Jacobs’ man putting the building blocks in place for the economy

I’m sitting in Kilmainham Gaol with Bob Pragada teasing out the prospects for global infrastructure giant Jacobs as it marks 50 years in the Irish market.

No, not that Kilmainham Goal, storied as it might be. This is one of the glass-fronted meeting rooms, all of which are named after landmarks across the capital, at Jacob’s spanking new offices in Sandyford, which were formally opened last week.

The naming follows a pattern set in Cork where rooms at its facility are named after some of Ireland’s most famous engineers. It’s easy to see the idea as one way to help Irish staff identify with a multinational employer.

In Ireland, Jacobs is synonymous with Intel, the computer chip giant. It was a key player in the group’s first chip fabrication plant here back in 1990 and has been involved with the group since then.

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But Intel is far from Jacobs’ only Irish-based client.

The group first came to Ireland back in 1974 when a US pharma company called Syntex was looking to build a plant at Clarecastle in Co Clare. Syntex was heavily involved in manufacture of the contraceptive pill, demand for which had been growing rapidly in the State.

Back then, pharmaceuticals was Jacobs’ speciality. Courted by the Irish government and attracted by incentives on offer from the then Industrial Development Agency (IDA), company founder Joe Jacobs took the leap into the unknown. It was the first time the business had worked outside the US.

Within a year, it was winning contracts in the Middle East from its new Dublin base.

The Syntex plant is now gone, closed in 2020 by Roche which acquired the business in 1994, with demolition and decommissioning of the site ongoing. But Jacobs has spread its wings far from those beginnings.

Over the years, it has been involved in everything from building an extension at Dublin’s Guinness brewery to the upgrade of the Whitegate oil refinery during Conoco Phillips’s ownership and advising on the Metrolink project.

Manufacturing of high-tech plants for the pharmaceuticals and tech sectors – including companies like Pfizer and Edwards Life Sciences – remains a core part of its business, with the company happy to boast that no product from one of its Irish plants has been recalled.

More recently, infrastructure, water, energy and environmental have become increasingly important sectors for the business, particularly after its acquisition of rival CH2M, its largest deal to date, back in 2017 in a $3.3 billion cash and shares deal. Given how CH2M’s areas of strength play into growing concerns about sustainability, it is easy to see why Pragada sees that deal as transformative for Jacobs.

Outside of infrastructure, where the client is the State or State agencies, the company is coy about naming clients. Even the images of big recent projects on display at its new offices generally list the client as “confidential”.

And even as we talk, a very relaxed Pragada is conspicuously careful not to namecheck clients specifically. Edwards, named in a recent company press release, is definitely an exception not the rule.

Fifty years after that first foreign investment, how does the Irish operation rank now in an organisation with $15 billion in global revenues and a presence in 40 countries worldwide?

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“If you were to base that on pure headcount, it’d be in the top five geographies for our business,” Pragada says. “However, if you were to rank it on impact on our global clients, it clearly is in the top three of what we do.

“The clients we serve here in Ireland, outside of public infrastructure, they are multinationals and we are doing work for them in other locations as well and utilising our Irish staff to support multinationals outside of Ireland.”

Much of the company’s recent business here has been in its traditional forte of advanced manufacturing in the life sciences and tech sectors, and also in infrastructure.

But working largely for the multinational sector, and a key foreign direct investment player itself, it is little surprise that Pragada is acutely conscious of the continuing debate about Ireland Inc’s ability to supply sufficient energy and water to attract future investment. Typically, he sees it as an opportunity for Jacobs.

“We were just talking to the Minister about power and water,” he says, referring to Minister for Finance Michael McGrath, who formally opened their building. “These are probably two of the most critical utilities for continued foreign direct investment growth. I wouldn’t say that Ireland is falling behind, but the growth aspect is requiring stronger grids and treatment facilities for water that are pretty robust so we are in the middle of that.”

Back when Jacobs first came to Ireland, Joe Jacobs was clear that the financial incentives offered by the precursor of IDA Ireland were a critical element of the attraction. But what about now? What are the big pull factors when a company like Jacobs considers whether to invest in Ireland and chase business here as against competing locations?

“People, the talent,” he says simply. “The intellectual horsepower that we have here in Ireland is world class. That process expertise, that science-based expertise that we have in Ireland gives a level of credibility for our multinational clients that they are going to get the same delivery that they can get anywhere else in the world.

“I never talked to Dr Jacobs. He had already passed when I joined the company. But his successor, Noel Watson, was very open about that. Originally is the foreign direct investment support that was the pull. But when we got here, the growth was due to the people.”

The most recent figures for the Irish business – for the year to September 30th, 2022 – showed an 8.5 per cent rise in turnover to just shy of €510 million as the business exited the pandemic. Profit before tax was €12.38 million, 3.6 per cent up on the prior year. An actuarial gain on the company’s defined benefit pension scheme now closed to future accrual brought total profit for the year after tax to almost €29.5 million.

The business paid a dividend of €12.5 million to its parent during the year, slightly in advance of the previous year.

Pragada is bullish about the performance of the Irish unit, which employs 1,200 people with another 100 to be recruited over the next two years. He expects double digit growth both in turnover and profit this year, bolstered by a strong backlog of projects.

“The pipeline is robust. Specifically, we would say that in life sciences and in water, the pipeline has doubled in just the last year,” he says, before clarifying that this refers to the company’s global outlook “but if you take Ireland as a microcosm of that global pipeline, the same thing has happened”.

In his annual report, Pragada highlighted climate response as one of the three “significant growth accelerators” for the business. But how does that square with the company’s heavy commitment to infrastructure which in Ireland has included the upgrading of the Dunkettle Interchange in Cork and the building of the new M28 motorway?

“It’s always been a debate, rail versus road,” he says, “but what’s happening with the electric vehicle ecosystem and even autonomous vehicles is creating a more sustainable road platform.

“In the old days, it was ‘okay you need more capacity, build more roads’. Well not necessarily. You can use data analytics to figure out if you really have to build 10 more roads or do you expand a single road and look at timing – you know, when are the heaviest congestion areas – and look at different transit schemes to address that, right?”

On that point, Pragada points out that Jacobs is also involved in the Bus Connects reworking of Dublin’s city bus network designed to make it more attractive and relevant to commuters in the city.

The transition to electric vehicles has also offered opportunity for Jacobs to leverage its manufacturing expertise, specifically in designing and building battery manufacturing plants.

“We’re in Scandinavia and in Germany” for a client, he says, noting the company is using its Irish operation to deliver the EV battery plants for the unnamed customer.

Originally from Chicago, Pragada qualified in engineering through the US Naval Academy before spending some years on deployment in Asia, the eastern Mediterranean and the Middle East. The navy sent him back to graduate school in Stanford for a masters in engineering. Taking advantage of the opportunity, he found time for some business classes.

While he was there, the White House Military Office which manages the various presidential facilities as well as Air Force One and Marine One for the president of the day and his family, got in touch. How would he feel about a stint as facilities director at the presidential retreat of Camp David?

“I was young, my wife and I had just had our first child and we were like: ‘This is great; yeah, we’ll go’,” he says. “You live there and you are designing, building, and maintaining the presidential facility.

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But when the president comes with the first family, cabinet members or other guests, “you take your engineering and facilities hat off and you put your concierge extraordinaire hat on”, says Pragada, who was there for two years during Bill Clinton’s time in the White House.

“We would be in a room – the president, the first lady and myself, just the three of us. The rule was that you could not ask questions of the president but the president could ask you whatever they wanted to. I found myself, I was 26/27 years old, sometimes pinching myself underneath the table because you are having this kind of conversation with the most important person in the world. And you just kind of shook your head but it was a great experience.

Pragada rose to the rank of lieutenant commander before making the leap across to the corporate world.

He has been a regular visitor to Ireland in the course of his career since the early 2000s, joining Jacobs in 2006. Among his roles there was a spell as group vice-president, northern region where he was responsible for the operation in Ireland among other things.

After a brief hiatus as chief executive of industrial speciality service group Brock, he returned to Jacobs where a series of senior positions saw him involved in the acquisition and integration of CH2M before taking over the top job at the start of last year.

Looking forward, what is the legacy he would like to leave at Jacobs when he eventually stands down?

“I’d like to see us as a company making a material difference in, if not stopping – which would be very aspirational – stalling the climate response,” he says.

For now, he says Jacobs is “extremely proud of the last 50 years in Ireland, but we’re also very excited about the future”.

C.V.

Name: Bob Pragada

Position: Chief executive, Jacobs

Age: 55

Family: Married to Jessica, they have two sons, Bobby and Cahlin.

Lives: Dallas, where his company is now headquartered

Outside interests: Spending time with his family and sport of any kind though his active participation these days is limited more to golf – he is a member at the Old Head of Kinsale – and a daily run or gym workout.

Something that you might expect: As boss of a multinational employing 60,000 people in 40 countries, he is wary of the current trend to populism. “A pure play where everyone protects their own borders and everyone reshores on to their own soil, I don’t believe we’re going to go there. We’ve become too globally connected for a human talent perspective for that to happen.”

Something that might surprise: Unusually, for someone who grew up with typical US sporting interests in basketball and American football, his sport of choice in university became rugby where played as a flanker. These days, he is a keen follower of the Six Nations, attending games regularly.

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