UNDER THE RADAR/Niall McGrath Agri Bio-Fuel Ireland Peter Cluskey:WHEN NIALL McGrath walked off with the award for innovation at the Young Farmer of the Year competition last year, it was the proof he needed that, not only did he have a future in agriculture, but he had a future in business.
What McGrath achieved when he set up Agri Bio-Fuel Ireland in 2007 goes to the very heart of what it means to innovate: he saw a new business opportunity in an eco-friendly waste product previously used for nothing more than animal bedding.
The company – run by McGrath and his father, Billy – produces Strogs: straw briquettes that are 100 per cent Irish-made, 100 per cent carbon neutral and, he maintains, about 35 per cent more economical than the traditional alternative, coal.
“We were producing vegetables on our farms in Garristown and Oldtown in north Co Dublin,” says McGrath. “But apart from the hard work, the margins were becoming smaller and smaller, and I felt there just had to be something else . . .
“Being tillage farmers, we also grow wheat, barley and oilseed rape. The surplus straw is used for mushroom composting or animal bedding.”
The money for this, however, is poor. So one day McGrath decided, out of interest, to google “burning straw” on his laptop.
“What I found changed everything: it led to the innovation award last September; to a slot on the RTÉ series Higher Ground; and to a deal with Spar which means we’re now selling in their 600-plus shops around the country and growing rapidly.”
McGrath found that, while he had certainly hit on a business idea hitherto unexplored in Ireland, a trail had already been blazed, in Denmark in particular, where straw is used not only to make briquettes but to heat homes and generate electricity.
“I found that the Danes were exporting this technology all over the world, to North and South America, to Asia and to eastern Europe, which is desperate to become independent from Russian oil. And that’s still only the tip of the iceberg.
“I knew that, while Ireland had traditionally burned turf and peat, there was likely to be EU legislation to control the exploitation of bogs, adding to existing pressure to change to renewable energy.
“And when I saw that Bord na Móna, for instance, sells 350,000 tons of baled peat briquettes a year, I knew that if we could get even a tiny percentage of that market, it would turn our straw into a few quid. That’s when the penny really dropped.”
In just over two years, Niall and Billy McGrath have built a thriving business. They argue that, given the turmoil of the past three years, theirs is just the type of gutsy small enterprise the Government should be supporting to help rebuild the economy.
“We’re still small to the extent that our turnover for 2009 was just under €400,000, but the Spar deal in the middle of the year, and potentially deals with one or two other retail chains, should double that in 2010.”
McGrath says the company has six full-time staff. It also uses a local haulage company, a local accountant and has two part-time bookkeepers. “So this little operation supports eight or nine labour units,” he says.
“On top of that, all the raw materials are sourced in Ireland, all the revenue is spent in Ireland, and we’re contributing in the long term to Ireland’s energy security. By contrast, 100 per cent of the coal used in Ireland is imported.”
McGrath has also set out to demonstrate that green products do not have to be the expensive option.
“In November, we were selling a 5kg pack of Strogs, with a burn time of just under four hours, for a special price of €2. Suddenly, we were selling 2,500 packs a day, and for four weeks we actually sold more than we could manufacture, right down to the last three pallets. Today, it’s all about value for money.”
On the record
Name: Niall McGrath
Company: Agri Bio-Fuel Ireland
www.strogs.ie
Job: co-founder
Age: 32
Background: Graduated from Greenmount College of Agriculture in Co Antrim in 1996 and joined his father, Billy, on the two family holdings at Garristown and Oldtown, Co Dublin.
Set up Agri Bio-Fuel Ireland in November 2007, manufacturing 100 per cent carbon-neutral straw briquettes from raw materials sourced from local cereal farmers. In August 2009, Spar agreed to sell Strogs – ie the straw logs – in its 600-plus shops nationwide. In September 2009, McGrath and Strogs featured in the RTÉ TV series Higher Ground, and McGrath won the award for innovation at the Young Farmer of the Year competition. The company now has six full-time staff.
Challenges: “Survival. This is a tough business so we have to make the most of what makes Strogs different: they’re totally Irish, they’re eco-friendly and they’re good value. But my main competition is Bord na Móna and, beside them, I’m a drop in the ocean.”
Inspired by: “My father, Billy, without a doubt. He put three of us through college in the 1980s, built up the farm, and taught us this lesson: always stick to your guns if you believe in something.”
Most important thing learned so far: “You may think as your business grows that you’re a great fellow and you have great ideas, but never forget to listen to feedback from customers. Always remember the hand that feeds you.”
