PM Group and Diversification Success

After recession drove PM Group to look further afield, it didn’t look back

PM Group is an Irish headquartered, international project delivery company, operating in Europe, the USA, and Asia. The company has a 45-year track record in project management, process design, facility design, and construction management for leading multinational companies.

A decade ago, things looked a little different, business development manager John Brophy told delegates at Competing for the Future, a panel discussion which took place at the RDS in Dublin as part Enterprise Ireland’s International Markets Week.

In 2007, the recession left PM Group faced with a diminishing home market. At the time, it had offices in Ireland, the UK, Russia and Poland, but the majority of its work was Irish based and, therefore, highly exposed to the construction downturn here.

 

PM Group expands to mainland Europe

“In order to diversify, we had to look out and mainland Europe was a very accessible market,” said Brophy. “We focused initially on Belgium, which was a massive market for many of our customers. We went out on a project by project basis with our customers.”

It opened an office in Brussels and has continued to grow there right up to today. Earlier this year, it acquired a company in Belgium which it has brought into PM Group.

“That gives us a greater presence. Most of our customers don’t want a single project, they are looking for continuity of relationship. So you need to be on the ground. You need to have people who can speak the language and you need to be able to service them time and again.”

Establishing partnerships with locally based companies has been an important part of its export strategy over the past 11 years, helping to guide it through language barriers, differing tax, visa, planning, permitting and other regulatory rules.

 

Forming strong local partnerships

“As an Irish company, we have found that we are quite good at partnerships, and if you form partnerships and alliances with local companies, you share your workload but they also help you to deliver and be successful for your clients,” said Brophy.

“You can’t go in and disrupt a market and say ‘We’re the best’. You need to work in partnership and understand how things are done. They are never done exactly as they are at home and you’ve got to learn very fast throughout a project. Local partners help with that.”

In recent years, PM Group has been taking action to mitigate the risk of Brexit.  The UK has already seen a slowdown in business investment since the Brexit vote, he said. “We work in capital projects, so it tends to be at the forefront of what people are deciding strategically for their business.”

Rather than diminish its footprint in the UK however, PM Group has responded to Brexit by growing its UK presence, acquiring a company there and adding two new offices, in Manchester and Edinburgh, “Because no matter what, the UK is a big country and you need to have a regional presence,” he said.

 

Diversification strategy

The Group has also diversified sectorally, including into chemical and petro chemical sectors, which the recent acquisition will help it service, he said. “So we have widened what we can do.”

Its UK acquisition is also helping it with its overall talent pool needs, creating a fresh and valuable new pipeline that can be fed through to the rest of the organisation.

Not every decision in relation to exports strategy will be correct, he said. PM Group moved into some markets, such as Russia and the Middle East, from which it subsequently departed. “By and large though, where we chose to go was good,” he said.

Any overseas expansion comes at a cost however. “It took a huge stretch on the management team. We sell a service, so the important thing for our customers is that the service they get around the world matches the service they get here, so we had to put people in the field. Finding the people was a challenge. We now have a local manager in China, Belgium and Poland, and that’s where we have got to in terms of maturity.”

Finding staff is only ever the start, it’s finding customers that counts. “It’s hard,” said Brophy. “You really have to find a way to differentiate yourself from the competition. You can’t go in there and say ‘We’re here, isn’t that good enough?’”

Today, PM Group has 17 offices around the world and works in high-tech sectors such as pharmaceuticals, medical devices, data centres, and food. All through this overseas expansion, investing in innovation has enabled PM Group to differentiate itself, as has its ongoing commitment to staff training.

“We have a lot of subject matter experts now. You have to be the best. You have to be someone who is sought after because price isn’t the only factor. It’s about being sought after and being able to offer a service that maybe they can’t find locally.”

Learn how Enterprise Ireland supports business to diversify with the Market Discovery Fund.

 

 

map of Ireland

Competing for the future at International Markets Week

Competing for the Future

Developing foreign markets can be daunting even for companies that are highly successful in their home market, the audience heard at Competing for the Future, a panel discussion organised as part of Enterprise Ireland’s International Markets Week programme.

“When you go abroad to foreign markets you are starting at ground zero, which is not an easy place to be,” said Harry Hughes, CEO of Mayo-based safety clothing and equipment company Portwest.  “It just takes time and you have to stay with it.”

Hughes has helped grow what was once a small family business with a turnover of €100,000 in 1978 into a €205 million a year business employing 3,000 staff. The UK was Portwest’s first export market and remains an important one, accounting for 40% of its sales, he said. However, by taking on new markets one at a time, the company now sells into 120 countries worldwide.

 

Top export insights from International Markets Week

He was joined onstage by Vivian Farrell, CEO of Shannon-based Modular Automation, a 32 year-old company that delivers advanced technological solutions to customers such as Johnson & Johnson, Boston Scientific, Stryker, and Medtronic.

Working with their manufacturing sites in Ireland provided Modular Automation with an entry point into the US market, which has transformed the business over the past five years, enabling it to double staff numbers to 150, Farrell said.

Delegates also heard from John Brophy, business development manager of PM Group, a leading project delivery company that works in engineering, architecture, and construction management.

The now 45 year-old company began developing export markets in earnest during the last recession. Today, while PM Group remains headquartered in Ireland, it has 17 offices around the world.

 

Fulfil your export potential

Complacency can make companies fail to fulfil their export potential, delegates heard. “We were probably very slow learners in the beginning, in that we were 25 years selling in Britain and had reached maturity in that market before, 15 years ago, we started looking into Europe,” said Hughes.

Portwest has taken a “one step at a time” approach to new markets since then, starting with the Netherlands, and then France. “There are only two ways to get sales, you can either buy them by purchasing a company in the market, or you can go out and build them yourself,” he said. Either way it costs money.

Modular Automation was able to leverage its multinational clients here and follow them overseas. International markets are now “hugely important in terms of reaching our ambitions for growth,” said Farrell.

“We’re investing heavily in R&D and innovation in Ireland and we see that as a catalyst for growth, in particular in the US.”

Read about Enterprise Ireland’s R&D and innovation supports

Three years ago, the company opened an office in Florida, both to service the sister sites of clients in Ireland and as a base to develop new customers. “That is our strategy for growth and it is working for us. But it’s only achievable if we do a good job for multinationals in Ireland, and critical to that is R&D and innovation.”

In 2007, PM group was faced with a diminishing home market. At the time, it had offices in Ireland, the UK, Russia and Poland, but the majority of its work was based in Ireland.

“In order to diversify, we had to look out, and mainland Europe was a very accessible market,” said Brophy. “We focused initially on Belgium, which was a massive market for many of our customers.”

 

Target opportunities in the Eurozone

Irish companies should view the eurozone as “a continuation of the domestic market,” said fellow panellist Julie Sinnamon, CEO of Enterprise Ireland. Doing so may require a “mindset shift” but having role model companies such as Portwest, Modular Automation and PM Group helps encourage other companies, she said.

That includes steps companies are taking in response to Brexit, such as Portwest’s decision to acquire 140,000 sq ft of warehousing in Poland, reducing its warehousing space in Britain. Regardless of the ultimate outcome of Brexit, such a move makes good business sense, said Hughes.

PM Group has also taken action to mitigate the risk of Brexit. It has responded by growing its footprint in the UK, acquiring a company there and adding two new offices, in Manchester and Edinburgh – “because no matter what, the UK is a big country and you need to have a regional presence,” he said.

It has also diversified into more sectors, including chemical and petrochemical, which the recent acquisition will help it to service. “So we have widened what we can do,” he said.

 

Act now in response to Brexit

Over the past year, companies have moved into action mode in response to Brexit, said Sinnamon. “Companies are beginning to invest in innovation and competitiveness to look at new markets. We are seeing a big increase in the level of demand for participation in trade missions and market study visits,” she said.

Mistakes will happen. In Portwest’s case, a key hire made in Ireland and relocated to Europe turned out not to be the right solution. “Now we employ French people in France, Germans in Germany, and so on. The boots on the ground need to be local,” said Hughes.

Innovation is key. “You really have to find a way to differentiate yourself from the competition. You can’t go in there and say ‘We’re here, isn’t that good enough?’,” said Brophy.

Julie Sinnamon agreed. “You are not going to conquer the world with me-too products. You have to have something that differentiates you,” she said, pointing to Enterprise Ireland’s Market Discovery Fund as a way of helping with costs, and its Agile Innovation Fund as a fast-track way of getting R&D support to ensure a product is fit for purpose in new market.

Above all, see the eurozone as a local market, delegates at International Markets Week were told. “We have the same currency and the same laws and there are no borders,” said Hughes. “You need to see it as a local market and get out there and invest.”

 

Languages Connect logo

The importance of multilingualism

The drive for new markets shines a light on the importance of multilingualism. Julie Sinnamon, CEO Enterprise Ireland outlines why language matters.

Ireland’s small, open economy depends heavily on being able to trade internationally. The global dominance of the English language has worked to our advantage but with Irish companies looking to export into even more diverse markets, the need to acquire more languages has never been more important.

Recognising the cultural value of communicating in the buyer’s local language and developing a workforce with foreign language expertise can improve relationships and increase efficiency when entering new markets.

Learn how Enterprise Ireland can support your business with the Market Discovery Fund

 

Channel sales

Channelling Success with Channel Strategy

Máire P. Walsh, SVP Digital Technologies at Enterprise Ireland’s Silicon Valley office, explains how an effective channel sales strategy can give Irish companies a wide international reach.

The business plans of start-up companies often focus on direct sales, aiming to sell as many products and solutions to as many consumers and end users as possible. The right channel sales strategy can, however, give Irish companies of all sizes and stages of maturity a wider reach, helping them to grow more quickly than a business plan that relies on direct sales alone. A successful channel strategy enables Irish exporters with unique technologies to harness sales opportunities at scale, driving business results in the US market and beyond.

Enterprise Ireland recently held a Sales and Channel Strategy Seminar in Dublin, which featured US industry thought leaders and senior executives, and was designed to advise and guide high performing Irish start-ups to expand into the US through the channel ecosystem. World-class experts on sales planning and channel strategy shared tips and success stories, while the event showcased a number of Irish companies that are already capitalising on the potential of the channel ecosystem to drive rapid growth.

Irish companies can apply insights shared by the event’s global speakers to use a smart channel sales strategy to quickly grow their business.

A “Best Practices in Channel” panel featured Kevin Morata, Global Channel Strategy at Dell EMC, Gerard Sheridan, Global OEM Sales Director at DataStax, and Kurt Hoppe, Global Head of Innovation at GM. The panel discussed how true collaboration is key to building successful relationships with channel partners. Companies should be aware that not all channel partners are created equal. With 20% of partners driving 80% of sales, Irish companies should allocate more time and resources to partners that will help to maximize business results. One tip for building trust is to feed leads to new channel partners at the beginning. That will allow them to gain experience in selling your product while developing a strong understanding of your value proposition.

Tiffany Wagner, Global Head of Sales Planning at SAP, described how a successful strategy must focus on your value proposition, rather than on the features and functions of your solution. At SAP, design thinking is key to well-orchestrated enterprise sales planning programs. All enterprise sales require a “3 x 3” influence model – three decision makers and three influencers must contribute to the process.

Insights were shared by Irish companies, including AltoCloud, Channel Mechanics and PlanNet21 Communications, that have scaled by partnering with the channel ecosystem. Kenneth Fox, Channel Mechanics CEO, described the three points of the channel triangle:  vendors, distributors and partners. The Channel Mechanics solution sits at the centre of the triangle, providing automation that runs the entire ecosystem.

Barry O’Sullivan, AltoCloud CEO, described how his company was formed with the channel in mind. Leveraging the business and personal relationships of partners has allowed AltoCloud to build a strong partner channel. One tip for Irish exporters is to have a ‘corporate vendor resources’ presence in the US and not attempt to drive it from Ireland.

When launching as an ambitious company almost 20 years ago, PlanNet21 Communications convinced partners to accept them into their channel program. The strategy has delivered revenues close to €50m, with the company on a mission to hit €100m within the next two years. Denise Tormey, co-founder of PlanNet21 Communications, described the strategy that drove their success, “Trust is hard won. We manage communication face-to-face, over the phone and by mail, to build those interpersonal relationships. We listen. We respond in a timely manner. We ask ‘Why?’ We care. We are true partners.”

The insight echoed the guidance of many of the day’s Irish and US speakers. A foundation of trust must be established to build effective relationships. Otherwise channel partner alliances are destined to fall flat and fail to deliver the growth promised. For channel strategy support, contact Enterprise Ireland’s Strategic Marketing Review program, which acts as a mechanism to review and develop your market development strategy overseas.

This article was originally published in the Sunday Independent.

Hanley Energy’s path to powering giants of the internet

Innovative solutions and a partnership approach have been central to the success of Hanley Energy, a global innovator in energy and power management delivery.

Headquartered in Stamullen, Co. Meath, Hanley Energy was set up in 2009 by co-founders Dennis Nordon and Clive Gilmore. The pair started out in a Local Enterprise Office incubation centre and, thanks to decades of experience in designing and delivering turnkey solutions for Europe’s most power-intensive users, they quickly built up a portfolio of domestic clients, including CIÉ, Glanbia, Roadstone and Largo Foods.

“Initially all our work was with indigenous Irish companies, providing energy management solutions, in real time, for companies who wanted to see exactly what their energy usage was,” says Nordon.

While the company still operates across a range of sectors, from food production to pharmaceutical, transport and heavy manufacturing, in 2010 it began developing specialist power management solutions for the country’s burgeoning data centre sector.

Powering data centres – lynch pin of the digital world

Used to house the vast banks of computing power required to store, process and distribute an insatiable amount of data, these data centres are the lynch pin of the digital world and one for which continuous, clean energy supply is mission critical.

Hanley Energy developed a range of bespoke solutions to enable its Tier 1 data centre clients to maximise uptime and minimise operational costs. Because of the secrecy that surrounds data centres, it cannot name these clients but suffice to say, “they are the giants of the internet,” says Nordon.

In 2013, the company opened a new headquarters and manufacturing facility in Stamullen. Within 18 months it had doubled in size. Demand is such that in 2018 a further extension will see it expand its physical footprint by 50%.

Today Hanley Energy employs 57 people and has grown by providing clients with a one stop shop solution for energy products, software and service, from consultancy and advisory, to design, build & maintenance, as well as the complete life cycle management process.

“Essentially, we help our clients to reduce their overall energy costs, ensure 100% up-time and optimise their operational competitiveness,” says Nordon.

But it isn’t just technical know-how that accounts for Hanley Energy’s success. “While innovation is our unique selling proposition, a key driver of our growth is relationships,” he says.

“Our commercial tag line is ‘Trusted Energy Partner’ and that is our ethos. It’s by being a trusted partner that you can really add value for clients. It’s about building relationships and working with clients on a partnership model over the long term.”

It is this partnership approach that has helped them develop its significant overseas business, starting with an invitation from a client located in Ireland to deliver a cutting-edge solution to one of its overseas plants.

They realised we are not some ordinary ‘me too’ vendor and asked us to look into a problem they were having in the United States,” explains Nordon.

“Hanley Energy is not simply a reseller or integrator but a developer of innovative technologies. We’ve been working with big data centres for long enough now that we understand the challenges they face. They are enormous power consumers with a mandate that requires them to keep that power on 24/7 365 days a year. For these clients, an outage simply cannot occur. We are tasked with keeping the power on and we create the solutions to do that,” says Nordon.

“We also provide the metrics that allow granularity as to how much power they are using and where they are using it. When you are using energy at this level, a percentage saving is colossal.”

Leveraging the overseas presence of multinational clients based here has enabled Hanley Energy to establish operations in Germany, Sweden, the US and Australia, with a further office planned for South Africa.

Once Hanley Energy has established a presence in each new market it then seeks out additional opportunities there, which require its skillset and expertise.

Resourcing global expansion

Enterprise Ireland’s overseas offices have been a huge help to us in that, from providing us with initial office space, to making introductions and identifying opportunities,” he says.

Expanding into international markets can put a massive strain on resources. To avoid this Hanley Energy has implemented a Global Competence Centre model as part of its strategic growth plan, based at its Irish headquarters. 

“Our senior management and technical expertise resides in Ireland and all our research & development and new product development operations take place here,” says Nordon.

“Many of our products are IP (intellectual property) protected and have taken years to develop. So when we enter a new market, operating on a Global Competence Centre model allows us to parachute our expert personnel in wherever and whenever they are required, to train up the teams on the ground. This has helped us get up to speed quickly in each new market. It is a very effective way to scale and has been our strategic driver for growth.”

To learn more about expanding your business internationally visit Markets & Opportunities.

Local Enterprise heroes

Following in the footsteps of Local Enterprise heroes

For many companies, becoming an Enterprise Ireland client is a significant step on a journey that started at a regional level. Local Enterprise Offices throughout Ireland provide supports, advice and training to start-up companies and existing micro-enterprises of up to ten employees. It is in this environment that experience is gained and vital lessons are learned which allow companies to prepare for growth and to take their ambition global.

A recipe for successful growth to €21 million annual turnover

It was in 1993 that a young man from Clonakilty got in touch with his Local Enterprise Office (LEO) in West Cork to ask if they could help him turn his business idea into a reality. Diarmuid O’Sullivan wanted to produce traditional churn-made yogurts. He knew how to make yogurts but he didn’t have enough funding to get the venture off the ground.

“I had the idea but not enough money,” Diarmuid recalls. “I heard there was funding available from the Local Enterprise Office, so I contacted them and put in an application. The maximum support they could provide at the time was £50,000 and the LEO in Clonakilty was able to help me put my ideas into a business plan to help secure funding.

“I also received quite a lot of mentoring and coaching. That was all done at concept stage – I hadn’t even identified a production site – but the support meant that I was able to get Irish Yogurts up and running by March 1994.”

Diarmuid’s yogurt-making idea was a recipe for success. His company grew quickly and its products were soon on the shelves of Irish food shops and supermarkets.

“In one of those early years, we grew by about 78.5%. That brought its own challenges, with regard to working capital. The Local Enterprise Office suggested that I move onto Enterprise Ireland, where there were financial supports for fast-growing companies which were creating jobs.

“We hadn’t really focused on exports, not at that stage. That came after we started working with Enterprise Ireland. Our first export customer in the UK was Tesco.”

This progress was recognised in 1998, when Irish Yogurts was named winner of Ireland’s first ever National Enterprise Award. In just a few years, it had gone from being a bright idea with insufficient funding to becoming an award-winning food producer.

Today, Irish Yogurts employs 160 people at its Clonakilty base and sells to every major supermarket chain in the UK and Ireland. Its annual turnover has grown from €300,000 to €21 million, with exports accounting for 30% of their business.

“We appreciate the input of the Local Enterprise Office and Enterprise Ireland, who supported us and our staff every step of the way,” Diarmuid says. “We still work with them and avail of supports and advice. Enterprise Ireland is very much a part of our team.”

A roll of honour

Irish Yogurts is one of hundreds of companies from every corner of Ireland that have transferred from Local Enterprise Office support to become Enterprise Ireland clients. Last year, 80 companies made the move. In 2016, the figure was 40. The roll of honour includes 10 other former winners of the National Enterprise Awards:

It is a track record that the Local Enterprise Offices are proud of. Oisín Geoghegan, chair of the network of Local Enterprise Offices, said, “It’s one of our targets to transfer companies to Enterprise Ireland – it’s progression. Companies which transfer into Enterprise Ireland are companies with growth ambitions to be exporting and creating jobs, which is incredibly important, particularly for the regions. So we would see it as an indicator of success when a company moves on to Enterprise Ireland.”

Local expertise supporting global ambition

Engineering services provider Obelisk engaged with their Local Enterprise Office in Cavan, even before they set up the company in 1996. Four years later, Obelisk won the National Enterprise Award.

Founder director Colm Murphy said, “We were looking to capitalise on the growth of mobile phone usage by offering installation services for operators. The people in our LEO understood the idea that opportunity was coming down the track. That gave us the confidence that our idea was good and could to grow into something big.

“They had an incubator office which we were able to rent and provided grant aid for early employees. They also provided us with advice about how to set up a company, and other supports such as training and mentoring – there was a lot more to it than financial support.”

The support has been paying off ever since, Colm says. “Last year we turned over €27 million. Employee numbers are between 250 and 300 people. We’ve expanded to include infrastructure solutions for fixed telecoms and the energy sector in Ireland, the UK, and South Africa.

“We want to continue growing. We’re looking for further investment. Over the next two to three years, we’re looking to hit the €100 million mark in sales. Exports are currently a third of our turnover but we expect that to become a 50/50 split.”

So what part did being able to access business expertise and support at a local level play in the company’s success? “Back in 1996-97, we would have found it difficult to kick-off from a zero base,” Colm explains. “We were just a couple of guys with an idea, and sometimes going for funding and that kind of stuff can be daunting. But when you get the kind of support that we did from the Local Enterprise Office, that’s a massive kick start.

“I would recommend that any company should be in touch with their Local Enterprise Office. They’ve always been good at describing the product set they have and how they support you. If you don’t ask, you don’t get and if you’re not engaging with them then you won’t necessarily be aware of new supports that are on offer.”

Reassurance and support

The view that “if you don’t ask then you won’t get” is shared by John Lynch, Chief Technology Officer of Acutrace. The Dublin tech company provides software and hardware which allows companies to control and monitor their energy usage. They count the likes of Google, Twitter and IBM among their customers.

Founded in 2015, Acutrace wasted no time in contacting their Local Enterprise Office in South Dublin. John says, “We reached out to the Local Enterprise Office immediately and they were brilliant. They gave us an employment grants and we managed to employ two engineers under that scheme. Within the first three months, we were exporting to London.

The company was growing quickly and the Local Enterprise Office was instrumental in steering Acutrace towards Enterprise Ireland’s High Potential Start-up (HPSU) programme.

John says, “Once we learned the criteria for the HPSU, we used that as our yardstick to reach for. We knew we had to have significant exports, we knew we had to have a scalable product that would generate employment and we needed to have the magic number of a turnover of €1 million, so it was a good objective to hit and we exceeded the target that year.

“By the end of 2016, we had turned over more than €1.5 million and we were exporting 40% of a product that was created in Ireland to the UK.”

The advice, professional support and reassurance they received has left a lasting impression on John and Acutrace.

He says, “I’m coming off the back of 20 years in the industry and so is my business partner Aidan, but it’s a little bit different when it’s your own enterprise – the risks are higher and there’s an isolation you feel, it can be profound. Then you engage with your Local Enterprise Office and you feel part of something, that you’re being protected or mentored.

“There’s funding and that’s important, but it’s also having that extra bit of confidence that there’s someone else behind you who has your back, that if you are going to create employment, well there’s someone there who’s grateful for that and they’re helping you, and they’re encouraging you.”

“You might be destined for Enterprise Ireland but until you hit that criteria the LEOs will mentor you and steer you in the right direction.”

Working hand in hand

That direction involves advice and supports, which evolve and change to meet the needs of encouraging start-up companies and other micro enterprises of ten or fewer employees, says Oisín Geoghegan.

“We provide a very broad range of supports – initial business advice, information and guidance, training and mentoring, and financial supports such as feasibility, priming or expansion grants. It can include money to employ people or towards marketing costs, business development, and so on.

“We also point entrepreneurs and companies in the direction of other supports that are available, such as the New Frontiers incubation programme and Innovation Vouchers from other agencies such as Failte Ireland, Intreo, Bord Bia and Microfinance Ireland.”

“For companies with strong growth ambitions, we work hand in hand with Enterprise Ireland on their journey and ensure that they make that contact at an appropriate stage so their development continues to be supported.”

Focus on Exports Helped Kirby Triple Turnover

“We’ve achieved growth in three ways, through strengthening our capabilities, going deeper into our chosen sectors, and through geographic expansion.”

Jimmy Kirby, MD Kirby Group Engineering

Key Takeouts:

  • Kirby provides full mechanical and electrical engineering contracting services, as well as specialist voltage design and construction services to clients.
  • Has achieved growth in three ways, through strengthening capabilities, going deeper into chosen sectors and through geographic expansion.
  • Enterprise Ireland has supported Kirby to develop its international operations.

Case Study: Kirby

Developing export markets has helped Kirby treble its business in just seven years.

Founded in 1964, Kirby provides full mechanical and electrical engineering contracting services, as well as specialist high voltage (HV) and medium voltage (MV) design and construction services, to clients across several key sectors. These include data centre, life sciences, industrial manufacturing, commercial, petrochemical, and substations and renewables.

With the support of Enterprise Ireland, Kirby operates in a number of markets including the UK and Northern Europe.

Growing international operations

“In 2008, we began our first overseas work in the UK, initially focusing on the pharmaceutical, industrial manufacturing and power sectors,” says Jimmy Kirby. “Originally, we were invited in by one of our large multinational power sector customers to deliver projects for them; then we successfully expanded into the other sectors.”

Kirby has continued to develop and grow its international operations.

“Over the past seven years, we have almost tripled our turnover, from €58 million in 2010 to €167 million for 2017. To meet our growth targets, we increased employee numbers significantly. We currently directly employ over 700 people.”

Kirby has strengthened its management team too. “Earlier this year we announced a number of key appointments at senior level to support growth and success,” Jimmy Kirby says.

The company has recently announced further expansion in its international operations to include the new geographical area of the Nordics. “Expansion into the Nordics market is proving to be a successful development for us, having secured a data centre project and with more in the pipeline. We have the capability to execute projects in Ireland, UK, Sweden, Finland, Denmark, Netherlands and Belgium, and are currently developing the capability to execute projects in Norway, Germany, Switzerland and Luxembourg.”

Preparing for further growth

The business is poised for significant further growth. “Kirby has excellent future prospects due to the strength of our management team, our staff and associated capabilities, our strategy formulation and implementation capability, and our customer value proposition.”

The company has developed an in-house, integrated project execution process called the Kirby Way. “At the core of the Kirby Way is efficient and successful project delivery” explains Jimmy Kirby, Kirby Group Managing Director.

“It involves understanding our clients’ needs, collaboration, building high-performance teams and supporting our clients through every stage of the project,” 

Strengthening its systems and processes is helping too. “Lean practices, such as standardisation, have become important components of our project delivery, bringing significant value to us and our customers,” says Kirby.

Staff members have taken ownership of continuous improvement. “We operate an Innovation Suggestion Scheme with participation encouraged among all of our workforce. This approach allows us to encourage a culture of innovation and continuously generate innovative and lean ideas from our site and office employees. The suggestions are focused around introducing efficiencies into the business through cycle-time reduction.”

Recent project wins include Gemini Data Centre and Substation in Dublin and Kilgallioch Windfarm Substation in the UK. Kirby is currently working on a confidential data centre site in Sweden, a biopharma facility in Meath, and Wembley Park Energy Centre in the UK, among many others.

Three ways to achieve growth

“We have achieved growth in three ways, through strengthening our capabilities, going deeper into our chosen sectors, and through geographic expansion,” Kirby says. “To ensure that there is a continuous pipeline of projects, it is important to track the investment levels in our selected geographies and sectors.”

Working with Enterprise Ireland is helping. “Enterprise Ireland has supported Kirby to develop its international operations over the years in a number of ways. It has done so by providing market research support, local market information and advice on new markets, providing access to its global network of contacts, and hosting networking events and seminars – such as a construction seminar held in Stockholm recently.”

Jimmy Kirby personally participated on Enterprise Ireland’s International Selling Programme in 2010, and went on to do a Masters Degree in DIT afterwards. The company also availed of a Market Access Grant, “which was a valuable support in our internationalisation efforts,” says Kirby.

Learn more about Enterprise Ireland’s Competitiveness supports here.

Irish construction

Digital ambition driving Irish construction to international scale

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.

Construction Turns Tide on Ireland’s Continental Drift

Collen Construction

Unlike most building companies, Collen Construction grew during the recession by identifying opportunities in new, technologically driven sectors such as data centres and biopharma. In 2010, the 210 year old family business built its first data centre for a multinational client. Now, with close to 2 million sq. ft of high-tech space completed, it is one of the top Irish contractors in the ‘hitech/data hall’ space.

In 2014, at the invitation of the same multinational client, Collen Construction built its first data centre in Germany, and last April, the company opened an office in Frankfurt from where it plans to pursue further opportunities throughout Europe.

The European operations manager of Collen GmbH, Thomas O’Connor, stresses the importance of having a clear focus in order be credible overseas. Collen’s reputation in Ireland for being good at a wide range of construction activities will not open doors or win business in Europe, he says.

“We’ve made data centres our sweet spot and built a reputation for knowing how to mitigate the risks involved. These types of projects impose challenging deadlines and require us to produce volumes of technical information. Since 2010, we’ve really got to know the suppliers in this specialised field, and we’re comfortable in it.”

One of the secrets for managing the risk, O’Connor reveals, is treating all the sub contractors as partners and stakeholders. “For our clients, it’s all about speed-to-market, and, in that sense, it’s a very unforgiving sector. In this type of specialised project, therefore, if one fails, we all fail. It really is that simple. So we adopted a partnership approach in 2014, and the model has not let us down.”

PM Group

Like Collen, PM Group has followed its blue chip clients into continental Europe and has been active in the Benelux region, in particular, over the past 10 years.

Colm Fitzgerald, head of construction services at the engineering, architecture and project management firm, says there are a number of “bear traps” that construction firms need to be aware of. First and foremost is the need to respect other cultures. “Even something as simple as a turn of phrase that might be commonly used in Ireland could be misinterpreted,” he warns.

There are also differences in approaches to health and safety across Europe. “On the ground investigation and research is essential to identify exactly where the bar is set. In some countries, it’s not as high as in Ireland or the UK, for example.”

Fitzgerald also puts a strong emphasis on identifying contractors compatible with the Irish company’s own way of approaching business. “We do a lot of work in the life science sectors, and our clients demand and expect world class standards. We put significant effort into the pre-construction phase of our projects in mapping out execution plans. This is key to establishing best-in-class construction quality and health and safety programmes, so that everyone involved in the project knows exactly what’s expected of them and is both willing and able to deliver. We have worked hard in establishing a solid supply chain, and this has paid dividends in terms of our successful project delivery.”

“We have tended to enter a country in stages. Typically we would begin with concept design work, then expand our services from there.”

Colm Fitzgerald, head of construction services, PM Group.

Up until now, PM Group’s primary focus has been on Benelux countries, but the company is beginning to turn its attention to other opportunities across mainland Europe. “We have tended to enter a country in stages, first getting to know the people, understanding the companies and cultures, etc. It takes time to establish relationships. We’ll do it organically; typically we would begin with concept design work, then expand our services from there.”

Cork Plastics

Founded in 1969, Cork Plastics (CP) manufacturers a wide range of quality plastic products for the construction, building and agricultural sectors. Its main markets are Ireland and the UK, but the company is also rapidly expanding its European customer base, notably in France. CP’s sales and marketing director Seward Lynch says that identifying the right products for, and route to, each market has been crucial. “The hardest part was identifying potential customers, using similar products to those we produce in Cork,” he told The Market. CP chose France because it is large and the closest to Ireland after the UK, which is served by sister company FloPlast. “It has been a steep learning curve for us,” he confirms. “There are a lot of similarities, but a lot of differences, too. The French are slow to change, but there’s still potential there for us in the future.”

Freefoam Plastics

Another Cork-based company Freefoam Plastics began trading in 1990 and has grown into a multinational organisation, operating from sites in the UK, Belgium, France and Germany.

Freefoam entered the French market in 2002 with a trade offering of roofline and cladding products and expanded into the DIY sector at the beginning of 2009. For the last three years, the company has been selling a new cladding product developed specifically for the Dutch market and is developing plans for Germany. The continent now accounts for over 20 per cent of the group’s turnover.

“You need to find the right people to help you enter a new market and then integrate them into your organisation. You also have to find the right customers and distribution channels,” says managing director Aidan Harte. For Freefoam, innovation has been an essential core competency. “It’s important in new markets to adapt to meet the market’s needs, to find solutions that work there, rather than trying to force your existing solutions on them,” he emphasises.

Freefoam invests substantially in R&D, with support from Enterprise Ireland. “This allows us to grow our sales and stay ahead of our pan-European competitors,” Harte says. “Our end customers always expect us to come up with new products and innovations – anything that will help them get their work done more efficiently.”

Harte says that language is always something of a barrier, even though in Europe, in general, the command of English is very good. But Freefoam still sees real benefit in hiring people with multilingual skills that will suit its markets. “We have an inherent knowledge gap in language,” he says, “which is why we make sure we bring those skills into the company by direct hires.”

The Freefoam MD is also a strong advocate of doing homework on regulations and certification. Freefoam, for example, is the only maker of PVC cladding products with ATEC certification from the French building certification body, CTSB.

“It is very important for us to have a strong technical team, but you also have to be willing to tough it out to achieve the results you want,” Harte concludes. “It can take a lot of time and money, but it really is worth it.”

“You need to find the right people to help you enter a new market and then integrate them into your organisation.” Aidan Harte, managing director, Freefoam.

Second and third language skills key to European markets

One of the keys to getting traction in European markets is a sharp focus on the product or service, according to Stephen Hughes, head of construction markets at Enterprise Ireland. “As a rough rule of thumb, the further you are from home, the sharper your focus needs to be,” he says. “You need to be laser sharp in identifying the product areas or sectors in which you can make a major contribution. If you suggest you can do everything for everyone, you won’t be taken seriously.”

He also advises companies to be rigorous in their market research. “Too many companies don’t spend enough time getting to understand the dynamics of the market, the scale, the existing players and where their own offering might fit within that in order to be compelling,” he told The Market. “There is only one opportunity to make a first impression.”

Irish companies are doing well in the German and the Benelux construction markets, but all too often, they skip France and look further afield because of unjustified prejudices, he believes.

Tied up with overcoming this reticence – and getting to grips with European business culture in general – is the need for business leaders to embed second and third languages in their companies, he adds.

“Because English is so widely used as a common language for business in Europe, there is a sense that we don’t need to be able to converse in the language of a potential German or Belgian client. And even in companies that are able to speak to the client in their own language, there are surprisingly few with the in-house capability to really engage in the detailed business and technical side of things. After 40 years of being in the EU, we might have hoped for more.”

For Hughes, the language issue is all about demonstrating commitment. “Even if the customer has perfect English, it should be part of your culture to do business in the language of the country. Local hires can be a good starting point to demonstrate that level of commitment.”

This holds true even in construction, which may involve one-off contracts. “They may be one-off projects, but that does not necessarily imply one-off relationships, between contractors and sub contractors, for example,” he says.

Data centre Irish companies Sweden nordics

Data centre surge connects Irish companies to Sweden

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.

Strong Strategy Key to Combilift’s German Market Success

 

“Having Germany as a good reference has helped to build our credibility in other export markets – customers think if German companies are buying our product, it must be good.”

– Martin McVicar, Managing Director, Combilift

Key Takeouts:

  • Exporting proved easier than domestic sales from day one.
  • Selling direct before appointing a distributor was an effective strategy.
  • Europe has delivered more sustainable growth than BRICs.
  • Enterprise Ireland provided credibility and on-the-ground support.

Case Study: Combilift

German clients have been the easiest to convince and as a market, Germany has been one of the easiest for Combilift to crack and grow in – compared to Italy or Spain – according to managing director of the company, Martin McVicar.

“The reason for this is that Germans are very analytical and open to innovative products when they can see a visible benefit – for example, when it will make them more efficient,” he says.

“Having Germany as a good reference has helped to build our credibility in other export markets — customers think if German companies are buying our product, it must be good.”

McVicar established Combilift in Co Monaghan with Robert Moffett in 1998. Both were highly qualified engineers with decades of experience between them. Their expertise, knowledge of the market and practical experience led to the development of the Combilift — an innovative long-load material handling solution.

By the end of its first year, Combilift had sold 18 units — 17 of which were in the export markets of the UK, Norway, Belgium and France. To date it has sold 35,000 units in 75 different countries and has developed a range of customised handling solutions.

“In our first year, we did sell one unit locally in Co. Monaghan, but strangely we found it easier to sell into other markets as a start-up in development stage”

“Customers in Norway, for example, didn’t query how big or small we were – they just saw that our product was innovative and solved an unmet need.”

A traditional forklift drives backwards and forwards and is manufactured by major players such as Toyota and Mitsubishi. Recognising that they couldn’t compete directly with these manufacturers, McVicar and Moffett were focused on innovation from the beginning.

“One of the unique selling points of the initial model was that it was multidirectional – it could also move left and right – allowing customers handling long products to transport them in a sideward direction, like a crab movement” McVicar explains.

“Nobody had developed a product like this before — one that could operate both indoors and outdoors. Our forklift could handle any length of product in a small space and handle it with more safety.”

Combilifts’s Partnership with Enterprise Ireland:

  • Availed of Enterprise Ireland R&D supports since it was first established in 1997.
  • Benefitted from introductions to English-speaking distributors in Germany.
  • Participated in trade missions that helped secure new key customers.
  • Boosted management capability with the Leadership for Growth programme.

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

The direct approach

McVicar and Moffett recognised from the outset that as a manufacturer of materials handling equipment Combilift had to be focused on exports; the UK and Ireland alone would not sustain the business.

They were very targeted in terms of the type of customers they went for — specifically the segment of companies with long products, such as timber producers. “We knew the big players weren’t specialised in the long-load market. We started in mainland Europe; then went into the UK. We went into the US and Germany in year two, which meant we had broadened out to six countries,” says McVicar.

In the early years, Combilift entered countries quite quickly, directly targeting specific industries and customers and not actively looking for distributors. Taking this route led to distributors seeking the company out. “When distributors in a given market can see there are already a number of users of your product, it convinces them of its quality and they are much more likely to be successful in selling it than if you knock on their door,” notes McVicar.

“We made mistakes in some markets, taking on distributors that promised the sun, moon and stars and we went nowhere with them. Finding users first and appointing or looking for a distributor afterwards proved to be a much more successful strategy.”

In Germany and France, Combilift purposely appointed English-speaking distributors to speak to local clients on its behalf. It didn’t invest in language skills in Ireland, but placed sales people fluent in languages on the ground in different markets. There are currently three based in Germany.

“Germany has better spoken English generally than other European countries. If you can speak to the owner of a dealership in English you are more likely to make a fast impact in that market,” says McVicar.

Combilift is in the process of building a new €40m, 46,000 sq ft greenfield operation in Co. Monaghan, which will allow the company to double its production in a single shift. This is planned to be operational in 2017. Presently, Combilift employs a total of 440 people and recorded turnover of €200m last year.

 

US flag - exporting to the US

Top 10 Tips for Exporting to The USA

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.