Saturday 24 February 2018

O'Doherty's E+I focused on engineering growth

Donegal-based company is one of the best-kept secrets of the Irish business world, writes Gavin McLoughlin

Philip O’Doherty at his company’s Burnfoot headquarters, which employs 700. Photo: Lorcan Doherty
Philip O’Doherty at his company’s Burnfoot headquarters, which employs 700. Photo: Lorcan Doherty
Gavin McLoughlin

Gavin McLoughlin

Philip O'Doherty's E+I Engineering might be the most interesting Irish company you've never heard of.

Based in idyllic Burnfoot in Co Donegal, just across the border from Derry city, the electrical engineering business makes products used for projects like data centres, commercial buildings, power stations and stadiums.

It employs around 700 people at Burnfoot and around 1,200 worldwide, with manufacturing locations in South Carolina and the United Arab Emirates.

PwC was engaged to act on the company's behalf last year after an approach from a potential buyer - but O'Doherty says he has no interest in selling the business.

He is currently working on plans to expand the company's enormous Burnfoot factory with a view to adding 100 new jobs over the next 18 months - with roles for engineers, sales staff and production operatives. The proposals for physical expansion are currently going through planners.

He's also making plans to grow via acquisition in the United States.

Engineering work at the giant plant. Photo: Lorcan Doherty
Engineering work at the giant plant. Photo: Lorcan Doherty

"We've looked two or three times at acquiring technology or acquiring companies but we haven't quite met the ones that we want," says O'Doherty. "I suppose our standards are quite high, coming from an Irish manufacturing base which we think is extremely efficient and competitive.

"But we're certainly looking at opportunities in the USA over the next year to 18 months - acquisitions either of technology or of companies.

"Depending on how large the cheque was, we could certainly do a medium-sized acquisition without any outside capital but we'd have to look at outside capital if it was a larger acquisition."

The company began its life in Derry but relocated across the border in the early 2000s.

Its current location is about a 15-minute drive from Derry city centre.

The company needed more space, and felt that moving across the border to Enterprise Ireland's jurisdiction would be a good idea.

"You couldn't afford to spend a lot of money on marketing and you couldn't afford to put people all around the continent. It was very useful to use the offices in France and the Netherlands and Germany," says O'Doherty.

His business is the type of business that's every politician's dream.

An indigenous business that has achieved scale, it offers high-quality manufacturing jobs, in a regional location, with a cross-border dynamic at work.

The workforce is a mix of Derry and Donegal people and many of them have backgrounds at other north-west manufacturing operations that closed down, like Fruit of the Loom or Unifi.

When those factories closed, a lot of the employees had manufacturing skills that E+I was able to modify in order to make its products.

The company operates a market-led research and development programme and spends significant sums on the programme every year. Developing new products enables it to target new customers or countries.

The factory in the Middle East opened around ten years ago and enables the company to service countries as far away as Singapore and Australia.

"It was probably a bad decision at the time [to go into the Middle East]. We saw a lot of high-rise buildings in the Middle East, and a lot of our products were used in high-rise building.

"We shipped product out for a year and the we realised that we needed to get out there. We went out there in about 2008 and the factory was finished and the collapse just happened.

"Ironically, it did work out quite well for us because everybody else was retrenching from the Middle East. We had a factory there, we had people there, we really couldn't retrench even if we wanted to... sometimes you get a good year or a bad year but you have to stick with it because it is a good place to do business," says O'Doherty, who in his spare time is the chairman of Derry City football club.

In 2014 E+I opened a facility in the United States, which was then expanded in 2015.

O'Doherty says that with customers who have global operations, it's necessary to have a footprint in the United States. The move also made it easier to tailor products specifically for the US market. Another Irish company, plastics business Mergon, from Castlepollard in Co Westmeath, has a facility just down the road from the E+I factory in Anderson, South Carolina.

Closer to home, Brexit looms on the horizon.

"We don't know what it means yet and we're trying to make plans to look at all eventualities," O'Doherty says.

"I think the sooner the plans are outlined the better. Everyone in Ireland, north and south, is looking to see what it actually means day to day. There's obviously a lot of concerns," he adds.

O'Doherty is keen on promoting engineering as a career to local youngsters and the company engages regularly with girls schools to try and increase the numbers of women employed.

As for him, he's found that the areas of the job he enjoys most have changed over the years.

"I think in the earlier days I just really wanted to work in engineering and was happier doing engineering but I suppose your job expectations and what you like doing changes.

"I very much like dealing with customers and finding out what their problems are and what we can do to help them. I still like getting involved in R&D," O'Doherty says.

The 56-year-old Derry native was fascinated by electricity from an early age.

He attended St Columb's college in the city - known for famous alumni including John Hume, Seamus Heaney and Republic of Ireland football manager Martin O'Neill. Then he went to Queen's University Belfast where he studied electrical and electronic engineering.

"I always used to look at those overhead lines and think, why do those birds not get electrocuted when they're standing on a live wire?

"Engineering was a career that I didn't know an awful lot about but I always figured that at least there was employment in it. And I think when you come form a working-class background, the first priority has to be that you're going to do a degree that's going to get you a job. My father was a docker in Derry and he taught me a really good work ethic, to work hard no matter what you were doing, and that stuck with me."

Summer work with the ESB in Sligo and Letterkenny confirmed his interest in the field. He then went to work for American chemicals producer DuPont in Derry.

After five years there, O'Doherty decided he wanted to work for a company that focused solely on engineering and thus E+I Engineering was born in January 1987, with help from Bank of Ireland. O'Doherty started making products that he had been designing during his DuPont career.

"I hired people in to actually do the manufacturing, so my main job in the early years would have been doing sales, doing the design, the commissioning.

"I gradually learned to build up a team and some of the team that I recruited in the early days are at senior levels within the company now. Damien McCauley, my number two, came in as an apprentice.

"Early on you realise that to grow a business it's about what people you bring with you. And identifying the right people is, I suppose, a skill that I have learned.

"I didn't have it to begin with maybe, you always make a few mistakes, but by and large I've made the right choices."

Sunday Indo Business

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business