Peter Fitzgerald's Randox Laboratories is a triumph of self-sacrifice in pursuit of a dream, writes John Murray Brown
Peter Fitzgerald was planning to get married and buy a house. Instead he spent his savings on a freeze drier for the small life-sciences business he was trying to set up in a henhouse at the back of his parents' farm.
That was 25 years ago. It took him another 16 years before he managed to tie the knot - with a different partner. The business meanwhile grew from strength to strength and today ranks as one of Northern Ireland's most successful private companies.
The Ulsterman's example of self-sacrifice in pursuit of a business dream is perhaps a little eccentric. But Fitzgerald says self-belief is probably the one factor that distinguishes an entrepreneur.
"It sounds a bit hard, but you have to focus. And I wouldn't have been any help getting married at that stage," he says.
Randox Laboratories, a manufacturer of diagnostic kits, employs 700 people worldwide - including 500 at its four facilities in Northern Ireland. Sales for 2007 are estimated at £50 million (€66.7 million). In 2006, it earned a profit of £1.5 million on sales of £43 million.
With £90 million invested in developing a new protein biochip technology that will allow clinicians to conduct multiple tests on a single patient sample, Fitzgerald confidently predicts that in 10 years' time Randox will be the world's largest diagnostics company, overtaking current market leaders Roche, Abbott and Siemens.
It is a big ambition for a company he set up while still a junior biochemistry fellow at Queen's University in Belfast.
"Without a scientific background I wouldn't have had the confidence to do it. But at the same time there were many colleagues at university who couldn't imagine the concept of starting a business when I said that's what I wanted to do. It wasn't the done thing then. I know they all talk about it now," he says.
In the first 10 years of the business, Fitzgerald did not take what he calls a proper salary: "I paid myself just enough to survive. But we ploughed all our earnings back into the business."
The first products, developed in the henhouse laboratory, were to measure enzymes to trace cardiovascular and liver disease, which he would try to get the local hospitals to buy.
Northern Ireland in the early 1980s, when the IRA's violent campaign was at its height, was hardly a propitious time to be trying to start a business. Fitzgerald recalls the "day of action" in March 1986, when unionist protesters brought the North to a standstill in protest against what they saw as the British government's ceding of power to the Republic under the Anglo-Irish Agreement, signed the previous November. The ferries and the airlines joined the action. "So we chartered our own boat. We ended up delivering faster than our German competitors. I was determined to show our customers we could supply on time."
Fitzgerald's parents were very supportive financially. The banks also backed the venture. He started the business with a £30,000 unsecured loan from the local Ulster Bank, now part of Royal Bank of Scotland.
"The first few years were very hard. There were stages when we were on the point of being insolvent. But you just had to keep faith that you could trade your way out of it, to keep selling," he says.
There were many occasions when he was tempted to take an outside investor. "We did receive some quite good offers," he recalls. "There was an American. I suppose you would call him private equity today. He offered £1 million for 40 per cent of the business. And that was in 1983-1984. We had nothing. We were just four or five people. But I felt it would have pushed the company too fast and it would have been detrimental to our long-term survival."
Randox has remained a family-controlled business. Fitzgerald owns 98 per cent of the equity. His parents each own 1 per cent.
The three remain the only directors, although in the past six months the company appointed a non-executive director, a local accountant.
"But the company is not run by a board. It's run by senior management. We're a private company as opposed to a family company. It's the only negative I have about being called a family company, because people think the company is for the family, which it isn't," says Fitzgerald.
Almost all key management personnel - those in charge of regulatory affairs, marketing and running the plant - have come up through the company. But Fitz-gerald is adamant that the non-family managers are sufficiently motivated without having to be co-owners of the business.
"We've never found a desperate need to offer them share options. Most things are to do with building up team spirit and effectiveness, treating people right and getting the message to them [ about] what you want to achieve," he says.
Keeping the business in Northern Ireland is also very important, he believes, in spite of the move of many rival operations to lower-cost overseas locations.
"Very few people can manufacture the products to the level we can. There are fewer and fewer manufacturers of quality diagnostics in the world and in many ways you build up a manufacturing culture. That takes time. It's not always easy. It's not textiles. This is high technology. Very disciplined procedures are required. Outsourcing production has never entered our minds," he says.
He is not quite the workaholic he once was. But he still does a 12-hour day, including the occasional weekend. He travels a third of his time, meeting distributors and buyers.
On his bookshelf are the Lonely Planet guides to Russia and Belarus, India and the Caribbean - just three markets he is currently targeting.
Fitzgerald is 57. His parents are both 85. Until very recently Wilhelmina, his mother, who is still officially the finance director, was a well-known presence on the North's business scene.
"My mother would not like to say she is retired, but she's not really carrying out her duties. It's actually quite a tricky period. She wants to be more active than she can be," he says.
So is he planning for the succession? "I suppose I should say yes, but the answer is actually no, we're not."
But retaining control of the company is a fine balancing act, he says. "I have to be very careful I don't hold up the development of the business. The more products we develop, the more we understand disease conditions, the more opportunities we will see. But I have 120 sales staff and they can't sell everything we make."
Fitzgerald is now considering a number of limited collaborations with partners on a number of product developments.
"The main reason for taking outside money is because you feel you're not exploiting your resources to the maximum. I'm sure having the pressure of shareholders sometimes is good. But I think if a private company can get its vision right, and get its execution right, it can be a very good catalyst for change," he says.
Fitzgerald has some advice to offer on how to stay successful as the owner-manager of a private company.
"You have to have self-belief because there will always be people who will tell you you are doing it wrong.
"You have to have your own vision. In high technology, you should push to be selling something even though it's not what you want to sell. You need to keep trading.
"I don't regret anything we've done because even the hard times are learning experiences . . . Family can be very useful and supportive particularly in the early days. But you can't rely on family. There has to be a broad-based management team."
