The top business leaders driving Cork's economy

Cloud cluster over southern capital has a silver lining for job creation in computing

‘THERE’S A very good story in Cork at the moment,” says Conor Healy, chief executive at the Cork Chamber of Commerce. “Companies are still investing in Ireland and they’re choosing Cork.”

He cites recent job announcements from IDA Ireland in relation to Aruba Networks, SouthWestern and Quest.

The last company, which is hiring 150 people for a shared-services centre, is part of the expanding cluster of cloud computing companies in the city. Cork Institute of Technology has already responded by creating the world’s first postgraduate degree in cloud computing.

While some pharma manufacturing jobs may fall by the wayside in the years ahead, Cork’s business elite are confident that the city can attract enough alternative investment and high-skilled employment to compensate.

Though most of the social media behemoths have headed for Dublin, games companies like Activision Blizzard and Big Fish Games are proving to be good local wins, with the games industry lining up alongside cloud computing and the even longer established ICT, biotech and pharma multinationals.

Big employers in the city like Apple and EMC, both present in Cork since the 1980s, have undergone substantial changes in their operations since then, shifting from manufacturing to sales and a range of other functions.

Foreign direct investment (FDI) doesn’t have to come from the US, of course, and at the chamber, Healy is busy trying to build on recent flickers of interest from Chinese companies, such as telecoms firms Huawei and ZJF Group, the recent acquirer of Tyndall Institute spin-out Firecomms.

Healy, alongside chamber president John Mullins, last week held a briefing on attracting Chinese investment and exporting to China in the city’s Clarion Hotel, while similar events are planned in relation to Brazil and Russia.

The pipeline of research with commercial potential coming from the university incubation centres suggests a positive future for the Cork economy, according to Healy, while work is also being done with Tourism Ireland to promote Cork as a city-break alternative to the capital. However, local consumer-facing businesses such as food producers and retailers are more exposed to the harsh economic times.

“The areas that are suffering are the retail community,” says Healy. “Consumer spending is low and it’s not going to rise anytime soon.”

Home-grown talent still going for growth

Declan O'Mahoney

Firecomms

SEMICONDUCTOR MAKER Firecomms last November became the first Irish company to be bought out by the Chinese, and chief executive Declan O'Mahoney is confident it won't be the last.

Firecomms' new owner ZJF is typical of a generation of Chinese firms that have cash and internal economic growth on their side but are looking to acquire the technology that will give them the edge, says O'Mahoney.

Firecomms develops and manufactures lasers and LEDs which enable high-speed optical data transmission in cars, homes and hospitals.

Crucially for the Chinese, its fibre optic cables are an alternative to copper. Any technology that will help Chinese industry resolve its resource issues is a target for acquisition, according to O'Mahoney.

"I've made it very clear that the R&D will need to stay in Ireland, as we are so plugged into the Tyndall Institute," he says.

"We currently manufacture in Malaysia and that production will move to China," he adds.

The acquisition is "still going through the transitory phase". However, he expects that, as a result of ZJF's investment, his team will double from 21 engineers - 19 of whom are based in Cork - to around 40, while €5 million will be spent on research and development.

Firecomms was founded in 2001 by John Lambkin and Thomas Moriarty following research at the Tyndall Institute by Lambkin. O'Mahoney, who had been living in Silicon Valley and heading Northstar Systems, joined the company as chief executive after he was approached by the venture capital funds which were investing in it at the time.

The funding environment has changed since Firecomms got its original VC support, he notes.

"There are very good seed capital funds and Enterprise Ireland has done a good job," he says.

"But proper large-scale funding is still an issue. Firecomms did very well and got significant funding, but I think it's not as easy now.

"There's not as much liquidity. It takes €10-€30 million to run a semiconductor company and it's very hard to raise that."

Ger Fitzgerald

Abtran

KERRY-BORN Ger Fitzgerald is an executive director of Abtran, the largest business process outsourcing company in Ireland, which he co-founded alongside Pat Ryan and his brother Michael Fitzgerald in 1997.

Abtran, which counts the ESB, BSkyB, Aviva and the M50 barrier-free toll operator BetEire Flow among its major clients, now has more than a thousand employees between Bishopstown, Co Cork, and the IDA technology park on the Model Farm Road, and turnover is more than €40 million.

This behind-the-scenes role typically results in households in Ireland interacting with Abtran staff at least four times a year, it claims.

The company also has a number of Government contracts, having built up its reputation since its work on the euro changeover back in 2001 – a “significant milestone” for the company, according to Fitzgerald.

“From day one we invested back into the business,” he says, with the result that it grew each year.

The recession is prompting more companies to cut the cost of payment processing, sales, administration, claims-handling and other customer services, which is good news for outsourcing companies like Abtran.

“You could say that recession suits our business, because companies need to streamline,” says Fitzgerald.

Last year, it announced that 300 new jobs would be created over the next three years as part of a €3.5 million investment in research and development, while the company has a research partnership with the Cork Constraint Computation Centre (4C) in University College Cork.

Abtran is also one of Enterprise Ireland’s scaling clients, meaning it has been identified as having the potential to quickly grow its presence internationally.

Already, around 30 per cent of the services it provides to BSkyB relate to its UK customer base.

Owen O’Callaghan

O’Callaghan Properties

“WE CAN’T let everything go to Dublin. We must try and keep something down south,” says Owen O’Callaghan of his proposal for a €50 million event and conference centre in Cork.

O’Callaghan, one of the few major property developers to survive the crash, will submit a revised planning application to Cork City Council for the proposed 5,000-seater Albert Quay centre on Monday.

The revised plan is “a better fit for the site” and he’s optimistic that the permission will come through, reducing the number of Munster residents travelling to Dublin’s 02 arena for entertainment.

Meanwhile, a revised application for an €80 million private hospital near Western Road is sitting with An Bord Pleanála, after an earlier application was refused in the wake of the 2009 Cork floods, which caused €100 million worth of damage to the city.

O’Callaghan was obliged to add an additional emergency exit to his plan, although the site itself was not flooded. The developer has been critical of the way in which ESB controlled its dams in the Lee Valley, accusing the company of “ineptitude” over its inability to control the outflow of water.

O’Callaghan Properties has built several major schemes in Cork and beyond over the years, with the Liffey Valley development in Dublin landing him in the Mahon Tribunal.

One of his less controversial developments is the Opera Lane retail development between Patrick Street and Cork Opera House, which boasts fashion chains such as Topshop, HM and The Gap.

“Opera Lane is trading satisfactorily, despite everything, though I wouldn’t say it’s breaking records,” said O’Callaghan.

Cork is making it through to the other side of the boom-and-bust with fewer scars than other parts of the country, he agreed. “I don’t think we went over the top to the same extent,” he said, though there were still excesses.

O’Callaghan predicts that a “crawling” recovery in the property market is imminent.

“I feel we’re close to the bottom this year.”

Pat O’Donnell, Enda Murphy, Dan Byrne

Lincor

LINCOR, FOUNDED by three ex-Apple executives – Dan Byrne, Pat O’Donnell and Enda Murphy – make hospital entertainment and patient management systems that go by the name MediVista. Its installed in 80 hospitals and 30,000 beds around the world, with clients including the NHS, Cork’s Marymount Hospice and the Harley Medical Group.

Due to its financial constraints, the Health Service Executive isn’t a customer yet. “What we’re still trying to show is that there’s significant efficiencies and advantages with the bed management part of the system,” says O’Donnell. It’s not just about providing internet access – software running on the same terminal includes features such as patient education avatars and real-time food ordering that help cut costs.

Before it launched MediVista in 2003, Lincor needed to design specialist hardware that would be able to withstand MRSA cleaning liquids, while the entire product had to both maintain security on hospital records and be easy for patients to use.

“If you’ve got an old lady who wants to watch Coronation Street, it can’t be intimidating – you can’t just tell her there’s a computer over there.”

There were a few years where the company, which is based in the IDA technology park on the Model Farm Road, was “probably struggling”, according to O’Donnell. “When you’re working for a large company like Apple, you don’t worry about cashflow; you don’t worry about who’s going to pay the bills. Richard brought discipline to us,” he says, of the decision to hire former Esat Group boss Richard Cooke as chief executive.

About €3 million has been invested by the founders, private individuals and Enterprise Ireland. The company, which has 34 employees, turned profitable three years ago and has revenues of €8-€10 million.

Gerry Wycherley

Templeford

GERRY WYCHERLEY is best known as the man who developed the Cork Airport Business Park. Having survived the property crash, he’s now seeking to develop his 24-acre site at Marina Commercial Park.

It’s not going to be a project with a quick turnaround, however.

When he applied for planning permission last year, Wycherley said the development in the Cork docklands could take several years to complete because of the depressed state of the market. He’s taking a five- to 10-year view on the 2.5 million sq ft development, which he proposes will include 880 apartments along 350m of quay front.

The site comprised some 18 acres occupied by the Ford factory which closed in 1983 and a further six acres occupied by Dunlops, which closed 1984. After Wycherley acquired the sites in the late 1980s, his company, Templeford, converted them into the Marina Commercial Park. Some 150 businesses operate there. From west Cork, Wycherley worked in the IDA in the 1970s and 1980s and went on to buy and redevelop sites abandoned by departing manufacturers. He took the view during the property bubble that the market was overcooked and avoided the fate of his developer peers.

John Dennehy

Assembly Point

TECHNOLOGY ENTREPRENEUR John Dennehy is chief executive of Assembly Point, which makes human resources software called HR Locker that helps employers track staff details, hours, reports, reminders and sick days. Clients include Thomas Cook, Ryanair and PopCap Games.

Dennehy is a veteran of the Dublin-based Upstart Games, a global developer and publisher of mobile phone games, which he co-founded in 2002 and sold in 2006, before moving to Cork to start all over again.

With its supply of computer science graduates from UCC and CIT, the city was a good place to find the developers he needed for his next start-up. In Dublin, the competition for senior developers was too tough, he says.

Dennehy raised €300,000 for HR Locker last year, with €150,000 of that coming from Enterprise Ireland seed finance. Assembly Point’s next big push will be behind Zartis, recruitment software designed for the social media age.

Dennehy compares the HR Locker sales process to “a funnel”, with the company trying to turn as many free trial users into paying customers. With the service costing €500-€1,000, it will take time for revenues to grow, he says.

“It’s not like the old days where you would do bespoke development for one company, go in and build it and say that will be €50,000.”

The company was operating out of a converted attic in a house on MacCurtain Street before it moved last year to Webworks, an impressive Enterprise Ireland-funded building on Eglinton Street designed by Scott Tallon Walker architects. It was opened in 2006 by Micheál Martin, but still contains a number of empty offices.

Philip Lynch

One51

CORK BUSINESSMAN Philip Lynch now heads investment group One51 but he is most closely associated with IAWS, the food and agribusiness group spun off from the Irish Agricultural Wholesale Society Co-Op and floated on the Irish stock exchange in 1988.

During his time as chief executive of IAWS, Lynch’s most eye-catching move was the 1997 acquisition of bakery group Cuisine de France, which led to the proliferation of par-baked baguettes in Irish convenience stores.

The sites of subsidiaries such as the Cork-founded feed importer RH Hall and flour miller Odlums loom large in the city skyline, though RH Hall’s grain stores on the city quays were badly damaged in a fire in 2006. However, IAWS itself no longer exists in its current form, with the food part of the business having merged with Swiss bakery firm Hiestand to form Aryzta and the agribusiness side of the operation spun off into Origin Enterprises.

Lynch’s time at the head of One51 hasn’t all been smooth. At last year’s agm, he was forced to see off a challenge from a rebel shareholder and listen to the criticisms of high-profile investors who were nursing heavy losses as a result of putting their faith in Lynch.

Patrick Coveney

Greencore

WITH ITS exit from the sugar industry, convenience group Greencore no longer has any active sites in Cork, though as a result of the property crash it still owns tracts of land at Mallow, despite the fact that the plant there closed in 2006.

Coincidentally, Greencore’s chief executive, Patrick Coveney, is one of the most prominent business people to hail from the city, growing up in the suburb of Blackrock and later on a farm in Minane Bridge on the outskirts of the city.

A former management consultant at McKinsey, Coveney is the son of the late Hugh Coveney, who was a Fine Gael TD for Cork South Central, and brother of Simon Coveney, who now holds the same position.

“I grew up in a political family, but it was also a commercial business family and I was always more business-minded,” said Coveney.

He took over the Greencore reins in 2008, having first joined the company as chief financial officer in 2005. Now three years into the job, Coveney sees his tasks at Greencore as “continuing to drive growth and performance, and secondly, to add to the company through acquisitions”.

The group, which is listed on the Irish Stock Exchange, is in acquisition mode, though Coveney’s 2010 bid for Northern Foods failed when a rival bidder, Boparan, came on the scene. Uniq, one of the leading players in the British convenience food market, is understood to be on the company’s radar.

Coveney confirms his acquisition target list comprises companies that, like Greencore, supply convenience food to the British supermarket sector.

Five years on from the Mallow redundancies, the legacy of its sugar beet production days remains on Greencore’s books. But the company will have to wait until buyers return to the commercial property market before it can offload both the Mallow site and its land in Carlow. Work on remediation and demolition of the sites is now largely completed, he said.

Jim Barry

Barry Group

JIM BARRY, managing director of the Barry Group, is the man behind the Quik Pick, Costcutter, Carry Out and BuyLo retail symbol groups. More than 235 retail outlets are affiliated to the group.

The company’s 2009 pretax profit was €3 million, up 12 per cent on the previous year – a performance that beat any other large wholesale chain – and its 2010 results, soon to be published, saw an expansion in turnover despite hugely difficult conditions in the retail and wholesale market.

“Everyone was hoping things would get better in the first half of this year, but it hasn’t happened,” says Barry.

The convenience sector will be down 5-10 per cent this year, after 10 per cent declines in 2009 and 2010 – “a huge strain on any business” – meaning the group has had to diversify in order to sustain its growth.

“It’s very important that we change our attitude to business and accept lower profits,” says Barry.

BuyLo, a discount grocery brand, is still at entry stage, but Barry hopes “the complete package” will be ready in six to nine months.

Off-licence franchise Carry Out, meanwhile, has to contend with below-cost alcohol selling by supermarkets, but franchise holders are outperforming independent off-licences, Barry claims. With banks still sucking in money rather than lending it, a lack of credit availability has made Carry Out’s growth “a bit more difficult” than expected. “We certainly could have opened a lot more.”

The Barry Group, which was founded by Jim’s father James A Barry in 1955, now employs 240 people at its headquarters and distribution centre in Mallow, Co Cork, where Barry lives. He was recently given the title MSL Cork Businessperson of the Year.

Paul Hands

Open Innovation Partners And Qumas

PAUL HANDS is best known in Cork as the founder of compliance software company Qumas, but he qualifies for the title serial entrepreneur.He started his career as a data controller for Cara computers in 1978 and also founded the Cork-based QCL Technologies, which was sold to Calyx in 2005.

In the early 1990s, Hands spotted a gap in the pharma, life sciences and financial sectors, developing compliance software to help these highly regulated industries meet legal commitments. Contracts with leading firms like Roche, Merck and AstraZeneca followed.

In 2006, Hands stepped down as chief executive of the company – the position was then taken up by recent Ernst Young Entrepreneur of the Year finalist Kevin O’Leary – and “moved upstairs” to become chairman.

His next direction was bioinformatics. “The focus is now on the maintenance of wellness rather than the treatment of disease,” he says.

There are commercial advantages to this. Drugs take time to develop and test, but for companies specialising in diagnostics, there’s usually a shorter gap between the original research and a product’s arrival on the market.

Hands has now set up Open Innovation Partners, which promotes commercialisation of life sciences research. He has two partners in the venture: life sciences consultant Diarmuid Cahalane and Charles Garvey, the former head of Horizon Technology. Two of the projects on which it is working – companies called Neonatal Diagnostics and Metabolomic Diagnostics – are the result of research originating from UCC and Cork University Maternity Hospital. Its third project is Raman Diagnostics – the result of a collaboration between DIT, TCD and the Coombe Hospital.

A veteran of multiple funding rounds over the years, Hands sits on the board of the Cork Chamber of Commerce and is a member of the Cork Entrepreneurship Steering Group.

He’s confident the pipeline of research and innovation will lead to commercial returns and reinvestment in the university sector. “We’re surrounded by almost an insurmountable number of opportunities. Everything is alive and well right now in university research.”

John Mullins

Bord GÁis

AS CHIEF executive of Bord Gáis, John Mullins is mostly in the headlines these days in relation to Government semi-State policy, but beyond the day job he also serves as president of the Cork Chamber.

Six weeks into the job, Mullins is convinced it is one of the strongest chambers in the country. “We have a fairly united front in Cork on economic development,” he says.

Infrastructure is top of his list, with Mullins and the rest of the Cork business community keen to convince Hibernia Atlantic and CVC Partners to branch a planned transatlantic fibre-optic cable into the Cork-Limerick-Galway area. The high-speed cables could boost Cork as a centre for high-frequency financial trading, which Mullins believes would sit nicely alongside the city’s growing reputation for cloud computing.

Although there are job-threatening issues in the pharma sector with drugs coming off patent, he’s confident that several of the multinationals based in Cork can do what a company like EMC has done: evolve.

“We’ve seen net increases in the pharma sector because they have added shared services centres,” he notes.

Bord Gáis itself employs 500 people at its headquarters in Cork – around half of its national workforce. A native of Cork and utilities sector veteran, Mullins also cites the economic value of bringing an events and conference centre to the city – O’Callaghan Properties and Heineken International are among those to have proposed centres. The success of the Live at the Marquee shows points to the need for a permanent venue, Mullins believes.

Pat O’Flynn

Solvotrin Therapeutics

IT WAS through the Enterprise Ireland Business Partners Programme that Cork businessman Pat O’Flynn, former chief executive of hazardous waste company AVR-Safeway, discovered the research of Dr John Gilmer, a Trinity scientist who began work on countering the side-effects of aspirin in the late 1990s.

O’Flynn had sold AVR-Safeway to international utility company Veolia in 2008 and was looking something new. He came on board as chief executive and invested in the company, as did Enterprise Ireland, Dr Gilmer, Dr Mark Ledwidge and his brother John O’Flynn.

Solvotrin has two lead products - the first of these, ST0702, offers advantages over conventional products for improving cholesterol levels, while the second, SI1004, will prevent premature ageing of heart tissue.

Solvotrin, which is based in both Cork and Dublin, has reached the stage of preclinical proof-of-concept on both compounds, having proved their efficacy in monkeys. “We’ve moved very fast and we have very exciting and encouraging preclinical proof of concept data,” says O’Flynn.

Solvotrin is now looking for a partner in the pharmaceutical industry to take its products through clinical trials. An alternative business arrangement would be a co-development partner and/or venture capital funding.

The global pipeline for the pharmaceutical industry is a major concern and has put a lot of strain on the industry,” says O’Flynn. However, Ireland is reaping the benefits of RD investment, meaning innovative companies like Solvotrin can counteract the trend, he adds.

“We have first-in-class manufacturing here too. I’ve travelled the world and we are exceptionally good.”