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Shabra
Plastics & Packaging
2 . Background
2.1 Company Information
Based in Carrickmacross, Co. Monaghan, Shabra Plastics
was founded in 1986 when Oliver Brady, a close family
friend of the Shah family, came back to Ireland from
Kenya. With little idea of what he would do on his return,
he was persuaded by the family to open a plastics manufacturing
facility using the knowledge he had gathered while working
at other Shah manufacturing plants in East Africa. Shortly
after Oliver founded the company, he was joined by Rita
Shah, and thus the Shabra name was born – ShahBrady.
When wondering how to break into the Irish market for
plastic bags, the two went to a landfill site on the
outskirts of Dublin and collected 14 old black bags
and carrier bags from the rubbish. The bags were brought
home and washed in the bath before being hung on the
line. From these samples, Shah was able to gauge the
specification of bag that was required for the Irish
market and set to work on having the bags manufactured
in Singapore to that specification.
The bags were manufactured and delivered and Shabra
approached the largest supplier of plastic bags in Ireland
(that were sold into retailers for purchase and domestic
use) with a sample. Almost immediately, 20 tons were
delivered and business took off from there – the
market in Ireland was won almost overnight. Shabra also
‘cracked’ the market for boutique bags. Times
were tough in the mid 1980s so, unlike the competition,
who would only sell a minimum of 5000 identical bags,
Shabra offered to sell boutiques a minimum of 3000.
Additionally, the boutique could choose from three different
sizes, in batches of 1000 each. The bags would be overprinted
with the boutique logo. At the time, no other supplier
in Ireland was offering this level of flexibility.
Premises in Carrickmacross were purchased in 1989 and
Shabra bought its first printing machine to overprint
the imported boutique bags itself. Shortly after, the
company started to manufacture its own plastic bags
(starting with black bags), using recycled material
from the UK. Although they were purchasing recycled
material from the UK, the company considered the thought
that there must be a supply of recyclable plastics in
Ireland.
Following a short research exercise, Shabra bought a
7-acre site in Castleblaney and built a plastics recycling
plant – the only recycling plant of its kind in
Ireland to date. This is shortly to be extended to include
recycling of a range of other materials.
In order to fulfil the plant’s requirement for
raw material, Shabra offered a new service to customers.
If customers spent €10,000 or more on any Shabra
products their plastic and cardboard waste would be
collected for free. Not only was this a clever value-add
service for customers but it also fulfilled the companies
need for raw material. This waste would then be recycled
back into products that Shabra sells to its customers.
Additionally, Shabra received a collection fee per collection
from Repak, the organisation responsible for the monitoring
of rubbish in Ireland.
On 4 March 2002, the Plastic Bag Environmental Levy
was introduced in Ireland in a bid to reduce the amount
of bags being distributed to shoppers and to encourage
re-use. At that time, 5% of Shabra’s business was
generated from the manufacture of these plastic bags
(for many of the large retail groups). Over time, this
production was shifted to production of long life shopping
bags and paper boutique bags.
Additionally, to cover the loss of revenue on that product
line, Shabra became a distributor of household cleaning
products. The company’s salespeople were visiting
shops for orders already and Shabra identified this
as another revenue stream as well as a value-added service
for its customers.
2.2 Market Information
Like many other companies that took advantage of the
Enterprise Ireland eBusiness Acceleration Fund, Shabra’s
eBusiness project was heavily market driven. “Had
we not have been pushed into it, we probably would never
have gone down this route”, commented Shah.
In Shabra’s case, the eBusiness Strategy was driven
by one of its largest customers, Musgraves, the market
leader in Irish retailing. Musgraves insisted on all
its major suppliers (of which Shabra was in the top
3) to implement EDI allowing the two companies systems
to be integrated. At the time, Shabra did in excess
of €1m of business each year with Musgraves and
thus it would have been a major blow to lose that client.
Although driven by Musgraves initially, the implementation
of EDI meant that there was potential for Shabra to
more easily increase the volume of business they did
with other large customers At the time many of Shabra’s
other large clients were taking advantage of centralised
ordering and billing. Those companies were not submitting
orders via EDI (though the potential was there) but
were still submitting orders electronically via email.
The implementation of EDI was an expensive process and,
with potential Y2K issues looming overhead, Shabra was
able to push the EDI implementation back to 2001.
Although only one customer is currently using EDI, Shabra’s
3000 other clients are starting to order electronically
with up to 50% ordering via web/email.
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