Sir, – Diarmuid O’Gorman (September 8th) suggests that Irish businesses should improve their product offerings in order to compete against foreign competitors. While what he says is fine when looked at in the one dimension, it doesn’t stand up to scrutiny. Irish businesses have fundamental disadvantages that possibly he’s blinded to, in Austria. Two of the major disadvantages are: we are an island nation and we have a very small indigenous market.
I had a business that had overheads of €1 million and sales of three million metres of product, (using rounded figures). That is 33 cent per metre. If I had been in the UK, I could have had the same overheads but been able to service about 10 million metres, ie 10 cent per metre. That’s a huge difference when your sale price is 85 cent per metre. Also, I could have six pallets going out on a given day going to Waterford, Cork, Kerry, Limerick, Galway and Belfast. That is six different transport companies each going off with one pallet. If I were in London servicing a market 15 times the size of Ireland, each of those orders would have been 15 pallets, ie a full truck load. So I would have six full lorry loads going to Birmingham, Manchester, Leicester, etc.
As any transport person will tell you, the difference in price of transporting a pallet load compared to a complete truck load, is massive.
In addition, Ireland has traditionally been used as a dumping ground for foreign companies to offload excess capacity without upsetting price in their own markets, in a typical marginal selling technique.
Ireland has massive natural business disadvantages and rather than a Government call to buy Irish, Irish business should receive annual location grants from the EU under the Cohesion Fund, and the Government needs to start that ball rolling. – Yours etc,