The recession has been a hammer blow to businesses in Northern Ireland and especially to those in the construction industry. Yet – surprisingly and impressively – it has been the inspiration for the rejuvenation and expansion of one Cookstown construction dependent business.
When the recession hit, CDE Global was a leading supplier of washing equipment for quarries that supplied the building industry. “The recession hit five years ago and our business was heavily based on the buoyancy of the construction sector,” says the company’s managing director Brendan McGurgan.
Clients included some of the largest names in the building industry in the UK and worldwide. CDE Global was tendering for major projects when the recession hit. It was as if the industry just “turned off the tap”, recalls Brendan, particularly for large contracts. “Anything over £1m disappeared overnight.”
A healthy future for CDE Global required it to fundamentally change its business model. “We determined very quickly these PLCs [in the construction sector that had been customers] were closed for business and that these major projects, worldwide, were not available,” explains Brendan.
The board evaluated where its existing expertise could be applied in other sectors that were not affected by the recession. “We invested more in innovation in that period than we have done in any other time in our history,” says Brendan. “We revised the product set, we explored new industry markets and we have grown significantly in the last five years since the recession took hold.”
CDE Global committed itself not just to overcoming the recession that hit in 2007, but to make the business recession-proof thereafter. It has since focused on activities that are less vulnerable to economic cycles and to diversify across different products, customers and national markets. “We don’t want our entire future to be dependent on the construction industry,” Brendan stresses.
One example was the formation of the CDEnviro division in 2008. It applies the same technologies for waste water treatment that had been used to wash quarry products. An initial pilot contract for Severn Trent worked well. “That solution was hugely successful and won an award for Severn Trent,” explains Brendan. Following that, the solution was sold to ten UK water utilities.
“That was one of the big success stories that came out of the recession,” says Brendan. “That was how we approached other sectors that are not as vulnerable to the recession. So we looked at some of the other companies in the group.”
The CDE Asia company was recognised as one that could be refocused to achieve growth. It had been focused on cleaning services for the sand and aggregates sector, but the mining industry became the priority to the extent that this now generates 70% of that division’s income.
A similar approach has since been adopted in other geographical markets, with the result that CDE has won a £3m contract with Australian mining company Bellzone. Other specialist markets have opened up through the cleaning of sands for glass manufacture.
Today CDE Global claims to be the world’s leading supplier of washing equipment for quarries and mines, outselling its competitors globally. The group’s activities include sand washing, dust washing, lignite removal, construction and demolition waste recycling and various types of waste water treatment. “If one sector is not performing that well, it’s hoped that other sectors will and mitigate any recession,” explains Brendan.
Export performance is key to the new approach. CDE Asia had been established as a joint venture, but is now a division of CDE Global. A division in Brazil has been opened, which is performing well. Another division operates in the United States.
“We are now selling into 40 countries around the world,” says Brendan. “Getting established in any export market is extraordinarily difficult. It’s really a three year process from when you first step into a new market.”
There are now seven priority export markets: South Africa, Australia, the Middle East, Central Europe, Turkey, Brazil and North America. The focus on Asia, primarily India, is the responsibility of CDE Asia.
The company’s situation has not merely been rescued from the impact of the recession, but has actually left it more resilient than before, larger and more successful. “Our turnover dropped dramatically at the time of the recession, but has now grown probably by more than 30/35/40% of what it was pre-recession,” explains Brendan. “The profile of that turnover is much better placed for further growth.”
As well as achieving growth in turnover, the new strategy has also enabled CDE Global to increase employment. Before the recession CDE Global employed about 65 people in Cookstown: today there are about 115 staff. Worldwide there are around 250 people employed by the group.
Given this recent history, it is perhaps not surprising that CDE Global won the Ulster Bank’s overall Business Achiever and Best International Business Award. “Winning awards is always flattering,” says Brendan. “We were up against some very, very good, high profile, companies, so winning against those was testament to the people we have and to what we are doing. It’s a nice pat on the back.”