Keeping a cool head during recessionary times

UNDER THE RADAR:John Kennedy, Irish Cooling Towers

THERE ARE almost invariably tensions over differences in management style when one generation takes over a business from another. John Kennedy recalls that, in the case of Irish Cooling Towers, the differences were all about expansion.

“I really enjoyed working with my dad, Peter, when I joined the company in the early 1990s. Only later I realised that, when it came to building up the business, he was naturally conservative, very much one of the old school,” says Kennedy (35).

“His view was: the bigger you are, the harder you fall. Whereas mine was the diametric opposite: the bigger you are, the more money you make. He’s since passed away, but I believe he was very happy to see me building on what he started.”

Irish Cooling Towers does what it says on the packet: it installs and maintains high-tech cooling towers for corporate customers, with the emphasis on the pharmaceutical industry and bluechip clients such as Pfizer, Genzyme, GlaxoSmithKline and Wyeth.

Kennedy says the company also won the contract to install towers for Fortune 500 biotechnology company Amgen, before it pulled out of plans for a new manufacturing facility in Cork in 2007.

“The towers were bought and paid for by Amgen and are still in our storage facility . . . That was a really bad day for Ireland Inc,” he says.

So what do cooling towers actually do? “That depends on the specific application,” says Kennedy. “You can have anything from a €2,000 model for a local drycleaners to a €20 million model for a power station.

“But basically, in the case of an office block with a heat, ventilation [and] air conditioning application, for example, what happens is that the building is cooled using chilled water. The chillers generate heat, just like a fridge. And that heat is taken up into the cooling towers on the roof and dissipated into the atmosphere.”

According to Kennedy, the towers range in size from “the equivalent of, say, a small car to the size of a block of flats”. But he adds that, in manufacturing, “what they tend to have in common is that they’re critical to the operation. If a tower is the final source of heat extraction and it fails, everything shuts down. It’s a big responsibility.”

Kennedy took over as managing director of Irish Cooling Towers in 1997. The following year his determination to expand saw him land the Irish distribution rights to the full range of products made by Marley Cooling Tower Company, a world leader based in Kansas. “From that point on we started to get involved with the established engineering houses, offering expert consultancy advice during the prebuild design phase of projects.”

Over the following decade, the company grew to a turnover in 2006 of about €4 million. But the recession is now making itself felt and, interestingly, has nudged Kennedy down the road of sustainable energy projects.

“Turnover now is roughly half what it was three years ago,” he says. “From €4 million in 2006, it will be around €2 million for 2009, though the irony is that our profitability probably won’t be affected that much.

“New tower projects have died the death, but those are the very projects for which we’d have to buy in expensive equipment from the US or the UK. And because companies are keeping their existing towers, there’s substantially more maintenance and refurbishment work.”

Irish Cooling Towers has a staff of 10 and shares a financial controller and receptionist with its neighbour in Kells, Co Meath: industrial boiler company HDS Energy, with whom it also shares a firm belief in renewable energy.

“HDS has built a wood-fired power-producing facility in Belgium and a tyre-burning facility in Portugal, and we’ve worked with them on cooling towers for both of those projects,” says Kennedy.

“It’s a no-brainer. Renewable energy is the way forward – far more than just tokenism.”

ON THE RECORD

Name: John Kennedy.

Company: Irish Cooling Towers.

www.irishcoolingtowers.com

Job: managing director.

Age: 35.

Background: After studying mechanical engineering at Dundalk Regional Technical College, he joined his father in the family company, Irish Cooling Towers, in 1992.

Became managing director in 1997. Targeted the pharmaceutical sector when Pfizer became a client in 2000.

Built the company to a turnover of €4 million in 2006. Moved from Trim to Kells, Co Meath, where he co-operates on renewable energy projects with HDS Energy.

Challenges: "Reinventing ourselves for the current economic climate so that we can work harder for less money in a climate where there's more competition and pressure on price."

Inspired by: "I remember reading Scott Peck's The Road Less Travelledmany years ago and the famous sentence, 'Mental health is an ongoing process of dedication to reality at all costs', and thinking to myself that the same could be said of business. It's never been about idealism, it's been about money, which is why we're cash rich. Though maybe I'm becoming slightly more idealistic as I get older."

Most important thing learned so far: "The buck stops with me . . . I never compromise when it comes to the long-term aims and benefit of the company."