ISSN 1649-7589 VOL 08 | ISSUE 01 | DECEMBER/JANUARY 2012

Also inside As dead as a Doha? Free trade regulations look set to shape Europe’s future in Asia Leading from the front Leadership marks out Irish success stories in UK construction Mr Ireland in China Liam Casey on PCH International and his new role as patron of The Asia Pacific Irish Business Forum Future ways to pay Four hot contenders to dominate the future for alternative payments Learning to fly CEO Captain Mike Edgeworth on the Pilot Training College’s $50 million investment plans

Young Irish companies NEW TO on earning their stars and THE USA stripes 023

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THE MARKET COVER STORY Enterprise Ireland The Plaza 016 new in the USA Eastpoint Business Park Young Irish companies talk about earning their stars and stripes during their first year in Dublin 3 the USA T: +353 1 727 2954/2000

PUBLICATIONS MANAGER Duncan Black REGIONS AND SECTORS E: [email protected] 012 As dead as a Doha? EDITOR Free trade regulations look set to shape Europe’s future in Asia Mary Sweetman E: [email protected] T: +353 1 727 2990 023 who’s taking the horse supplies to France?

EDITORIAL ADMINISTRATION & France’s €10 billion equine industry SUBSCRIPTIONS Teresa Meagh 016 shouldn’t we all be speaking German? E: [email protected] T: + 353 1 727 2954 Ireland’s foreign language deficit and how savvy companies are addressing it

MARKETING & DISTRIBUTION MANAGER Maureen Egan 030 Leading from the front E: [email protected] Leadership marks out Irish success stories in UK construction T: +353 1 727 2866

DESIGN & PRODUCTION Boyle Design Group PEOPLE

PROOF READING 014 Learning their wings Anthony King CEO Captain Mike Edgeworth on the Pilot Training College’s $50 million investment plans

PRINTED BY Turner Print Group 021 An awfully big venture Interview with Chris Coburn, executive director of Cleveland Clinic Innovations The Market magazine is sold by subscription (+353 1 727 2970) 036 mr Ireland in China Readers may email comments and suggestions to [email protected] Liam Casey on PCH International and his new role as patron of The Asia Pacific Irish Business Forum The views and opinions expressed in The Market are not necessarily those of Enterprise Ireland. Published by Enterprise BUSINESS Ireland Corporate Marketing Team. 033 future ways to pay www.enterprise-ireland.com/en/ Four hot contenders to dominate the future for alternative payments publications 039 finding your way in translation Advice on finding the right translator 042 taking them back to your place Meetings on home turf can really help cement relationships

REGULARS 002 noticeboard News for and from the export community 044 market Intelligence Updates on trade regulations and market research 048 good Reading Books about business models

Magazines Ireland Magazines Ireland Irish Magazine Awards 2011 Irish Magazine Awards 2009 050 travel News BUSINESS EDITOR Magazine designer of the year of the year Flights and travel update

Enterprise Ireland is funded by the Irish 051 City Guide Government and part-financed by the European Warsaw Union under the National Development Plan 2007-2013. 053 the back page The next big thing

This issue’s Noticeboard was compiled by Gordon Smith

DECEMBER/JANUARY 2012 | THE MARKET

002 Noticeboard System Dynamics raise Declan Lennon and Thomas Marry, SurfBox glass to new deal with Pernod Ricard

ystem Dynamics, one of Ireland’s oldest IT services firms, Srecently scooped a significant twelve-month contract with Pernod Ricard in the UK, using experience gained here to land the deal. “We opened an office in the UK early in 2009 and we were very focused on finding the right niche into the market in the UK. We leveraged off our position in Ireland where we have a lot of expertise in distribution,” says MD Tony McGuire. System Dynamics will implement a tailored JDE implementation, providing the drinks brand with an integrated solution for financials, sales, procurement and inventory, while also integrating SurfBox nets major it with Pernod Ricard’s other backoffice systems. From a standing start to a year ago, the UK airport contracts will account for 15 per cent of System Dynamics’ rmonde Technologies, “Operating within these two revenue this calendar year, McGuire adds. “UK Owhich operates the SurfBox airports doubles our current companies need companies like us who are internet and print kiosk brand exposure, allowing our prepared to give them the kind of service, skills, business, has signed deals to service to be seen and used and cultural knowledge that is needed to make install 90 units at Gatwick and by an additional 41 million projects a success. One of the things that was Edinburgh airports. passengers a year,” added Marry. obvious from the very first time we met The deals will bring a SurfBox also supplies Pernod Ricard, there was a cultural fit. It significant revenue boost to the the hotel sector, and its total wasn’t just about the process and the company, increasing its turnover network comprises 750 internet price, but the people,” he insists. by around one third, said kiosks and 400 printers across McGuire believes the company managing director Thomas Ireland, the UK, France and can tap into the gap where the trend Marry. The company is expanding Belgium. towards offshoring IT contracts internationally, and already The Gatwick Airport to locations like India has been a supplies terminals to regional contract will be the Kilkenny- “failure”. airports in France at Toulouse and based company’s largest Adds Nigel Sylvester, System Nantes. It will tender for two contract to date, with more Dynamics’ UK sales director: “What more, Bordeaux and Strasbourg, than 32 million passengers we found – a little through trial and in the new year. It is also using the airport per year. error – is that focusing on the broad considering sites in Portugal as SurfBox will install 60 internet market is very much the wrong thing potential opportunities. kiosks with eight printers for us. Our success is focusing on what Marry explained that the at various points around the in the UK sense are niches but are still company won the French deals concourse. The deal with massive markets in their own right. against indigenous suppliers Edinburgh Airport will see That’s where we can really compete because its innovation in design SurfBox install 30 internet against the UK and European large was more practical. kiosks and six printers. systems integrators.” Those specific All told the company now Outlining expansion plans vertical markets include renewable supplies its pay-as-you-go kiosks for the coming year, Marry energy, pharmaceuticals and the public to 15 airports in Ireland, the UK said: “We would see ourselves sector. and France, with a combined as an automated retailer in IT security compliance and footfall of 80 million passengers the airport space. Today what infrastructure specialist Integrity a year. SurfBox claims it fought we’re retailing is internet access Solutions is increasing its focus on the off strong competition from plus printing. In 2012 we’ll UK financial services sector, using its the incumbent provider of the look to develop our portfolio certification in the ISO 9001 and ISO service in the UK, and will begin further. We’re looking at a 27001 security standards as a selling operations in Gatwick Airport number of automated vending point. Managing director Eoin Goulding from 1 January 2012, and in products because we see is also looking to the UK as a source of Edinburgh from 19 December that as something there are talent, in the absence of some technical this year. opportunities in.” skills in Ireland.

THE MARKET | DECEMBER/JANUARY 2012

003

(from left to right) John Aherne, Founder, Golfgraffix, Oisin Geoghegan, CEO, Fingal More funding support County Enterprise Board AND Marcel Priester, CEO, Golf Baan Animatie options for companies to research new markets

nterprise Ireland’s New learn, it requires no capital outlay. EMarket Research Programme It automates management of provides grant assistance for a company’s IT infrastructure client companies to research and provides improved visibility, opportunities in new geographic control and efficiencies in markets. Under changes to the managing it, allowing them to run programme, companies will be their technology systems more able to choose between two cost-effectively. “At the end of mutually exclusive options. the day when it comes down to The first option provides your technology, you want it to support for a company to relocate produce cost savings or introduce an existing employee to the target efficiencies into your business. market or recruit a new employee That ticks those boxes,” said for the purposes of undertaking Trilogy MD Edel Creely. the research assignment. This is Creely believes the edge/point supported at a maximum grant proposition is ‘unique’. “We’ve level of 70 per cent (or 50 per done a lot of development and cent for the UK) and it covers created our own intellectual eligible expenditure such as property around using the salaries, overheads, professional underlying Kaseya platform,” she fees and rental of temporary said. office space. She said it’s too early to say The second option provides how big an opportunity the UK support for a company to appoint represents for Trilogy. It is still a local market expert/consultant scoping out the market and has to undertake market research received funding from Enterprise assignment. This is supported Ireland to do so. Par for the course as at a maximum grant rate of 50 per cent, and Enterprise Ireland Golfgraffix scores Dutch consultancy rates apply. The Dublin-based managed deal worth €400,000 IT service provider Trilogy Technologies remains focused on tart-up Golfgraffix has inked a three-year distribution deal growing business in Ireland, but Swith Dutch company Golf Baan Animatie, to supply 3D digital to extend the company’s reach course guides and apps to golf courses across the Netherlands. and look for other opportunities, it It is estimated the contract will generate €400,000 in sales for decided to size up the UK market. the Irish company over its lifetime, as there are 155 golf courses The company has taken in Holland. the partnership approach by Golfgraffix is based in North Dublin and has already signed teaming up with Ziptech Services, similar distribution deals to supply 3D Digital Flybys, iPhone a London based IT support Apps, Course Guide Books and Interactive PC Games to golf company which will resell course owners in Ireland, the UK, the US, Spain and Portugal. Trilogy’s ‘edge-point’ portal to Since it was founded in 2009, the company has worked with the companies in the UK. owners of over thirty golf courses on four continents. The ‘edge/point’ portal Commenting on the latest contract, company founder John provides organisations with Aherne said: “This three-year distribution deal will enable an overview of their entire IT Golfgraffix to continue its reach into Europe, capturing a bigger infrastructure including incident share of the golf marketing services sector. Golf courses in management, technical support, Edel Creely, MD of Trilogy, Holland will now be able to offer prospective members an detailed reporting and change which is using funding from opportunity to play the 3D version of their course or to download and problem management Enterprise Ireland to scope useful iPhone Apps to encourage membership,” he said. information. Easy to install and out opportunities in the UK

DECEMBER/JANUARY 2012 | THE MARKET 004 Noticeboard Irish export performance grows but global outlook slows

rish exports performed well in recent quarters relative to its main Itrading partners, recent figures show. Reportedly the first study of its kind, Investec Ireland’s Export Analysis Report captured both the export demand and export competitiveness components of Ireland’s export potential. It found that in value terms Irish exports were €22.689bn in the third quarter. That represented an increase of 0.4pc on the previous quarter and 1.7pc on the year. The bank said this indicates that Ireland’s trading with its major 15 export partners continue to grow, albeit at a more modest pace than 2010. The Investec index covers Ireland’s top 15 export destinations over the period 2006-2010. These 15 countries accounted for 87 per cent of Irish exports by value over this period. The US is the Republic’s largest single trading partner, accounting for almost a quarter of Irish merchandise exports. Next is the UK, then Belgium, Germany and France. Strong demand forecast Meanwhile the Organisation for Economic Cooperation and Development’s second economic outlook of the year differed sharply for website translation from its first forecast in May. Then, it estimated the world economy would grow 4.2 per cent this year and 4.6 per cent in 2012. By ore than half (58 per reality the four largest European November it had revised its forecasts downwards, saying world Mcent) of companies in markets – France, German, Spain growth would slow to 3.4 per cent in 2012 from 3.8 per cent this tourism, hospitality, life sciences, and Italy – still represent the year. exporting, technology and greatest opportunity for most Faced with the ongoing debt crisis, it said the euro zone had multinational sectors will need Irish exporters.” entered a recession and is set to grow marginally by just 0.2 per website translation services He claimed many Irish cent next year. That contrasts with a forecast of 2.0 per cent growth in the next year and over one organisations are missing out on indicated in its May outlook. third (35 per cent) will be lucrative international business The OECD was more bullish in its outlook for the six Southeast rolling out international search opportunities by failing to Asian economies: Indonesia, Malaysia, the Philippines, Singapore, engine marketing (SEM) and have their websites and critical Thailand and Viet Nam. Combined growth will be 5.0% in 2011, and search engine optimisation marketing collateral available is projected to be 5.6% during 2012- 2016, 2% lower than in 2010. (SEO) campaigns, according to in different languages. Rodgers Global uncertainties and natural disasters shed a negative light research by Irish firm Cipherion said Irish exporters need to on the growth prospects of the region but compared with sluggish Translations. take the same level of care with OECD economies, overall Southeast Asia will have a solid growth French, German, Spanish and their translations to French or performance in the coming years, the group said. Italian will remain the primary German, as they do with their languages for exporters and English-language marketing multinationals, as indicated messages. “Too many first-time by more than 70 per cent of exporters are left with poor respondents. online conversion rates, directly Figures from the UK Centre attributable to translation for Retail Research suggest that mistakes. If the quality of the of the forecast €202.9 billion in German translation is not what online retail spending in Europe the customer expects, they react this year, more than 85 per cent with a click to another website,” will be made by non-English he said. speaking consumers. The Irish Internet Association Cipherion founder and CEO says it is fielding a growing Mark Rodgers commented: “In the number of enquiries from Irish press there is some hype about e-commerce businesses looking the BRIC [Brazil, Russia, India, to expand into other European China] countries. However in markets.

THE MARKET | DECEMBER/JANUARY 2012 005 Businesses urged to take strategic approach to manage costs better

rish businesses should take a more strategic approach to cost The Seedups team Imanagement in order to remain competitive, new research has found. Start-ups get new source Expense Reduction Analysts (ERA), a cost, purchase and supplier management specialist, published new research urging businesses to of cash via crowd-funding focus on improving relationships with suppliers, to encourage a cost- recent Congressional law launching in February, Seedups conscious culture among employees and to benchmark performance Achange in the US will make has attracted close to 900 to ensure competitiveness. it easier for early stage start-ups entrepreneurs and nearly 400 The findings were gathered through feedback from 70 senior to raise money from investors investors from the USA, UK and directors at debates held over the past 12 months across Ireland through what’s known as crowd- Ireland. and the UK. One of the most common themes to arise was the need funding. “We knew there was a gap in to foster partnerships with suppliers and work with them to reduce In November, the the funding cycle for disruptive costs. That might include holding an annual suppliers’ lunch or Entrepreneur Access to Capital tech-based entrepreneurs setting up a supplier incentive scheme, ERA said. Act was passed with bi-partisan and we also knew that Angel The findings uncovered a strong consensus that an organisation’s support and it allows groups Investors were struggling to own staff is critical to improving the bottom line through developing of ordinary investors to put find enough opportunities to a ‘cost-conscious’ culture. Among the suggestions to achieve this a collective fund towards fulfil their investment goals, so were: encouraging staff to use local suppliers to ensure better quality supporting a small business in Seedups was born from that,” results and empowering teams across the organisation to manage return for an equity stake. Prior said Faulkner. “We know that their own P&L accounts. to this, it was illegal to provide tech companies are the ones The poll said it was important for organisations to benchmark crowd-funding in the US for with the greatest scale, but their own cost management performance relating to different parts small start-ups that were not most ideas stall in their infancy, of their own business, as well as conducting this exercise amongst registered with the Securities and we know that crowd- suppliers. and Exchange Commission. funding can help this.” The debates also suggested that the financial director is not Crowd-funding, sometimes Seedups uses micro- always in touch with the operational impact of some types of cost known as crowd financing investments and the “wisdom reduction and therefore other departments and senior managers or crowd sourced capital, is of the crowd”, so that investors needed to be closely involved in implementing savings and managing growing in popularity. The decide the value of a company. the change. Economist has estimated there Individuals can contribute Other feedback identified through the debates are around 250 platforms anywhere from €250 to included: to support individuals on €10,000 into businesses, which - The need for cost management to start at the the lookout for potential can raise between €25,000 and top with the board fully supporting the CEO and investments. €250,000 using this model. The financial director A Donegal-based investment company’s investment pool now - Human resource directors must platform, Seedups, says it is set stands at almost €26 million. be involved in any process to to benefit from the law change. Registration for Seedups’ foster a ‘cost-conscious’ ethos The company has offices in site (www.seedups.com) is throughout a business Ireland, the UK and in Silicon free for entrepreneurs and - Collaborating with companies Valley and it operates a self- investors. The site lets would- in the same industry sector allows governed system which fits the be Dragons browse investment supplier costs to be benchmarked collectively exceptions allowed by the US opportunities and compete - Companies should consider end-to-end Act. with micro-bids to ensure they buying rather than just focusing on unit price. The company was founded are part of an equity deal. The by Michael Faulkner in 2010 platform uses a matching The findings uncovered a strong and aims to open up the engine supported by a social consensus that an organisation’s funding pipeline for seed- network so that investors can own staff is critical to improving stage investors, as well as ask questions, interact, form enabling armchair investors groups, discuss investments the bottom line through to get involved in early-stage and conduct due diligence on developing a ‘cost-conscious’ technology start-ups. Since start-ups. culture.

DECEMBER/JANUARY 2012 | THE MARKET 006 Noticeboard Irish Business

development project for Halwani Dragons’ Den meets Deals flow Bros, one of the Gulf’s oldest food manufacturing companies fields and farmers from Middle with major production plants in his November, 12 Irish of land and feedstock, efficient East trade Jeddah and Egypt. Tagricultural machinery agricultural machinery will play Pivotal International secured manufacturers gathered at the a significant role in combating mission a deal to complete the detailed FTMTA premises in Naas for food supply shortages in a cost design of the prestigious new an Enterprise Ireland seminar effective way. The organisers of hospital and trauma centre addressing the challenges and the recent CropWorld conference in Jeddah. The project is opportunities faced by Irish and in London, which saw record valued at €750,000. Pivotal British dairy farmers in a time numbers of attendees, have International will operate as of global economic uncertainty. requested specifically for more sub-consultant to the main Coming on the back of Irish Irish manufactures to attend due consultant SAK Consultant success at AgriTechnica – the to demand for tough, durable Office. Headquartered in world’s largest farm machinery products. Waterford, the Irish organisation show, which took place in In France, agri-technology is is a multi-discipline consultancy, Hanover earlier in the month one of the most dynamic sectors, comprising four established – the seminar showcased with 87 per cent of French built environment service innovative Irish engineering agricultural machinery imported companies – Nevin Construction, solutions for agricultural due to the low presence of French Fewer Harrington & Partners machinery to an audience of players in this industry. Enterprise Architects, Thomas Garland British dairy farmers, dealers, Ireland-supported companies in & Partners and MacArdle policymakers, and journalists. this sector projected an export McSweeney Associates. Combined, the 12 clients growth of 36 per cent in 2011 (from Byrne Looby Partners exported well in excess of €25m €19m in 2010 to €26m in 2011). won three commissions everal Irish companies to the UK alone in 2010, and this As in the UK, the French farming with a top-tier Saudi trading announced significant new figure is projected to rise to over community values the innovation, S company specialising in contracts and business alliances €34m in 2011. durability and dependability of international shipping, port during Enterprise Ireland’s At the event, high-level Irish agricultural machinery. facilities, energy, water and trade mission to the Kingdom of briefings on the state of the It is hoped that this event power and was chosen as Saudi Arabia and Qatar during British and Irish dairy industry will be the first of a series of technical advisor on a new 16- October. were followed by Dragons’ similar events, aimed at linking storey headquarters for the Irish manufacturing and Den-style pitches from leading Irish agricultural machinery company. services exports to Saudi Irish agricultural machinery manufacturers with dealers, Jennings O’Donovan of reached €734m in 2010, and the companies, who each explained farmers and opinion-formers in Sligo landed a contract as the kingdom is the largest market how innovation relates to a key the UK. primary infrastructure designers in the region for Irish small and product in their portfolio. The 12 companies that for a mix of residential and medium enterprises (SMEs). Enterprise Ireland’s London participated were Abbey commercial properties with Both Qatar and Saudi Arabia office is keen to find new ways Machinery, Cross Agricultural housing opportunities for more are investing heavily to rapidly to work with Irish agricultural Engineering, Dairymaster, than 100,000 people in Bahrain. modernise their infrastructure, machinery manufacturers to Dromone, Hi-Spec, Keenan CES Energy won a contract medical services, educational help them grow their sales Group, Malone Engineering, from Jeddah developer Adeem capacity and housing, opening even further. With food prices O’Donovan Engineering, Al Wataniya Group to supply up opportunities for Irish rising and increasing pressure Running Gear, Samco, Tanco, and all the power, cooling, heating business – particularly in to get the most resources out Major Equipment. and water requirements on a the design, architecture and prestigious 245,000sqm, 52- construction sectors. storey mixed use headquarters Some 45 companies building in the city. The project’s attended the recent mission. value has been estimated at PM Group, the international $150 million. engineering, architecture and Astrotek Ireland, a specialist project management firm, is technology lighting consultancy currently working on a range of based in Dublin, opened an office projects in the Gulf region with in the Qatari capital Doha and a capital value close on €360m, announced it had been awarded and has just begun work on a contract for phase one of a a major multi-million dollar reservoir project in the country.

THE MARKET | DECEMBER/JANUARY 2012 007 Irish firms honoured in export awards

.F. Engineering was awarded the SManufacturing Exporter Award 2011 by the Irish Exporters Association Pictured at the announcement in South Africa are (L-R): Johann Willemse, CEO & Chairman of Equity Pharmaceutical Holdings (Pty) Ltd, Jan O’Sullivan TD., at a ceremony last month. The company Minister of Trade & Industry, Mr Fred Klinkenberg, Enterprise Ireland, Mr supplies and integrates high-tech Patsy Carney, Managing Director of Eirgen Pharma processing equipment for the global food industry. It exports to the UK, Sun shines on Irish companies Europe, Russia, Middle East, Poland, USA, Australia, Japan and Chile. With in South Africa a staff of 80, the Sligo company has he Enterprise Ireland trade mission supply agreement for 2012 worth €1.8 an annual turnover in excess of €12 Tto South Africa at the beginning million and a new five-year distribution million. of November saw a range of new deals arrangement worth €9.1 million over its Sponsored by Enterprise Ireland, the announced for Irish companies which are lifetime. awards recognise the achievements of expected to deliver millions in export sales. EirGen Pharma announced a manufacturing companies in securing A significant market in its own significant partnership with Equity and building new export markets. right with a population of close to 50 Pharmaceuticals, to develop and The overall Exporter of the Year million people, South Africa is also commercially supply five oncology Award 2011 went to ABC Nutrition being positioned as a gateway to sub- products from the Irish firm’s facility in of Shannon, Co. Clare. The company, Saharan Africa for export-focused Irish Waterford. The deal size was reported which produces sports nutrition and companies. It has the advantages of as €3 million per year based on an other health nutrition products, also being English-speaking, with a legal and anticipated 20 per cent market share won in the Emerging Markets Exporter tax structure much like our own, and of the €15 million market for this Award category. The company expects many multinational operators have their portfolio of oncology products. EirGen to employ 13 people next year and is headquarters for the continent in South is a speciality pharmaceutical company projecting €5 million in revenues, with Africa. Padraig McBride, chief financial focusing on the development and supply 83% derived from exports. officer at telecoms marketing provider of niche highly potent drugs typically Clara-based Europharma Concepts Brandtone, says the claim stacks up. used in cancer treatment. won the Life Sciences Ireland Exporter “South Africa is a natural hub for other Clarigen, a human resources software Industry Award 2011 for its range of African markets. It’s a good place to provider that emerged from a joint oral care, cosmetic and medical device start your discussions and to lead your venture with a South African company, products. It employs about 40 people ambitions to hub into other markets like announced a €150,000 contract with and last year had sales of more than €4.3 Kenya and Nigeria.” Silburn Drake, a human resources million. Irishman Mark Peters, a director organisation based in Pretoria. The Services Export Award 2011 at WITS Business School, says: “If you Cork technology company Azotel was won by Parc Aviation, which haven’t been here, you will find that the signed a deal with Wirulink Pty Ltd provides aviation personnel solutions infrastructure in the major centres is through Multisource, its distributor and services. S3 Group won the first-world – the roads, the office blocks… in South Africa. The value of contracts Software Export prize for its range of It’s the big surprise for people coming to through Multisource is in the region of products, solutions and professional South Africa for the first time.” Last year €3m over the next two years. Azotel also services to the digital TV, telehealth Irish exports to South Africa grew by 23 launched its Broadband Franchise model and semiconductor industries. The 230- per cent on 2010. for Africa during the trade mission. strong company turned over more than During the trade mission, road Terminalfour, which develops web €21 million. infrastructure specialist Rennicks Group content management software, paraded its The Irish Food and Drink award was signed a multi-million euro agreement to first African client – South Africa’s Rhodes shared by Butlers Chocolates and Irish supply vehicle licence plate materials to University. Bannow Exports of Gorey Distillers-Pernod Ricard. Openet landed Uniplate Group in South Africa, in a deal announced the transfer of its technology covering the entire Sub-Saharan region. to South Africa with the establishment of the innovation exporter award. The €75 Uniplate is the largest number plate Bannow Africa to provide package sewage million company provides software to provider south of the equator in Africa. treatment plants and environmental large telecom and cable customers in 28 The deal incorporates the renewal of the protection equipment. countries.

DECEMBER/JANUARY 2012 | THE MARKET 008 Noticeboard

In advance of Showcase Ireland in January, Frock and roll One of the Cian Molloy looks at some of the export world’s oldest manufacturing success stories among Ireland’s craft companies, Avoca Handweavers is also experiencing growth in and creative sector. its export markets and has just signed a deal with a Japanese distributor. All things bright Despite having a network of its own 10 retail outlets in Ireland, the company exhibits its throws and rugs each year and beautiful at the Showcase Ireland event. However, director Ivan Pratt says, because of the importance of ugar, spice and all things UK independent retailers to the nice will be on display business, its two most important Sin the RDS at Showcase trade shows are the Top Drawer Ireland 2012 – the annual event, and Pulse shows in London. Avoca where Ireland’s creative sector also exhibits at Maison Objets manufacturers showcase their in Paris and at shows in Berlin, products to retail buyers from Copenhagen and Stockholm. round the world. While overall company Among the companies with turnover is about the same as significant export business that last year, exports are up and, at will be at Showcase Ireland is €10m, account for 30 per cent in Carraig Donn, which is making revenue, with the UK accounting serious inroads into the US for 40 per cent of export revenue. market and is one of the very The company, which was founded few Irish companies to have in 1723 and currently employs broken out of the ‘Irish’ to 600 people, is listed with the John mainstream programming on Lewis retail group and is stocked the QVC shopping channel there. in its Oxford Street and Peter Other crafty Irish export success Jones stores. stories intending to set up shop at Showcase include Hannah’s Making scents Ireland’s Hat, Magee and Wild Goose. leading perfume house, Fragrances of Ireland, is also continuing to enjoy the sweet smell of success thanks to a collaboration with shopping channel QVC and growing exports to Germany and France. Founded in 1983 and located at the foot of the Sugar Loaf in Co. Wicklow, the company originally targeted the tourist market, but now 60 per cent of turnover comes from exports, with the majority of that being US sales. In recent years the company has made inroads into the German and Japanese markets, which now account for 15 per cent of export sales. With 16 employees, last Avoca Handweavers is experiencing growth in year Fragrances of Ireland saw turnover increase by 6 per cent export markets and has just signed a deal with a and expects this year’s turnover to Japanese distributor. increase by the same amount.

THE MARKET | DECEMBER/JANUARY 2012 009

Each year the company exhibits with QVC is great because you at Showcase Ireland, and that know that when you are investing is still one of the three most in product development, you have important trade shows in the at least one definite order from company’s calendar, alongside them – and once it works on QVC, the New York Gift Show and Surf you can then roll out that product Expo, which takes place in Orlando later to other outlets. There is this January. The company’s also the fact that being on QVC involvement in Surf Expo is gives you credibility, because they explained by the fact that Inis, its have very high criteria and severe leading fragrance, is inspired by a penalties if you fail to make a summer’s day on an Irish beach. delivery on time. If you are on Designed for use by both men and board with QVC, other stockists women, Inis has proved extremely take you seriously.” successful and the brand has been extended to include three Showcase Ireland is an Promoting the internationalisation other fragrances – Inis Arose, Inis initiative of the Craft Council of of Irish companies – know-how on Moonlight and Inis Ór. Ireland. Avoca Handweavers, Additionally, the company has Carraig Donn, Fragrances of the business of exporting, and developed a completely separate Ireland, Hannah’s Hats, Magee winning sales overseas. fragrance, Caru, at the request and Wild Goose are clients of of QVC, said sales and marketing Enterprise Ireland. Photos: Avoca * Interviews with experienced exporters director Barbara Campbell. “We’ve and the Craft Council of Ireland * Overseas market opportunities, by sector had a wonderful relationship with * Legal briefings and trade regulations QVC that has worked well for us * Analysis and advice in so many ways. It is not just the * Enterprise Ireland’s support programmes television shopping channel, it is * Events the QVC.com website also – if you go on to the fragrances section Subscribe to The Market for one year €54 of that site and search by ‘best plus vat (€61.29) for 6 issues. sellers’ you will find Inis there. “Being on the website means Contact us on 01.727.2954 or email that customers who see the [email protected] perfume on the television channel don’t have to remember the product code to make an order, they can just look it up on the website. Fragrance is a very personal thing and people will want to try it before they purchase it, so they go into their local store and ask for it and then we get orders from those stores. Being on QVC has a massive promotional impact. “Inis is quite a light, summer fragrance so QVC asked us to develop something richer and deeper for the winter market and we worked very closely with them to develop our Caru fragrance. We did market research sessions with 500 QVC customers where they sampled four different fragrances and 99.8 per cent said they preferred Caru, which is a phenomenal result. “For a small company, working

DECEMBER/JANUARY 2012 | THE MARKET 010 Noticeboard Irish Business

“What we had ven by the standards of application with the minimum belief that product development Irish software companies, amount of features needed to should happen away from public in 2008 was Esix months from product make the product distinctive view, lean calls for constant launch to acquisition must count or compelling. Scaling back the customer feedback from the two laptops as some kind of record. That’s the feature set allows the software moment the development phase and €500. That story of Orchestra.io, a platform to be delivered more quickly. begins. “Lean forces you to for developers who use the PHP Projects are broken down into validate your assumptions and doesn’t make you programming language. a series of agreed objectives or prove yourself wrong. You’re lean, it makes you Three years ago Eamon tickets, and a more collaborative not trying to be the only end- Leonard and his business partner relationship is fostered between user,” Leonard sums up. In that hungry. Starving, David Coallier formed a software the developer and the project spirit, he showed the code in in fact.” development consultancy owner. In some cases, it allows rough format to 50 people and Echolibre. Like many start-ups, the code writers to charge used their feedback to improve

Eamon Leonard consulting services offered a upfront for a set amount of the product spec. Orchestra was Orchestra.io cofounder way to start earning revenue tickets. launched in February 2011, with further modifications made after that. By April the product was HUNGRY building momentum among customers and the company returned to the US to test START the market for possible VC investment. Conversations began with the US PaaS pioneer Engine LEADS Yard and a good cultural fit was quickly apparent, Leonard said. TO LEAN “Their commitment to open source is admirable – they’re committing dollars to it. Things SUCCESS like that were a good sign for us.” After a two-month due diligence process, a deal for The Irish founders of while the ultimate goal was to This approach transformed Engine Yard to acquire both Orchestra.io, which build up the case reserves to the company’s cash position Orchestra.io and Echolibre was was bought by US develop a product. “We didn’t and slowly gave Echolibre agreed by August. “We have a have a product and our processes the freedom to allocate more level of autonomy in the control PaaS pioneer Engine were all over the place,” Leonard resources to its goal of building and direction the product takes Yard this summer, recalled. “What we had in 2008 a product. The founders with the Engine Yard brand. The tell Gordon Smith was two laptops and €500. That had multiple ideas rather instant benefit to us is, it’s great how lean software doesn’t make you lean, it makes than betting the house on to be part of a family that has five development allowed you hungry. Starving, in fact.” just one – which is another years’ experience in platform as a them to launch in The traditional approach of recommendation of the lean service,” said Leonard. record time and on a software development typically philosophy. “We didn’t have a Acquisition hadn’t been part involves staggered payments name, just a concept,” Leonard of the original business plan shoestring. based on reaching certain said. but Leonard is happy with the milestones in the project, but A trip to Silicon Valley in 2010 outcome because it will let the if a deadline is missed or the helped those ideas to coalesce new entity expand into Europe scope of the project changes, this around what would become and crucially, do so from a Dublin seriously affects a developer’s C. It is classed as ‘platform-as- base. The company has relocated cashflow. To crack this problem, a-service’ (PaaS) for software to new headquarters and plans Echolibre adopted lean software developed in PHP, which is the are underway to recruit more development principles. language used to build online staff, up from eight people in Lean, which is gaining services like Digg, Facebook, Dublin and four in the US. The popularity in software circles, is Wikipedia and Wordpress. “PaaS new facility also has space to an iterative approach to product for our area of expertise, which run events for the open source development. In software, is PHP, hadn’t been done in an community and to act as a focal in essence it calls for a more effective way,” said Leonard. point for local activities in open stripped-down version of the Unlike the commonly held source software development.

THE MARKET | DECEMBER/JANUARY 2012 011 New US network opens door to opportunities for Irish mobile firms

“We have a sandbox in Silicon Valley where we are hosting innovative companies that want to test devices or applications on our network.”

Sanjiv AHjua CEO, LightSquared

s LightSquared gets set country. It’s able to do this “Our network is fully open, and other carrier, to my knowledge, is to launch as the US’s through a combination of 4G LTE unrestricted. We have a sandbox offering this,” he told The Market. Anewest network, it is technology and satellite coverage. in Silicon Valley where we are The US is ahead of Europe opening its doors to Irish mobile LightSquared hasn’t been doing hosting innovative companies in deploying LTE and is also a and apps players. much publicity prior to launch that want to test devices or commercial opportunity in its own Irish app developers and but chief marketing officer Frank applications on our network,” said right, he added. “If you’re an Irish mobile device makers are being Boulben spoke exclusively to The Boulben. He suggested a range of company it’s a very good starting encouraged to use a test-bed Market to explain a little more possible applications that could point because if the application system to trial their products about what the company is doing be tested, including Voice over IP, is promising there’s a natural over a 4G network. The service and the opportunities for Irish video calling, videoconferencing, market in the US,” he said. is being offered by LightSquared, developers to work with it. music streaming, immersive The company has already a new US network that is still in “Our wireless network will be multiplayer gaming, M2M, cloud cut a deal with Openet, although pre-launch mode but has signed sold only on a wholesale basis computing, mobile analytics, that is an infrastructure contract a deal with Dublin-based Openet and that’s something that is really digital advertising and telematics. rather than a deal to use the Telecom. a revolution in the industry. We “The sandbox is really a test test-bed. Openet is delivering LightSquared is due to launch will be just the pipe. We will not lab where for the first time, real-time subscriber controls in the second half of 2012 but sell to the end user consumer or application developers and to LightSquared which in turn it is already soliciting offers business,” he said. In doing so, it device designers can test the is providing these to each of from start-ups and established will avoid any conflict of interest. network that is really a dumb its partners regardless of the technology firms about its All retail sales and branding pipe. They can connect directly complexity of the service offering. ‘sandbox’ which replicates a live will be done by LightSquared’s to the transport layer on our It’s particularly strategic for 4G network from a facility in customers, who will be a network, unrestricted. For a device LightSquared given its place Silicon Valley. combination of existing mobile developer, that’s a huge innovation as a wholesale provider, and it The company is unusual in operators, fixed-line telecoms and that should in turn allow a lets the companies differentiate that it will be the first US carrier companies, retailers and device number of start-ups to come up themselves by offering operating across the entire manufacturers. with new innovative designs. No personalised plans to customers.

DECEMBER/JANUARY 2012 | THE MARKET ASIA-EUROPE TRADE RELATIONS 012

Free Trade Agreements (FTAs) are set to dominate trade relations with five key Asian economies, as Doha runs out of steam and the US loses its appetite for international agreements. That was the message at this year’s Asia Pacific Irish Business Forum. Mark Godfrey reports from Seoul, where the first of a series of Europe-Asia FTAs is now being implemented. AS DEAD AS A DOHA?

senior EU official in Asia says that there are of the EU-Korea free trade deal are complex, it’s clear that it could opportunities for Irish exporters to further tap into be hugely useful to companies in both territories, particularly thriving consumer markets in one of the world’s makers of machinery, IT and chemicals – core industries for both Atop 10 economies. Head of the EU Commission’s sides. While some areas remain protected – the FTA benefits delegation to Korea, Tomasz Kozlowski told a gathering of Irish won’t apply for another five years, for example, to pork, a key businesspeople in Korea that he found it curious that Irish food product for Korean farmers. companies in particular were not growing their market share in Certainly, Irish firms with ambitions for Asia will have to Korea. The EU’s man in Seoul said that while implementation take note given EU officials are in negotiations with or ‘scoping’ of a new EU-Korea free trade agreement (FTA) – “our most out FTA deals with Malaysia, Vietnam and Japan as well as comprehensive ever with a third party” – was going to plan, he Thailand. By contrast, the priority with Beijing, for now, said wanted to see more EU-based companies taking advantage. Kozlowski, is about ensuring better conditions for EU firms in the Kozlowski was speaking at the recent Asia Pacific Irish Chinese marketplace. Business Forum, an annual gathering of Irish business in the East this year, held in Seoul to coincide with an Asian GAA Changes afoot Head of the Seoul Global Centre, a Korean tournament. EU-Korean trade is worth €80 billion every year. government think-tank, Alan Timblick pointed to Korea’s record Ireland, one of a few companies with a trade surplus with Korea, as a valuable market for the EU – “Korea’s is less an export- sees most (30 per cent) of its exports come from the healthcare oriented model than China’s”. But Korean officials, he said, have sector, with food accounting for 5 per cent and the next biggest been assiduous in educating local firms on how to take advantage segment represented by IT. “To my surprise, Ireland is not a major of the new FTA to grow shipments to Europe. “EU governments exporter of agricultural produce here [Korea],” said Kozlowski, must also educate their local firms.” who said he saw the FTA as useful to firms seeking sales in land- Seoul-based trade lawyer Heidi Chang sees a big change as strapped Korea, a net food importer. foreign firms shift from relying on Korean distributors to setting up plants. “As a big market, you can produce here in a meaningful Eliminating tariffs Predicting that the pact will lift EU- way.” Cash-rich Korean firms (wealthy from a national economy Korean trade by 20 per cent by eliminating tariffs, Kozlowski growing at an average 6 per cent per year over the past decade) are said his office was paying particular attention to the elimination meanwhile keen to use their cash to expand globally, in Asian as of possible non-tariff barriers (such as product testing) and any well as Western markets. limits to public procurements contracts in Korea for EU firms. There are glitches: since the FTA is premised on direct Speaking after Kozlowski, the director of the EU Chamber of shipments into Korea, producers of fashion are angry they won’t Commerce in Korea Kim Jun Suk said that while the specificities benefit since shipments typically go through hubs like Hong Kong

THE MARKET | DECEMBER/JANUARY 2012 ASIA-EUROPE TRADE RELATIONS 013

EU officials are scoping out FTA deals with Malaysia, Vietnam, Japan and Thailand, while the priority with Beijing, for now, is about ensuring better conditions for EU firms in the Chinese marketplace.

and Singapore. However, the Korea-EU trade pact is a sign of things Ollie Brogan. He pointed to the firm’s roots, 35 years ago in to come said Rob Edwards, vice president of Standard Chartered economically stagnant Ireland. “We had talent and we wanted to bank’s Korean operations and chair of the local British Chamber of see if we could export that.” Today the firm sends a multinational Commerce. “Doha is dead, the US is not interested in international staff base to roll out power networks in markets as varied as rule making bodies…so FTAs will be the way forward.” On the Pakistan, Malaysia and Vietnam. Korean side, local financial services firms argue they’ve “no competitive advantage at all” against European competitors. Diplomatic case While corporate representatives were Timblick said that he expected Irish exporters to expand keen to stress the importance of Irish traits like adaptability and on strengths in medical devices and pharmaceuticals and to tap cultural sensitivity to success in the vast Asian market, Irish a local demand for education. “The university system is under ambassadors based in Asia made much of the importance of scrutiny… chaebols say the universities are not doing what limited Government resources. [is] needed…there’s too many Arts graduates.” He advised Irish Ambassador to Singapore Joe Hayes detailed his embassy’s educational institutions to look to the model of Singaporean efforts to undo recent damage done to Ireland’s corporate image academies that have teamed with the likes of Cornell to offer in one of Asia’s banking and investment hubs. Given that the MBA programmes to name-conscious Asians. Singaporean state investment firm Tamaesk owns Eircom, the consequences of not restoring the country’s image, damaged by Irish operations in Asia The Asia Pacific Irish Business unsound banking practices, could be “catastrophic”, explained Forum also heard from several executives running Irish business Hayes. Yet he said that there was also demand on his resources in operations in Asia. Even small investments in China terms can representing Ireland in the vast emerging market of Indonesia, to translate into jobs in Ireland, explained John Casey of financial which he’s also accredited. In addition, Hayes travels to Jakarta as services firm Fexco: he pointed to 60 new jobs in the firm’s Irish Ireland’s representative to ASEAN headquarters. base, which came out of consistent growth in China, where clients Irish business has, meanwhile, only belatedly arrived include major institutions like Bank of China and ICBC. Casey in India, which has an Enterprise Ireland presence, noted said niche Irish services firms were a good fit for developing ambassador to Delhi, Kenneth Thompson. In an echo of the markets like China but that they had to sign up for a long-term potential effect of Ireland’s own image problem in Singapore, liaison with the region: “It’s there for the taking,” he said. Thompson said India’s vibrant free press allowed the lurid as well Irish firms can also be significant players on Asia’s as the positive news of the country to be portrayed globally, “and engineering scene: a shortage of engineers, particularly people usually remember the negative.” He urged Irish aviation, electrical engineers, has created demand for the services of pharmaceutical and IT firms to explore the diverse country ESB International, explained head of international operations which is a “not a singular market, rather plural markets.”

DECEMBER/JANUARY 2012 | THE MARKET THE EXPORTER: INTERNATIONALISING A SERVICE 014

Irish-based Pilot Training College is responding to massive growth in the airline sector with an ambitious strategy of its own. Gordon Smith straps into his chair and hears the captain speaking. Learning their wings

Edgeworth is a former corporate jet pilot who co- founded PTC in 2002 with Captain Tony Kember, a 40-year flight training veteran. The CEO says the company aims to be among the top three independent European pilot training providers in the coming years. “We are competing against similar European-based organisations like ourselves, but the demand is way ahead of supply, and we see that gap extending in the coming years,” he states. plane full of passengers, fuelled and ready for takeoff with instruments showing ideal flying Differentiating PTC claims it can do this by conditions is an apt metaphor to describe Pilot differentiating itself on quality of training over and above A Training College’s present position. The Irish what the regulatory standard requires. The numbers company is facing into a year of major expansion on the appear to bear out the boast: PTC claims 87 per cent back of several key deals in a growing global market. first-time flight test pass rate and a 93 per cent pass Added to that mix, PTC is finalising plans to launch a new scores for first-series flight tests and the JAA theoretical high-tech facility that will boost jobs significantly and knowledge exam. “All of our training is focused on push revenues further skywards. producing airline pilots and future airline captains,” he PTC currently trains up to 300 pilots each year says. across its three training centres – one in Waterford The company’s expansion comes against a backdrop Regional Airport, another in Weston Airport near Dublin of a booming aviation sector in complete contrast to and a site at Florida’s Melbourne International Airport the world economy. In November alone, Boeing broke near Cape Canaveral. While the company provides its own records by receiving orders and commitments training to self-funded pilots on an individual basis, for 359 commercial aircraft from buyers like Emirates, CEO Captain Mike Edgeworth says the strategy has Oman Air and the Indonesian carrier Lion Air. Meanwhile, deliberately shifted to focus predominantly on direct Airbus clocked a $6.4 billion order courtesy of Qatar deals with airlines. That plan has paid off, with Saudi Airways. “Each of those aircraft has to be crewed, so if Air, Etihad, Flybe, Air Kazakhstan, Turkish Airlines, Aer you do the numbers, you can see the level of demand Lingus, Qatar Air and others recently added to the roster. that’s going to exist,” says Edgeworth. PTC’s pipeline anticipates growth in Europe and the At the same time, there is a looming shortage in Middle East as well as in some of the African regions, pilots. “In the airline industry, there is a huge increase and the company is also looking at opportunities in South in demand for pilots. Demand is 23,700 per annum. East Asia. It anticipates revenues of close to €16 million Worldwide, there is 45-50 per cent capacity available for the 2011 calendar year, an increase from €9 million relative to the demand that’s going to be there,” adds last year. Next year, it is forecasting revenues of more Edgeworth, pointing out these estimates date from than €20 million. before some of the recent headline-making aircraft deals were announced.

THE MARKET | DECEMBER/JANUARY 2012 THE EXPORTER: INTERNATIONALISING A SERVICE 015

Capital outlay The capital outlay is significant, but Edgeworth points out that simulation eliminates many of the variable costs that can affect airline training operators, such as fuel prices (PTC has access to 49 different aircraft on its books), not to mention the expense in maintaining bases that can offer the types A separate development is the arrival of a new pilot of varying weather conditions needed to give pilots the training curriculum called a multi-pilot licence (MPL), necessary experience. “From a training perspective, it’s which is coming into effect across the industry. This much more effective,” says Edgeworth. represents a significant change in how pilots are trained, “A complete centre will require an investment of switching the emphasis from clocking up lots of hours about $52 million, but the return on that is significant,” in a single-engine aircraft to undertaking exercises in he continues. Each MPL centre is expected to bring simulation equipment that more closely represents the in revenue of €30 million. The centre will be funded jets commonly used in commercial air travel. “As we through a combination of private investment, low- speak, we’re following traditional curricula and they interest financing, manufacturer lease arrangements haven’t changed for 35 years. That no longer matches for the equipment and some funding from the business the requirement of the pilot operating in the modern itself. “It will give us a competitive advantage. We will cockpit. Various schools and colleges are responding; our be the leaders of the second wave in this, and we believe response is that we completely want to transform the we will be the first to offer a pure MPL offering,” says system,” says Edgeworth. Edgeworth. For the training providers, it creates a requirement The move will also mean a major job creation drive. for more sophisticated hardware in the training process. PTC employs 94 people and when the MPL centre To make the necessary transformation happen, and to becomes fully operational, that will rise to 241 people. A meet demand created by the combined business drivers, final decision on the location of the first centre was due PTC has designed its first MPL centre. Construction is as The Market went to press, with the decision coming due to begin in February, and the facility is expected to be down to a straight choice between a site in Ireland and fully operational by November 2012. “Rather than trying one in the US. to attract people from airlines worldwide to one location, So, it’s a case of clear skies ahead for PTC. which has lots of logistical hurdles, we’re going to take it Edgeworth reveals the plan goes far beyond a single MPL to the airlines at their location,” Edgeworth explains. training facility. “Our vision for this is 20 centres located Clients include Saudi Air, Etihad, in 20 different countries within 20 years. The first will be significantly more expensive than the others. It will be Flybe, Air Kazakhstan, Turkish our showcase.” Airlines, Aer Lingus and Qatar Air.

DECEMBER/JANUARY 2012 | THE MARKET COVER STORY 016 NEW TO THE USA

hen film maker Wim Wenders declared America had Donal Nugent “colonised our imagination”, it was largely his own craft talks to four young he had in mind. Nevertheless, a quick glance at the modern companies about business lexicon confirms it holds true in the world of earning their stars W commerce too. While its days of political pre-eminence may be waning and stripes during and its economy is struggling to escape recession, America continues their first year to to exert a powerful allure on the business mind and its promise of 18 months in the opportunity is no empty claim. USA. The historic ties between Ireland and US have, in the last decades, been cemented by “hard facts on the ground”. According to IBEC, total US investment into Ireland is greater than into Brazil, Russia, India and China combined. And, while this investment directly creates over 100,000 jobs here, perhaps the more surprising fact is that Irish direct investment into the US brings employment to over 75,000 people there. Trade between the two countries has long been dominated by the multi-national sector, but with an 18 per cent surge in Irish exports to the US in 2010 (and 27 per cent to Canada), a palpable sense of opportunity exists.

THE MARKET | DECEMBER/JANUARY 2012 COVER STORY 017 Going stateside Recruitment services for foreign SMEs settting-up or scaling in the US

EO of Stateside Solutions, Mary Rogers, A further risk in the lure of the familiar explains why a market pummelled by is not drilling down to where the opportunity Crecession over the last three years should actually lies. “Companies may set up in places be of particular interest to Irish SMEs right now. like Boston or San Francisco because of direct “The big opportunity is that the US has gone flights or contacts already there. They end up back to quality over brand. So, if you are offering ignoring places like the Carolinas or Atlanta that a quality service at a fair price, then you can get could be more beneficial to their business.” talking with a large corporation. They no longer A final serious mistake she identifies is the expect you to be IBM.” tendency to send out very senior people first. Rogers set up Stateside Solutions to help Irish “This is a loss to the Irish team resources, and, companies entering the US market, following if the person doesn’t have the experience or her own move back from New York to Galway. “I the contacts in the US, then they can’t deliver could see a lot of companies falling into a similar quickly enough to justify that loss.” trap. They were coming to the market too early, The American approach to networking without doing their research in advance, and is something she recommends plugging into they were spending a lot of money very quickly, fast. “You will be doing business at the baseball organising meetings, but not with the right game, at the breakfast table,” she points out. people, and not achieving their targets.” While the American business style is less formal Budget is a major issue for any company than the European, there are certain rituals that setting up in a new market and Rogers observes should be observed. “It is very important that, if that “companies often don’t budget for the long you don’t get the contract, you should still say lead into a sale. The lifetime of a sale in Ireland thanks for the opportunity and refer the contact might be six months, yet people assume it will be on to other people. The US is a collaborative three months in the US. Their expectations are environment and, if a contact doesn’t work out, too high.” you shouldn’t be afraid to share it with someone Inevitably, questions about Ireland’s else.” economic situation will arise in or around early negotiations. She observes that “customers will “You will be doing express concerns over whether your company will be around in three years and, if they buy you business at the baseball product, whether will it be serviced in two years game, at the breakfast time”. Her advice is not to avoid the topic but to answer it directly, in a prepared way. “Companies table.” will accept what you say, once you allay their concerns.” While the enduring relationship between the two countries is a huge positive and Irish people adapt quickly to the US business culture, she points to an issue with service levels that can typically crop up with SMEs. “Irish companies can have an issue with responsiveness. The rule of thumb in US corporate businesses is to expect a reply to an email within 24 hours. I have seen a lot of Irish companies fall down on that.”

DECEMBER/JANUARY 2012 | THE MARKET COVER STORY 018 The heat is on Heatsolve capitalises on the American love of comfort

A great start is hen Heatsolve was set up in 2004, the Heatsolve’s key competitive advantage lies goal was to supply electric heating in the offer of bespoke systems for different to piggyback on Wcable and elements to manufacturers flooring types – tile, carpet, laminate and wood someone else’s of electric blankets, floor heating and medical flooring. “Our products therefore maximise device equipment. Just three years later, the energy efficiencies and are also the simplest to relationship. acquisition of a South African company allowed install in the marketplace, so that combination If you have a it to “move significantly up the value chain”, helped us to gain considerable traction.” business development manager Brian Hopkins As it has gained market knowledge, it has distributor who explains. Producing complete products for the also begun adapting its products to the market has relationships first time, Heatsolve began branding them also and, in 2012, will launch a new “smart” range and, today, its flagship product – an electric under- that addresses upcoming changes in regulatory with a retailer, floor heating system – is sold by distributors in requirements in the US and Canada and give then try to work Asia, Africa, Europe and North America. In all, 95 more functionality to the user. per cent of the company’s output is exported and Entering the market just as it was changing with that. Hopkins credits “a very active R&D department from a component manufacturer to a branded and had quite a lot of assistance from Enterprise offering was, perhaps, not ideal. “However, Ireland” for giving the company, with a staff of once we had completed that process, we made 25, its market-leading capabilities. The move to real progress,” Hopkins says. The company has branding was, he adds, “a conscious development just set up its first sales and marketing office in – we had come from a background of supplying Chicago “We are now hitting our targets and a commodity product and we wanted to create have plans to grow by 30 per cent year-on-year products that would grow our business and our over the next few years.” gross margins”. For other companies looking to enter the The company’s success in new markets US, a great start is to “piggyback on someone is built on a strong commitment to market else’s relationship,” he says. “If you have a research, identifying the main players and distributor who has relationships with a agreeing a strategy to target them. retailer then try to work with that. Having a Of course, a good introduction always product that is in growing demand is also a helps, and when a German client recommended plus.” Heatsolve’s products to its distributors in North He stresses, however, the need to adapt and South America, the company took steps to to cultural difference. “It is important to follow up quickly. “We had made a few attempts at understand how one business should approach cold calls in these markets,” Hopkins reflects, “and another in the US and to tailor your proposals while it does work, it is a longer route. A referral, and presentations so that they are fit for market whether through a customer or Enterprise Ireland, and the audience they are going to”. has the effect of getting you attention quicker.” Preparation and professionalism will In the event, it was the US and Canada that always out. “You may be dealing with customers proved the more lucrative markets, chiefly, with a turnover of $2bn or $4bn so you have to Hopkins says, because “they were most ready to be match fit and ready. You also need to project adapt to the new technology we were offering. an image of being available and contactable Comfort is a big part of the decision-making during their working hours. They like to be processes in America and Canada and we were able to pick up a phone and dial an American offering a better solution for home-owners.” number.”

THE MARKET | DECEMBER/JANUARY 2012 COVER STORY 019 Feeding frenzy Automated Feeding Systems’ labour-saving innovation for US horse owners

“Americans any success stories have been built on He later discovered the sales rep he was the creation of labour-saving devices, bantering with was Eric Haydt, vice president like the new Mand Waterford company Automated of sales and marketing with the company. and the Feeding Systems Holdings (AFSH) ranks among “It was a lucky break. Triple Crown is a very the most recent. As part of a family for whom progressive feed company, and Eric was innovative, so show-jumping and eventing were in the blood, immediately interested in what I had to say.” if you offer 5.30am starts were routine for JP Monaghan. Soon after, Monaghan availed of the Horses need exercising and they need to be fed at opportunity to invite him to an inward buyers something least an hour before they are exercised. event Enterprise Ireland was hosting for different, you A mechanical engineer by profession, its equine cluster of companies, “He visited Monaghan was “getting fed up with these early the factory, we brought him to six or seven will stand starts. I thought there must be an easier way. reference sites where our products are in use, out and get So, I made a small machine that would give the including the Curragh, and, soon after, we horse its feed by a timer and that earned me an received our first order for 420 machines.” In noticed.” extra hour in bed.” As neighbours and friends September 2011, Triple Crown announced a expressed interest in the invention, he sensed an $2.5 deal for supply of the Simple Feeder and, opportunity. over the coming years, Monaghan expects the With the support of the South East value of exports to be a multiple of this. Enterprise Platform, he began to research His simple and direct approach to the and design prototypes and, in 2010, set up the company that would become his distributor business, designated a High Potential Start Up was just one of a number of experiences that by Enterprise Ireland. Based in the Northern leads him to conclude that businesses in the US Industrial Estate in Waterford, AFSH has five “are open to the cold call. I’ve found a number employees, and the machine, now branded the of times that this approach can get you to the ‘Simple Feeder’, is assembled and manufactured decision makers very quickly.” on site. It’s value is more that simple labour Recently returned from a trade show in saving, however. “Most horses are fed three times San Antonio, Texas, a further lesson is to take a day,” Monaghan points out, “but in nature, a full marketing advantage of any innovation horse will graze for 18 hours a day, so enforced you offer. “We were at a show with 3,500 vets feeding is not very natural and they suffer anxiety and, according to Triple Crown, it was their as a result. The machine, which can deliver feed busiest stand in years. The reason was they up to 16 times a day, helps to solve those issues.” had something new to offer. Americans like With the Irish market relatively small, the the new and the innovative, so if you offer company recognised exports would be the key to something different, you will stand out and get growth from the start. Opportunity knocked in noticed.” 2010 at the World Equestrian Games in Kentucky, Having confirmed its “high potential” tag which were sponsored by Irish company Alltech. early, Monaghan says the company will be Attending the event, Monaghan engaged in “a bit looking to replicate what it has done in the US of guerrilla marketing” by approaching the stand in Canada, Australia, New Zealand and France. of the US feed company Triple Crown Nutrition. “With the help of Enterprise Ireland, we will “I asked how many times they fed their horses try to push that out. I would see us growing to and explained that, in Ireland, we did it eight between eight and 12 staff by the end of 2012.” times a day.”

DECEMBER/JANUARY 2012 | THE MARKET COVER STORY 020 Soft landing Software to make America’s ‘smart grids’ smart

Automsoft supplier of advanced metering and O’Toole adds that “an awful lot is sometimes monitoring software to the energy made of the challenges of exporting. For us, software is A industry, Automsoft’s offer revolves Dublin to New York is a plane ride and a hotel used in 65 per around its data historian software package, room. You don’t need people on the ground at ‘rapid power’ and its advanced analytics engine first and, ultimately, when you do, whether your cent of the ‘nua views’. sales guy is in Portlaoise or Paolo Alto, you have world’s oil rigs “A few companies around the world do to get your head around managing at a distance what we do, but what’s different about us is the so there’s no huge difference”. and 82 per cent vast amount of data our software can handle,” In terms of networking in the US, he of the planet’s chief executive Paraic O’Toole explains. recommends a “caveat emptor” approach. “You It is a claim confirmed by the fact that have to be able to gauge the purpose of the merchant Automsoft software is used in 65 per cent of the network you are joining. If it is a case of paying shipping fleet. world’s oil rigs and 82 per cent of the planet’s for introductions, then we would not have a merchant shipping fleet. great deal of time for that.” On the other hand, Founded in 1997, the company employs he recommends more informal networking some 40 people, with software development enthusiastically. “You will find a lot of warm, carried out in Dublin and Ukraine. Newly friendly Irish Americans and Irish people in the established sales and marketing offices in the US who are very receptive to Irish companies east and west coast of the US reflect its recent and who will help you from an entirely refocusing on opportunities in the smart grid altruistic position. These are certainly people and smart metering industries, for which the worth getting to know.” two centres of innovation are, respectively, Confirming the perception that US business Raleigh in North Carolina and Silicon Valley. has turned away from brands and towards Selling abroad has never been a problem for quality, he says “no one in the States has ever a company that has frequently found success asked us how big we are, what our turnover is, through the partnership route – embedding or how many people we employ. If your product its software in a larger software package. does what it says on the tin, their concern is In this vein, in September 2011, Automsoft much more about what you are like to deal with, announced a partnering with fellow provider and whether they can trust you. In the end, it of real-time software solutions, US company comes down to building a strong relationship Power Analytics. “Dublin is our base but we with your customer.” actually get very little revenue out of Ireland. The attitude we frequently find here, especially in public procurement, is ‘anyone but a small Irish company’. In contrast, the approach in the US is ‘if you do business with us, we will make you big’”. GH A ME 18, 19 & 20 GES A P PHOTOS TERES C OURTESY

THE MARKET | DECEMBER/JANUARY 2012 LIFE SCIENCE 021

Some 250 medical technology decision- makers were at this year’s Med in Ireland expo. There Claire O’Connell caught up with Chris Coburn, executive director of Cleveland Clinic Innovations, to talk venture capital and breaking into the US market. An awfully big venture

ome 250 leading international “Following the market collapse in 2008, decision-makers from over 30 the venture community is still trying to find its countries throughout the world, footing,” he told The Market. “There’s a debate Sidentified as potential customers or as to whether or not fundamental change has strategic partners for Irish companies, were occurred in the venture business, or if we are in brought to Dublin for ‘Med in Ireland’, the one of the many cycles that have occurred over national expo for the Irish medical technologies the 35 years of venture capital - I don’t know if sector in October, 2011. there is a clear answer on that.” The aim was to get them to meet with and In the current environment, life sciences visit Irish companies at both the convention investors particularly want to see fast returns centre and their sites throughout Ireland in and they are tuning more intently into areas the days before and after the main event. In all, such as healthcare IT and devices, he notes. there were a massive 900 one-to-one partnering “These days, the technology side of the meetings held with Irish companies on the day. market in the US is clearly favouring deals that Among the international visitors was Chris involve shorter timelines,” he says. “That is not Coburn, executive director of Cleveland Clinic to say that drug or biopharmaceutical deals are Innovations, the corporate venturing arm of not getting financed, [but] it’s harder.” Ohio-based Cleveland Clinic. The clinic’s spin- The regulatory environment in the US out companies have raised more than $450 is also becoming more complex, and many million in equity investment, and Cleveland US companies are now looking for European Clinic Innovations has been ranked among the approvals first, to achieve a CE mark, explains top health corporate venturing organisations. Coburn. Coburn is no stranger to Ireland - the “In the US model, that means you have got Cleveland Clinic has been building up links here to build in this longer timeframe from your for several years, and he has watched the life fundraising to your ultimate payback - these sciences sector grow. So with Irish companies are some of the complexities that the system is needing such a strong export focus in the still absorbing, and the arithmetic that results life sciences, what insights can he share with in funding and then ultimately return on fledgling companies about securing investment investment is still fluid, as again these factors and breaking into the US? are being worked into the basic formula.”

DECEMBER/JANUARY 2012 | THE MARKET LIFE SCIENCE 022

The vibrancy But despite the regulatory and funding And one of the key factors is to get good squeeze, Coburn sees light breaking people on board, he adds.“In every deal no of the medtech through. “It’s still a difficult and complex matter what the technology is, investors always sector in Ireland environment but it appears a little bit better seek and reward experienced management. than a year ago - we have had multiple financing Finding experienced entrepreneurs and is evident and it’s in the last 12 months.” managers has always been one of the bedrocks something we He describes how those recent financings in of the life science venture world, but I would Cleveland Clinic Innovations’ portfolio include argue that in this era it is almost more important feel right at home a $32-million financing for a device company than it ever has been.” with - we would working on a treatment for migraine headaches, Coburn is enthusiastic about the potential $11.5 million of financing for a company for Irish companies: “We have a chance to travel only anticipate with a search engine for electronic medical around the world and I think the vibrancy of an improving records, $12m in financing for a cardiovascular the medtech sector in Ireland is evident and diagnostic company using proprietary it’s something we feel right at home with - we situation in biomarkers from the Clinic and a $3.8-million would only anticipate an improving situation in Ireland over the financing for a wound healing technology. Ireland over the next five years,” he says. In general, for companies seeking funds, He encourages contact with the Clinic, next five years looking at initial routes to market that aren’t which has already forged links with several too hair-raising tends to be a good idea. “Parsing companies, institutions and agencies in off some of the deal in a way that creates Ireland. “I think there are some terrific opportunities for some lower risk investing is companies in Ireland, and since the time we certainly important,” says Coburn. have been active in Ireland the amount of growth is really positive,” he says. “If it’s an Irish life science company give us a call, we are happy to help - we have got access to grant money and the presence of the Cleveland Clinic in the US market, we have an onsite accelerator, we would love to talk to people.”

(l-R) Frank Ryan. CEO Enterprise Ireland; Richard Bruton, T.D., Minister for Jobs, Enterprise & Innovation; and Michael Lawlor, VascoCare Ltd from Carlow IT explaining how his innovative patient positioning system is designed to hold a patient in a natural position during surgery.

THE MARKET | DECEMBER/JANUARY 2012 EQUINE SUPPLIES: FRANCE 023

hile Ireland has the highest density of horses of event held each year to introduce Irish companies to trainers, any European country, France is the European owners, racecourse owners, equine vets, etc. country with the highest number of horses, so it’s “Two years ago, the French horse industry was valued at €10 Wa common interest that is well-worth building on. billion, and there were more than 900,000 horses registered, with Indeed, there are quite a few Irish companies doing very well various equine organisations catering for the racing, show-jumping, out of the French horse industry and which enjoy a very good eventing and leisure sectors,” says Eimear O’Rourke of the EI Paris reputation in the sector. Redmills, for example, has supplied feed office. “As in most countries, the racing sector is the most valuable, to at least one of the winners of the Prix de l’Arc festival every but what is notable about the French horse-racing industry is that year for the past four years. Indeed, the Prix de l’Arc has provided not only is it Europe’s largest, with 248 race courses and 100,000 quite a showcase for Irish horse breeders – previous Irish-born racehorses regularly competing, in marked contrast to horse winners include Hurricane Run, Zarkava and Dylan Thomas, while racing in Ireland, the French racing industry is continuing to grow Sea the Stars is regarded as one of the greatest race horses of all – betting on horse races in France is up 24 per cent in the last five time after winning the 2,000 Guineas, the Epsom Derby and the years, and horse racing is now France’s third largest spectator Prix de l’Arc in one year. Now, Enterprise Ireland is using the Prix sport. There are already several Irish equine industry companies de l’Arc to showcase Irish equine industry suppliers, with a major doing well in France, but we believe there are further opportunities. Six out of every 10 thoroughbred horses sold in Ireland are exported to France, so it pays those supplying the horse industry in Ireland to consider supplying l’industrie du cheval en France. Cian Molloy noses out the opportunities. WHO’S TAKING THE HORSE SUPPLIES TO FRANCE?

DECEMBER/JANUARY 2012 | THE MARKET EQUINE SUPPLIES: FRANCE 024

Horseware One of the best-known Irish companies in the their original brand, which includes the world’s best-selling turnout French equine market is Horseware, makers of top-of-the-range rug and whose range has steadily grown to include the Rambo horse blankets, sponsor of a host of equestrian events across Wug, which has a higher neck and a patented front closure system Europe and known in France for its support to champion show- and the Rambo Flybuster, which is designed to offer unparalleled jumper Timothée Anciaume. Recently, to further develop its fly and sun protection; Rhino, which has a unique fabric French market, the company has dispensed with construction with the waterproof breathable its distribution partner and has employed its own “You need to have barrier inside the rug; and Amigo, whose products business manager, Aurore Naegelen, who travels all your labels and are aimed at the more price-conscious youth/ extensively in France and also a French-speaking fashion market. Through a series of acquisitions customer service in Dundalk. indications written and constant R&D, Horseware has expanded its “We were founded 26 years ago and have a in French, your product range to include equestrian clothing, presence of close to €30m, of which about €2m tendon boots and equine healthcare products. is in France, which is our fifth biggest market brochures have to after the UK, the US, Germany and Sweden, but be in French and Animal remedies Also targeting France, France is our fastest growth market,” explains TRI is a company that started off catering European sales manager Gearóid McMahon. the pictures in the specifically for the horse racing industry, but has “We will have a presence at Salon du Cheval brochures have to since expanded to cover all horse breeds and in December to support our retail partners other animals. MD Raoul Masterson explains: who are exhibiting there. We are very careful be of well-known “When we started in 1989 and were supplying choosing our stockists; our policy is not dealing French riders.” nutritional supplements in Ireland only, we were with everyone – you have to be of a certain known as Thoroughbred Remedies, and 100 per standard, and we avoid having stockists based too close together cent of our sales were to the thoroughbred industry, but when so that they are not competing against each other. Once we have we started exporting and trying to win business in other sectors, a retail partner, we will support them with their marketing and we would get potential customers saying ‘It’s a pity we can’t use with sponsorship of their local events.” your products on sports horses, quarter horses or warm blood’, Horseware produce three ranges of horseblanket: Rambo, or whatever the case may be. So to combat that we changed

it until the foals have got used old females, having equine Two Irish companies short- to it and, once that happens, accessories in pink makes listed for Salon de Cheval the opening can be reduced sense! People say that the so that the feed can only be French will only buy French. innovation awards accessed by the foal, allowing But that isn’t the case if you for easy and safe creep-feeding have something different to sell t this year’s Salon de of withstanding aggressive in the presence of adults. them, and we always highlight Cheval consumer show, horse-play.” Concannon says that it the innovative features of our Atwo Irish companies The JFC Ringfort foal- pays to be innovative in this products. There is also the fact – JFC and Nortev – are short- feeder, designed in consultation market: “At another trade show, that if you say you are Irish listed for innovation awards. with a veterinarian surgeon, is we launched a pink-coloured and are linked to the equine JFC is a Tuam-based industry, straight away, you plastics manufacturing “Given that on the are listened to. There is a lot company with a strong portfolio hobby-horse side of of respect for the Irish horse of agricultural products, this market, there is a industry. We hope to build including a growing range substantial proportion on that and are preparing a of feeders, drinkers, stable brochure as part of a new focus equipment and wheelbarrows of 12-to-35-year- on the French equine industry. specifically aimed at the equine old females, having In addition to the Ringfort Foal- industry. “Our products have equine accessories in Feeder, we have other products a lot of innovative features,” pink makes sense.” JFC Ringfort foal-feeder in development that we hope to says business development launch in France.” manager Miriam Concannon. a stand-alone unit that allows wheelbarrow, and the amount The other Irish company “For instance, our rotational four foals to feed at the same of press attention we got up on the Salon du Cheval moulding technology allows time. The openings to the was unreal, but given that on innovation award shortlist us to produce drinkers with Ringfort’s four feeding ports the hobby-horse side of this is Nortev, a high-potential a double wall, making them can be adjusted so that both market, there is a substantial start-up that has developed extremely durable and capable mares and foals can feed from proportion of 12-to-35-year- a portable equine nebuliser

THE MARKET | DECEMBER/JANUARY 2012 EQUINE SUPPLIES: FRANCE 025 our trading name – we now have two companies. TRM is a written in French, your brochures have to be in French and the manufacturing company producing about 30 different nutritional pictures in the brochures have to be of well-known French riders. supplements, primarily for horses. But we also do supplements “We’ve had the same distributor in France for 15 years for cats and dogs, racing pigeons and camels. We also have TRI, – believe it or not, our relationship started when I met the which has an equine superstore on the Curragh employing 50 proprietor, before he set up the company, in the bar of the people and then a sales and marketing arm exporting to countries Great Southern Hotel in Eyre Square in Galway, where the Irish all over the world. Veterinary Union conference was taking place. “About 15 per cent of our turnover is in Ireland, with the “When looking for a distributor, you want someone that has balance coming from exports. In order, our most valuable markets the infrastructure – a warehouse and people on the road – and would be Ireland, UK, Italy, Spain and France. Traditionally, most you want him to have enough products to have a critical mass. of our business was in Europe, but over the last five or six years, But you don’t want that range to be too great or your 30 products we have been winning more business in third countries – North will be lost among the 20,000 other products he is selling. Also, America, Russia, Turkey and the Middle East. Until 2008, we would while email, Skype and teleconferencing are all very good, the have been growing at about 15-20 per cent a year, but in the last equine industry is based on personal customers – you need three years, growth has been at about 2-3 per cent. There has someone to be going to the stables and meeting your customers been a marked decrease in European business and a big increase to talk to them about their horses and their individual needs. It’s in third countries, but France is very important to us still. not like selling airline flights or hotel bedrooms, which you can “Every national market is different and has its own do on the internet. People in the horse industry need the personal peculiarities. Whereas in most other countries there is a cachet touch. If you are exporting into any country, you need a face-to- to having foreign goods, the French will always try to buy French face meeting with your agent at least once or twice a year, where first, unless you can give them a reason to do otherwise – on the you sit down over a meal and talk about the peculiarities of the road they mainly drive Renaults, Peugeots and Citroens. Most local market and how to use them to your advantage.” French people holiday only in France, and 99 per cent of the food The French equine market isn’t exactly a gift horse: there on their supermarket shelves is French. You have to be able to is work to be done if you want to succeed there, but do your give them a good reason to choose your product over a French homework properly and, as they say in racing parlance, your alternative. You also need to have all your labels and indications company could be ‘winner alright, winner alright’! system. Founded by MD Gavan usually in thoroughbred racing big market for us – we have O’Sullivan and technical – with younger horses, which three distributors there: one director Declan Moran, Nortev have developed inflammatory who found us and two of whom employs six people but is airway disease (IAD) and need were introduced to us by a UK currently advertising to hire to be treated with antibiotics. partner. Enterprise Ireland’s another three. “We hold two “We’re currently exporting Paris office have been very patents,” said O’Sullivan. “One to France, Germany, Belgium, helpful, their Prix de l’Arc patent is for the flexible, all- Sweden, Australia and the UK event was fantastic because it in-one plastic mask used in and are just about to take off enabled us to put our product the device, where other equine in the US, where Flexineb is right in front of the horse nebulisers use solid plastic being validated by Hagyard, trainers, who will be a masks with separate seals to one of the world’s best known primary market.” attach the device to the horse’s equine veterinary practices. We head. And we have a patent on started trading in September Flexineb our battery-operated medicine last year, and we hope to hit €1 in use delivery system, where other million turnover over the next nebulisers need to be plugged two years. into the mains. The nebuliser is “One area that has really used – usually in show jumping taken us by surprise is natural – on older horses, which have therapies – horse owners developed lower respiratory are able to use our device to tract disorders, either recurrent administer eucalyptus oil or a airway obstruction (RAO) also saline-water solution almost known as ‘heaves’ or chronic immediately after discovering obstructive pulmonary disease a problem instead of having (COPD), which are both lifelong to wait for a vet to arrive to conditions similar to asthma in prescribe a medicine. humans. It can also be used – “France is going to be a

DECEMBER/JANUARY 2012 | THE MARKET LANGUAGES TO EXPORT 026

The high-tech skills gap is a well-aired topic. But do we also have a deficit in foreign language skills? And is there an easy way for companies to get these skills onboard when initially scoping out a new market? Lucille Redmond finds out.

n’t ould shCould we be speaking German soon?

THE MARKET | DECEMBER/JANUARY 2012 LANGUAGES TO EXPORT 027

ou don’t always miss what you’ve got until you could be about to lose it. While talks of a break-up of the eurozone look pessimistic, they bring sharply into focus the massive advantages YIreland has had over the last decade in being able to trade with two of the world’s top economies on its doorstep – without currency risk. Add to that approximately 1,500 Single Market directives since 1993, aimed at ironing out all kinds of barriers and kinks to seamless trade between the European Union’s member states – and it becomes evident that, although far from perfect, the Single Market is free from many of the currency, tariff and legislative headaches associated with selling goods and services elsewhere in the world.

he problem for us Irish is the language. whereas older people tend to be more protective According to a Eurostudent survey earlier of French culture and the French language, so you Tthis year, reported at the time in the Irish do need to have language capability within your Independent, Ireland is almost at the bottom of company when tackling the French market.” the pile in Europe when it comes to speaking McPartlin points out that in 2001 the total foreign languages. In most European countries, number sitting the leaving certificate was 51,935. at least 20 per cent of third-level students claim Of these, 65 per cent sat French and 18 per cent sat to be proficient in at least two foreign languages. German. By 2011, the total number was 57,532. But in Ireland, the figure is just 5 per cent – better However, of these, just 47 per cent sat French only than Turkey, where just 2 per cent claim to and only 12 per cent sat German. “As a small, speak two foreign languages. Moreover, students open economy, we will always be dependent in Ireland, along with Poland, Lithuania and on exports. Germany and France are two of our Slovakia, perform poorly in terms of experience largest trading partners both from an overall of life overseas – with less than 20 per cent of export and indigenous export perspective. Add in students here having studied in another country. Switzerland and Austria and we are talking about Deirdre McPartlin of Enterprise Ireland’s a market of 165m sharing for the most part the Düsseldorf office sees this as a major challenge same currency, and accessible both in terms of to Irish companies winning more business in the business practice and geographic proximity – a still booming German market. This is a pity, she ‘no-brainer’ if you are thinking about attractive believes. Despite perceptions to the contrary back exports. To put it another way, as exporters we’re home, Germans are surprisingly well disposed never going to want to ignore two of the world’s to Irish products. As reported in the last issue largest economies on our doorsteps,” she says. of The Market, recent research from Amarach At the heart of our complacency towards Consulting found that 30 per cent of German languages, Mc Partlin believes, is a misconception consumers regarded products from Ireland as that globalisation means that we can all get by positive compared with a figure of 34 per cent speaking English, and that as native speakers, for products from France but just 27 for products we’re alright Jack. Another misconception is from Holland and only 16 per cent for products that we should speak our customers’ languages from the UK. A further positive finding was simply to be understood in case their English is that 73 per cent of German consumers said they not great, when really the reason the language would welcome the introduction of more Irish will get you ahead is because you can research the products to the German market. market better, understand who your local as well But not enough of us speak their language. as international competitors are (and position Gary Fallon, Ireland’s man in Paris agrees: yourself accordingly) and be more aware of the “Younger people in France tend to be more cultural nuances in conducting business in that outward looking to the English-speaking world; country.

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particularly important when you’re dealing with HOW TO GET LANGUAGE the local entities - plants and factories. There, you’re dealing with the local management, SKILLS INTO YOUR COMPANY and more importantly, with the workforces on the ground. Where we’re in construction management roles, language capability becomes espite business or technically savvy The reason the quite critical. people with good languages skills being “Typically, in those locations, we’d recruit thin on the ground, some companies have language will D local engineers and train them, and they’d work worked out ways to get language skills into their get you ahead with us, but our management teams and our company while doing an initial scoping out of leadership basically come from our home offices. the market. is because you That’s where the challenge now comes - the “It’s a huge advantage to be able to make can research the people leading and interfacing with the client a contact through a person who has the native have to have decent language skills. Over the last language, and who can go to a meeting with you market better, few years that’s become the biggest test - having and talk quite comfortably in that language,” understand who people with language capabilities as well as says Mick Lynam, a director of the world-class technical and management capabilities.” engineering and project management PM Group. your local as well PM Group took advantage of Enterprise Ireland’s as international Business Accelerator Kilkenny Graduates for International Growth scheme to mechanical and electrical service company bring multilingual business students as interns to competitors are Dunreidy took a different approach. Through work within the company. (and position Enterprise Ireland’s Business Accelerator One was Mark Gillett, who is now on staff. Programme, the company was teamed up “Mark was based in Germany, giving him a very yourself with industry expert Guenther Helios to gain good opportunity to interface with German- accordingly) some initial market intelligence and traction, headquartered organisations, and to get a proper and they now retain Helios as a consultant. He understanding of people’s business plans, and be more has a background in management and sales where we’re going to be investing, and to start aware of the for engineering companies and he has a deep forming contact networks with them,” says knowledge of engineering and pharmaceuticals, Lynam. “He could act as interface and market cultural nuances making him ideal to interface with companies analyst, which worked exceptionally well.” The in conducting in their own language, Dunreidy director Donal Dublin and Cork-based company employs 1,600 Dunne says. people in 25 offices in Europe, Asia, USA and the business in that Dunreidy sells its Hycon stainless steel Middle East. “Using their own language gives country. containment system to pharmaceutical you great credibility with prospective clients. companies in Europe, Asia and America, If you go into a room where you can’t speak the including Pfizer, Novartis, Sanofi Aventis and language, it drops your chances of success quite Genzyme. dramatically. When you have someone there “A lot of German people speak English, who’s comfortable in the language you’re at an but when you go to a meeting and you’re doing advantage immediately.” a demonstration, you need to have somebody PM Group is on a journey to being an there who can technically describe the products, international organisation, says Lynam. “Our strategy is to establish entities in the locations where our core clients are spending and planning to invest.” The company has offices in the UK, Belgium, Sweden, Poland, Turkey, Moscow, Saudi Arabia, UAE, India, China and the US - San Jose covering the west and Boston the east. “A large element of our client base is multinational companies, including European multinationals based in Germany or France. We just completed a project for Sanofi, and we do a lot of work in Belgium for companies like GSK and Genzyme,” he says. “For those projects, you have to have a much greater language capability. It becomes

THE MARKET | DECEMBER/JANUARY 2012 LANGUAGES TO EXPORT 029 and answer the technical questions in German,” understand the types of customer service that Dunne says. “Otherwise it’s very difficult to would be needed for French clients or the get the uniqueness of the product across to the French market. Another Evergreen placement, engineers. In the two years Guenther has worked German student Marco Catania, worked with with us, we’ve attended well over 50 meetings environmental consultancy Greenstreets and met somewhere between five and eight Environmental Resources, helping Greenstreets people on average - a huge number of people - “Over the last to build a picture of how the market operated which has allowed us to create market awareness. few years, and providing market research which ultimately “You wouldn’t be able to access the people informed their sales strategy going into Germany. we’ve accessed without a native speaker. It would having people have been impossible for us to arrange meetings with language Graduates for International and do the demonstrations to the effect that we Growth John Nevin, managing director of were able to do it.” capabilities as Instant UpRight, which sells its access products If you wish to trade with continental Europe, well as technical into 40 countries, says: “It’s absolutely essential he stresses native speaking skills are a must, for companies to bring in language skills irrespective of your product. “To be able to talk and management - doing business from Ireland with English- about your product in technical terms, you need capabilities has speakers only gets you so far.” When Enterprise somebody who can speak the language. You Ireland launched a programme (Graduates can be totally misinterpreted if you’re speaking become the for International Growth) to find high-quality English to somebody - it is very easy for technical biggest test.” graduates to assist export companies to go to terms to be misunderstood.” market, Instant UpRight’s first hire was Bebhinn Nutty, who is fluent in German. Match-making Evergreen Internships, based “Bebhinn spent six months here both in Carlow, match-makes companies and business training on the product and doing course training students to find the right fit. “Degree and masters with Enterprise Ireland, and then moved into students from EU universities who wish to market in July this year; she is now in place complete an internship as part of their study for 12 months altogether in the market, both programme come to us, and we match them researching and selling,” says Nevin. Her work with a host company or organisation to suit their has been so successful for the company that profile and internship objectives,” says managing they are now interviewing for a Russian-fluent director Tremayne Horkan. One of Evergreen’s graduate to extend the scheme. “Our customers clients is Kilkenny company SurfBox, which are appreciating the fact that they can talk to provides internet access in airports. SurfBox had people in their mother tongue - everyone will already begun to export to France, so Evergreen give you the courtesy of speaking English, but organised a French student, Jessica Tsala, to work they would prefer to speak in their own language. with them. Tsala helped with export activity and “Since Bebhinn has come into the company developing further export activity, and supported we run meetings with German customers in SurfBox with contractual documents and trade German, and it makes the customer a lot more agreements. comfortable about it. Bebhinn translates for She translated the SurfBox website into us, sitting in on the meetings. It’s improved French, and enabled the management to the professionalism of what we bring to our customers; by having Bebhinn in market with fluent German it’s improved our research, and it’s improved the speed of access to potential customers.” Some companies rely on their dealers in their markets abroad, but Nevin points out that this approach has flaws: dealers have different skills, and a different agenda. Having someone within the company with the right language skills gives you more knowledge of the market. “If we were to quantify it, having Bebhinn and our Business Accelerator Programme person in Italy, Sean Lynch, who lives in Italy and has Italian skills, is going to increase our sales by up to 10% in 2012,” he says.

DECEMBER/JANUARY 2012 | THE MARKET UK: CONSTRUCTION 030

Survivors of Ireland’s beleaguered construction sector are thriving in Britain thanks to the sheer determination of their bosses. Ian Campbell hears how shoe leather and face-to-face meetings proved to be more important than elaborate marketing campaigns and big advertising spends.

LEADING FROM THE FRONT

THE MARKET | DECEMBER/JANUARY 2012 UK: CONSTRUCTION 031

ince the bottom fell out of the Irish “You can see the Irish companies that do it right. construction sector, most people’s Those that haven’t are either gone or going perception of life after the crash average.” Swould be based on bad news NAMA With little or no money spent on headlines and a few upbeat reports about Irish advertising or exhibitions, the go-to-market firms working on the 2012 Olympics. A much strategy was all about entering a highly more interesting story, however, offers a salutary sophisticated networking scene. “There are lesson for any business looking to pick itself up lots of them for different types of industry, in and start again. For even the most beleaguered different formats serving different purposes. sector, it seems a recession is not necessarily an And it’s not like Ireland. You don’t go looking obstacle to overseas expansion. for a good time, it’s all about the work,” said The Enterprise Ireland office in London had O’Farrell. a portfolio of around 40 construction companies Having got in front of prospects, O’Farrell that rose to 400 after the crash. EI’s senior still had to win the businesses. What made them market advisor for the sector, John Hunt, is stand out it a highly competitive and crowded responsible for connecting Irish capability with market? A particular skillset around renewable UK opportunities and has seen what it takes for energy was the calling card. “We had a lot of companies to succeed. “Beneath the headlines, experience in sectors that proved to be more there are lower profile Irish companies securing prevalent in the UK than Ireland. Planning work in very difficult conditions and growing rules and building regulations are quite onerous their businesses. They are succeeding on some on developers for achieving carbon reduction good business principals,” he said. targets and the market is much bigger in the Hunt cites three companies in particular UK,” said O’Farrell. that have established a UK footprint from The knowledge and capability of the nothing: Dornan Engineering from Cork, firm’s senior engineers also proved to be a Bennett Construction from Mullingar, and unique selling point. All three companies said EDC, also from Cork. Ranking high among their the upside of the Celtic Tiger construction “good business principles” is leadership from the top. In all cases, either the chief executive or managing director moved over to London from Monday to Friday and began growing a UK client base out of a London office. The senior management of each company were soon out meeting people, networking after “With some of our competitors, hours, proactively pushing themselves and their companies into the spotlight. clients would have to go through “We came over blind with no projects, four tiers of management to get to opened an office in September 2008 and spent six months walking the streets before we won the guy at the top. With us, it was our first job,” said Richard O’Farrell, managing pretty much me, following leads.” director of Engineering Design Consultants (EDC). “It’s all about face-to-face, one hundred and ten per cent.” A niche engineering firm, EDC currently employs sixteen people, double the number on its books immediately after the crash. It still has a busy Cork office but 80 per cent of its work is now in the UK. boom was a better trained and more rounded Contacts initially came from people workforce than Britain. “In Ireland, we worked they knew, including friends and family. Any on all types of project all the time, whereas, in opportunity was taken to network and they England, you could be working on the same were willing participants in the Enterprise thing for a decade. We have broader skillsets Ireland Business Acceleration Programme. After that definitely work in our favour,” said the first contract win, the company never looked O’Farrell. back. Having senior management active on the John Hunt said the same kind of flexibility ground was imperative, according to O’Farrell. was evident at management level.

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“Their leaders are capable of making very quick Like Dornan, Bennett Construction’s decisions, steering their businesses to suit introduction to the UK came from a British the opportunities that are in front of them,” client it worked for in Ireland. “They asked us to he said. “Typically UK firms, by contrast, sit tender for something in late 2008 and we won in boardrooms trying to strategise their way it. In the end, the job didn’t go ahead but it made through the recession and fail. It’s about leading us sit up and think seriously about the UK,” said from the front and getting out there.” Paul McGee, joint managing director. The subsequent strategy was to focus on Stepping stones Of the three companies, opportunities around London, inside the M25, the best positioned to move abroad was Dornan rather than chasing projects all around the Engineering, a specialist in installation services regions. “If we had gone in with a scattergun with data centres among its high-tech clients in approach, we might have won a project in Ireland. When chief executive Brian Acheson Manchester but with no guarantee of a pipeline. saw the recession coming, he steered the London was where most the activity was going company towards overseas contracts. on, so it made sense to focus,” said McGee. “We had an opportunity to do a job Bennett is a building group that serves a with Pfizer in Sweden and that was the range of sectors including residential, healthcare psychological break that we needed. It made us and pharmaceutical. Reliable execution and an international company,” he recalled. “After attention to detail had helped build a solid base that, our game plan was to try and find existing of repeat business in Ireland before the crash. clients that would give us an inroad into The same formula is now working across the another market. We used the multinationals Irish Sea, but it took time to get going. in Ireland as a stepping stone back into their The goal was a small number of large countries of origin. Building a data centre for projects rather than the other way round, the the Nationwide Building Society took us to the kind of pitch where it makes sense for the UK.” managing director to lead the way. Ask McGee From day one, Dornan found itself chasing what was the one thing that got them off the jobs where it was more competitive than UK ground and he will give you a succinct answer firms yet still able to make healthy profits. that tells you all you need to know: “Shoe The proactive culture of the company also leather and time”. attracted attention at a time when competitors The fact that it was the managing director tended toward complacency. It all presented an knocking at doors turned out to be a big opportunity for Acheson that was too good to differentiator. “With some of our competitors, miss. clients would have to go through four tiers of Like his Irish peers at EDC and Bennett management to get to the guy at the top. With Construction, Acheson placed great store in us, it was pretty much me, following leads,” he doing business face-to-face. “For me and my said. “What bore most fruit was identifying clients, it’s all about personal relationships,” he developers and speaking to them directly. I said. Every part of every engagement is crucial, would go in and shake up their tender list by according to Acheson. “You don’t do business being very competitive and showing a track in the UK the way you do in Ireland, it’s much record of delivery.” more professional, from the time you meet them The company also used market intelligence until the time you leave them; everything has to to find out who was about to build or who was be correct.” looking for funding. There was some modest They must be doing something right. Today, investment in advertising and the occasional 90 per cent of Dornan’s business is overseas and trade show, but once again it was the people- the UK is its biggest market, accounting for 60 first approach that got results. From a standing per cent. The company currently employs 650 start, the UK now accounts for 30 per cent of the people compared to 400 in the heyday of the company’s business. Celtic Tiger, most of them Irish. John Hunt sums up a very discernible There is a steady trickle of new jobs and trait that all these success stories share. “In a they continue to recruit from home, but business-to-business, service-oriented sector Acheson leaves no doubt as to where the future like construction, face-to-face is what it’s all lies. “We’re in the UK from here until eternity. about. And you can take years off trying to enter Even if it gets better in Ireland, we’ve told our a market if you are the man in charge of the lads we’re not going home,” he said. business,” he said.

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The future for alternative payments POSSIBLE CONTENDER has not yet been written. Conor Devlin surveys the crowded and fragmented landscape for clues as to which #1 platform may dominate. FUTURE

REALITY CHECK: WAYS As a result of multiple payment providers, card companies and mobile networks creating their own closed-loop payment TO PAY solutions, a standard universal payment eco-system looks he payments industry, with innovative Near field unlikely. Customers, who start-ups and long established want to use their digital communications wallet in any store and avail players promoting a varying degree (NFC) technology of any promotion – just like of payment options, has finally a real wallet – are met with T NFC technology has been network conflicting and reached a crucial turning point. Every day brings numerous announcements of mobile hailed as the new seamless technological restrictions. In a way to pay for goods and recent effort to provide clarity operators, payment solutions providers and services. Beginning with the within the NFC payments card networks signing agreements or mergers NFC-enabled credit and debit industry, the GSM Association to develop the next big payments initiative. cards, the technology shows has announced that 45 of Consequently, the payments landscape it has potential, but with its the world’s leading mobile only advantage being shorter operators have committed has become over-crowded and fragmented. queues in the supermarket or to support and implement With so many platforms for merchants and corner shop, the technology SIM-based near field consumers to choose from, the winning option alone lacks innovation and communications solutions and will ultimately be the most adoptable, value- value-added services. The services. The association, which integration of NFC within represents the interests of added, convenient and user-friendly. smartphones, however, mobile operators in more than The two platforms emerging out in combines the contactless 220 countries and unites nearly front of the payments race are near-field- payment solution with location- 800 of the world’s mobile communication-enabled smartphones and based vouchers and coupons, operators, has published a new interactive loyalty schemes and set of industry specifications PayPal’s end-to-end payment solution. Also, enhanced customer promotion to enable the development as negative sentiment towards global financial through social media ‘check-in’ and deployment of “secure, institutions steadily increases – taking form functions. Visa’s soon-to-be- interoperable and ubiquitous” in movements including Occupy Wall Street launched digital wallet V. me, NFC services. However, which allows users to carry the future for a universally and National Bank Transfer Day – Bitcoin, the MasterCard and American compatible payments world’s first decentralised currency steadily Express digital cards, in ecosystem will more than grows as an alternative payments platform. addition to vouchers or loyalty likely remain unclear due to the Then there is evolution of m-payments for the cards, currently feature the number of rivalling most realistic functions of a components and companies, unbanked and for micropayments for virtual wallet and may gain the widest each promoting better or goods and services. customer adoption. additional value added services.

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POSSIBLE CONTENDER POSSIBLE CONTENDER #2 #3

PayPal Bitcoin

PayPal is currently trying to As the world’s first reinvent the payments industry decentralised currency – an by launching its complete end- open sourced digital currency to-end payments solutions. that can be used to transfer PayPal, which referred to money around the world or NFC technology as Not For pay for goods – an increasingly Commerce, is rolling out its large number of merchants are own closed-loop solution that accepting Bitcoins as a form of REALITY CHECK: REALITY CHECK: is available on any mobile payment. Bitcoins are traded, device. According to PayPal like a physical currency, against What PayPal offers, while Bitcoin is still in its early president Scott Thompson, its other currencies and can be convenient and innovative, stages of development and, plan is to provide “a one-stop purchased in major banks in requires customers to open while free for anyone to open shop for merchants to engage the US or, alternatively, can be a PayPal account and further an account or digital purse, their customers directly during bought on-line at dedicated manage funds relating to their is not user-friendly as of yet. every part of the shopping currency exchange sites. purchases in addition to their The currency has suffered lifecycle – generating demand What started out as a strictly current Visa or MasterCard varying degrees of scrutiny from consumers through online transaction process accounts. With customers now about its level of security, with location-based offers, making has now shifted into physical managing another account, reports of hacking and theft payments accessible from stores thanks to the launch of the convenience factor is emerging. Due to the lack of any device (not just from the Bitcoin POS terminals. With somewhat diluted. PayPal’s security, the volatile traded mobile phone), and offering the elimination of a third party other major problem, the price of Bitcoins will remain more flexibility to customers – banks, credit card companies opposite of those competing inconsistent and could rise and even after they’ve checked out.” and money transfer companies in the NFC solutions industry, fall sporadically. However, the PayPal’s technology enlists – the average cost of moving is that it lacks any major cons mentioned are dutifully the use of a mobile devices’ Bitcoins is one-tenth of a penny, competition, leading merchants being address by enthusiasts camera to scan the barcode of allowing merchants to pass to hesitate on fully adapting who are currently developing items and provides an option on savings to customers. In to the stand-alone payment mainstream software to create to bypass the checkout as 2011, there were 6.5 million solution that goes against the a more secure and user-friendly customer’s PayPal accounts Bitcoins in circulation among an grain of the more dominant environment. are automatically deducted estimated 10,000 users, and, NFC industry. upon completion. Also, for at its peak, a single Bitcoin was customers who do not have traded for $30, and $1 at its access to mobile devices, lowest value. PayPal provides a PIN only point-of-sale terminal located In 2011, there were 6.5 million Bitcoins at the checkout. in circulation among an estimated 10,000 users, and, at its peak, a single Bitcoin was traded for $30, and $1 at its lowest value.

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POSSIBLE CONTENDER The number acts as My own verdict: an activation code and the consumer receives an SMS to confirm the purchase. When While Bitcoin may #4 the purchase is completed the become a mainstream charge appears on their carrier alternative payment bill. In addition to its direct solution, it will take mobile billing facilities, Zong has recently created an extension to many years to become the service called Zong+, which a secure and viable allows customers to bill micro platform to be taken transactions to debit or credit seriously. PayPal’s m-money cards. PayPal’s purchase of Zong will eventually permit customers attempt to become With mainstream payment to pay for goods in countries a major competitor channels requiring a bank without internet access. Zong will only take shape account or permanent has connections with 250 carrier when it recognises the networks in over 45 countries address, those in developing lucrative opportunity countries who do not hold in 21 different languages and is these requirements, or those a mobile payment provider for that NFC holds. If who cannot qualify for a debit Facebook credits. and when PayPal fully or credit payment facility, adopts NFC in its end- Similarly, m-Via, a US- REALITY CHECK: alternatively turn to the mobile to-end processing money solution. based mobile payments The m-money channel, provider, launched its Boom With direct carrier billing having operation and allows which allows users to send, platform, giving unbanked the potential to reach the more other payment receive and pay for goods consumers access to than 4 billion people around the networks within its payments, banking and money world who have mobile phones through direct carrier billing, is platform, PayPal the main electronic payment transfer services through their – including people who don’t option in Africa. According to mobile phone. m-Via has built have (or choose not to use) will gain traction recent reports, Africa’s most an extensive partner network bank accounts or credit cards and rise as a serious successful mobile phone for Boom where members online – m-money will remain competitor. Until can load and withdraw money, a major payments channel based-money transfer service then, NFC enabled M-PESA processes more and make purchases from for the unbanked. However, transactions domestically their Boom accounts. Boom excluding the convenient smartphones provide within Kenya than Western allows customers to open a method of purchasing digital the easiest option for Union does globally. bank account by using just goods in games or social media, both merchants and the customer’s mobile phone m-money does not represent The current demand for consumers. Having m-money services and the number, and if a member sends a significant commercial potential benefits that it could money to a phone number of payments channel for the recognised payment bring for African operators and someone who is not a Boom already banked consumer. processors, including vendors have led experts to member, m-Via will instantly Visa, MasterCard and create an account for that estimate that m-money will be American Express, worth $3 billion in 2015. person. Even in the banked sector, attached to the m-money has become more technology provides a popular within the digital sense of security for goods sector. Companies like Zong, which was recently both merchants and acquired by PayPal, allows customers, something gaming customers to purchase PayPal has yet to do. additional top-ups or bonuses in real time through their mobile phone.

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As founder of PCH International, Liam Casey is deservedly seen as Ireland’s most successful business-person in China. He tells Mark Godfrey about the business model behind his global supply chain solutions company and how targeting China’s domestic market is next on his agenda.

n 2008, at a gathering of Irish business Success story Casey has become the in Asia, former Tanaiste Dick Spring biggest success story for Irish business in China. introduced a speaker who he knew from A Cork man, he set up privately held PCH (the his days in Leinster House. It was Liam name comes from Pacific Coast Highway, a Casey, who in an earlier drapery career had tribute to Casey’s stint in California before he Isold Spring the suits that made him regularly moved to Asia) after a 1996 trip to an electronics the best-dressed politician in the Dáil. trade fair in Taiwan. His links to the US and an A long way and a couple of decades on understanding of China’s contract manufacturing from those Leinster House days, at this year’s scene has since allowed him bridge the two gathering of the Asia Pacific Irish Business and become one of the most admired figures in Forum (APIBF), the role of patron was passed on supply chain management, the process of getting from Spring to Casey, who left Dublin to become goods from the production line to customer. founder and CEO of PCH International, a global PCH uses 1,000 suppliers and 100 supply chain solutions company headquartered manufacturers, trusted through years of in Cork with operations and offices in China, the cooperation, to make goods for a client base of US and Europe. Silicon Valley staples (among them, reportedly,

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Apple). “Clients like PCH because we work with High spirits and hard work are Economics writer them on design, on specifications,” according to abbreviations for Casey’s character (his only Casey. “Ensuring the product is ready to specs lowlight of 2011 for PCH was “not having James Fallows and by the launch date is key”. enough hours in the day to do all the business used PCH’s we want to do”.) But has economic stagnation Three-day supply chain Casey’s in Western economies affected PCH’s business? business model achievement is what he calls a three-day supply The answer is a clear no: PCH, according to to define ‘the chain. “When we started, shipping a finished Casey, is focused on the hyper-growth categories product from China to the customer took up to of accessories for smartphones, eReaders and smiley face’ curve three months. Today raw materials might arrive tablets “which saw phenomenal growth in concept of supply in China on Sunday evening, hit the production the past two years… The recession in Western lines on Monday morning and then be packed companies is a concern, but it has not affected chain, with the out by Tuesday. Wednesday night, they’re our business.” high-value design taken by courier to the US and delivered to the customer’s home on Saturday morning.” Strategies for continued growth and marketing Rather than being shipped to a US port Another growth area for the coming years for activities at each and then warehoused for eventual distribution PCH is medical devices. Casey has meanwhile nationwide, goods ordered on a website are now been working with older clients in the IT end and the lower shipped directly from PCH’s logistics centre hardware segment to get the ‘attach rate’ of their value elements – “when someone orders from a website in the products up: IT brands like accessories such as a US that’s clicked through to us.” mouse or a bag that adds margin to a computer creating the sale. middle swoosh of PCH’s Accelerator programme Casey Casey doesn’t divulge his client list likes to stress how short supply chain cycles – confidentiality means he’s legally compelled the smiley. make financing easier and reduce the capital not to, in any case. But it’s clear, even in a tough needed to make the product. The agility of his economy, they’re doing well. PCH is “helping model – there’s no inventory so warehousing them to sell more products, reduce inventory costs are pared away – thus makes it easier for and have a more efficient business model”. start-ups to get their product to market. Casey’s As of next year, PCH will also be helping way of staying ahead is Accelerator, a PCH clients dispatch goods within China rather programme that selects start-ups, which it both than shipping to the US or Europe. Supplying advises and co-invests in to develop promising the domestic market is not necessarily an easy products. progression: while it’s the same country, the One such device, which PCH will have logistics systems across China vary wildly, made in Shenzhen, is Lark – a silent alarm that which is why PCH’s big investment of 2011 was monitors sleep patterns. Accelerator also allows the acquisition of TNS Distribution, a logistics PCH to take a sweeter share of the value chain in firm. product development. This is something Casey That deal was a highlight of 2011 for Casey: has long aimed at, judging by his interviews he sees TNS as “the perfect fit for the service with distinguished American economics writer offering we want to provide to our clients”. James Fallows nearly five years ago. Fallows Casey’s priority for 2012 is organic growth, (who by chance met Casey at the breakfast “focusing on the Chinese domestic market, room at the Four Points Sheraton hotel in and offering a sustainable supply chain for Shenzhen, where he lives and greets visiting our clients”. Among the Irish clients taking buyers) studied PCH’s business model in the advantage of the new China focus of PCH is US-based Atlantic magazine, using it to define designer Orla Kiely, whose garments will be what he termed the smiley curve concept of made and retailed in China. supply chain: a smiley-face icon that runs from With a 1,200 staff (up considerably from the beginning to the end of a product’s creation 800 in 2007), PCH’s financial success – revenues and sale, with the high-value design and climbed 170 per cent in 2010 to US$413 – say marketing activities at each end and the lower as much about the calibre of the firm as its value (manufacturing, packaging) elements investors and board of directors. US$30 million at the middle swoosh in the smiley. America’s brought in by Casey in 2011 came from among (and now PCH’s) place is at the two ends of the others Tamasek, the Singaporean government smiley, “and those are where the money is,” sovereign investment arm, and the Hong wrote Fallows. Kong-based Fung brothers whose Li & Fung

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remains the bellwether of China’s sourcing Accelerator is a scene. Joining PCH’s board of directors: Stanford Helping the Irish get University professor Hau Lee, considered by PCH programme a handle on Asia some the world’s foremost academic expert on that selects start- supply chain management. Liam Casey tells Market Godfrey how he Though PCH doesn’t (and won’t) own its ups, which it plans to help set up an Ireland Shenzhen own factories, Casey is using new PCH funding both advises and Chamber of Commerce and his new role as for more space to pack and dispatch goods the incoming patron of The Asia Pacific Irish from his manufacturing partners. He believes co-invests in to Business Forum (APIBF). his supply chain model makes it ever-easier develop promising for start-ups to bring their products to market. ising wages in China is a boon for PCH – it But he’d like to see banks keep up: “today products. allows the firm to tap premium talent, transaction times are shorter and the amounts Rincluding engineers, products designers involved much smaller.” Yet while Chinese and management from overseas. They’ve proven banks like Merchants are far better at adapting good recruits for PCH-offshoot Shenzhen Celts to the new speed, international peer banks need GAA, which carries the PCH logo on its strip. A to catch up in understanding the reduced risk colourful posse of Cork, American and Chinese in the supply chain and in coming up with new accents, the team has been one of the grittiest trade finance products. presences in the ever-larger annual competitions of Gaelic games in the East. Triple bottom line Casey says he worries Has PCH’s success in any way opened up about his workers’ welfare, and he has an relationships and opportunities/success stories for environmental side. His ‘triple bottom line’ Cork in China? “Yes, in both business and personal concept makes social, environmental and relationships! We have around 18 Irish people economic factors PCH priorities. He also talks working in Shenzhen, many of them are from Cork about the importance of treating people well. “A and married to locals. We started the Shenzhen cradle-to-grave analysis of a product’s lifespan Celts, which has brought Irish culture to the local to reduce waste” means using environmentally community where we live and work,” Casey says. To help trade with home, he will help set up an friendly packaging materials and demanding Ireland Shenzhen Chamber of Commerce. standards of suppliers. The Cork man doesn’t speak Chinese: He’s kept a Cork accent, but Casey, 47, is as “Businesspeople all speak the same language much at home in Shenzhen as he is by the banks – we want to do business. The language you speak of the Lee. “We’ve all come here on our own, is not a factor in success.” Having to divide his with a dream and a positive, can-do attitude” time between a customer-base in Silicon Valley, he says of the city – a sprawling 10-million a production-base in Shenzhen and a customer urban mass of everyone who’s wanted to make service centre in Cork means Casey wasn’t it in China since Deng Xiaoping made it the present in Seoul to accept his new role as the Asia experiment in 1979 that put China on the road Pacific Irish Business Forum (APIBF) patron. The to free market capitalism. As the first-starter, words he sent to be read by the event’s organisers Shenzhen developed an advantage in a cluster of told of his company’s values: “passion, integrity industrial plants, manufacturing know-how and and teamwork” – and how these values keep a investment that it’s held onto. Being a port town company with 1,200 people of 16 nationalities in on the Hong Kong border also helped. 10 locations in constant growth mode. “To stay Casey’s words for Shenzhen – “innovative”, relevant, Irish businesses need to look to Asia and “entrepreneurial”, and “hard working” are the APIBF with the GAA’s impressive network, can also good reasons why rising wages and costs offer connections and opportunities in the region.” won’t persuade him to join the manufacturers But why would someone as busy as Casey leaving Shenzhen for cities like Chongqing and take on the role of APIBF patron? “If you want Zhengzhou where wages are half local rates. something done, ask a busy person to do it! I “Other regions don’t have the raw materials believe it is the right time for Irish businesses to or the logistics infrastructure or the skilled look towards Asia to take advantage of the huge workforce. Yes, they may have cheaper wages opportunities in this region. Dick Spring did a very but the products we make are high quality and good job as former patron. Being based in Asia, I need to be manufactured on time and to correct can offer practical advice and experience on what specifications. This [Shenzhen] is the best place the key focuses should be, on-the-ground here, for for us to do that from.” Irish businesses.”

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FINDING YOUR WAY IN TRANSLATION company’s localised website and the “Machine translation is basically a gisting Surveying the letters and emails it sends out to a engine,” he says. “It will certainly help you professional possible customer in another country get the ‘gist’, or idea, of a document in another Aare among its most important language, quickly and for free.” There are times translation communication. They set the tone, define the when this is useful - for example, to get the sense scene, Lucille company - its efficiency and reliability and of an email requesting a quotation. Redmond passes business profile. Everything about the company But it is sensible, even at the beginning, to - even its name - may need to be translated for commission a series of standard letters from a on advice about cultural sensitivity Coca-Cola’s Chinese name, professional translation service, to be used as a finding the right ‘Kekoukele’, means ‘delicious happiness’; template for answering such queries. translator and Subway’s, ‘Saibaiwei’, means ‘filled with 100 Scattergood advises companies to include flavours’. translation as part of their overall process, and going that extra But for some small companies, translation especially warns against leaving it to the last mile to capture represents a worrying cost, and so they may take moment. “You need to remember that this is the nuances of the shortcut of machine translation, using one the main image a client gets of you in another your industry and of the free online translators like Babel Fish, country. If you received a misspelt, badly Systranet or Google Translate during their early translated document in English, what would brand. days, and waiting until the business is really up you think of the company trying to sell to you? and running to hire a professional translator. “So think about what they think of your translation. Putting effort in up front helps Don’t cut corners Damian Scattergood, you sell more in the end. If your translation managing director of Star Translation Services, is professional, your company is seen as warns that this strategy is fraught with danger. professional.”

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Finding the right translator customers, and phone and talk to these Enterprise Ireland has a list of translators, and customers about the translations the company companies seeking the service can also check has made for them. the list of the Irish Translators’ and Interpreters’ “A tip: if your text includes a lot of Association. repetitions, you should ask potential translators Olga Gashi, co-founder of Word Pefect if they have a CAT program, and what matrix Translations, says that their work can involve they offer for repeat text.” Computer aided interpreting - for courts, the Gardaí, hospital translation programs can produce an analysis patients - or translation of a warranty, a manual, of text, which can cut the cost to the customer correspondence, a website, brochures, business - for instance, if your text constantly uses cards, marriage or divorce certificates, diplomas. characteristic phrases that don’t need to be re- She too cautions against machine translated every time they appear, you will not translation, pointing out that you would not pay the full price for each re-translation. hire an amateur to design your website or do other professional work, and the same approach Expressing the nuances Damien is sensible when sourcing translations. Scattergood tells clients that a translation must A translator specialising in business work express their brand, rather than being literal or told me: “Anyone looking for a translator stiff. It is particularly important for companies should check out the Irish Translators’ and to have their sales literature translated into Interpreters’ Association, and preferably look for the local language for markets such as China a professional member. and Japan. This is seen as a measure of your “When making contact, it might be a good professionalism and commitment to the market. idea to ask for reference translations - though If your company is in a high-end technology these may not deal with the particular area of sector, it is essential to employ interpreters and interest of the company making the enquiries, translators who have a good understanding of because for reasons of confidentiality, there your technology. And it is sensible to have an are not many translations a client will agree to expert fluent in both the target language and have circulated as a reference translation.” (It is your industry proofread all translations in their normal for translators to sign a confidentiality final version, to make sure that the translations agreement.) are both correct and consistent, because in Before hiring a translator you should some cases, multiple translators can be used on definitely seek a reference from satisfied successive versions of a document.

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Dolores Rogers is chief operations manager reads correctly in the different languages.” of Cubic Telecom, which makes and sells Sean O’Sullivan is managing director of Maxroam SIMs for global roaming - you may Avego, which manages transport capacity in have bought one on a plane or when abroad, cars, vans and buses. Avego can make you part of or online. “Our website, maxroam.com, is a the public transport network, using the empty worldwide site, so we offer it in many different seats in your car or van, and it also works for bus languages,” says Rogers. “Traditionally, we companies. would have used students or colleges, but Avego develops its software in Ireland, as our business has grown, that hasn’t been but has customers all over the world. In the satisfactory.” US, thousands of people use Avego apps, in Translation by non-professionals did not particular in Seattle and Houston. There are have enough sensitivity to the message the users in Bergen, Norway. And in China and company was giving; it was more of a direct across Ireland, bus companies are Avego’s word-for-word job, she says. “So I did some clients. research last year, looking for translation Avego’s entire website is available in companies that would be familiar with the English and Chinese. “We do most translation travel industry and with the global roaming with our staff - we have 10 different nationalities industry, and would understand the nature of working in our company, so for most languages the message. that we would translate to, we would have staff “I sourced a Dublin company called that know the languages, though occasionally Cipherion Translations. Mainly we use them we send out a couple of hundred dollars worth for European languages, like French, German, of work for translation and localisation.” Spanish, Italian and Polish. They proved We are fortunate in Ireland, says O’Sullivan, to be competitive in pricing, but also very that we are increasingly living in a multicultural professional in their work ethic. We’re always state. “Thank God, we have Chinese staff that putting them under severe pressure with can work for us in Ireland. It’s very difficult to deadlines, and they always deliver. We don’t get a work visa for Chinese staff, but fortunately have the comfort of having three weeks to we do have some, and that’s helped us greatly change something - it’s normally three days, or when we have our Chinese companies coming less. to Ireland to visit with us.” And Avego’s name in “They do a lot of copy-editing for us as well, Chinese? It translates as An Wei Gao, meaning proofreading our website for us to make sure it ‘High Safe Technology’ - a sure winner.

DECEMBER/JANUARY 2012 | THE MARKET MARKETING 042

Travelling to meet great way to know what your The factory visit Tanco Autowrap is a customers want is simply to ask long-established Carlow-based agricultural channel partners them. Likewise, if you want your manufacturer that exports to over 30 countries and buyers is part Aagent or distributor to understand worldwide. The company, which makes of international your business, it’s good to show them. But agricultural wrapping machinery, recently business. But how leveraging opportunities to meaningfully engage hosted a large dealer group that handles sales with potential buyers, build relationships with of its products in Norway, Sweden, Finland and about inviting them existing customers or simply get a busy partner Denmark. to Ireland to see to focus on your offering can be a real challenge. “It gives us a great opportunity to say your operations “Your customers put the dollars on your thank you to our sales partners,” says sales table, so don’t lose sight of them as your most director Maurice Maye. “We use the opportunity first-hand?John powerful knowledge-asset in developing people to get closer to our dealers; have a chat; find Cradden talked and products,” advises Ornagh Hoban, vice out how things are going; discuss trends, issues to three Irish president of marketing and strategy at travel or any areas of concern for them; show them software firmD atalex.To stand out from the new products or discuss ideas. We value their companies that crowd, she says that firms should exploit the comments.” hosted visits from strength of Ireland’s image abroad. Needless to say, it’s also a good opportunity distributors or “Ireland, its business community and its to exploit the very best of Irish hospitality. customers this people represent a powerful brand, one that “People love coming here, even if it’s raining,” uniquely transcends cultural and socio-political he adds. “Certainly in the Irish export sector, I summer and found divides. Trade shows, exhibitions and podiums think we have improved greatly in recent years that meetings on may allow you to glisten and gleam, but if they in ensuring a stronger relationship with our home turf can don’t permit meaningful engagement, they can overseas partners. I believe inward visits are burn a lot of dollars for little return,” Hoban adds. encouraged more and more by Irish exporters.” really help cement Site visits can work well for all types of relationships. The thought-leadership event manufacturing exporters, he believes. “Yes, we Pursuing an alternative strategy, Datalex all have Skype and videoconference facilities recently hosted its fifth annual conference in which are great, but there is no substitute for June, which was attended by over 150 delegates having your sales partner on your premises. It’s Taking from global airlines and agencies such as Delta, all about building relationships for the long term United, Travelport, Frontier, Westjet, Aer Lingus, and the strongest ones are built on face-to-face Air China, STA Travel, Expedia and the Stella experiences.” them Group. So how did the company manage to attract The training event Some firms depend so many busy executives to what looks like a great deal on relationships with their another boring product conference? “What’s distributors, so finding ways to develop and back different is that we broke the mould of a strengthen those relationships can make sense traditional customer-user conference, which on so many levels. tends to focus on the podium, power points of Trulife is a Dublin-based firm that to your the product and one-sided opinions, leaving little manufactures silicone gel positioners that are chance of real dialogue or debate.” placed on surgical operating tables, under the Instead, Datalex has positioned its patient, to help prevent pressure ulcers or bed conference as more of a forum for thought sores. The company sells to distributors, which place – leadership, general discussion and debates in turn sell directly to public or private hospitals about issues facing the travel industry. worldwide. “In essence, they are responsible for “It’s our customers’ conference and it’s their understanding the market they are in and selling agenda,” says Hoban. “Such learning puts our to the market correctly,” says sales director employees and our products ahead of the curve Sheila Judge. and positions us as trusted peers, investing in The company recently hosted a training the future of our industry and our customers’ visit for 19 companies from no fewer than business objectives.” 19 different countries. “The main aim was to Datalex regards the conference as “the educate our customers on our products and best marketing investment we make each year” our company,” says Judge. “It was also great she says, yet the company’s press or marketing to spend more time to get to know them, while partners are not involved in the invitation-only giving them the opportunity to network with event. each other. They are all in the same business,

THE MARKET | DECEMBER/JANUARY 2012 MARKETING 043 but each market presents very different had previously organised training visits for “It’s all about challenges.” its distributors every five years, but such was “We began by giving a tour of our facility the positive feedback this year, Trulife is now building demonstrating how our products are made – considering doing it more regularly, possibly relationships for mostly by hand. We then visited the headquarters every three years. “It’s a win-win for everyone for our international business in Citywest, and as they get a fresh outlook and information; the long term, had a speech from our CEO Noel Murphy. we also garner good feedback and get to form and the strongest “We chose the Guinness Storehouse as closer relationships,” said Judge. the place for our training, as it was both a Likewise, Ornagh Hoban says Datalex’s ones are built symbolic and an inspiring venue. Our first day conferences have resulted in real and on face-to-face of training was from our education manager, tangible dividends, including better informed who demonstrated how to effectively use our employees, a clearer product development experiences.” products and gave our customers, who are at roadmap, a better view of customer and market different stages of working with Trulife, a chance opportunities and better brand awareness to ask any questions. That evening, we brought and reputation. “The opportunity to sell will them to Johnny Foxes, where they took photos emerge with much greater reward if you can up the mountains and enjoyed the craic and ceol. prove you are aligned to your customers as a “The next day, we concentrated on the trusted industry partner, engaged in their views marketing and selling process and had one of and concerns and matching your business our longest-standing distributors explain how imperatives to theirs.” they had become so successful. We also did an in-depth training session on research and development. We then went for dinner to Rolly’s in Ballsbridge and finished off with a few pints in the Foggy Dew in Temple bar.”

Costs and benefits While inward visits of this nature can be costly to facilitate, partners will often be happy to pay for a portion of the costs. “We both agreed to share the cost of the trip,” said Maurice Maye of Tanco. “They paid their airfares, and we looked after the accommodation, meals and transport to and from the airport.” The visitors to Trulife’s recent training forum also paid for their own flights. The return on investment can, for some companies, be immediate. Maye already has tangible proof of the value of the last visit. “Before they left, we had undertakings for over €100k of new orders, which have since been shipped and invoiced.” Meanwhile, Sheila Judge of Trulife believes that distributor training is more of a long- term investment, so any translation into sales may not be seen until the end of this year, at the earliest. The company

DECEMBER/JANUARY 2012 | THE MARKET 044 Client Knowledge Services

Market intelligence ICT/SOFTWARE Compiled by Enterprise Ireland’s Global Tech Market Outlook The Enterprise 2.0 User for 2011 and 2012 - Economic Profile: 2011 Information Centre team and Financial Turmoil Dims Forrester 2012 Prospects October 2011 Enterprise Ireland’s Information Centre hosts Forrester Content and collaboration September 2011 professionals rolling out Ireland’s most comprehensive collection of This analysis predicts that global enterprise 2.0 strategies and business information and is staffed by specialists IT market growth for 2011 will technologies need to understand who can aid quick and effective searches. The be 11.5% in US dollars, with a how social tools are currently currency-adjusted growth rate of being used before they map out team can help clients of Enterprise Ireland find 7.7%. But 2012 growth will slide their long-range plans. This report information on markets, products, companies, to 5.5% in US dollars and 6.5% in outlines who is using enterprise technical standards and management. local currencies. In 2012, the IT 2.0 technologies, how they’re markets of Western and Central using them and the policies Europe will have the slowest businesses need to put into place The centre subscribes to a wide range of growth, with Eastern Europe, the to support them. databases, including Middle East, and Africa and Latin America growing the fastest. European Mobile Unified • datamonitor Profiles Communications Market: Rise • Espicom Attitudes On Cloud of Smartphones and Tablets • Frost & Sullivan Computing: A 360-Degree in the Enterprise Drives the View Need for Mobile Collaboration • Mintel Forrester Frost & Sullivan November 2011 November 2011 Here is just a sample of the types of research Knowing how each role in your This market insight covers organization feels about cloud market trends, key benefits, and reports to which the centre has access. computing will affect your cloud risks, challenges and various strategy, and being mindful of the solutions related to extending attitudes they bring to your efforts unified communications and could be the difference between a collaboration to different successful implementation and a mobile devices. It also includes a catastrophic failure. Forrester data discussion of strategic options that shows that the CFO and business enterprise are facing today with leaders are the most positive on regards to their mobility strategy. the use of this technology and are encouraging developers to Consumer Cloud Services: leverage cloud services without Applications & Opportunities I&O consent. Sourcing and vendor Analysys Mason management pros don’t know August 2011 how to deal with take-it-or-leave- This report assesses the market it cloud service contracts, and potential, associated risks and security and risk professionals fear communications service providers the unknown. (CSPs) opportunities for ten types of consumer cloud service, and Strategies for Delivering it provides case studies. The Multi-Play Consumer Services ten cloud services covered are - Business Insights Report streaming music services, cloud- Business Insights based gaming, standalone video Enterprise Ireland clients may obtain market research September 2011 information from the Information Centre, free of charge, by a services, synching, backup and simple phone call or email. Alternatively, clients can visit the Telecom operators today must locker services, music locker centre or regional offices, by appointment, to view publications find ways to differentiate their services, secondary cloud video such as those listed above. brand in a market where services services, cloud-based DRM, To set up an appointment, contact the Information Desk on and service providers are often consumer web applications 01 727 2324. Please note that access to the material summarised indistinguishable. This report and remote control and home on this page is covered by copyright restrictions. Reports may not identifies the features that can monitoring. be loaned or sent out to client companies. Further details about be leveraged to provide product the Information Centre are available on www.enterpriseireland. differentiation. com/information

THE MARKET | DECEMBER/JANUARY 2012 045

FOOD, RETAIL AND CONSUMER PRODUCTS CLEANTECH, LIFE SCIENCE, CONSTRUCTION & INDUSTRIAL

Understanding the Female Personal Care Data Centre Construction European Building Millennials: The Rise of Young Regimes in Brazil - Targeting Market UK: 2011 – 2015 Automation Systems Market Adult Consumers in India value and personalized needs Analysis. Frost & Sullivan Datamonitor in a fast-growing market AMA Research August 2011 November 2011 Datamonitor October 2011 The European building This report captures key trends October 2011 Analysising the UK data centre automation systems (BAS) market and patterns that are impacting Brazil is one of the fastest-growing construction sector, this report has weathered the storm of the the lifestyles, choices, and emerging markets as far as the finds the current outlook for the recent recession and will grow behaviors of Millennials in cosmetics and personal care market over the medium term steadily throughout the next India, through key themes such industry landscape is concerned. is positive, with the shortage of seven years. The way forward for as lifestyle, media, socialising, Growth of over 30% is expected modern and efficient data centre the BAS industry will involve technology, the workplace, food for the adult personal care market space experienced at present installing technically more and drink and personal care. in Brazil through to 2014. Globally expected to drive both newbuild advanced systems in a manner the country accounts for the and replacement activity for the that is economically viable Multi-channel Retailing - UK third greatest consumption of foreseeable future. and which not only optimises Mintel beauty products after the US and energy consumption, but also November 2011 Japan, and the second greatest The Market for Minimally maximises comfort and facilitates This report looks at how consumption of male grooming Invasive Medical Devices maintenance. mobile digital devices are now products after the US. BCC Research creating new opportunities June 2011 Contract Pharmaceutical for ‘fast shopping’ – shopping Non-Alcoholic Beverages According to BCC the global Manufacturing, Research and on the move and social media in China - An analysis of market for MIS devices and Packaging: Global Markets generated shopping – which the Chinese non-alcoholic instruments was worth an BCC Research requires retailers to devise and beverages sector, including estimated $13.4 billion in 2010. August 2011 create imaginative and relevant key trends, competitive The market is expected to reach According to BCC, the global shopping environments, both landscape and new product $14.4 billion in 2011 and $21.1 market for pharmaceutical real and virtual, for today’s launches billion by 2016, a compound contract manufacturing, research technology-focused consumers. Datamonitor annual growth rate (CAGR) of and packaging was at $196.5 October 2011 7.9% between 2011 and 2016. billion in 2010 and will further Consumer Attitudes Towards This report provides an insight Cardiothoracic surgery was the grow to $217.9 billion in 2011. Luxury Brands - UK into the latest developments largest application segment for It is projected to reach $360.6 Mintel in the Chinese non-alcoholic MIS devices and equipment in billion by 2016, increasing at a November 2011 beverages sector. It provides 2010, representing 68% of the compound annual growth rate This report finds that the worlds detailed analysis of new product total market. Orthopedic surgery (CAGR) of 10.6%. This report of high-end fashion and fast developments by key players and is the fastest growing application provides trends for global as well fashion have never been so related trends. segment, with a CAGR of 11.2% as regional markets and also intertwined. A flurry of designer between 2011 and 2016, followed includes company profiles and and high street collaborations Trends In Brazil’s eCommerce by cardiothoracic surgery (8%) patent analysis. has burst onto the retail scene, Market - How Online Retail in and vascular surgery (7.8%). with shoppers jumping at the Brazil is Evolving Differently Western European Markets rare opportunity to get designer From Other Major Markets LED Revolution and Key for Endoscopy Devices pizzazz at affordable prices. Forrester Opportunities for Lighting Frost & Sullivan November 2011 Companies in the Global August 2010 MarketWatch: Personal Care Forrester forecasts that online Market This study covers the state of the Datamonitor retail revenues in Brazil, currently Frost & Sullivan European endoscopy market, November 2011 US$10 billion, will double over July 2011 examining drivers and restraints Datamonitor’s Personal Care the next five years, with growth The rapid emergence of LED for growth, pricing, distribution, MarketWatch provides monthly in Brazil’s online channel set to lighting is transforming the demand and geographical insight into the key developments far outpace growth in traditional technological and competitive trends. Following from these, in the personal care industry, retail. Yet Brazil remains a market landscape within the lighting market growth for regional and including the latest news, analysis, untapped by most global online industry. This market insight market segments are forecast. and opinion from Europe, North retailers. Local players, providing summarises the complexity of In addition, an in-depth analysis America, South and Central heavily localised payment and the current situation and gives of the competitive situation America and Asia Pacific. delivery options, dominate the a perspective on the market including vendors’ market shares landscape. outlook to support forecasting and is included, along with detailed strategic planning. profiles of the key vendors in the industry.

DECEMBER/JANUARY 2012 | THE MARKET 046 Regulatory Briefing

Trade regulations, information EC launches strategy to the public funds spent; help SMEs seize global – Creating a single virtual and negotiations opportunities gateway to information for n its new strategy ‘Small SMEs wishing to do business An update on customs compliance, trade IBusiness, Big World - a new beyond the UE borders; partnership to help SMEs – Leveraging existing EU regulations and negotiations seize global opportunities’, the policies to accelerate the European Commission presents international growth of steps to support small and European SMEs. medium sized enterprises in Member States are encouraged international markets. to adopt a similar approach The strategy recognises that and work in close cooperation SMEs face particular obstacles with the Commission in to tapping the global market strengthening the support when it comes to access to environment for European SMEs’ market information, locating international growth. possible customers and finding the right partners. In addition, Paying Taxes 2012: The they face more complex issues global picture such as compliance with foreign wC has launched Paying laws, for example mandatory PTaxes 2012, the sixth rules of contract law, customs edition of its joint annual report rules, technical regulations and with the World Bank and IFC, standards, managing technology which compares tax regimes transfer and protecting in 183 economies worldwide intellectual or industrial from a business perspective. property rights. And in dealing The study looks at corporate with such challenges, SMEs are income tax and all the taxes usually less well equipped with and contributions a domestic in-house expertise and financial medium-sized case study or human resources than larger company must pay. It considers enterprises. the full impact of all these taxes The new strategy sets out the in terms of both their tax cost following goals: and their compliance burden – Strengthening the existing on business. See www.pwc.com/ supply of support services in payingtaxes. priority markets; – Improving the governance Tackling double taxation with structure of the Enterprise special tax measures for Europe Network to allow interest and royalty payments better collaboration with he European Commission hosting organisations and Thas adopted a stakeholders. Communication on Double – Making support schemes at Taxation, highlighting where EU level more consistent to the main problems lie within raise their impact; currently the EU and outlining concrete there are more than 300 measures to address them. As support programmes at an immediate first step, the national level, often focusing Commission also adopted on one growing region only a simultaneous proposal to whilst in the meantime new improve the Interest and growth regions have emerged. Royalties Directive. This aims – Promoting clusters to reduce the instances of and networks for SME one Member State levying a internationalisation; withholding tax on a payment, – Orchestrating pan-European while another Member State Information on export duties and regulation is available in the collaboration in priority taxes the same payment. ‘Export’ section of Enterprise Ireland’s website. markets to make the most of

THE MARKET | DECEMBER/JANUARY 2012 047

Changes to Canada’s EC finds room for EU calls for support for Explanatory Notes on VAT Harmonized System improvement in online Doha development agenda invoicing rules mendments to the Schedule shopping experiences (DDA) he European Commission Ato the Customs Tariff were report based on the ccording to a new EU Thas published Explanatory published in the Canada Gazette A experiences of ‘Mystery Astudy, the economic Notes on VAT invoicing rules to on October 12, 2011. These shoppers’ from the EU-supported benefits arising from the DDA provide a better understanding amendments are the result of European Consumer Centres’ negotiations in the WTO would of VAT invoicing. The details are changes made to the Harmonized Network shows the results of lead to an increase of world available from http://ec.europa. System (HS) at the World Customs 305 purchases in 28 countries. exports by $359 billion on an eu/taxation_customs/taxation/ Organization (WCO), and are Delivery from abroad has turned annual basis. This increase is vat/traders/invoicing_rules/ effective as of January 1, 2012. The out to be reliable overall, with mainly realised through the index_en.htm Department of Finance Canada 94% of orders delivered (up liberalisation of industrial goods, has created concordance tables to from 66% in 2003) and only agriculture and services. Tax treatment of R&D facilitate the implementation of 1% of the products found to be Separately, the WTO Deputy facilities across the world these changes. See www.fin.gc.ca/ faulty. But shoppers had more Director-General Valentine Taxand has designed an fin-eng.asp problems when returning the Rugwabiza has warned that essential desk top “ready goods (as part of the EU-wide “to turn to protectionist reference” guide to assist Finally… Russia’s WTO cancellation rights). When trade measures in the current executives faced with accession negotiations shoppers returned the products circumstances would be a huge considering the tax impact of concluded under the EU ‘cooling-off’ rules, mistake triggering a game of locating, expanding or closing his November, all members the product cost was reimbursed lowest common denominator R&D facilities across the world. Tof the WTO working party in 90% of cases. However, 57% of where the loser will ultimately The guide includes a country- approved Russia’s WTO accession, shoppers had problems getting be global growth”. by-country brief introduction bringing an end to an 18 -year reimbursed for the original However, in its latest to the key incentives available. long process. According to the delivery costs, as required under monitoring report on See www.taxand.com/news/ WTO, its accession represents a EU rules. Also, some traders “protectionism”, the European publications/Taxand_Global_ major step forward for Russia and placed illegal restrictions on Commission found a lack of Guide_to_R_and_D_Tax_ its trading partners as they will returning the goods (e.g. by progress in the reduction of trade Incentives benefit from Russia’s integration telling the shoppers that they barriers within the group of G20 into the global, rules-based had no such right). countries. The report counts FTAs in focus as US moves system of trade relations. It also no less than 424 restrictive on trade deals with Korea, creates further opportunities in Europe proposes more measures to open trade since Colombia and Panama the Russian market for foreign efficient cooperation on the start of the Commission’s he growing importance of investors and exporters. Russia collecting excise duties monitoring in October 2008. Tfree trade agreements has is the EU’s third largest trading ew rules on administrative In the past 12 months alone, come under the spotlight as the partner after the US and China. Ncooperation in the field 131 new restrictions have been US Congress has approved three of excise duties, which would introduced while only 40 have new trade agreements with EU and Moldova endorse speed up the collection of the been removed. Korea, Colombia and Panama. customs cooperation duties and improve Member This follows a set of recent FTA strategic framework for States’ controls on the revenue, EU to reform its trade defence being negotiated by the EU in Abetter customs cooperation have been proposed by the instruments Asia. agreed between the EU and Commission. The new regulation he European Commission Moldova builds on three would replace the existing rules, Tannounced a review of how Serbia’s WTO accession shared priorities for the period to better reflect the introduction it supports European companies moves towards end game covering 2011 to 2014: improving of the computerised Excise in the face of unfair competition t the eleventh meeting of the cooperation and risk management Movement and Control System from across the globe. This will AWorld Trade Organisation’s at borders; fighting illegal trade; (EMCS) in April 2010 (see kick-off with a consultation Working Party on Serbia’s and stepping up investment in IP/10/401). Currently, part of the process with stakeholders, accession to the WTO, members customs modernisation. information exchange between including producers, supported an early accession of Member States on the movement importers, exporters, business Serbia and welcomed its progress WTO preliminary ruling on of excise products (alcohol, organisations, EU capitals and in the implementation of new electronic payments - China tobacco and energy products) is the European Parliament as legislation to comply with WTO he WTO panel has circulated still done manually. The draft well as independent experts on rules. Ta preliminary ruling in regulation will now be discussed trade defence. The delivery of China’s electronic payment by the Council and the European the concrete reform proposal is services dispute. See www.wto. Parliament, with a view to its expected in autumn 2012. org/english/news_e/news11_e/ quick adoption. ds413pre_30sep11_e.htm

DECEMBER/JANUARY 2012 | THE MARKET 048 Good Reading By Lucille Redmond

The business model is a fundamental Getting core of what will make or break a company. Lucille creative Redmond looks at three excellent books that put with business model generation under the microscope. business models

Batman and Indiana Jones. – long-tailed companies Then in 2005, LEGO began like LEGO and other niche experimenting with user- content providers; unbundled generated content, introducing corporations like Swiss banks; its online LEGO Factory, where multi-sided platforms which customers can order their own bring together distinct but custom-designed kits; again, interdependent groups of they switched the business customers, like Skype or model to one that suited a new Google – are wonderfully age. brought to life by the book’s With this mass design, which uses graphs, customisation Pigneur pictures, handwritten and ENERATIONS and Osterwalder write, the printed text, colour and form of children grew company entered ‘Long Tail’ so that your eye goes zinging up playing with territory – a long tail company around the page as if on a Ginterlocking LEGO being one that sells a large website. bricks from the time of the number of niche products, The book excitingly covers company’s foundation in with each single one selling what a business model is, and 1949. The Danish company relatively infrequently. readers – I almost said ‘users’ had found the perfect business Osterwalder, whose theories – can deploy a tool called the model for its time: define the are used in multinationals ‘canvas’ to construct their own best ever toy and sell millions. such as 3M, Ericsson, Deloitte model. This is used to break But over the years, and Telenor, and Pigneur, a down the patterns within the Alexander Osterwalder and professor of management models, and to design, then Yves Pigneur write in Business systems at the University evaluate the model you have Model Generation, competition of Lausanne, have set out to chosen. in the toy industry forced Lego explain the disruptive new The book is a visual treat, to change and seek innovative business models – much and for anyone running a paths to growth. LEGO started imitated but little understood business, or even dreaming up licensing the rights to use – that are changing industries. a business, it will spark ideas characters from blockbuster Their insight on the and help to refine them into movies such as Star Wars, variation within industries the most focused model.

THE MARKET | DECEMBER/JANUARY 2012 049

In his Open Services economies will overheat: at you should “think about your In conclusion, he makes Innovation (follow-up to his time of writing, China had business, whether a product the point that globalisation, best-seller Open Innovation), 98 billionaires and India or a service, as providing a often seen as a threat because it Henry Chesbrough, professor 58. Meanwhile, Western complete experience for your creates more competition, also and executive director of the economies are increasing customers”. expands our market around Center for Open Innovation spending to stimulate growth, Innovators must “co-create the world: the emergence of a at Berkeley’s Haas School of while tax receipts decline,– a with customers”, like the billion new consumers into the Business, starts out with a story classic vicious circle. personal finance software global market is “a genuinely about IBM. The solution for the West, maker Intuit, which brings its exciting prospect”. Paul Horn, IBM’s senior according to Chesbrough, is customers in on the innovation Open Services Innovation vice president of research, for Western companies to offer process, he writes. deserves to be as influential as told Chesbrough that the their customers a dedicated In this dense and complex its predecessor. biggest problem today for the service,– bearing in mind book, Chesbrough uses Management models company’s research branch marketing guru Tom Levitt’s familiar examples to explain provide the framework to stemmed from the fact that its statement that customers don’t his open services innovation know if your business strategy model had changed. want to buy a power drill: it’s concept. One is Ryanair, is going to work. In Key “Research activities were the holes they’re after. which “unbundled the various Management Models Berenschot geared to support a company In one example of how services they provide during consultants and authors that made computer products: growth and competitive a flight, such as check-in... Marcel Van Assen, Gerben Van systems, servers, mainframes advantage can come about drinks, food...”, allowing den Berg and Paul Pietersma and software.” But most of through services, Chesbrough Ryanair to charge low ticket offer a guided tour to over 60 IBM’s revenues now come from cites the Razr and the iPhone. prices and get more money management models. services, not from products. Motorola’s 2004 Razr was a from its passengers for beautiful phone, whose “cool ancillary services. design made it a hot product”. Unusually, models Motorola sold over 50 million include some from emerging Razrs. economies, like Shaan’Xi The iPhone, introduced in of Xian, China, which is 2007, had a sleek design, an moving from making turbo elegant user interface, and a compressors and blowers to novel touch screen. But this offering the kind of technology wasn’t what made it take over development and consulting the market. It was the fact that services sold by its Western the iPhone wasn’t just a mobile competitors. phone, it was a platform. In the future, Chesbrough “It was a system that writes, universities are our Chesbrough’s point is that attracted many third-party best source of innovation For each model, the authors virtually all successful Western applications and services to research. “Since we now live in introduce the concept, then companies today are service provide users with a wide range a services-based economy, it is suggest when it is useful to providers. Product lifespan is of experiences with a single disconcerting that universities consider this model (offshoring shortening, and products are device.” Millions of apps now are not focused on the vital and outsourcing, the EFQM being made all over the world, exist, offering undreamed- services sector in their research excellence model, Greiner’s making it increasingly difficult of services to the phone’s activity. At a time when growth model, and so on). For for companies to make a living users: geocaching, first aid, concerns about outsourcing each model, they then offer an through production – the dictionaries, music identifiers. and offshoring white-collar jobs explanation – “the big picture” combination of forces known Chesbrough advises that all and economic development – plus charts and closely- as the commodity trap. entrepreneurs think of their are raising alarms, a field that reasoned information and Brazil, China and India company as a services business. could assist in understanding opinion on its use. are growing so fast that Rather than concentrating how to add value and jobs goes The book has one problem: they themselves fear their on innovating new products, unexplored.” its tiny print, which makes it no pleasure to read. But the Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers material is sound: it would be by Alexander Osterwalder; Yves Pigneur and Tim Clark, published by Wiley worth putting the sharpest- Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era by Henry Chesbrough, published by Jossey Bass eyed young executive on the Key Management Models: The 60+ Models Every Manager Needs to Know job to read this and précis its by Marcel Van Assen, Gerben Van den Berg and Paul Pietersma, published by Financial Times/Prentice Hall points for your company’s use.

DECEMBER/JANUARY 2012 | THE MARKET 050 Travel News United Airlines to launch Dublin-Washington, D.C., non-stop service

he US’s administrative capital is set to get a lot closer for business Ttravellers when United Airlines launches a daily non-stop service to its Washington, D.C. hub, Dulles International Airport, on June 8, 2012. As the capital of the United States, Washington, D.C. is home to the federal government and is the fourth largest metropolitan Knock and economyin the US, with steady growth in the areas of education, finance and scientific research that attract businesses worldwide. Kerry get new Washington also provides easy access to the states of Virginia and services, but Maryland, and United’s Washington Dulles hub offers non-stop services to more than 80 cities across the Americas. Galway loses The Washington flight, CO127/UA127, will depart Dublin daily at 11:25 a.m. and arrive at Washington/Dulles at 2:25 p.m. local time the out SAS increase same day. The return flight, CO126/UA126, will depart Washington/ Dulles daily at 10:02 p.m. and arrive at Dublin at 9:55 a.m. the ootball manager Alex capacity next day. The service will be operated by a Boeing 757-200 aircraft, FFerguson kicked off Flybe’s featuring 175 seats, with 16 in BusinessFirst and 159 in economy. inaugural Manchester to Knock flight this October. Flights from from Dublin United flight attendant, Bridget De la Riva, Yvonne Muldoon, United’s Sales Manager Ireland and Northern Ireland, and Ireland West Airport Knock will for 2012 Flight attendant Carolina Valencia. operate four times a week on Mondays, Wednesdays, Fridays candinavian Airlines is to and Sundays, with one-way fares Sincrease capacity on its three from £29.99, including taxes and non-stop routes from Dublin to charges. Copenhagen, Stockholm and Oslo Meanwhile, Ryanair has for 2012. announced that it will open The SAS schedule will four new routes from Knock to increase as follows: Barcelona (Girona), Frankfurt – Dublin - Stockholm up to (Hahn), Milan (Bergamo) and 5 flights a week with a 9% Paris (Beauvais) from April 2012. capacity increase Kerry is also to benefit as – Dublin - Oslo up to 4 flights Aer Arann Regional launched its a week with a 7% capacity Kerry-Dublin twice-a-day service, increase with return flights starting from – Dublin - Copenhagen up to €70, including taxes. 13 flights a week with a 4% Reserved seating on However, the airline has capacity increase suspended its services at Galway Furthermore, the airline has all Ryanair routes from Airport for the winter season. announced that passengers can The affected Galway routes are now use their mobile phones as January 2012 the Aer Arann Regional flights to a boarding pass at Dublin airport. London Southend, London Luton, Once passengers have checked yanair is to extend its reserved seating service to all its routes, Manchester, Edinburgh and in via text or through the SAS Rafter trialling it on over 100 routes since May. The pre-booked Waterford. Mobile Portal, they will receive service, which will be bookable on all routes from January 10, 2012, “In the months ahead a mobile boarding pass direct to costs €10 (each way) and includes priority boarding. The optional Aer Arann intends to work their phone. This includes a 2D service allows passengers to pre-reserve seats in the front two rows, with Galway Airport with the bar code, the flight number and for a quick getaway on arrival, or in over-wing rows (16 and 17), intention that a strategy will be seat, as well as the departure which provide greater legroom. Ryanair will continue to offer its put in place for the re-launch and arrival time. Passengers can Priority Boarding service for €5, with priority and reserved seating of services from Galway at the then proceed straight to security passengers allowed to board the aircraft first. Those travelling with beginning of the summer season at the airport, without having to passengers under 16 years of age can reserve seats in row two only, in April,” Aer Arann CEO Paul print out boarding passes. the airline says, due to safety restrictions. Schutz said.

THE MARKET | DECEMBER/JANUARY 2012 051

FROM THE AIRPORT TO CITY GUIDE well), Tamka 43 (which also THE CITY: operates as a café and a wine Warsaw Frederic Chopin bar) offers a weekly changing Airport is approximately 10km menu that is presided over by south of the city centre. The an intuitive, skilled team of centre is accessed by bus and chefs. Dishes include lobster taxi; bus #175 and #188 operate with epice sauce, and sturgeon between the airport and city served with Japanese turnip. from early morning to late www.tamka43.pl (and there is also a night bus, N32). It is advised that you use THREE THINGS TO DO IF taxi companies recommended YOU HAVE A FEW HOURS by the airport authorities, TO SPARE: as taxi drivers soliciting for Culture: The Chopin Museum business inside the terminal is open just over a year (it are known to overcharge. was inaugurated to celebrate the 200th anniversary of the SLEEP: composer’s birth), and is based 1st Choice: Following major in the Baroque Ostrogski restoration, Le Regina, set Palace. A very fine building right on the cobbles of the Old that is testament to the man’s Town, is now one of the most genius. www.chopin.museum stylish places in the city to rest your head. Deluxe rooms Shopping: If you have a boast either large balconies or notion to buy some presents private gardens. www.leregina. yet don’t wish to visit the usual com High Street-type suspects, try an hour or two at the Bazar Na 2nd Choice: InterContinental Kole, an outdoor flea market Warszawa is located directly that is held just outside the across from the city’s Palace city each Sunday morning of Culture and Science, and from 7am. Accessed via the is a premium example of the Kolo trams. business/leisure hotel. It even has corporate apartments with Art: After a short bus journey fully equipped kitchenettes. WARSAW (on either the 117 or 519 www.intercontinental.com/ from the central railway warsaw By Tony Clayton-Lea station) you’ll find yourself in Wilanow, where the Poster EAT: The largest city in Poland, Warsaw is Museum, Wilanow Palace, Lunch: For close on twenty known as the ‘Phoenix City’, due to its houses over 30,000 Polish film years, The Belvedere, Lazienki noble recovery from extensive damage and and theatre posters from the Park, has been one of the city’s destruction during World War 2. This sense past several decades. www. must-visit places to dine. At of fortitude permeates throughout the city, postermuseum.pl least one of the recipes here as it experiences the biggest economic boom (Beef Tenderloin with boletus) of its history. Among many other notable This sense of links back to ancient royalty. listings, Warsaw was ranked 8th out of 65 Other impressive fare on the fortitude permeates cities on MasterCard’s Emerging Markets menu includes terrine of Index (2008). Added to this innate work ethic throughout the city, salmon and turbot, and baked oysters. www.belvedere.com.pl (the city has the largest concentration of as it experiences high-tech industries in Poland) is the fact the biggest Dinner: Effortlessly the city’s that next year, Warsaw is host to the opening economic boom of most elegant restaurant (it is match of the UEFA Euro 2012 competition. In designed and lit particularly football as in business: bring it on! its history.

DECEMBER/JANUARY 2012 | THE MARKET 052 The back page

ech people love stories calls surprising obviousness. They about breakthrough feel at once fresh and familiar. It’s this innovations – gadgets or combination that lets a new gizmo take technologies that emerge off quickly and dominate. suddenly and take over, The iPhone was designed by Apple Tlike the iPhone or Twitter. Indeed, engineers who had learned plenty there’s a whole industry of pundits, from successes and failures in the PDA investors and websites trying feverishly market, including, of course, their to predict the Next New Big Thing. own ill-fated Newton. By the time they The assumption is that breakthroughs added those pinch gestures, they’d are inherently surprising, so it takes made the obvious freshly surprising. special genius to spot one coming. If you want to spot the next thing, But that’s not how innovation Buxton argues, you just need to go really works, if you ask Bill Buxton. ‘prospecting and mining’ – looking for A pioneer in computer graphics concepts that are already successful who is now a principal researcher at in one field so you can bring them Microsoft, he thinks paradigm-busting to another. Buxton particularly inventions are easy to see coming recommends prospecting the musical because they’re already lying there, world, because musicians invent close at hand. “Anything that’s going gadgets and interfaces that are robust to have an impact over the next decade and sturdy yet creatively cool – like – that’s going to be a billion-dollar guitar pedals. When a team led by industry – has always already been Buxton developed the interface for around for 10 years,” he says. Buxton Maya, a 3-D design tool, he heavily calls this the ‘long nose’ theory of plundered music hardware and innovation: Big ideas poke their noses software. “There’s normal spec, there’s into the world very slowly, easing military spec, and there’s rock spec,” gradually into view. he jokes. Can this actually be true? Buxton OK: If it’s so easy to spy the future, points to exhibit A, the pinch-and- what are Buxton’s predictions? He zoom gesture that Apple introduced thinks tablet computers, pen-based on the iPhone. It seemed like a bolt interfaces, and omnipresent e-ink are out of the blue, but as Buxton notes, going to dominate the next decade. computer designer Myron Krueger Those inventions have been slowly pioneered the pinch gesture on his stress-tested for 20 years now, and experimental Video Place system they’re finally ready. in 1983. Other engineers began Using a ‘long nose’ analysis, experimenting with it, and companies I have a prediction of my own. I like Wacom introduced tablets that bet electric vehicles are going to let designers use a pen and a puck become huge – specifically, electric simultaneously to manipulate images bicycles. Battery technology has onscreen. By the time the iPhone rolled been improving for decades, and the around, ‘pinch’ was a robust, well- planet is urbanising rapidly. The nose understood concept. is already poking out: Electric bikes A more recent example is the are incredibly popular in China and Microsoft Kinect. Sure, the idea of becoming common in the US among controlling software just by waving Looking for The Next Big takeout/delivery people, who haul your body seems wild and new. But as them inside their shops each night to Thing? The chances are that Buxton says, engineers have long been plug them in. (Pennies per charge, and perfecting motion-sensing for alarm it has been evolving and no complicated rewiring of the grid systems and for automatic doors in developing right under your necessary.) I predict a design firm will grocery stores. We’ve been controlling nose for at least the last introduce the iPhone of electric bikes software with our bodies for years, just decade. Innovation comes and whoa: It’ll seem revolutionary! in a different domain. dropping slowly, writes But it won’t be. Evolution trumps This is why truly billion-dollar Clive Thompson. revolution, and things happen slowly. breakthrough ideas have what Buxton The nose knows.

THE MARKET | DECEMBER/JANUARY 2012 Enterprise Ireland International Network

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