‘There is still potential in the UK market and that is our focus’

Brexit Proof Q&A: Michael Murphy, Rivval

 Michael Murphy and his wife Una set up railway-support business Rivval in 2004. File photograph: Martina Regan

Michael Murphy and his wife Una set up railway-support business Rivval in 2004. File photograph: Martina Regan

 

Michael Murphy left Ireland with his wife Una in the middle of the 1980s recession. They went to the UK where he worked as a production engineer in the rail industry. Returning to Ireland in 2003, the couple saw an opportunity to support the railway business here and established the Co Monaghan-based Rivval in 2004.

The company, which is based in Carrickmacross, designs and makes “anything that attaches to the track, along the track and into the control centre”, including switch mechanisms, electrical connections, track circuits for train detection, signals, display installations, cable management systems, ducting, signal points, gantries, and equipment cabinets and housing for safety critical equipment.

What was your reaction when you heard that the UK had voted to leave the EU?

It seems like ancient history now. Like most people, I think I was disappointed but it wasn’t a shock. The choices and the information that the UK electorate were given, and the way the campaign was run over there, meant that a no vote was probably going to be inevitable.

How is your business likely to be affected?

Until we know whether it is going to be a “no deal” or we get the final trade deal, it is hard to know how we are going to be affected. More than half of our business is traded in Northern Ireland and in Britain. There is no doubt that there will be changes but we are hoping that they will be minor inconveniences on the customs side – perhaps additional paperwork and documentation rather than more significant duty and VAT implications.

We are currently in normal trading mode for the rest of the year as we see it so it’s really about preparing for what will happen next. Ours is a niche market and we also have several long-term contracts in place.

When did you begin preparing for Brexit and what contingency plans have you put in place?

Last year was a period of preparation for us – evaluating what Brexit could mean for the business. We have done a fair bit of training, with thanks to the Monaghan Local Enterprise Office, on import and export procedures and on customs clearance. They have been very progressive and very active particularly in getting Border companies up to speed on everything.

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We have also spent a lot of time engaging with our supply chain – our customers and our suppliers – and looking at how we can manage any effects through the supply chain. At this stage we’ve probably done all we can in terms of looking at how we can control things without it costing us a significant amount of further investment.

What has concerned you most about the process so far?

The big concerns for us have been time and uncertainty. Getting to the 31st of January 2020 meant a period of uncertainty – would they actually leave the EU, would there be another referendum . . .? At least now we are over one hurdle in the race.

And what has given you hope?

We are a small SME and are constantly planning. If we look at our Swot [strengths, weaknesses, opportunities and threats analysis], Brexit was in the “threat” box and we have been looking at how we can move it into our “opportunity” box. It’s been a case of us planning for the future and finding opportunities in that.

We opened a Rivval UK business in 2019. It is not currently an active business but now that we have it it gives us the incentive to make use of it.

Are you examining new markets/suppliers?

Our strategy for the next few years is to grow the UK market and we don’t see Brexit changing that. There is still potential in that market and that is where we are going to keep our focus.

When do you expect to be Brexit-ready?

We are as ready as we can be at the minute. We have put procedures and training in place and, until we know what the final trading arrangement is between the EU and the UK, it is hard to know exactly what is going to be in place. We are conscious of not wasting any resources in terms of customs for example when effectively it might not be needed.

What’s your best/worst-case scenario?

Best-case scenario, now that the UK has left, is that we see minor changes in some of the documentation for imports and exports, maybe some additional Intrastat reporting. Worst-case scenario is still a no deal and full implementation of import and VAT liabilities.

Does Brexit present any opportunities for you in your business?

It’s given us the initiative to look at taking more market share in mainland UK. Now that we have set up Rivval UK there is an incentive to look at what more we can do with the UK market.

Looking out five years, how do you think that your business or industry will have changed as a result of Brexit?

It will make us stronger in terms of how we approach the UK market. It is also going to push us to look at how we can reduce our reliance on UK imports, how we can increase our own manufacturing capability and output levels and overall I think it will make us stronger.