Recession, what recession? Things are flying for many industries as some businesses are thriving, finds Roisin Burke
'People are looking for better value on essential products that are cheaper, on brands they know'
While some traditional businesses such as HMV or Blacktie have been poleaxed, some sectors of Irish business are absolutely flying. Capitalism is, after all, the creation and destruction of businesses.
There's a genuine air of positivity surging through parts of corporate Ireland in big and small firms as shrewd and smart entrepreneurs are starting to rev up through the gears.
New companies are winning market share by offering cheaper innovative products, better services or through selling on a wider global market. Despite the weak domestic economy, the future is looking terrificly bright for some sectors of Irish business.
Dealz boss Jim McCarthy thinks Irish shoppers have been royally screwed by the multiples.
"The Irish consumer has had a really tough deal in the past two or three years," the chief executive of Ireland's newest discount chain says.
"While they've started to compete more, prices at Tesco and Dunnes have been artificially high in our view. People are looking for better value on essential products that are cheaper, on brands they know. And quality own label has had an upsurge too."
Dealz' selling point is its "single price formula" – the vast majority of products cost €1.49 each all the time. "What customers get with us is lower prices, but also prices that are always the same, every day, every week, every month. They can budget and have confidence with no smoke and mirrors," says McCarthy.
Owned by the British Poundworld group, Dealz opened 25 stores in Ireland in a year and will double that number between now and March 2014, adding 300 jobs here and a €3m plus investment in the economy.
"We think we can profitably have 50 stores in total," McCarthy says. Being able to haggle for better rent deals to get 'just off pitch' – retail speak for those stores located on sites off the main shopping streets – has helped drive rapid rollout.
Meanwhile German discount grocery giants Aldi and Lidl have been annexing more and more Irish retail territory, according to Kantar Worldpanel. In 2006, the duo shared €516m in grocery sales in Ireland. By 2012 that more than doubled to €1.05bn. "Likewise, their market share has doubled, from 6 per cent in 2006 to almost 12 per cent now," says Kantar's David Berry. Last year Aldi expanded particularly aggressively, increasing its number of stores by 25 per cent.
And its not just bargain bread and toothpaste that people are after. Cheap but trendy clothing name Penneys recently reported sales 25 per cent higher than expected in the Irish market.
Oil and engineering services
Clonmel-based Kentz recruits much of its 14,000 staff from here, to provide services for oil and gas explorer clients like Exxon and Chevron dotted around the globe. The company has a €10bn order pipeline.
"Irrespective of negative headlines and poor GDP growth in countries around the world, our client base continues to spend and provide Kentz with repeat business," says CEO Chris Brown. "We are growing significantly and have quite a bit of bidding activity going on. We have new operations in Columbia to add to our core markets in South Africa, Qatar, Abu Dhabi, Saudi Arabia and ex-Soviet states."
Closer to home Kentz is tracking what's happening for the likes of Providence Resources and Fastnet off the Irish coastline with interest. "We would look to bid and win any business there," says Brown. "We're going to continue to grow and grow in double digits and hopefully grow the workforce."
A jumbo-sized €100bn worth of aircraft leasing business is done out of Ireland.
"A lot of Tony Ryan's Guinness Peat Aviation people set up their own companies and created a big infrastructure skillset here," Tom Woods, aviation leasing partner with KPMG says. "Then the government introduced very favourable double tax treaty networks with other countries.
"Ireland is the preferred jurisdiction, with over half of the world's leased aircraft managed out of here."
The growth market sweetspot is Asia, and the two biggest Chinese banks, ICBC and China Development Bank, have established leasing operations in Ireland.
Ireland has a thriving cluster of pay-online operators, again owing a lot to the mobile device boom.
"Although the retail sector has been reasonably flat since 2008, online trading has grown," explains Omnipay CTO and shareholder Pat Clarke. "Some of our clients are heading for transaction activity growth of 20-30 per cent."
Omnipay processes around €55bn worth of transactions a year and is hiring and expanding this year.
Children and teenagers who should know better want to order characters for online games like Moshi Monsters, people are increasingly downloading movies and music, you can hire a taxi using an app – all underlaid with credit card transactions. And now, increasingly, mobile phone transactions.
"There are so many new channels for displacing cash," says Clarke. "Mobile transactions will become much more prevalent, especially for low value payments – a trip to Centra or McDonald's, where you'll soon be able to flash your mobile to pay."
PayPal, FexCo, SumUp, Realex and others are part of "our ecosystem of payment firms. International clients see us very much as a hub."
The mobile device revolution that led to a global consumer electronics boom is money in the bank for Ireland Inc.
"Worldwide demand is driving tech jobs growth in customer support, ad platform services, marketing, mobile payments and software in Ireland," says Zartis boss and software millionaire John Dennehy, who thinks there could be demand to hire for 4,000 jobs in this sector.
Dennehy has spent the last year working with recruitment teams at Google, Twitter and Facebook to set up a tech industry-led hire website, makeitinireland.com. "It's great to go to these companies and see it's as if the recession isn't happening – it's positive, there's a focus on growth."
Indigenous tech stuff is playing an absolute blinder too. Digital greeting card company Cleverbug has launched its app in the €20bn US market. Social media recruiter Skillpages has garnered 10 million users, with about a million more joining each month. It has opened a Silicon Valley office to drive expansion in the US.
Okay so there's the patent cliff, with its effect still not fully quantified for big pharmas here. But medical device firms continue to do really well.
Exports are worth €7.3bn, with 250 companies and 25,000 people employed in the area. Half the companies in the sector are home-grown Irish SMEs.
During 2012 those raising funding or hiring or both included Cook Medical, Merit Medical, Technopath Manufacturing and Stryker Ireland.
"Last year has been yet another strong year for the dynamic med-tech industry," said Sharon Higgins, director of the Irish Medical Devices Association. "Exports are up over 13 per cent to €5.9bn for the first three quarters of 2012. Over €200m in investment and more than 1,500 jobs have been announced over the past two years."
The new deal just inked on Thursday means Ireland is set to become a major supplier of wind energy to Britain.
Eddie O'Connor's Mainstream Renewable Power is perfectly poised to take advantage of this potential.
Mainstream proposed to build a huge €6bn 'energy bridge' between Britain and Ireland, an undersea energy transporting cable. It has early stage agreements for finance with Portugal's REN, a power company where China's state national grid also has a share.
The company also has massive projects under way in South Africa, Chile, Canada and the US.
An Irish animated short has just won a top award at the Sundance Film Festival and Disney has announced record ratings for Doc McStuffins, an animated children's series produced by Oscar-nominated Brown Bag Films.
Disney has commissioned another Brown Bag animation starring former Spice Girl Geri Halliwell.
In TV, Mrs Brown's Boys scored a big audience in Britain, there's been Love/ Hate's success and Sky's commissioning more of Chris O'Dowd's Moone Boy.
In film there was Martin McDonagh's well-received Seven Psychopaths and Lenny Abrahamson's What Richard Did. Abrahamson is making a €5m budget movie starring Michael Fassbender and Maggie Gyllenhaal.
The audio visual industry here is worth over €550m, employs 6,000 and supports over 500 SMEs.
Food & Ingredients
Food and drink exports topped €9bn last year. The horse burger debacle aside, meat and livestock was the strongest performer, worth €3bn.
In total 77 per cent of food and drink exporters saw sales rise in 2012 and they expect more of the same this year.
Organic yoghurt maker Glenisk plans to expand by 30 per cent and Tayto-making Largo Foods is hiring, having grown exports by 20 per cent in the last year.
In a sign of confidence in the food market, Glanbia was able to raise €470m – 50 per cent more debt than it planned to – from banks.
Sunday Indo Business