Based in Goresbridge, Co Killkenny, animal feed company Connolly’s Redmills has increased the export proportion of its revenue from 2pc in 2007 to 15pc last year.
This family-run business, in operation since 1908, recently became the first foreign company in the world to be registered to distribute horse feed into China.
Group business development director Michael Connolly says taking part in leadership development programmes run by Enterprise Ireland has helped the company to have a strong focus on strategy and significantly increase exports.
His brother, managing director Joe Connolly, took part in Enterprise Ireland’s Leadership for Growth programme last year. Another brother Bill is joint managing director and there are various other extended family members working at Connolly’s Redmills, which now employs 100 people in Goresbridge and a further 250 in the wider group.
“These courses have helped enormously to relieve ourselves of some of the baggage old family companies can be burdened with and facilitated us to develop our business on a more global scale,” says Michael.
Joe adds: “The course was great in terms of confidence building. Every one of the 32 companies taking part got something out of it, from each other as much as anything. There is one man from the course that I now ring every week to bounce ideas off.”
Redmills is split into three divisions: agri-business; pet food; and horse feed. In terms of its exporting strategy, Redmills has been most successful in its horse feeds division. Having started exploring outside markets in the early Eighties, it’s now exporting to 38 countries with Enterprise Ireland support.
“We have used several different forms of market entry depending on the potential we have identified. This varies from appointing a sole distributor to appointing a number of distributors; a distributor with a number of our salespeople on the ground to having a fully-controlled export environment with our own offices and warehouse,” Michael explains.
The China journey
Redmills started investigating the Chinese market in 2004. In the rest of Asia, Japan is its biggest market and it also sells into Korea, the Philipines, Hong Kong, Singapore and Malaysia.
“In 2004 we realised we’d missed the boat in terms of pet food in China. However, we saw the potential for horse feeds. The market is underdeveloped – it is growing slowly and only finding its own feet,” Connolly notes.
“Since the Olympic Games, consumer self-confidence has grown and the emerging middle class have found equine sports of tremendous interest, particularly show jumping. China’s horse racing business is not fully developed as its government has held back on allowing betting. It’s anybody’s guess when betting on racing will start in China as there have been a number of false starts since 2004.
“We decided that despite the fact that the business is small now we will benefit from having first-mover advantage.”
The application process to be granted permission to sell into China has been laborious, involving five years of jumping through regulatory hoops and passing test after test.
“There is a huge emphasis on regulation imposed on European providers of feed because of the risk of BSE since 1989. This has been a competitive advantage for us. Most companies see complying with standards as something they have to do, but we have embraced them and incorporated them into our whole management structure and how we do things,” says Michael.
Redmills is shipping its first orders of 10 containers of horse feed to China this month. It has broken the market down into three segments: professional horse riders sponsored by owners in the show jumping and racing markets; semi-professional horse riders; and the purely leisure market.
Connolly notes that Redmills’ packaging system gives it a critical competitive advantage when exporting. “Over seven years we have developed a unique process of packaging and preservation which is natural but preserves the product much longer, giving it a shelf life of six to seven weeks. Having crossed the equator twice going from a cold Irish summer to temperatures of 40–50 degrees, for instance, the feed still smells great when the bags are opened at their destination.”
The pioneering technology is called Nutrient Fresh Management System and has been supported by significant R&D grants from Enterprise Ireland.
“Transportation makes up 20-30pc of horse feed product cost, and confidence that our products will stay fresh allows many of our customers to order larger quantities and reduce transport costs by up to half.
“Trainers and breeders must cut costs, but not the quality of the products. This new technology allows us to be able to offer the benefits and efficiencies of complete diets to new markets that hither to could not get such a choice of affordable, good quality feed.”