EY Entrepreneur of the Year finalist: Clodagh Cavanagh, Abbey Machinery

Not many Irish manufacturers can boast the pedigree of the Cavanagh family, which has been making agricultural equipment in Tipperary since the 1800s, when it had a blacksmiths. In 1947, the family set up Abbey Machinery Ltd. It now develops and makes specialised agricultural machinery, such as equipment for cattle feeding, and grassland and slurry management.

Clodagh Cavanagh, a granddaughter of the founders, joined Abbey Machinery Ltd in 2004 as a trainee accountant and took over as managing director in 2012.

Based in Toomevara, the firm includes retail outlets, a parts business and a manufacturing operation. It employs almost 100 people, mostly in Tipperary, with field sales staff across Ireland and the UK. It exports to Australia, New Zealand, Saudi Arabia, United Arab Emirates, France, Iceland and the UK

What is your greatest business achievement to date?

Abbey Machinery has recently invested in a new 100,000 sq ft facility on a green field site. This has already allowed us to increase capacity and the size of our product offering and increase efficiencies. It incorporates a dedicated research and development facility.

What was your “back-to-the-wall” moment and how did you overcome it?

In 2008/2009, the bottom fell out of the market and our turnover fell by 46 per cent. To survive, we had to reduce costs quickly. Headcount, wages, and inventory all had to be managed carefully. No one wants to have to ask staff to take a pay cut or make people redundant, especially in a business where you know everyone and their families. Ultimately, you need to take tough decisions to protect the business for the long run. And we did.

What moment/deal would you cite as the “game changer” or turning point for the company?

Export market growth was a saving grace after the recession. We expanded in the UK and began trading in New Zealand. The focus on new markets and tighter cost control allowed us to turn the business around. The downturn gave us the impetus to improve efficiencies and invest in our facilities.

What numbers do you look at every day in your business?

‘Production output’ and ‘on order’. Because much of our equipment is build-to-order, our cycle-time for turning an order into an invoice can be anything from four to 12 weeks depending on its complexity.

To what extent does your business trade internationally and what are your plans?

We export over 60 per cent of our manufactured products to countries including the UK, Iceland, Saudi Arabia, South Korea, United Arab Emirates, France, Australia and New Zealand. To reduce the risk of seasonality affecting the business, our immediate plans for growth are in the southern hemisphere.

Have you started to feel the effects of the economic upturn within your sector/industry?

Agriculture has bucked the economic trend in recent years, but is now facing a time of uncertainty with milk and commodity prices under severe downward pressure. Sustaining our ambitious growth in the current climate will be extremely challenging, but we are optimistic about that challenge.

What is the one piece of advice you would give to Government to stimulate the economy?

The Irish government needs to widen its renewable energy incentives from wind to other areas of such as bio-gas and solar. If we had built our plant in the UK, we would have solar panels covering our roof and would be a net contributor to the energy grid, while improving our cost base.

How will your market look in three years?

The long-term fundamentals of our industry are sound. The world population is growing and to feed it, farmers need robust, reliable and efficient products and the latest technology to help reduce costs. However, agriculture is expected to be in the doldrums for the rest of 2016 and early 2017. With growth expected from the second quarter of 2017 onwards, the market should look promising in three years.