How Modular Automation transformed into a substantial international exporter

/0 Comments/in , /by

Over the past five years, Modular Automation, a 32 year-old Shannon-based company that delivers advanced technological solutions for the manufacturing industry, has grown its business significantly thanks to export success.

The company delivers automation solutions for advanced manufacturers, including custom solutions and build-to-print machines for clients such as Johnson & Johnson, Boston Scientific, Stryker and Medtronic.

Working with these companies’ manufacturing sites in Ireland provided Modular Automation with invaluable opportunities to sell into their sister sites overseas, attendees heard at Competing for the Future, a breakfast briefing organised by Enterprise Ireland as part of its International Markets Week programme.

 

International markets are now hugely important for Modular Automation

Leveraging multinational clients here and following them overseas enabled the company to grow revenues and double staff to 150 people, CEO Vivian Farrell noted.

International markets are now “hugely important in terms of reaching our ambitions for growth,” said Farrell.

Three years ago, the company opened a US office, in Florida. The idea was not just to service the sister sites of clients in Ireland but to also serve as a base from which 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 the multinationals in Ireland, and critical to that is R&D and innovation,” she said.

“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.”

Much of Modular Automation’s research and development comes as a result of co-investment with customers here. “The machines that we develop for our customers haven’t existed before, so it’s primarily custom automation. It’s new and it’s risky, and it involves a lot of R&D. But when we crack it, very often there’s a market for that in their sister sites,” she said.

 

Winning business across the US

While Modular Automation already had a significant customer base in Florida when it chose to locate there, the company has succeeded in winning business right across the US, from New York to the West Coast.

“We opened the office in 2015 but started planning it in 2014. The background to it was that there was a lot of discussion around Made in America at the time. We felt it was a risk that was going to make it more difficult for our customers – and potential customers – in the US to do business with us, unless we had a base there. We felt we needed to commit investment to the US, get boots on the ground, and show we were there for the long haul and willing to invest in the US market.”

Setting up the new office was challenging. “We were naive at the start in thinking that after maybe 12 months we’d have secured our first new deal. In fact it took double that amount of time. That was one of the key learnings we made,” she said.

It was an expensive time. “You’ve got a lot of set up costs and hiring in the US is expensive as well. There were a lot of lessons in the first two years of set up but thankfully it is starting to pay off now. We’ve secured some nice deals and are hoping to grow that into the future.”

She advises anyone thinking of following suit to “put it down on paper. There’s nothing like getting your ambition down on paper and seeing it through.”

 

Make the most of Enterprise Ireland supports

Make the most of Enterprise Ireland’s supports. “There are 650 clients here at this event alone,” she said. “We find it a fantastic resource, being able to tap into businesses that have already made the move is hugely helpful, talking to people who have done something similar to what we were planning.”

The US is an easy place to do business but it can also be overwhelming because of its sheer size, she said. “Getting on the ground and engaging with the Enterprise Ireland representatives who are out there and who know the landscape is hugely helpful.” Staff from Modular Automation also attended Enterprise Ireland trade missions, which helped make initial introductions to new customers.

“Tap into that network, talk to other businesses, talk to the Enterprise Ireland staff, get on the ground,” she said. “Be brave and take the leap.”

 

For more information on entering the North American market visit our dedicated US Markets page.

Why Portwest views the Eurozone as its local market

/0 Comments/in , , , /by

Once a small family business in Mayo, Portwest has become the world’s fastest growing work wear company. Here’s how.

The saying, ‘don’t let perfect be the enemy of good’ means that if you wait for everything to be perfect, you’ll never progress. For businesses, the maxim could well be adapted to ‘don’t let success in the home market be the enemy of export growth’.

It was an issue touched on by Harry Hughes, CEO of Mayo-based safety clothing and equipment company Portwest. He was speaking at Competing for the Future, a breakfast briefing panel discussion organised by Enterprise Ireland as part of International Markets Week.

During the discussion, Hughes suggested to a packed auditorium in the RDS that success in the home market can inadvertently stymie ambition overseas.

“When you go abroad to foreign markets, you are starting at ground zero, which is not an easy place to be,” said Hughes.

It takes a successful business out of its comfort zone. “It just takes time and you have to stay with it,” he said.

Hughes, who is the current EY Entrepreneur of the Year, helped grow what was a small family business with a turnover of €100,000 in 1978 into the €205 million a year business employing 3000 staff it is today.

 

How Portwest broke Europe

The UK was Portwest’s first export market and remains an important one for the company today, accounting for 40% of its business. Its success there may, however, have discouraged it from entering new markets.

“We were probably 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.

It has taken a “one step at a time” approach to new markets ever since, starting with the Netherlands and then France. Today, Portwest sells into 120 countries worldwide.

“We started in the Dutch market and after that it was one brick at a time in Europe. We now have sales people in every country in Europe. We have eight people in Germany which we have found to be the most difficult to crack but obviously the prize is the biggest, at 82 million people.”

Every country has its own nuances, he said, and it’s important to understand the competition in each. “In our case, we would have 50 competitors right across Europe. Nobody is standing at doors waiting for us. But if you are persistent, you will get there in the end.”

The key is to innovate, he said. “We have to look at the local styling. The Germans expect a better product for a lower price, so we’ve had to adapt to that. There is no reason why any Irish company cannot succeed as long as they keep saying ‘What are the issues?’ and keep resolving them.”

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

Today the company, which sells globally, views the Eurozone as its local market. “We have the same currency, the same laws, there are no borders.”

Brexit uncertainties make looking further than the UK more important than ever. Portwest has responded to the UK’s imminent departure from the EU by shifting some of its warehouse activities.

“There are only two things we give away – warehousing and sales. Everything else we do in Mayo,” he said.

The company recently acquired 140,000 sq ft of warehousing in Poland, reducing its warehousing space in Britain. “We take the attitude of ‘plan for the worst’,” said Hughes. “So rather than have one major distribution centre servicing the EU we will have two.”

Regardless of the ultimate outcome of Brexit, such a move makes good business sense, he said. “We’ve been growing at around 25% a year and currently have nine international warehouses, but from a Brexit point of view, we only had one distribution centre in Europe, so that will now go to two.”

Language and culture are not barriers so much as issues to be resolved, he said. “You need to see (the Eurozone) as a local market and get out there and invest,” he said. “Sales are going to cost you initially but once you make that initial investment, once you get a taste for selling into one country in Europe, you’ll find it as easy as selling in Ireland – and then you will keep going.”

Burgeoning middle class in China creates opportunities along New Silk Road

/0 Comments/in , /by

“Made in China” are three words that became ubiquitous in global manufacturing. Being a factory for the world powered China’s economic rise over the past four decades to become the New Silk Road.

The most populous nation on earth has gone from producing less than 3% of global manufacturing output by value in 1990 to almost a quarter last year. Companies large and small throughout the world have products that are made in China, including 80% of the world’s air-conditioners, 70% of its mobile phones, and 60% of its shoes.

 

How China became the ‘New Silk Road’

Exporting is key to China’s success but it has also transformed the domestic economy into one that is increasingly consumer-led.

More than 400 million of China’s 1.4 billion population are now considered middle class. Consumer spending accounts for more than 60% of economic growth in China and, according to a study by consulting firm McKinsey, 76% of China’s urban population will be considered middle class by 2022, compared to just 4% in 2000.

Dr. Linda Yueh, a fellow in economics at Oxford University, where she directs the China Growth Centre, says that this burgeoning middle class presents huge opportunities for Irish exporters seeking to sell into what is forecast to become the world’s largest economy as early as 2020.

“China is now a maturing economy and has reached the stage where future growth is going to rely on domestic demand,” Dr. Yueh says. “The cities are already full of rich people and therein lie opportunities for Irish exporters, particularly given that many local companies there haven’t yet faced global competition.

“You can be a massive firm in China and never have faced global competition because in China you have a domestic market of 1.4 billion people.”

The 1980s is when China began to reform and to upgrade its industries, moving out of central planning and becoming more market oriented. This ‘open doors’ policy towards global trade transformed the country and it continues to advance today in the form of the ‘New Silk Road’ routes of the Chinese government’s Belt and Road Initiative (BRI).

The BRI development strategy involves infrastructure development and investments that will connect cities across 68 countries and including 65% of the world’s population across Asia, Europe and Africa. The plan is to open trade corridors and develop a unified market which creates jobs and opportunities for people and businesses along the routes. Crucially for Irish exporters, it will make it easier for businesses to reach China’s growing middle classes.

 

Irish ambition in China

An increasing number of Irish companies partnering with Enterprise Ireland have set their sights on taking advantage of this vast and rapidly expanding market.

In 2017, Enterprise Ireland client exports to Greater China grew by 9.7% to record levels of €1.03 billion, with China now accounting for 52% of client exports to the Asia Pacific region. Enterprise Ireland has set ambitious targets to grow exports to Greater China by 40% to €1.44 billion by 2020.

Dr. Yueh says that demand for high-quality innovative, imported products will continue to grow strongly in China for the foreseeable future.

“A third of the world lived in abject poverty in 1990. Today we are at a historic point, where just one in 10 live in extreme poverty. More than one billion people have been lifted out of poverty since 1990 and most of that is due to China,” she says.

“Hundreds of millions of people have entered the middle class and on current growth rates the projections are that in a couple of years, we’ll have 3.2 billion people who are middle class around the world. That’s somebody earning between $10-$100 dollars per day.

“By 2030, and this point may be hit even sooner given how strong emerging economies growth is, especially in Asia, for the first time ever more than half of the world will be middle class – 4.9 billion out of an estimated 8.5 billion people at that point.

“At the moment, more than half of the middle class are in the West but by 2030, two-thirds of the middle class will be in Asia.

“This means there will be a huge amount of opportunities that we haven’t seen before. The United States powered the world economy following World War II in terms of growth with about a quarter of a million people. With Asia, we are talking about five billion people who are going to be middle class. Some of these countries, including China, may not become rich on average but the changes this is bringing into the world economy are significant.

“We’re all going to be impacted by these tremendous opportunities as a new global middle class in China and indeed the rest of Asia.”

 

Contact Enterprise Ireland’s local office for information and support about identifying and developing market opportunities in China.

CEO 4site

How 4site engineers innovate

/0 Comments/in , , /by

“We are design-led. It’s a unique selling point. We bring innovation to every project we do.”

Ian Duggan, CEO 4site

Key Takeouts:

  • 4site is a leader in the design, survey and installation of fibre networks.

  • The company has fostered a culture of innovation, learning and knowledge-transfer.

  • Success is driven by cost-efficiencies and speed made possible by innovative design.

  • Enterprise Ireland’s Grad Start funding supported the employment of graduate engineers to meet the challenges of a quickly changing sector.

Case Study: 4site

4site is a leader in the design and roll out of large-scale fibre network systems, the gold standard for digital connectivity. Founded in 2003, the company is based in Limerick, with offices in Dublin and the UK, and has approximately 80 employees. 

Starting out as an engineering firm, run by and employing engineers, 4site is committed to a culture of innovation with new, imaginative design solutions that give the company a competitive edge.

“If I were to offer advice to start-ups in the sector it would be to diversify – don’t be too dependent on a particular capability.” 

 

Innovation at 4site

This is reflected in the recruiting and training of graduate engineers, supported by Enterprise Ireland’s Graduate Business Growth (Grad Start) and Job Expansion Funds.

Enterprise Ireland’s support helped expand the number of employees and establish an in-house Fibre Planning Programme tailored to the skills 4site requires. Employees are mentored, attend weekly training sessions and are encouraged to contribute new ideas through an Innovation Forum. In 2018, Engineers Ireland acknowledged 4site’s excellence in CPD through its Accredited Employer Scheme.

 

“One of the most successful parts of our business is getting young, enthusiastic graduates who contribute a wealth of new ideas. They always have a faster, better way of doing things and within six months, they are really fantastic additions to the organisation.” 

 

The ‘4Survey’ app, introduced in 2017 and developed in partnership with Esri, the international supplier of geographic information software, was a product of the Innovation Forum. No more marking maps by hand, taking photos on a handheld device and filling in spreadsheets, which are then taken separately to a central office. The app does it all, transferring complex survey data straight to the design team via the internet. The survey process is now 50% faster, more accurate and more cost effective.

A further innovation is the use of the latest drone technology. Drones highlight solutions not readily available from ground level – for example, carrying out an asset inventory check on a 40m tower, gauging the safety of a rooftop before accessing it, or eliminating the need for permits and mobile platforms at the roadside. Cost and disruption are kept to a minimum, while health and safety risks are minimised by reducing the need for working at height.

This approach has garnered impressive results. A leading provider of fibre network in the UK is blue chip firm CityFibre. 4site recently won the contract to design CityFibre’s new networks in the UK cities of Huddersfield and Coventry. This contract is 4site’s biggest yet and is worth in excess of one million sterling. CityFibre has ambitious plans to provide fibre to five million homes across 12 UK cities.

In 2017, 4site provided survey and design services to develop a 5G-ready network for the Scottish city of Aberdeen. 4site also fitted a network of ‘small cell’ sites connected to existing fibre and power services. Small cells are unobtrusive and cost-effective installations, ensuring excellent wireless and mobile phone coverage particularly suited to the densely populated urban environment.

With over a decade’s experience of major network infrastructure projects, 4site has acquired a reputation for excellence. This year, they were only the second Irish company accepted to the FTTH Council of Europe. They have also achieved ISO certification in environmental management, quality management, and health and safety, as well as acquiring a list of major clients including Vodafone, Cignal, Huawei, Three, Nokia, Ericsson, O2, Eir and Siro.

Duggan recognises that quality and reliability are also important factors in their success, “I think it’s trust that builds strong relationships with our customers, and the fact that we can do things faster and cheaper than our competitors.”

 

How support from Enterprise Ireland helped 4site to succeed

Advice from Enterprise Ireland resulted in a greater emphasis on sales and marketing, and a restructuring of the management team, Duggan explains, “Enterprise Ireland encouraged us to rebrand and invest in full time sales and marketing managers.  We have built a strong leadership team in the organisation – that has been key.”

“Enterprise Ireland’s advice and support were transformative for the business.” 

4site also made use of Enterprise Ireland’s Business Accelerator Funding scheme to expand into the UK market with offices established in Reading in 2012.

 

The future for 4site

Europe is only just beginning to promote fibre networks with countries such as the UK, Ireland, Italy and Germany trailing behind. According to the 2017 FTTH Ultrafast Broadband Country Ranking the UK has approximately 3% coverage. The market potential therefore is vast.

 

Learn how Enterprise Ireland can support your Innovation project here.

map of Ireland

Competing for the future at International Markets Week

/0 Comments/in , , , /by

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

/0 Comments/in , , , , , , , , , , , , , , , , , , , /by

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

 

T.E. Laboratories maximising commercial benefit of IP

/0 Comments/in , /by

“Enterprise Ireland’s IP Strategy programme has made a fantastic impact. It’s going to change the landscape of how we handle IP.”

Breda Moore, Technical Director, T. E. Laboratories

Key Takeouts:

  • T.E. Laboratories is evolving from primarily providing environmental and oil analysis services in the Irish market to developing novel, game-changing analytical sensors and instruments for customers worldwide.
  • Enterprise Ireland’s IP Plus Strategy programme and Lean Plus programme have had a dramatic impact on the company’s approach to product development and IP protection.
  • T.E. Laboratories is now moving to commercialise a range of new environmental analysis products, initially targeting the US market.

Case Study: T.E. Laboratories

T.E. Laboratories Ltd, based in Tullow, Co Carlow, started life in 1991 carrying out fuel analysis. It still does; but the company is now entering new territories, with future growth set to be driven by hi-tech product launches, based on novel intellectual property (IP) developed in-house or via technology transfer from international partners.

“We have enjoyed iterative growth from the start, becoming an accredited environmental laboratory and a chemical manufacturer as well as Ireland’s only specialised oil analysis laboratory,” explains Technical Director, Breda Moore. Clients include multinational pharmaceutical and other manufacturers as well as local authorities, utilities and fleet operators.

“Specialist analytical and chemical manufacturing services are set to remain important pillars of our business. But our future growth projections are based on the company evolving as a leader in developing advanced sensors and analysers for environmental and oil applications.

“Moving into a purpose-built building, in 2010, with a dedicated R&D laboratory for new product development, was a key milestone. Our focus changed from doing more of the same to being quite expansive about product development, looking at things that we might have previously considered too big a challenge, either financially or knowledge wise, with the aim of producing a significant number of new products in a relatively short time.”

T.E. Laboratories now employs 50 people, including seven full-time researchers in the R&D lab, which is the engine room for new product development. The lab is 75% funded through EU collaborative research projects (such as Horizon 2020 and Framework programmes), allowing this relatively small company to punch above its weight in innovation terms.

Protecting intellectual property

Now, with R&D projects delivering tangible results, the challenge of maximising the return from this output has come sharply into focus.  

“We are starting to generate significant levels of IP both internally and in collaborative projects. As these products get closer to market, thinking strategically about their commercialisation becomes important, making us realise that, up to now, we hadn’t given IP enough attention,” explains Moore. 

For T.E. Laboratories, then, the recent launch of Enterprise Ireland’s new IP Strategy programme was perfectly timed. The pilot programme provides companies with financial support towards the cost of engaging an external IP advisor to help them develop an IP strategy to secure the maximum return from their RD&I activities, and, in the process, strengthen their in-house IP management capabilities.

“Through the IP Plus Strategy programme, we’re putting in place a formal process to cover the IP that we’ve already generated so that we can leverage maximum benefit from it, and we’re also looking at the IP we’re starting to produce to identify the best strategy for protecting that,” says Moore.

“For example, we’ve reviewed all the default agreements in our European projects to see how they can be improved, and we’ve examined how we can capture IP in our labs and where we can derive a commercial advantage. It’s all about putting procedures in place to handle IP in a consistent way; whereas before it was very reactive.

“The advice we’ve received from the IP attorney has made a fantastic impact in a short space of time. We can see that we have an awful lot more to do, but the IP Plus Strategy programme is going to change the landscape of how we handle IP.”

New product development

Among TelLab’s developing IP portfolio are a new breed of environmental sensors, which Moore describes as “game changers”.

“We believe we are leading the field in low-cost environmental sensors with our Aqua Monitrix device, which offers real-time, remote monitoring of water quality,” she explains. “We see massive potential in the US market.”

One of TelLab’s Aqua Monitrix prototypes is currently competing in a nitrogen sensor challenge, coordinated by the US Environmental Protection Agency.  If it can meet performance goals during onsite testing, the prize for TelLab will include an order of 200 units and a performance verification report.

“It’s an exciting time for us,” Moore says. “I believe this product range will change the company by an order of magnitude.”

Intertwining a focus on Lean and IP

Dovetailing with the focus on IP protection, T.E. Laboratories recently completed Enterprise Ireland’s Lean Start programme and is now working through Lean Plus to achieve increased competitiveness and productivity across operations.

“We’re particularly interested in applying Lean to our new product development activities. This will enable us to bring products that are successful at the research phase to the market as efficiently as possible. We will cut out unnecessary steps, concentrating on features that add actual value to the end user, and designing with Lean manufacturing in mind,” explains Moore.

“For us, the Lean and IP Strategy programmes are going to cross over significantly in some areas, and we see that as having a hugely beneficial impact,” she adds.

“As we bring these products to international markets, we will continue to use Enterprise Ireland’s global network of offices, and we anticipate significant benefits arising from the IP Plus Strategy and the Lean Plus programmes.”

Learn more about Enterprise Ireland’s Innovation supports here.

Channel sales

Channelling Success with Channel Strategy

/0 Comments/in , , , , , , , , , /by

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.

Setting up shop stateside: How to establish a US business entity

/0 Comments/in , , /by

If you are an Irish company setting up in the United States, taking time to organise operations properly is essential.

Going Global USA: Learn your Legals is a concise and yet comprehensive guide to the most important elements you should consider, covering how to manage taxation, visas and immigration, and trade and customs. In this deep dive, learn how best to approach establishing a US business entity.

How to establish a US business entity

Setting up in the US without adequate research and planning exposes your company to the risks of litigation and state and federal taxation penalties.

To qualify to do business in the United States, you must, at the very least, have a registered branch office in the country. Choosing the branch office option can, however, make the parent company in Ireland a more visible target for lawsuits and legal claims, and liable for US federal, state, and local income taxes.

Form a distinct US legal entity

It is more prudent, and in the long run more cost-effective, to form a distinct US legal entity, be it either a US business corporation, known as a C-Corp, or a US limited liability company (LLC).

A C-Corp is similar in structure to an Irish limited company and is usually a better option than an LLC for overseas businesses. While there are tax advantages to forming an LLC, they apply to individual shareholders rather than shareholding parent companies. As C-Corp shareholders are perceived to be more ‘separate’ from the everyday activities of the company, C-Corp owners tend to be less exposed to litigation, and to have more limited liability.

Remember, however, that C-Corp profits can be taxed twice, under the US ‘double taxation’ system.  Firstly, at federal and at state level, a C-Corp is assessed for corporate income tax on profits. Then, if the company chooses to distribute earnings, shareholders will pay capital gains tax on dividend income.

On the plus side, C-Corps are familiar entities to both customers and institutional investors, are scalable, and can be made public. And as most early stage companies reinvest profits to fund growth, when dividends are not issued, double taxation is not a major concern.

US location, location, location

Wherever you plan to do business in the United States, it is probably best to set up in the State of Delaware, where legislature deservedly enjoys a reputation for having America’s most business-friendly laws.

Delaware is one of only five US states with a separate non-jury Court of Chancery, with judges focused solely on business law. The Chancery Court is also unlikely to interfere in arrangements where signed corporate agreements are already in place.

Unlike in other states, shareholders and directors of Delaware-registered corporations do not have to be Delaware residents. In addition, Delaware corporate law applies to Delaware corporations no matter where they actually operate, or where their physical headquarters are located.

Delaware also offers favourable taxation laws. The state does not tax royalty payments and non-residents are not liable for personal income tax, including capital gains tax on dividend income.

While it may cost less to register a business in other states, potential short-term savings should be off-set against the long-term legal certainties that the Delaware legislature provides.

As easy as ABC Delaware: How to form a C-Corp or LLC

There are four steps to forming a C-Corp or an LLC in Delaware.

  • Firstly, check online that your preferred choice is available and decide on a business name for your corporation or LLC.
  • Secondly, appoint a registered agent to receive service of process and other correspondence on behalf of your company. If you have a Delaware address (which must be more than a PO box number), you can do it yourself. Otherwise, you can appoint an attorney or an accountant as a registered agent, or you can use a registered agent service company, which will charge you as little as $50 for their services.
  • Thirdly, file a Delaware Certificate of Corporation that includes the name of the corporation, the name and address of its registered agent, the purpose of the corporation, and the total number of shares that the corporation is authorised to issue. The fee for filing this documentation is $89 (at time of writing), if all your information is contained on one page. Otherwise, an extra $9 is charged for each additional page.
  • Lastly, you must remain ‘in good standing’, which requires you to file an annual report and pay a franchise tax. That part is crucial. If a Delaware corporation loses its good standing, it loses its limited liability shield, and the corporation’s creditors can make claims on shareholders’ personal assets.

Franchise tax is not based on income. It is based on overall share value and is assessed using two methods: the authorised share capital method and assumed par value capital method.

It is important to take professional advice to avoid paying more franchise tax than is necessary. If you authorise a large number of shares but only issue a small portion of them, or if the shares have no par value, you could end up with a franchise tax bill for tens of thousands of dollars. A corporation with 5,000 or fewer authorised shares, will pay at least the minimum franchise tax fee of $175 annually.

Foreign qualifications

If your US company is conducting business in any state other than the state in which it is incorporated (for example, outside Delaware), it will most likely also need to register in each additional state, in a process known as ‘foreign qualification’.

As the rules for foreign qualification vary from state to state, consult with a business lawyer or, at the very least, conduct some research on the state’s Department of State website. Foreign qualification involves additional paperwork and expense. A Delaware corporation applying to do business in New York will spend at least $334 to obtain all required certification.

Note that, whether you file a foreign qualification or not, a company deemed to be doing business in a particular state will be subject to state income taxes in that state. However, there are states, such as Texas, where generous tax-free allowances mean that most small businesses pay little or no state income tax.

Talk to your Enterprise Ireland advisor to get advice on setting up your company’s presence in the United States or read more in Going Global USA: Learn your Legals

How investing in growth paid off for SF Engineering

/0 Comments/in , , , , /by

Visit almost any leading food company around the world and you are quite likely to find production line technology supplied by Irish firm SF Engineering.

Since its establishment in 1983, SF Engineering has been responsible for more than €250 million worth of food processing projects in 63 countries across Europe, North and South America, Russia, the Middle East, and Australia.

Central to the company’s success during that time has been its commitment to innovation and unwavering customer focus.

“We started off in the fish industry,” says CEO and founder, Seamus Farrell. “After that, we moved into the red meat sector and the broader food industry. This wasn’t part of a grand plan. It sort of happened accidently.”

It was a natural evolution, however, given the impact the company had already had on the fish sector. “What we did for the fish industry was futuristic,” he says. “At the time, it cost around €25 per tonne to process fish. We reduced that price to €4 per tonne by automating the process. That was our first big kill and set us up for future growth. After that, we moved into the Scottish and Scandinavian fish sectors – that was quite a natural move for us. We have never been export shy.”

Today, SF Engineering designs, manufactures and installs high-quality food production lines. Specific product lines include conveyors, packing solutions, platforms, weighing equipment, fat analysis, quality control, hygiene equipment, lifting and tipping equipment.

“Our process design expertise enables us to deliver highly efficient food production lines that reduce costs, increase capacity and require less maintenance”, says Farrell. “Our food technology experience covers a range of sectors, including meat, poultry, fish, bakery, dairy, fruit and veg, ready meals and pet food. We are experts in the precision engineering of complex engineering systems for the food sector and we provide a trustworthy support service to our clients who operate around the clock throughout the year.”

Expansion into international markets began in earnest in the late 1990s and this saw the company form a number of key strategic alliances with global partners. “We have formed great partnerships with companies, firstly the main one being Ishida, then following on from that CEIA,  Marelec and Eagle”, says Farrell. “They have been very important to us. They allow us to combine our complementary strengths in different areas to supply turnkey solutions to the global food industry.”

These partnerships have been an important source of new business referrals, but the company is active on international markets winning new orders. “You have to keep driving on,” says Farrell. “We have consistently invested in R&D over the years, with support from Enterprise Ireland and others. Back in 2009, when Irish businesses were severely challenged by the recession, we made a decision to invest in growth.”

That decision saw the acquisition of Opal FPS in St Ives, Cambridgeshire. “That helped us to grow our sales in the UK. It has also Brexit-proofed our business.”

Another key decision around that time was the opening of a new base in Prague, where the company’s Global Installation Team is based. The relationship with the Czech Republic dates back to the late 1990s.

“In the late 1990s and early 2000s we found that we were losing people to the building boom,” says Farrell. “That led to us employing a lot of people from the Czech Republic. We found them to be very good stainless steel fabricators. Without those guys we wouldn’t have been able to expand internationally as quickly as we did. The Global Installation Team is in transit, with all the team travelling around the world from project to project.”

Farrell is grateful to Enterprise Ireland and the other bodies which supported the company in its growth and development over the years. “They believed in the company and supported us, and that was very important.”

He believes export success begets further export success. “Having supplied all these blue chip companies around the world gives us the confidence to go out and win more business,” he says.

“We are also very lucky to come from a country with a very strong food industry, which has travelled well globally and has established a reputation for high quality. Our core values are to be as professional and competitive as possible. We are never going to be the cheapest, but we will add the most value and deliver the best and fastest return on investment to our customers. We are large enough to compete around the world but small enough to be flexible when it comes to delivering solutions for customers. We understand that retailers and consumers want more affordable, safer food on supermarket shelves, and they want very good quality. We provide the solutions that enable our customers to meet that demand.”

These core values have seen SF Engineering expand to employ 110 people in Ireland, the UK and Prague, with business growing strongly year on year. “We will have sales of €20 million this year,” Farrell concludes.

Learn how Enterprise Ireland enables companies to access R&D funding with our innovation supports.

Meditec US hospital supply chain

How Meditec conquered the US hospital supply chain

/0 Comments/in , /by

Breaking into the US market isn’t always easy but with the right supports, infrastructure, attitude, and product, it is achievable.

Alan Sullivan, Managing Director of Meditec Medical, addressed the Enterprise Ireland knowledge event aimed at helping Irish manufacturers to navigate the US supply chain.

His company has enjoyed tremendous success in the US thanks to the Mediflex, a specialised mattress for clinical use, which prevents pressure sores. While the innovative product is now used in hospitals across the region, initial entry was made with the help of a planned introduction from Enterprise Ireland.

“Enterprise Ireland brings US companies to Ireland to showcase what our businesses do. One day we were told that Boston Children’s Hospital were in – the holy grail for suppliers,” he explained.

Opportunity knocks for Meditec Medical

“Dave Walsh, the hospital’s Director of Supply Chain Administration, came into our office and we showed him around. He said there and then: ‘When can you trial this?’

“We went to Boston with the sample and presented, then started talking about the innovative stain-resistant cover, and the traction started to build from there.”

From the start, Alan was keenly aware that opportunity only knocks once, which drove the company’s rigorous preparation ahead of every visit.

“I have one chance and I have to get that right.

“Before going into the US market, there are certain things you need to be ready for. The last thing you want to do is to go into a big seller and for them to ask, ‘do you have X in place?’ and for the answer to be ‘no’, or to have not even considered an answer,” he said.

“We got our product tested in the east coast of America for compliance with fire regulation. Because we were already looking for our FDA approval, we already had those wheels in motion.”

Securing a long-term relationship

There can be several boxes to tick, he explained, and no value in attempting to cut corners. Teaming up with local expertise is often a good idea.

“For the FDA approval, we did a lot by ourselves, but we also got a consultant in the US. Importing into the US is very different to importing into Europe. You have to have an importer on record, essentially a company in the States who will keep your records to be referenced by organisations like the FDA.”

“When it comes to customs clearance, you have to get a partner to ensure everything runs smoothly,” he added, noting that delays early in the process can have a disproportionate impact on long-term relationships.

“It’s important that all of the details are nailed down before it leaves Ireland. Don’t promise the order will be there by Tuesday, only for it to get caught in customs.

While an in-market distributor can offer big benefits in terms of access, contacts and local knowledge, Alan insisted that staying clearly visible in discussions was key to the success of the product’s sell-in.

“The main thing about dealing with a distributor is that you can’t just allow them to take the products on and present them,” he said. “I know my products, how to present them, the engineering that goes into it. It’s very hard to relay this to someone with 2,500 products in their portfolio.”

Nailing the process

This hands-on approach served Alan and Meditec extremely well over the course of their developing relationship with Boston Children’s Hospital.

“We sent the product over by flight and I followed it over myself. I met key people from the hospital and we got a chance to iron everything out. Anything we didn’t have in place, we nearly had in place. We got the trial.”

The process, Alan explained, was not simply a test use period – but also an ongoing opportunity to refine the product to suit the buyer’s needs.

“We already had a heel section and the clinicians wanted a head section too. So, we went home, added that and came back.

“Labelling, visibility, everything – we changed and customised it to get it right.

“The clinical aspect of the product stayed the same, but we adjusted the features.”

This detail-oriented approach was precisely what the hospital stakeholders were looking for and was an important element in the eventual success of the trial.

 “I trained up the people on the ground and put my distributor in the position where they could fix any issues,” he explained.

“If they feel like you’re far away and you’re not going to put in the hard yards, they’ll go for the safe option –  like a US multinational. You need to show them.”

Local Enterprise heroes

Following in the footsteps of Local Enterprise heroes

/0 Comments/in , , , , , , , , , , , , , /by

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.”