August 20 2014 Latest news:
Monday, March 17, 2014
Lord Ballyedmond, Edward Haughey, gave an interview to the Belfast Telegraph in December 2012, in which he talked about his company, Norbrook, and how it all began.
Here is the report in full ...
It’s difficult to fail to be impressed when someone sends a helicopter for you. Norbrook chairman Edward Haughey’s helicopter was in good company, parked between the Aga Khan’s chopper and golfer Arnold Palmer’s aircraft at the back of Dublin airport.
Haughey (no relation to CJ) is one of the most successful businessmen in Northern Ireland. He’s both chairman and founder of the low-profile but extremely rich Norbrook Laboratories, one of the major Irish pharmaceutical companies. He was appointed to the Seanad by Albert Reynolds and then by Bertie Ahern. He certainly moves in the right circles.
Haughey speaks slowly and very, very carefully, picking over each word with great care. He really doesn’t like giving interviews, which is probably why he has done so few. His office is a fairly arresting room, dominated by an antique desk piled high with papers. A giant safe sits against the wall. “There’s nothing in it but air,” he jokes.
Not likely. The latest “Rich List” has him pegged with a net worth of about £250m. As well as Norbrook Laboratories, he owns Carlisle Airport, a 1,000-acre estate in Cumbria, a house on Fitzwilliam Square and a stately pile in County Down. He also owns the biggest holly tree in the British Isles, according to a visiting tree society.
Haughey, 57, was born posthumously in Louth, his father dying a couple of months before the birth. His mother ultimately remarried a wealthy farmer when Haughey was in his early teens. But he’s very clear about one thing. He didn’t get any handouts. “I’m a self-made man,” he insists.
Responding to the death of Lord Ballyedmond, the editor of the Belfast Telegraph, Mike Gilson, said Northern Ireland had undoubtedly lost one of its most innovative and thrusting entrepreneurs.
He said Lord Ballyedmond had begun with little more than a briefcase and a price list of pharmaceuticals and reputedly become the richest man in Northern Ireland – a story that was far too uncommon.
His company, Norbrook, employs more than 1,700 people and his annual wage bill pumped millions of pounds into the Northern Ireland economy, as well as providing well paid and secure jobs.
Mr Gilson said, given recent job losses in both the public and private sector, that there was an urgent need for more business success stories like Norbrook.
He added: “Where are the self-made men like him whose vision created wealth not only for himself but for the wider community?
“He demonstrated that with the right products and drive, Northern Ireland is as good a place as any to base a successful business.
“His greatest legacy would be to inspire others to follow his example.”
Norbrook Laboratories is one of the top pharmaceutical companies in the world, especially in the field of veterinary drugs. However, its medicinal and raw materials divisions are picking up speed very nicely, according to the slide show Haughey puts on. As could be expected, he’s in serious PR mode.
The medicinal division was established in 1999 and already accounts for about five per cent of turnover. Norbrook is the only foreign company permitted to import sterile veterinary injections into the US and the company has won three Queen’s awards for export in the UK.
Norbrook does quite a bit of contract work for nine of the top 10 pharmaceutical companies in the world. In fact, some 40 per cent of the business is contract work, according to Haughey, with the remainder cuvée Norbrook. The company now has 7,000 registrations, or licences to sell worldwide with about 1,200 patents.
Because it is a private company, he likes to keep information fairly tight. He expects to turn a profit of some £5m this year, double that of last year. “The turnover will have grown by 23 per cent and next year I predict it will grow comfortably by over 20 per cent because we already have a number of new products.”
Recent accounts have shown the company’s sales breaking the £40m barrier and turning in pre-tax profits of £500,000 in 1999. Business would appear to have picked up quite substantially since then.The pharmaceutical industry is highly secretive, with plenty of suggestions of industrial espionage. Even the wall coverings in one of the rooms would be worth lots of money to competitors; or indeed the process of keeping vials sterile.
Norbrook has had to call in the lawyers to keep its secrets intact, he says. The US pharmaceutical watchdog cleared the plant straight away. It was the first time ever that a plant had been cleared so quickly, he says proudly. It hasn’t always been so cosy with the authorities. A couple of plants had difficulties in the past, he admits.
Haughey is only bursting to spread his latest bit of good news. “Last week we got clearance from the FDA for a major new product, a major raw material, and for the facility to produce it. So that has put me in a very strong position,” he says, smiling.
A major multinational has also decided to outsource all its contract manufacturing to Norbrook. Haughey sees these two developments as the driving force behind such ambitious growth rates. The company has spent more than £40m over the last four years in jazzing up its facilities. This should leave it in a good position when European pharmaceutical production regulations change soon.
Running Norbrook isn’t quite as easy as falling off a log and Haughey freely admits to botching up a couple of things. “I have made several mistakes and I’ve learnt from my mistakes,” he continues.
“The worst mistake I ever made was probably not doing something. On three occasions I didn’t buy companies, because I thought they were too expensive and didn’t think that there was anything there.” These days, he is open to expert advice.
Norbrook has been touted as a flotation candidate for several years now. “There was a great culture three years ago to float companies. And it sounded awfully attractive at that time. I looked at it and said: ‘Yes, that’s where I want to go’.” However, Haughey pulled the plug after he decided that he didn’t want the hassle, the loss of control or (presumably) the prying eyes.
“I find it difficult to work with other people. I don’t know whether it’s an insecurity on my part or whether I’m an autocrat or even a combination of both. But whatever it is, it has resulted in me not being able to work fruitfully with other people.”
Haughey’s board is small but neatly formed, with just two other directors, former Shorts MD Roy McNulty and accountant Martin Murdoch, at the top table. “I want to be on my own. This is what I want to do and so far it’s worked for me.
“I’m very quick to realise that if you are in plc mode you can have a degree of autonomy but you also have an enormous responsibility. It’s like the old saying: ‘You can’t have gratitude without obligation’, so if I go public, I’ll have that obligation.” But, ever the diplomat, he says that the machinery is in place to go public should he change his mind.
Not being a public company means that sometimes Haughey can fly by the seat of his pants. “I bought a licence in the US over the phone for $3m and I didn’t see the person I bought it from. And I said yes over the phone and he couldn’t believe it. I once bought a company for $10m over the phone and never saw the people who were selling it.
“They turned out to be two of the very best deals I ever did. On another occasion I spent almost $1m doing due diligence in detail and I ended up not buying it in the end.” You could just see a plc boardroom feeling quite queasy. “The licences and the company were a gut feeling. A person in their right mind wouldn’t have done it.”
Norbrook has being going since 1968, when Haughey returned from the US and a stint as a pharmaceutical salesman.
“We were very small and dormant until 1978, until I bought the first factory. It was a struggle.” The company picked up a blockbuster of a patent and signed up a major multinational all in one fell swoop.
“That gave us the muscle to get going. We were very poor up until that one break.”
Although things were tough, Haughey never sold a single share in the firm. There have been offers. “I almost sold at one stage about 15 years ago. It was very persuasive.” He says that he was offered “telephone numbers” to sell but he didn’t. “I held off. It was a multinational trying to buy me. What put me off was when the person said to me, when we acquire you, Eddie, I want you to realise that you’ll just be a number.” Presumably the person who said that hasn’t been let near another acquisition target.
Outside Norbrook, there’s plenty of other stuff happening. He’s just bought up 50 acres of prime Ugandan land and a couple of islands in the middle of Lake Victoria. He knows the area well from his days in sales. The Ugandan land will be used to grow citrus fruits and sugar cane, he says. Three Boeing 707 jets will pick up the produce from the local Entebbe airport best known for a hostage rescue raid by Israeli commandos in 1976 and fly up to Haughey’s Carlisle airport. He says that he’ll build a house on one of the islands and perhaps a small landing slip.
The future isn’t terribly clear for Haughey and the company. “I’m not young now. I’m 57. The family haven’t shown any great interest in going into the business. That’s not to say that they won’t. They’re still sowing their wild oats.” He has two sons and a daughter.
“What will I do? I have either the opportunity of taking my managers and putting in a system to incentivise them, or bring in one of my own family to run it and bring it on where I leave off. Will that happen? I honestly don’t know.”