Monday 17 June 2019

Growth is biggest motivator for Combilift boss as he turns his 'hobby' into €1bn business

Monaghan farmer thrilled at founding and developing warehouse solutions firm in his hometown, writes Group Business Editor Dearbhail McDonald

Martin McVicar, founder of Combilift. Photo: Rory Geary
Martin McVicar, founder of Combilift. Photo: Rory Geary

It's a foggy December morning, half the country is stranded under snow as a child draped in a high-viz jacket swirls around a playground in a brand new electric toy.

At least, that's what it looks like when you see Martin McVicar, CEO of Combilift, demonstrating the prowess of a four-directional forklift destined for one of more than 75 global markets the Gallinagh, Monaghan firm exports to.

It's an oddly endearing sight, watching a 45-year-old boy revelling in €225m worth of toys.

Mr McVicar's 'playground' is a new, state-of-the-art €46m factory, 11 acres under roof - nestling on a 100-acre site - that is set to double production at the warehouse-solutions outfit which aims to become Monaghan's first €1bn company.

Combilift - one of the most significant employers in this border county, which last week won Business and Finance's Excelling Enterprise of The Year Award - was established by Robert Moffett and Martin McVicar in March 1998.

Combilift, which spun out of Moffett Engineering - the duo went out on their own after Moffett Engineering was acquired by Powerscreen - was established weeks before the Good Friday Agreement was signed.

Now the firm stands, literally and metaphorically, on the frontier of Brexit and a new, daunting dawn for Irish exporters.

Mr McVicar, who grew up north of Emyvale in Truagh, close to Aughnacloy in Tyrone, has become the go-to guy for international film crews eager to capture the (for now) invisible Border and secure an insight into the potential impact of Brexit on business and the wider peace process.

The married father of three boys, who breeds continental cattle part-time, was one of the few Irish CEOs who took the prospect of a No vote to heart, selling forward sterling currency the day before the June 2016 poll.

This was after conversations he shared with the MD of a UK-based rival and a British dealer who visited him in the days leading up to the referendum.

"When I switched on the TV on the morning of the Brexit result, I was mentally half prepared for it," says Mr McVicar, whose company - as it always has - derives up to 25pc of its business from the UK and has witnessed phenomenal growth from that market in the last year.

Combilift, which began life as a forklift manufacturer, but is now a fully-fledged warehouse-solutions operation - its Combi-Connect logistics division designs warehouses free of charge for customers - has always been export-focused and has pivoted at key moments, investing 7pc of its turnover in R&D.

The firm changed its focus from construction to warehousing in 2006, just as the boom was reaching its peak.

And it has consistently diversified into new global markets and sectors, boasting more than 200 dealers worldwide.

That strategy that has helped it weather the global financial crisis and new challenges such as Brexit.

Despite Britain's decision to leave the European Union, Combilift is not slowing down investment in its key market.

"As long as the UK doesn't go into a recession, there is going to be a demand for our products," says Mr McVicar.

"And as long as we can continue to develop more innovative products that we can charge a premium for, that can help to counteract currency fluctuation and the potential of import tariffs as well."

Indeed, it is not currency or tariffs per se, but the post-Brexit supply chain that worries Mr McVicar most for Combilift - and the wider Irish economy.

Many of his suppliers are UK-based. And although he hasn't cut links with any, all new suppliers come from mainland Europe including Germany where Combilift enjoyed 25pc growth this year.

"Ireland is booming and we're the fastest-growing economy in Europe," he says. "But a lot of that growth is still reliant on what is going on in the UK."

Mr McVicar says his main challenge is keeping up with demand and ensuring Combilift's sub-contractors can keep up with the pace of its growth.

"Our lead time today is longer than we would like it to be," he says with a refreshing honesty.

"There is nearly too much opportunity out there, it is knowing where to focus."

By any measure, Combilift, one of Enterprise Ireland's poster child clients - EI supported the build of the new factory which was primarily funded from Combilift's retained profits - has enjoyed phenomenal growth. In 1998, its first year of operations, it sold 18 units of industrial forklifts: last year it sold 4,450 ergonomic units worldwide.

Overall, Combilift has designed and has sold more than 30,000 units - ranging from forklifts to its market-leading aisle master and port style straddle carriers than can lift and move more than 100 tonnes apiece.

Privately owned, it enjoyed revenues of some €225m this year, doubling its growth in the last six years alone.

And Mr McVicar, who has committed to giving Combilift 50 years of his life - he's 20 years in - says the company will grow to a €1bn firm, even without acquisitions, in the next 10 to 15 years.

There was only one blip in Combilift growth curve. That was in 2009 when the downturn hit the Irish and global economy like a freight train.

Combilift, which at that time was significantly exposed to the UK construction market, took a hit on its order book, shedding 26pc of sales.

The slump was not as bad as other competitors - forklift sales worldwide halved - but it led to 43 of Combilift's then 200-strong workforce losing their jobs in one day.

Combilift, which refuses to move to a double shift regime to accommodate its workforce, many of them part-time farmers like Mr McVicar, prides itself on job creation in a rural community.

Letting staff go in his community was Mr McVicar's hardest yard.

"I personally did it [the redundancies] in this room, meeting every one of them," he says, his relentless optimism momentarily faltering at the memory.

"That was the toughest day, people coming in and out that door.

"What I learned from that day is that when you are laying people off, it's not just one person who is losing their job, an entire family is affected."

Combilift made a quick recovery, re-employing more than 30 of the staff it let go. It now employs 500, sourcing the next generation of employees from the locality through a dedicated training programme with the Monaghan Institute.

A strong advocate for continuing education, Mr McVicar has also spearheaded, along with other manufacturers, the creation of a three-year, State-backed national Original Equipment Manufacturers (OEM) apprenticeship that is set to go live next year.

Ironically, Mr McVicar almost didn't make it into engineering, having substituted woodwork for science at Inter Cert.

Debarred from sitting honours physics at Leaving Cert, he cut a deal with St MacCartan's school that he could take the exam if he was best in class by Christmas.

He secured an 'A': the rest is history.

Mr McVicar joined Moffett at the age of 17 and hasn't left the factory floor since.

"I don't like the word 'no'," he says of that formative experience. "If you put your mind to it, everything is possible."

What's possible isn't always preferable and he is cautious about the tantalising allure of the Brics market - Brazil, Russia, India, China and South Africa.

Combilift convinced Brazilian authorities to reduce a 14pc import duty to 2pc owing to its products USP.

Indian and Asian sales are thriving, but selling to indigenous companies in China is, he admits, a tough sell.

"Unless a business has a truly unique offering, it will always face challenge entering local Brics markets," he says.

Mr McVicar, who has secured international clients such as Bunning's Warehouse, Australia's mega DIY, Garden and Hardware company, and Castorama, the French DIY giant that is part of Kingfisher PLC's sprawling portfolio, insists that Combilift will never go public.

Growth matters, but so does the flexibility to make quick investment decisions.

When he is not traversing the globe, Mr McVicar attends to his first love, farming.

"When I go down and look at the cattle every day, none of them answer back and they always look forward to seeing me," he says before bursting into laughter.

The biggest thrill is Monaghan.

"It's the pride of having a growing industry in my home county.

"The thrill is growing a business in my hometown and growing it with people employed in the area.

"What really motivates me is growth, growth more than profit.

"I don't see this as work. This is my hobby. This is my baby. I don't see Combilift as work at all."

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