THE NETHERLANDS: A SPRINGBOARD INTO EUROPE

The Dutch economy is very open to and relies on international trade. Linda Pearson speaks to Irish companies about their experiences trading within this accessible country.

CFE's booth at Victam International trade show, Netherlands

Successfully penetrating markets that can yield large returns on investments.

The Compound Feed Engineering Group (CFE) expanded their company to the Netherlands in January of this year and initially found it hard to penetrate the market there. However, through exhibitions, meeting customers, featuring in Dutch magazines, and selling to wholesalers, they are overcoming obstacles to attract what Con Lynch, Director, CFE Group describes as “loyal Dutch customers”.

CFE supply pelleting consumables to the compound feed industry. Their prime objective is to supply a total service and engineering solutions package to the pelleting industry. Lynch describes the Netherlands as “the home of the animal feed business”, and explains that they were eager to get into the market there.

ACCESS ALL AREAS

One of the attractions that drew CFE to locate in the Netherlands, as is the case with most companies locating there, is its close proximity to the Benelux, German and Eastern European markets. “I had worked with another company prior to setting up CFE and I had spent some time in the Netherlands and from my experiences there and from my information on the market there we decided it was an opportunity to present our products in the Netherlands. We also saw it as an opportunity to sell into Belgium and Germany and surrounding European markets,” explains Lynch.

Although the Dutch market is about the size of Munster geographically, according to Lynch, “it has a market size that is four times the size of Ireland so there’s a big volume of business there, and we see a big opportunity in the Dutch market.”

LOYAL LINGUISTIC CUSTOMERS

The director describes the agricultural industry in the Netherlands as conservative but he also explains that this is a market place worthwhile penetrating because the customers are loyal and will stick with you. “We tried to push our way of business in there and we realised that people there have a way of doing things. When you are in a hurry to get in there it’s frustrating but in the long term it’s a good thing because when they do commit to do business and if the product you offer is very good, cost effective, and efficient, then they will be slow to move away from you again and their loyalty is good,” comments Lynch.

LINKING BUSINESSES

Expanding to the Netherlands means excellent transport, an ideal location, and good existing business links with Ireland and Europe.

Walsh Western International (WWI) has been active in the Netherlands since 1986 when they started a Transport and Freight Forwarding Operations. Logistics operations and light sub-assembly followed in 1990.

REASONS TO LOCATE THERE

Colin Enright, Chief Operating Officer, joined WWI in 2000 and assisted in new contract implementation and facilities expansion across operating sites in UK, Holland and Ireland. The principal reasons for locating to the Netherlands was “the central location of the Netherlands in Western Europe and the excellent air, road, rail and sea links,” says Enright.

The Netherlands is strategically located and has an extensive and much-used railway network, connecting virtually all cities and many towns with each other. Schiphol, the Amsterdam airport, is the main airport in the Netherlands, and the fourth largest in Europe. There’s also the fact that Rotterdam has the largest port in Europe, with the rivers Meuse and Rhine providing excellent access to the upstream hinterland, reaching to, Switzerland, Germany and into France.

HISTORY OF BUSINESS LINKS

Along with these many infrastructural reasons for locating in the Netherlands, Enright also mentions the “good business links with Ireland due to Ireland’s strong manufacturing background and the Netherlands strong logistics and service background, and also the competitive and high frequency road freight moving between Ireland and the Netherlands.”

WWI’s experience of trading in the Netherlands has been “excellent” and Enright recommends it to other Irish companies contemplating expanding business to the shores of the Netherlands. Over the last 20 years WWI have been built a successful and growing business in the Netherlands and it is now their European headquarters and the cornerstone of their European network.

Due to the brilliant business network and relations they have experienced in the Netherlands so far, WWI has major growth plans in the Netherlands over the next four years.

LOCAL KNOWLEDGE OPENS DOORS

Enright advises Irish companies thinking of setting up there to partner with a local company who has local knowledge, or with an Irish company in the Netherlands whether it is for sales or logistics or in other areas. He remarks that “local knowledge can open more doors.”

THE HEARTH OF BUSINESS

One of Heat Design’s fireplaces Heat Design are creators and distributors of products such as stoves and room heating appliances, and have an extensive range of fireplaces in contemporary and modern designs. ADMIRABLE CHARACTERISITICS They have always had their business in Ireland and it’s only in the last few years they have started to export in the UK, Benelux, and Spain. Stephen Tripp of Heat Design says it is a pleasure doing business in the Netherlands because the people are straight talking and keep to their promises. This is something he says he has not found in other countries, where the opposite is often the case. “If I look at how the business has evolved with the Dutch, they do what they say they will do and are extremely direct, and I love that. It’s so refreshing. You are dealing with people that, if they say they are going to pay you, they’ll pay you and if they say they are going to do something they will do it. They’re extremely straight and that has been brilliant to deal with. This is in comparison to some of the people we have encountered in Southern Europe where it’s a nightmare to get paid and they are a law onto themselves,” explains Tripp. NO LANGUAGE BARRIER Along with this admirable characteristic, he says that undoubtedly the fact they enjoy speaking English is a huge plus and makes doing business there terrific. There is a strong tradition of learning foreign languages in the Netherlands and about 90% of the total population can communicate in English. “The big advantage is language. You can go to France and Spain where they refuse to speak English although they can, but in the Netherlands everyone speaks English and it’s fabulous,” continues Tripp. MAKING THE TRANSITION Many companies look for advice and support from agencies and bodies in Ireland before they take the step to set up abroad. They can provide export marketing strategies and aim to help companies export, realising that developing a strong exporting sector is vital to the Irish economy. In particular, Tripp found Enterprise Ireland very supportive when making the transition to the Netherlands. “We have found Enterprise Ireland excellent in particular and amazing to deal with. That’s what made the difference for us. They have been a super asset to us and the fact that someone goes in and is from the Irish government, it makes a big difference and it lends credibility. They were very interested in our business and showed great understanding in it too,” concludes Tripp.

GENERATING THE WIND OF SUCCESS

Arno Verbeek, Dutch Offshore Manager, Airtricity Airtricity’s Arklow Bank offshore wind farm With one of the world’s most ambitious wind programmes, the Netherlands is an attractive location for renewable energy companies to establish in. Irish energy group Airtricity is investing hundreds of millions in a 284 mega-watt wind farm off the Netherland’s North Sea coast; seeing the scope in the country for renewable energy opportunities as their gas reserves deplete. The Dutch government itself sees this danger and has set itself the target of generating 6,000mega-watt of electricity from North Sea wind power by 2020. PROVIDING SUPPORT Arno Verbeek, Manager Dutch Offshore, Airtricity, explains that renewable energy is of high priority in the Netherlands and they actively support companies looking to provide alternative forms of energy there. He also states that they are very supportive towards Irish companies doing business there. “We started to look at expanding to the Netherlands three years ago. When we make the decision to move to a country we look at whether there is a support mechanism or a financial incentive for renewable energy in that country to build wind farms, specifically the ones offshore because that is very expensive part of the business. Coupled with the fact that the Netherlands is bordered by the North Sea and has great offshore winds, we saw that there were opportunities for Airtricity there. The Dutch government at that time was promoting the development and construction of offshore wind farms and they did have a support mechanism in place that would help us finance an offshore wind farm,” explains Verbeek. The Dutch Offshore Manager says that, along with this financial assistance, the awareness in the country for the need for alternative sources of energy has been heightened by the newly elected coalition government in the Netherlands which “focuses a lot more on the renewable energy and has set themselves very high targets to achieve.” SMALL BUT PROSPEROUS Alongside the fact that the Netherlands has one of the world’s most ambitious wind programs, Verbeek mentions numerous other benefits of expanding Airtricity business to one of the world’s smaller yet very prosperous countries. A Dutchman himself, he tells of how the Netherlands is a compact country making it easier to get around and to do business. “One of the best benefits is the infrastructure in Holland. It is compact and easy to get around. That means banks and suppliers are within easy reach. The culture is very open to trading and there is a beneficial tax regime where corporation tax is friendlier than in other countries,” explains Verbeek. Hub of expansion The Dutch Offshore Manager continued by describing the country as a hub with extending worldwide connections and a successful history of international trading. “The Netherlands could act as a hub for further expansion into Europe because of its ideal location and focus on trading with other countries. Their major banks are located all across the world, they have good worldwide connections, and they have a lot of experience when it comes to expanding your business into the rest of Europe and the world,” concludes Verbeek.