Family business in Derry looks to stay afloat in turbulent economic waters

BELFAST BRIEFING:The Northern Executive needs to support local businesses through difficult times

THE DELUGE of rain which has hit Northern Ireland in the last few days may prove to be a good omen for one fledgling Derry firm which plans to expand into the inflatable boat business.

North Atlantic Rib Marine intends to launch a new range of rigid inflatable boats, known as ribs, in Europe.

The company is a family-run business set up by a father and his two sons, who have already established two successful businesses. Francis O'Loughlin and his sons Joseph and Dominic are investing more than £250,000 in their new business.

It is an ambitious step for a family-run firm, particularly in the current economic climate, but they are determined to make it work.

The O'Loughlins plan to concentrate on developing an export market - although if the rain continues in the North they could find a ready-made market on their doorstep.

Francis O'Loughlin believes Derry is the perfect location from which to assemble and export the ribs. He says the firm has identified opportunities in the fast-growing marine leisure market. It also sees the potential in exploring chances to supply ribs for commercial, police and rescue services.

The O'Loughlins demonstrate what entrepreneurial spirit is all about - doing your homework and taking a risk. They also have a track record - Francis is an experienced engineer while Joseph and Dominic have had their own engineering firm since 2001.

What is just as important though is that they have faith that their new business venture will work out. It may only employ three people at the moment but the O'Loughlins want to create jobs in Derry and make the business a success.

It is an ethos into which the Northern Ireland Executive desperately needs to tap if it is to stem the rising flood of redundancies taking place across the North. The Executive needs to find a way to support local businesses through these difficult times and encourage them to plan for a potentially brighter future.

Northern Ireland may still be a public-sector led economy and in light of the global economic downturn, this may not be the worst case scenario. However, it is also a small business-dominated economy and family-run firms are the front line of defence for the North's economy.

The question now is to whom do they turn when their business is under threat - should the North's economic development agency Invest Northern Ireland be more proactive?

When well established Northern Ireland-owned companies such as Creagh Concrete Products warn staff of potential job cuts, it is a worrying indicator of how increasingly vulnerable they now are.

Creagh Concrete, which employs nearly 500 people, says it may have to lay off 90 staff across several sites in Northern Ireland, Scotland and England because of a fall in orders.

It is a similar scenario at the family-run Hillcrest Group in Derry. The firm specialises in providing metal partitions, doors, windows and glass for the construction sector. It has warned that jobs are at risk because of the slowdown in the sector, particularly in the private housing market.

Government statistics show that construction output fell during the first quarter of 2008 for a fifth quarter in a row. Further research is likely to support concerns in the sector that it is continuing to fall and at a more rapid pace.

Housing output, which includes both public and private sector housing and accounts for 35 per cent of construction output, has fallen for five consecutive quarters.

However, it is the knock- on effect of the decline which is going to really double the pain for the North's economy.

It is one thing construction jobs and sector-related jobs being under threat because of the slowdown but, when evidence emerges that other industries are hurting, then it is definitely time to check the floodgates.

Financial institutions, surveyors and estate agents have all seen a sharp decline in their level of business activity.

Latest Government housing statistics, which show a consistent fall in house prices in the North during the 12 months to June, suggest this is a trend which is going to continue.

Business leaders are also warning there can be no light at the end of the tunnel for hard- pressed companies in the North if the rate of inflation continues to climb in the UK.

It rose to 4.4 per cent in July, meaning that last month, the annual rate of inflation stood at its highest level since records began in 1997.

According to Joanne Stuart, chairwoman of the Institute of Directors in Northern Ireland rising food, petrol and utility costs are to blame. She is hopeful though that a drop in oil prices may serve to relieve some inflationary pressures.

The short-term outlook for the Northern Ireland economy is like the weather forecast this week - far from sunny. What we desperately need now are more firms like Derry's North Atlantic Rib Marine which believes it can find a safe port to develop its business in the current economic storm.