Monday 24 October 2016

First link in the food chain

Paudie O'Connor tells Sean Gallagher how his third generation animal-feed business has stood the test of time

Published 07/08/2016 | 02:30

Sean Gallagher and Paudie O’Connor at the Rhyno Mills headquarters in Castleisland. Photo: Domnick Walsh
Sean Gallagher and Paudie O’Connor at the Rhyno Mills headquarters in Castleisland. Photo: Domnick Walsh

Located in the heart of Kerry, the market town of Castleisland is renowned for the width of its main street. In fact, it has the second widest main street of any town or city in Ireland - second only to Dublin's O'Connell Street.

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Considered the gateway to Kerry, you pass through here on your way to places like Tralee and Killarney. And it is here, too, that the beautiful Vale of Tralee begins.

With its rolling hills and fertile green pastures, it is no wonder that local man William H O'Connor returned here in the early 1900s, having made his fortune in the diamond mines in South Africa. After his return, he set up Rhyno Mills, in 1919, in the centre of town - and today, almost 100 years later, the business continues to flourish under the careful stewardship of his grandsons, Paudie O'Connor (managing director) and his cousin, Joe O'Connor (director).

"Here at Rhyno Mills, we manufacture and distribute a range of animal-feed products for dairy, beef and sheep farmers in the Kerry, Cork and Limerick region," explains Paudie.

Where possible, the company sources their raw materials locally, such as native barley which is bought predominantly from growers in North Cork. Other ingredients (such as soya bean, soya hulls, maize, rapeseed and molasses) are sourced through respected local and international importers. Once delivered, these are blended and additional minerals added to improve their nutritional value. Given the challenges faced by farmers in terms of the price they receive for both milk or beef, it's important the company achieve the right balance between the best formulation of nutrients and affordability.

"We have our own in-house nutritionist who is responsible for achieving the least cost formulation or the best quality for the lowest price," insists Paudie.

Quality is paramount and the company's strict control procedures enable them to trace ingredients all the way back to their place of origin.

"Like the farmers we serve, we are part of the first stage of the food chain and as such, we are very cognisant of our responsibilities in ensuring quality and traceability of whatever products enter the food chain at this point," stresses Paudie.

Today, the process of milling is now largely automated. Large machines grind the meal while large rotating conditioners (called augers) mix and blend it into the various feed compounds. Molasses is added to help make it more palatable while steam is also introduced to maintain its moisture content before it is fed through circular steel dyes (called cubers), where it is compressed into nut-like shapes. These are then cooled and ready for either bulk storage or packing into traditional 25k bags.

In the yard, the company's fleet of trucks are lined up and ready for loading.

Painted in the legendary green and gold of Kerry, some are bulk trucks, which are used to transport large amounts of feed in loose format (On arrival at a farm, it is blown into large on-site feed bins.) Others trucks carry large bulk bags of a half a tonne each.

"We only focus on the quality side of the market and don't make or sell low-quality products. It's an approach that has been the cornerstone of our business since it was set up all those years ago," explains Paudie.

In 1919, Rhyno Mills was started by Paudie's grandfather, William. Originally from Scartaglin, in Kerry he had travelled to work in Cape Colony, South Africa. There, he got a job with De Beers Consolidated Mines, installing and maintaining machinery in the vast diamond mines of the surrounding townships. In his spare time, he worked with a local builder who taught him about construction.

An enterprising man by nature, he then began building houses, which he rented to workers and their families who had come from all over the world to toil in the mines. These he called Emerald Villas. It is reported that he worked 20 hours a day for many years in order to amass his wealth. In 1907, however, he made the decision to return to his native Castleisland.

"With the money he had made, he bought a bar, drapery shop, grocery store and an existing old mill which he then renamed Rhyno Mills - based on the old English translation of 'rhyno' meaning money," explains Paudie. "By the time he died in 1946, he had become a highly regarded pioneer in the field of animal-feed milling."

After his death, Paudie's father, Sean, and his brothers, Liam and Hugh, took over the running of the business. In 1974, Paudie had just completed his degree in business studies at the College of Commerce, Rathmines. While waiting for his results to come out, he decided it might be worth trying his hand at the family business.

"I joined more out of curiosity and to have a look at what was happening there. But I never left," he explains.

He quickly discovered that he had a flair for business. Starting in the drapery store, he progressed to the office and later to the mill - where he enjoyed the challenge of improving the company's margins and cash flow. He gradually took on more and more responsibility and by the mid 1980s he had effectively taken over the running of the business.

In 1988, this was formalised when, along with his brother, Willie, and his cousin, Joe, Paudie led a management buy-out of the business.

"It was tough in the beginning," admits Paudie. "There had been little or no investment in the mill over the previous 10 years, so the place had become run down. At the time we had no capital to invest in plant, machinery or technology, so we had to work incredibly hard to build up tonnage and trade our way out of the difficulties. Over time, we re-invested every penny we made in upgrading and modernising the business and began to grow from there," he adds.

A very competitive sector, Paudie reaffirmed the company's vision of focusing only on producing quality products. In 2000, the company received the international ISO Q Mark accreditation, and in 2015 were accredited under the Bord Bia Feed Quality Assurance Scheme.

"However, like many other similar businesses, we made significant investments in the facility in anticipation of the abolition of milk quotas. We all expected farmers to begin producing much more milk and that prices would hold up.

"However, that didn't happen and when milk prices fell, the amount of feed we had expected to sell didn't materialise. As a result, we were left with excess capacity which we now need to fill," explains Paudie. "Thankfully, all the indications are that milk prices will begin to rise towards the end of this year or early next year. We remain determined to continue to grow our business and to stay at the forefront of animal-feed industry.

"As long as there are animals to feed there'll always be a demand for what we do," he adds optimistically.

As Paudie, Joe and their colleagues get ready to celebrate a century of being in business, it is worth reflecting on the challenges of sustaining a business for almost 100 years.

Through recessions and world wars to shifts in market trends as well as changes in family ownership, the continued success of Rhyno Mills demonstrates just how entrepreneurial Paudie and the O'Connor family are. Their ongoing commitment to innovation, to high quality products, good customer services and plain old-fashioned hard work and perseverance suggests they might well be around in another 100 years.

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Paudie's advice for other businesses

1 Surround yourself with positive people

"Negativity and negative people can quickly undermine the atmosphere and culture of any company. Try to surround yourself with positive people who enjoy what they do and who are always looking for solutions rather than problems."

2 Make sure you look after your staff

"To be successful in the longer term, it is essential you treat your staff well. Communicate the WHY you want things done not just the things you want done. Look after your staff - and they will in turn look after your customers."

3 Manage cash flow and profit

"Cash flow and profit are the very life blood of any business. While it takes discipline to do so, make sure you remain focused on these at all times. They must be the top priority beyond anything else. Always be thinking turnover, profit and cash flow."

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