Ireland report 2018

EU’s fastest growing economy on four-year streak seeks stronger business links with Japan

GLOBAL MEDIA POST

Rising anew from a devastating recession 10 years ago, Ireland has rehabilitated its image as the Celtic Phoenix as its economy grows year-on-year, wages rise and new jobs are created. Although small in terms of size and population, Ireland is among the world’s most productive and profitable markets across several industries and has attracted many global companies wanting a presence in the larger European market.

Although relatively young, one of Ireland’s most vigorous relationships has been with Japan. In 2013, Shinzo Abe became the first Japanese prime minister to visit the country since it gained independence. During the trip, the prime minister and his counterpart, Taoiseach Enda Kenny, released a declaration of partnership for innovation and growth.

“The cultural exchange between the two countries is increasing. While our history is short, it has been continuously deepening for the past 60 years,” Embassy of Japan First Secretary Sou Watanabe said.

This desire to expand into Japan and other parts of Asia has also prompted a shift in attitudes among local businesses, many of which are close-knit operations reflective of traditional Irish culture.

Chambers Ireland Chief Executive Ian Talbot
Chambers Ireland Chief Executive Ian Talbot | CHAMBERS IRELAND

“Implementing the various cultural approaches and keeping the family orientated structure might have been considered very good practice at that time. But things have changed over time, as our exporting ambitions have grown,” Chambers Ireland Chief Executive Ian Talbot said.

Inbound investments

Undeniably, Brexit is the most significant issue affecting Ireland’s economy, given that one of the country’s main trading partners is the United Kingdom. But, as the cliché goes, crisis breeds opportunities. Amid the uncertainty, Ireland’s position as an ideal investment destination within the EU is strengthened, with the added benefits of low corporate taxes, an English-speaking population and an adaptable highly skilled workforce.

Ireland’s Minister of State at the Department of  Finance Michael D’Arcy
Ireland’s Minister of State at the Department of Finance Michael D’Arcy | MINISTRY OF FINANCE

“Japan, for a long time, has been Ireland’s largest trading partner and the largest investor from Asia,” said Minister of State at the Department of Finance Michael D’Arcy, who believes Irish-Japanese ties will grow stronger precisely because of Ireland’s commitment to the EU.

With this, top Irish law firms A&L Goodbody and Matheson have received several inquiries from Japanese companies about doing business in the country, while OBH Partners is enhancing its mergers and acquisitions and property practices to specifically cater to the Japanese.

Meanwhile, IDA Ireland, the country’s main investment promotion agency, recognizes Asia as a priority in Ireland’s growth plans. Divisional Manager of Growth Markets Eileen Sharpe said, “We value the sophistication, high-end technology, research and knowledge from Japan.”

Tánaiste and Minister for Foreign Affairs and Trade Simon Coveney
Tánaiste and Minister for Foreign Affairs and Trade Simon Coveney | MINISTRY OF FOREIGN AFFAIRS

Committed to strengthening bilateral ties, the Irish government announced the multimillion euro project to build an Ireland House in central Tokyo that will serve as the location for its new embassy, as well as its other commercial, cultural and tourism offices. This will be the largest capital investment of the Department of Foreign Affairs.

“Our investment in an Ireland House is a reflection of our investment in our relationship with Japan. Beyond being a top-class building, Ireland House must be a beacon for the Irish community in Japan and those Japanese who share an affinity with Ireland. It must be a meeting point that supports commercial interaction and a laboratory for discovery and innovation,” said Tanaiste and Minister for Foreign Affairs and Trade Simon Coveney.

Global outlook

As Ireland welcomes a continuous flow of foreign investment, local players have looked outward and have cast their view beyond Europe and the United States.

“Traditionally, companies here are oriented toward the U.K., EU and U.S. markets. This role gives a good starting point towards globalization. We have also observed a renewed focus on the Asian market for their businesses,” Dublin Chamber of Commerce Chief Executive Mary Rose Burke said.

With the recent signing of the landmark EU-Japan Economic Partnership Agreement, agriculture, Ireland’s largest indigenous industry, will stand to benefit the most.

Ireland’s Minister for Agriculture, Food and the Marine Michael Creed
Ireland’s Minister for Agriculture, Food and the Marine Michael Creed | MINISTRY OF AGRICULTURE

Minister for Agriculture, Food and the Marine Michael Creed emphasized how Irish businesses must take advantage of this new development, “ The agri-food sector is an extremely important contributor to the national economy. Output and exports are growing strongly, and we view the Japanese market as a very important component of our export-oriented strategy for the development of the sector. It is also opportune that, after 60 years of Irish-Japanese diplomatic relations, our government is in the process of developing a new Ireland House facility, combining the chancery, ambassador’s residence and state agencies. This reflects Ireland’s strong commitment to its relationship with Japan.”

He added: “It is important that we continue to diversify our market portfolio in the context of Brexit, and Asia is the perfect opportunity for that.”

Bord Bia, or the Irish Food Board, points out that Ireland and Japan have compatibilities in their food and beverage culture, especially with how they value sustainability and quality.

Together with several homegrown brands, CEO Tara McCarthy believes it is the right time to build on the reputation of Irish food in the East.

“We are looking forward to further growth because we believe that the type of products Japanese consumers are looking for fits the food culture that Ireland is producing well,” she said.

While Bord Bia sets up a permanent office in Tokyo, the agency organizes several trade missions and has attended food exhibitions in Japan. With this, some players such as pork producer Rosderra Irish Meats Group Ltd. and seafood players Connemara Seafoods Ltd. and Rockabill Seafood Ltd. are gaining a foothold in the Japanese market.

Similarly, Irish whiskey distillers enjoy a shared enthusiasm for the product also made by the Japanese. A traditional product undergoing a renaissance, Irish whiskey is gaining popularity in Asia, led by brands such as Irish Distillers’ Jameson and Na Cuana’s Boann Distillery.

This outward outlook is evident in other industries as well. Financial technology company Fexco Holdings Ltd., biometric authentication leader Daon Inc. and wind turbine manufacturer C&F Green Energy are some examples of Irish companies that opened operations in Japan and are expanding partnerships and product lines there.

Meanwhile, cloud-based construction and data management solutions provider, Zutec Holding AB, wants to establish relationships with the largest Japanese construction companies.

“We see Japan being a key influence toward our Asian strategy,” CEO Brendan O’Riordan said.

Solidified partnerships

In July, SoftBank Corp. Vice President for Global Business Strategy Hidebumi Kitahara came to Dublin to sign an agreement with Dublin City Council Chief Executive Owen Keegan to use the city’s docklands area as a testing ground for its Smart City and “internet of things” (IoT) products.

“We find Ireland as a hotbed for IoT. Once we form the blueprint for smart cities, we can expand our technology to other European countries,” said Kitahara.

In line with this, state-owned Electricity Supply Board Chief Executive Pat O’Doherty highlighted its work with Nissan and other electric vehicle manufacturers to support the electrification of transport, powered by ever-cleaner electricity.

“Underpinning these partnerships is the motivation to collaborate and cooperate on new ideas and concepts. In our dealings with Japanese companies, we always find that there is the shared commitment to invest time and effort on any project,” he said.

Similar to this, Japanese companies continue to be involved in transport-related collaborations.

Rennicks Group, which makes car license plates, traffic signage and safety equipment,  has been bringing Japanese Nippon Carbide cutting-edge products to Europe for the past 40 years. This long-standing exclusive relationship has been a win-win for both companies, with a strategy that highlights evolving markets with reliable, relevant and sustainable technology.

“It’s a little bit unusual to have a robust binding distribution agreement with a Japanese company as comprehensive as ours, but it has been immensely beneficial for us both,” said Rennicks Group Managing Director Michael Flanagan, who has worked with the company’s Japanese principals for 35 years.

In February, Toyota Ireland and Toyota Financial Services in Japan launched a joint venture, Toyota Financial Services Ireland (TFSI) hoping to make car ownership easier for thousands of Irish drivers.

CEO Steve Tormey was very pleased with the “vote of confidence,” believing that the joint venture was a clear sign of Toyota’s commitment to work with its Irish partner and build a sustainable future.

Back in the capital, Dublin City Council Assistant Chief Executive Richard Shakespeare said, “Dublin is a gateway destination for business to access European Union and U.S. markets and many of the global leaders in technology, research and financial services call the city home.”

“The unique cultural and artistic heritage of Dublin combine to provide a spectacular and welcoming destination for visitors. We very much encourage the people of Japan to visit Dublin and Ireland, as this will help strengthen business and cultural ties between our two great nations,” he added.