Entrepreneur onto sure thing with storage tanks
Suretank has become the world’s largest manufacturer of tanks and cargo-carrying units– but it hasn’t all been plain sailing
Patrick Joy, founder of Suretank and EY Entrepreneur of the Year. Photograph: Dara Mac Dónaill
It has been a busy 12 months for Tipperary man Patrick Joy. He sold a 67 per cent stake in his company Suretank for €35 million, he was crowned EY Entrepreneur of the Year, and he stepped down from his position as chief executive of the Louth-based manufacturer.
Suretank, meanwhile, established a new facility in Brazil, opened a new headquarters in Dunleer and secured a multimillion euro contract in the US.
Tomorrow, Joy will battle it out against company directors from more than 50 countries for the title of World Entrepreneur of the Year at a gala event in Monaco.
Whether he wins the award or not, he is a worthy recipient, considering he has built a €72 million-a-year company from scratch. The Irish-headquartered firm is the world’s largest manufacturer of tanks and cargo-carrying units.
Its trajectory to that position wasn’t all plain sailing for Joy though. Among the bumps along the way was a four-month period from November 2008 when no new orders were received.
The price of oil had collapsed and Suretank suffered a 40 per cent fall in revenues from €43 million to €28 million. But it battened down the hatches, managed costs and still turned a profit.
A mechanical engineering graduate of University College Dublin, Joy first encountered storage tank manufacturing while working for Whessoe in Finglas during the 1980s.
“They were in the tank business. We built all the big oil storage tanks down at Dublin Port. We also built tanks for the ESB Moneypoint and Aughinish Alumina.”
Towards the end of 1983, Joy left Whessoe and joined Tipperary-based engineering company Kentz, which Whessoe had employed as a sub-contractor in Kuwait.
He spent five years working with Kentz in Saudi Arabia before returning home to Ireland in 1988 to undertake an MBA at Trinity College Dublin. He then went to work for container manufacturer CPV in Clones, Co Monaghan
“Between 1989 and 1993 was quite eventful. I went from working in the company in Co Monaghan to managing director of a glass factory, Taylor Made, in Co Tipperary and then back to CPV.”
Joy had taken the position of sales director at CPV hoping to be involved in a management buy-in, but things didn’t go as planned.
“That was when I was trying to become my own boss and put some equity in. I wanted some involvement, some ownership and some more control in the business and where I was going.
“Along with the management team, we put a bid together to buy out the shareholders, or some of the shareholders. Unfortunately, our bid to buy the company failed.
“We were gazumped at the last minute by Powerscreen. It was extremely disappointing. We didn’t anticipate that would happen and we didn’t have the right steps in place to protect ourselves.”
Joy started looking around for something else to do and joined Jim McCormack at Atlantic Tank, a small company in Co Kildare that made gas tanks.
“He was in a business that was declining. He was looking for someone to come in and help his business to find new products. I came in bearing knowledge of ISO tanks and also a new product called offshore tanks.”
Things quickly went downhill, though, when a former employer sued them.
“We had started to manufacture ISO tanks to compete with my previous employer and he took exception to that. I ended up in front of Mr Justice Costello in the High Court with an injunction against manufacturing.
“That was quite a traumatic time. He [the former employer] had no grounds in my opinion to stand on. When the case finally came up for hearing a year and a half later, they didn’t put up any defence.”
Following the case, McCormack and Joy had a “fundamental disagreement” about the direction the company would take.
“We agreed to split and that was when I decided next time I was going to do business on my own. I was lucky that a Norwegian customer had stuck with me through all of that. He said if I set up my own business, he would support me.”
With a purchase order from the Norwegian client, but no factory, Joy set about looking for a premises first in Tipperary and then in Cork and Limerick.
“I had a guy helping me who used to work with me in Co Monaghan – Jimmy Connolly was his name. He happened to be at the races on Boxing Day in the North.
“He met a bookmaker called Pat O’Hare. Pat said he knew someone in Dundalk – Neil McCann of Fyffes – who had empty buildings on the Coes road.”
Joy believes better thought-out tax breaks for start-ups and businesses could boost the economy. And he should know, for it was money from the Business Expansion Scheme and Forbairt that got Suretank off the ground back in 1995.
“Dundalk was a very depressed area. It was almost bandit country in some people’s eyes. Forbairt were extremely supportive of any business coming into Dundalk. We got IR£7,000 for each job we promised to create.”
As well as a £98,000 grant from Forbairt, which was approved within eight weeks, Joy raised £150,000 through the Business Expansion Scheme.
“We had a very good deal on the rent. We had a five-year rent agreement with Fyffes/United Beverages. The rent there was approximately 50 per cent of what it was anywhere else in Ireland at the time. We were renting something like 1,500sq m for IR£9,000 per year.”
The company brought in revenues of £800,000 (more than €1 million) in its first year of trading, and despite everyone’s predictions, made a profit.
Joy says a move into manufacturing cargo carrying units in Poland in 1999 was a “game changer”. It increased Suretank’s product range and put no strain on cash flow.
“In fact, in a short while, the profits generated allowed us to expand our tank business, move out of rented premises in Dundalk, and build our own factory in Dunleer with minimum borrowings.”
By 2003/04, the company had a global footprint for tanks, having entered the US, Canadian and Australian markets. The Far East was the next port of call, and, in 2006, Joy travelled out there.
By 2007, he had found a sub-contractor in Thailand to manufacture equipment for Suretank, and two years later he bought the company out.
“That company unfortunately had financial difficulties and we were obliged to buy them out. It wasn’t our intention to buy it. [But] if they had failed, we would have let down our customers, and we didn’t want to do that.”
But the forced move placed a burden on the business. “We went through a rocky patch starting in 2008/09. We burnt about $4 million over a two-three year period in Thailand.
“We were making money in Ireland and Poland and losing it all in Thailand. Moving oversees is fraught with risk but Thailand is now a big part of our operation. We employ nearly 300 people there.”
Suretank now manufactures in seven countries – Ireland, the UK, Poland, Thailand, China, Brazil and the US – and has sales offices in Dunleer, Aberdeen, Bergen, Bangkok, Zhongshan in China, Perth, Rio de Janeiro and Houston.
As for the future, Joy says the business faces competitive challenges from China and, to stay ahead of that, it must innovate, develop new products, and be best in class in quality, design and delivery.