Author: John Reynolds is a freelance business journalist; Twitter username: @JohnReynlds
Dubliner Sir David McMurtry, co-founder and CEO of the €2.5bn precision manufacturing equipment maker Renishaw, is Ireland’s greatest living inventor and our most successful engineer.
The 75-year-old Clontarf native, who has many letters after his name, made model planes and modified their engines as a young boy. Now his company makes equipment used to make real jet engines and parts. He became a dollar billionaire earlier this year after the FTSE 250 listed company’s shares rallied, while the Sunday Independent recent Rich List estimated his wealth at €860m.
At Rolls-Royce in England, where he started out as an apprentice at the age of 18, he was the inventor or co-inventor on 47 patents and applications. He is named on more than 150 connected with his work at Renishaw; these in turn led to a further 300 patents being granted, and the company has 1,500 in total.
Headquartered in a 16th century mill beside a lake and nature reserve in a green Gloucestershire valley about 45 minutes’ drive from Bristol city centre, the firm is an advanced manufacturing and innovation powerhouse whose employees are at the top of their game.
Analysers, spectrometers and precision measuring tools
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Equator, a high-speed, low-cost measuring and inspection machine used to check that components or products have been manufactured correctly[/caption]
Its high-tech equipment – microscopes, lasers, analysers, spectrometers and other precision measuring tools such as probes - is used all over the world by the makers of essential components for Formula One teams, spaceships, cars, planes and trains. More recently, Renishaw is understood to have supplied the giant companies with ‘megafactories’ in China and Korea to which Apple and Samsung contract out the manufacturing and assembly of their smartphones, sending its sales in Asia rocketing by 124 per cent.
Its machines are instrumental in enabling them to make up to a million a day, to check that they’ve been made to very rigorous levels of precision, and also to check that the machines that make them are operating correctly.
The company is also betting on 3D printing and niche areas of healthcare, such as facial reconstruction, to drive its future growth, investing €68 million in R&D over the past year, mostly in these divisions. Near Birmingham it is busy establishing one of the biggest 3D printing centres in the world.
McMurtry owns a 36 per cent stake in Renishaw, from which he has received fees and dividends of about €70 million since 2009, while control of the 17 per cent stake belonging to his co-founder John Deer gives him effective control of the company. Next month it is expected to announce sales of about €700 million, with profits of about €200 million. The business is in its 42
nd consecutive year of growth. While it took 32 years to achieve €215 million in annual sales, its sales will have increased by that much alone in the past year.
It employs 4,000 staff (and currently has more than 400 job vacancies) in 70 locations in 32 countries, 200 of whom are employed in Swords in north Co Dublin. About 400 employees are highly prized software engineers while, overall, about a third work in R&D, a third in manufacturing, and the remainder in sales, marketing and corporate functions.
Prototype jet engine at Rolls-Royce
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Prototype of the Rolls-Royce M45 geared, variable pitch fan jet engine from a project on which McMurtry was chief engineer[/caption]
A prototype jet engine that he worked on at Rolls-Royce is proudly displayed in the lobby area of the HQ, surrounded by leather seats and shelves full of books and journals. In a ‘back to the future’ kind of way, manufacturers are again looking to this design for its fuel efficiency and low noise level.
Our interview takes place in the Dubliner’s modestly appointed office on the first floor; we sit at a conference table accompanied by Chris Pockett, the firm’s head of communications. With a dry, irreverent sense of humour, McMurtry’s accent is a mix of soft Dublin and south-west England.
Renishaw was founded in the early 1970s after he invented a probe to measure small diameter fuel and oil pipes in Rolls-Royce’s Olympus engine for Concorde, a project on which he had been brought in as a problem solver. He realised there was a business opportunity in making it and other precision tools, so he and his colleague John Deer left and started their own company.
Did he ever get to travel on Concorde before its sad demise in 2003? “I had two flights back from the US on it, one took just less than three hours from New York to Heathrow.” There will be a lasting connection with the plane as well, in Filton on the outskirts of Bristol. He is supporting a new high-tech heritage museum, the Bristol Aerospace Centre, where one of the remaining planes will be housed.
Compared to supersonic aviation, it seems trivial to talk about mere iPhones. With each of ours on the table – McMurtry’s in a natty brown leather case - I ask about his company’s machines being used in the manufacturing of the phone. Pockett politely interjects: “We’ve never named our customers and we absolutely respect commercial confidentiality with all manufacturers with which we work. Nor do we have a direct relationship with the companies you refer to. We sell equipment to companies that supply them. What we can say is that the majority of the world’s manufacturers recognise us and we’re at a scale where we get approached by the biggest manufacturers in a variety of industries.”
“When a new phone model comes along, seemingly it requires a new factory. If you want to make a million a day, you need a megafactory. How long this will go on for, I don’t know, but presumably there are many new models of laptops, tablets and other electronics to come,” adds McMurtry carefully.
Assistant CEO Ben Taylor had revealed earlier during my visit that committing to carry a large inventory of equipment had given Renishaw the edge over a rival in one of the supply deals in question. Another competitor struggled because it couldn’t figure out how probing equipment would be used in the phone manufacturing process.
“In the past we’ve been ahead of our customers and had to wait for them to adapt to our innovations,” he added with a smile. The strategy is definitely paying off. It more than doubled its half-year sales in China for the metrology division, to €84 million, over the previous year; and quadrupled sales in South Korea, to €33.5 million.
The LinkedIn profile of Dan Green (who did not return messages when contacted for this article), a former Renishaw engineer and technical manager who now works for Apple at a senior level in manufacturing design, indicates how sought-after the firm’s key employees are. Like McMurtry himself, they are some of the most inventive and talented in the world. A description written partly in engineering jargon reveals Green was involved in a team that worked on how the latest iPhone’s curved casing designs could be manufactured seamlessly and with great precision.
Speeding up diagnoses of infectious diseases
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Renishaw's Revo, the award-winning measuring and inspection system can cut measuring and inspection times for a product or component from 55 minutes to five minutes[/caption]
Other work of Renishaw’s is equally cutting-edge. Its medical and healthcare divisions are helping to speed up diagnoses of infectious diseases in a multi-billion-euro niche market that will see it compete against larger and more established players such as Abbott and Roche. It is aiming to help Britain’s beloved NHS to reduce the €160 million spent every year on a tiny number of patients who contract a fungal infection. “Despite the competition, smaller companies have 46 per cent of this market. It could be very big for us. It’s high potential and high growth,” said Taylor, a straight-talking American with a background in metrology.
Using 3D printing, particularly of materials such as titanium and nickel alloys, in niche areas of healthcare and precision manufacturing in aerospace, space, defence, motorsport and industrial tooling has similar potential. Over the past year it has recruited more expertise and filed more patents in this business division than any other.
A 3D-printed titanium mountain bike frame that Renishaw created got the firm a mention in last year’s
Guinness Book of Records. If components in self-driving cars have to be traceable “with the equivalent of an airworthiness certificate – so you have very rigorous standards of safety, as in aviation”, says McMurtry, the company could supply key equipment to make them.
Although a rival currently has a faster 3D printer that uses more lasers – the firm believes its intellectual property (IP) will soon put it ahead of them, says McMurtry, who has some teeth designed and printed on one of its machines. “Initially this division will be loss-making, but we’re investing to get a lead in a niche in the market that requires high precision. We’re innovating by bringing our process and quality control techniques to bear, and working flat out to get our IP in place.”
Global industrial giant GE believes up to half of all manufacturing of parts could soon include an element of 3D printing; this year its aviation division will begin making fuel nozzles this way. He agrees, adding that most high-volume, low-cost manufacturing is where the robots will increasingly take over. His employees already achieve significant results for customers in the sector, enabling a maker of aircraft components to halve their production cycle time, while another reduced the time it took to forge an €85,000 part from 12.5 hours to 4.5 hours.
The technology also has a niche application in facial reconstruction work, reducing the time taken to carry out a scanning process from an hour down to a minute and a half; again, helping the NHS to save cash. With new materials such as silicone, the aim is to push these boundaries even further. This high-value, low-cost work still needs people involved at most stages, so it is safer from increasing automation and use of robotics in manufacturing, he adds.
Renishaw’s Irish office is likely to benefit from these growing divisions. It recently bought two buildings adjacent to its existing one. Mostly working in healthcare and probing machine manufacturing, the Irish workforce has increased from 70 to 200 since 2012, giving some indication of how it might grow further. “We don’t make any promises. We just do the best we can,” is his standard reply to questions on future jobs numbers, of which he can expect a steady stream from Germany, Spain, the US, China, as well as the UK over the coming months.
Creating 'a Mittlestand of Ireland'
On Ireland’s broader economic strategy, he takes the view that we need “loads of Kingspans… more Irish-owned businesses… to create a Mittelstand of Ireland in the industries in which it has plenty of expertise. Food and farming is doing well. It’s good for advanced manufacturing, for certain products, too. Countries are at their best when they’re manufacturing”, he argues.
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Renishaw's facility in Swords, Co Dublin[/caption]
When I ask about his thoughts on Ireland’s tech-related foreign direct investment (FDI) and our emerging start-ups, he name-checks Patrick and John Collison - the Limerick-born founders of the multi-billion-euro-valued payment technology firm Stripe. “Good luck to them. They’re an amazing success. If you can make, say a piece of software, and its function is repeated, or it’s just cloned multiple times, it’s a great business to be in. How long social media ones, is another matter. Move the clock back 50 years and if I was good at software or technology, I might’ve had a go,” he says with a smile.
He is keen to attract more young people into manufacturing, acknowledging that smartphones and iPads are a big distraction to physically making things and tinkering with them. The company runs various scholarships, apprentice schemes and alliances with universities. “Parents tell their kids to avoid working in manufacturing. But when they visit us, their opinion changes,” Taylor proudly announced earlier in the day.
McMurtry admires Germany’s Mittelstand – its multi-billion-euro export-focused specialist manufacturing, service and innovation sector that includes many family-owned SMEs. “They don’t appear to be greedy. They live relatively modest lifestyles and it gives them long-term stability. If they go through a recession, the owners seem to put money in so they survive.
“With companies here owned by the City [pension funds or other big institutional shareholders], or other types of investors, you have a big problem of short-termism. In bad times, companies are folded and moved. Their technology and R&D goes with them. Out of those two models, I don’t know what a third one is, but I’d like to invent one.”
The culture he has fostered at Renishaw partly reflects his view. “For me it’s always about when you want to make quick decisions, you don’t want to be in hock to a bank or anyone else. When you want to borrow money – which is not in my culture - you have to explain the risks and everything else to the lender. Well I couldn’t be bothered. I’ve already done that in my head. I don’t want to repeat it,” he affirms, with a self-assuredness and certainty of vision that brings to mind a Michael O’Leary or a Steve Jobs.
Has he ever looked at trying to take the company private? “As long as I have control [of his and John Deer’s combined 53 per cent], that does the job. It’s far better that my time is used to develop the business and not dealing with a lot of hassle seeking permission and money to do things.”
He keeps a chunk of cash in the bank, currently €105 million, both as a safety net and to fund acquisitions. “If we hear of a potential acquisition - with a niche specialism that’s a good fit with what we do – we’ll do some due diligence on it and then make a decision. Anything dearer than our bank balance would have to be exceptional for us to break our golden rule of not borrowing, though.” The most recent purchase was a German company that had figured out a specific aspect of the 3D printing process.
The cash buffer was vital in keeping the business afloat during the 2008 economic crash. “That was scary; it gave us a real wake-up call. We just didn’t know when it was going to stop, and had to lay off 437 staff. We were hit so hard because our manufacturing customers already had our machines and could build what they needed to build, so there were no new sales. Sales to our machine tool customers plummeted by 80 per cent, because their customers like car manufacturers were cutting production,” McMurtry recalls.
There have been other battles. Shortly after he and Deer had bought the touch-trigger probe patent that was the foundation of Renishaw from Rolls-Royce in 1987, they had to fight two long, stressful and costly court cases: one with a US distributor, and another with manufacturer Zeiss.
Fortunately they won both. It taught them not only how to construct and defend patents, but also what it takes to protect an invention. If there is an alternative way of doing what your invention does, or of replacing it, or improving on what it does, you need to consider it and patent that as well. Several full-time patent agents help the company do this, and are often busy defending them.
3D-printed device that could deliver drugs directly to the brain
A solution that McMurtry came up with - how to make a 3D-printed device that could deliver drugs directly to the brain for the treatment of cancer, Parkinson’s and other brain diseases - gives an idea of his genius. He was inspired by the bone-anchored hearing aid of somebody he met in a pub. He and his designers then copied the way it was hidden behind the ear and incorporated a screw into the bone that went right through the skin.
Problem solving and R&D are the most enjoyable aspects of his work. “I enjoy interacting with people, asking them what they’re working on. If they have a problem, I have a think about it and do some drawings. Then I come back to them with my ideas. You can’t do that unless you’ve got that ongoing interaction and relationship with them. I’ve got solutions from my experiences working in many different areas over the years; that I’ve gained from another division where they haven’t yet worked, or I’ll suggest someone there who might help them. Of course people come to me with plenty of other problems as well, pensions or corporate governance matters,” he laughs.
A keen aptitude for maths and science – “I was hopeless at everything else” – informed him from an early age. Model plane-making – “a major distraction to my education” – helped to nurture his innate talent. Growing up in the 1940s and 50s, he also played in his father’s tinned foods factory beside the River Tolka in Fairview. The clunking, whirring machines, which later produced boiled sweets, perhaps fuelled his inventive curiosity. Seeing his father go out of business when the factory flooded also appears to have shaped his insistence on having the cash safety net and his dislike of borrowing.
World's biggest manufacturing trade show in Beijing
He also enjoys visiting the world’s biggest trade show for makers of manufacturing equipment that is held in Beijing every year. “I’m there to observe what’s happening, all the time looking for opportunities, asking myself ‘what have they missed?” he enthuses, with a smile. He also meets his Asian customers and takes all of the company’s staff there out to dinner.
As he used to make model planes, does he fly as a hobby, or own a private jet that would be handy for such trips? “Perhaps if I had time to fly one, I would. But no; it’s a bit ostentatious, like driving around in a Bentley. I wouldn’t fly private. British Airways business class is great.”
His choice of cars is also relatively modest. A Ford Sierra Cosworth RS500 - a souped-up version of its popular 80s family hatchback - “was a fun car, and I drove it on track days. I’ve still got it, but I don’t drive it as my wife has banned it. I’ve just ordered a new Mini Cooper S-works. It’s my second Mini,” he adds. It’s the fastest Mini ever made. He’s a bit of a boy racer, it seems. Other than that, when he’s not at home, with his family, or at work, his hobbies are table tennis and squash. For light reading material he enjoys a very thick grey annual of academic papers on manufacturing technology, “a great thought-provoker”. He mentors a number of people with businesses “in areas where I have knowledge”, preferring to keep these private.
Perhaps his only other indulgence was having Swinhay House, a €36 million futuristic eco-mansion designed and built in 2001. Although it featured in the finale of BBC’s
Sherlock last year as home of villain and newspaper magnate Charles Magnussen, its 60 acres of grounds, with the latest energy efficiency technologies, a cinema, bowling alley, eight-car garage, 25-metre swimming pool and squash courts weren’t as appealing to his wife, so they live in a converted barn nearby that is easier to maintain.
“My grandchildren were thrilled to meet Martin Freeman and Benedict Cumberbatch when they were there filming. We had a few meals with them; all the family enjoyed it,” he recalls. The property is hired out all year round for various events including Shakespeare evenings and fashion shows, with the proceeds donated to charities that Mrs McMurtry supports.
What will happen to his stake in the company in the future? His children haven’t followed him into Renishaw, but have their own businesses. “That’s a problem that has to be addressed. Myself and John Deer are the eldest employees, after all,” he says, declining to elaborate. His wealth may increasingly be channelled into philanthropic efforts, as with the support for the Concorde museum. “You can’t take wealth with you. More and more will go that way,” he said in a previous interview.
Along with the knighthood and CBE on McMurtry’s CV, there is a list of awards and honorary doctorates one and a half pages long, from various universities and organisations in the US, Japan, Wales, Scotland and, of course, England – but not one from any in Ireland. It is about time somebody changed that.
John Reynolds is a freelance business journalist; Twitter username @JohnReynlds