Cunnane optimistic despite ‘challenging’ year

WHILE he admitted 2009 was a tough year for Shannon Development, Chief Executive Vincent Cunnane was putting on a “glass half full” face as he discussed the company’s performance.

The scale of the difficulties faced were shown in the company’s accounts, which accompanied its annual report, and showed a deficit of €17.355 million for the year with a decrease in reserves of over €11 million.
Despite the dismal figures, Dr Cunnane wasn’t being despondent. “It was a very challenging year, there’s no point denying that. We are a self-financing company and we raise our income through property related activities, so try doing that over the last two years. It has been difficult but we have managed to get through that and we have made the changes in order to ensure that we continue to be a viable and dynamic organisation.
“There were a number of positives throughout the last year. As the minister said the increasing role of R&D in the Free Zone is encouraging, we have approved investments of €15.5 million in supports for Shannon Free Zone companies last year across both indigenous and multinationals. That leveraged €57 million worth of investment from those companies.”
The Donegal man, who took the helm in 2008, said that Shannon Development wouldn’t be dragged into financial mire and that it has a plan to recover.
“We have a new financial plan to address the deficit and to make sure that we get back to a balanced budget by 2013 and we have the opportunity to do that. We had a difficult year but we were in the happy position of being able to cover those losses. You can’t do that for a long period of time but you can manage your way out of it and what we’ve been able to do is manage our way out of the deficits.”
Despite the losses, Dr Cunnane said the Government had nothing to gain by implementing the McCarthy Report’s recommendation to axe Shannon Development.
“I firmly believe that regional development is what is needed and we don’t have enough of it. McCarthy was all about savings but there are no savings to be made by cutting Shannon Development. In fact I would say it would cost the Government a lot because we run a very efficient operation.”
He said that auditors had expressed no doubts about the future of Shannon Development, and he claimed that it is set for recovery in the near future.
“The future is a whole lot brighter than when I was standing before you last year. Then there was nothing in the pipeline, there are a few things now, Genworth is over the line and there are a few other things we hope to get over the line too. Companies that have made it through the recession are looking to invest now and I think the future is much, much brighter for the region, our companies and for Shannon Development.”
The regional development company has backed an extension of Limerick City’s boundary into Clare. It’s not an idea that sits well with many people in South East Clare, but Dr Cunnane stood over it. “There’s no doubt Limerick needs to develop, we have to have a very strong city at the heart of any region, that’s not to say that we’re taking the emphasis off any other place, Clare especially. But you have to ensure that there’s a strong beat at the centre of the region and that’s why we’ve put emphasis on the greater Limerick area, to attract people into the future.”
Dr Cunnane said that Shannon Development had worked hard to save jobs at Element 6 and had been relatively successful in doing so.
“Element Six announced that they were ceasing manufacturing, but they’re still here, they’re still manufacturing. We worked very hard with the management team to make sure that happened. That’s the sort of thing you can do. It was a year of ups and downs but we did the best that we could in that period.”
He said that Shannon Development were looking at things like international consultancy and energy, and that it has a new plan for the future.
“What we’re trying to do with the new strategic plan is to have the best of the products that we’ve had in the past continuing to grow and to introduce new products that are appropriate for the future.”
He is hoping for a recovery in the tourism sector in the second half of 2010. “Tourism had a very challenging year last year and it has continued to be challenging this year. The cold weather at the start of the year and the ash cloud certainly didn’t help. But June has been a good month and July is going to be, so we’re hoping that the year will improve in the second half.”