Crest Solutions leads in the good fight
Frank Madden tells Sean Gallagher how Apple's decision to close one division of its Cork operation spurred him on to set up his own business
In recent years, the prevalence of counterfeit drugs has become a huge global problem, estimated to be worth billions of euro in value. Interpol and others estimate that as many as half-a-million to a million people die each year from taking counterfeit drugs, the majority coming from the poorer or developing regions of the world.
Some sources suggest that 10pc to 30pc of all drugs currently sold worldwide are counterfeit - antibiotics, Aids and cancer medication, antidepressants, drugs for erectile dysfunction, weight-loss supplements and anti-malaria medication are the most common. Some are cheap rip-offs of well-known brands, others are completely falsified medicines containing dangerous fillers that can kill consumers.
This week's entrepreneur is Cork-based Frank Madden whose firm, Crest Solutions, has become one of the leaders in the fight against such counterfeit drugs. It was set up in 1998 following his redundancy from Apple, when the division in which he worked was wound down. Today, Crest Solutions has an annual turnover of €15m and employs more than 100 staff between its offices in Cork, Westport, the UK, Belgium and Sweden.
"Putting it simply, we install engineering equipment and cameras on packaging lines in pharmaceutical plants across Europe," says Frank. "These then apply and read unique identification codes on the drugs' packaging, which helps track these products throughout the entire supply chain process. This means that pharmacists and patients are able to verify the source and authenticity of the drugs they are selling or consuming."
Much of the growth in the demand for Crest Solutions' services has come about as a result of new traceability legislation introduced to combat the counterfeit activity.
"The sort of things we inspect include date and batch codes, fill levels, carton contents, bag seal and vial integrity as well as labelling and 2D barcodes or other unique identifiers that appear on the product's packaging," says Frank.
To comply with these regulations, this data is required to be securely stored and shared with the regulatory authority whose responsibility it is to police the sector in each region. This is where Crest comes in.
Crest is the exclusive partner in Ireland, the UK, Benelux and Scandinavia for Italian-based engineering firm, Antares Vision, whose systems collate the information required so that when a patient opts to buy a product in a pharmacy, the pharmacist is able to ensure the authenticity of that individual product by scanning the code on the carton to check that it matches the authority's central database of codes.
"In an increasing number of markets, every box, carton and packet needs to be tracked and traced from the manufacturer right through to the end user. It's the only way to eliminate counterfeit products," says Frank.
From a standing start 18 years ago, he has grown his business to a position where he now services a network of more than 50 blue chip corporations, including many global brands in the pharmaceutical, medical device and food and beverage sectors. In recent years, Crest has also grown internationally, with 70pc of its turnover now coming from outside Ireland.
Frank grew up in Ballaghaderreen, Co Roscommon. There, his father owned the local builders' supplies store, something that seems to have had a strong influence on Frank and his siblings as all five ended up running their own businesses.
Frank remembers how, as a 10-year-old, he loved taking radios and electronic equipment apart and putting them back together, which led him to study electronic engineering, first in Sligo and then at Cork Institute of Technology. He worked initially for a number of electronic engineering companies including Concurrent and Alps Electric before landing his dream job with Apple in its manufacturing plant in Cork city.
Starting as a technician, he made his way up to become an operations manager, writing software programmes to help increase the efficiency of the plant's operation. However, against a backdrop of rising costs and increased competition from lower-cost markets, the Apple facility closed.
With the money he received from his redundancy, Frank set up Crest Solutions to bring the type of software he had been developing for Apple to other industry sectors.
"I only made one mistake at the time, and that was selling my shares in Apple," he says with a laugh.
His first task as a new entrepreneur was to find customers. Luckily, most of these came as a result of his network of former colleagues in Apple, many of whom had ended up joining other manufacturing companies that had a need for Frank's new offering. Even with that, growth came slowly.
"In fact, we have hired more people in the last 12 months than we did in the first 10 years," he says.
"When you're a start-up, you spend all your time selling. When you get some sales that you need to deliver, you then begin concentrating on delivering and no one is out selling. This then causes sales to be up and down until you finally decide to resource both areas. As a result, you then have to sell even more to cover your costs, which in turn forces you to either grow or go out of business.
"As you grow, you also need finance, particularly in the form of cash flow. Many good businesses fail due to the lack of finance rather than customers.
"We've been lucky, though, in that we never needed to look for outside financing because our steady and measured expansion allowed us to achieve growth through reinvesting profits."
Because his business is heavily dependent on the quality of the service he provides, finding and retaining great people has been essential.
"We're fortunate to have an exceptional team, and it has been a revelation to me to discover just how important culture is in an organisation. Today, we focus on hiring people who we feel will fit our culture and our overall mission," says Frank.
However, it hasn't been all plain sailing. There have been backs-to-the-wall moments such as in 2010 when, faced with the downturn, many pharma firms cut budgets, with a knock-on effect on Crest Solutions' turnover.
The experience led Frank to re-evaluate his entire business model. Participation in Enterprise Ireland's International Selling and Leadership for Growth programmes helped transform his thinking. Through these he was connected with an experienced mentor who helped him devise a new four-part strategy that included internationalising his business, implementing more effective internal operating systems, creating new product and service strategies and partnering with leading international equipment manufacturers.
As a result, in 2011, Crest Solutions invested in a Belgian-based company called VistaLink, which led to the formation of the key relationship with equipment supplier Antares Vision. This was followed by the opening of offices in the UK, Benelux and Sweden, which in turn led to a massive increase in exports as well as in turnover and employee numbers.
"We plan to aggressively grow our UK and Scandinavian business and are in the middle of extending our Belgium office by a further 20,000 square feet to keep pace with demand there," says Frank.
"Overall, we aim to double our size over the next three years to €30m."
Frank takes me on a tour of the company's new pharmaceutical training academy. Here he will ensure that his staff are trained to the highest standard so they can support their customers in an environment where pharmaceutical regulations and standards are constantly on the increase. He believes that expertise in the areas of industrial vision and track-and-trace will become key differentiators for his business.
"With more and more legislation being introduced globally in the areas of serialisation and anti-counterfeiting, the requirement for our expertise, products and services is only going to increase," he says.
As he reflects on the past 18 years, Frank considers himself a lucky man. Had adversity not visited him in the form of redundancy, Crest Solutions might never have become a reality.
For further information see www.crestsolutions.ie
Frank's advice for other businesses
1 Exceed customer expectation
"Do more than you get paid for. Go further for your customers than your competitors are willing to go. Satisfied customers will come back to you and will invite you to do more and more for them. Happy, satisfied customers will help you to grow your business."
2 Take responsibility
"Do what is needed to get the job done. Even in the face of challenges, stick with it. Do the hard stuff that needs doing - the stuff that your competitors won't want to do. Such dedication to a high level of customer service will get rewarded."
3 Don't leave any dirty water behind you
"Finish every job you take on, regardless of the cost. Customers need to know that once they entrust their project to you, you will deliver as agreed. Sometimes you get it wrong and can let your customers know you are losing money on the project - but finish the work."
Sunday Indo Business