Hugh Morgan spent the best part of 10 months on the road last year.

The founder and Managing Director of the Killean-based Morgan Fuel Group racked up the miles as part of a push to expand the network of filling stations across Europe which house terminals that accept his company’s fuel card. During that 10-month spell he estimates he was taking up to six flights a week to meet with potential clients.

“I would sometimes be getting up at a hotel in the morning and not knowing what country or city I was in. It was hard graft but if it has to be done I’ll do it,” he told Ulster Business.

Clearly the hard work has paid off. The Morgan Fuel Card is now accepted in 4000 filling stations across 14 European countries. The latest addition to the network is a chain of filling stations in Sweden and the business hopes to soon announce its first stations in the Czech Republic, Slovakia and Hungary.

The card offers hauliers and commercial fleet operators fuel purchasing and on-line fuel management services across Ireland, the UK and Europe and is currently used to purchase fuel by over 20,000 commercial drivers. The business now employs more than 80 people on the island of Ireland, France and Hungary and has turnover of around £150m.

It is a far cry from where Morgan started out. After leaving school at 16 he worked as a truck driver and then in 1981 bought a petrol station on the border. From there he began to develop the idea of a network of 24 hour, unmanned, multi-lingual fuel terminals. Today, Morgan Fuels is the only independent fuel card provider with no tie in to the major oil companies.

“It is a concept that works everywhere. The network can keep growing, we can keep adding additional sites, and we have the ability to partner with anyone in the fuel industry,” explains Hugh.

There are however, no rigid expansion plans regarding where will be next, because opportunities often come up where least expected, he says.

“As we develop the business we will be looking for opportunities and if it’s the right one we will take it. We’re not afraid to take big decisions. We can make them there and then – there are no shareholders to consult as there are in the big firms. That makes us pretty nimble,” he adds.

“The same goes for challenges. Nobody knows what they will be and you have to face different challenges in a different way. In all my years in business I have learned that every challenge is different.”

When he talks about challenges it is impossible not to ask about the recent publicity Morgan received during the Irish Presidential elections.

It emerged that he was the businessman who in 2008 gave presidential hopeful Sean Gallagher a €5,000 donation for Fianna Fail, a political party Gallagher was strenuously playing down his links to. Gallagher’s handing of questions about his history with Fianna Fail was seen as decisive to the race and the presidency eventually going to Michael D. Higgins.

The intense press interest in the story catapulted Morgan on to the front pages, and in the process resulted in his own past being dragged into the public spotlight. As part of this he confirmed he had been convicted of tax evasion in the mid 1990s in relation to fuel smuggling, but also that he had repaid the Exchequer and paid a substantial fine.

Despite the furore the Newry-based entrepreneur refuses to be downbeat about the experience.

“You have to look forward, why look back,” he shrugs. “I made my mistake in 1994 and I have paid dearly for it. But when your name’s already out there you might as well engage with the publicity and use it.”

Morgan’s view is that whatever the economic situation, his customers need fuel to keep their businesses running and so long as the firm provides a good service, the future is bright.

“We don’t worry about anybody,” says Hugh. “I take the view that everybody else should worry about us! We give a good service and we look after our customers and employees. That’s it. What anyone else thinks doesn’t bother us.”

Morgan is of course well known in the border region for his long-standing support of GAA and it is when the conversation turns to his beloved Armagh that he is most enthusiastic.

The businessman has for many years been the principal sponsor of the Armagh GAA and recently secured the naming rights to the Armagh Stadium – now known as the Morgan Athletic Grounds.

But while the Armagh colours coincidentally match the Morgan Fuels logo and he admits that being one of the largest sponsors in GAA has “opened doors all across Ireland” he insists the arrangement has nothing to do with commercial gain.

“It was never about an advertising campaign, it was always about pure passion,” he says. “This is the sport I have followed all my life and I enjoy every minute of it. It’s just my passion, my club and my county.”

The Newtownards company has exported its expertly crafted products to a wide variety of countries in the more than 20 years since it was first formed.

Many of its traditionally strong markets have been flat during the past few years of recession as consumer spending has been constrained, but director Steve McIlwrath says there are some places where people still have money to spend.

“We’re seeing signs of activity popping up again in some places. We’re focusing a lot on Germany and we’re starting to see some progress in Austria, Holland, Switzerland, that little hub of countries. There seem to be less signs of economic pressure, consumers are spending money and traders are keeping a decent level of stock,” he said.

“This year we have also, unusually, sold a few guitars to Greece. We sold a guitar to a recording studio in Western Samoa, which is probably the furthest afield we’ve sold one to. This month we’ve also sold a few to Brazil. So there are markets now that are popping up and there is good business from them which you would never have included in a business forecast.”

Historically, Avalon had a strong presence in the US, which was its biggest export market. But even before the downturn sales had fallen away because of Sterling’s strength against the dollar, which removed the company’s flexibility on pricing and made it hard to remain competitive against established US manufacturers such as Martin and Taylor.

That has driven the company, which currently has seven employees, to focus on what makes it unique and look for new markets.

“What we’ve tried to do, and it is working well for us in Germany, is that we’re emphasising the fact that we are an Irish guitar, because that is a significant point of differentiation to those competitors. It lets us emphasise a different tonal quality to the guitar, and a different look and feel to the guitar,” says Steve.

Avalon has sold its products in different markets through distributors, through agents and by having its own distribution businesses. He believes the way local companies should approach export markets often depends on how far they are from the firm’s home base. In the US he believes a big enough business should distribute itself, while in somewhere like Japan a distributor is advisable because Asian markets requires the building of long term relationships.

“You can’t just treat the whole world as an export market,” says Steve.” You have got to look at the circumstances in each market because they all have their own quirks. For example you’d probably think that in America and Canada that because they speak English everything will be fine, but you have to jump so many hurdles because of bureaucratic systems and regulations, and there is a cost associated with that. In the EU you don’t find wide variation in the law with regards to moving products around, but there is variation in the documentation and the interpretation of the rules. It is mostly about cultural differences.”

Avalon’s guitars are used by a host of well-known musicians including the likes of Ed Sheeran, Teddy Thompson, James Morrison, Katie Melua and even musical greats such as Van Morrison and Bruce Springsteen. It has masterclasses planned with expert local guitar players in those countries such as Germany in which sales are doing well to further promote the brand.

“That hub of markets around Western Europe is what we’re focusing on, we think there is traction there, we’re getting a good response. So our outlook is cautiously optimistic. I am going back next month and we’re starting to appoint dealers in Belgium and Scandinavia, places where there are signs of economic progress. Even in the Republic of Ireland, where we haven’t had a distributor for a while, we’ve seen some dealers restock. So things are picking up.”

Through Invest NI’s Boosting Business campaign, you can access a range of support that will help you secure your position for the future. Get in touch today. Visit boostingbusinessni.com or call 0800 181 4422

Local finalists in the Ernst & Young Entrepreneur of the Year competition believe that despite the economic uncertainty Northern Ireland has much to be positive about when it comes to innovative business people. Symon Ross reports.

Entrepreneurialism is alive and well in Northern Ireland.

At least that is the view of two of the seven locally-based business people who have made it through to the final of Ernst & Young’s programme to crown the island of Ireland’s entrepreneur of the year.

While Northern Ireland is often lambasted for its reliance on the public sector and a perceived lack of entrepreneurial spirit, the business people competing in the E&Y competition believe the province is not short of get up and go.

Grainne Kelly, inventor of the Bubblebum inflatable car seat, thinks the harsh economic conditions of recent years have prompted more people to take a chance on starting a business.

“I think people realise that you can’t always do what you’ve always done, because you’re not going to get what you’ve always got. Not in this climate,” said Grainne, noting that lots of people phone her every week looking for advice on starting a business.

“Some people are being left with no option but to do it and it is stretching their horizons. They have got to be more innovative or they’ll just have to sit in the house. Opportunity is not going to walk across the front of your TV screen.”

Grainne started Bubblebum in late 2009 and is now selling her product in 20 countries, including the US, where it launched in July.

While the Derry-based entrepreneur didn’t initially get Invest NI support for her company, she points most of those who call her towards Invest and InterTradeIreland, confident they will direct aspiring business people to the right funding options.

“I think we have got to have a change in mindset and people have got to understand that these bodies are actually there to help and facilitate your business growth. I think in Northern Ireland we’ve been brought up to be very confidential and private about what we’re doing and we don’t like to shout about it, but you’ve got to understand these bodies can help if you go to them.”

Another of the finalists – Patrick Hurst, Managing Director of Bangor-based Munster Simms Engineering – is even more upbeat about the ability of Northern Ireland firms to respond positively to the economic climate.

“I definitely think the economic trading conditions are making people more innovative, more entrepreneurial, because the days of businesses growing because the market is growing are over in my opinion,” he said.

“We are growing because we are taking market share, we have launched a lot of innovative products in the last three years, invested a lot in engineering and R&D when our multinational competitors haven’t been doing that. The success for us has been product diversification, increasing the value to the customer and taking more market share.”

In 2009 Munster Simms employed 90 people. Today is has 150 staff and sells its products in 48 countries.

It reinvests the majority of its profits in the business, spending about 12% of turnover on product development, and has managed to increase its leisure marine business despite that market being 70% smaller than it was four years ago.

Patrick is involved in mentoring several smaller companies and says he is confident other entrepreneurs here will prosper, given the right support from their banks and agencies like Invest NI.

“I’m often amazed just what entrepreneurial small businesses there are in NI – many of them are just under the radar. But there are many talented businesses in this country that with the right help can grow. I just think we need to start to nurture that talent a bit more,” he said.

Cary Wilson, E&Y partner in charge of the Entrepreneur programme in Belfast, says while businesses continue to face difficult challenges – from funding for working capital to finding staff with the right management skills to cope with growth – there is no shortage of entrepreneurs here with the vision to see huge opportunities.

The challenge then, he says, is helping them realise that potential.

“There is more entrepreneurial spirit out there than most people realise. Over the last couple of years since I took this on I have found there are lots of fantastic examples out there. The biggest issue is that most of them try to hide it, to stay below the radar.
I think that’s one of our biggest challenges, that we don’t have enough role models out there. It is not that the entrepreneurs aren’t there, it is that they are not prepared to stand up and tell people about it, it’s not in the Northern Ireland psyche to do that.”

He also noted the high proliferation of exporters among this year’s finalists from Northern Ireland – with four of the eight finalists in the international category from here.

“If you are limiting yourself to the Northern Ireland marketplace you will probably struggle to have a business that will grow year on year, you’ll max out pretty quickly. So it comes with the territory that to be entrepreneurial you have to look beyond these shores,” he added.

The Northern Ireland-based finalists in this year’s Ernst & Young Entrepreneur of the Year awards are Brian McConville, MJM Group; Adrian McCutcheon, Telestack; Patrick Hurst, Munster Simms; Mark McCusker, Texthelp; Mairead Mackle, Homecare Independent Living; Pete Boyle, Argento; and Grainne Kelly, Bubblebum. The overall winner will be announced at a gala event in Dublin on October 20.

As sure as a wet weekend in August, Northern Ireland’s great exam results make front page headlines. All credit to the hard working teachers and pupils, but when will we start to really look behind the headlines and see the thousands of young people who didn’t make the grade, asks Ian Jeffers, Director of The Prince’s Trust in Northern Ireland?

We are in the middle of a perfect storm for our young people. Record levels of youth unemployment, massive competition for university places, a private sector that is struggling, a public sector that isn’t recruiting entry level roles like it used to and an education system that produces thousands of young people without the basic qualifications for most jobs.

We need to wake up to the reality that if we do not support our young people now, we will be paying for many years to come. The Cost of Exclusion, research conducted by The Prince’s Trust, shows that youth unemployment in Northern Ireland is costing the local economy a staggering £4.5m a week.

There isn’t a ‘one size fits all’ solution to the problem but there are many things that can be done that will make a big difference and the private sector has a massive role to play in making sure our young unemployed do not become our young unemployable.

I would argue that the private sector is already doing a considerable amount for our young people but that with a bit more support from government it could do a lot more.

There are two things that many of the young people we support lack; role models and aspiration. Providing these will not cost anyone a fortune and look at any company in Northern Ireland and you will find both in abundance. Getting a young person into a meaningful work placement for two weeks will do more for that young person’s self esteem and confidence than six months sitting at home on the dole. But it is more than just providing work experience. It’s about linking that work experience to qualifications and the potential of employment. We talk to young people every day who struggle to see how they can break the cycle of no qualifications and no work experience.

We aim to break that cycle. Two weeks work experience on its own isn’t a solution. But take a young man that wants to be cook and teach him about food and hygiene, give him some basic knife skills and then give him some work experience and all of a sudden you have got a motivated young man who believes he can and will be a chef. This isn’t a pipe dream, it works. From cooking to construction we are showing our young people that we believe they can succeed. One of The Trust’s long term partners is the construction and facilities management company H&J Martin. Their System’s Manager, Geoff Martin is in no doubt about the need to support young people, saying: “We recognise that investment in our local young people is an essential part of our planning for a sustainable future. The Prince’s Trust has been invaluable in this process, providing young individuals who enthusiastically embrace work experience opportunities. The practical work placements we provide at H&J Martin prove a stepping stone for these young individuals.”

This is a partnership – a partnership with the private sector that can provide the work placements and staff to support and motivate a young person, and The Prince’s Trust that can create the programme of basic training and then provide the mentors to help that young person move into employment, education or training.

This cost-effective intervention works – three out of four people we support achieve a positive outcome. This wouldn’t be possible without an engaged private sector.

As our political masters on the hill debate the next Programme for Government they should be considering how the private sector can be encouraged to provide meaningful work placements and how the provision of programmes such as those delivered by the The Prince’s Trust can become universal. With this solution our young people can ride out the storm and we can all play a part in better preparing them for the future.

Ian Jeffers is Director of The Prince’s Trust, Northern Ireland. He can be contacted on 028 9075 8102 or by email at ian.jeffers[at]princes-trust.org.uk [at] = @

Business advisors Deloitte prepare to welcome new Pensions Partner Mark McClintock from PwC, where he was the Head of Trustee Pension Services in the UK. Mark will lead Deloitte’s pensions practice in Northern Ireland. As he takes on this new role from 1st October, Ulster Business asked him about the challenges facing some of Northern Ireland’s longest standing pension schemes and the companies who are responsible for funding them.

What was behind your decision to join Deloitte, along with 12 of your Northern Ireland-based associates?

I was incredibly impressed by the quality of Deloitte as an organisation, by the talent of its people and the ethos of a client-centred approach. Having a reputation for fighting hard for my clients, particularly in the current economic conditions when business is tough for many, I felt that Deloitte was a perfect fit to continue to deliver that type of service in Northern Ireland. I was impressed that, quite independent from me, my team came to the same conclusion!

You have had over a year of gardening leave. What was the experience like?

Going from flat out to chilled out was difficult although I don’t expect any sympathy! I struggled with not being able to help clients initially but gradually realised that the time would go soon enough and to make the most of it. I was given a DIY list from my wife and proceeded to find other things to do to avoid it – a few holidays for example and I was even spotted at the gym once or twice! I also have had the luxury of time to do more technical reading than at any other time in my life, so I won’t be rusty.

Is pensions consulting viewed as a growth area for Deloitte?

Deloitte has already made a significant investment in Belfast and in the rest of the United Kingdom, recruiting the most talented team around. This is in reflection of the fact that clients view dealing with their pension obligations as one of the key board-room problems to solve if they are to be successful. Despite the investment to date we are still recruiting – indeed, this month, we are taking some of the first batch of graduates from the actuarial degree course at Queen’s University.

What is your own employment background?

As a qualified actuary I’ve been involved in advising trustees and scheme sponsors (the company) for over 20 years. This has included some of Northern Ireland’s oldest private sector businesses with the largest historic pension liabilities, and some of the newest public sector bodies, including the Northern Ireland Assembly.

Deloitte advises large clients including pension schemes sponsored by globally recognised companies – what does this involve and what are they looking for when they come to you?

Traditionally this has meant doing the number crunching in order to advise on how much the company needs to reserve to pay the benefits promised, or advice on investment strategy and in many cases also doing the administration of paying those benefits out. However, in the current climate most schemes have significant deficits and where Deloitte adds value is in helping clients find increasingly innovative ways to meet the obligations. This can include non cash funding solutions which protect cash-flow for the business. This reflects our view that the trustees’ best asset is a strong supportive employer. However, Deloitte advises many local businesses and the problems they face are just as significant for them, with the same need for innovation in the solution. Clients’ pension assets range from a few hundred thousand pounds to several billion.

What does the Deloitte team offer that some of your competitors perhaps don’t have in terms of expertise or experience?

Deloitte is unique in being able to offer a full service proposition to trustees and scheme sponsors. Given the complexity of pension problems, increasingly trustees need the advice of business analysts to assess and advise on the employer strength, corporate finance to help with restructuring, tax advisers and investment advisers, as well as actuaries and administrators. Deloitte’s pension team in Northern Ireland can provide a one stop shop for corporate and trustee pension clients.

In an aging society where very few people are saving for retirement do you expect a fundamental change in the way the pensions industry operates in coming years?

The conclusion that has to be reached when people are not saving themselves is that unless the savings gap is closed in some way, proportionately more people will live in relative poverty in retirement than previous generations. This builds a social problem with the result that more people will rely on the state to stay above a basic minimum existence with the consequent increase in cost to the public purse. With previously altruistic employers realising that to stay in business they cannot afford to provide the level of pensions they once did, more emphasis will be placed on the pensions industry to encourage people to save for themselves. This will require innovative product development from the pensions industry, government support via tax and saving incentives and a greater realisation from the general public as to how valuable a pension is.

It has been said that private sector employees are now being offered pension choices never before made available to them – how much is this really the case?

I would say, perhaps a little flippantly, that the choice of late has been between having a pension or a job, as to survive many companies have looked at lots of ways to keep their workforce (and skills) but reduce costs. Where it has been contractually possible this has included reducing pension costs or other benefits but also involved three or four day weeks and other employment terms. Prior to the current economic problems it was true that many more employers were looking at offering choices of benefit through flexible benefit plans. These allowed employees to select from a menu of options the benefits that were most valuable to them at that point in their lives. Senior staff could also be motivated by performance related pay or share option plans.

How much of an adjustment for employers will the auto-enrolment changes being introduced next year require?

It will be significant enough, particularly for smaller companies who perhaps have not contributed to a pension for their employees before. Ensuring that all the administration is set up in advance will require careful planning, including the consideration of any existing pension arrangements. Recent surveys in the pensions press would suggest that the impact is not universally appreciated with significant numbers of companies not yet having thought about this. The changes may be seen by many companies as a further unwelcome cost of employment at just the wrong time.

Some of the larger companies may use the changes to effectively “level down” pension arrangements to the new arrangements. If this happens it will add to the looming social problem I mentioned earlier. The level of contributions from auto enrolment is a start if an individual has previously been unpensioned but it will not lead to an affluent generation of pensioners.

What are the other biggest challenges facing the pensions sector today?

Rising life expectancy (normally a good thing), historically low interest rates, poor investment returns in the equity markets and now rising inflation all contribute to driving up the cost of pension provision for employers who support defined benefit arrangements. Over the last decade you could add increasing regulation and the associated costs, stealth taxes and shorter timeframes to make good any shortfall. It’s not hard to see why many have given up.

In a defined contribution pension arrangement the employee bears all these risks instead of the employer. So it’s not hard to see how individuals mistrust the pensions industry.

The challenge will be to convince employers and employees to save enough to target a comfortable retirement.

A lot has been made of the need to reduce the cost of public sector pensions – how do you expect that to play out?

The public sector is now facing up to the problems the private sector has been dealing with for a number of years. I believe there will be a staged approach to reduce the cost (and consequently the value) of pension benefits provided. There is no overnight solution to this as the costs built up to date are huge. Look at the largest deficits in the biggest companies in the UK and you will see many are in previously nationalised businesses and the solution is long term if the pension obligations are not to cripple the business.

Dealing with this will need care to ensure public support and avoid industrial action, but also some innovation will be required to reduce the cost and risk to the public purse. There is no doubt that lower value benefits will likely be the outcome but care needs to be taken to target this correctly so that, for example, the lower paid are protected.

Many private sector employers have already made changes – is the defined benefit/final salary scheme now a thing of the past?

I believe so – in their current form. However, the defined contribution solution doesn’t seem to be the complete answer either as for many employees bearing the risk completely has not worked. Perhaps in the future there will be more hybrid types of approach where the risk is shared and better managed.

Pensions serve two purposes. The first one is to provide a level of pension that avoids poverty in retirement; the second is to serve as a savings vehicle where taking risk has less disastrous consequences if it goes wrong. It may be that in the future employers are prepared to protect against poverty by providing a reasonably low “defined benefit” with risk areas like improving life expectancy and investment mitigated. A defined contribution approach could work for pension savings above this minimum e.g. for the higher paid who arguably could afford to take on some risk themselves.

The point is there are many possible pension designs depending on the bespoke needs of each business.

Will the proposed changes to the state pension age have much impact on the penions industry or is it more of a worry for workers themselves?

When the basic state pension was introduced, life expectancy in retirement was only a couple of years. Now it is more than 20 on average. So the surprising thing perhaps is that it wasn’t addressed sooner by government or successively as life expectancy improved.

The key worry is for employees to maintain an alternative income until they are entitled to receive the state pension. However, with changes to the age discrimination laws it is less likely that someone will find themselves out of work on age grounds, but there needs to be enough available work, and people need to remain fit and able to work. There is the social question that if people stay on working for longer in a static economy, there were be less available jobs for young people coming on to the job market.

How much will the recent market volatility affect the value of pension schemes over the short and long term?

For companies supporting defined benefit pension schemes if there is no quick correction to recent market falls, they will be facing larger deficits which either will require higher contributions or longer recovery plans to make good the deficit. There are already a number of companies who have recovery plans that extend to 20 years.

For defined contribution investors invested in equities many have lost the equivalent of the last five years of investment performance and contributions. If they are close to retirement then this will dramatically reduce the amount of pension they can buy. However, some investors swap out of equities into bonds in the years approaching retirement to avoid the risk that the markets fall close to their retirement date. The effect on them would be less stark.

Have you seen a lot of companies seeking to reduce or remove pension risk by transferring pension liabilities to insurance companies?

Every company in the UK would love its pension scheme trustees to “buy out” the pension liabilities with an insurance company to remove the risk. There has been some activity in this area with some high profile buy outs and partial buyouts (£1.4bn in the second quarter of 2011.) The problem for many is that it is simply unaffordable in the short term and particularly since the recent market falls.

Many therefore set buy out as the strategic aim but it may be 10, 15 or 20 years off and in the meantime they seek to reduce risk over time and remove liability in phases. Offering enhanced transfer values to ex-employees has been one such activity.

Many therefore view it as a “glide to buyout” but I expect there will be some turbulence along the way and a few crash landings.

160 delegates from 30 countries attended Randox's last sales conference

Crumlin-based medical diagnostics firm Randox Laboratories is going from strength to strength. Symon Ross met Managing Director Dr Peter Fitzgerald to get an insight into the business

There are not many businesses in Northern Ireland that are still working flat out the Friday before the 12th of July holiday.

But then Randox Laboratories is not your traditional Northern Irish business.

Set up by Dr Peter Fitzgerald in 1982 the medical diagnostics firm now has 900 staff around the world – more than 600 in Crumlin – and sells its sophisticated chemical diagnostic tests and devices into 130 countries, exporting more than 95 per cent of its products outside the UK and Ireland.

When I visit its headquarters in the Co. Antrim countryside – one of several sites in the area – the place is a hive of activity, with phone calls coming in from clients around the world, meetings taking place, and business trips being planned.

Dr Fitzgerald – who seems to be just Peter to everyone at the company – is polite and softly spoken, retaining the demeanor of a scientist rather than CEO of a company that has recently announced plans for a £15.8m expansion of its facilities and the recruitment of 242 new employees to cope with demand for its products.

“We’ve been pushing very hard in the last number of years to increase our sales and our sales have been going quite satisfactorily – we’re up about 20 per cent in the first five months of the year. Fundamentally we need to expand our research and development, we need to expand our general operations, manufacturing, and sales and marketing. So all areas of the company are expanding in tandem with our market push,” he explains.

“We hope to build additional manufacturing facilities in Northern Ireland in the near future. The actual building could be a year to two years along the line, but the planned job expansion of 250, we’ve taken on about 50 already and by the end of the year it will be another 30 or 40. The expansion is ongoing, not necessarily in large chunks, but it is relentless.”

Randox deliberately exports broadly, with 40-45 per cent of business from Europe, 25-30 per cent from North America, 15-20 per cent from Asia and 10 per cent from Latin America. Last year it invested $7m in a new US headquarters in West Virginia and it has built a plant in India to service the Indian market, which will begin manufacturing next year. It has almost 30,000 customers.

“We don’t have high market penetrations in many countries, we have broad representation. But our growth rates are better in the BRIC countries, India, Brazil and China, and we’re improving in the Middle East,” says Dr Fitzgerald.
“We’re trying to keep our footprint very broad around the world to be in as many countries as possible. We do see plenty of growth in the more mature economies because we are taking market share away from our competitors and we are also bringing out new products which give new clinical improvements and innovations, so new markets are developing.”

R&D

Randox spends upwards of £7m on research and development every year and has 200 scientists in Co. Antrim working on developing new products and systems to carry out its diagnostic tests. It manufactures around 8 per cent of all clinical chemistry tests in the world, and around 2 per cent of total diagnostic tests.

Since 1992 the firm has invested £130m in developing new Biochip Array Technology, which allows medical technicians to screen a patient sample for multiple diseases at the same time. Previously only around five or six tests could be run on a single sample.

Dr Fitzgerald says this allows more accurate and in many cases more timely diagnosis, noting that by putting numerous tests on to a microchip for cardiovascular disease it can save 20 per cent more of the people who come into a hospital with chest pains. For respiratory diseases, the tests help doctors prescribe the correct anti-biotic first time because he is able to diagnose what organisms are causing the infection.

“At the moment we are at the stage of trying to convince – because the medical establishment is slow to take up anything new – of the importance of new tests and multiple measurements,” he said.

To further convince people of its technology Randox has opened a clinic in Crumlin to conduct health checks. People pay for a test, are given the information and analysis of it, and are then recommended to take the results to their GP. The Crumlin centre has been successful in identifying many different ailments and Randox plans to open another one in London in the next few months.

“We feel our role is to add value to the patient – to get a more accurate and proper diagnosis. We feel the patient should be empowered more, he should know more about his own measurements, his own tests and he should have access to them more readily,” said Dr Fitzgerald.

“We find GPs are very happy with it because it helps them with their diagnosis. We’re not pretending to be doctors, we’re scientists.”

PROCUREMENT

Despite positive responses from GPs to Randox Health Checks, Dr Fitzgerald is clearly frustrated by the unwillingness of local hospitals and the NHS in general to engage with his company.

Randox has just won a significant contract for the biggest toxicology and forensic sciences lab in France and sells its products to forensic science doctors in America, China and Latin America, but he does not believe the prospects of selling in Northern Ireland are good.

“We make products which we sell to other people and you come back to Northern Ireland and the hospital is paying four times the price for them because of the way they buy,” said Dr Fitzgerald.

“Sometimes you think there is a distinct bias against buying locally. That’s not a statement I can support with facts, but you do sometimes feel that way. We sell to some prestigious hospitals around the world but (local hospitals) seem to find reasons not to buy from us.”

He further notes that when Randox recently wanted to do a cardiovascular study in Northern Ireland it was unable to get support from local hospitals and the research in the end was done at hospitals in Dublin, Leeds and Edinburgh.

“Yesterday I was in Paris and we got the order for the largest forensic laboratory in France which will lead on to serving all the main medical laboratories. We have to write letters to the forensic science service here trying to get considered and we’re going through that process at the moment. Antrim Hospital won’t entertain us at all, which is extraordinary. You wonder what you’ve done wrong.”

He insists it is not a case of sour grapes, simply frustration that Randox has the better technology and can provide it cheaper than hospitals here get it through the current procurement system, which he feels favours large global organisations such as Roche.

“We went to the Executive and the Audit Commission and questioned legally the practices of how they seem to be charging hospitals. We don’t think procurement practices in Northern Ireland trusts or hospitals is very good. There’s something very wrong,” he said.

BARRIERS

Dr Fitzgerald has never been afraid to voice his frustrations at the mentality of the Northern Ireland establishment.

In 2008, exasperated by the bureaucracy of Invest NI, he opted to base a new facility and 50 jobs in Donegal. The £2.4m Invest NI has put into Randox’s latest expansion suggests that relationship has been mended, and Dr Fitzgerald describes current Invest NI chief executive Alastair Hamilton as “dynamic”.

But he still has concerns that the economy remains too focused on the public sector, with not enough innovation and enterprise, and too few entrepreneurs, with a global outlook, prepared to go out to the world to sell.

Unlike many other business leaders, he doesn’t think that lowering corporation tax would have a big impact on his firm, which already reduces its corporation tax via R&D tax credits.

“It’s not going to change our business,” he said. “There are things we feel that are far more pertinent to improving business in Northern Ireland – such as industrial tribunals. Employment law is a disincentive to employ, it is very draconian, inefficient and misplaced. Even though you might only have the odd case each year, we feel it is a disincentive to employ. It doesn’t allow us the flexibility of employment that we should have. If we were to leave Northern Ireland it would be because of employment law more than anything else.”

With an increasingly large role as an employer and exporter, it is to be hoped Randox finds no reasons to leave any time soon.

Ulster Business talks to Chain Reaction Cycles MD Chris Watson about the company’s climb to the top

How has business been in the last year?

In general it’s been pretty good for us. Luckily a good proportion of our business is carried out overseas so this has helped buffer us against the wider economic difficulties within the UK. We have continued to invest in people, systems and marketing and all of this has enabled us to continue to grow. The Cycle to Work scheme in the UK – where people can get bikes tax free through their employer – has also had a positive effect on of the growth of cycling.

What are your biggest geographical markets?

We have a fairly wide customer base with a good spread across all the European countries. We are also strong in Australia, Russia, South Africa, USA and of course we are ‘big’ in Japan! We have great multilingual CRC customer service staff here at our headquarters in Doagh, and offer our customers contact in English, French, Spanish, German, Italian, Portuguese, Russian and Japanese. We have plans to increase this further and are always interested to hear from people who are a native speaker in a second language and have an interest in cycling or other outdoor sports.

You’re now the “world’s largest online bike store” – is there room for further growth in the sector or will you branch out?

It’s important to stick to what you are good at but we’re always interested in understanding other opportunities where there is a synergy in what we do with other sports or industries – even if things don’t work out you will always learn something new. Too much blinkered focus in one area can make your business become stale; being aware of overall market trends keeps your perspective fresh and your motivation high.

What’s the secret to successful online sales?

Work with good people who care about the job and the customer, be honest and work to improve the offering every day. Customers will forgive service blips if they understand that you don’t take them for granted and are working to always make things better for them.

How long did it take to get your warehouse management system to the point where you can dispatch 24 orders a minute?

Just one day, the day we realised that if we didn’t dispatch that many a minute from the current backlog that we would shortly have an awful lot of very unhappy customers trying to contact us. In reality 10 years of working to continually refine processes, remove bottlenecks and re-engineer IT systems to fulfill our customer promise of dispatching all orders received by 3pm on the same day. It can often be hard to plan capacity and workload around online sales promotions so everyone in the chain has to be flexible and react to deliver for the customer.

Would you be as successful in this business if you were not cycling enthusiasts?

I would say no, but being a biking enthusiast is only one part of it. You have to be passionate about all aspects of what you do to be successful. It’s the mindset. Cycling is a competitive pastime for a lot of the people in CRC and that competitive element is evident in the workplace. Good just isn’t good enough, for them it always has to be the personal best you can do.

Why are you opening a new store in Belfast?

We started out as a small retailer on the grand ‘High Street’ of Ballyclare and we are still a retailer, just on a different scale and through different mediums. We have always kept the showroom at our locations for our customers to browse and have always had the desire to improve this service to our customers that want to ‘touch and feel’ the product. Now seems to me to be the right time to be launching the retail store. Customers want more choice, more access to product and a multi-channel service – that’s what we are offering and there is no better place to start than on your own doorstep.

What one thing could Government do to improve business conditions for your company?

I guess help improving transport links. On a global scale we are a tiny island with a tiny number of people, so trying to get product and people in and out can be expensive and challenging at times. But then that’s part of the charm. People often chuckle at our tagline of ‘World’s largest…’, and ask how can Northern Ireland have a ‘world’s largest’ anything, but we are and we are immensely proud of that!

Nick Cobur

Ulster Carpets has reiterated its commitment to the Craigavon area and work is under way on its new production facility. Symon Ross caught up with Managing Director Nick Coburn to hear how the manufacturer’s products are being used from the US Midwest to the Middle East

Though he didn’t set foot in Northern Ireland on his recent visit to the Republic, US President Barack Obama did walk on a little bit of Ulster.

That’s because Portadown manufacturer Ulster Carpets provided a deep red carpet to a church he visited in Moneygall, Co Offaly, the home of one of the President’s ancestors.

It wasn’t the first time Mr Obama had walked on an Ulster carpet either, as the Washington DC Convention Centre and the Washington DC Hilton hotel, venues for events to celebrate his inauguration, were also carpeted by Ulster Carpets.

“We supply a lot of the carpets he walks on in the States in Washington and we were very happy to be involved,” Ulster Carpets Managing Director Nick Coburn told Ulster Business.

“At a time when Ireland needs good news and tourism needs good news, anything that helps sell Ireland abroad is welcome. We also have a large operation in the US, so any good news that goes back and is listened to by Americans is good for us.”

The company is of course a mainstay of the Craigavon business landscape, having been established in Portadown in the 1930s. While all of its main UK competitors have either moved to cheaper locations in Asia and Eastern Europe, or gone out of business, Ulster Carpets took the decision in 2008 to stay in Northern Ireland, investing in a new central production facility.

It has committed to investing £30m in the next five years and has completed phase one of the project, which relates to distribution. Coburn says market growth and results to date have vindicated the strategy.

“The more we progress with it the more we feel assured we made the right decision because it carries operational efficiencies. Certain operations added over the years were in the wrong place, so it is an ideal opportunity to start with a clean sheet,” he said.

The company is proud to have provided stable employment for three generations of local people and says it aims to ensure its pay rates are at the higher end for the sector, with 10% of profits paid to employees.

“The company was set up here in 1938 at the tail end of the depression of the 1930s to provide employment to the Portadown area, and that idea still holds good. We’re also into the third generation of families in the Craigavon area, across all sections of the community, who are working here. So there is that loyalty which works both ways,” he explains.

But there are also hard edged commercial reasons behind Ulster Carpets’ commitment to the area, learned the hard way following an ill-fated acquisition of a company in South Africa in the early 1990s which was made on the basis of accessing low cost labour.

“We pumped in about £20m to make it work but couldn’t get it to work so we exited from that operation and brought everything back to Portadown. We realised Portadown had the best workforce, the best productivity and service to the market. Having gone through that learning experience it helped reaffirm our commitment,” said Coburn.

Though it may pay slightly more in electricity and transport costs, the easy access to its main markets in Europe and US makes Northern Ireland the perfect location, he adds.

EXPORT FOCUS

While it remains committed to manufacturing in Northern Ireland, Ulster Carpets realised even before the recession that it had to adapt to remain relevant in the global economy. Where ten years ago 70% of its business would have been retail business – for residential homes mainly in the UK – now 70% of its revenue comes from its contract business.

The most positive markets have been hotels, casinos and cruise ships and in the last six months it has completed a £1m contract at London’s prestigious Savoy Hotel and announced £1.5m of deals from Saudi Arabia, including bespoke carpets for the King Abdullah Convention Centre in Jeddah.

“Retail, particularly in Ireland, has suffered and the UK is soft at the moment. But that is more than being offset by our international market strength. Our financial year ended in March and we would expect to see an increase in profits and growth in sales, primarily because of our export markets,” explains Coburn.

“We focused very strongly when the recession hit on developing new markets, particularly in places like the Middle East, further into Eastern Europe and maintaining our strength in America, which is one of our strongest markets and is starting to recover very well this year,” he added.

“We have carpet which is expensive to make so we are at the premium end of the market – five star hotels like the Ritz Carlton, Four Seasons, casinos and cruise ships, which is a strong segment of the market for us.”

Within months of the financial market crash in 2008, Ulster Carpets took the bold move of establishing a full time office in Dubai from which to service the potentially huge Middle East market, including Abu Dhabi and Qatar. Coburn said the investment was necessary to allow it to get specified by designers and close deals with property owners in the region. While it hasn’t been without its challenges the move is yielding results.

“We would hold our hands up and say that when we first went in there two and a half years ago we made mistakes, we didn’t understand the culture particularly well. So what we’ve got now is a mixture of our own people and locally employed people who understand the working culture. The countries within the Middle East are all very different too. So there was a hard learning curve where we made mistakes, but at the same time, two and a half years on we are seeing very strong business that complements the work we are doing in the US and Europe,” the MD said.

ECONOMIC CHALLENGES

Held up as a local manufacturing success story, Ulster Carpets has in the past year had visits from an array of politicians, including Prime Minister David Cameron, Secretary of State Owen Paterson, Enterprise Minister Arlene Foster and Finance Minister Sammy Wilson.

Nick Coburn believes that, certainly at a local level, those politicians understand the importance of supporting manufacturing while other sectors are in the doldrums and are starting to turn that into action.

“We hope that government is listening. They are making the right noises about moving from dependence on the public sector and financial services to more of a manufacturing base. If that rings true, and if the Corporation Tax in Northern Ireland changes, that would be evidence the Government is listening. If we don’t have the right environment in Northern Ireland we won’t create the jobs, we won’t invest as heavily,” he said.

“I would have a bit more of a concern about manufacturing in the UK. We don’t believe the British Government has fostered a good environment for manufacturing companies to innovate, to grow, to invest and create jobs and wealth. There is an unnecessary burden of regulation that is placed upon business.”

Sean Canning

Ulster Business caught up with Sean Canning, UK Head of Operations at outsourcing firm Firstsource Solutions to discuss the contribution it has made to the Northern Ireland economy over the past five years

Sean Canning is well aware that some people look down their noses at contact centre companies.

When a recommendation was made in the Barnett Report that Northern Ireland look to bring in more call centre jobs to provide a short-term economic boost, the idea was derided in the local press as lacking vision.

And yet, from a standing start in 2006, Firstsource Solutions has grown to become one of the province’s largest employers, with 2,000 staff spread across its two sites in Derry and Belfast.

UK Head of Operations Canning, a 25 year veteran of the call centre industry who is based in Derry, is proud of the contribution the company has made to the region since setting up with just 150 people.

“Call centres are not the career of choice for everyone, but having said that it works for some people – I’ve been in this industry 25 years,” he said.

“What we offer is training and skills to people who are just coming out of school, college and university. We’re giving them development opportunities to get their first or second leg on the career ladder. They may stay with us for a year or five years before moving on to a job with a better salary,” he adds.

“It feels like we are doing something for this economy. As I look at it today there are 2,000 people who are not on the dole, who are working with us and hopefully building their careers on the basis of what they do with them. Some of them do see customer service and call centres as their career.”

After bumper years in 2008 and 2009, when client companies were looking to outsourcing as a means of taking cost out of their business during the recession, 2010 was a relatively quiet year for Firstsource in terms of new client growth.

But activity among customers in the key telecoms and financial services sectors has begun to pick up again as these companies increasingly look to more in house functions to a managed service model.

“As long as that interest turns into firm orders 2011 is looking great,” says Canning.

“But it is very competitive. The challenge that Firstsource have is that some clients approach customer service and call centre buying as a commodity service, so it becomes about answering so many calls or buying so many man hours, what is your best price. Our challenge is to educate customers not to look at the lowest price but the value we can bring to their business. How much revenue can we bring to you, how can we improve your processes to take cost out.”

Canning describes Firstsource as specialists in “end to end customer lifecycle management”, which essentially means any process from acquiring the customer to selling and managing services such as billing, payments, complaint management, underwriting, etc.

To meet this need Canning says staff are dedicated to one client. For example those who work for Sky buy into its brand and deal with clients as though they are Sky employees, meaning the customer never knows they are speaking to Firstsource.

The company last year increased its UK reach by purchasing a Barclaycard processing centre in Stockton-on-Tees. It retained 700 staff and now provides the same services back to Barclaycard. The company is keeping an eye open for similar acquisitions in the knowledge that there is an appetite among banks and financial firms to outsource certain functions.

“The people we work for are typically FTSE 100 companies and brands. We have been able to prove that we are customer management experts and I believe we can more often than not deal with the end customer better than the client can. Their core business is provision of telecoms or financial services products. But I know how to manage the psychology of the client and to get what we need from them,” says the Firstsource boss.

With a number of “relatively safe” contracts that typically last between one and five years, he adds that the company has enough forward visibility to plan for seasonal peaks and troughs, and to make long terms plans for its Derry and Belfast operations.

“Over a four year period we grew to 2000 people. So the first few years was about how you deal with that volume and the challenges of recruitment, getting people in, getting them trained,” he says.

“Now it feels like we are a mature business and the challenge is how we stabilise the business, how we improve our in house operation, and how do we prepare for that next level of growth.”

A lot of business owners talk about the passion they have for their business and the buzz they get from it, but often you are not sure if you believe them.

Benny O’Hanlon certainly doesn’t leave you in any doubt.

It’s clear from the first time you meet the founder and Managing Director of outdoor activity company Todds Leap that he lives and breathes what he does, and that he gets a massive kick out of seeing the effect that coming to the centre has on his customers.

O’Hanlon started the business near Ballygawley some 20 years ago as a means of combining his passions for off road driving and the outdoors with his love of meeting people.

Today, Todds Leap boasts a wide array of attractions including off road driving, blindfold driving, quad biking, paintball, clay pigeon shooting, climbing walls, a 100ft inflatable super slide, an even higher zip line, and much more. Its customers too are extremely varied, from corporate team building to school/youth groups, stag and hen parties and family fun days.

While he says there are some outdoor activity centres out there which do certain elements of it well, Todds Leap stands out because it has a great location, great product and great staff.

“When we started up I felt the corporate entertainment market in particular was over priced, under nourished, and essentially a rip-off. That was not the way I wanted to do business. We put our customers first because if there are happy customers they tell people about us and come back.

There’s no other way to grow this sort of business. You can’t grow a business under false pretences. You can sell DelBoy watches for £5 a piece all day long. But you can’t do DelBoy toasters the next day because the watches didn’t work,” he explains.

“We would rather under-describe and over-deliver.”

Located 45 minutes from Belfast and two hours from Dublin, O’Hanlon says that, despite the recession, the company has continued to get business from both local and national companies who have seen the benefit in sending their managers and sales teams on team building trips.

“If you look at our client list in the last 12 to 18 months, you’ll see some of the cleverest companies in Northern Ireland and the UK. They are progressive, go ahead companies. They don’t come here to complain about the recession. They come here to consolidate their position and to build strength for the growth that’s coming,” he says.

“One of our very early slogans in the 1990s was no phone, no fax, no fuss. That was where we were coming from. We encourage people when they are here, especially business people, to switch their phones off and enjoy themselves.”

While he knows many people view team building as a waste of time he says his office is full of thank you letters from companies who have been amazed at the effect on sales performance that a structured day or weekend out of the office has had in terms of building trust between employees and helping them get to know one another better.

O’Hanlon notes that a structured programme that involves a sense of achievement is essential if an organisation is to get anything out of teambuilding.

“There’s no point sending everybody to the pub, because somebody will get a black eye,” he jokes.

“Our activities are largely motorised and adrenaline fuelled. We have a zip-line of 497 metres. We take what the ordinary person considers extreme activities and we talk them through it and get them to do it successfully. What that does is change their mindset.”

Unlike many companies O’Hanlon doesn’t base his own hiring policy just on qualifications, but rather how staff get on with customers, deliver the product, and buy in to the ethos of the business. He tells the story of an employee – still hobbling around the centre when I visit – who showed up at work on a Monday despite breaking his ankle on the weekend as evidence of the commitment his 56 staff have.

“Once you get a brand and a certain size of company, the business owner doesn’t own it, the employees own it. The staff here have a job to do, and how well they do it ascertains the certainty of their future, and I tell them that,” he adds.

It’s also apparent that the Todds Leap founder has a straightforward approach to life as well as business. He gives talks to many of the groups of young people that come to the centre and aims to convey the message that by taking responsibility for themselves there is no reason they can’t achieve what they want in life.

O’Hanlon also has high hopes for the future of his own business, and there’s noticeable excitement in his voice when he talks about a new attraction that is planned. Though the details are being kept under wraps he tells me it will be “0-60 in less than two seconds” and better than a bungy jump or a skydive.

“You have to keep thinking ahead,” he says. “Business changes, customers change, so you have to keep things fresh, keep moving and give things a facelift once in a while. You have to stay in front.”