Tuesday 6 December 2016

Back-up power helps generate growth

Pat Smith left a secure ESB job to set up his own power management firm. Now his son Padraig is taking it to new levels

Published 08/11/2015 | 02:30

Padraig Smith and Sean Gallagher at PSE Power's HQ in Newcastle West, Co Limerick
Padraig Smith and Sean Gallagher at PSE Power's HQ in Newcastle West, Co Limerick

The success of most businesses largely comes from their ability to solve problems for their customers. This week's company is no exception.

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Headquartered in Newcastle West, Co Limerick, and with a second location in Dublin, PSE Power supply back-up power generators and uninterrupted power supplies (UPS) to a wide range of businesses and organisations across Ireland, the UK, Europe and the Middle East. Set up originally by husband and wife team Pat and Olive Smith in 1985, the company is now run by their son, Padraig.

Having been in operation for over 30 years, the business employs 31 staff and has an annual turnover of more than €5m.

"Nine out of 10 businesses will suffer from a power outage at some point," explain Padraig as he shows me one of the many different types of power generators his company supplies.

For most of us, the loss of power can be an inconvenience - but for some companies, it has far wide-ranging implications, depending on the mission-critical nature of their operations.

"Imagine a hospital where surgeons are in the middle of performing life-saving surgery and the power is suddenly cut off," Padraig exclaims. "The same applies to an airport, where planes are being landed every few minutes. Can you imagine what the consequences would be if all their technology and communications equipment suddenly shut off?

"Or a large manufacturing plant working to production deadlines, or a data centre managing huge amounts of important data on behalf of large customers around the world… the list is endless.

"In circumstances such as these, losing power and productivity can mean a loss in revenues, lost production time, penalties due to contractual obligations, reputational damage and very many potentially unhappy customers. Our job is to ensure that these organisations have generators or back-up power supplies that kick in immediately upon interruption of power and which will allow the organisation to continue to function as normal until whatever problem they have is sorted and power is restored.

"It's a responsibility we take very seriously," he insists. And the company's expertise is very much in demand, with a long list of multinational blue-chip clients that includes Google, IBM and Interxion in the IT and data centre space; Pfizer, Novartis and DePuy in pharma; Apple, Dell and Intel in hardware manufacturing, as well as a host of other customers in sectors such as facility management, aviation, engineering, financial services and hospitality.

In addition, PSE works with many state agencies to ensure continuity of critical public services - such as RTE, the OPW, the Irish Aviation Authority and Irish Rail. In the healthcare sector, they help ensure continuation of services across a number of leading HSE and private hospitals.

As with all businesses, the company's reputation for technical excellence and customer service did not happen overnight.

Pat and Olive Smith - both natives of West Cork - moved to Newcastle West, Co Limerick when Pat was appointed area manager with the ESB in 1969. Having spent over 22 years with the utility, Pat identified a gap in the market for a business that could provide reliable power protection and energy management solutions to large companies. So strong was this conviction that he left his secure and permanent pensionable job and embarked on the more precarious path of self-employment.

"It wasn't an easy thing for him to do back then. In fact, many people at the time told him he was absolutely crazy to even dream of doing something like that," explains their son Padraig with pride. "The fact that they were the first company of their type to set up outside of Dublin did have its own advantages, as many customers liked the idea of dealing with a local supplier they knew and trusted."

However, there were plenty of challenges as they sought to build up their customer base. But the couple persevered. Their Co Limerick location also had its distinct advantages. Cork was becoming a real hub for pharma at the time. Because of Pat and Olive's own Cork roots, they were able to break into the local market quickly, wining a number of important contracts.

And from there things began to grow.

As a teenager, Padraig remembers spending his Saturdays and summer holidays working in the family business. In 1990, he joined the company on a full-time basis straight from school and immediately began serving his time as an apprentice electrician. Once qualified, he continued to work in the business as a service engineer. Gradually, he began to expand his role to the areas of business development and sales before being appointed managing director in 2006.

"Every company makes key strategic decisions in its lifetime that help propel it to the next level and we were no different," explains Padraig. "For example, in 2000 we opened a second office and depot in Dublin in an effort to break into the market there. We had come to realise that many of the country's mechanical and electrical consultants were based in Dublin and these were responsible for managing projects on behalf of the larger client firms around the country," he adds.

It was a move that proved critical to the company's continued growth. That same year, they secured their first substantial contact to supply five large generators for a new data centre in Dublin - another important step.

Business continued to grow steadily - until the downturn. Like many businesses, PSE suffered a sharp fall-off in new product sales. Rather than scaling back like many other companies, Padraig and his team made the strategic decision to focus instead on the service element of the business. Repositioning the company as a 24|7|365 critical power service provider, he sought to create a recurring revenue stream. While at the time, he had to invest heavily in gearing the company up for this new activity, the move proved smart, one with staff numbers more than doubling over the next five years.

Constantly repositioning the business has been key to PSE's success.

"In 2009, we made yet another strategic decision to move into providing combined heat and power (CHP) systems to our clients. These systems simultaneous produce both heat and electricity, usually from natural gas-fed generators. They recover the heat normally lost in electricity generation, but rather than releasing it wastefully into the atmosphere, they use this to help in the heating and cooling of buildings. In addition, they also deliver environmental benefits and significant efficiencies and cost savings of between 20pc-35pc.

"More recently and because many of our customers cannot now access the capital to purchase this type of equipment, we are now developing a business model to provide this as a service without any capital outlay on the part of the customer," adds Padraig.

Almost every entrepreneur is keen to recognise the role of their staff in their success. So too is Padraig. Many of PSE's employees have been there since its foundation and their combined expertise and customer focus has proved key in developing the company's well-deserved reputation.

As we make our way into the assembly and stores area of the Newcastle West facility, staff are busy preparing for their upcoming participation in next week's DataCentres Ireland exhibition at the RDS (on Tuesday and Wednesday). With Ireland's growing attractiveness as a data centre location, it is an area that Padraig sees as having huge growth potential for the business.

"We have seen Apple, Google, Facebook, eBay and Amazon all locate here. All of them need the type of equipment and services we provide, so we see this as being a key part of our growth strategy for the future," he adds excitedly.

Turning the cover of his company's 2020 Vision strategy document, Padraig shows me the ambitious plans he has for the company which will see the company double its turnover to €10m over the next five years. He believes such a goal is not only realistic but achievable.

Padraig Smith runs a highly specialised business. The success of his company comes from having strong sectoral expertise as well as building long-lasting relationships with his many customers. He knows all too well that these customers depend on his ability to protect their operations during times of power outages.

It's a responsibility he takes very seriously.

His business has continued to grow because he has learned to adapt to the needs of his customers and to the many new opportunities continually emerging.

While many of his colleagues and friends at the time may have thought that Pat Smith was crazy to leave his job in the ESB to start a new business, the 31 staff that now work there and the many customers that business now serves will no doubt have a very different view.

For further information contact www.pse.ie

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