Involved in business since his father’s death when he was 15, Teeling has always been interested in “finding sustainable, competitive native Irish businesses.” However, possibilities for that are limited in Ireland due to its remoteness from the rest of Europe, the small domestic market and high transport costs.
“For long-term success, over generations, we need to have our own businesses rather than foreign direct investment,” Teeling states. While foreign direct investment is “very good”, it “can be short-term and goes through cycles.” Internationally competitive businesses are most likely in Ireland’s agri-business and tourism sectors, he believes.
As Executive Chairman of the 162 group, which currently owns five companies in mining, exploration and alternative energy, Teeling sold his highest profile venture, Cooley Whiskey, to Beam Global for $95 million (€71 million) in January.
The idea for Cooley Whiskey came to Teeling when he was studying for a business doctorate at Harvard Business School, and wrote a paper on the failing Irish whiskey sector. It was established in 1987.
“They have totally dismantled Cooley in eight weeks,” Teeling tells eolas. “They are going to focus on Kilbeggan. This is a big shock to myself and my two sons.” He adds that his son Jack, Cooley’s former Managing Director, “found it very difficult to sell”, but Beam “are going to be good parents.”
The US company bought Cooley because “Irish whiskey is growing like topseed and will continue to grow for two more generations,” according to Teeling. He predicts that the five million cases of Irish whiskey sold this year will increase to 10 million by 2015 and 20 million by 2021.
From the small family money lending business he took over in his early teens, Teeling gained a Bachelor of Commerce degree from UCD before completing an MBA at Wharton University of Pennsylvania and a doctorate in Harvard Business School. In 1969, he returned to Ireland and lectured in economics and commerce in UCD. “I don’t think there was ever a chance of me doing anything else,” he says of his entry into business.
Four things are needed for success in setting up a business Teeling contends:
• an idea that you believe in;
• the ability to put together the resources, management and technology;
• the ability to handle uncertainty; and
• energy and enthusiasm.
“If you don’t want to wake up at 4 o’clock in the morning repeatedly, then don’t go into business because it goes wrong,” he warns.
Energy and the environment
Resources are finite, Teeling agrees. “But if you change the price, you change the peak.”
Oil at $10 a barrel will mean “terrible trouble” in terms of energy resources. “At $120 we are in a hell of a lot less trouble because there is a lot of oil you can find. There are tar sands, shale oil. It’s profitable to go into the Atlantic [off] Ireland at $120 a barrel. You wouldn’t dream of going there at $70 or $80.”
If the cost of oil were to rise to $6-8 dollars per litre, “people would adapt, they’d get electric cars.” Teeling looks ahead 100 years and predicts: “You will not be driving these crappy old carbon-emitting cars … I have infinite belief in the ability of man to adapt and improve technology.”
When asked how he feels about the environment, given his interests in mining and oil exploration, Teeling responds: “In any country, I’m apolitical. I really do believe that business shouldn’t be political or shouldn’t have political ethics.”
He will “work with the political rules of the country I am in” and “will work with the environmental rules, as you must.”
“It is not at all necessary for resources companies to damage the environment,” he argues, pointing to Sweden, which has a successful mining industry along with “hugely restrictive environmental requirements.”
In addition, Teeling points to mining sites which have become massive tourist attractions.
“You dig an enormous hole in the ground: is that damaging the environment?” he asks. “The biggest attraction in Wales are the old slate quarries, one of the biggest attractions in South Africa is the Big Hole in Kimberley or Gold Reef City in Johannesburg.”
A “fascinating conundrum” occurred when the diamond company DeBeers was forced to leave the Kalahari Desert after nomads set up camp around the exploration site, resulting in an international outcry that their traditional nomadic way of life would be ruined. His own company was refused oil exploration rights in Iran due to a special area of scientific interest for tortoises.
On the practicalities of working in politically unstable countries, Teeling states: “It’s very difficult and you get screwed all the time.”
The 162 group’s strategy is “to accept higher political risk in return for lower geological risk.” Teeling explains: “We have to go where resources are. Often we go where others won’t. We are currently in Bolivia for oil and gas [and] the Peruvian jungle. We are in Zimbabwe which is not at all dangerous, just politically unstable.”
“The €80 billion given to the banks is gone. It’s not coming back. It’s called deleveraging,” Teeling remarks. He believes that the debt must be written off in a way that doesn’t destroy our reputation. However, he adds that “there is no point in destroying us [because] we are about half of a per cent of the EU. Why would you bother? The money is gone.”
While Ireland should be trying to get its income and expenditure into order, rapid inflation would mean its debts being written off. Alternatively, the debt could be deferred as is being discussed with the ECB.
“We need a period of grace. I said six years. If they get 13 years that’s great,” Teeling states.
Importantly, Teeling points to the fact that many drugs (which formed 28 per cent of Ireland’s 2011 exports) are coming off patent. He predicts that the move to generics could reduce Ireland’s GDP by
5 per cent. “That hasn’t been factored into anything I’ve seen.”
On the future of the euro, he says: “You cannot have a common currency without a common monetary and fiscal policy.” He is “fascinated” by the Fiscal Compact Treaty which requires countries to have a deficit of no greater than 0.5 per cent of GDP. “I think that’s very clever by the Germans. It’s almost a de facto fiscal policy. IBEC is not addressing that. There is no hope of us getting to that [target].”
A euro and a euro-lite “would be good” for Ireland, he concludes.
Profile: John Teeling
Looking to the future, Teeling intends to keep his eye on energy storage, but his main focus will be on the drinks industry in Ireland.
“Currently, I don’t like wind, I don’t like wave, I don’t like solar because they are not suited to this country.” He has looked at using second hand batteries in a big way or salt-dome storage.
The 162 group comprises of: Connemara Mining Company plc (mining for zinc in Ireland); Botswana Diamonds (operating in Botswana, Zimbabwe and Cameroon); Petrel Resources plc (exploring for oil in Iraq, Ghana and Ireland); Clontarf Energy plc (producing oil and gas in Bolivia); and Alternative Energy Resources Ltd (an ethanol supplier, now developing a patented technology to release energy from algae.)
He is a member of Clontarf Rugby Club and prefers amateur rugby to the professional game. He lives with his wife in Clontarf while his three children and extended family live close by. A veracious reader, he enjoys thrillers, usually picked up from the airport bookshop’s top 10 list.