Posted on Friday 31 May 2019 by Ulster Business

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The export market is booming in cross-border areas in and around Newry, but how will things change post-Brexit? Pavel Barter checks out the pulse of businesses in the region

As the morning sun illuminates the shores of Carlingford Lough in Co Down, a team of workers carry bags of oysters from the water to the beach. They toss, turn, and grade the shellfish according to size, before returning them to the seabed. Across the Lough we can see the Cooley Peninsula and Co Louth. In the Brexit border debate, this is ground zero.

Growing oysters takes three years, says Darren Cunningham, owner of Killowen Shellfish, and he exports stock every week.

“It leaves on a Friday evening at around 5pm, and 98% is exported to France. It goes through Dublin and Rosslare to the top oyster buyer in Europe. The oysters are in purification tanks in France by Sunday evening. That’s how quick it is.” Carlingford Oysters then travel to restaurants in Paris and other European capitals.

How is business? “Very good,” Darren says. “We sold nearly 50 tonnes of oyster last year. Two tonnes went to China and the rest to France.” Is there much competition? “Not for us. We’re the talk at the minute. We have the best stuff.”

Darren and his team work next to Ballyedmond Estate, the family home of the late Edward Haughey, founder of Norbrook, one of the world’s leading veterinary pharmaceutical companies. If you travel further up the lough – past Warrenpoint, home to Northern Ireland’s second largest port – you will reach Newry, where Norbrook is based.

Killowen Shellfish and Norbrook, which generated an operating profit of £45.1m in the year to August 2018, are very different businesses, yet both speak the common language of exports. There are around 8,000 VAT registered businesses in the greater Newry area and many of them are accustomed to criss-crossing the border.

“We have a number of major global players based here in Newry who supply goods across the world,” Colm Shannon, chief executive of Newry Chamber of Commerce and Trade says.

He name-checks MJM Marine, a leader in the global marine industry, which employs 270 people in three offices across Europe. “Equally, we have a number of smaller companies who are involved in north-south trade. That’s usually the first step into the export market.”

Exports are the essence of business for Re-Gen Waste, a Newry firm established in 2004 by five siblings. Re-Gen began by recycling paper, cardboard, tin and plastics, before graduating to municipal waste and black bin waste. The family developed their own purpose-built facility in Newry, creating a business that generates millions. Its work is spread across Northern Ireland, the Republic and rest of the UK.

According to John Doherty, a director at the business, Re-Gen “exports hundreds of tonnes across the border every day. We’re the fourth largest recycler in the Republic.” Its recycled products are exported to almost 30 countries around the globe.

Re-Gen is not alone. Other successful Newry exporters include FM Environmental Group, which has offices in Malta and the Middle East. In 2018, Newry’s BM Steel landed new business, in a deal worth £1m, in the Netherlands and Great Britain. Around Noon, a producer of high-quality sandwiches, employs 330 people and has made acquisitions in Dublin and London.

Newry-based construction firm mac-group is another all-island operation. In 2018, it completed a £11m refurbishment of River House, a 14-storey building in Belfast. Simultaneously, it was working the new Barclays headquarters in Dublin.

“We employ over 180 people, across four different offices,” Brendan Moley, group interiors managing director at mac-group says. “The Newry office has 40 full time people. A lot of those staff members support projects in Dublin, London and Birmingham. There’s a lot of commuting back and forth across the border. We are trading in cross border services on a daily basis, but we’re also heavily involved in products and goods.”

Although GB is Northern Ireland’s biggest external market, businesses in the Newry region are accustomed to cross border trade due to their geographical location. “We’ve always looked at Newry as being half way between Belfast and Dublin,” Brendan says. “You can get to Dublin Airport in 50 minutes from here. The talent available within the Newry market, in terms of some of staff, skill-set and knowledge, is extremely beneficial as well.”

Some businesses fear that a hard border, in the event of a ‘no deal’ Brexit, will cause delays. According to Darren Cunningham, only a few hundred lorries crossed the border every day in 1994. That number is around 13,000 today. “A minute delay can knock everyone back hours,” he says. “My oysters can’t hold their breath forever. They’re a living creature. They only have a certain amount of time. The quicker they get to France, the better condition they’re in.”

Re-Gen operates its own transport department. “Currently we send a lorry to Dublin twice in a day to collect materials,” John Doherty says. “If there is a delay at the border, you are likely require a second lorry. The cost of taking everything from the Republic to the north doubles.”

Technology, such as unmanned border posts equipped with cameras, would be unlikely to solve the problem, suggests Brendan. “Any type of border control will impact business. Being from the border area myself, knowing how many crossings there are, I think it would be absolutely impossible to police it in any sensible way.”

Newry businesses fear they will face mountains of costly paperwork post-Brexit. There may also be compliance issues, such as food traceability difficulties for food producers like Killowen Shellfish, construction product regulations for mac-group, or paper work for Re-Gen’s haulage drivers, whose Certificates of Professional Competence (CPC) may not be to be recognised in a post-Brexit EU.

The Government has suggested imposing zero tariffs on goods from the EU in the event of no deal. Newry businesses believe this would put them at a competitive disadvantage. “The business community has expressed concerns that Northern Ireland will become a back door into the UK market for goods coming from the EU,” Colm Shannon says. “History tells you when you have variation of tariffs on the border, that’s an opportunity for smuggling.”

Staff recruitment is another concern at Re-Gen, which has a 205-strong workforce. “We’re already finding it difficult to recruit staff,” John says. “Often, the people we’re hiring are seasonal and foreign workers. It’s the same for the agricultural industry, hotels...”

But what about the arguments that a managed no-deal could be good for business? Firms would still have access to EU markets under WTO rules. Furthermore, the UK might strike lucrative trade deals in the years to come. Businesses around Newry are not buying this. Certainly not Norbrook, which has “an integrated supply chain, with a global supply base, which relies on frictionless trade,” according to Liam Nagle, the company boss.

Uncertainty reigns for export businesses in the Newry area. “The chaotic nature in which this has been managed has restricted companies like ourselves from planning for the future,” Brendan Moley says. “It’s one false dawn after another.”

Darren Cunningham, looking across the water to where Co Louth is starting to feel very far away, says: “A lot of people are in complete disbelief and don’t think it’s going to happen. I can’t get my head around it at all. That’s the truth.”

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