Saturday 20 January 2018

Interview: 'We assumed nothing would change - and suddenly everything has to change'

Denis Brosnan has been a titan of Irish business for decades, and shows no sign of stopping

Denis Brosnan: 'futile to advertise'
Denis Brosnan: 'futile to advertise'
Dearbhail McDonald

Dearbhail McDonald

C-Suite interviews can be daunting, for interviewer and interviewee alike. And, as with all new encounters, first impressions count.

Five minutes late for my first meeting with Denis Brosnan, the legendary founder and former chairman of the Kerry Group, I apologise profusely for the driving rain that slowed down traffic on the motorway and the challenge of parking in his busy adopted city of Limerick which is, under his watch, undergoing a major revival.

I curse the poor first impression I've made - I did leave 30 minutes early to avoid traffic - but Brosnan is having none of it.

The 72-year-old businessman quickly calculates that owing to the drive from Dublin, I had no time for lunch and insists on a mini-banquet of food and a hot cup of tea before the formalities begin.

It's a small but much appreciated gesture that drives home the advice I had received from many before I met Brosnan: that while he is a consummate professional, he is a gentleman first.

Brosnan, who stepped down as chairman of the Kerry Group in 2003 and has been attempting to extract himself from business for several years now, agrees to meet me on the occasion of his appointment as chairman of Irish agri-tech business BHSL.

BHSL, which this year booked €50m in sales (primarily to the UK) is about to embark on a global expansion plan after securing worldwide patents to turn poultry manure into fuel for energy generation on farms.

Last July BHSL, whose system is the only one that meets both US and EU environmental regulations, teamed up with the US state of Maryland whose lawmakers have engaged in epic clashes with the poultry industry over toxic chicken manure used as fertiliser by farmers which is polluting its water supplies.

Maryland is one of six US states that surround Chesapeake Bay. It's a region heavily populated by massive chicken farms - raising around 100,000 egg-laying chickens each - where environmentalists have long argued that agriculture, including chicken farming, is the single largest source of pollution.

The $3m pilot tie-in between Maryland and BHSL is part of the Limerick company's bid to target what it conservatively estimates to be a $500m market in the US, where around 9bn chickens are consumed a year.

It is also eyeing sales to other export markets next year including New Zealand, Poland, Germany, Holland, Italy and Saudi Arabia.

Brosnan, a family friend of brothers Declan and Jack O'Connor who lead BHSL, thought twice about the invitation to chair the company.

"I had been retired since 2013, I work on our family businesses, I had no intention of going back" says Brosnan, laughing at himself. "My first answer was 'I'm not going back to work'. It was easy for me to do it [commercialise BHSL's offering] - it was a case of did I have the will to go back there and do it again?"

But the temptation proved too much and Brosnan went to work, enticing half a dozen senior executives about to retire from Kerry to join BHSL in senior roles.

He also persuaded a series of heavy hitters to join him on the board.

It's not every SME that can count former ESB chief executive Padraig McManus, corporate adviser David Hickey (formerly of KPMG and HSBC), as well as Fidelma Macken, the retired Supreme Court and European Court of Justice judge, on its board.

But it's a mark of Brosnan's determination to see the company succeed. The recruitment of former Kerry colleagues, including Michael Kearney and Michael Wren, was key to Brosnan's decision and to ensuring BHSL protects and exploits its first-mover advantage.

Brosnan led Kerry into many global markets, making it the first Irish company in places like America, Mexico, Malaysia and China. So he knows it's vital to secure such an advantage.

"Kerry is one of the biggest poultry suppliers in the world and knows every poultry processor in the world.

"So that side is easy for us. But we must go global quickly, as other companies will catch up with us someday."

To fuel its global sales presence, BHSL has launched a process to raise at least €7m in new equity, appointing corporate finance firm, Focus Consulting, to lead the capital raise.

Brosnan pauses when I ask if he is a fan, of sorts, of the private equity fund phenomenon that is engulfing Irish businesses as investors eye returns on Ireland's recovery.

"The answer is the cost of the money," he says diplomatically.

"I'm not looking out every day to find the next private equity fund to come and help.

"I probably come from the old school, which meant giving away as little equity as you can and trying to borrow as much money as the company can afford.

"In the present fundraising focus, if it's equity initially coming from... call it the Irish people who want to invest, that would be great. If they have to get someone from the private equity sector, so be it. But it wouldn't be our first port of call."

Inevitably our conversation drifts to Brexit: he was surprised and upset about the decision and worries about further contagion.

"We assumed nothing would change - and suddenly everything has to change," he says, somewhat mournfully. "We don't know the outcome of a hard Brexit or a soft Brexit or whatever it is. Ireland will suffer quite a lot and will suffer a lot more than we have seen to date.

"It really depends on what type of Brexit is chosen - and we have very little say on that.

"That isn't for us to decide. And the most horrific part - leaving aside issues of border and passport controls - is the effect on sterling itself and where it's leading to."

His advice for the Government? He's not sure if he knows what he would do, but cautions it to run three or four different scenarios - and be prepared for the one that's going to happen.

Brosnan is mindful of the impact of Brexit on companies such as BHSL, but was accustomed to currency crises during his long tenure at Kerry.

Brosnan, who lives with his wife Joan on their stud farm in the village of Croom outside Limerick, is struck by the drastic changes to rural Ireland, where small farmers are disappearing and towns and villages have suffered as margins tighten and the EU reduces or eliminates subsidies to food producers.

"Some people will say that is just natural evolution, so there is no point in going back and crying for what was there 20 or 30 years back.

"Perhaps it is natural evolution, but it has given us a rapidly-changing Ireland where fewer people want to work in the sector and everybody wants to live in a city."

Brosnan is intrinsically linked to Kerry, his native county as well as the eponymous plc which famously commenced life as a co-op run from a muddy caravan before it became a global food behemoth.

But it is Limerick which may claim his greatest legacy.

Brosnan was at home in Croom in 2009 when he received a call from former Tanaiste and then Minister for Enterprise Mary Coughlan asking for his help after almost 2,000 people lost their jobs at Dell, precipitating overall job losses of 5,000 in the city and county.

Brosnan and his nine strong team identified a series of structural issues such as the duplication of councils and State agencies as a barrier to Limerick's recovery and set about introducing a series of reforms to help revive the city's fortunes - and reputation.

He has high praise for the five ministers and various governments whose commitment to Limerick was consistent, even if their tenure wasn't.

"Each minister and each of the different governments subscribed to everything we were saying and that has changed Limerick," he says, adding "we are now in the last stage of the big change of Limerick".

That last stage is Limerick 2030, a special purpose vehicle tasked with delivering €500m worth of investment structure across the city formerly dubbed with the hackneyed 'Stab City' moniker.

Brosnan, who is executive chairman of the SPV, lights up as he describes its key projects which will see the redevelopment of 1.4m sqft of prime real estate across four sites including the former 'hanging gardens' where flowers were once hung, the 550,000 sqft Opera Site, the Cleeves Riverside Campus, as well as a new film hub in Castletroy.

The SPV is backed by the Irish Strategic Investment Fund and the European Investment Bank.

"We also have support from the European Bank for Reconstruction and Development, which is probably even more appropriate and has the designation for the reconstruction of cities that need to be given a lift up in the world again," adds Brosnan, who this month celebrates 30 years living in Limerick.

Brosnan is confident that the project will create almost 8,000 jobs and will rival Dublin for foreign direct investment and any other post-Brexit bounce.

Beyond BHSL and bringing Limerick to new heights, Brosnan is busy attending to family business and supporting his four adult children in their own corporate adventures.

He spends a week a month in the US with his daughter Aimee and her husband Geoff in their IT business, whose technology helps military personnel find work in the civilian world, while his son Cathal manages Croom House stud.

Brosnan also provides support for his daughter Mary and son Paul in London who are managing a series of nurseries and schools for children with emotional difficulties ­- a business he helped set up when he secured a management buyout after he extricated himself from Barchester, one of the largest healthcare companies in the UK.

"Everyone remembers Barchester," says Brosnan, who stepped down as chairman of the nursing home company backed by JP McManus, Dermot Desmond and John Magnier in 2012.

Health is Brosnan's wealth.

"I have never been in a hospital other than to visit people," he says when I ask if there is any chance of him slowing down.

"I actually enjoy getting up in the morning and working."

The former chairman of Horse Racing Ireland also loves horses, and has just nipped back from a flying visit to Ascot when we meet.

As he reflects on his life in business, Brosnan, who says he stays in touch with his former Kerry colleagues, says that Ireland's economy has been transformed by technology.

"Ireland has changed. In our day, business was the CRHs, the Smurfits, the Kerrys, Independent Newspapers and Waterford Wedgwood.

"In the Kerry days, you left Ireland and came back two or three weeks later and then you were at home for a few weeks and then you left again and did the same thing over again in a different place.

"As of now, I get to pick and choose."

In my spare time I stay down at the farm

In my time off I ….

"Usually I would either stay on the farm - or I might go racing."

The last book I read was.....

"A Life Worth Living - Michael Smurfit's autobiography."

The last great meal I had was….

"The Riverside Restaurant in Croom, with UK visitors two weeks ago."

If not in business, I might have been….

"I've never had another life, or time to think about it since I graduated from UCC in 1967."

Sunday Indo Business

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