business month november 2014

13 November 2014 BUSINESS MONTH

I N C I S I V E , O B J E C T I V E , I ND E P END EN T

In association withNovember 2014 • ISSUE 48PRICE £2.50 (Where sold)

• DUBLIN WEB SUMMIT PREVIEW • FOCUS ON EUROZONE ANDUS ECONOMIES • PAUL GOSLING ON WELFARE REFORM

WE NEED TOMAKE THINGSMAKE THINGSAfter Gallaher’s, whither manufacturingin Northern Ireland?

Glory days: Workers atHarland and Wolff’s engineworks tool room, 1935

Business Month 124-144 Royal Avenue,Belfast, BT1 1EBEditor - Margaret Canning

Sales manager - Jackie ReidContact: +44 2890 264070 or email:[email protected]

Design and production: RE&DBusiness Month is an imprint ofIndependent News and Media (NI)

Editor’s noteMargaret [email protected]

CONTENTS


WELCOME tothe Novemberissue of Busi-ness Month,in which we

tackle the thorny subject ofNorthern Ireland’s manufactur-ing sector head-on.

In light of the proposedclosure of Gallaher’s in Bally-mena in two years’ time, PaulGosling considers if reports ofthe demise of manufacturing inthe province have been greatlyexaggerated.

What we do know is that,notwithstanding Gallaher’s, wehave plenty of manufacturerswho are in rude health.

Harland & Wolff, as well asbeing the subject of our frontimage, provides a case studyof how a maker can move withthe times.

But we also want to showoff our great tech companies— and that’s why we’re taking aspecial look at the Dublin WebSummit, taking place later thisweek.

No doubt there’ll be someslightly sore heads today asthe mini Belfast Summit tookplace last night, just as Busi-ness Month was coming off thepresses.

Paul Gosling is also peeringinto the murky issue of welfarereform, while our Focus Onsare honing in on office space,and the growing popularity ofsponsorship of the arts by thecorporate world.

The Chairman is alsorelieved to see the businesssocial scene cranking up a gear.

Enjoy, and see you again inDecember.

FEATURES

COVER STORY

48

12 Analysis: Firms from the northwill be well represented wheninternational delegates attendEurope’s biggest technology event.14 Analysis: Joan Houstonanalyses the new loans environmentafter profound changes in thebanking world.16 Economy Watch: We look at theeconomies of the United Statesand eurozone.22 Analysis: Alan Watts exploreshow venture capitalists are faringin a new era.37 On song: The indie cherub whowent on to become a topPR man in Northern Ireland.

FOCUS38 Office space: A lack of topgrade office space in Belfast isstifling economic growth, sayproperty agents.42 Sponsorship of the arts:Commercial sponsorship couldcome to the rescue and give thecultural scene a much-needed liftin the face of savage cuts.

OFFLINE46 Out to Lunch: Joris Minnevisits James Street South withRobert J Cooper, the head Harlandand Wolff Heavy Industries Ltd.48 Day in the life: Graham Keddiemanaging director of BelfastInternational Airport.58 The Chairman: Our man abouttown gives us the inside track onbusiness.62 Last Word: Restaurantshereareburgeoning.ButthisgrowthcouldbehaltedduetothehighrateofVatcomparedtotheRepublic.

POSITIVE OUTPUTDespite the gloom,forecastsfor the manufacturingsector remain upbeat

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NEWS BITES

4 BUSINESS MONTH 3 November 2014

5%increase in overseasvisitors

19%increase in overseasholidaymakers

31%increase in Great Britainholidaymakers

29%growth in North Americaholidaymakers

7%growth in revenue from alloverseas visitors

Invest NI gives Seagate£8m of added support

IT company Seagate has received£40m of support from Invest NIin the last 12 years, the economicdevelopment agency has said— including £8m towards thecompany’s latest project.A new £34.7m investment by

Seagate in Londonderry, one ofInvest NI’s most heavily-support-ed companies, will account forover 40% of Northern Ireland’sresearch and development spend-ing target for 2014. The figurewill include 35 new jobs at thecompany, with an average salaryof £35,000 per annum.Invest NI said that support for

Seagate projects will also contrib-ute towards £254m of investmentinto the economy.Seagate came to Northern Ire-

land in 1993 when it establishedthe facility at Springtown indus-trial estate and now employsaround 1,400 people makingparts for computer disc drives.However, in 2008 the com-

pany’s Limavady plant shut itsdoors with the loss of almost1,000 workers. Money given tothat development by Invest NIwas eventually clawed back.East LondonderryMLAAdrian

McQuillan said: “While I hopethis affirms further commitmentto the city of Londonderry fromSeagate, it is a pity the people ofLimavady could not have benefit-ed from this sort of investment.”

Health giant Eakin buysmedical skin care makerCO Down specialist healthcarebusiness Eakin Group has ac-quired English firm Cliffe Medi-cal, which owns Respond Plus inLarne, for an undisclosed sum.Comber-based Eakin, which

makesmedical skin care productsfor use in stoma andwound care,said the acquisition would boostits workforce by 55 to 280 people.Cliffe Medical is based in Not-

tingham and has two tradingsubsidiaries, Ostomart Ltd andRespond Plus, a home deliveryservice for stoma patients.Respond Plus employs 11 staff

who dispense stoma products

directly to patients as well as pro-viding a nurse advisory service.With a turnover of £72m, the

Eakin Group is one of NorthernIreland’s biggest success storiesin the health sector.

Tesco hit as it admits£263m accounts holeTESCO’S share of the NorthernIreland grocery market has fall-en steeply over the 12 months toSeptember 2014, figures show.The supermarket giant, which

has owned up to a £263mhole inits UK accounts, is the dominantplayer in the region’s grocerymarketwith 56 stores and a 35.5%share, according to figures fromKantarWorldpanel. This is nearlydouble rival Sainsbury’s marketshare of 18%. But the dominanceof Tesco is on thewane, theKantarfigures suggest, with its marketshare decreasing from 35.9% in2013, and its sales growth dramat-ically falling from 3.9% to 0.1%.Tesco has acknowledged that

it has a £263m hole in its ac-

counts, more than the £250mpreviously expected. As a resultof the profits error, shares in thegroup dropped by 7%, wiping acolossal £2bn off its value. Chair-man Sir Richard Broadbent hasannounced he will step down.

Master Builders warnover public sector cutsTHE Federation ofMaster Build-ers has said looming public sectorcuts could hit the recovery inNorthern Ireland’s small andme-dium-sized construction sector.The warning came as the FMB

published results of its state oftrade survey for quarter three2014, showing Northern Irelandhas remained in positive territoryfor the sixth successive quarter.In contrast, businesses stating

lower levels of activity declinedto 10% from 14%.LouiseWard from FMBNorth-

ern Ireland said: “The SMEconstruction sector has beenslowly recovering over the past18 months but it is important

to remember that the widerconstruction sector won’t reachpre-recession levels until 2017.“Worse still, the looming public

sector spending cuts in NorthernIreland are likely to pull the rugfrom under us before we havemanaged to regain our footing.”

Goldman Sachs makesfirst big NI investmentINTERNATIONAL investmentbank Goldman Sachs is makingits first substantial investment inNorthern Ireland with a deal tobuy loans on Belfast’s MerchantHotel and other assets fromUlster Bank.Goldman Sachs is the preferred

bidder to buy loans relating to theCathedral Quarter hotel and fourothers in the Republic — pack-aged up as Project Nadal — afterwinning out over four other bids.All the properties remain open

for business as Ulster Bank con-tinues the process of divestingitself of property debt throughportfolio sales.

Source: Tourism statistics for January to June 2014, compared to 2013, Nisra

WINNING FORMULA: Students from Lurgan College helped launch Almac’s schools outreach programmePathway. At the pharmaceutical company’s Craigavon headquarters are (left to rright) Derek Baker, Perma-nent Secretary of the Department for Employment and Learning, Jamie Davison and Samantha Bann fromLurgan College and Stephen Barr, managing director of Almac’ Sciences’ business unit

NEWS BITES


It’s hoped JTI will keep some operations in Ballymena

22.2% across the UK. Some 29% ofthose who are inactive are sick ordisabled, 27% are students, 25%are home carers and 12% havetaken early retirement.By comparison, of the UK

figure, only 24% of the UK eco-nomically inactive are sick ordisabled— themajor factor in thedifference with Northern Ireland.Some 26% are students, 25%are home carers and 15% havetaken early retirement. NorthernIreland’s high rate of economicinactivity means that it has theUK’s lowest employment rateat 68.3%, compared to the UKaverage of 73.0%.Northern Ireland’s employ-

ment situation has improvedsignificantly in recent weekswith a number of positive job an-nouncements, which exceed thenumber of potential job losses atJTI. PwC is to recruit more than800 new staff in Belfast, Allen &Overy has announced 100 newjobs in Belfast, Rapid7 will takeon 75 people in Belfast, VersionOnewill employ a further 50 staffin Belfast and Chelsea Apps iscreating 33 jobs in Belfast.Away from the capital, there

were announcements of 60 newjobs with Autoline in Newry,49 new jobs with Lakeland inEnniskillen and 35 new jobs atSeagate in Derry.

UNEMPLOYMENT in NorthernIreland has fallen yet again andis now down to 6.1%, asmeasuredby the Labour Force Survey. Thisis only marginally below theUK rate of 6.0%. The NorthernIreland rate fell by 1.2% in thelast year.However, other statistics pres-

ent a negative picture. Claimantcount unemployment in North-ern Ireland is actually the highestof any UK region at 5.9%. TheUK average rate is a mere 2.8%.Northern Ireland does even

worse when rates of economic in-activity are considered. It has thehighest rate of inactivity acrossthe UK at 27.2%, compared to

Mixed bag in unemployment figures

▲ HOUSE PRICESNorthern Ireland averagehouse prices rose by 19.5%in the last year to £109,392,according to the Halifax.▲ IRISH HOUSE PRICESThe average house price in theIrish Republic rose by 15.0%in the last year, according toIreland’s Central StatisticsOffice.▲ DIYSpending on home improve-ments will rise 38% in thenext three years, predicts theFederation of Master Builders.It says parents want morespace to accommodate youngadults who cannot afford toleave home.▲ CONFIDENCEConsumer confidence has hita six year high, according tothe Danske Bank’s consumerconfidence index.▲ BORROWINGUK government borrowingis continuing to rise — itincreased by £1.6bn in the yearending September.▼ INFLATIONThe Consumer Prices Indexwas 1.2% in the year to Sep-tember, down from 1.5% in theyear to August.▼ WAGESUK real wages have fallenbetween 8% and 10% since theonset of the recession in 2008,according to the Centre forEconomic Performance.▼ STERLINGThe pound weakened againstthe euro. A pound bought morethan €1.28 in early October,before falling back to less than€1.25 in mid October and thenrallying to €1.27 at the end ofthe month.▼ BUILDINGNorthern Ireland’s construc-tion output has fallen. It fellby 3.7% in the second quartercompared to the first quarterand by 6.0% against the sameperiod a year before.▼ MANUFACTURING JOBSThe sector was responsible for25% of UK jobs in 1978: it isnow just 8%.

THE announcement of potential-ly almost 900 job losses at the JTIplant in Ballymena was hedgedin terms of consultations aboutpossible closure, rather than adefinite decision.In its statement the company

said: “JTI will undertake appro-priate consultations on proposalsto change its product sourcing,which could lead to the closureof some of its manufacturingsites. JTI’s facilities in Lisnafillan(Northern Ireland) and Wervik(Belgium) would cease to operate,with productionmoving to otherfacilities, potentially in Polandand Romania.”It continued: “Consultation

with employees’ representativesand the EuropeanWorks Councilwill be appropriately conducted.Support for affected employeeswill be discussed as part of theconsultation process. This pro-posal would affect approximately1,100 full-time jobs across theEuropean Union.”Although the statement was

not definitive, it is a requirementof European Union law for largeclosures to be subject to employeeconsultations. A spokesman forJTI said: “Consulting is part ofa clearly outlined legal processin order to give the employees’representatives the opportunityto understand and discuss theeconomic rationale of the com-pany’s plans. JTI has completedconsiderable investigations be-foremaking this announcement,however it is prepared to considerany proposals which are made.”

Employment and LearningMinister Dr Stephen Farry andEnterpriseMinister Arlene Fostermet representatives of JTI afterthe announcement to discussopportunities for retraining. ButArlene Foster indicated that theExecutive hopes JTI will retainsome operations at Ballymena.She said: “We are in the unique

position of having a considerableperiod of time to explore everyavailable option tomaintain somepresence at Lisnafillan. Togetherwith my officials in Invest NI, Iwill explore every option availa-ble to the company in terms of,for example, support for researchand development, to avoid com-plete closure of the factory.”

Cigarette plant jobs under consultationPAUL GOSLING

NEWS BITES


THE banking crisis has led to araft of overseas investors buy-ing-up property in NorthernIreland, the Republic and GreatBritain.According to figures from

the Property Industry Alliance,overseas investors are now thelargest owners of UK commercialproperty. Previously, institutionalinvestors were the largest groupof owners.The value of portfolios held

by overseas owners in the UKhas more than doubled over thelast decade to £94bn. Sovereignwealth funds were particularlyactive last year in making largescale property acquisitions. Over-seas investors now own almostone quarter of all commercialproperty investment. Institu-tional investors’ holdings of com-mercial property fell in the sameperiod by 16%, to £75bn.

Sir Robert Finch, chairman ofthe Property Industry Alliance,said: “Drawing on recent work bythe Investment Property Forum,the (Property Data) Report high-lighted that of the £683bn totalUK commercial stock, retail is thelargest sector by value, £305bn;followed by offices, £195bn; andthen industrial property, £126bn.Other commercial property, in-cluding hotels and leisure, wasvalued at £58bn.”The Northern Irish commercial

property market has been par-ticularly active in recentmonths.In one of the most recent deals,Goldman Sachs has bought aportfolio of Northern Irelandproperty-related loans from Ul-ster Bank at the completion of theso-called Project Nadal operation.Ulster Bank is also selling its

Project Aran portfolio of non-per-forming loans in the Republic,Northern Ireland and GB. Thismay lead to the buyer taking

ownership of the underlyingproperties — probably at belowmarket values.In a third major transaction,

Ulster Bank is making progresswith Project Achill, a portfolioof loans secured on commer-cial and residential properties.These include some of NorthernIreland’s most high profile prop-erty schemes including Belfast’sWaterfront Plaza, the Arc Apart-ments in the Titanic Quarter andthe Ards Shopping Centre.Earlier this year, Cerberus

Capital Management of the USbought Nama’s Project Eagleportfolio, which consisted ofproperty-related debts held byNorthern Ireland-based debtors.Some of those properties are nowbeing sold by Cerberus. Assetsplaced on the market includepart of the Crescent Link out-of-town business park in Derry anda site approved for the buildingof apartments in Portstewart.

Overseas property investors move inPAUL GOSLING

Figures show rise in customers to high streets and fall in shopping centres

THERE are positive signs forNorthern Ireland retailing.Footfall rose in NorthernIreland’s shops in August by4.2% over the year before and by0.2% in September.This contrasts with a drop in

footfall in the UK as a whole,where it reduced by 0.9% inSeptember compared to the yearbefore. Recent footfall figuresshow a stronger performance byhigh streets and a fall in visitorsto shopping centres.Aodhan Connolly, director

of the Northern IrelandRetail Consortium, said: “It isencouraging to see we again havepositive growth in our footfallin Northern Ireland even if itis slight.“The figure of 0.2% growth

may seem insignificant but itmust be remembered that anygrowth is a positive sign, thatwe have performed better thanthe national average of a declineof 0.9% and most of all we havehad sixmonths growth in footfallthis year.”Diane Wehrle, retail insights

director at Springboard, whichproduced the figures, added:“High Streets are the clear

winners, whilst the 4% dropin footfall in shopping centresreflects their dominance byfashion retailers, and the factthat it was this sector thatsuffered from the unusually warmweather in September and theconcomitant impact on fashionsales.“Whilst out-of-town locations

still recorded a positive resultin September — reflecting thepositive sales in furniture and

household goods — the fact thatthe increase in footfall is by farthe most modest of any monthin 2014 suggests this channelhas felt the impact of the poorperformance in fashion, a strongindicator that their success nowalso hinges on this sector.”NIRC predicts visitor numbers

and sales will rise in the run-upto Christmas, but warns retailersthat online competition will bestrong.

Shops record a rise in footfalldespite drop in UK as a whole

AGREEMENT on a co-ordinat-ed British-Irish visa system isexpected to increase touristvisitors to Northern Ireland.Businesses involved in tour-

ism have long complainedthat visitors from China andelsewhere have been blockedfrom visiting Northern Ire-land because Ireland and theUK have different systems forapproving visas for foreignnationals.Niall Gibbons, chief ex-

ecutive of Tourism Ireland,said: “The introduction of theBritish-Irish Visa Scheme isreally good news, making iteasier than ever before forvisitors fromChina and Indiato visit Northern Ireland andthe island of Ireland.“It is a significant step in

helping us to grow visitornumbers from these markets—whether those visitors wishto travel here for sightseeing,golf or simply as businesstourists.“For the island of Ireland,

the majority of our overseasvisitors come from GreatBritain, North America andmainland Europe, and whilethis will continue, it is im-portant that we expand ourfocus beyond these marketsand look to the long-term op-portunities presented by newtourismmarkets, particularlyChina and India, which we be-lieve will play an increasinglyimportant role for travel andtourism.“Given that visitors from

these markets are travellinga considerable distance, andoften want to include morethan one destination on theiritinerary, it makes sense tomake it as easy as possible forthem to visit both Ireland andthe UK on a single visa.“Wewill be working closely

with our colleagues in Vis-itBritain, to leverage the bene-fits of the new scheme in bothIndia and China.”The joint visa scheme will

be in place in time for book-ings for summer 2015.

British-Irishvisa schemeshould openthe north up toChinese, saystourism bosses

NEWS ANALYSIS


ALL recent indicators point toNorthern Ireland’s growth po-tential across a range of businesssectors, not just in agri-food,which we seem to be gettingbetter at shouting about, but alsoin manufacturing, technologyand IT.The NI Composite Econom-

ic Index (NICEI) highlights anannual economic activity rise of1.2% since the second quarter of2013 and an increase in privatesector performance.The Northern Ireland Centre

for Economic Policy (NICEP)spring outlook 2014 shines a rayof light on manufacturing andpoints to the recovery of jobs inthe sector, but caveats this newswith the fact that although ex-ternal sales to Great Britain areperforming well, productivity isbroadly static and exports outsidethe UK have fallen by 1.2%.We all know the importance

of rebalancing the local economyand therefore the need to pro-

mote and develop private sectorbusiness here.Through engaging with the

business community I’ve had thechance to appreciate and evalu-ate the melting pot of skills andcircumstances needed to pushahead in these business sectors.The necessary ingredients

include better collaboration be-tween the government, universi-ties and private sector — and I’dinclude banking in that— as wellas a stronger focus on innovationand entrepreneurial spirit, acrossall of these sectors.Within the bank, we have

recently developed a numberof specific business packagesand are supporting a numberof exciting entrepreneurs — sowe know Northern Ireland hasa number of rising stars alreadyputting innovation at the heartof what they do.One example is the mul-

ti-award winning Plotbox, aninteractive software companythat mines, collates and mapsdata about graveyards and burialgrounds.

Melting pot of skills needed to push aheadAISLING PRESS

Aisling Press, regional manager ofFirst Trust Bank

Most recently it picked up thetop prize at the Northern IrelandScience Park Invent awards andis certainly one to watch.We have had the pleasure of

working with them to fund theirbusiness to the next level andknow that they have opened upa truly global market providinga solution to an age old problemthrough application of innovativethinking.Similarly, Quad-X, a Co Antrim

manufacturer of machinery andaccessories for the quad bike andagricultural market, has expand-ed its operations and created 25jobs with our support, after theapplication of clever engineering.Likewise, Portadown-based

joinery business Deluxe Grouprecently announced major ex-pansion plans following recentexport success having won sig-nificant contracts for Disney-land Paris and for a new energyscience centre in Saudi Arabia onbehalf of Saudi Aramco.Export figures highlight that

clearly it’s not just the largerwell known private sector firmss

accounting for manufacturingexports — our lesser known butequally impressive smaller com-panies are putting Northern Ire-land on themap.We just need toharness that talent and courage.The innovation and entre-

preneurial gene is in our DNAhere.We just need to rediscover,reignite and replicate it - andthat is something we all in thewider business community canhelp nurture.

NEWS ANALYSIS

12

attending the inaugural event in2010, and a “wee, secretive one”back in 2009.AirPOS has also been invited to

join the Alpha programme.“It’s amazing, just unbelievable

— basically the largest collectionof start-ups and investors any-where in Europe,” Mr Neill said.“The people you get to meet,

it’s just flabbergasting.“Youmeet people fromEstonia,

Russia — investors from all overthe world, and it’s the only placeoutside the US that you’ll get thattype of access.”And you need to have the

chutzpah to approach completestrangers to promote your start-up. “If you don’t have that, you’rein trouble. It’s verymuch a start-up environment— if you’re doingthe start-up dance and you’reafraid to talk to people, you’re inthe wrong place.”Last year’s event witnessed

such eye-wateringonders as Bonoworking the room and Ireland’sTaoiseach Enda Kenny ringingthe opening bell for the Nasdaq.Niklas Zennstrom, the founder

of Skype, even said he was there“to find the next Google, the nextFacebook”.And the event has also hosted

Twitter founder Jack Dorsey,Netflix founder Reed Hastings,and TheHuffington Post founderArianna Huffington.Nasdaq said ‘there was a quar-

ter of a trillion dollars worth ofprivate internet companies inthe room’.This year, a preview event took

place in Belfast on November2, to give around 150 start-upsfrom the province the chance to‘perfect their pitch’ (in the wordsof organisers) before the mainevent in Dublin.Start-ups from this side of

the border heard from speakersand were able to network withinvestors.Invest NI will be present at

the Dublin event, accompanyingseven tech companies from theprovince. Some of those are al-ready showing the export-drivenfocus that can make a web com-pany stand out from the crowd.But the sheer scale of the Web

Summit blowsmost business net-working events out of the water.Start-ups will be able to networkwith 1,000 journalists from 65registered countries, representingpublications and news serviceslike Germany’s Der Spiegel, theNew York Times, Bloomberg,Reuters and Forbes.Last year 900 high calibre

start-ups exhibited over two days,and there were dinners for part-ners and speakers in stunningvenues like Christchurch Cathe-dral in the city.The roots of the Summit go

back to 2010, and an informalgathering of 450 people from thetech community in Dublin. Threeyears later, and there were wellover 10,000 people, with 60% ofthe Fortune 500 in attendance.A Summit spokesman said:

“Within three years, we have be-come themost influential and in-ternational tech event in Europe.“The Summit 2013 showcased

over 250world-renowned speak-ers, 1,000 exhibitors, 100 satelliteevents and the opening of theNasdaq market live on stage.”

BUSINESS MONTH 3 November 2014

BLOOMBERG wryly called it‘Davos for geeks’ — because forsheer scale and aplomb, the Dub-linWeb Summit rivals the annualcelebrity-strewn festival of ideasin Switzerland.In fact, it’s Europe’s biggest

technology event with 10,000attendees, more than doublethe size of the next biggest techgathering.When the Dublin Web Sum-

mit takes place in the RDS thismonth it will attract thousands ofinternational delegates— there’llbe Fortune 500 companies likePayPal, Google, Facebook andthousands of start-ups.There will also be a strong

representation from NorthernIreland companies, with Brewbot,Glistrr, DisplayNote, AnalyticsEngines, Pulsatedate, BottletopMedia and AirPOS among around20 people keeping the side up fornorth of the border.DisplayNote, which recently

received a £1m cash injectionfromKernel Capital, will use theSummit to launch a new mobilecollaboration product calledSwoopit.And entrepreneur Paul Stewart

from Belfast, who establishedstudent luggage delivery serviceUnibaggage.com, has chosen theevent to unveil his new venture,FETCH.It is a same-day delivery app

for ordering items for deliverywithin an hour, from groceriesto electronics.FETCHwill join the Summit’s

special Alpha programme forparticularly promising start-ups.Mr Stewart said: “The Web

Summit is a fantastic conferencewhere the tech communitymeets.We are delighted to have beenselected to exhibit.“Our main aims are to grow

our network and raise awarenessof FETCH in Europe. I am lookingforward to mingling with otherstart-ups and hearing some of thebig name speakers.”Marty Neill fromBelfast is the

founder and chief executive ofAirPOS, which makes softwareto help retailers sell in storesand online for clients includingSamsung, PayPal and Apple. Hewill be back down this year after

Summit really specialFirmsfromthenorthwillbewell representedwheninternationaldelegatesattendEurope’sbiggest technologyevent,writesMargaretCanning

Even more Northern Ireland firms are expected to attend this year’s Dublin Web Summit

NEWS ANALYSIS

This year has seen a numberof changes in how banks dealwith property debt - withUlster Bank leading the way


BORROWERS from Ulster Bankand other institutions are lookingon as large-scale sales of propertyportfolios are advertised. In somecases, such as the sale of loans se-cured on hotels like theMerchantHotel, transactions are alreadywell under way.It is expected that many of the

transactions will be completed bythe end of the year. So what doesthatmean for anyonewith a loan?The loans disposal process

has suited politicians and bankswho believe that it is anotherstep towards the sunlit uplandsof an improving the economiclandscape. It is clear that therelease of parcels of toxic loansfrom a bank will mean that theyhave brought finality on thesituation with regards to theirbalance sheet.The banks no longer have

to deal with large tranches ofproperty loans which were notbeing serviced andwhichwere innegative equity. These loans re-quired closemanagement and for

a long time customers and bankswere in a difficult position wherethere was a substantial lack ofliquidity, nomarket for propertyand limited scope to resolve thechallenges. Now the position forthose banks is resolved.The banks, in having divested

of these loans and personal guar-antees, are now in the positionwhere they are seeking businessopportunities and aremuchmoremindful of the risks and rewardsof loans given their recent experi-ences. The way back for strongerbanks, is the same as in any otherbusiness, they need to grow, im-prove their core profitability andmargins. That will mean that thenegotiations for finance will havedifferent terms and conditionswhich customersmustmake surethey understand.But where does this leave a

borrower who now owes the debtto a new lender? This is a depar-ture into uncharted territory forthem and the situation providesan entirely different dynamic.

The new loan book owner hasinherited the history of each loanbut has no requirement to havean on-going relationship withthe borrower. The agenda is veryclearly one of how the loan canbe repaid.The borrower is now in a com-

mercial relationship with the loanbook holder. There is no on-goingrelationship requirement, it isjust a matter of how to deal withthe debt and in what manner anagreement can be reached.As in any commercial relation-

ship this is amatter of negotiationand understanding what eachparty position is and how they canreach an agreement. There areno banking regulations or codesin this new commercial environ-ment and the remedy for bothparties is very much containedwithin the financial constraintsof the situation. The loan bookholder will have their own rela-tionships with assetmanagementcompanies and they will havean infrastructure to drive the

process. The borrower may seethis as an opportunity to resolvethe challenges of his portfoliobut it is naive to underestimatethe clear purpose and focus of aloan book holder.While this has replaced the

players at the table, the under-lying resolution of the problemswill still have to be achieved. This,still in many cases, representsa future of tough decisions andthe resolution of the problems.This may be achieved throughre-financing, introduction of newcapital and other innovative solu-tions. For some it may still resultin forced sales and enforcementof security over assets.Borrowers need to grapple

with their situations based uponthe current status regardless ofwhat their circumstances werein the past.It is still true that we live in

interesting times and advisorsin the world of restructuringand corporate finance will havea role to play.

A new era for borrowersJoan Houston, restructuring specialist at Begbies Traynor, analyses thenew loans environment after the profound changes in the banking world

ECONOMY WATCH


MixedThe global economy has been sending

ica sends out positive signs of a strength-‘triple-dip recession’ have been circling as

CENTRAL bankers’words can have apowerful influenceon financial markets.No more so than

Mario Draghi’s ‘whatever ittakes’ speech on July 26, 2012.Within the context of renewedfears over a eurozone break-up, the ECB president cameout with the now famouswords: “The ECB is ready to dowhatever it takes to preservethe euro. Believe me it will beenough.”By merely threatening to

implement new policy actions,Draghi restored confidence inthe beleaguered eurozone forover two years. Stresses andstrains within financial mar-kets eased and subsequentlydissipated. The return to fi-nancial market calm prompteda series of European leadersto affirm that the worst of theeuro crisis was over.Fast-forward 28 months

from Draghi’s speech and thepublic affirmations look some-what premature. Concernssurrounding the eurozonehave returned, and indeed theeurozone economy is in muchworse shape today than it wasin the summer of 2012.Back then, the eurozone was

in recession, with Germanyone of the few economies stillgrowing. The unemploymentrate was 11.3% and consumerprice inflation, at 2.4% year-on-year was running above theECB’s ‘close to but below 2%’target. The euro also traded atmore attractive rates for Euro-zone exporters ($1.206 & 77.7p)than the rates prevailing today.With the public finances, con-cerns that deficit targets wouldbe missed were confined to theEurozone periphery. But now,the EU is challenging Franceand Italy for breaching its newbudget rules.Today the eurozone is flirt-

ing with both recession anddeflation. The latter promptedthe ECB to follow up its words

with more policy actions inJune. These included cuttingthe ECB’s main lending rateto just 0.05%, one-tenth of theequivalent Bank of Englandrate. Consumer prices in theEurozone are barely rising,with Italy, Spain, and Greeceexperiencing deflation. Theeurozone’s unemployment ratehas eased from last year’s peakof 12% but is still marginallyhigher than it was in July 2012.There has been a steady

stream of poor economic datafor Germany recently, suggest-ing the eurozone powerhousemay have re-entered recession.Next week’s third quarter GDPfigures are expected to reveala contraction in the eurozoneeconomy following a flat read-ing in the second quarter. Suchan outcome will fuel ‘triple-diprecession’ headlines. Wheth-er they appear or not, thechallenges facing the eurozoneremain severe. Particularlywhen you consider the lack ofeconomic progress over the lasttwo years.Whilst European equities

have rallied by over 40% —

according to the Euro Stoxxindex — since Draghi’s land-mark speech, the Eurozoneeconomy has stagnated. In thetwo years to the second quarterof 2014, the eurozone economyhas grown by just 0.1%. Thiscompares with 4.9% for theUK and 4.4% for the US. EvenGermany has expanded byjust 1.3% during the last twoyears. The French economy hasaveraged growth of just 0.4%p.a., with the same pedestriangrowth rate anticipated for2014. The plight of Italy is evenmore worrying. The eurozone’sthird largest economy has con-tracted by 3% since Draghi’sspeech and is a staggering 10%smaller than it was before therecession began.The outlook for the eurozone

is worrying when you considerthe deteriorating economicconditions in its core econo-mies. German exports plungedin August by the largestamount since the peak of thefinancial crisis — and moretimely surveys for businessactivity and confidence havepointed to a further slowdown.

EUROZONE This has prompted Germanyto slash its official forecastsfor economic growth in 2014and 2015 to just 1.2%. Aslowdown in China, the crisisin the Ukraine and sanctionsimposed on Russia are impact-ing on German order books.A series of large Germanexporters including: Siemens,Volkswagen, Fendt (the tractormanufacturer) and MAN (thetruck manufacturer) are allreporting a decline in demandfrom Eastern Europe in Q4.After years of near-record lowunemployment, Germany isnow facing job losses.Draghi’s soothing words

bought European leadersprecious time to implementmuch-needed reform. Howev-er, this time has largely beensquandered. Now, with aus-terity fatigue widespread andanti-EU sentiment rising, thepolitical will to implement un-popular policies is largely ab-sent in Europe. Lack of reform,however, will not compensatefor a lack of demand, which isbehind the twin challenges ofrecession and deflation.The reality is the ECB and

leaders of the three largesteconomies, and founding EUmembers, must implementpolicies politically unpopularbut economically necessary.To date, their approach hasfollowed the spirit of the MeatLoaf song ‘I will do anythingfor EU but I won’t do that’.The ‘that’ has meant differentthings. In France and Italyit has been economic, labourmarket and public sector re-forms. In Germany, it’s provid-ing a sufficient fiscal stimulusfor the eurozone, borrowingto invest in infrastructure andallowing the ECB to engage infull-blown quantitative easing(like other central banks). Theperiphery did what it had todo, now the core has to followsuit. ‘Whatever it takes’ actionswill speak much louder than‘whatever it takes’ words.

Richard RamseyChief economist Ulster Bank

ECONOMY WATCH


pictureconflicting messages of late. While Amer-ening dollar, in the eurozone rumours of asome of its big nations struggle again

GLOBAL financialmarkets have hada turbulent month,with a sharp declinein the value of the

majority of risk assets and anaccompanying plunge in gov-ernment bond yields. The mainreason for the increasein market volatility has beenanxiety around the upcomingend to quantitative easing (QE)in the US together with a stringof recent weak growth andinflation data points.The global economic picture

remains mixed: the US econo-my appears to be in good shapebut major emerging marketeconomies, notably China,have seen disappointing fig-ures. Europe continues to lookvery weak and now potentiallyfaces the dual threat of defla-tion and recession.Looking more closely at

the US economy, it has beenimpacted by a number ofexogenous factors of varyingmagnitude. The trade-weight-ed US dollar has strengthened7% since the lows seen in Q2(and 6% vs. GBP), US equitymarkets have declined almost10% over the past month, andglobal growth forecasts contin-ue to be pared back.Most positively, crude oil has

fallen $25 from recent highsand mortgage rates, pricedfrom the benchmark of the30 year Treasury rate, havedeclined to below 3%.Perhaps the most positive

segment of the US economy inthe past 12 months has beenthe jobs market. Employmentgrowth has averaged in excessof 200,000 jobs per month overthe last year with the unem-ployment rate now below 6%.Interestingly, despite tight-ening conditions in the jobsmarket, inflation has remainedrelatively stable c.1.5-2%. Oureconomists consider that thesefactors, coupled with indus-trial production and servicesdata over the past quarter,

continue to suggest 3% growthfor the US economy remainsintact.One recent data report

which surprised many econo-mists, was September US retailsales (falling 0.3% month onmonth). However, our researchanalysts believe that consum-ers are set to benefit from anew source of spending powernamely the aforementionedfalling oil price.Retail petrol prices have

already dropped more than 50cents per gallon (c.14%) sincethe end of June and the oilfutures market suggests thatretail prices are set to continueto decline. Spending on petrolcompromises about 3% ofoverall US consumer spendingand the recent drop in pricesat the pump will have boostedreal consumer income growthby 0.6%. The US consumerhas long provided a bulwarkagainst the impact of sloweroverseas growth — consumermakes up some 70% of US GDP.In the late 1990s, the decline inenergy prices associated withweak global growth during the

Asian financial crisis was a keyfactor in driving US consumerspending and strong relativeGDP growth.If US consumers spend the

additional income they saveon petrol, this would meana boost of roughly 0.4% toreal GDP growth, more thanoffsetting the negative effectsof the roughly 0.2% drag fromthe strengthening dollar. Thenear-term effects are likely tobe considerably more benefi-cial for the domestic economyas there are relatively longlags in the speed at whichcurrency moves affect real GDPgrowth, but the transmissionfrom lower energy prices tostronger consumer spendingis relatively quick. Given USconsumers do not save much oftheir income, a boost to incomegrowth translates relativelyrapidly into stronger real con-sumer spending. US consumersare unlikely to spend muchtime pondering whether theECB will provide further mon-etary easing or how much theChinese property market willslow. US retailers can expect a

USA

Mona ShakerBarclays

solid Thanksgiving and Christ-mas holiday period.With the domestic economy

making steady progress to-ward the Federal Reserves dualmandate of stable inflationand maximum employment, itis not clear to our economistshow the Fed will respond inan environment in which theglobal economy, particularlyEurope, is lagging and riskassets begin to underperform.Notably, every time the Fed haspreviously tried to exit its QEprogramme, risk assets havetaken a turn for the worse no-tably in summer 2011 with theend of QE2 — US equities de-clined in excess of 15% throughthat period. The pattern overthe past month looks some-what similar, despite the muchhealthier US economy.How much do risk assets

need to fall and/or inflation/growth expectations contin-ue to decline before the Fedresponds? As the SeptemberFed minutes noted, all but twoparticipants indicated that theFed should start the interestrate hiking cycle in 2015, eventhough all but one believedthat inflation would remainbelow 2% in 2015. Commentsfrom Fed members over thepast week suggest someconcern over slowing globalgrowth and domestic inflationand expectations for a US, andUK, interest rate increase havenow been pushed well out intothe second half of 2015, andany increase in interest rates islikely to be at a very slow pace.Over the past year, out with a

weather-related Q1 slowdown,the US economy has displayedimpressively robust growthtogether with benign inflationand improving employmentmetrics. This compares veryfavourably with the majorityof the major global economies.This coupled with continuingeasy monetary policy shouldsee the recent trend of astrengthening dollar may be

COVER STORY

THE potential closureof the JTI cigarettefactory in Ballymena,with the loss of nearly900 jobs, is a warning

shot for the whole of North-ern Ireland. Nor is JTI alone.Northern Ireland’s three largestmanufactured goods businessesas listed in the Belfast Tele-graph’s Top 100 Companies of2014 — Bombardier, Caterpillarand Aventas/Quinn — have allcontracted in recent times.In September, Bombardier

— Northern Ireland’s thirdlargest business — announcedit will reduce its workforceby around 400. Two yearsago Caterpillar — the 10thbiggest company in NorthernIreland, formerly known as FGWilson — laid off 920 workersin Larne. (It has since taken onabout 300 staff in Belfast andLarne, supported by grantsfrom Invest NI.) And Quinn’smanufacturing business —now known as Aventas — iscurrently being broken up,with the radiator, cement and

The planned closure of JTI Gallaher’s shows ourmanufacturing industry struggles to compete with lowwages and overheads in other countries, but forecasts

for the sector remain upbeat, writes Paul Gosling

POSITIVEOUTPUT


glass manufacturing opera-tions being sold separately.Manufacturing, the figures

suggest, is of declining im-portance to Northern Ireland.As recently as 1995, manu-facturing generated 15% ofNorthern Ireland jobs. Todayit is about 10%. The obviousexplanation is that NorthernIreland is simply unable tobe price competitive. WhileJTI’s pay for factory workersin Ballymena, according tothe Irish Congress of TradeUnions, is £40,000 to £50,000a year, pay in the tobaccoindustry in Romania (wheresome of the manufacturingis transferring) is less than£10,000 a year.For large manufacturers,

electricity prices in NorthernIreland are significantly high-er than in most of Europe,according to market analysisundertaken by the UtilityRegulator. Only Italy chargesmore for electricity to largecustomers, with NorthernIreland more expensive than

the rest of the UK. Large man-ufacturers in Sweden, Finlandand France can buy electricityfor about half the price pre-vailing in Northern Ireland.Those located in the Republichave a 20% electricity priceadvantage over the North.In addition, companies here

face other additional costs.Corporation tax in the UK is21%, compared to 12.5% in theRepublic. And distribution islikely to be significantly moreexpensive from NorthernIreland to most large markets.Even water is more expensivehere.Quite simply, Northern

Ireland has ceased to be alow cost centre of production.Many of these cost factors hitnot just Northern Ireland, butthe whole of the UK. One ma-jor Indian company — ApolloTyres — complained recently:“It’s far more expensive.... TheUK, as far as manufacturingis concerned, is not lucrativeat all.”Stephen Kelly of Manu-

facturing NI warns that thecost and profit pressuresfacing JTI apply to othermanufacturers also consid-ering whether their nextmajor investments should behere or elsewhere. “JTI.... areessentially deciding that, inthe medium and long term,to invest in the Ballymenaplant (for) new productionlines does not stack up giventhe costs of manufacturingin Northern Ireland,” hesaid. “There are other majoremployers in north Antrimand across Northern Irelandwhich need similar invest-ment in production lines.”Mr Kelly is calling on the

Executive to tackle the issueof costs, which is damagingNorthern Ireland’s productivecapacity. “The issue isn’t oneof demand, it’s one of costand we must address this as amatter of urgency,” he said.While electricity is the

major factor in those cost dis-advantages, there are othersas well, he said. “Our water

company is 30% less efficientthan benchmarked compa-nies in Great Britain and theinevitable transport costs ofgetting raw materials to andfinished products from hereadds an additional burden.”Yet despite all these cost

challenges, it is misleadingto paint a wholly negativepicture. Economist JohnSimpson said: “Although wetalk about manufacturingemployment as falling, man-ufacturing outputs are stillincreasing. They are increas-ing at about 2% per annum,which is what you wouldexpect and that is reassur-ing. The short answer is thatif output is still increasingand if we are doing that withfewer people employed, thenwe should not worry.”Moreover, the official fig-

ures do not necessarily tell anaccurate story. Professor NeilGibson, director of the North-

>> Turn to page 20

w The last ship to sail out of Harland & Wolffwas the MV Anvil Point, which left in 2003.w Ironically, it was owned by a consortiumincluding the Bibby Line company, which ownedthe Venetian, the very first ship built by Harland& Wolff in 1860.w With the decline in shipbuilding, in 2005 thecompany began a diversification strategy, usingall the knowledge and skills it had learnedfrom the historic trade to target new types ofbusiness.w Harland & Wolff has now repositioned itself inthe manufacture and refurbishment of renew-able energy and offshore facilities, with skilledstaff and unrivalled workspace — including thebiggest dry dock in western Europe and massivegantry cranes Samson and Goliath — makingthe firm an ideal base for the construction ofmammoth installations.w One of its first renewables projects was anoff-shore wind farm of 30 large wind turbinesthat are now installed off the Cumbrian coast inthe Irish Sea.w Other schemes have included a 60-turbineoffshore wind farm off the south west coastof Scotland, a 3,000-tonne under-sea structure

off the north German coast, a prototype tidalenergy generator, aw Marine turbine unit now being used inStrangford Lough and a tidal turbine in theOrkneys.w And it isn’t just renewables.w In 2012 one thousand workers helpedcomplete a one-month project on the SeaRose“floating production, storage and offloadingvessel” for the Canadian oil firm Husky Energy.w That work helped secure the multi-millionpound Blackford Dolphin contract. The colossaloil rig, which was supposed to be in the city forjust 60 days for a refit, was with Harland & Wolfffor six months after structural defects werediscovered once the structure was out of thewater.w Hundreds of workers toiled around the clockon what became the city’s ‘unofficial Christmastree’.w And in a sign of further developments tocome, in May, Harland and Wolff performed theworld’s heaviest water load test. The massiveSamson gantry crane lifted a 774-tonne load.

CLARE WEIR

Setting sail in another direction: the lessons of H&W

3 November 2014 BUSINESS MONTH 19

COVER STORY


ern Ireland Centre for Eco-nomic Policy (NICEP) at theUniversity of Ulster, points outthat the scale of outsourcing bymanufacturing companies hashad the effect of recategorisingmany support jobs from themanufacturing to the servicesector. “Many workers in pro-fessional services — includingagency workers — will actuallybe in factories, or at least serv-ing factories,” he said.“Certain industry will

always remain, food process-ing for example, but North-ern Ireland has strengths inaerospace, heavy machinery,pharma too. Industry asso-ciated with recycling is alsoa growing area. Whilst otherlocations do out-compete oncost, there are many firmslooking at coming back to USor UK shores. Costs are risingelsewhere and there are otherrisk factors that make manyother markets less attractivethan their cost base mightsuggest.“Big factories are still a

part of the industrial future,though it is true that smallerproduction is becoming morecommonplace. We worry abouta 500 job factory closure,but if we lost 100 five-peoplebusiness it would be just asbad — it just would not makethe news. Look at the worldleading UK car plants or someof the big pharma plants inIreland to see that the modern‘big factories’ still have a placein the developed wealthyworld.”Overwhelmingly, the big

job announcements recent-ly have been in the servicessector in Belfast, in particularwith accountancy and lawfirms. While the jobs are goodnews, it is important to have adiverse economy, Prof Gibsonsaid. “We do need a variationin our sectoral mix: our skillsbase demands it as not every-one can work in an office,” hesaid. “Also factories are bettersuited outside of cities for themost part and this is also help-ful from a policy perspective.”The latest economic fore-

casts from NICEP predictcontinued growth in North-ern Ireland’s manufacturingoutput. Strengths, says ProfGibson, are the sterling curren-cy, an appropriately skilledworkforce for some manufac-turing activities, legal certain-ty, property and IP protection,competitive skilled wage rates

and low staff turnover rates.In addition, there are thefinancial incentives of industri-al de-rating and Invest NI’semployment support grants.On the down side are energycosts, lack of local energy sup-ply (without fracking), key skillshortages and the potentialimpact of changing state aidrules.Angela McGowan, chief

economist at Danske Bank, isalso positive about the sector.“One of the key lessons learntduring the economic crisis wasthat economies with a healthymanufacturing base were thefirst to emerge from the crisis,”she said. “Our local manufac-turing base is fairly preciousto us in Northern Ireland. Thiselement of the private sector isresponsible for employing over80,000 people — 10% of thelocal labour force — and repre-sents nearly 15% of local GDP.“The short term strategy

for local manufacturing firmsduring the financial crisisinvolved cutting costs, raising

productivity from their currentworkforce and seeking exportmarkets further afield. In thelonger term, the survival ofour manufacturing base willbe dependent on a number ofthings, such as technology,ability to innovate and operatein a globally competitive envi-ronment and, of course, accessto skills.”Ms McGowan said:

“Northern Ireland cannotcompete when it comes tolow value-added traditionalmanufacturing – this type ofproduction has long shifted tolow-cost economies.” Despitethis, Danske Bank forecastslocal manufacturing output tosignificantly outperform thewider economy — projecting4.4% growth for manufactur-ing this year, compared to av-erage growth of 2.5%. But withmanufacturing output restingon improved technologicalbased productivity improve-ments, employment growth inmanufacturing is projected atjust 2.5%.

Bank of Ireland UK econo-mist Alan Bridle is also upbeat.“It is too soon to be writingthe obituaries for the sector —indeed, the irony of the recentJTI announcement is that itcomes at a time when the latestdata suggests Northern Irelandmanufacturing is outper-forming the UK average withannual growth in output ofalmost 6%, led by engineering,metal products, chemical andpharmaceutical companies,”he said.“The rebalancing of the

Northern Ireland economydebate is too often defined innarrow terms of public/privatesector. In reality, if the localeconomy is ever to achieve the‘escape velocity’ we aspire to ofmore higher productivity/high-er wage businesses, the balancewithin the private sectormerits closer consideration andpolicy support, particularly interms of taxation and energycosts where quite often, a localoperation faces internal com-petition from another plantsomewhere else in the world.“The retention and growth

of our manufacturing sector istherefore critical as it remainsthe key driver of the region’sGVA (gross value added) per-formance and wealth creation,research and development in-vestment and export base. Theoverarching challenge is one ofscale — we have some notableworld class business perform-ers in Northern Ireland, butthey are numbered in the hun-dreds and not the thousands.“In my view, the future for

the Northern Ireland manufac-turing sector is challenging butnot daunting — our successfulbusinesses will be those withstrong and ambitious leaderswho compete on quality andvalue, not price. It has been evi-dent for decades now that anycompetitive advantage we mayhave had from relatively lowwages is rapidly diminishing— the future is one of playingin markets and niches we cancompete in, both in terms ofthe quality of our productsand after-service that generaterepeat business. Competitivewage rates of course will re-main part of the equation.”Dr Esmond Birnie, PwC’s

chief economist, is in nodoubt that it is important forNorthern Ireland to remain amanufacturing economy. Hesaid: “The important thingabout manufacturing is thatmanufactured products stilloutweigh services in world

Caterpillar, formerly FG Wilson, laid off 920 workers in 2012

>> Continued from page 19

COVER STORY


trade in terms of volume ofactivity. So, if you are a tradingeconomy like the UK andtrying to pay for imports it isimportant to retain marketshare in world trade in manu-facturing.“There may also be some

distributional consequenceswhich flow from the strengthor otherwise of manufacturing.In percentage terms, manufac-turing makes up only a smallshare of the economy in theSouth East of England andLondon whereas it is propor-tionally more important inthe Midlands and the north ofEngland and Northern Ireland,Scotland and Wales, so man-ufacturing matters from thepoint of view of greater region-al balance within the UK.“Similarly, some commenta-

tors now fear that the incomedistribution is undergoing anhour-glass effect, i.e. fewermiddle income jobs comparedto more at the very top or verybottom of the distribution.Manufacturing, more so thanmany service activities, mayproduce more jobs in themiddle.”Dr Birnie believes that

re-shoring — bringing back off-shored jobs closer to compa-nies’ head offices and nearer totheir primary markets — pro-vides major opportunities forNorthern Ireland. “In March2014 PwC forecast that suchre-shoring could add 100,000to 200,000 extra manufactur-ing jobs by the mid 2020s at theUK level,” he says. “Pro rata,that would imply significantgains to NI.”Perhaps 12,500 jobs could

be created in Northern Irelandover the next decade if the UKas a whole has a clearer indus-trial strategy, suggests the CBI.That strategy would be built ona greater focus on exporting,re-shoring and strengthenedsupply chains, includingthrough industrial clusters.Nigel Smyth, director of

CBI NI, says that NI’s STEM(science, technology, engineer-ing and maths) strategy and itsinnovation strategy “arguably”puts NI “ahead of the game insome areas”. He adds that thekey is maximising the skills,knowledge and productivityavailable in NI. “There is aplace for higher value added.We have done a lot of work with

highly skilled businesses. Thekey companies — eight, 10, 12medium to large manufactur-ing companies — are all goingout and doing most of theirbusiness outside Northern Ire-land. And that has acceleratedover the last four or five years.“There is a lot of growth in

medium sized companies,”added Mr Smyth. He praises,especially, some companies inthe engineering, IT and phar-ma sectors. “Most of them havelinks with universities andfurther education colleges,”he said. “That is where yousee the fastest growth at themoment.”The Northern Ireland

Science Park is also centralto the efforts at modernisingour manufacturing sector. DrNorman Apsley, chief exec-utive of the NI Science Park,said: “The shape of manufac-turing in Northern Irelandhas changed and is changingagain, from the big structuresof the past — ships, cars, planes— to finer, more advancedengineering-based processes.Advanced manufacturing andengineering is the bedrock ofthe regional economy, supply-

ing the materials and compos-ites necessary to the evolvingmanufacture of products.”Dr Apsley believes that

while advanced manufactur-ing is responsible for growthin manufacturing sales andexports, it could achieve evenmore. “Despite the prevalenceof manufacturing companies,it is acknowledged that thissector is not achieving its fullpotential,” he argues. “Theunder-development of theregional advanced manufac-turing sector can largely be at-tributed to a lack of awarenessof advanced manufacturing asan enabling technology and thefailure of the regional manu-facturing sector to develop newtechnologies and skills in linewith the rest of Europe.It seems, then, that Northern

Ireland can have a future aswell as a past as a manufac-turing economy, even thoughit may not either employ thenumbers of people or perhapspay the high wages of the past.If we focus on what we can dowell, rather than just produc-ing things cheaply, NorthernIreland might return to some-thing like its glory days.

NEWS ANALYSIS


CROWDFUNDING ismagic. You have thisidea for a productbut no means tobring it to reality.

And then a group of peopleyou’ve never met give youmoney and just hope ‘fingerscrossed’ that you might some-day send them the product.It seems too good to be true,

but at just under £1bn contrib-uted in the UK alone in 2013,the magic clearly seems to beworking for some people.Crowdfunding is a relatively

new phenomenon but it is hereto stay. And it’s shaking up theinvestment scene as you mightexpect. But howis it affectingthose bastions ofinvestment —the venturecapitalists?The poor old VCs have been

going through a hard decadewhen many of them have notprovided good returns to theirown investors. But withouta history of returns, the VCsare unlikely to be able to raisemore funds. However, the bestVCs continue to do well andhave scored a few spectacularsuccesses like Google, Linke-dIn and Facebook.But how have they adapted

to the brash new kid on theblock? Are they following thecrowds and piling their VCmoney into the products wherethe masses have gone before?Figures are starting to

appear now from the USA toshow just what their VCs aredoing. Data from Crunchbaseshows that over 400 projectsreceived funding of $100,000(£62,000) or more from crowd-funding websites Kickstarterand Indiegogo — and approxi-mately a quarter of these wenton to raise VC money. Actuallyquite a lot of money as it to-talled over $500m (£312m).The biggest category here

was games, including audiowhich took about a third of themoney. But wearable and homeproducts were also big.So it’s pretty clear that

crowdfunding is affecting

VC-land and probably actingas a very useful pipeline andindicator for these professionalinvestors. Or to put it anotherway, the investors are usingcrowdfunding success to vethardware start-ups.However, when you delve

deeper into the figures it’s pos-sible to get an idea of what isreally getting the VCs excited.Instead of just looking at the

overall amounts, if you look atthe multiple of VC money tocrowdfunding money anotherpicture emerges.Thus for every dollar the

crowd put into products you

wear on your body or yourclothes, the VCs put in 11. Sincethe average across all productswas $2.71 of VC for every crowddollar, you can see that on-body products is a hot spot.Conversely, we hear a lot in

the press about 3D printingand it took in a lot of moneyfrom the crowd (£16m) but thiswas almost 1 for 1 with whatthe VCs put in. So fine, but VCsare clearly not as excited by it.So a picture emerges of cer-

tain niches where the profes-sional VC investors think thecrowd is very right. One inter-pretation of this is to say that

the crowd back what peoplewant today. However perhapsthe professional crowd arelooking past this and believethey can see what people willwant tomorrow.It seems like the flock are

leading the way and that thefew are following their leadbefore concentrating on thejuiciest pickings.Or the shepherd is leading

from the back?

Alan Watts is the director of Halo,the Northern Ireland BusinessAngel Network. Halo is based atthe Northen Ireland Science Park

Rise of crowdfundingAlan Watts explores how venture capitalists are faring in a new era

Bank of Ireland’s Julie-Ann O’Hare congratulates Sean and Leona McAllister (r) of Plotbox, NISP’s INVENT winner

BREAKING THE MOULD


I got into a technology businessbecause....Well, I suppose part of theblame for my career must restwith my father who had hisown insurance business. Itstarted in the mid 1980s withmy dad purchasing a Wangcomputer for quite a few thou-sand pounds. I think it had4000 bytes of memory.I saw ways in which tech-

nology was helping my father’sbusiness. It was clear that tech-nology provided a way to helppeople manage data but moreimportantly, it also enabledpeople to learn, develop andcommunicate. From the earlypart of my career, I wanted touse technology in my day-to-day working.I remember being in India

in 1996 (which seems like onlya few years ago) and havingto write out customer visitreports, then battle throughtraffic to find a local traderwho provided internationalfax facilities, then having toconfirm that the report wasreceived back in Antrim. Iwanted to use a computer andemail but it was just ‘not com-pany policy’. I guess they justhad to work this way.Since then my career has

been focused more within theeducational technology sector,where I have been passionateabout exploring ways in whichtechnology can be used to en-hance the learning process.

I didn’t always do this...I had various jobs throughoutuniversity, from Chinese deliv-ery driver to a Big Mac burgerboy. Although I don’t often usethese skills in my current role,the jobs did help instil in me ahard working attitude.After university, my career

allowed me to travel extensive-ly, working and living in India,Italy, USA and Singapore, the

latter being cut short by thebeating of my heart for a girlback home.The appeal of internation-

al business has always beenimportant to me, knowing thattechnology has no borders. For-tunately, the return home fromSingapore was the right choicebut it did take me a while toconvince the girl to marry me.

The best thing about my work is...The dedication of working ina tech start-up creates a greatatmosphere. Everyone hasgreat ideas, everyone is fullycommitted and we are all push-

ing for the same goals.

The person I take inspiration from...It’s funny when I sat downto think about this, my firstthought was toward somehistoric figure, the EdmundHillary type who strives toachieve a goal or ambitionregardless of the scale of thechallenge.However, it has never really

been in my character to takeinspiration from any particularcharacter. I believe that is thenature of an entrepreneurialspirit, to not follow in the foot-steps of others, and as Hillary

said himself, “no-one remem-bers who climbed Everestsecond”. . In our business, ourcustomers always inspire us tomake things better.

My advice to anyone starting out intechnology...Be clear on who they aredeveloping for. Do the thingsthat people don’t think you cando, and make sure you findthe right people to go on thejourney with you.And I suppose like Hillary,

(who I said does not inspireme... I lied) find your SherpaTenzing.

A web of opportunityDisplayNote’s Paul Brown, which specialises in presentation andcollaboration software, gives an insight into his vision for the future

Paul Brown, chief executive of Northern Ireland tech start-up company DisplayNote

Name: Paul BrownCompany: chief executive ofDisplayNote, one of a numberof Northern Ireland companiestravelling to this month’s DublinWeb Summit

AND I’LL TELL YOU ANOTHER THING...


Name: Les McCrackenCompany: Managing director ofMcCue Crafted Fit

My first job was....A summer job when I was 15years old, which is still freshin my memory. I worked for alocal farmer near Ballymoney.I had to leave home at 6.30amevery day, then cycle a fewmiles to get to work. I benefit-ed from plenty of ‘hard graft’until 7pm at night for six daysa week earning the princelysum of £10. It was hard workbut I still believe that the les-sons I learned were invaluable.

The person who taught me tosucceed was...Myself — I have always beenhard working with a particularattention to detail. When I setmy mind on any project I be-lieve true success comes whenyou see it completed to a highstandard.I also think that these valuesand success factors have trans-lated into part of what McCueCrafted Fit has become today.We pride ourselves in highquality results for every clientor brand we work with.

My business mantra is....Believe and be honest to your-self and others. If you have be-lief in the products or servicesyou are offering to customersthrough your business along-side good, honest communi-cation with employees andclients — this is the basis of apositive business mantra.

It’s all changed since I startedout....I’ve been in this industry 36years and I wonder how any ofus could imagine life withouta mobile or email. A lot of ourwork is based outside NorthernIreland, in the UK and furtherafield so it is essential that Iam able to link up with theteams working on projects on adaily basis.From an industry perspective,McCue has changed a lot overthe years too. This year marksour 60th anniversary in busi-

ness, which is great achieve-ment for a Carrickfergus firm.Our first ever project wasmaking wooden boxes for linenover 60 years ago and todaywe are working with a range ofpremium global brands includ-ing Urban Outfitters, Hamleystoy store, Hugo Boss, The Savoyand Berkeley Hotel in London.For me it’s also importantnever to forget the company’sroots so that’s why we continueto work with really excitingprojects right here at home inNorthern Ireland. The hospi-tality, retail and office scenes

especially have never beenmore in tune with what cus-tomers want so we have beenable to offer our own creativeinsight with local names likeShiro, The Albany, Eason’s andChain Reaction Cycles.

In 10 years the world will...Be crazier than it is now,naturally. I also think this is areally exciting time for McCuegiven our recent growth in newmarkets so I would say the bestis definitely yet to come.

My one business regret is....

Probably holding back some-times but I am very lucky tohave a great team in place whoare committed to driving thebusiness forwards at home andin new markets.

My one piece of business adviceis....Read this and think about it.“You cannot do it all yourself –depend on others and lead.”

I couldn’t start the day without....Waking up and smelling thecoffee — it certainly puts a lotof things in perspective.

Hard graft pays offLes McCracken, of award-winning refurbishment and fit-outcompany McCue Crafted Fit, shares some secrets of his success

Les McCracken, managing director of McCue Crafted Fit, has been in the industry for 36 years

SME WATCH

Fighting fit: physiotherapist Simon Harland


SPORTS physio SimonHarland is bringing hisexpertise back homewith his RE:PLAY highperformance sports

physiotherapy clinic in BedfordStreet, Belfast.Mr Harland, a highly

regarded specialist, returnedto Northern Ireland earlierthis year after four years withArsenal Football Club.The 40-year-old physiother-

apist and entrepreneur fromWhitehead, Co Antrim, hasmore than 20 years experiencetreating the public and pro-fessional athletes, includingprevious work for Irish Rugby,Ulster Rugby and Irish Cricket,among others.Mr Harland told Business

Month he moved home to setup the clinic after spotting agap in the market for a highperformance physiotherapyservice, his desire for a newchallenge and to spend moretime with his wife and theirtwo young children.Educated at Belfast Royal

Academy, the University ofBrighton and the Universityof Ulster at Jordanstown, hebrings a wealth of experienceand specialist expertise toBelfast.He enjoyed four years with

the Gunners’ first team, treat-ing players like David Beck-ham, Robin van Persie, ThierryHenry, Jack Whilshere andTheo Walcott.“I went over the Arsenal in

2010,” he said. “I was numbertwo, the head guy Colin Lewinhas been there since day dot.“Arsenal has quite a small

backroom staff compared tosome of the other premiershipteams.”“I was quite lucky to get

away on pre-season trips.The tours were unbelievable,visiting every country for a fewdays and off you go again.“In last couple of years, it

has got a lot more commercial,so the bigger name teams—Man City, Man United,Arsenal, Chelsea — get furtherafield, so we headed off toChina, Hong King, Malaysiaand Vietnam.”A physiotherapy career has

certainly taken Mr Harland allover the world.“I have been really lucky

A top teamAmanda Ferguson talks to top physiotherapist Simon Harland aboutthe driving force behind his new sports clinic in Northern Ireland


being involved in Irish Sailingand Irish Athletics, and espe-cially with Irish Cricket.“I have been to Africa,

Zimbabwe, Sri Lanka, all overthe States, Canada, all aroundEurope, Far East, Australiaand New Zealand,” he said.“If you are a sports physio it

sounds magic but you don’t seea huge amount when you arethere. You are seeing traininggrounds and stadiums andhotels, but the odd time you getthe chance to get out.”But to explain what brought

him home to Northern Ireland,Mr Harland said: “The job ismagic but you don’t have anyother life outside of work.“Working in professional

sport is massively intense,” headded. “You probably averagea day-and-a-half off a month, ifyou are lucky.“I want to do other things

and at home there is defi-nitely the opportunity to geta proper sports physio clinicup and running. Working inprofessional sport does make adifference. It is a speciality inits own right.“If you wake up with a sore

back, certainly come and see

me, I won’t turn anyone away,but you are going to get a bitmore out of it if you are a ten-nis player or GAA player with asore back. The Re:Play team isright up there.”Indeed, working alongside

Mr Harland at Re:Play isrenowned physio Phil Glasgow,who heads up the Sports Insti-

tute at the University of Ulster.“He is a great guy, so knowl-

edgeable, and the list of his in-volvement in sport is endless,”Mr Harland said.“We are hoping to go big

with cycling-related injuries asPhil is one of only a few peopleover here who is a registeredRetul bike fitter and he has

great experience in the cyclingworld, including physio con-sultant to British Cycling.”Chris Bleakley will also be

part of the team, as well asworking at the university.Mr Harland said: “It’s a qual-

ity, experienced team.”Contact RE:PLAY on 028 95436363 or visit replayclinic.com

Re:Play high performance sports physiotherapy clinic in Belfast

ASK THE EXPERTS

All questions should be addressed to: [email protected] and advice are publishted in good faith but should not replace the advice of your professional financial advisor.

CASHFLOW is an ongoing concern in my business. How can I get paidmore quickly without upsetting my customers?

MOST businesses experience an average two week delay after the invoicedue date before payment is received. The first key step is therefore todetermine when you need to be paid to ensure you can meet your ownsupplier payments and other obligations such as payroll and taxes. If youneed cash within 30 days consider a 14 day credit period on your invoices toincorporate any delays into your own cashflow.

Providing customers with multiple options to pay is critical. Clearlystate your full bank records including international bank numbers and BICcodes if applicable, plus offer credit card and online payments options,such as PayPal and Stripe.

Utilising cloud accountancy packages to issue invoices electronicallywill allow for “pay now” links to be included on pdf invoices, which givecustomers the ability to click a link and pay simply and quickly via a webbrowser. Integration of direct debit options can also now be set-up withinminutes via cloud applications.

A common reason for delay is due to an invoice being lost or queriedwhen it reaches your customer. Ensure your invoice is addressed to theperson responsible for processing payments in your client company. Emailthe invoice where possible and ensure that the invoice is complete withtax date, Vat number and a full breakdown of the products or servicessupplied, and ensure your contact details are clearly stated.

Finally, review your receivables balances regularly and speak to custom-ers early about problematic balances. Effective and prompt engagementwith the customer will allow the opportunity for issues to be addressedbefore they spiral out of control.NMcG

ASK THE EXPERTS


WHERE a business is underpressure for its margins, thecash question is more criticalthan ever.The business needs cash to

keep its suppliers of goods orservices support, never mindgrowth.We know the clichés: turnover

is vanity, profit is sanity and cashis king, but how do we do it?To grow a business will put it

under pressure for cash as thedemand for products and servicesgrows.These must be converted into

invoiced sales and debts beforethe cash is released to fuel thebusiness.Cash is therefore stretched to

achieve growth.A business has a number of op-

tions to raise finance from banksor other funders but it must alsomanage its resources carefully tomake sure that it maximises itsopportunities.Here’s the thing: you can actu-

allymanage your cash if you havethe right structures in place tocontrol your stock, debtors andsuppliers’ terms.Take time out to look at how

you run your business.Check if you have the best

terms and conditions in placefor your customers and suppliers.

MY business is profitable, growing and developing, but what I’dlike to know is - where is the cash?

Ask yourself: do you only holdthe stock you can sell or need?When did you last analyse whatto do with that old stock to re-lease cash?Very often, an independent

review of your working capital

management by a restructuringexpert can help you to releaseyour cash and provide the nec-essary funds to accelerate yourgrowth.It pays to make it work.

JH

WHY are the accountancyrules changing and what doesthis mean for my business?

FOR accounting periods com-mencing on or after January 1,2015, FRS 102 will replace cur-rent UK accounting standardsfor most local companies.

This change is happening inorder to bring UK accountingrules closer to internationalaccounting rules.

These changes will affecthow company results arecalculated and could havesignificant implications forbusinesses with loan cove-nants and these companies willhave to plan ahead to ensurethat these changes don’tlead them to breach thesecovenants.

For example, any companywith a revaluation reserve willneed to recognise deferred taxon upward property revalua-tions.

This will have an immedi-ate impact on the net assetposition of any companies thatcurrently carry a revaluationreserve.

For example, a companywith a revaluation reserve of£1m will see its net asset posi-tion reduce by circa £200,000under FRS 102.

This may have consequenc-es for companies with netasset bank covenants.

In addition, probably themost significant change iswhere goodwill and intangiblescan continue to be amortisedbut the presumed life will befive years unless a reliableestimate of the life of the assetcan be made.

Under current UK GAAPan assumed life of up twentyyears is currentlypermitted.

For example, a companywill a goodwill cost of £1m mayhave an annual amortisationof £50,000 under current UKGAAP.

This may increase to£200,000 under FRS 102 andwill have the impact of reduc-ing reported profits, potential-ly in breach of bank covenants,and of reducing distributablereserves thus reducing theability of the company to paydividends.BC

Brian Clerkin,Director at ASM CharteredAccountants

Joan HoustonRestructuring specialist atBegbies Traynor

Niall McGinnityDirector ofNuvem 9 Ltd

Sound advice can be a valuable commodityWe put your questions to the experts with the answers

TICKERSINSIDE REPORT


THERE has beenenormous confusionabout the cost toNorthern Ireland ofthe UK Government’s

welfare reforms. While the fig-ure of £750m has been widelyquoted, it has become clear inrecent weeks that much of thatsum relates to changes thathave already been implement-ed.The £750m figure came

from a report— The Impactof Welfare Reform on North-ern Ireland — produced bySheffield Hallam University forthe Northern Ireland Councilfor Voluntary Action (Nicva). Itwas written by two of the UK’sforemost academic experts onthe welfare system, ProfessorChristina Beatty and ProfessorSteve Fothergill.That report painted a bleak

picture of the impact of thewelfare reforms. It concludedthat if all the reforms proposedby the UK Government wereimplemented in NorthernIreland, they would take £750mout of our economy.Northern Ireland is the

hardest hit part of the UK bythe welfare reforms. This is nosurprise — we have the highestrates of economic inactivity andclaims for benefits linked toincapacity and disability.In absolute terms, the worst

affected UK council district isthe Lancashire seaside town ofBlackpool, which has specificproblems of poverty and youngadults living in short-termaccommodation. It also has

WHAT COSTREFORM?

Northern Ireland will be the region hardest hit by the WestminsterGovernment’s Welfare Bill due to our dependency on benefits - butconfusionpersistsonwhattherealcostwillbe,writesPaulGosling

above average numbers of poorelderly and disabled residents.Below Blackpool, it is North-

ern Irish cities and towns thatdominate the impact tables.The second worst affected placein the UK is Londonderry, thethird is Strabane, the fourthBelfast, the seventh Limavady,the 15th is Moyle, the 17th isOmagh and the 20th is Newry.This is out of 405 local au-thority areas and illustratesNorthern Ireland’s highbenefit dependency. The lossof household incomes is high.In the case of Derry, there is anaverage loss per working ageadult of £900 a year.It needs to be stressed,

though, that these figures werecalculated on the basis that allthe welfare reforms proposedby the UK Government willbe implemented in NorthernIreland. Some of those reformshave already been adopted,others have not.Reforms already agreed and

implemented include the use ofa cap for housing benefit pay-ments based on average localrents — this was adopted in2008. Since 2012, single adultsunder 35 have been entitled tohousing benefit at a rate thatassumes they share accommo-dation — whether they do ornot. This latest change is taking£55m out of the local economy.Other changes already imple-

mented include removing childbenefit from higher incomeearners (£80m a year impact),cuts to tax credits (£135m), lim-iting benefits up-rating to 1%

(£120m) and changes to ruleson non-dependents (£10m).These five changes, already im-plemented, have taken £400ma year out of Northern Ireland’seconomy —more than half thetotal impact of the proposedreforms.There is another batch of

reforms that are graduallybeing felt, by making enti-tlement more difficult. TheEmployment Support Allow-ance (ESA) was introducedin 2008 in place of incapacitybenefit (IB) and all IB claimantsin Northern Ireland have nowmigrated to ESA. Tougher WorkCapability Assessments meanthat ESA claimants are morelikely to lose their entitlements.In addition, it is proposed thatESA could be time limited formany claimants to one year, butthat has not yet been agreedhere. Northern Ireland couldeventually lose £90m a yearfrom these reforms to IB andESA, according to the SheffieldHallam report.Professor Beatty said: “It is

not quite so straight forward todisentangle these two elementsfrom the Northern Ireland dataI have. However, in the work wedid on Great Britain in Hittingthe Poorest Places Hardest, 60%of the total financial loss is dueto the time limiting of ESA and40% is due to other IB meas-ures. So if the same was true inNorthern Ireland then approx-imately £90m pa would be lostdue to these measures alreadyunderway.”Other reforms have not yet

been introduced. One of theseis the move to universal credit.A report from the Institute forFiscal Studies published lastyear found that 10.9% of North-ern Ireland families would losefrom its introduction, while11.4% will gain. People withdisabilities are likely to losethrough this change, whilefamilies with single earners andchildren will gain, said the IFS.We then have the so-called

Northern Ireland will be hardest


‘bedroom tax’, which is officiallycalled the spare room subsidy.This measure limits paymentsof Housing Benefit to claimantswho are considered to havemore rooms in their homesthan they need. It has previ-ously been adopted for privatesector tenancies, but the UKGovernment has extended it toall tenancies. If this were adopt-ed in Northern Ireland it wouldhave an impact of £20m a year.

But there has been agreementbetween the Department forSocial Development and the UKTreasury that this will not beimplemented here for the timebeing because of the shortage ofsmaller accommodation units.The current impasse on

welfare reform therefore comesdown to the implementation ofthree specific measures that areoutstanding and are included inStormont’s stalled Welfare Re-

form Bill. One is the adoptionof a cap on benefits of £26,000— seeking to ensure peopleare better-off in work than onbenefits — and the other is thereplacement of the DisabilityLiving Allowance by PersonalIndependence Payments, alongwith stricter assessments ofentitlement. Together theseaccount for £250m of potentialcuts, or just one third of thetotal package of reform cuts.

The third outstanding measureincluded in the Welfare ReformBill is the time limiting of ESApayments to some claimants.In terms of impact, the

replacement of DLA by PIPis likely to have the severestimpact. A modelling exerciseby the Department for SocialDevelopment projected that25% of existing DLA recipients

>> Turn to page 34

hit when the UK Government’s welfare Bill

INSIDE REPORT


ticularly in urban areas.”The overall impact of the

reforms will continue and isserious. Professors Beatty and

Fothergill spelt it out in theirreport for NICVA. They con-cluded: “By lowering incomesmore than elsewhere, a key ef-

fect of the welfare reforms willbe to widen the gap in prosper-ity between Northern Irelandand the rest of the UK.”

will not be entitled to PIP,while 32% will have a reducedentitlement. The next biggesthit from the proposals in theWelfare Reform Bill come fromthe time limiting of ESA.Given that reforms have

been implemented on a grad-ualised basis since 2008, it isdifficult to measure a directeconomic impact on North-ern Ireland. Moreover, theirimplementation has coincidedwith the most severe recessionin modern times and the worstproperty crash in the world.But we can be certain that

the benefit cuts have hadeffects on consumer spending.Glyn Roberts, chief executiveof the Northern Ireland Inde-pendent Retail Trade Asso-ciation, says that those of hismembers with more customerson benefits have been harderhit during the recession.“There’s no doubt about

that,” said Mr Roberts. “Con-sumer spend is down. Therewere a lot of retail casualties inthe recession. Many people onbenefits use their local shops.They are important customersfor many of our members, par-

Benefit cuts will have an effect on consumer spending


TICKERS


Ulster Bank economist Richard Ramsey gives a rundown on the latest key pointers

RECOVERY in UK publicfinances remains a long way off.However, the UK’s overall

economic recovery has beenimpressive over the last twoyears. This has been par-ticularly apparent within thelabour market with the UKcreating more jobs over the lasttwo years than the rest of theEU put together.Meanwhile the UK’s unem-

ployment rate has plummetedto 6% which is almost half therate prevailing in the Eurozone(11.5%). In light of this superioreconomic performance, the EUhas asked the UK for an addi-tional £1.7bn contribution tothe EU budget. While many ofthe economic headlines painta picture of a robust UK eco-nomic recovery, a meaningfulrecovery in the public financesremains a long way off. Con-trary to what was forecast backin the March 2014 Budget, lastmonth revealed that the UK’s

public sector borrowing isrising as opposed to falling, aspublic expenditure is rising ata faster rate than governmentrevenue.Meanwhile public expendi-

ture increased by 2.9% over thesame period.

Total revenue has increasedby just 13% since 2007/08.However, some sources of

tax revenue have outperformedothers. Vat revenues over thelast 12 months are almost onethird higher than in 2007/08.However, despite record levels

of employment, income taxrevenues are just 1.5% higherthan 2007/08 levels. Incometax receipts over the last sixmonths are just 0.1% higherthan last year. This compareswith growth of 5.4% for corpo-ration tax and 3.9% for Vat.

The month’s local indicators at a glance

IN recent weeks there has beenincreasing evidence that a globalslowdown is now in train.Whilst this has negative con-

notations there are some pos-itives too. Commodity priceshave recorded significant fallsin recent months, particularlythe oil price. Businesses andhouseholds will benefit fromlower energy and fuel billsgoing into the winter.

From a UK perspective, itis the price of oil in sterlingthat matters as opposed tothe dollar price. The price of abarrel of Brent crude, which isthe European oil benchmark,has fallen from £67.5 in lateJune to a four-year low of £52.3last month. This represents afall of over 22%. Over the sameperiod, UK petrol prices havefallen by less than 4%.

NORTHERN Ireland’s labourmarket continues to show signsof an ongoing economic recovery.Employment continues to rise

and unemployment continuesto fall. According to the latestQuarterly Employment Survey(Q2-2014), Northern Ireland hasrecorded nine successive quartersof employment growth.Half of the jobs lost during the

downturn have been recouped

during the last two years.The number of individuals

claiming unemployment ben-efit fell for the 21st month in arow in September.Northern Ireland’s headline

ILO unemployment rate hita pre-recession record low of3.2% in the three-months toJuly 2007. It subsequentlypeaked at 8.3% in 2011 butcurrently stands at 6.1%.

BUSINESSPEOPLE

37

Vibes record label.Time Flies was released only

on vinyl and cassette (remem-ber those?) and Terri jetted offto London with a suitcase fullof singles to meet with recordcompanies and radio stations.This resulted in us beingplayed regularly on RadioOne by luminaries suchas Steve Wright and DaveLee Travis. Time Fliesbroke into the NorthernIreland singles chart Top10 and all of a sudden wewere being touted as‘the next big thing’…the dreaded kiss of

death.It was all happening so

quickly. Our follow-up singleOh June followed Time Fliesinto the upper echelons ofthe local charts and we werebooked to play at huge festivalssuch as the Fleadh in Fins-bury Park, London, and the‘Trip to Tipp’ in Thurles,Tipperary, hanging back-stage with bands like theStone Roses and HappyMondays. Looking back

on those heady days, Istill think we couldhave ‘made it big’but let’s just say


EVER since I was asmall child, I lovedmusic.At risk of giving

away my age, Iremember my early party piecewas ‘Come Back My Love’ byDarts. Nothing to be proud ofthere.Through every phase of

school right up until A-Level,by which stage I had finallystarted playing the guitar andwriting proper songs, I wasregarded as somewhat of amusic nut.As a singer I was continually

encouraged to hook up with aclass mate who was known as aguitar virtuoso. This culmi-nated in the two of us beingasked to provide the music forour final year Mass, which wedid by transforming a batch ofpopular classics into ‘hymns’by simply replacing the occa-sional key word with ‘Jesus’.This memorable service, in

which the choir ended up out-numbering the congregation,turned out to be an early incar-nation of Tiberius’ Minnows,the band we formed a couple ofmonths later, a decision whichwas to shape our lives morethan we could have imagined.I was the singer songwriter

of the band which quickly builtup a strong local followingfrom our first gigs in Dungan-non. We all headed off to Bel-fast, which for a group of ladsgrowing up in Tyrone, may aswell have been New York tous. It seemed that all of Tyronemoved to Belfast with us as wewere soon packing out showsin the Queen’s Students Unionand within a year we had wonthe prestigious ‘SmithwicksBand of the Year’ competitionwhich was judged by a panelthat included Terri Hooley ofGood Vibrations fame. A shorttime later, in March 1991, wereleased our debut single TimeFlies on Terri’s famous Good

The Northern Ireland Businessperson who...

Duffy Rafferty Communications’ Michael Rafferty on singing with Tiberius’ Minnows

Michael (front) in Tiberius’ Minnows in the 1990s- and as he is today (below)

...tasted fame and fortune as an indie band frontman

we had some bad advice alongthe way and made some poordecisions, turning down dealswe really should have signedin the hope that the deal of thecentury would come along.We weren’t making a living

from the band as everythingwe earned was ploughed intorecording and marketing sowe collectively decided to gofor jobs that would have directbenefits for the band.Myself and our guitarist

Paul were accepted on journal-ism courses, keyboard playerBarry became a teacher whiledrummer Stevie and bassplayer Kevin ventured intopromotions with local radiostations. Paul then went off tobe a sound engineer at a localrecording studio while I dida six month placement witha newly-formed PR companycalled Profile Practice.That’s when I first met my

business partner LawrenceDuffy, who actually turned outto have a Minnows CD in hiscollection.I’ve been working with

Lawrence ever since — fromProfile Practice, through thecompany’s merger with GCASPublic Relations and ultimate-ly our management buy-out in2005 that saw us create DuffyRafferty Communications.People often ask me if I wishThe Minnows had made itbig but I have no regrets. Hadthings worked out differently,I would probably never havemet my wife Catherine andwouldn’t be father to twoamazing sons Sean and Ethan.That alone makes everythingworthwhile.I do think that all those

years in the band have reallyhelped me in my public rela-tions career and given me adifferent perspective that Ibelieve has added real value towhat I do on a daily basis.

FOCUS ON: OFFICE SPACE


THE Belfast office leasing marketis showing signs of recovery butthere is still plenty of room forimprovement, according to indus-try experts.

More than 200,000 sq ft of office leasingbusiness was recorded in the first ninemonths of 2014, with more than half of thisactivity occurring in the last three-monthperiod alone, said letting agents CBRE.The volume of activity between July andSeptember was almost double the secondquarter of the year, with more than 117,000sq ft of office lettings signed in the city.But a closer look at the office lettings

market reveals that in Belfast city centre,where there is a total rental stock of ap-proximately 9m sq ft, more than 1m sq ft ofoffice space is sitting vacant.More worryingly, 75% of this stock is non

A-Grade accommodation.Typically, Grade A offices are brand new

or recently refurbished properties boastingopen plan layouts, raised access flooring,suspended ceilings, air conditioning, lifts,and easy access data connection points.They are the most sought after commercialproperties and can command the highestrental values.However, agents say that a major lack of

Grade A office accommodation in the cityis stifling economic growth as expandingfirms are finding it increasingly difficult tofind suitable properties. And the pipelineof new-build office space is also a cause forconcern as more than 630,000 sq ft of officeaccommodation in Belfast is still awaiting aplanning decision, In addition, most of the1.9m sq ft of office accommodation that hasplanning permission has not yet reachedconstruction stage.Indeed, it is estimated that nearly 40%

of the total square footage in planningcould expire by the end of 2015 and some ofthe schemes granted planning permissionmay not be developed due to difficulties insecuring funding.Richard McCaig, a senior surveyor at

agents Osborne King, sums up the indus-try’s dilemma: “There is a lot of talk aboutbusinesses coming to Belfast and that’s

brilliant but where do we put them? InvestNI announced a lot of jobs over the last 12months but if someone came along todayand said ‘We need 60,000 sq ft of accom-modation in Belfast in one building’ theywould struggle to find it.”Referring to the mood in the market,

McCaig said: “There has been very limitedoffice movement in general in the wider

ROOM FORA lack of top grade office space in Belfast is stifling economic growth, say property agents. And

There is a lot of talkabout businessescoming to Belfastbut where do we putthem?

Artist’s impression of the proposed City Quays 2 development at Belfast Harbour


market over the last five years. Everybodyhas been in recessionary mode. There isnowhere near the same amount of take-upin office space as there was in the pre-re-cession years 2006-2007, but it has toimprove.”David Wright, a director of CBRE Belfast,

says the jobs outlook for Northern Irelandis improving and this will help to buoy thelettings sector.“We are encouraged by recent job

announcements across the region and are

currently aware of at least 30 companiesactively searching for Grade A accommoda-tion. This is good news for the city and theeconomy.““We have also witnessed an increase in

prime rents in the Belfast office market,with prime headline quoting rents now inthe order of £14.50 per sq ft.”But one industry insider said that the

majority of city centre rents are still sittingat between £12-£13.50 per square foot, “byfar the cheapest within the UK region”.

“Outside Belfast, rents are even cheaper at£8 and £10 per foot,” he said.It’s an ill wind but property agents have

also been kept busy by the growing numberof receiverships in the region, offeringinsolvency firms, banks and financial insti-tutions disposal advice when properties areseized.However, there have been some signif-

icant deals in recent weeks which show

signs of recovery and growth in the officemarket sector.Accountancy firms Deloitte and EY have

announced plans for expansion, with bothrequiring up to 60,000 sq ft over the nexttwo years.But the ‘big ticket’ event was Belfast

Harbour securing planning permissionfor a new £20m waterfront office develop-

ment close to the city centre.The City Quays 2 development is part

of a £250m scheme that includes a mix ofoffices, residential space, retail outlets anda proposed 200-bed hotel.Belfast Harbour, which owns one of the

largest real estate portfolios in the citywith around 700 blue-chip multination-als located within the Harbour Estate,

EXPANSIONfirms who want to move here find it hard to get suitable premises., says Simon Rowe

>> Turn to page 40

The First and Deputy First Ministers were at the offices of Deloitte earlier this year, when the business services firm announced a major investment. and300 new jobs. Such expansion by firms in Belfast has increased the pressure on office space and led to claims that there arent’t enough Grade A offices

FOCUS ON: OFFICE SPACE



has also received planningpermission for a 200,000 sqft extension of its SydenhamBusiness Park near GeorgeBest City Airport.The Harbour plans to devel-

op 26 business units for smallto medium sized firms on the90-acre park.Meanwhile, McConnell

Chartered Surveyors is cele-brating having negotiated anew 5,000 sq ft office letting atWeavers Court Business Parkto American data protectionservices firm, Proofpoint Inc,which is creating 94 technol-ogy jobs in Belfast, in a £6minvestment. Weavers Court —located on Linfield Road — is anew-build three storey 20,000sq ft Grade A office building.Another significant develop-

ment in the pipeline is McAleerand Rushe Group’s planned26-storey, 225,000 sq ft Bed-ford Square office building onBedford Street which has beengreenlighted by planners.With developments such

as these in the pipeline, theonly way is up for office rentalmarket.

First Minister Peter Robinson and Deputy First Minister Martin McGuinness with Paul Terrington, PwC regionalchairman. PwC is creating 807 jobs, and is expected to seek Grade A office space in Belfast

FOCUS ON: SPONSORSHIP OF THE ARTS


WITH the an-nouncementof significantcutbacks ingovernment arts

funding, commercial spon-sorship has never been moreneeded for our cultural scene.The Arts Council of North-

ern Ireland faces cuts of over4% and the Northern IrelandTourist Board is losing the£1.1m budget that helpedfinance events like CultureNight — so there is a fundinggap that needs to be filled.Key players in 21st centu-

ry patronage of the arts arethe banks. This month, theUlster Bank Belfast Festival atQueen’s has brought a wealthof contemporary and classicalart, music, theatre and danceto appreciative audiences. In2008 Ulster Bank in effectsaved the Belfast Festival. Theinitial three-year sponsorshipdeal was estimated at over£1m and the bank’s annualsupport is now smaller, butremains a six figure sum.The question is what the

financial institutions get inreturn, apart from the obviousadvertising value. Accordingto Ellvena Graham, head ofUlster Bank Northern Ireland,quite a lot. She said: “We havea long history of support-ing community initiatives,including the arts, and derivemany benefits which go farbeyond brand awareness.Primarily it’s about creatingmeaningful connections withour customers, many of whomengage in and value the arts. Itis also about highlighting andreinforcing Ulster Bank’s keyrole in the local economy andsociety.”

This is virtuous marketing.Ms Graham added: “Support-ing the arts also reflects oursocial commitment. There arealso tangible benefits in termsof employee engagement anddevelopment. As part of ourinvolvement in the Ulster BankBelfast Festival, we have some30 staff involved in activelypromoting the programme ofevents as volunteers.“This cross-fertilisation

between arts and businesshelps foster creativity andideas-development within ourworkforce.”She added that this wasn’t

just altruism on the bank’spart. “Overall, we sponsor thearts because it makes com-mercial sense. It’s a mutuallybeneficial relationship be-tween Ulster Bank and the artsorganisations involved.”Similarly Danske Bank was

the main sponsor of the £18.1mcapital programme whenThe Lyric Theatre reopenedafter a rebuild in 2011 and thebank continues to supportthe artistic programming andmain stage, now known as theDanske Bank Stage.

Nicola McCleery, head ofmarketing at Danske Bank,said: “As a leading local bank,we are keen to celebrate localtalent and are delighted to sup-port the local arts through ourcommercial sponsorships withthe Lyric Theatre and the Der-ry-Londonderry MillenniumForum which we’ve supportedsince 2010.“There is no doubting the

value of the arts to the localeconomy, to the local commu-nity and to visitors and we’redelighted that we too can playour part.”For the past six years, Dan-

ske Bank has also joined forceswith local children’s theatrecompany, Cahoots NI, on anaward-winning show Lights,Camera, Math ’a’ Magic’. Thisinteractive show combinesmagic with maths in an exhila-rating multi-media education-al experience which has taughtbasic financial acumen to 6,671Northern Irish primary school-children this year.Naturally funders want

to know how effective theirsponsorship has been and itis not simply a question ofthe financial impact. There isalso what’s called the socialimpact to consider — which inthe arts may mean outreachprogrammes and reachingnew audiences or the value ofperformances to the communi-ty. Gauge NI is a company thathelps organisations measure,evaluate and communicatethis, and as business develop-ment manager Stephen McGar-ry said, the results help bothfunders and funded.“The question is, if we all

rate the arts why is this thefirst sector to feel the pain of

HELPING TOThe arts face government cutbacks, putting numerous events in dan-ger. However, commercial sponsorship could come to the rescue and

give the cultural scene a much-needed lift, says Jane Hardy

We sponsorthe arts

because it makescommercial sense.It’s a mutuallybeneficial relationshipbetween Ulster Bankand the arts groups

Tony Wilcox of Danske Bank, Michelle Jackson of V


ust volorrum utatiata volenda quiani alitati ratiumet et vendus diset voluptas ut ium nihilla quamusduscipis ressequam quassimus.

FILL THE GAP

>> Turn to page 44

the cuts? At Gauge we thinkit’s about how organisationstell the story of the impact theymake.“Most organisations are very

good at measuring outputs, ie,how many people attended acourse or got jobs.“What they struggle more

with is the ‘so what?’ question,and it’s our job to take thatposition. We need to know howwhat our clients deliver chang-es the lives, behaviour and atti-tudes of those individuals andhow it benefits their schools,communities and families.“And if organisations are to

survive in the new era of cutsand rationalistion, they needto be able to communicate howmuch an investment in themgenerates in economic andsocial value.”The company recommends

we move towards using the“common outcomes frame-works” when measuringimpact to allow funding organ-isations to make fully informeddecisions about where bestto invest and provide a levelplaying field for voluntaryand social bodies to accessthose scarce but vital pots offunding.The cuts in the Department

of Enterprise Trade and Invest-ment/Northern Irish TouristBoard events funding and theirimpact on Culture Night neatlymake the point. Here we cansee that the value of grant aidis far outweighed not just by atotal return on investment of£2.5m, but in terms of support-ing jobs in pubs, developingartists, local tourism, positiveattitudes and behaviour.It’s not always how much you

spend in sponsorship but howyou spend it that counts. TheBank of Ireland has cleverlydeployed a relatively modestamount of money to create a

on of Victoria Square and Victoria Vettesse of Cahoots NI. Danske sponsors Cahoots’ kids’ show, Lights, Camera, Math-a-Magic

FOCUS ON SPONSORSHIP OF THE ARTSFOCUS ON: SPONSORSHIP OF THE ARTS


special bursary which sup-ports the classical musiciansof the future. In 2005 the bankcreated the Catherine JudgeAward in memory of a valuedcolleague whose passion wasclassical music and who diedin August of that year.Since then the bursary,

which is worth £5,000, hasbeen presented annually to anexceptional classical soloistwho wants to pursue a musicaleducation.This year it went to Abigail

McDonagh, a student at theYoung European StringsSchool of Music in Dublin.A Bank of Ireland spokes-

woman said: “As well as beinga lasting and fitting tributeto a former colleague, theCatherine Judge MemorialAward provides an opportuni-ty for musicians who want totake their musical studies to afurther level.“The award also enjoys a

profile across the island of Ire-land and throws the spotlighton these great musicians, pro-

viding them with a platformto showcase their talents toa wider audience and we’reproud to facilitate that.”There is also a prestigious

evening event held at Queen’sUniversity when the award ismade, usually hosted by MarkCarruthers, which adds lustre.With further cuts to arts

budgets anticipated, theimportance of arts sponsor-ship can’t be overestimatedin keeping the Northern Irishcultural scene vigorous.

The Lyric Theatre is one establishment which has benefited from corporate funding


44


NEW YORKSTATE OF MIND

MORE THAN MEETS THE EYE

MOTORING

MONEY MAKERVolkswagen Passat shows its class

DAY INTHE LIFE

GRAHAMKEDDIEMD of Belfast International Airport

MANABOUTTOWN

THE CHAIRMANInside track on Northern Ireland business

OFF LINE SECTION

45

OUT TO LUNCHof

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23 James StreetSouthSmoked eel 7.50Wood pigeon 8.50John Dory 19.00Turbot 19.50Champ 3.50Chips 3.50Lge Sp water x 2 9.00Diet Coke x 2 4.40Double espresso x 2 5.30Total 80.20

Breathing newlife into an ailingengineering firmJoris Minne visits James Street South with Robert J Cooper, the head of one of NorthernIreland’s best-known manufacturers, Harland and Wolff Heavy Industries Ltd

ROBERT J Cooper is a happyman. Twelve years ago he startedtreating a terminally ill patientand to everyone’s amazement thepatient came back to life. Today,

the chief executive of Harland and WolffHeavy Industries Ltd says the patient is inrude health and adds that he couldn’t havedone it on his own.“This was a collective effort,” he says.

“We were at rock bottom, the company hadbeen restructured, we were all emotionallyexhausted by the hard decisions taken tosave the yard from closure and many of ourcolleagues were laid off. The firm had reachedthe end and everyone expected the last ritesto be administered.”But he and his team set about a new diver-

sification strategy, looking for new marketsand finding new buyers for a service and skillsbased on generations of innovation, expertiseand hard graft.“Today, management and the unions work

in close collaboration so everyone knowswhere we are going,” he says.The 150-year-old Belfast manufacturer

has rebuilt its reputation and is globallyrecognised as a centre of excellence in designengineering andmore recently as a leader inthe offshore renewable energy sector.“Our first renewable project was the assem-

bly of a 30-turbine wind farm for an area of

the Irish Sea off Barrow and this opened upa whole new market for us,” he says.We are enjoying a light lunch of turbot and

John Dory (and sparkling water — he’s gotmeetings to go to this afternoon) in JamesStreet South.H&Whas completed twomore wind turbine

arrays plus a number of offshore transformerplatforms. It is now manufacturing a rev-olutionary foundation system for offshoreturbine supports.The business operates on two sites in

Queen’s Island. The repair dock at the tipof the peninsula, just beyond the NorthernIreland Science Park is busier than ever takingin fast-turnaround ship repair and conversioncontracts. Two years ago the Canadian energycompanyHusky appointedH&W to undertakea massive refurbishment programme for theSearose, one of the world’s largest floatingproduction, storage and offloading vessels.More recently the Blackford Dolphin drill

platform dominated the city skyline as H&Wworked round the clock to complete anothermajor overhaul and partial rebuild in themainbuilding dock, home to Samson and Goliath.But it’s the offshore renewable energy busi-

ness in which H&W has led the way.Was it tough turning a seemingly dying

engineering company into a streamlined,specialist skilled business?“Of course it was very hard and when you

look at what we were in 2002 to what we arenow, I’m not sure we could have imagined thisdegree of success. We have the skills and thecommitment and have always believed thatthe ship yard could be not only profitablebut also a leader,” says Mr Cooper. “We havebeen at the forefront of the developmentof new technologies in this sector and I amconfident that the future will see furthergrowth in this business.” Mr Cooper says thecompany’s success also owes much to thebusiness environment. “Northern Ireland isa good place for business: nowhere is perfect– energy prices here are high and transportcosts are a factor, too. Yet we are competitivebecause we have the right people.

With Robert JCooper, CEO,

Harland and WolffHeavy Industries

Ltd

STREETVIEW

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SEVEN generations agothe Huguenot Gasgo-ine family set up theirlinen business a shortdistance from Gilford.

Today their once-derelictmiddle class merchant houseand linen-grading barn formthe core of a cluster of four mi-cro businesses-owned and runby Master Potter Sean O’Dowdand his wife Marie. Sean grewup on a nearby farm and wasinspired by pottery classes inhis teenage days to the extentthat he developed a smallbusiness on his farm. In themid-1980s his main outlet waswholesale supply to the boom-ing trade in Dublin. A decadelater the derelict neighbouringfarm with its historic Grade IIlisted house was bought andrefurbished.Visitors will discover a

distinctive cluster of buildingswhich have maintained theirrural Ulster heritage. Distinc-tive thatching and retention ofthe sloping floor in the restau-

rant (former linen barn) exem-plify sympathetic restoration.On entry to the old house

and pottery showroommostwill initially ignore the stairwayto the left and investigate thedisplays of pottery and gifts.The nature of the buildingis good for pottering (!) withvarious nooks and cranniesdisplaying glassware, jewellery,candles, and lamps alongsidestoneware ‘functional pottery’.

There is access to the coffeeroom by a door to the courtyardor by a corridor with variousdisplays including importedpottery from Italy in the formof richly coloured tiles. Servinghome-produced food, the120-seater restaurant itself haswaitress service.Over the years the business

has grown organically, with theadvantage of the various sec-tions supporting one another

Ron McBride

Streetview No. 50: Ballydougan Potteryas trade varies seasonally orinevitably changes with the im-pact of the recession. Nineteenstaff work in the complex todaywith the business winningvarious awards in the fields ofhospitality, best restaurant andbest rural business. Ballydou-gan’s success is partly due to itbecoming a destination experi-ence as people, often in groups,can easily spend a morning orafternoon.Eating in the restaurant,

using their pottery or stayingin the cottages using their food,not to mention purchasingtheir pottery creates a strongmutual support for the compo-nent strands of the business.Anyone wishing to vis-

it a pottery with a sense ofrural heritage and in pleasantsurroundings should find Bal-lydougan interesting. They mayeven sign up for a pottery class.

Ballydougan Pottery177 Plantation RoadGilford02838342201

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‘Developing newroutes to keymarkets is the mostimportant item onour agenda’

Graham KeddieManaging director of Belfast InternationalAirport

7amHaving just moved to Belfasttwo months ago to take up theposition as managing direc-tor of Belfast InternationalAirport, I am still living outof suitcase. My wife and I arein the process of buying ahouse and I hope that she willbe able to move here beforeChristmas. So as it stands mymorning routine is to get up,grab some breakfast and headto the airport to start the day.I am trying to get used to theNorthern Ireland weatherhaving worked in the MiddleEast for so many years. Sayingthat I am originally fromAberdeen so it shouldn’t takeme too long.

9amOn arrival at the office Inormally catch up with myPA, Patricia, to go over theappointments for the dayahead — she runs a tight shipand keeps me very organised.I have just started the jobso there are lots of people tomeet, from staff to businesspartners to airlines, so I makea point of getting around totalk to everyone and so they

can get to know me. Mondaymorning sees the weeklymanagement meeting at 11amin which staff with directresponsibility for key functionsget together and we talk, as ateam, about the issues that lieahead for the coming week. Iam doing lots of meeting andgreeting at the minute so todayI am heading off to Stormontto meet with the First and Dep-uty First Minister. Primarilyit is a ‘get to know you’ sessionso they can put a face to thename and we can discuss theairport development and anyopportunities that are on thehorizon. For instance, one ofthe areas we will be discussingis the significant land bank wehave on the airport site that weare hoping to develop. We arekeen to achieve enterprise zonestatus for this area, which willallow us to attract developersto the site and create an areawith grade A office space,warehousing and distributioncentres, bringing much neededemployment to the area.

1pmTime for lunch and I am catch-ing up with Uel Hoey, our busi-

ness development director andone of our customer airlines,to discuss their upcoming newroutes and also possibilitiesfor further route developmentwith them. Developing newroutes to key markets is themost important item on ouragenda — it is essential forus to develop connectionsbetween European cities bothfor tourism and investment inNorthern Ireland. We knowthat many Northern Irelandpassengers travel to Dublinbecause the route they want isnot served from Belfast and weare determined to expand ournetwork so that our passengerscan fly locally and direct towhere they want to go. A Mid-dle Eastern carrier is also verymuch in our sights.

3pm:Back to the office and a catchup with Patricia again, to checkall the documentation I needfor heading to Westminster. Iam presenting to the all partyparliamentary group of MPsdiscussing regional airportswith a focus on the impact ofair passenger duty (APD).I have recently signed up

to Twitter and find it such afascinating vehicle for com-municating with people. Ourairport Twitter has over 11,000followers and I am sure thatwill continue to grow.

6pmBefore leaving the office I liketo stop by with at our opera-tions control centre. The centreis at the heart of the operatingand essential to the efficientrunning of the airport. I alsocall in with the airport policeat the station, normally for acuppa and a chat, before head-ing off home. It is importantfor the staff to be able to talkto me and see me around theterminal and feel that they canapproach me with any queriesor concerns they may have.Once I get home and have aquick bite I try to Face Timemy sons who are both studyingin Scotland. I have to say thatthe first two months in the jobhave been exciting and reallyinteresting. I am delighted tobe in Northern Ireland and Ilove the aviation business, Ilook forward to each day andthe challenges and opportuni-ties that it will bring.

MOTORING NEWS

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MOTORING NEWS

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Calculate if an apprenticemakes sense for your firm

THE Institute of the MotorIndustry has launched a newapprentice return on invest-ment (ROI) calculator whichwill help employers and train-ing providers make a strongbusiness case for hiring an ap-prentice. The calculator makesuse of recent data from theIMI’s ROI studies to allow busi-nesses to measure the costs ofhiring an apprentice againsttheir own unique businessrequirements. Last year sawthe first rise in apprenticeshipstarts since 2010 and the IMIis aiming to use the calculatorto drive continued growth inthis area.Businesses can now access

their own unique forecast forfree online and via mobile.

Driverless Audi completesfull circuit of Hockenheim

AUDI used the final race of theGerman Touring Car Series todemonstrate their driverlesscar. It took the Audi RS 7 pilot-

ed driving concept just slightlyover two minutes to complete alap on the Grand Prix track inHockenheim.For orientation on the track,

the car uses specially correctedGPS signals. This GPS data istransmitted to the vehicle viaWiFi according to the automo-tive standard and redundantlyvia high-frequency radio. Inparallel to this, 3D cameras inthe car film the track, and acomputer program comparesthe cameras’ image informa-tion against a data set storedon board. This enables the carto place itself on the track to anaccuracy of a few centimetres.

Festival of Speed and theRevival return to Goodwood

GOODWOOD Circuit has an-nounced the provisional datesfor both the Festival of Speedand Revival meeting in 2015.The Festival of Speed, celebrat-ing the very best from the pastand present of motoring andmotor sport, will be held onJune 25 to 28, 2015.The Revival, the world’s most

popular historic motor racingand vintage culture event, willbe held for an 18th time fromSeptember 11-13.Tickets and hospitality

packages for both events willgo on general sale on Thursday,November 6, as will a limitednumber of tickets for the 73rdMembers’ Meeting, which wasrecently confirmed as beingheld on March 21 to 22 2015.

£5.4m fund to help improveautomotive supply chain

FUNDING of £5.4m awardedrecently by the Departmentfor Business, Innovation andSkills (BIS) will help six UKautomotive suppliers win newbusiness and close the skillsgap. Currently only a third ofthe parts used in UK-built vehi-cles are sourced domestically.The investment, which was an-nounced by Business Secretary,Vince Cable, will help business-es around the country win andmaintain more contracts withlarge automotive suppliers.The government-industry

investment includes £2.7m

from the Employer OwnershipFund automotive supply chaincompetition. The fund enablesemployers to design trainingprojects that can address skillsshortages holding back theirbusiness, providing 50% matchfunding to the company.SMMT chief executive Mike

Hawes said: “Strengtheningthe UK supply chain is essen-tial for the future prosperity ofthe whole automotive industry.We have to secure skilled jobsfor long-term growth so thisfunding will ensure that UKsuppliers are well placed totake advantage of the potential£3bn of new business opportu-nities available to them.”

No disc required... but alldrivers still need to be taxed

WITH the changes to car taxnow in place, a tax disc is nolonger required to be displayedon the windscreen. However, todrive or keep a vehicle on theroad, owners are still requiredto tax their cars, and the DVLAwill continue to send out arenewal reminder. While the

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IT may retain a famil-iarity, but the elegantbodywork of the eighthgeneration VolkswagenPassat clothes an all-new

car. Featuring state-of-theart electronic driver supportsystems, the new saloon ispresented by the company ashaving ‘advanced technologyin a designer suit.’ The modelis extremely important forVolkswagen as it is their bestselling vehicle world-widewith over 22m sales in its 41year journey. Today that paceis maintained with 3,000 cars

a day leaving the showrooms.While the latest model

is all-new and 85 kg lighterthan its predecessor, it devel-ops the lines of the currentcar into a more refined andsophisticated presentationwith a lower roof-line andwider body. An increasein wheelbase by a notable79mm provides a roomiercabin without sacrificingboot space, while largerwheels complete the package.Launched in some markets

including the Republic ofIreland with a 1.6 litre petrol

engine, UK models will allbe turbo-diesels in either 1.6or 2.0 litre capacities, andranging in output from 120PS to 240 PS.Test choice was this latter

power unit, its twin turbo2.0 litres developing 500 Nmof torque from 1750 rpm.Delivering power to all fourwheels via the company’stried and tested 7-speedDSG gearbox, it covers thebenchmark sprint to 60 mphin under six seconds withthe potential to top 150 mph.But what statistics do not

record is the smoothnessof the power delivery andthe overall refinement ofthe engine even under firmacceleration. As is the casewith this transmission, it canalso be used in ‘Sport’ settingfor a sharper response whilea manual override option isavailable on both the gearselect lever and the steeringwheel mounted paddles.Handling on the Passat

was significantly improvedwith the introduction ofthe four-link axle and thishas been further developed

MONEY MAKERUpdated Passat shows why the saloon is Volkswagen’s best seller, says Jim McCauley


VOLKSWAGEN PASSAT 2.0 TDI 4MOTION

Engine: 2.0 litre, 4-cylinder twin turbo TDI diesel; 240 PS at 4,000 rpm; 500Nm torque from 1,750 to 2,500 rpmDrive: Via 7-speed direct shift gearbox (DSG) to 4MOTION all-wheel drivePerformance: 0-62mph (100km/h) in 6.1 seconds; max, 150 mph (240 km/h)Fuel on combined cycle: 53 mpg (5.3 l/100km)CO2: 139 gms/km; VED Band E for annual car tax of £130Trim: R-LinePrice: £35,505Insurance: N/AWarranty: 3 years/60,000 milesBenefit-in-Kind: 20%Euro NCAP: Expected 5-StarAvailable extras: 3-year Service Package £384, Extended 4-year warranty£390, Area View obstacle detection system, Park Assist, Trailer Assist, RearTraffic Assist, Front Assist (including City Emergency Braking function withPedestrian Detection). Prices of these to be confirmed.

for improved performanceas well as ride comfort.All-wheel drive is standardon this flagship model withsituation based power dis-tribution. Equipped with the5th-generation of Volkswa-gen’s ‘4MOTION’ system, thecar maintains a front-wheeldrive only power delivery butcan respond immediatelyto all-wheel distribution,including almost 100% to therear wheels as the situationdemands.In addition to the

all-weather/poor surfaceadvantages of such a system,it also permits earlier appli-cation of power on exitingcorners. Power balance onthe same axle is furtherenhanced by sophisticat-ed electronic packages toprovide maximum handlingsecurity as well as honingsteering response.Other driver support

systems, standard in mostmodels in the range, includethe post-collision brakingsystem which automaticallybrakes the car followingan initial collision, while arange of optional systemsincludes automatic brakingapplication on pedestrian de-tection or car in front in slowmoving town situations.With the premium sector

appeal of the new Passatcomes an upmarket inte-rior finish with improvedpassenger space and higherquality materials. Gone arethe traditional analogue in-struments which have beenreplaced by a 12.3 inch ‘activeinfo display’. This high-reso-lution digital screen presentsthe main instruments inanalogue form while thecentral space can be used toreplicate any information, in-cluding navigation from thecentral console touch screen.

A leather-rimmed steeringwheel with multi-functionspoke controls is adjustablefor reach and rake, comple-menting the driver set-upchoices on the fully electricfront seats. The feeling ofspace in the cabin is accentu-ated by the slim full-lengthdash air-vent that givesvisual width to the interiorand adds to the premiumfeel, initially suggested onthe exterior by the rearwardbiased cabin and long lowbonnet.The new Passat is also

launched with the latestgeneration of Volkswagen’sinfo-tainment system, whichallows a high degree ofconnectivity to link up andinterface with smartphonesand their apps. Among theoptimal features are the abil-ity to call two mobile phonesat the same time, have textmessages read aloud and the

downloading of audio books.In their eighth genera-

tion evolution of the Passat,Volkswagen have raised thestakes in taking their bestselling model into the premi-um arena. And while it maymaintain its familiarity tothe outgoing model, it addsan elegance that along withits underlying technologiesand Euro 6 engines easesit comfortably up-market.While the UK range startswith the 1.6 TDI manualmodel at £22,215, the flag-ship model tested in R-Linetrim is listed at £35,505.All models can be ordered

now for January deliveryin either saloon or estateformats.The standard three

year/60,000 mile warrantycan be extended to four orfive years while a three-yearservice package costs just£384.


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Treze ‘Heads Up’ Software MonitoringTool,£15 p/mth @ www.nobully.com

Treze is a Newry software developmentandmarketing company that has devel-oped a product called Heads Up, afterextensive research and consultationwith child psychologists and schools.Heads Up is a cloud-based softwaretool that enables parents to monitor

their children’s social media activity in a non-intrusive,trust-based manner. The software will provide parents withalerts for any possible negative activity, cyberbullying andinappropriate language originating on any device on theirchildren’s social media and email accounts. Treze has its ownonline platform— nobullying.com, which is already attract-ing a quarter of a million sessions per month and has over2,000 original published articles prepared by written by childpsychologists, online safety experts, teachers and parents.

Belfast to host adigital economy andtechnology eventFollowing the success of lastyear’s event, Digital DNAwilltake place from November4-7 in various venues acrossBelfast. The all-round busi-ness experience will show-case the very best knowledge,practice and expertise fromlocal successful business andglobal thought leaders. It willbring together the very bestdigital practitioners, creativeleaders, successful entrepre-neurs, business advisors andinspirational speakers. Ticketsavailable to purchase at www.digitaldna-ni.com

Lumicycle Insight Light £80 @ www.lumicycle.comThere are millions of cyclists on the road and if you are one of them youmight

feel invisible to car drivers, despite wearing a high-viz jacket or usingflashing lights. Help is at hand with the Lumicycle Insight that recog-nises when you have hit the brakes and lights up the rear light, just like

brake lights on motorbikes and cars and everything else onthe road. There is tech built in to this light that ‘learns’how you’re riding and interprets when you’re brakingand when you’re just bashing about on potholes. Italso has a healthy 50 lumens in light mode, but firesout 200 lumens of Cree and Samsung LED action when

braking is sensed.

HTC Desire EYE Smartphone£400 approx @Three UKThe HTC Desire EYE has been dubbedthe ‘selfie’ lover’s smartphone due to itsimpressive camera features.With its dual13MP cameras on the front and back, 5.2Full HD screen and BoomSound speakers,the Desire Eye delivers on all fronts. Ithas a unique cylindrical design, madeto fit comfortably in your hand. The REapp features a remote live viewfinderthat lets you set up the perfect shot andwatch the live action on the screen ofyour mobile device, or switch to albumand playback view to flick through theshots and videos already stored on thecamera. In the future, this RE appwill beavailable on Android and iOS and offerreal-time video streaming to YouTube,

allowing you to live inthemoment and shareit live via your YouTubechannel.

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FASHION

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Wool winnerBy Grainne McGarvey

WITH a notice-able chill inthe air it’s timeto fight theelements and

snuggle up with the perfectwinter material — wool. Thistraditional fabric has becomeso important, it even had itsown week of celebration in

the UK last month. Also infavour with the fashion packthis season, designers havebeen embracing a relaxed andearthy palette.Coats, bags and even shorts

are embracing this naturalmaterial and giving us anopportunity to wrap up in arange of layers and styles.

Luxe greycroppedtop: £28@DorothyPerkins Cable midi-dress:

£69.99@Monsoon

Woollencoat:£440@Eden Park

Wool rib zipcardigan:£199 @Jaeger

Luxe woolwalkercoat:£150@Land’s End

Herring-bonetrousers:£65@WhiteStuff

Howick wool checked flatcap: £25@House of Fraser


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NEW York, New York. So good,goes the song, they namedit twice. And with goodreason — for although itsheadline attractions stretch

fromMacy’s, museums and the EmpireState Building to the Brooklyn Bridge,Broadway and Lady Liberty herself, thecity that never sleeps only occupies afragment of the state.Beyond, to the north (hence the “up”

in upstate) lies a vast territory borderedby Canada, New England and the mightyGreat Lakes. Spanning forests, farmsand mountain preserves, it’s the bigger,greener apple. While first-time visitorsrarely stray much beyond Manhattan,New York State’s wider appeal luressecond and third-timers to mix urbanand outdoor environments. How best toconvey the sheer scale of New York Stateand its great outdoors? Well, the state isbigger than England — and its mightiestpark, Adirondack, is larger than Wales.Once you break free of NYC, you find agreen and exceptionally pleasant landwhich is also becoming a hub for conser-vation and preservation of wildlife.The state divides itself into 11 regions,

of which the closest — Long Island andHudson Valley — are ideal for a briefescape. The Hudson River rises in theAdirondacks and flows south to theAtlantic via New York City.On its way, the river cuts through a

valley so captivating that it inspired itsown artistic movement, the Hudson Riv-er School of the mid-1800s. Glorious val-ley views can be had on Poughkeepsie’sWalkway Over The Hudson (walkway.org), a mile-long former railway spanrevived as the world’s longest elevatedfootbridge (with links to further trails).The main rail route from New York City’sPenn Station (amtrak.com) follows theHudson Valley north. Manhattan toPoughkeepsie, takes only 90 minutesand costs as little as $25 (£15) one way.One railroad branch continues north

to Montreal. The full, scenic journeytakes 11 hours (from $67/£40, one-way).The other loops west towards Buffaloand Niagara Falls, with trains continu-ing to Toronto or Chicago.Further north, the Catskills are a hit

with weekending New Yorkers, whilethe rest is best explored on a multi-day,self-drive trip.

The state’s vast expanse of uplands,lowlands, historic towns, wineries andAtlantic and lakefront shores make forendless recreational options. For outdoorenthusiasts, there’s hiking, biking andwhite-water rafting (plus skiing andsnow-shoeing in winter), or kayakingand boating on the waterways. Urban-ites might prefer galleries, outlet mallsand farm-to-table dining, or the seasidescene in Fire Island or the upmarketHamptons. And there’s Niagara Falls,New York State’s signature sight, wherewalking trails and boat rides take youright into the spray.Although it holds year-round appeal,

autumn is arguably the best time to visit.The maples are the first to turn and puton the best display, followed by oak,ash and hickory, and the stately Amer-ican beech. The result is a patchworkof blazing colour; the Adirondacks andCatskills hold the largest tracts of forest,so head here to catch the scenery at itsglorious, seasonal best. October is alsothe perfect time to encounter the kingof fish. The aptly-named Salmon River,in the Thousand Islands Seaway region,is considered the fishing capital of theAmerican north-east. Chinook and Cohosalmon are the target species here, withthe “run” of fish surging upstream tospawn reaching its climax mid-month.Bear in mind that upstate hotel rates

tend to be lowest on weekdays, whenNew York City prices can often be skyhigh. Conversely, the city is cheapest atweekends, so time your trip accordinglyto make the most of your budget.If there’s one thing New York State

isn’t short of, it’s water. Flanked by two

of the Great Lakes (Ontario and Erie)and home to countless others, there’s anabundance of aquatic activities to enjoy.Beyond fishing, boating and kayaking,there are leisurely cruises on LakeGeorge, the “Queen of American Lakes”(lakegeorgesteamboat.com) and sailingon the 125-mile-long Lake Champlain.In the scenic Finger Lakes, however,the main appeal is on land. This is NewYork’s best wine country, awash withtasting opportunities. There are severalwine trails to follow, such as Ameri-ca’s first, the Cayuga Lake Wine Trail(cayugawinetrail.com), which takes in 17boutique wineries and four distilleries.Audley (01993 838 755; audleytravel.

com) suggests a 12-night New York StateDiscovered fly-drive combining NYCwith the Finger Lakes and Niagara Falls.From £2,210pp, including flights, carhire and accommodation.The Catskills are New York City’s

playground, offering open space filledwith family attractions and outdooradventures.The Adirondacks are larger still. The

mountain resort of Lake Placid has host-ed two Winter Olympic Games — in 1932and 1980. Find out more at the OlympicMuseum (whitefacelakeplacid.com).Skiing and snowboarding are on offerin many locations, with Gore Mountainclaiming the most terrain in New YorkState (goremountain.com).For a genuine away-from-it-all break,

head to Garnet Hill Lodge (001 518 2512444; garnet-hill .com), near the villageof North River. This cosy, family runhotel has just 16 rooms in a hilltop logcabin with far-reaching views over forestand lake. Chipmunks, deer and wildturkeys are frequent visitors to the gar-den, and it’s even accessible by train (viaSaratoga Springs) for those who don’twant to drive. Rooms from $195 (£114).Niagara and beyondAt just 35 miles long, the Niagara Riv-

er may not be among the world’s longest,but its waterfall is of global renown.Niagara Falls is actually a collection ofcataracts — Horse-shoe, Bridal Veil andAmerican Falls — shared between Cana-da and New York.Grand American Adventures (0333

999 7961; grandamericanadventures.com) has a three-day coach tour depart-ing from Newark for £375pp, including a

New York State-sideIt’s not just about shopping and skyscrapers – for outdoor adventures and fall

foliage, now is a great time to visit the bigger, greener apple, says James Litston

Times Square in New York City - but there’smore to the state than just the Big Apple

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guide, accommodation and boat trip.Post-falls, the Niagara empties into

Lake Ontario, which itself is drainedby the St Lawrence River through theThousand Islands Seaway. This was thedestination of choice for well-heeled,Edwardian-era New Yorkers, and itslaid-back appeal prevails to this day.Waterfront Clayton makes an ideal basefor kayaking through the archipelagoor biking around Wellesley Island StatePark. Also, don’t miss the outstandingcuisine at Bella’s (001 315 686 2341,bellasonlinenow.com), a restaurant thatis big on local flavours.Stretching 118 miles from the borough

of Brooklyn to Montauk Point, LongIsland is anchored in city and seaside.Barrier islands front the Atlantic: someare protected zones ideal for picnics,

swimming and windswept walks; othersare buzzing resorts.Long Island’s most celebrated resorts

are The Hamptons, a string of ocean-front villages where New York societysummers in style.East Hampton, with its bars, bou-

tiques and see-and-be-seen vibe isarguably the chicest spot. Parking canbe difficult, so it’s best to come by bus(from $25/£15 one-way; hamptonjitney.com) or train (from $20/£12 one-way,mta.info/lirr) and rent a bicycle forgetting around. Or stay at The Maid-stone (001 631 324 5006; themaidstone.com), a Scandinavian-inspired boutiqueretreat, and you can borrow a bike freeof charge. Rooms cost from $263 (£164)per night, including breakfast.New York City is not the state capital.

That title goes to Albany , which lies inthe Hudson Valley, 135 miles north ofNYC. Today, the Erie Canal is a popularattraction, drawing cyclists to ride the365-mile Erie Canalway Trail (eriecan-alway.org) and less energetic types tointerpretive boat tours. The rail journeyfromManhattan takes two hours, 30minutes, for a fare of $41 (£26).The wider region is also known

for the genteel spa town of SaratogaSprings, which has a charming Down-town and a Performing Arts Center witha roster of high-profile acts.America As You Like It (020 8742

8299; americaasyoulikeit.com) can com-bine Capital country with Long Island,the Hudson Valley and the Catskills on a13-night fly-drive from £1,295pp, includ-ing flights, car hire and accommodation.

Getting there:New York is the obvious gateway. Flightsfrom Heathrow are available with BA (ba.com), Virgin (virgin-atlantic.com), United(united.com), American (aa.com) and Delta(delta.com), and from Gatwick on Norwegian(norwegian.com). American and Unitedalso fly from Manchester, and United fromEdinburgh, Glasgow and Birmingham.Northernmost New York State is easy toreach from Canada; BA, Air Canada and Air

Transat (airtransat.co.uk) serve Toronto andMontreal from London.

Getting aroundBesides the rail options from New York Cityto Albany and Niagara, Megabus offers low-cost links in the state. Manhattan to Albanytypically costs $15 (£9), with six departuresa day. The end-to-end journey from Buffaloto New York costs $30 and takes eight hours.Fly-drive options abound. Bon Voyage (0800

316 3012, bon-voyage.co.uk) suggests a well-paced, 10-day Beautiful Upstate Journey.A package including flights, car hire andaccommodation costs from £1,795pp.

More informationThe State’s website is iloveny.com. Respon-sible Travel has a guide to New York State’ssmaller-scale tours, activities and accom-modation that benefit communities andcountryside (bit.ly/ResponsibleNYS).

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TRAVELof

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Six of the best: European ski hotels

For Friends Hotel,AustriaPoised on the edge of the InnValley, For Friends Hotel is openfor its first ski season, havinglaunched this summer. Thehotel’s design aims to blend intothe surroundings with timbercladding, glass walls that giveway to panoramic views over theTyrol region and a sauna carvedinto the rock face. Accommoda-tion ranges from standardrooms to “lofts” and suites; forthe biggest and best in thehouse, check into the RooftopSuite, which has two bedrooms,a private sauna and gardenterrace. The hotel may not beright next to the slopes, but thesurrounding area has 37km ofski pistes.Am Wiesenhang 1, Mösern, Tyrol,Austria (00 43 5212 20300;for-friends-hotel.at). Doublesstart at €170, includingbreakfast.

Le Mélézin, FranceA stay at this atmospheric hotelgives you access to the world’slargest ski area, Les TroisVallées on the French-Swissborder. Situated on theBellecôte ski slope – a shortstroll from Courchevel 1850 – LeMélézin’s interiors feature a mixof bronze sculptures and200-year-old oak beamsframing the communal spaces. Alight, modern take on Frenchcuisine is the order of the day atThe Dining Room restaurant,while a spa, sun deck, hammamand pool are ideal for après skirelaxation.Le Mélézin, Courchevel 1850,France (00 33 4 7908 0133;amanresorts.com/lemele zin).Doubles start at €880, roomonly.

Nira Montana, ItalyThis sister hotel to the NiraAlpina in Silvaplana, Switzer-land, opens in the Aosta valleyon 5 December. Set in the formermining town of La Thuile – apopular resort with families – itoffers access to 160km of highaltitude runs in Italy and France.Inside, you’ll find warm roomswith a sylvan theme – forestwallpaper, tree trunk tables andpolished wooden floors. Highquality, informal Italian dining isoffered in the Stars Restaurant,

while the spa offers an indoorpool, sauna and treatments.Localita Arly 87, La Thuile, Italy(niramontana.com). Doublerooms start at €275, half board.

DVChalet, ItalyAlthough labelled a chalet, thisstylish ski lodge is in fact a smallhotel with just 20 rooms, eachindividually designed andadorned with classic furniture byEames, Le Corbusier and AlvarAalto. The restaurant servesdishes made with organic Italianproduce, while the slick spafeatures thalassotherapytreatments and Turkish baths.DV Chalet is just 300m fromMadonna di Campiglio’s Spinaleski lifts.Via Castelletto Inferiore 10,Madonna di Campiglio, Trentino,Italy (00 39 0465 443191;dvchalet.it). Double rooms startat €210, including breakfast.

Das Central, AustriaThis five-star retreat is situatedin the Tyrolean village of Sölden,home to 144km of pistes andtraditional slopeside restau-rants. Like the mountainssurrrounding the hotel,everything is on a grand scalehere, with 30,000 bottles of winein the cellar and a three-storeyspa equipped with 10 saunas and16 treatment rooms. Extras suchas ski safaris, Nordic walking,snowshoeing and a shuttle tonearby lifts are included in theroom rates.Auweg 3, Sölden, Austria (00 435254 22600; central-soelden.at). Doubles start at €192, halfboard.

Hotel Firefly, Switzer-landThis luxurious hotel at the baseof the Matterhorn is all-suite,with some of the 16 roomsaccommodating up to 10 people.With ski-in, ski-out access it’seasy to get on to the 200km ofpistes around Zermatt (20km ofwhich are operational insummer). The Firefly’s Bar 55 isideal for an après-ski drink, but ifyou prefer a more supine form ofrelaxation there is a spa.Schluhmattstrasse 55, Zermatt,Switzerland (00 41 27 967 76 76;firefly-zermatt.ch). Doublesstart at Sfr595 (£390), includingbreakfast.

OUT AND ABOUT

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withTheCHAIRMAN


The Chairman is relieved to report from a string of interestingsocial events as the glitterati lure him from his BT9 mansion

THE Chairman loves agood Northern Irishinvention as much asthe next man, and hassat on many Massey

Fergusons, and been ejected frommany seats through the years.Thankfully he was on his best

behaviour at Titanic Belfast forthis year’s INVENT 2014 North-ern Ireland Science Park Awards,which celebrate the cleverestinventions with the greatestmoney-spinning potential.The Chairman enjoyed an

excellent dinner with the KernelCapital clan, including BelfastKernel partners Daniel Mc-Caughan and Jayne Brady, aswell as guestsNeil Simms, PaulBrown and Gavin Campbell.The Chairmanwas delighted to

talk about old times withGillianMcKenna of Invest NI, but daresnot to hope he remains as fresh-faced as she.It’s fair to say that Ms McK-

enna and the Chairman trodto excess on memory lane, re-membering the old days back incorporate finance with the IDBand old friends like CharlesHarding, JohnHumeandDerekShannon.The Chairman was bowled

over by the ingenuity on displayfrom the award winners, andlooks forward to tracing his ownfascinating forebears using thetechnology pioneered by overallwinners, Leona and SeanMcAl-lister of Plotbox.WilliamWright ofWrightbus

was a reminder of the longevityof our brightest minds, andmereschoolboy Gareth Reid a fore-taste of the great future whichlies in wait for the tech sector.The Chairman exited the Ti-

tanic Belfast, rolling gently fromside to side as is his wont afterone or two libations – and hewasdelighted to bump into sprightly

Jerry Kochanski of INVENT 2014 finalist Coolsafe 360, along with GavinCampbell of engineering category sponsor Bombardier

Sean and Leona McAllister of INVENT 2014 overall winner Plotbox andMichael Black of category sponsor Intel

Appointments

economist John Simpson, theelegantClareWeir of the BelfastTelegraph and suave BBC manSymon Ross.

Natasha Jordan has joinedlaw firm CFR as a trainee in itscompany/commercial depart-ment. She graduated from theUniversity of Liverpool in 2012and completed the LPC at theUniversity of Law, Chester in2013. She previously worked atClyde & Co.

Mervyn Perry has beenappointed business develop-ment manager of the cleaningdivision of The Mount CharlesGroup. He will lead the growthof the division by identifyingnew opportunities. He is aformer regional sales managerat Zenith Hygience Group.

Karen McMenamy joinsSmarts Communicate as anaccount manager, workingacross a range of global FMCGclients. Before joining Smarts,she worked in commercial,customer marketing andconsumer marketing roles forDiageo.

A queue at the car park ticketbooth was a great opportunity fora catch-up with the Chairman’sfavourite hacks.


Appointments

Jade Gabriel has joined lawfirm CFR as a trainee solicitorin the property department.She graduated from Queen’sUniversity Belfast in July 2014with a degree in law. She willbe attending the institute ofProfessional Legal Studies inJanuary 2015.

Rachel Lewis has joined lawfirm CFR as a trainee in thelitigation department. Shegraduated from Queen’sUniversity Belfast in July with adegree in common and civil lawwith French. She will be start-ing her studies at the Instituteof Professional Legal Studiesin January 2015.

Nathan Campbell is joining lawfirm CFR as a trainee solicitorin the private client/consultan-cy department. He graduatedin 2011 from Durham Univer-sity. He was formerly a legalassistant for another Belfastlaw firm and also spent time onsecondment overseas.

(l to r) Sean McCann, head chef of Canteen at the MAC, and Joery Castel of The Boathouse in Bangor hosted agourmet night in Belfast’s MAC as part of Belfast Restaurant Week

The Chairman tickled his ar-tistic side this month at Canteenat the MAC’s Art of Food andWine evening in Belfast’s trendydistrict, the Cathedral Quarter.The chef behind the stove

doing his bit for Belfast Restau-rant Week was The Boathousein Bangor’s Joery Castel, withwine selections provided byUnited Wines’ CiaranMeyler.The soiree began by ambling

through the upper and tallgallery, admiring the work ofartists Colin Darke and PeterLiversidge while savouringthe first two courses of the fivecourse adventure. The openingcourse marked a first for theChairman, who’d never had eel.

The smoked Lough Neagheel with apple was wonderfullypaired with the Chairman’s fa-vourite wine of the moment, alight and fruity Albarino.For the third course the Chair-

man descended to the sunken gal-lery, this time eating in themoretraditional fashion of a table.The sunken gallery has to

been one of the most delight-ful settings to have dinner,surrounded by the paintingsand sculptures of artist KevinHenderson.The Chairman was humbled

to be joined by Sharon Wright,director of Canteen at the MAC,Belfast Chamber of Commercepresident Paul McMahon and

his wife SharonMcMahon, andhusband and wife, Phil Smythand JeanWylie.The Chairman loves to talk

about food as well as eat it, andeagerly led discussions on howMarks and Spencer’s food isn’twhat it used to be, while the sup-posedly discount retailer Lidl’sfood is surprisingly good.And laughed at how the Chair-

man can’t get parked in theGerman supermarket’s west Bel-fast store for all the BMWs andMercedes.With the last two courses ac-

companied with port, the Chair-man will be having a stern wordwith CiaranMeyler for the sorehead he experienced the next day.

THE CHAIRMANof

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TEDFORDS restaurant inDonegall Quay, Belfast was thesetting for the Eakin Group’slatest big announcement.Over a truly delicious lunch

Tom, Paul and Jeremy Eakin,from the Co Down medicaldevice manufacturer, told theChairman all about buyingCliffe Medical.The Comber-based firm is

making huge strides in thehealthcare market and as partof the acquisition has also tak-en over Respond Plus, a med-ical distribution business inLarne, where the Chairman’sassociates are still reeling fromhow the town was presentedin last month’s BBC NorthernIreland documentary, I LoveLarne.The Chairman is a big

fan of the Co Antrim coastaltown and will proudly sportan I Love Larne badge on histuxedo at his next engagementthere.So, back to Tedfords and the

chaps from Eakins.The Chairman is hard to

impress but couldn’t help butpat the Eakin guys on the backfor their rapid expansion overrecent years through a series ofstrategic acquisitions.Its products are now sold

in 36 countries worldwidedelivering annual revenues inexcess of £60m.

Not too shabby at all.The delightful Chris

Cochlin, Nic Stevenson andNicola Ingledew from PelicanHealthcare, part of the Eakingroup, were over fromWalesto celebrate the Cliffe Medicaldeal.Also dining with us was the

cream of Belfast journalism,including the newly-wed PressAssociation’s David Young,BBC NI business journoSymon Ross, alongside thebusiest and chattiest freelancereporter in town, AmandaFerguson. The Chairman wasalso delighted to mingle withFiona Brown and LawrenceDuffy of hosts Duffy Rafferty.

(l to r) Ross Mullen, Joe Mayse and Alan Stewart from Marcon Fit-Out at the opening of the new Synge & Byrnecoffee shop in Londonderry’s Foyleside Shopping Centre. The firm led the design of the new cafe

Appointments

Thomas Holmes has beenappointed the new sales andmarketing co-ordinator atHutchinson Engineering. Hehas been with the company forfive years and is now responsi-ble for identifying new custom-ers. Hutchinson Engineeringis a laser cutting, folding andfabrication sub-contractor.

Brian Beattie has been ap-pointed all-Ireland marketingdirector for Northern Irelanddrinks company, Tennent’s NI,part of the C&C Group. He hasheld senior roles in Arla Foodsand Dale Farm. He is respon-sible for marketing Magners,Bulmers, Clonmel 1650, Ten-nent’s, and Tipperary Water.

Jeff Tosh has been appointedhead of Northern Ireland ontrade for drinks companyTennent’s NI, part of the C&CGroup. Mr Tosh is also custom-er marketing manager for thecompany and has extensiveexperience in the hospitality,catering and licensing trade.

THE Chairman does try to bediscriminating in whether ornot he accepts the many stiff-backed gilt invitations whichcross his antique desk.But when a Londonderry/

Maiden City/Stroke City/Der-ry event comes calling, he’sstraight on the train fasterthan you can say FeargalSharkey.A good cafe in the old days

was hard to find — but nomore, thanks to a lovely newspot in Derry.Movers and shakers from

the world of business, beautyand design were treated to an

evening of music and hospital-ity, as new cafe brand Synge &Byrne had its grand opening atthe Foyleside Shopping Centre.And no, the name isn’t a

tribute to the Chairman’sfavourite playwright and Late,Late Show host respectively,but a clever, made-up brand.The Chairman tapped his

geriatric toes to music fromDerry singer songwriter LauraB (Tangled Music), who playedan acoustic set to entertainguests.He also downed lattes,

cappucinos and flat whites tohis heart’s content, and hada disturbed night’s sleep as aresult.Mayor Brenda Stevenson

welcomed the new outlet to thecity and showed her supportfor the team.Marcon Fit-Out maestros

Ross Mullen, Joe Mayseand Alan Stewart looked onproudly at their handiwork —while October Business Monthcover girl GrainneMcGarveykept an eye on the smoothrunning of the evening.Synge & Byrne owners

Damien and Adrian Garveysaid they had been delightedwith the warmth of the northwest welcome and are lookingforward to doing businessAnd let’s raise a flat white

to that.

THE LAST WORD

with JamieStinson

62

RESTAURANTS in Northern Ire-land have begun to flourish overthe last few years, and it feels likethere’s a constant stream of newopenings.

We’ve seen the opening of The Poacher’sPocket (formerly known as LisbarnettHouse), Canteen at the MAC, and HowardStreet, to name but a few.That’s in addition to Belfast staples like

Mourne Seafood, Shu and James StreetSouth, which feel like they’ve been aroundforever.In what was once a more laboured

decision, now diners have never been soblessed for options on where to go out.Saying Northern Ireland restaurants

don’t get the credit they deserve has beenso commonplace, it’s almost a cliché.Since 2011, Northern Ireland has been

without a Michelin star, when Deanes lostits accolade.Darling of the UK newspaper restaurant

critics, OX is viewed as the most likelyto gain a Michelin star, with its AlainPassard-influenced cooking, while Bangorhas the hugely underrated The Boathouse,where Dutch chef Joery Castel is creatingambitious dishes which are exciting anddifferent.It would be wrong to say they’re all per-

fect, but the variety in what’s available fordiners is a huge improvement on five yearsago, never mind before then.With more and more restaurants open-

ing, there becomes greater competition forgetting customers through the door.This keeps places on their toes, knowing

they have to be at the best or consumerswill take their money elsewhere.However, there is a huge problem facing

the industry, stopping the growth of thenew restaurants and expansion in existingones.The restaurateurs in Northern Ireland

are plagued by three letters: Vat.In last month’s Irish Budget, Finance

Minister Michael Noonan announced hewould extend the tourism industry’s ex-emption from paying the higher rate of Vatin the Republic, a policy first introduced.The tourism sector includes hospitality,

with restaurants and bars only paying 9%VAT.In stark contrast, across the border

Northern Ireland restaurants pay thesame 20% rate of Vat as every other sectorin every other part of the UK, more thandouble what they would be paying over theborder.

Business owners in the hospitality sec-tor have been calling for a measure to putboth sides of the border on an even footing.It’s not just about cutting the tax bill,

it’s about making themmore competitiveagainst businesses throughout the wholeisland of Ireland.In the south, the reduction in the rate

has been of great benefit and supported byboth businesses and consumers.It’s been helping people when they’ve a

little less in their pocket than they’d like,keeping the restaurants and bars full.I spoke to one restaurateur with venues

north and south, and he said in the southhe was able to invest back into his busi-ness, train staff, and improve wages. In thenorth, it was the opposite.Despite wanting to put money back into

the business and expand, after the tax billthere was no money left in the till.This, for me, is a major worry, as without

being able to invest back into business, itwill stop improving quality for staff, keepgood staff incentivised to stay will thebusiness, and it’s inhibiting the creation ofnew jobs.Earlier this year, South Down MPMar-

garet Ritchie raised the issue in the Houseof Commons, calling on the UK govern-ment to address the problem. She argueda reduction in the Vat rate would createdemand, create jobs and help reduce youthunemployment.In the first year it was introduced in the

south, it’s said to have created 10,000 jobs— while in Northern Ireland, it has beenestimated a similar cut would create justunder 3,300 jobs.It would also go towards tackling one of

the bigger problems faced by the economyin Northern Ireland, youth unemployment.Jobs in the hospitality are traditionally

taken by younger people, and getting thesepeople into work, or back into work, is abig problem in the province.Youth unemployment, those between the

age of 16-24 years old, in Northern Ireland(18%) is above the UK average (16%).Having young people in work is great for

the economy, not only for the unemploy-ment figures, but because they spend mon-ey. Young people go out, they go shopping— they are not worrying about carryingover anything over to the following month.In other words, they’re not savers. Thisisn’t Germany.Young people are not waiting for a rainy

day. They’re spending their wages on a newpair of jeans or down the pub with their

mates. The money is ploughed back intothe local economy and helping businessesin the area.Vat is not devolved to Stormont, so West-

minster must decide. The Treasury hasburst the bubble of those looking for a cut,maintaining it wouldn’t accept a UK-widereduction.Well, a Vat reduction throughout the

UK would cost the Treasury a lot, at a timewhen it’s still counting the pennies.But they should not just flippantly disre-

gard allowing the tourism industry in theNorthern Ireland a relaxation in the rate.This is not about tax cut for firms in

Northern Ireland while penalising those inEngland, Scotland and Wales.It is about allowing firms in the prov-

ince fairly compete with its direct competi-tors in the Republic of Ireland.


Restaurants here are burgeoning, with more and more sprouting up. But this growth couldbe halted due to the high rate of Vat that they pay here compared to the Republic of Ireland

There is a hugeproblem facing

the industry, stoppingthe growth of the newrestaurants and expansionin existing ones.

Restaurants are on the rise

business month november 2014

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