John Flaherty: keeping Irish manufacturing alive
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Senior Writer
Jody Clarke Jul 10, 2009
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It's not a great time to be Irish. After a decade of impressive economic growth, unemployment is headed for 17% next year as GDP contracts by as much as 10%. But John Flaherty, 45, is bucking the trend. His Galway-based industrial equipment company, C&F Group, has just developed the world's most energy-efficient wind turbine. And flying in the face of the outsourcing trend to the Far East, he's designed and developed it all on the west coast of Ireland.
The son of a farmer, Flaherty learnt the value of hard work early on in life, weeding and sewing sugar beet on spring mornings alongside his father. "He motivated me to succeed, which is very important. You don't just wake up one morning with motivation. It's drilled in to you from an early age." He left school at 15 to take an apprenticeship in tool making, before setting up his first business aged 21 in 1989, making custom-built tools such as sewing-machine parts for local industry. "I couldn't wait to get out of school and finish my apprenticeship. I couldn't wait to attack the world and earn some money."
With £5,000 borrowed from Lombard & Ulster, a local bank, Flaherty rented out a 1,000 sq ft building near Galway City, growing his business alongside multinationals such as refrigeration firm Thermo King in the years that followed.
But by 2000, with the firm turning over €8m, customers started drifting away to lower-cost eastern European countries such as the Czech Republic. "It was either fold or follow the customers. So I found a piece of land 40 miles from Prague and built a factory." Flaherty later built extra sites in the Philippines and China, not because of cheaper labour, but because that's where his customers were.
But he still employs more than 600 people at his factory in Galway, a bold decision given the wholesale move into services and property by most Irish entrepreneurs in recent years. It's a business policy Flaherty doesn't shy away from criticising. "You're left with a nation of shopkeepers and hairdressers if you strip out your manufacturing."
Turning over €63m last year, C&F Group should hit €100m in 2009 as it starts churning out its wind turbines for the first time. Most turbines start producing electricity at wind speeds of three metres a second. "Ours start producing at one metre per second," says Flaherty. The key to this is the world's first alternator (a device that generates AC current) that can produce multiple power outputs at the same time. The result is a turbine capable of producing 40% more power than their existing rivals. At a cost of about €20,000 each, it will take seven and a half years to recoup money spent on the turbines – that's half the time offered by existing products.
Two such turbines went live last month in Galway harbour, hooked up to the Irish grid and generating enough power to cover the cost of the Volvo Ocean Stopover, a yacht race that docked in June. "This is a machine that is unequalled for strength and reliability. I have the key to C&F Group becoming a leader in the manufacturing industry. And I will do it because I have the manufacturing plants, the engineers and vehicles to do so."
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