Electric cars force new focus at McMurtry firm
Market disruption could hit petrol and diesel component sales at billionaire Irish inventor's Renishaw, writes John Reynolds
Irish billionaire inventor David McMurtry's Renishaw is targeting its R&D efforts at the electric car market as the company acknowledged that earnings at the €4bn FTSE-listed precision engineering and measuring device maker that he co-founded could be hit by the move away from petrol and diesel cars.
Manufacturers of parts and components for cars have been a large market for the business, but speaking at the company headquarters this week new CEO Will Lee - who has taken over the role from McMurtry - spoke about how it may be affected, though the company does not break down its sales by industrial sectors.
"The pace of disruption that's taking place brings opportunities and challenges. We're looking at the opportunities it may give us - particularly related to electric motors - and refocusing our sales and R&D accordingly," he said.
Car maker Nissan said this week it will gradually phase out diesel car production in Europe, while some cities have said they will ban petrol and diesel cars as soon as 2025.
Renishaw also outlined how parts for electric cars may also need to be made by 3D printing (also known as additive manufacturing), which its latest quad laser-equipped 3D metal printer could make. The printers, which are priced from €745,000, can already make a key component for range extenders for electric cars, it demonstrated.
Having four lasers reduces the production time for a part by at least 50pc - helping manufacturers increase their efficiency and reduce production costs accordingly, company executives explained.
Supplying them to the makers of these high-value parts, as well as components for aircraft engines, for example, are another key focus of the firm's R&D. "We're targeting areas that our competitors aren't in. At the moment most of the patents we're filing are in this area. Our staff are also looking at the role artificial intelligence will play in 3D printing," said its head of engineering Geoff Mulholland.
McMurtry added: "We're confident that our profit margin in this area should be high as long as we can get a niche in the market. Though [US industrial giant] GE have now bought several 3D-printer makers, none of their machines have four lasers like ours. Most in the market have only two lasers." Makers of flat screen TVs - which have been boosted by the trend for bigger screen TVs - are among Renishaw's customers, while an expected increase in manufacturing of them in China, rather than Korea, could help boost device sales, as could a rise in semiconductor manufacturing for the electronics markets, the company said.
Its laser encoders feature in robotics, and can also be used in self-driving cars, as well as in manufacturing processes.
As its global workforce approaches 4,600 people, Renishaw forecasts sales this financial year of €665m-€693m, with pre-tax profits of €165m-€181m. Both sets of figures are up slightly on its previous trading update.
Sales for the nine months to March 31 were up 11.9pc on the same period last year, to €488.5m, while pre-tax profit is up 39.2pc on the same period last year, to €111m.
Speaking to the Sunday Independent, McMurtry, 78, explained how he now focuses on the firm's R&D, having become executive chairman overseeing innovation and product strategy.
"My wife jokes that I'm perhaps working harder now, spending time on R&D, than I did as CEO," he said. "Investing in it is critical for us. Just this week there's a patent on my desk on which I'm the named inventor, and we now employ six company patent lawyers."
Sunday Indo Business