Alex Turner meets EOGHAN McTIERNAN, MD of HQC, in Haydock

HAYDOCK Industrial Estate is not one of those modern out-of-town hubs of commerce, with water features and rolling lawns.

But the much-sought-after green shoots of the economy are reaching for the sun in two units near where the improbably-named North Florida Road leads on to Bahama Road.

Inside the factory of sheet metal manufacturer HQC, managing director Eoghan McTiernan is proud of his company’s small, but important, role in bringing the global recovery to the UK.

He said: “If you just take us as a microcosm, we have added 16 people – we have grown about 30% in terms of people. We are doing our bit for private industry. You add up all those little bits, it’s the SMEs that will drive a lot of it.”

The growth enjoyed by HQC originates further afield, in long-standing relationships with multi-national firms operating in far-flung markets.

“A large proportion of our growth this year has been with existing clients. They are all international companies – when people in Germany, France, wherever, start coming out of recession, they do, too,” he said.

“We did 25% year-on-year growth last year to this, and we are aiming for 25% growth this year.”

The growth has come at an exciting time for the company, which is marking its 25th birthday. Earlier this year, McTiernan led a management buyout (MBO) of the firm, along with finance director Sheila Bowden and operations director Peter O’Neale.

The deal saw managing director Keith Parkes and investor Merseyside Special Investment Fund (MSIF) exit the business seven years after a previous MBO, when McTiernan had first arrived in Haydock.

“We need to be able to assure all the investors that we can do it, so it is fantastic to be able to grow during the MBO,” he said.

“Companies like this do MBOs every seven years or so – I won’t be here for 30 years, I will be here for, say, 10. We generally breed the MBO teams from within. The only thing that really changes is the investors.”

McTiernan is focused on growing the company – and its value – quickly, although he recognises it needs to run quite quickly, just to keep pace with competition from the Far East.

He said: “With MBOs in small companies like this, you only realise the value at the end. You may be able to pay dividends along the way, but generally you realise it at the end.

“We have got pretty good plans to expand what we have here and double the business in five years, that will bring its own benefits for everyone. We have been growing at 25% so it’s not unachievable.

“The biggest issue we have is low-cost countries stealing our business. For every one we win, we lose one.

“We have now got a partner in China, that helps us keep the business especially when you get to a certain volume.”

The decision to work with, rather than in competition against, a Chinese manufacturer, formed part of HQC’s low-cost strategy, which was developed after the company lost a hugely-important customer.

“The client was building, say, 100 pieces a month,” said McTiernan. “We helped them and set it all up here.

“After a couple of years, they got a big contract and it was up to 300 a week. Then the business got taken off us to China.

“With it went all the other stuff – that customer had been 70% of our business, now it’s 0.5%.

“We decided to hang on to the business we needed to offer something whether it’s a partner so we hang on to it all.”

The partnership makes their offer competitive, but he recognises that they can still face a tough fight to keep hold of the high-volume work.

“My next problem is this one,” he said, indicating another piece of shaped and sculpted metal. “It was 100 a month and now it’s 100 a week. But coming with it is all his other metalwork and we, possibly, will lose that.

“At this stage, we can offer them a Chinese alternative, so at least we have something to offer, and if we don’t lose that main piece we won’t lose the rest of it.” In the long-term, McTiernan does expect the balance to shift back slightly as Chinese growth becomes inhibited by demands from customers and workers.

He said: “Everyone is saying work is coming back from China. They have had to raise wages, raise conditions. It will raise costs, it helps us more, there will be jobs coming back to the UK.”

High standards are at the heart of HQC’s proposition, which is encapsulated in its corporate tagline “adding value through engineering”.

He said: “Because of our clients being blue-chip clients, they drive us higher and higher in terms of compliance, accreditation, engineering, HR standards, health and safety standards.

“They do it for themselves because a lot of them are doing work for Government bodies and they expect us to do the same.

“That gives us a leg up because we are then compliant and a lot of our competitors aren’t.

“You hang on to their coat tails. If this customer is growing, just go with them. They will introduce you to other parts of their business; for example, Siemens in the UK introduced us to their German operation.”

The company doesn’t have a sales presence overseas, but it still exports 40% of what it manufactures, with intra-company referrals being a key part of that.

“We just get sales by reference because of our excellence. Jonny or Gunther will say ‘these are the guys you need’,” he added.

“It’s because we provide them with such a good service. When they have a new design, we make the samples. We are very close to their engineering teams, so we are the first port of call. People always come back again, again and again because we are the ones that help them out.”

McTiernan is evangelical about the importance of personal relationships, which is the result of a career spent in sales.

After university, he started as a shop assistant “selling calculators and computers, like the ZX81”, before running Texas Instruments’ technology centre in Dublin.

He jumped from retail to trade, selling semi-conductors before moving into contract manufacturing, which saw him headhunted to become HQC’s sales director in 2004.

Customer service, and dogged determination, are two key elements to McTiernan’s approach.

“It’s perseverance. When you want to get a client, you persevere – we have won business by just being persistent.

“Customer service is a people thing. It’s got nothing to do with the products or the machines.”

Trust, at the heart of the relationship, comes from good communication with customers.

He added: “I have always looked to manage the perception of the clients, they have the feeling they are being looked after.

“That can involve an investment in the customer, although it might only cost you a very small amount.

“That’s the beauty of smaller companies – I have come from big corporates – the beauty here is that one or two people can make those decisions. Our ship is much easier to turn.

“Here we can make decisions very, very quickly. That’s why we win all the time against the big boys when it needs a quick turnaround.

“That’s what I really enjoy, this part of it.”