‘Irish food firms need to be world class’

FOOD companies should focus on lean manufacturing and increased productivity rather than demanding export credits, says Enterprise Ireland (EI) chief executive Frank Ryan.

Irish food companies need to work towards world-class production standards. They, and all other Irish exporters, need to minimise exposure to currency risks by targeting increased sales growth within the Eurozone countries.

“Export credit is an issue, but it is not the only issue,” said Mr Ryan.

“Food companies were heavily impacted by the devaluation of sterling. But, while our exports to the UK were down 10% in value terms, most of that was due to the devaluation of sterling. In volume terms, we were only back 2%.

“In 2010, our plan is to stay strong in the UK and the USA, and to make breakthroughs in China, Russia, Brazil and India, where we have recently established new offices.”

Mr Ryan’s ambitions for 2010, however, were tempered by harsh trading realities in the end of year statement his organisation issued yesterday.

Total exports by EI’s client companies fell by 10% to €13bn last year, even though they collectively achieved around €500m in new export sales. EI’s biggest concern was its clients’ overall net decline of 19,000 jobs, which would have been worse but for the creation of 7,400 new jobs.

Over the next six months EI is hosting trade missions to New York, Dusseldorf, Sidney, Warsaw, London and Shanghai, among others.

Despite the overall decline this year, there were notable success stories. For instance, 598 new sales contracts were signed by EI client companies in 2009 – a 44% increase on the same period in 2008. Some 65 companies secured 79 first sales in new overseas markets – 50% of which were in Europe.

This growth tied in with the drive to increase exports to the Eurozone, which is free from currency risk.

Mr Ryan added: “The answer to Ireland’s challenge remains a return to export-led growth. That is what drove the economy in the foundation stages of the boom and in Ireland, exports equals jobs. Our export engine of high quality, competitive companies is fundamental to our return to economic prosperity. It is critical that we continue to work with them, to help them stay in business and position themselves for the upturn.”

He highlights sectors such as clean tech, software, medical devices and lifestyle companies as areas of continuing success. He cited the 250 new jobs created by business process outsourcing company Abtran in Cork, and anticipated that a number of green energy and water treatment EI member companies would enjoy sizeable export growth in 2010.

Furthermore, EI companies recorded growth in export orders in four of the past five months. Entrepreneurship and R&D investment were ahead of target in 2009.