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People power brought home overseas
John Mulligan



PAT MCDONAGH thinks there are some things he would have done differently if he had the time back.

The founder of Galwaybased Supermac's, McDonagh has ploughed over 20m into a chain of almost 20 Irish pub-restaurants in the US in the past few years. The Claddagh Irish Pubs generate about 70% of their money from food, and are dotted around states such as Indiana, Ohio, Illinois and Wisconsin.

McDonagh took the step to invest in the US after a former American employee of Supermac's suggested that such a move might pay dividends. It was also a reaction to the difficulties McDonagh was encountering in Ireland in his attempts to overcome planning obstacles for new shops, as well as a compensation culture that was wheeling out of control.

"It was time to look farther afield, " he said. "There are 80 million or so Americans who claim Irish heritage, so it's a bit of a captive market."

But making inroads into the US market has not been plain sailing. Different countries and cultures inevitably present new problems and issues, and, in retrospect, McDonagh thinks he should have boosted his US management team from the outset.

"I think now that I would have set up a board of directors that would have had a bit more knowledge of what happens on the ground over there, " he explained. "But, for the most part, I wouldn't have done anything significantly different."

One issue that arose and still remains is that patrons in an Irish pub and restaurant in the US expect to find Irish staff. "It can be difficult to get them because the restaurants are in areas that don't traditionally have strong Irish communities."

McDonagh is aware that people are the lynchpin of his business, whether in Ireland or the US. "It's all down to the people you have. I'm not going to be able to be everywhere, so you need good people on the ground."

One of Ireland's serial entrepreneurs, John Teeling, agrees. With a string of exploration firms to his name, as well as a whiskey business, Teeling tends to gravitate towards regions where angels fear to tread.

Companies under his banner, such as Petrel Resources, were busy wheeling and dealing in Iraq before the US invaded, as trade embargoes were hitting hard. Petrel Resources' managing director David Horgan made frequent trips with cases of medicine (and, of course, whiskey) to help lubricate the wheels of the economy.

"If you're in exploration you've no choice but to go beyond Ireland's borders, " said Teeling. His companies have been fairly dogged in their pursuit of foreign licence opportunities, and a non-judgemental disposition to any country's political establishment is a defining factor in the ability to clinch deals, according to Teeling.

In Iran recently, Persian Gold secured a deal to acquire a 70% option on a project about 350 miles southwest of Tehran. But Teeling is aware that without the right people on board . . . in this case, an Iranian geologist who had lived in Germany for 20 years . . . that deal may not have been done.

Many of the people working with Teeling's companies are former civil servants in their respective countries.

"The approach has always been to find strong local employees and consultants, " he said. "We accept that we often don't know what we're doing. We're going into unknowns and you need someone to guide you through it. We were reluctant, for instance, to go into Iran until we got locals on board. It took me 18 months to find someone who could mind us there."

The Irish background also plays its role. When working on a project in Botswana, one minister believed that African Gold was Englishowned (it's listed on London's Alternative Investment Market), but the tone of the conversation was quickly relaxed when he realised it was Irish.

"He told me that when he and his peers had been imprisoned during colonial days they studied Michael Collins and Eamon De Valera.

I had a great relationship with him after that."

While people count in breaking new markets, so do the nuts and bolts. Seamus Butler reckons that for his Longford-based company, one of the keys to success has been consistent research and development.

The engineering firm, of which Butler is managing director, manufactures effluent treatment products used in over 30 countries, in places such as Lebanon, Mayotte in the Indian Ocean, France and Oman.

"Right now our main focus is on generating growth in the North American market, " said Butler, who was spending a sunny afternoon last week showing Newfoundland and Labrador's minister of municipal affairs around the company's midlands operation, which employs 35 people.

Butler Engineering has just entered into a joint venture in Canada in an effort to tap into the US market, in particular. Canada's membership of Nafta (the North American Free Trade Association) eliminates many of the trade obstacles that could hinder growth if the company was exporting directly from Ireland.

"The US can be a very restricted market, " said Butler. "But we're trying to use Canada as a springboard."

In an effort to boost its international sales, Butler reckons that achieving ISO certification has been critical in ensuring the company's products are included on the buying lists of major engineering firms such as Halliburton, and its subsidiary, Kellogg, Brown and Root.

"I think that, for a small to medium sized enterprise, constant R&D is a real necessity too, " Butler added.

In breaching foreign markets, he said, the best route for doing so for his firm is through licensing its intellectual property.

"Our business is like the antithesis of software, " he said. "We have extremely long product life cycles, maybe between 20 and 30 years, so it can take a long time to get them to market. It has taken us the guts of five years to get where we are in Newfoundland."

The dividends may be substantial, though. Within a few years, Butler expects that the Canadian operation could be bigger than that in Ireland.




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