Transport & Logistics Industry Update – Webinar

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The Covid-19 pandemic, Brexit and the re-shaping of transport routes brought a very turbulent start to 2021. Logistics and transportation companies involved in the movement, storage and flow of goods have been directly impacted and had to rapidly adapt to changing business landscape. Irish companies exporting their products or importing components or raw materials need to follow and understand these trends to stay competitive.

This Enterprise Ireland webinar identifies these challenges and examines current developments with a panel of industry experts.

The webinar is chaired by Enterprise Ireland’s Director UK & Northern Europe Marina Donohoe with insights from:

 • Gopal R, Global Leader, Supply Chain & Logistics, Frost & Sullivan

• John Ward, Managing Director, Maurice Ward & Co. Ltd Ireland

• Richard Nolan, CEO, Nolan Transport – Nolan Group

 

Register now to attend the webinar.

Man with lightbulb representing Innovation

Agile Innovation Fund: Easier than ever for companies of all sizes to access R&D funding

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It is now easier than ever for Irish companies to access R&D funding to improve their products and services and compete internationally.

That was the message from Enterprise Ireland and the national network of Local Enterprise Offices to representatives from more than 60 companies who attended a research, development and innovation event recently in Dublin.

Enterprise Ireland and the LEOs pledged to use the Agile Innovation Fund to support companies of all sizes as they to seek to open new export markets and grow – promising a fast, flexible and simple application process.

 

Find more information about the Agile Innovation Fund here.

Speaking at the Agile Innovation Workshop, Eoghan Hanrahan, Enterprise Ireland Regional Director for the Dublin Region and Regional Development, said: “In doing R&D, companies have to challenge the norms, do something different, look at achieving some kind of technical innovation to try and future-proof their company.

 

Get support for Agile Innovation

“We recognise that R&D can be challenging but it is a very important step for any business to take and it’s also important that they are supported in doing so. Enterprise Ireland and the LEOs are here to assist people and companies who want to invest in R&D. The Agile Innovation Fund offers up to 50% funding to a maximum of €150,000 in grant aid.”

Irish companies are spending less on R&D than most European competitors. Latest Eurostat figures show that spending in 2017 equated to 1.05% of GDP, almost half the EU average of 2.07% and well behind R&D leaders Sweden, Austria, Denmark and Germany – all of whom spent more than 3% of GDP.

Of the €3bn that was invested in R&D in Ireland, €1bn was spent by indigenous companies. It is notable that in 2007, Ireland spent a higher percentage of GDP (1.23%) on R&D than it did in 2017.

Joe Madden, Manager of In-Company R&D Supports at Enterprise Ireland, told the workshop that the Agile Innovation Fund was designed to counter the belief among SMEs that funding R&D is too costly and that securing state support for projects is too complex and geared towards larger operations.

 

Flexible and fast access to Agile Innovation funding

“The Agile innovation fund was introduced at the beginning of 2018 as a response to a very steep fall off in applications for R&D support,” Mr Madden said. “Companies were telling us that the standard R&D application process was too complicated and very often they would have a project finished before they even knew whether they were going to get approval to do it.

“We needed to introduce something much more flexible, much faster and where the funding wasn’t as high so that we could apply a less onerous process for evaluating and approving applications.”

The main feature of the Agile Innovation Fund is its fast turnaround time, with an application process that results in decisions in a few weeks rather than several months. More than 90 companies have drawn down around €20m in funding since it was launched last year, with 90% of them rating the application process as relatively simple in a survey.

Madden added: “There are only two documents required to apply for the Agile Innovation Fund, an online application form and a project plan. The project plan is what the technical assessment of the application is based on. The technical assessors are looking for two things: is this eligible R&D and are the costs reasonable. To be eligible R&D, there has to be technical uncertainty – this means the project must demonstrate some kind of product or process development technical challenge.

“Total expenditure on any single application is limited to €300,000, so if your project spend goes to €300,001, it is not eligible for funding. Typically for a smaller company, the funding would be 45% of the total cost, which equates to a maximum grant of €135,000. If a small company collaborates with a partner, this funding can rise to 50% and therefore the limit increases to €150,000.”

The goal of the Agile Innovation Fund is to increase the amount of spending by indigenous companies of all sizes on R&D across the economy.

 

Local Enterprise Office support

Oisin Geoghegan, Head of Enterprise at LEO Fingal, advised companies that are not Enterprise Ireland clients to get in touch with their Local Enterprise Office.

He said: “Providing assistance and funding for R&D projects or innovation is one of the core reasons why the Local Enterprise Offices are here. R&D is not just about wearing white coats and having a lab. Most of the businesses we are dealing with could potentially apply for and receive R&D grants

“We want to see more applications from SMEs and the LEOs will work with you to give you advice and guidance on the application process. It’s called Agile for a reason, the application process is straightforward, it’s online and we want to see applications processed and approved quickly.”

Apply for the Agile Innovation Fund now.

John Ferguson Ambition Asia Pacific 2

‘Phenomenal’ middle class growth in Asia Pacific an opportunity for Irish companies

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The growth of the middle class throughout Asia Pacific presents ambitious Irish companies with unprecedented opportunities, delegates at the recent Ambition Asia Pacific conference in Dublin heard.

Some 23 million new ASEAN households are on track to earn more than US $35,000 a year by 2030 in what is “the fastest-growing, most dynamic region in the world,” said John Ferguson, Director of Country Analysis at the Economist Intelligence Unit, who provided an overview of growth trends and opportunities in the region.

 

Growth rates in Asia Pacific countries

In China, major strategic programmes such as Made in China 2025 and the long term Belt and Road construction initiative “are not going away”, he said.

“Chinese growth is still just very modestly slowing down to around 6%,” he said. The government there is using monetary goals and fiscal policy to maintain that growth.

Even allowing for the challenges facing China, “it’s still going to grow pretty reasonably well over the next couple of years,” he said.

Growth prospects in Japan, at 1%, are much smaller, however. As a huge, developed and rich economy, it’s one in which there are still “a lot of opportunities” for Irish companies, he suggested.

Much of that opportunity relates to Japan’s Society 5.0 initiative, the Japanese government’s focus on artificial intelligence, sensor technology and automation.

“This is a huge initiative for the Japanese. That’s where some of the growth opportunities will present themselves in Japan, already a highly developed economy but really trying to push themselves with this fourth industrial revolution.”

India represents a particularly “bright spot” in the global economy, said Ferguson, who predicted growth of around 7% on average likely over the next five years.John Ferguson Ambition Asia Pacific

This compares with global growth of around 2% and Asian growth of between 4% and 5%. India’s growth outlook is “extraordinary”, he said.

The primary opportunity in India, as in Asia Pacific countries such as Vietnam and Cambodia, is one of population development and subsequent growth in demand for consumer goods and services.

With predicted growth levels of 5% and a large population, Indonesia is another really strong performer, again driven by the fast growth of its middle, or consuming, class, he said.

Indonesia’s five-year growth rate forecast is almost double that of Singapore’s, at 2.9%. However, the additional opportunity in Singapore comes from its ease of doing business and its popular status as a launchpad from which to do business elsewhere in the Asia Pacific region, he said.

So, while Singapore is growing a more slowly than some of the less well developed countries in the region, it’s still growing at “a pretty impressive rate of growth for economy at its stage of development.”

South Korea is another mature market but still likely to show average growth of 2.7% over the next five years. “In our view, that’s a pretty reasonable growth for a country at that stage of development.”

“The rising middle class in the Asia Pacific region is phenomenal. The world is moving east.” Kevin Sherry, executive director Global Business Development, Enterprise Ireland

Australia – another frequent launchpad into the wider region for Irish companies – and New Zealand are both stable economies but, cautioned Ferguson, both are seeing climate change and immigration becoming significant political issues.

Kevin Sherry at Ambition Asia Pacific Conf.For Irish businesses looking at these markets, either as part of their supply chain or as end markets, it’s worth keeping an eye on regulatory initiatives in relation to either, he said.

Enterprise Ireland is working with more than 600 companies who are doing business in the Asia Pacific region.  “Irish companies are used to winning in the Asia Pacific markets,” said Kevin Sherry, executive director Global Business Development at Enterprise Ireland.  “The rising middle class in the Asia Pacific region is phenomenal. The world is moving east.”

Depending on what happens in October in relation to Brexit, Ireland may be the only English speaking country in the EU, a fact that presents challenges but opportunities too, he pointed out.

Enterprise Ireland is expanding its footprint in the Asia Pacific region to help support Irish companies looking to capitalise on the growing level of opportunities there, opening new offices in Auckland, in Ho Chi Minh City, Vietnam, in Melbourne, Australia and in Shenzhen, China, he said.

 

Read more Global Ambition articles on the opportunities for Irish companies in Asia.

Irish companies banking United States

How to manage US banking, employees and legal fees

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Two challenges that Irish companies sometimes experience when preparing to export to the United States for the first time involve banking and employment. The following pointers will help you to prepare.

Download the full Going Global USA: Learn your Legals guide now.

All US banks require an Employer Identification Number (EIN) confirmation letter, also known as Form SS4, before opening a business account in your company’s name.

 

How to apply for an Employer Identification Number

You can apply for an EIN online on the Internal Revenue Services website, if you already have a US social security number (SSN), or an individual taxpayer identification number (ITIN).

If you don’t have an SSN, you can apply for an EIN from the IRS by fax or have a lawyer act as a ‘third-party designee’ to prepare and process an EIN application on your behalf.

 

If you have an EIN

Some banks will accept a copy of a fax from the IRS assigning your business entity with an EIN. Others will need to see the EIN verification letter sent by the IRS, which can take weeks to arrive.

Most banks will also require a copy of the company’s formation documents – US business address and annual statement of officers and directors.

To comply with mandatory anti-money laundering legislation, US banks need to verify the identity of those opening business accounts under Know Your Customer (KYC) rules. There are several ways the requirement can be met:

  • Get a visitor visa to travel to the US and personally open an account at your bank of choice
  • Use third-party services to help you set up an account
  • Some banks will set up an account without the relevant corporate officer being in the United States. If acting on a referral from a legal representative, the process can be completed via email.

 

Employment considerations

Irish companies should carefully plan their approach to hiring personnel in the US as there are a number of potential pitfalls to be aware of. For example, if you hire someone as a consultant or independent contractor, it could later be determined that they are actually an employee under US law. Improper classification risks exposing a company to penalties and liabilities, including the withholding of taxes, benefits, and the possibility of being sued by the employee.

Laws governing US employment and benefits are complicated, which makes it vital for potential exporters to seek the advice of legal professionals.

As US benefits packages vary widely and differ significantly from those in Ireland, companies should seek advice on what employees in specific roles are likely to expect when considering a job offer.

 

Legal costs

For small companies using a lawyer or legal service provider for help with company formation and setting up, fixed fee packages in the range US$3,000 to US$5,000 are available. Packages usually include general counsel, registration fees, and the creation of incorporation, confidentiality agreements and stock issuance.

In general, you can expect to pay additional fees for operating and shareholder agreements, as they can be highly complex. While legal assistance with IP transfers can also be costly due to complexity, many Irish companies keep IP rights within the Irish parent, with the US entity established as a servicing company.

 

Access more insights on doing business in the US.

Future Transport

Ireland: the go-to destination for future transport

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Transport is changing and Ireland’s automotive suppliers are in the driving seat. Companies that think globally, invest in the growth of their companies and innovate continuously are most likely to succeed, particularly in the fast-changing automotive and mobility space.

Irish companies are doing all three, delegates at Connected Autonomous Vehicles and Mobility heard recently.

Organised by Enterprise Ireland, the event brought leaders from the global automotive industry to Dublin. These included Kelly Kay, Executive Vice President of the Toyota Research Institute; Rahul Vijay, tech deal-maker at Uber, and Amer Akhtar, managing partner at Foothill Ventures and an advisor to Chinese electric vehicle (EV) company NIO.

Their audience included top Irish automotive and mobility engineering companies, including CitySwifter, which uses big data and predictive analytics to optimise bus networks; Cubic Telecom, a global connectivity specialist for the automotive sector, and micro-location semiconductor solutions developer Decawave.

Taoglas, a developer of antenna solutions; iCabbi, a dispatch specialist and Fleet, Ireland’s first peer-to-peer car hire platform, were represented too.

Key executives from vehicle tracking and fleet management company Transpoco; Xtract, a developer of a unique software solution for the auto-insurance and OEM after-sales markets, and satellite communications solutions Arralis, a maker of smart antennae, were also present.

The attendee list alone demonstrated the breadth of capacity that already exists in the transport space, including AdaptiveMobile, a world leader in mobile network security protecting 2.1 billion subscribers worldwide.

It also included Arup, who helps transport authorities and city planners to optimise transport networks, as well as connected transport IoT solutions provider Davra Networks. The event attracted both innovative start-ups and established manufacturers such as Combilift, whose materials handling solutions are used worldwide.

 

Commited to innovation

What all have in common is an adherence to the three key indicators of sustained success – a determination to internationalise, to invest in the growth of their company, and a constant commitment to innovation –  said Tom Kelly, head of innovation and competitiveness at Enterprise Ireland.

“The people in this room, all of them, meet those objectives. They are businesses for whom innovation is the critical component of their thinking, and that is the best recipe for success,” he said.

Their commitment to these three pillars – internationalise, invest, innovate – is what drives all Enterprise Ireland-supported companies to success. “Over the last seven years you can see confident, upward progress in terms of the key metrics we look at, in terms of the sales output of our companies,” he said.

This includes exports of more than €22 billion by companies supported by Enterprise Ireland, a figure on track to hit €26 billion by the end of 2020, he said.

The automotive sector has a particular resonance here, Kelly noted, with Ford having been one of the country’s biggest employers, in addition to the influence of the presence of a number of UK subsidiaries up until the 1980s.

“But we have a greater history too, in the importance of our subsuppliers who today do business all over the world, with all of the leading automotive sector companies,” he said.

“The Nissans, the Volvos, the Jaguar Landrovers, the Fords, the Bentleys, the McLarens, the Nascars, the Teslas – they are all there, all companies doing business with Irish companies. This isn’t something that stands still either, with Irish companies simply supplying a part. Our companies are continuing to evolve, to change and respond to the needs of those companies.”

“It’s a fact that comes back to the investments they make, to the capability they are putting into their company, to the capacity they build and the innovation they commit to. That is characteristic of the companies sitting here today and it is a guarantor of their future success and of their future relevance to their customers.”

 

Transport is changing fast

The automotive world is changing fast, with the machine element becoming less complex but the electronics and software components infinitely more so. It’s a development to which Ireland is well placed to contribute.

“What we have in Ireland are companies that have been supplying more traditional component parts and also the emergence of companies that are providing the kind of sensor technology and software that enables autonomous operation of vehicles,” said Kelly.

Companies supported by Enterprise Ireland currently export some €130 million direct to the automotive sector, and another €30 million through automotive software applications. “So we have significant scale of activity already, a platform to build on that gives us confidence as we go forward.”

A major part of Enterprise Ireland’s role is to drive the innovation agenda, to support companies with grant assistance and incentivise them to do more on this front and to take on greater challenges, he said. “But probably the most understated and single most important thing we can do is make connections, whether in the marketplace with suppliers and customers, or with companies.”

Building connectivity, partnerships and long-term alliances yields success, he said, a fact Enterprise Ireland is facilitating through the creation of an industry cluster around the vehicles of the future. “It is very much about recognising that the vehicle of the future is going to be connected, autonomous and shared and electric, it will have all of those attributes, and there is still going to be a traditional element too.”

Enterprise Ireland’s aim is for Ireland to be the “go-to” place for the supply of components and technologies of relevance to the future automotive sector, he said. The launch of the €500 million Disruptive Technologies Innovation Fund is a clear indication of the Irish government’s commitment to realising this ambition.

“The people in this room come from different areas, with deep levels of knowledge in sensor technology sitting beside traditional components suppliers, engineering companies and software expertise. It’s a clear expression of the capability that exists in this country.”

 

Languages Connect logo

The importance of multilingualism

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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

 

Local Enterprise heroes

Following in the footsteps of Local Enterprise heroes

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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.”

Strong Strategy Key to Combilift’s German Market Success

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“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

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

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

1. Preparation

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

2. Legal

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

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

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

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

3. Tax Structuring and Compliance

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

4. Trends

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

5. Banking

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

6. Immigration

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

7. Insurance

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

8. Recruitment

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

9. Offices

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

10. Incentives and Supports

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

 

Enterprise Ireland companies with Global Ambition

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Attendees at Enterprise Ireland‘s International Markets Week heard from established Irish companies successfully selling globally and had the opportunity for meetings with Market Advisors, available to provide expertise on exporting to new markets.

If you are attending IMW please consider the following:

  • In which markets are you successful and how have you achieved this success?
  • What is your business/value proposition?
  • Why have you decided to target this new market?
  • What market validation have you carried out and what evidence do you have for a demand for your product / service?

Contact the International Markets team at International Markets Week for further information.

Like the Rubik’s Cube, Hungary is Worth a Twist for Irish Businesses

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The designer of the Rubik’s Cube said “we turn the cube, and it in turn twists us”. In other words, to solve the puzzle you must look for other perspectives.

Hungarian professor Erno Rubik’s aphorism is apt for his home country today. Unorthodox politics and the controversial treatment of migrants has hurt its reputation, while the international business community has criticised Hungary for bringing its finances into check with the help of taxes on mostly foreign-owned banks and large companies.

However, much like the Rubik’s Cube, looking at Hungary from a variety of angles may lead to a different perspective.

For instance, it ranks in the top quartile of the Human Development Index and is the ninth most complex economy in the world – six places above Ireland. It exited the EU’s Excessive Deficit Procedure in 2013 and has defied predictions with growth projected at an average 2.5pc out to 2020. Imminent income tax cuts and a relaxation of a bank levy are expected to boost what has been described as a ‘creditless’ recovery.

It is a country of great artistic, cultural and sporting tradition. Hungarians won gold medals at every summer Olympics except Antwerp 1920 and Los Angeles 1984, when they did not compete. It was also the first country to host a Formula One Grand Prix from behind the Iron Curtain in 1986.

It counts composers such as Bela Bartok, Zoltan Kodaly and Franz Liszt among its native sons and is also a pioneer of cinema, providing Hollywood with Adolph Zukor, who founded Paramount, and Wilhelm Fuchs, who founded Fox Studios.

Hungary also boasts a strong scientific tradition, with scientists of Hungarian birth or origin receiving the Nobel Prize on more than 20 occasions. The OECD ranks Hungary 16th in the world in science education.

Indeed technical skills, allied to moderate wages and a location on the edge of European supply chains, led to investment in the early 1990s. Today, inward FDI amounts to 78pc of GDP, the highest in the region.

Hungary has been particularly successful in attracting FDI in the automotive and electronics sectors (often intertwined). As a result, participation in global value chains is among the highest in the OECD.

Large investors include Audi, Suzuki, GM and Mercedes plus more than 700 suppliers. Bosch, Alpin, Samsung, Honeywell and Rosenberger are among the big electronics players – and many are scaling up. This should interest Irish suppliers with sectoral references or offering added value for production or services.

There is also opportunity in Hungary’s national development plan (2014-2020), with €6bn allocated for health, infrastructure, environmental protection and tourism – which is predicted to increase 4.2pc this year, to a total of just over 12m visitors. Similar growth is expected until 2020, boosting tourism-related expenditure and hotel industry value.

BMI Research expects growth in the medical devices market of more than 6.3pc in 2016 and with the country reliant on imports to meet demand, producers and developers of time- and cost-saving healthcare solutions should take note.

Opportunities for Irish companies

Irish firms are already active here. Architectural practice O’Donnell+Tuomey designed the redevelopment of Budapest’s Central European University in time for this year’s 25th anniversary and CRH opened its new business services centre in the capital, providing administration for operations in Austria, Hungary and Slovakia.

Outside Budapest, McHale Hungaria produces hay bailers in Szolnok; Kingspan manufactures construction industry components in Ujhartyan; and in Torokbalint, Kerry Group produces food ingredients.

So despite its reputational issues, Irish businesses should look again and take note of possibilities in Hungary, perhaps with the aid of an invention of a former Budapest newspaper editor called Laszlo Biro.

Ladislav Muller is Enterprise Ireland director for the Czech Republic, Hungary, Slovakia, Romania and Bulgaria and is based in Prague

This article was originally published in the Sunday Independent