Isolation once again? How Ireland’s businesses are gearing up to deal with coronavirus
Businesses are putting in the work to ensure they can continue operating, with new policies proving invaluable as infection spreads, writes Sean Pollock
LAST Wednesday, the sound of cranes and pneumatic drills seemed louder than usual in the streets surrounding Google’s €300m Boland’s Quay development. On Tuesday and Wednesday, the US tech giant closed its office next to Grand Canal Dock as a staff member was tested for coronavirus. Most of its 8,000-strong workforce was asked to work from home for two days, leaving the streets eerily empty, but not quiet.
With the absence of workers around Grand Canal Dock apparent, Grainne O’Brien, a pharmacist at Meaghers Pharmacy, which is attached to one of Google’s buildings, said the business had no remedy for the closure of the Google office. “It feels like a ghost town around here,” she said.
Since emerging in China last December, coronavirus has been rampant in its spread not just geographically from person to person but also business to business. It has spread across the Asian continent and into Europe, making its way into Ireland via Italy last weekend.
While the virus physically affects people, its symptoms are also being felt by businesses. Global supply chains, so reliant on the Chinese manufacturing sector, are in meltdown as the Chinese economy struggles to reopen at anywhere near its full pace.
With the previously roaring engines of the world’s economy now spluttering as countries attempt to stop the disease’s spread, the OECD has warned that global growth for the year could halve from its previous forecast. The Paris-based group lowered its central growth forecast from 2.9pc to 2.4pc but said a “longer lasting and more intensive coronavirus outbreak” could slash growth to 1.5pc in 2020.
Referencing the OECD report, Bank of Ireland’s chief economist Dr Loretta O’Sullivan noted that Ireland would not be immune. “As international trade is very important for Ireland, weaker demand from overseas customers and supply chain disruptions are a downside risk for economic activity here,” she said.
With the success of the Irish economy intertwined with global trade, many internationally focussed businesses are reporting symptoms.
Last week, Hostelworld chief executive Gary Morrison warned coronavirus could slash its earnings (ebitda) by €4m. Ryanair also reduced the number of flights to Italy, one of the worst affected countries in Europe.
With coronavirus spreading, many Irish companies are enacting plans to limit the potential damage and get back to focusing on growth.
Global Shares, a developer of employee share plan management software, is one such business hoping it has the remedy. It has 15 offices across the globe including two in the country at the epicentre of the coronavirus outbreak, in Beijing and Hong Kong.
Preparation has been essential for Global Shares. Despite the international nature of the infection, Stephen Tabb, human resources manager at Global Shares, said it was a weather event closer to home, the ‘Beast from the East’, in Co Cork that meant the company was ready to act.
The company has developed a dedicated communications team, has provided its employees with laptops to ensure they can work from home, has created a learning module about the infection and has banned business travel.
The company’s Chinese offices in Beijing and Hong Kong have both been closed since the outbreak of the infection, with employees in both locations working remotely.
Preparing policies is one thing, but getting caught short on the supply side is quite another and has the potential to shut down manufacturing operations completely.
A report by corporate data analytics firm Dun & Bradstreet found some 51,000 companies around the world have one or more direct suppliers in Wuhan.
June Butler, head of sectors at Bank of Ireland, pointed out there are concerns among Irish companies about the incoming stock that should have been in transit over the last few weeks.
The Irish manufacturing sector is particularly exposed to global supply chains. Martin McVicar, founder and managing director of Combilift, is drawing up his company’s response to the potential for a supply chain crisis.
The Co Monaghan forklift truck manufacturer imports raw materials and components from around 23 countries, while it also ships its wares out to 85.
McVicar said the company was forced to take the outbreak of the coronavirus seriously from the outset after suppliers, including General Motors in the US, warned they could be affected due to difficulties at sub-suppliers in China. He said the issues faced in northern Italy have been of “real concern” for Combilift.
“We have 26 suppliers from Italy,” he said. “We’ve touched base with all of them, and as of today, they are still operating. They are still confident they can supply, but it all depends on their sub-suppliers. If they can’t provide them with components, then it creates a lot of uncertainty.”
McVicar, who pointed out the business was still fully operational, has been quick to react. He said Combilift had asked its northern Italian suppliers to send more stock of components to ensure it can continue manufacturing and supplying its global client base.
Like the manufacturing sector, the Irish food industry also finds itself exposed to the outbreak. According to Butler, China accounted for 7pc of Ireland’s food and drink exports in 2019, highlighting the potential for problems.
A source from within the dairy industry warned the closure of the Chinese market would drive dairy prices down. The source said products from New Zealand — China’s largest market for dairy — once destined for China are now being shipped elsewhere, where they compete with Irish products. The source, who also has an interest in the meat industry, said the pig meat market would also be severely affected. He said some of the big meat producers, including Rosderra, Dawn Meat and Kepak, had reduced their prices by between 4c and 8c last week.
It’s not just the Chinese market which is closing down for those interested in international growth. Individual companies eager for exposure are reeling as worried international business conference organisers cancel events. Large companies, including Twitter, are also stopping business travel.
Gerry McQuaid, executive vice-president of Cubic Telecom, said the business had suffered “serious disruption” as a result of embargoes on business travel. He said the company was particularly disappointed with the disruption and ultimate cancellation of the Mobile World Congress, the world’s biggest phone show, as it meant being unable to get priceless engagement with big clients, particularly from the Asian market.
“We decided to pull out, thinking about the safety of our staff,” he said. “It then got cancelled two to three days later. That’s the biggest event on our calendar; it was a difficult decision to make.”
With business tourism down, general tourism has also suffered. A senior source from a company which provides services to the aviation industry across the world said the effect on airlines and travel agents would eventually hurt them.
“We have sufficient working capital to cushion the impact looking out for the next nine months. But many businesses will find it hard and it could push them over the edge,” he said, before confirming that his business had the option to make some short-term layoffs should it be required.
Not all businesses are contemplating temporary layoffs — some are thriving. A few Irish companies have tapped into the demand for services focused on ensuring business continuity.
Vanessa Tierney, chief executive of remote working company Abodoo, said her business had experienced a doubling in enquiries over the last week. “We are getting so many enquiries from companies that are literally having to turn on remote working within 24 hours,” she said. “Up until last year, it was about matching companies with workers who wanted flexibility. We are now providing more assistance for technological support and consultancy. On that side, there has been a huge uplift; this is so new to so many businesses.”
Despite the uplift, Tierney and her business have not remained immune to the presence of the coronavirus in Ireland. Having given birth to a baby boy recently, Tierney, worried that she might be at risk of exposure to someone with coronavirus, cancelled a physical appearance at the #GetMobile2020 conference at Talent Garden in Dublin. With the conference looming, Tierney opted to deliver her scheduled talk remotely.
“If it were just myself, I wouldn’t mind about the coronavirus,” she said. “But you have to think about the old, the young and those with underlying conditions.”