Bracing for Brexit: ‘We’ve 100% put all our focus on the US market’
Brexit Proof Q&A: Donal Byrne, Big Red Barn
Big Red Barn CEO Donal Byrne: ‘The Irish Government in my opinion haven’t been very prepared for the past two years at all.’
Established in 2014 by Byrne, the company offers a fast solution to construction in addition to its event business which supplies everything from smoking shelters and temporary storage units to offices.
What was your reaction when you heard the UK had voted to leave the EU?
We were shocked, it had a huge effect. Three years ago, when they originally voted, we were working in Hinkley Point and we had priced a job in sterling and we lost the full margin on that job. We learned that we weren’t gambling on currency any more.
How is your business likely to be affected?
It has delayed everything because everyone has been sitting on the unknown. We’ve had to build into contracts that, if there’s any import duty, the customer has to pick that up. We’ve also built it in that they’re paying us in euro. If sterling plummets, it’s not our issue.
How much do you rely on raw materials or markets north of the Border? And how much on Britain?
All my timber would come from Northern Ireland. The steel comes from a supplier in Mayo but a lot of it comes in from a mill in the UK. He has quite a mountain of stock but there could be import duties. He’s been looking at sourcing his steel elsewhere but the steel market has been hugely affected in the past few months anyway.
When did you begin preparing for Brexit and what contingency plans have you put in place so far?
We did avail of the Brexit grants and I hired a consultant to come in. We had to start preparing the minute it happened because all the contracts we priced were null and void because sterling had plummeted.
Are you examining new markets/suppliers and, if so, how practical is that?
We’ve 100 per cent put all our focus on the US market. I’m not chasing the UK market any more and whatever work we get is from previous work or word of mouth.
We’ve joined up with a manufacturing company in the States and we’ve a new entity formed. The US is a way safer bet, it’s like 50 different countries. They all speak English and it’s very positive. We were totally over-reliant on the UK.
It was a slow process but we’ve seen great strides in the past few months. When you look at it, it makes way more sense. There’s a lot of rules and regulations in the UK.
Does Brexit present any opportunities for your business?
Without question. If Brexit hadn’t happened, I’d still be back and forth to the UK. And our company wouldn’t be worth a fraction of what it will be in the next few years with our expansion into the US. Ireland is very much afraid of modular housing while, if you look at the US, in Pennsylvania alone there are 32 factories making modular housing.
It’s the same with the rest of Europe. Ireland is very old fashioned in its ways. Concrete is too slow and costs too much more. The Americans have already copped that and they’re coming away from the conventional build.
What’s your best-/worst-case scenario?
Our worst-case scenario is that import duties are crazy high and we don’t get work but I’ll live with that. It’s been the kick in the ass we needed. Our best case is that our growth will come even faster and we’ll get more work in the UK.
How might the Government help ease the pain of Brexit for your company or sector?
The Irish Government in my opinion haven’t been very prepared for the past two years at all. They haven’t gone and explored other markets when they should have been going to America .The €1,000 grant to get the consultant in is a help, but it’s peanuts compared to what we spent.
How do you think the Irish and British governments have handled the Brexit negotiations?
They haven’t handled it well. They’re all civil servants. None of them have ever struck a deal with anyone. It’s a business transaction and it has to be hard-core. I know Europe has our backs but there’s been very little preparation.
Looking out five years, how do you think your business will have changed as a result of Brexit?
Growth will be slower without any question. In relation to my business, we have a massive US operation and Ireland will still be good and there’ll probably be more interest in modular construction. The US will explode because it’s far stronger. If Brexit doesn’t happen, we just stay as we are. I don’t think an awful lot will change.