Dromone Engineering turns crisis into opportunity
04 April 2013
During a recession, most companies slash costs – and staff – in an effort to ride out an economic slump. Dromone Engineering, however, decided to follow a different path out of economic difficulty and saw opportunity in the midst of crisis.
The engineering company, which is based in Oldcastle, Co Meath, had long been dependent on the agriculture sector. Founded in 1978, it was a one-product company, making pick-up hitches for tractors. Although Dromone had already weathered economic storms in the 1980s, the worldwide recession that picked up pace in 2008 saw its international customers close their wallets.
“On 1 October 2008, with the collapse of Lehman Brothers, North America just switched off – it was like all of our orders just stopped,” explained William Egenton, managing director of Dromone since 2002. “If you look at our company graphs from this time, it looks like we fell off a cliff. All of our competitors started cutting back and we could easily have justified letting 30 or more staff go, but instead we opted for a three-day week and we went hell for leather on research and development [R&D], sales and staff training so that we could get into gear fast when things started to pick up. Our competitors weren’t able to do that as quickly.”
Dromone decided to invest in its people, according to Egenton. “We really developed our team and set about becoming an Engineers Ireland CPD-accredited employer, which recognises good organisational practice in the area of professional development for engineers and technical staff.” Dromone strengthened its team and hired extra mechanical and manufacturing engineers.
“We bucked the trend during the recession and changed track to focus on research and development, but we also focused on export growth. There’s a core of industrial companies in Ireland doing research now. Below foreign direct investment, there are many indigenous companies who are taking this initiative – the economy has forced us all to think differently and seek to develop innovative products that differentiate us from the rest of our competitors. In a way, it gave us the freedom to be innovative and channel our energies.”
Egenton reognised that Dromone had to diversify our product range, expanding from pick-up hitches to the excavator business. “We had to ‘professionalise’, so to speak, to become a tier-one supplier to the OEM [original equipment manufacturer] sector. We were already selling to OEMs, but we wanted to increase sales. This sector had changed a lot as it become leaner and tried to be like the automotive sector.”
Dromone invested in two areas of R&D, in particular – pick-up hitch technology and quick couplers. The company set in motion the development of a quick coupler for an excavator, which was its first foray into the global construction market. This represented a change of direction, away from its traditional core business of manufacturing pick-up hitches – and it took a massive shift in mindset to go down this path, according to Egenton.
Dromone wanted to maintain its existing clients, but also target the customers that it had long been looking to attract. Egenton set about meeting these potential customers. “Even though they weren’t buying, it was important for us to meet them and ‘prep’ them, so that they would keep us in mind when the economy started to recover. We worked hard on customer conversion during that time – the team members who were customer facing made a very important contribution to the customer conversion process.”
He spent 23 weeks of the year abroad in 2009 and at one stage, found himself catching 14 flights in 14 days around the United States. “It was very hard to get traction and we had a lot of doors closed in our faces. But we had to persist. Back in 2003, we had one order in the whole of the US, but North America is now our biggest market. We kept our cards close to chest and shocked our competitors from Britain, Italy and America when we launched our new products such as the quick coupler.”
Egenton also invited potential blue-chip clients such as Esco Corporation to Oldcastle, where staff impressed with their energy, attitude and motivated approach. The Irish company secured a contract to design an excavator quick-coupler for Esco as a result. Although Dromone attends a number of high-profile international trade shows every year, Egenton said that its main marketing drive is still “on the ground, building and maintaining relationships”.
Diversification and the big push to increase overseas sales have seen the company transform into an export-driven business, employing 100 staff and supplying customers in 36 countries. Dromone has secured the business of some of the biggest names in the OEM sector, such as Massey Ferguson, Claas, Valtra, Volvo, John Deere, Link Belt and JCB. Its processes are ISO9001:2008 accredited and all its products are CE approved.
“OEMs always want competitive pricing, but of course there’s no compromise on safety. We carry out a lot of testing into product strength, durability and reliability. We have particular experience in high-specification steel casting to reduce weight and maximise strength, while maintaining competitive pricing and productivity. Large OEMs don’t want to compromise on any element.”
Dromone launched 24 new products last year alone – the massive change in construction legislation in 2012 was one of the main drivers behind this demand.
Such expansion requires skilled engineers, of course, and Egenton believes that more can be done to encourage young people into the profession. Initiatives like Project Maths were to be welcomed but should not be rolled out in isolation, he said, and the cuts to the national education budget were divisive and short sighted.
“We must do something about branding for engineering. Organisations like Engineers Ireland are doing great work in schools and motivating students when they’re young, and initiatives like Forfás’ Expert Group on Future Skills Needs [with which Egenton was involved, regarding the manufacturing sector’s future skills requirements] are great, but the industry really needs to showcase Irish success stories.”
He also welcomed the Government’s renewed drive to promote the value of careers in technology and engineering in schools, but said there was a clear time-lag between this and actually producing engineers with the expertise to meet the expansion needs of a company like Dromone. This has forced the business to look abroad for the right type of engineer.
“I don’t know if it’s because we’re a rural business, but we need to keep third-level standards up and feed through students from secondary school. We have market opportunities that could grow our sales to as much as €20 million by 2014, but we need to recruit staff with the requisite skills to meet this target. It’s difficult to find Irish engineering professionals with the specific experience and skills we need.”
He added that engineering continued to offer great employment opportunities, despite the difficult economic climate. “I spoke to the MD of Massey Ferguson, Richard W. Markwell, recently about people don’t realise that it’s fun to work in this industry – we have no hotshots like Mark Zuckerberg representing engineers,” said Egenton. “What young people don’t realise is that within 18 months of joining a company like Dromone, they’d be attending international trade shows and representing the company – and utilising their skills –in countries like America, China and France.
“The vast majority of our products are for export and young engineers just wouldn’t get chances like this if they worked with multinationals. There are opportunities that they haven’t imagined within Irish companies like ours, like Combilift in Monaghan, Dairymaster in Kerry, McHale’s in Mayo and like Keenan’s in Carlow. Many indigenous companies have a lot of flair and encourage this in young engineers.”
According to Egenton, niche areas offer the most growth potential for Irish engineering companies. To hold our own, Ireland must focus on innovation, protecting intellectual property and developing a competitive mindset.
“We need to get the message across that mechanical engineering is about more than just grease and wrenches in factories, just as there’s a lot more to civil engineering than hard hats and wellies.”
Egenton, a chartered engineer, holds an MBA and in 2011, he also took part in the Enterprise Ireland-sponsored Leadership for Growth Program at Stanford University, California. “It was very intense, but I learned a lot from it. There’s a can-do attitude in California that we didn’t have in Ireland historically, although this is changing. Sometimes, Irish engineers have to travel in order to realise their worth and see that they are capable of competing – and succeeding – anywhere in the world.”
The Dromone senior management team was also involved in the programme and Egenton said it inspired them to revisit the company strategy to focus on four key areas – operations excellence, engineering design, customer facing and supplier development. These four elements form the cornerstone of Dromone’s future business strategy.
“As part of the operations excellence area, we developed a lean-manufacturing programme as a result and we’re in the process of implementing this,” explained Egenton. “We want to embed the lean concept throughout every facet of Dromone and use these principles to increase competitiveness.”
As part of engineering design improvements, the company has also set about developing a channel of added-value products; while the customer-facing focus sees it strive to give clients better value on functionality as well as price. Finally, as part of supplier development, Dromone has turned its attention to ensuring that it gets the smooth, speedy delivery that it needs, no matter where in the world it sources its supplies. “We want to grow our coupler business in both construction and agriculture, so we also have a strong focus on regulation and intellectual property,” he added.
Egenton said that none of these developments over recent years could have taken take place without the support of the founder, Pat McCormick and the entire the Dromone team, who gave him the chance to take Dromone down new paths.
“I’d describe myself as a naïve optimist,” he concluded. “Securing big contracts like we have not only paves the way for us to clinch future business, but it also helps other Irish engineering businesses to get a foothold – it’s like a chain reaction. We’re marketing the country, the people and its products.”
William Egenton joined Dromone Engineering Limited as managing director in 2002. He worked in a number of countries including the UK, North America and China before he returned to Ireland with his family in 2001. He has held a number of senior roles in multinational companies including Raychem Corporation, Tyco Electronics and Ingersol Rand. Egenton has carried out numerous international assignments in Mainland Europe, North America, Asia Pacific and South Africa.
He holds a Bachelor’s Degree in Manufacturing Engineering from Dublin Institute of Technology, Bolton Street, a Masters in Industrial Engineering from NUI Galway and a Masters in Business Administration from London Business School. Egenton completed the Enterprise Ireland Leadership for Growth Program in Stanford University in 2011. He is a chartered engineer, is on a number of charitable boards and is also a former non-executive director in Eirgrid plc.http://www.engineersjournal.ie/2013/04/04/dromone-engineering-turns-crisis-into-opportunity/http://www.engineersjournal.ie/wp-content/uploads/2013/04/Dromone-MultiLock-Sept-2010-564-1024x725.jpghttp://www.engineersjournal.ie/wp-content/uploads/2013/04/Dromone-MultiLock-Sept-2010-564-300x300.jpgMechagriculture,construction,Dromone Engineering,manufacturing,research