Global experience of Irish firms a valuable asset

The Irish Stock Exchange is largely composed of companies that spend a lot of their time and resources serving and building markets overseas. That provides a unique ecosystem of knowledge and skills that provides highly-valued intelligence for the Irish economy.

Senior executives of companies in Ireland travel the far corners of the globe each week as they support and develop businesses with worldwide footprints.

These companies are also confidently building manufacturing, marketing and support systems to underpin growth plans that will expand their market shares, add employment and create wealth for shareholders.

This process is evident in numerous industries. In packaging, for example, you are likely to find Smurfit Kappa executives across a number of Latin American economies including Mexico, Venezuela and Colombia. In food manufacturing, Irish managers from Kerry, Aryzta and Glanbia are deeply invested in developing businesses in countries as far flung as Australia, Nigeria and Malaysia, alongside more established markets in Europe and North America. Aircraft leasing companies have executives all over the world every week.

Clearly, these managers are undertaking these long- distance trips to further the interests of the companies they work for. Existing operations must be managed, customers are to be met and new development opportunities have to be explored.

A cursory review of the balance sheets of industrial companies in Ireland will show that all of them have the potential to deploy capital in support of both organic and acquisitive-led growth. It would be reasonable to expect both triggers to be pulled as we advance through 2014.

This global reach of corporate Ireland is very different from the experience in other larger economies. Ireland has a disproportionate amount of corporates whose existence depends on worldwide business, a function of our small domestic economy and open trade aspects of manufacturing and services.

Similar-sized companies in cities such as London, Paris and Berlin, often have large local markets which provide encouraging and recurrent revenues, but often create a myopic strategy which misses opportunities outside their home markets.

This is rarely an issue in Ireland, as virtually all leading stock market-quoted companies are engaged in sectors where international competition is ferocious. By being exposed to these forces, Irish companies are more streetwise and combat-ready than many similar sized companies abroad.

A parallel phenomenon is evident in their shareholder structures. Over the past decade, Irish listed companies have seen their equity base migrate towards global fund management investors.

These are, usually, hard- nosed equity investors who have clear views on world industry and shareholder value creation.

By being exposed to these investors on a regular basis (a necessity for quoted companies) the executives in Irish companies quickly understand and appreciate the forces that can help create equity value over the medium and long term.

This combination of living in global industries and being exposed to global fund managers, creates a level of investment intelligence unmatched in other capital markets. It is a resource that is tapped by the next generation of managers in each company but it is also accessible by other Irish companies. I’ve found that most successful Irish senior executives are generous with their time and insight when asked for it by other ambitious companies.

That knowledge base is an intangible and invaluable asset that should be tapped by entrepreneurs and policymakers alike as we voyage in to the next decade of corporate expansion.

*Joe Gill is director of corporate broking with Goodbody Stockbrokers His views are personal


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