Mannok boss says Brexit deal good for business
One of the region’s largest employers believes a 'No Deal' Brexit would have cost the business in the region of millions of euro.
“We export an awful lot of our product in the GB and Northern Ireland markets. So had the Northern Ireland Protocol not being honoured by the British government, certainly there would have been issues,” says CEO of Mannok, formerly Quinn Industrial Holdings, Liam McCaffrey. “Definitely, in terms of loss, a No Deal would have run into millions. It would however be impossible to speculate just how much that might have been.”
Mr McCaffrey’s comments come just days after a Brexit deal was struck between British and EU negotiators, and on the same day as Mannok employees returned to work on Monday last, January 4, following the Christmas holidays.
Mannok has invested significantly in putting the proper processes in place to meet the demands of the new Customs arrangements going forward, but even still Mr McCaffrey accepts teething issues will emerge.
Like many others, Mannok has moved to automate the processes required and has also set up a number of companies in the UK to allow them to continue trading in a “more streamline fashion”, according to Mr McCaffrey.
“We did the preparation. So far so good with the dispatches that have gone out today. There probably will be some short-term disruption to transport, I don’t know what extent that’ll be, but overall we’re reasonably happy, and [the deal struck] is a good deal for business.”
He adds: “The prospect of tariffs and the difficulty a No Deal would have caused to us is certainly something we wished to avoid. There is still some additional administrative procedures we had to go through today that we didn’t have to in December and I have no doubt there will other issues that’ll arise... but that is to be expected.”
Last year Mannok, which rebranded in September, announced earnings before tax and interest for 2019 had increased slightly despite the company recording a slight dip in turnover from €240m in 2018 to €234m in 2019.
But the impact of the pandemic in 2020 has hit Mannok, as it has most companies.
Despite lockdowns and restrictions, the business has progressed and, despite rising Covid case numbers in both Cavan and Fermanagh in recent days, Mr McCaffrey states that, for now, it remains “business as usual”.
“We’ve invested an awful lot to ensure the work environment is as safe as possible for our staff. Obviously it’s worrying the rate of transmission in the community at present, so we just have to see how things develop over the next coming days and weeks,” says Mr McCaffrey of Mannok, which has invested heavily in systems to assist remote working.
“Thankfully in our factories most people can distance reasonably well. We do have a situation where everybody who can work from home are working from home. We have put in place the systems to support that. So we’re as well prepared as we can be. But with the rate of transmission, as it is at the present time, it’s literally in the lap of the gods which way it’ll go in the next week to 10 days.”
Back to the post Brexit environment, Mr McCaffrey says this is the first time in almost four and a half years that Border businesses like Mannok can begin to plan for the future “with any real degree of certainty”.
He says: “You can cope with most things, but what kills a business is uncertainly. At least now we know what’s ahead of us. We have our plans in place to cover it. We think we’re in good shape, but we can discount some short-term disruptions because of the new Customs and checks that invariably will be at ports.”
Of the year ahead, Mannok Packaging is close to releasing a new recycled plastic-bagging line, with further expenditure expected in other elements of the business also.
Last year the business’s two key divisions - building products and packaging - reported capital expenditure of €11.5m, which included investment in fleet and plant, the latter of which is expected to yield significant profitability over the years ahead.
“Everything is flowing ahead as planned. We’re cautiously, and cautious is the only thing we can be I suppose, optimistic about the year ahead. It's really just to now focus on the next month or two, establishing supply channels, working with the new Brexit and Customs regime, and obviously deal with what the pandemic throws up as well. Most of our product is heavy so it doesn’t travel well for very long distances. There is a certainly a market still for it in the GB and Northern Ireland markets. That has been our focus and will continue to be our focus.”