£2 million investment will be made in Balcas’ Enniskillen site next year, future proofing the Fermanagh business and protecting jobs.

The company’s newly appointed Chief Executive Brian Murphy tells The Impartial Reporter that the investment has been made possible by Balcas’ largest shareholder, Dutch company SHV Holdings, going into a majority position in Balcas earlier this year.

“That’s a reflection of their confidence in where the company is going,” Mr. Murphy states.

SHV is the largest private company in the Netherlands. “While Balcas’ attraction to SHV is nominally the energy side of the business, because it allows them to compliment their existing energy services, they recognise that the DNA of the business is very much in timber processing,” says Mr. Murphy. “As a measure of that commitment we will be making an investment of £2 million next year in upgrading our saw mill in Enniskillen.” Mr. Murphy continues: “That investment will future proof the business. The investment is good news for the local area. While it won’t impact the number of jobs in the company (currently 280 employed locally), it modernises the business and will improve business efficiency.” Balcas currently processes almost one million tonnes of logs per annum, the equivalent of 40,000 articulated lorries of logs. The last invested in its Enniskillen sawmill was in 2001. Mr. Murphy points out: “No matter how well you maintain it, software and control systems become obsolete. The business is now hugely automated. We are creating high paid engineering jobs. Our job descriptions have changed and grown e.g. our maintenance guys are less mechanically orientated and more electronically orientated. Therefore, all the software has to be upgraded.” Taking over from former Managing Director Ernest Kidney in May, Mr. Murphy was previously the company’s Chief Financial Officer. He pays tribute to Mr. Kidney, saying: “I’m really lucky in that the former MD is still here; Ernest Kidney is now in a business development role.” He continues: “It’s a big challenge and I’m looking forward to it and seeing if we can make the business grow and develop more.” Balcas was established as a saw milling business by George Kidney in 1962. During the 1990s the business grew, with acquisitions of other sawmills in Europe. Balcas diversified into renewable energy generation in 2004 with the installation of a £12 million combined heat and power (CHP) and pellet manufacturing plant in Enniskillen. In 2006, it invested in a CHP plant in Invergordon, Scotland. Both CHP plants are self sufficient in electricity, allowing Balcas to sell surplus electricity to the grid.

The recession hit the company hard and it backed out of its European ventures. Balcas faced “five very difficult years” and its current manufacturing operations are: the sawmill in Enniskillen, an architectural mouldings factory in Kildare and the CHP plants in Enniskillen and Invergordon.

“At the start of the recession in 2008 we were under pressure with the legacy of our debt which was over £30 million. That was down to just over £12 million early this year and we now have new facilities secured until 2024 with our financial partners. That puts us in a good, strong place for going forward,” states Mr. Murphy.

The fact that he steered the company through the difficult financial days helps in his current role, Mr. Murphy believes.

“It’s good to have a background in finance and to have been through all the really, really hard times of 2008-2012 because I’ve seen what the crucial earning points of the business are.” The main aim of the business is to extract maximum value from its two streams: logs and Brites wood pellets.

“Timber is about ensuring factory efficiencies - the volume were are getting through the factory every day and maintaining the speed of the factory, keeping our customers satisfied and ensuring that they want to do business with Balcas,” Mr. Murphy explains.

“With the wood pellets, what we are primarily looking for is secure, long-term, stable heat demand. We are trying to work with the distillery sector in Scotland and other industries such as the dairy sector who need heat for pasteurisation.” Balcas wood pellets are now contributing to 50 per cent of Balcas’ turnover (which is approaching £90 million this year).

“We are currently replacing 100 million litres of oil per year across Britain and Ireland,” Mr. Murphy reports.

The Brites pellets are currently sold to customers such as the South West Acute Hospital, local schools, Maghaberry Prison, the Dáil and Stormont.

“In Britain one of the large supermarket chains is one of our largest single customers, heating over 100 stores with Balcas brites,” he adds.

“In Scotland we have long-term arrangements with four major distilleries, including Bacardi, which claims 90 per cent reduction in their carbon footprint through the use of our pellets.

“We will probably grow the Brites revenue over the years to come but we are under increasing pressure from fossil fuels at the moment because the cost of oil is very low.” Commenting on the current state of the Northern Ireland economy, Mr. Murphy calls for political leadership.

“More than anything, the Northern Ireland economy needs a positive outlook and it needs our politicians to work together. If we don’t have that we become out of sight and out of mind and that will only send us backwards in terms of economic progress. It’s really important that our politicians take ownership of the economy and work for the people of Northern Ireland to try and drive it forward. We have all of the resources necessary to make ourselves much better, but we have to do it ourselves. We can’t be relying on others to do it for us,” he comments.

He adds that he can see “a very definite recovery” in the construction sector in Ireland.

Asked who he admires in business, Mr. Murphy replies: “Here in Fermanagh I have great admiration for my predecessor at Balcas, Ernest Kidney, for growing and developing the business to where it is today. For the same reason I have great respect for Sean Quinn, notwithstanding recent troubles, for his huge contribution to development and employment in this part of Ireland. Ernie Fisher along with his late brother Bertie built a world class engineering business on our doorstep. If I look to a greater NI context, I will betray my financial background by mentioning Stephen Kingon, a former managing partner of PWC, who has worked tirelessly in the interests of NI throughout his career, helping to create thousands of jobs, directly and indirectly, for our economy.” Originally from Wexford, Mr. Murphy moved to Enniskillen with his wife Anne and three children in 1992. He begins each day by walking the dog in Castlecoole and enjoys cycling and skiing in his spare time.