Dáil Éireann - Volume 431 - 26 May, 1993

Ceisteanna—Questions. Oral Answers. - Marketing Capability of Indigenous Industry.

16. Miss Harney asked the Minister for Tourism and Trade his established targets for growth in indigenous exports during the next three years; and the means by which he proposes to achieve these targets; and if he will make a statement on the matter.

23. Mr. Durkan asked the Minister for Tourism and Trade if current trading indications are in line with business expansion/job creation projections in the Programme for a Partnership Government, [861] 1993-1997; if he expects benefits to accrue to the economy in accordance with the Government's intentions; and if he will make a statement on the matter.

39. Mr. Lowry asked the Minister for Tourism and Trade if he will give details of the measures, if any, he intends to introduce to encourage partnership marketing and to build market skills in firms.

Mr. Gallagher (Donegal South-West): I propose to take Questions Nos. 16, 23 and 39 together.

The critical need to improve the marketing capability of indigenous industry has been recognised by successive Governments. Following the decision of the EC Commission to adopt a support rate of 75 per cent for marketing measures under the Programme for Industrial Development 1989-1993, the Government has been able to substantially increase An Bord Tráchtála's budget over the four year period. This year An Bord Tráchtála will receive £37.828 million in Exchequer grant-in-aid, an increase of 11 per cent on the 1992 outturn and over 80 per cent higher than the 1988 figure. Given the many demands and constraints on Government spending, this level of funding underlines our commitment to improving the marketing skills of our manufactures and service companies to enable them to compete on world markets.

The increased Exchequer support has enabled An Bord Tráchtála to intensify its existing services to Irish exporters and to initiate new market support measures. The success of An Bord Tráchtála's programmes can be judged by the prodigious export growth of our indigenous firms. Last year, 1992 was the fifth year in a row that our indigenous exports surpassed overall export growth. The 1,200 companies in the indigenous sector, employing almost 98,000 people, have increased their export sales from £2.1 billion in 1988 to £3.7 billion last year.

The Minister for Tourism and Trade has recently set An Bord Tráchtála a new target of increasing indigenous exports by 50 per cent by the end of 1996—from [862] the current £3.7 billion to £5.5 billion. This ambitious target can be achieved by maintaining the current high level of Exchequer support for An Bord Tráchtála's existing activities and for the new measures which the agency will initiate under the market development programme 1994-1999. Our market development policy over the coming years will have the radical focus demanded by the Programme for a Partnership Government in order to optimise the employment spin-off from this increased marketing effort.

In the area of partnership marketing, An Bord Tráchtála operates a wide range of programmes and services. For example, the agency recently introduced a new group marketing scheme which is designed to aid groups of first time exporters to make the initial breakthrough into the international marketplace. An Bord Tráchtála are prepared to fund up to ten group marketing schemes representing 50 exporters over the next three years. Under this scheme, An Bord Tráchtála will co-finance market based agents which represent a number of companies. The total cost of this scheme over the three years will be £1.4 million of which An Bord Tráchtála will contribute up to £0.5 million with the rest of the cost being shared between the participating companies.

The regional markets — international partnerships programme is aimed at identifying new commercial opportunities for Irish firms in selected regions of the Community which are showing above average economic performance. As part of the process, An Bord Tráchtála assists firms to identify suitable partnership arrangements for Irish SMEs with firms in the chosen regions. The programme also involves establishing linkages between Irish SMEs with firms from other countries with a view to developing opportunities in third markets. The regional markets programme now covers 11 EC regions and has so far generated additional exports worth £72 million. In 1992 alone, 1,600 companies participated in the programme.

Through their group promotions programme, [863] An Bord Tráchtála organises group promotional events and activities by small companies within a given product or market sector which would not have the scale or expertise to proceed on an individual basis. Logistical and organisational support is arranged centrally on behalf of the group and the purchasing power of the group is used in space negotiations with trade fair organisers.

An Bord Tráchtála's group development programme facilitates the gathering of design and market information for groups of firms with common marketing objectives and needs. Through this programme consultants usually prepare product, merchandising or packaging concepts. Costs are shared between participating firms and An Bord Tráchtála.

Mr. Deenihan: Would the Minister outline how indigenous exporters have fared in comparison with multinational exporters? It seems there is a more positive result in respect of exports by multinationals. Regarding the lack of foreign language skills in selling indigenous products, would the Minister agree with recent commentators that the lack of those skills is a major barrier to selling Irish products abroad and is a flaw in our marketing process?

Mr. Gallagher (Donegal South-West): The programme has generated additional exports worth £72 million and that is indicative of its success. In 1992, 1,600 companies participated in the programme and I have no doubt those numbers will continue to increase and that the exports generated will grow.

I fully accept that foreign language skills are vitally important. The fact that a considerable amount of business is carried out in English is an advantage to us. If business is transacted in another language we require a working knowledge of that language. There is an obligation on us to impress upon companies the necessity to take advantage of language skills but it does not come within the ambit of these programmes. It is a [864] matter I will discuss with the Minister to establish whether we can be of assistance.