Andy jalil - andyjalil@aol.com - With the enormous amount of trade and various business activities with Britain, it’s concerning to Ireland’s government agency that too many companies in Ireland — a member of the EU — are still not focusing enough on preparations for the UK’s departure from the European Union, the head of Enterprise Ireland (EI) has warned.
Julie Sinnamon said companies needed to have a plan in place to deal with the potential fall-out, especially those exposed to the British market.
At the publication of the agency’s annual results, she said there had been a big increase in the number of companies participating in trade missions, as well as a rise in interest in euro zone markets.
But she added: “Despite all of the roadshows, all of the work we’ve done through broadcasting, Brexit scorecards (an EI initiative), there still is not enough focus by Irish companies in terms of preparing for Brexit.
“This continues to be a major focus for us in 2018, I think companies were initially very slow to believe that this was actually going to happen.
I think when we saw a hike in the exchange rate, it had an increased focus.” She added: “What we have seen since then is a higher level of interest from companies beginning to take action.
The big issue has been getting sufficient companies to move in to action as opposed to talking about it.”
Sinnamon said not enough companies had looked at the risks and put plans in place to address them.
Brexit has had an impact on exporting firms in terms of cash flow and profitability. “The strongest and most professional companies are committing a lot of resources to the UK leaving if they are exposed to their market, so everybody exposed to the UK market has to have a plan,” she said.
Seventy Enterprise Ireland client companies had availed of a Brexit grant by the end of 2017 since the scheme went live last year.
The EI ‘Be prepared Grant’ provides firms with up to a maximum of 5,000 euros to get themselves in shape to deal with any potential fallout from the UK’s EU exit.
The grant support is designed to help firms cover consultancy, travel and other out-of-pocket expenses associated with drawing up a plan of action.
EI has undertaken to match 50 per cent of the costs incurred by a company in drawing up a strategy up to the maximum figure.
The grant was launched at the end of March last year and is limited to EI’s five thousand client companies.
However, it is likely to be most popular with about 600 of the agency’s companies that are exposed to the UK.
The agency stressed that it was working on a one-to-one basis with each of the client firms involved with the British market.
The number of companies taking up the grant is gradually — though rather too slowly for the agency’s liking — rising. In September, 45 companies were approved for the scheme.
The agency at that time were expecting 100 companies to take up the grant by early 2018, so they might still be able to achieve the figure.
Persuading companies to prepare for life after Brexit has been difficult.
In the six months to September, just 38 per cent of EI’s firms had taken measures to deal with the UK’s departure, an event that will assail Ireland by its impact the country feels, through this year.
And firms are expected to cut costs with growth expected to slow to just above 4 per cent compared with 5 per cent last year.
“While the news of the progression of the negotiation between the EU and Britain is welcome, companies cannot wait and must urgently put a plan in place for their business as the countdown is under way and there are a little over 400 days left for Brexit,” the EI spokesman said.
He added: “From a Brexit perspective we are mainly engaging with our 600 clients with significant UK exports to ensure they get access to all of our supports in the areas of business, innovation, sales, operations resourcing, etc.”
Meanwhile cross-border (between Ireland and Northern Ireland, which is part of the UK) development body InterTrade Ireland, has so far approved 24 Brexit vouchers worth 2,000 euros to companies in Ireland, with 17 applications pending up to the end of 2017.
(The author is our foreign correspondent based in the UK. He can be reached at andyjalil@aol.com)
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