Saturday 21 July 2018

Coillte revamps its UK operations to meet Brexit threat

Coillte chief executive Fergal Leamy. Photo: Eason Creative Photography
Coillte chief executive Fergal Leamy. Photo: Eason Creative Photography
Colm Kelpie

Colm Kelpie

Coillte has restructured its UK office and installed a new commercial managing director there as the agency has taken "significant steps" to prepare itself for Brexit, its chief executive has said.

The commercial semi-State's financial performance is also growing strongly, with Ebitda (earnings before interest, tax, depreciation and amortisation) surging to €17m in the first two months of this year, compared with €10m in the same period in 2017.

The forestry agency said its 2017 dividend to the State was around 24pc higher than its 2016 figure, which totalled €6.2m, according to Coillte boss Fergal Leamy.

Mr Leamy said Brexit will be a "significant challenge", but he said the UK will remain a dominant market for Coillte.

He said staffing at Coillte's UK office in Dartford has been fractionally increased, with staff from its offices in Germany and the Netherlands transferred there.

"We've made some significant steps in preparation for Brexit," Mr Leamy told the Irish Independent. "We've strengthened our UK office in Dartford. We have restructured that, and the presence it has in the market is much greater."

Coillte said it has appointed a new commercial managing director to the Dartford office, and it has also brought its Germany and Dutch offices into the UK operation.

"The majority of our business is in the UK in terms of our customers and we want to be seen as much a UK-based business as possible," said Mr Leamy.

"We essentially had offices that were doing call centre jobs anyway in terms of servicing those customers, so we brought German nationals and Dutch nationals into the UK to manage that piece. It doesn't really matter where they were but what it does do is give a greater presence in the UK and allows a much greater servicing of our UK customers as if we were a home-grown business."

Mr Leamy said the organisation's contingency plans also include the potential for having warehousing in the UK in the event of a hard Brexit, but he insisted that no decision has been made.

"We won't pull the trigger until we have to," he said, adding that the ideal answer is to have "minimal" friction between the two jurisdictions.

"But we are clearly preparing for it. We have a couple of options that are in existence that would work for us. So we would have the ability to move reasonably quickly if we had to."

Mr Leamy said that even with the preparations, Brexit will pose a significant challenge.

"The UK will always be a huge market for us. It is the second-largest importer of timber in the world and you can't change that overnight," he said.

"In our forestry business, there is the added complication that our standards are so aligned with the UK for timber. It simply is not a choice to go to merchants in France and say 'stock our product', because it doesn't meet their specifications.

"For us, it is about how do we embrace the UK in as much a way as possible, to ensure that we are present there and in there?"

Mr Leamy said he did not expect Coillte's business to be overly affected in the long term, with the UK remaining a dominant market.

"I'd say in five or 10 years' time it's hard to see it being dramatically different to [what it is now]."

He said that while the company focuses largely on east-west movements, a border on the island would impact Coillte. He said wood products supplier Balcas, in Co Fermanagh, is a significant Coillte customer, with trucks crossing the Border thousands of times a year.

"We have a nursery in Killygordon, in Donegal. It services the North, it doesn't do anything else," Mr Leamy said. "We are concerned about the ability to move that product across."

Irish Independent

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