental in its growth in Central and Eastern Europe. The facility opened at a time when costs were increasing in Ireland but also responded to developments in a part of Europe that was becoming a major manufacturing hub, particularly in the automotive sector. This is an industry where “to grow sales and deal with rising costs, you needed to be close to the customer”.

Mullen says that achieving the success they’ve found in Central Europe “would have be very difficult without the Brno plant, as we wouldn’t have been able to grow sales as aggressively. If you don’t have presence, it can be hard to convince your customer that you can supply them. Once we established here, that presence has actually supported our manufacturing capability in Ireland. We can switch capacity and supply from both locations.” In its approach to Europe, the company divides the continent with strategic line supply from Czech Republic.

For an Irish company looking to expand in Central Europe, Mullen says it is “really no different to selling in any other part of Europe”, but adds that “having people who can speak the language and know the culture is certainly important. It wouldn’t be as effective if we were to try to do the same thing with an Irish sales team”.

The opportunity represented by the automotive industry in the region has, if anything, only increased over the years. The Škoda auto plant has its headquarters in Mladá Boleslav, Czech Republic, while neighbouring Slovakia holds the title of the world’s largest producer of cars per capita, with Volkswagen, PSA Peugeot Citroen and Kia Motors all having major facilities there. While it is a prestigious industry to be part of, Mullen points out that winning clients will usually come down to the two particular drivers, namely being the best and the best value, and suppliers have to prove themselves in terms of technical capability, consistency, quality and ability to delivery on time.

As regards the tendency of Irish companies to focus on the UK, he ascribes it to a general trait of “following the path of least resistance. If you’re going to get business in the UK, then naturally you’ll concentrate on that, but from a risk point of view, the broader the spread of your business the better. Our experience is that if you can sell successfully into the UK, then you have nothing to fear in other markets in Europe”.

Setting up in the Czech Republic has undoubtedly been pivotal to its growth in Central Europe and, overall, the experience has been excellent, Mullen adds. “We have only had good experiences. It is another piece of the jigsaw, and it has allowed us to keep higher specification jobs in Ireland. The dual presence benefits both locations and has been an important part of our growth.”

Mapping Europe’s engineering strengths

Germany remains Europe’s industrial powerhouse as a leader in automotive and machine manufacturing. The fourth largest producer of cars in the world behind the US, China and Japan, the industry is dominated by household names like Audi, BMW, Mercedes-Benz, Opel, Porsche and Volkswagen. In addition, Germany controls 14 per cent of the global market for construction and material handling equipment. Doing business with some of the country’s global giants can also open opportunities to enter the supply chain of these German headquartered multinationals elsewhere in the world.

Central Europe’s substantial Central Europe’s substantial and growing manufacturing hub now includes large portions of the Czech Republic, Hungary, Poland, Romania and Slovakia. It is fast becoming one of the leading global destinations for domestic appliance, flat-screen TV and automotive manufacturing.

With strengths in agricultural machinery, energy, cleantech, transport and aerospace, the French engineering sector is worth an estimated €40bn, employs around 350,000 people and is forecast to grow by 7.4 per cent over the 2015-2020 period. Key trends include energy transition, maintenance and renovation, smart cities and intelligent transport.

Italy is also famous for its engineering sector and is home to leading global companies in sectors such as automotives, aerospace and oil and gas. Irish companies with innovative solutions and niche products and international references can win business here.

The Nordic nations of Sweden, Norway and Finland are European leaders in metal ore mining, and Norway is a global player in the oil and gas sector. Sweden is home to an innovation-led automotive sector for cars and heavy and specialised vehicles, while Denmark is a European forerunner in renewable energy innovation, particularly in the areas of wind and biogas.

The Benelux ports of Rotterdam and Antwerp provide entry to Europe, making this a good market for logistics, fleet management and other solutions that can improve material handling and transportation efficiencies.

Movidius

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“These connections are worth far more than any amount of money they can give you.”

David Maloney – CTO & Founder

Who

Movidius are a leading developer of high performance computer vision platforms with applications in drones, VR headsets and robotics.

How

Enterprise Ireland’s connections with universities enabled Movidius to access technologies that they needed, enabling their ability to expand to international markets.

Result

Movidius’s success in international markets led to the company being acquired by Intel in September 2016.

See How We Helped Movidius

Irish animation Great White North

Irish animation conquers the Great White North

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Philip Callan, market executive for the animation sector based in Enterprise Ireland’s Toronto office, describes how Irish animation companies are making waves in the North American market.

With over nine million children living in Canada, and with a business climate and culture similar to Ireland, the ‘Great White North’ is a market filled with opportunities for Irish animation studios and service providers.

The Irish animation industry’s success in developing content for audiences at home and abroad has driven an increase in domestic employment. While only around 100 people were employed in the sector in the mid-2000s, it is estimated that more than 1,700 work in animation in Ireland today. The sector is worth almost €100 million to the economy, the majority of which is export generated.

The ways in which children consume entertainment internationally is evolving in ways that are suited to the strengths of Irish providers. While watching TV itself remains the most popular way for children to spend leisure time, content is increasingly consumed on newer devices, like phones and tablets, and through digital platforms, namely YouTube, Amazon and Netflix. A Viacom Insights Kids of the World study found that, of children surveyed aged 6-11, 41% owned their own tablet and 37% owned a smartphone.

Canadian broadcasters, such as CBC Kids and TVO, are required to follow government-mandated guidelines when purchasing content from international partners, including rules about representing Canadian values, such as equality, diversity and non-violence. There is a growing trend for productions that incorporate educational content that teaches children about their world and issues such as terrorism, personal safety and internet security.

Irish animation excels internationally

The widespread international recognition garnered by Irish studio Cartoon Saloon’s The Breadwinner, an Ireland/Canada co-production with Toronto-based Aircraft Pictures, is a great example of that global trend. The feature film addresses issues such as gender inequality, political oppression and warfare, and was nominated for Best Animated Feature at both the Golden Globes and Academy Awards.

Nora Keely at Guru Studio in Toronto has highlighted Canada’s co-production treaty with Ireland as a driver of projects between Irish and Canadian partners. At this year’s Kidscreen Summit in Miami, an important event for the global children’s entertainment industry, a panel of Canada’s leading figures encouraged peers to take advantage of co-production pacts and to source international partners for projects.

One challenge smaller Irish companies must overcome is scaling and getting their name known internationally, notes Ronan McCabe of Treehouse Republic and Animation Ireland. Pitching at international markets such as Kidscreen, Cartoon Forum and MIPCOM is important. Even if a pitch doesn’t succeed on the first occasion, those pitched to may remember the project later when they need to purchase content.

Pre-school shows can be easier for Irish companies to pitch to international buyers, as the older the age bracket, the greater the divergence of children’s pastimes and hobbies. Dublin and Belfast-based JAM Media secured a deal with CBC for its new pre-school show Becca’s Bunch, which combines live action, puppetry, 2D and CG animation to create a multi-textured world. Cartoon Saloon’s Puffin Rock is also aimed at the 2-5 year-old bracket and was acquired by Netflix to air in Canada, the USA, and around the world. Both shows focus on nature, wildlife, friendship and exploration, universal themes for the age range, and a great fit for the attitudes of modern children, which Viacom research describes as independent, confident and curious.

In addition to the established markets of North America and Europe, opportunities in developing markets in Asia, particularly China, are being targeted more closely by Irish studios. While significant barriers to entry remain, including a requirement for government approval of imported animation programs, they offer a growing middle-class population with significant demand for children’s content. Cartoon Saloon recently signed a multi-licence deal for Puffin Rock with the China Nebula Group (CNB) in a market with a population of 1.3 billion, of which 27% are under 20 years old.

Enterprise Ireland’s overseas office network is available to assist Small and Medium Enterprises in the animation sector with assessing in-market opportunities, identifying potential customers, and supporting international buyers to source from Ireland. For more information on doing business in Canada visit our Markets pages or download our Going Global guide.

This article was originally published in the Sunday Independent.