UNDER THE RADAR Bo Nielsen, Rib World:LOOKING FOR an example of how wrong the banks had their priorities before the downturn? Then look no further than thriving Clonmel company Rib World – which probably wouldn't exist today if it had been depending on funding from the banks.
Set up in 2004, it’s already in the top three producers of cooked pork ribs in Europe, with a turnover this year of more than €9 million and a workforce of more than 50. Not so long ago, however, the banks wouldn’t give its business plan a second glance.
“The banks had absolutely no interest, though everything was booming,” recalls the company’s Danish founder and managing director Bo Nielsen. “We weren’t in construction so nobody wanted to know. They had easier ways of making money – or so they thought.
“They told me the business wouldn’t work. But as I said cheekily to my bank manager the other day: ‘Isn’t it funny that we’re still in business when a lot of the people you were throwing money at a few years ago are nowhere to be found’?”
What made the crucial difference for Nielsen was his long career in the food industry – 19 years in Denmark, South Africa and Ireland – before Ernst Young put him in touch with his Canadian business partner Bernard Berry, and together they decided the time and the project were right.
“I have friends in Denmark who owned a large rib manufacturing plant, though they didn’t export. My knowledge of their business convinced me that there was a gap in the market in Ireland and particularly in the UK, where we saw our key customers as the big restaurant chains.”
However, this is no textbook story of the perfect start-up.
Whereas Nielsen figured he needed at least €3 million to get off the ground, he did it on a shoestring of €500,000 – helped by the fact that when he took a 20-year lease on an empty factory the landlord agreed to finance the refit as part of the deal.
On top of that, business was slow for the first two years. “We had quite big losses both those years, though I’d known that was going to happen. So in effect we were more debt financed at that stage than equity financed.”
That might have become a problem for Rib World but for a series of developments that Nielsen readily acknowledges sometimes owed as much to sheer luck as to strategic planning.
The first was that his business partner, Bernard Berry, found two new US investors who between them pumped $1 million into the business.
The second was a decision in mid-2006 to move into the retail sector. Just a few months later they were on sale in Tesco, Superquinn, SuperValu and Dunnes Stores.
The same change of strategy in the UK saw them taken on by Lidl in March 2007 – doubling their turnover in a single month.
“Looking back, 2007 was our breakthrough year, the first year we went into profit, with a turnover of €5.4 million compared with €1.8 million in 2006. That was mainly due to Lidl. By the end of that year, we also had Aldi and Booker Cash Carry, the UK equivalent of Musgraves.”
Rib World now exports to Denmark, Sweden, Greece, Cyprus and Iceland, as well as to the UK, and was chosen at the end of last year for a €450,000 investment from Enterprise Ireland as a high-potential export company.
In the context of such rapid – if somewhat delayed – growth, what’s been most frustrating, concedes Nielsen, has been the weakness of sterling.
“Business is up 30 per cent in volume on last year, but whereas we were expecting to break €10 million in turnover now we’ll break €9 million. It’s hard when we’ve been waiting so long, but it’s made us look at our options and put more emphasis on markets outside the sterling area.”
On The Record
Name:Bo Nielsen
Company:Rib World
www.ribworld.ie
Job:Founder and MD
Background:After working with Campari as brand manager for Scandinavia and then with EssFood, the world's largest pork-exporting company, he moved from Denmark to Ireland in 1994 to join meat exporters NWL Ireland as trading manager Mediterranean and Africa. Subsequently set up a joint venture, Dan Export/SA Foods, before moving to Dawn Farm Foods as head of sales in 2002.
Opened Rib World in 2004 with backing from business partner Bernard Berry. In 2006, Rib World products went on sale in Tesco, Superquinn, Dunnes and SuperValu in Ireland, and in 2007 in Lidl, Aldi and Booker Cash Carry in the UK. It has a staff of 54 and a turnover for 2009 of more than €9 million.
Challenges:"We're developing the business on target but trading conditions will continue to be extremely difficult without the normal availability of credit – and that will improve only when the banks start to function properly again."
Inspired by:"Three people I've worked with have inspired me during my career and given me a lasting sense of what's important in business: they're Tim Davidson, head of the South African Meat Association; Tony McNicholl, former managing director of NWL Ireland; and my business partner Bernard Berry, who's been a constant support."
Most Important Thing Learned So Far:"Things always take a lot longer than you think, no matter how good your planning. And you always need twice as much liquidity as you anticipate."
