Murtagh in driving seat as Kingspan accelerates global growth with acquisitions
Gene Murtagh is revolutionising the insulation world with Kingspan. Just don't mention the B word
The back roads of Cavan were probably not foremost in tech guru Elon Musk's mind when he pioneered the Tesla, the state of the art electric car that can accelerate from zero to 100km an hour in 2.7 seconds.
But they're a bloody good place to take one on a test drive.
This much I discovered when Gene Murtagh, chief executive of global insulation maker Kingspan, allowed me to take the wheel of his beloved Tesla on a mini road trip around Kingscourt.
The Cavan mart town is best known for its weekly sales of sucklers and bullocks as well as being home to Kingspan, the Irish-listed company founded by Murtagh's father Eugene which is on course to report revenues of more than €3bn this year.
It's next to impossible, but I stay within the legal speed limit.
And my co-pilot (it feels like a flying machine) is an impeccable host: only a slight frown of amusement - or was it fear? - appears on Murtagh's forehead when I explain that I had a lifelong fear of driving and only passed my test five years ago.
For Murtagh, who loves cars, the automotive industry is a blueprint for the construction industry and the Tesla - his favourite device - is "technology on wheels". There are parallels between Musk and Murtagh (the tech, solar and climate change evangelists) outside of the fact that they are the same age.
Musk is revolutionising transport: Murtagh is on a mission to revolutionise insulation.
Beyond annual general meetings, interim results and investor calls, the intensely private and notoriously media-averse Murtagh says little in the public domain.
Which is a pity, as he has a lot to say and not just about Kingspan, the former SME that has grown exponentially since it listed in 1989 with revenues of under €100m.
I try and break the ice with Brexit. This, it turns out, is a major faux pas as any mention of it is forbidden in Kingspan.
"The word is banned because it's just something we have to deal with like any sort of challenge that's thrown our way," says Murtagh who believes that a sensible solution will be found to prevent the reinstatement of a hard border. This is a vista he says would be "so regressive it would be just criminal".
"Very quickly these things can become an excuse for lack of performance, so to avoid that kind of exit channel, we don't really talk about it".
But we do talk about it, even if Brexit dare not speak its name.
For Murtagh, a married father of three who lives in the border county of Louth, the only thing that truly matters is the exchange rate. "I've seen what it's like when the exchange rate goes awry, and the ferocious damage that it inflicts for local industry, retail, jobs and all the rest," he says in the boardroom of Kingspan's Net -Zero Energy use HQ.
"We're clearly heading that direction pretty fast, faster than I would have expected".
In the run up to and immediate aftermath of Brexit, companies were advised to hedge currency and conduct scenario planning. Kingspan, which generates around a quarter of its revenues from the UK and has just completed its latest five-year rolling business plan, did neither.
"We didn't take a position. We're not good currency speculators," says Murtagh, who resisted the creation of a "scenario squad" adding that Kingspan will maximise the unmentionable world, whatever scenario comes its way.
"We've an enormous asset base from which we can export from the UK. We certainly have cards ourselves as a company. We are not beholden to any one economy or any one currency. We've got flexibility, which is key."
Acquisitions and product diversification have also played key roles in Kingspan's runaway success in recent years.
Last year Kingspan spent €414m on two acquisitions, Joris Ide in Belgium and Vicwest in Canada.
The company spent a further €83m this year acquiring Euroclad in the UK and Tankworks in Australia. More recently it announced a €126m deal to acquire Essmann, a European daylighting business with exposure to Germany, and Eurobond, an affiliate of Euroclad.
Essmann will form the heart of a new division the company has established called Kingspan Light & Air.
With almost 100 factories around the world, Kingspan is currently building 10 new facilities worldwide. It has now entered Mexico and is on the lookout for potential takeover deals in Brazil, and is actively scouting locations in Singapore, Malaysia and Indonesia.
However, one place Kingspan is not going back to anytime soon is China, despite being one of the first Irish corporate sinophiles, moving into China in 1996.
Murtagh fled in 2006 after visiting a Chinese facility the company was considering adding to its acquisition pile.
After the company sent a suspect luxury car to bring him and a colleague to its facility, things went rapidly downhill when its 'showcase projects' turned out to be pictures downloaded from Kingspan's website.
Inspecting aspects of a Henniker line (produced by Henniker, a leading UK plasma tech company) didn't quite stack up. Murtagh rang Henniker, only to discover Henniker had never installed the line.
"So, fake car, fake lobby, fake machine," says Murtagh." I said 'let's just go home' - as in home to Ireland and not back to the hotel - and that was the end of that".
Kingspan has transformed from a small Irish outfit into a global conglomerate, but home and Kingscourt,, where much of the company's R&D emanates from, is core to its DNA.
"Kingscourt is a very important part of the emotional fabric and the appearance of the business," says Murtagh. "We are an Irish origin business that has become international, but everything has an origin and you should cherish that."
Kingspan was founded in 1970 by Eugene who with his wife Andrea - a sheep and cattle breeder and huge supporter of the arts - set up a business in their home town making cattle trailers and sheds before discovering insulation panels in the US.
Murtagh, who has three brothers and a sister, none of whom are directly involved in Kingspan, credits his late mother as much as his father for instilling him and his siblings with a creative, entrepreneurial spirit.
"This was a very small business when we were growing up," says Murtagh. "It was industrious and entrepreneurial, not a silver spoon job."
Murtagh's ascension into Kingspan was not a foregone conclusion, but his path would always be a commercial one.
He first began "tricking around" with the stock market while at boarding school in Gormanstown, but refuses to disclose his teenage picks. "I can't mention them because some of them were shocking," says Murtagh who in person is warm, engaging and a cracking raconteur.
Murtagh, who joined Kingspan two days after he graduated, met his wife Orla (his "1,000pc business supporter") during his first term studying German and business at the University of Limerick.
The couple have a son aged 17 and a twin boy and girl aged 15. "I'd say we're joint chairman at home," says Murtagh, who travels outside of Ireland some 200 days a year, clocking up around 600 flight hours in a gruelling schedule which is offset by an active exercise regime.
Murtagh, who took over as ceo from his father Eugene in 2005 at the tender age of 33, has managed to shake off the succession plague that has afflicted others who have stepped into their famous father's footsteps.
Insulating the business from the worst vagaries of the global recession helped.
Murtagh - whose father is chairman of Kingspan (the family owns some 20pc of the business) - said its pipeline saw the construction nosedive before the proverbial hit the fan.
"Do you remember the soft landing discussions in late 07?" he asks. "Our curve was telling us nothing like that, so we basically took rapid and deep action - with a fair bit of resistance because it hadn't yet hit the fan".
"They were probably the worst times," says Murtagh who restructured the business in 2008 and started a reinvestment programme, entering the insulated panel market in North America.
"Resilience is an absolute prerequisite and what I learned then was the value of being conservative from a debt perspective.
"I've seen great companies go bang, not because they couldn't perform, but because they couldn't perform in their loans".
Murtagh never directly reported to his "phenomenally instinctive" father when Eugene Snr was ceo, and says the transition was "remarkably smooth".
He insists that he enjoys as professionally a proper relationship as any would expect between a ceo and non-executive chairman, albeit one with a lifetime's experience at Kingspan which employs 10,000. "It's not this tight, Murtagh-dominated family-run company," he says, adding that the Kingspan family is much wider than just the Murtaghs. "We run a very proper, transparent public company."
It's a company that Murtagh wants to bring to fresh heights through innovation in tech.
"Insulation is actually tremendously exciting," says Murtagh, at one point cradling what looks like a strip of cardboard with tinfoil - the kind I used to make for angels' wings at the nativity play.
It's actually a prototype for a groundbreaking new product.
Murtagh says the prize for Kingspan, which is the only Irish listed company to have made it onto the global Climate 'A' list - other "A Listers" include Citigroup and Unilever - lies largely overseas in new markets and new technologies.
At home, he worries about slipping standards in education, as well as health and the environment for entrepreneurs.
Murtagh is incredibly mild-mannered, but don't get him started on Europe, threats to Ireland's corporate tax regime and the Apple tax ruling.
"I feel tremendously strongly about that [Apple]," says Murtagh, who warns that multinationals are significant job creators that are more mobile than we think.
"It is a business's priority to maximise its return and a tax authority's responsibility to ensure they maximise the tax gain. A company cannot be blamed for operating within the law - it's crazy to suggest that."
His is also adamant that Ireland retains its 12.5pc corporate tax rate - it is a red line issue.
And while he thinks Ireland has benefited phenomenally from EU membership, he worries that its bureaucratic "single boot approach" and an "invisible, dictatorial influence" does not suit the individual requirements of member states.
As Europe moves, seemingly inexorably, towards a common tax regime, Murtagh says Ireland would lose control of its destiny if it surrendered its stance on corporation tax.
"Control of that at the cost of not being in the EU, I'd go that far."
Sunday Indo Business