Posted on Friday 16 October 2009 byUlster Business
Scratch the surface of the Northern Ireland economy and there's a company competing in the world market from our own back yard. David Elliott went along to find out more about Randox, a business claiming a significant stake in the global diagnostics market.
What do a factory in rural Antrim and a US police investigation program have in common? The answer lies in a manufacturer of clinical chemistry products called Randox, based not far from the shores of Lough Neagh, which counts the medical examiner's office in Miami Dade as one of its many clients around the world. The company's media fact sheet clears the air of recognition by pointing out this is the setting for CSI Miami, the cult hit US television show and certainly not the first thing that comes to mind when arriving at the relatively humble Randox headquarters outside Crumlin to meet founder and managing director Dr Peter Fitzgerald.
A refreshing change from the typical senior executive, Dr Fitzgerald gives the impression of a man thoroughly immersed in his chosen field while still - luckily for this reporter - capable of explaining complex products in layman's terms.
Randox's trading by-line states it provides 'clinical diagnostic solutions', basically products which measure - for example, proteins and enzymes - to help diagnose various conditions in the body and therefore make it easier for doctors to pinpoint specific ailments.
Dr Fitzgerald started the business in 1982 having worked in a research post in Queen's University and has since grown turnover to €270 million with 26 global offices, 800 employees (around 600 of whom remain at the Country Antrim headquarters) and a presence in 130 countries.
The idea for the company came from an obvious gap in the market.
"We decided a number of years ago that diagnostic tests were inadequate. There were too few tests per patient and it was difficult to get an accurate diagnosis. The best way to overcome this is to put many different tests on a microchip which then becomes a bio chip.
"Everything we do is outside the body," he said. "Body fluids are taken out and put onto a microchip. The chip is then attached to a measuring machine and we get a meaningful figure. Normally you do one test at a time but with our technology you can do many tests at a time which enable clinicians to carry out more accurate diagnosis earlier, saving money and time."
These 'clinical chemistry' products account for about 25% of global diagnostics tests and of that, Randox has a considerable share. In volume terms, it accounts for 7% of the world clinical chemistry market and 2%-2.5% in value terms. Achieving that hasn't been easy with the sales proposition often involving education of the market-place.
"We're going through a very long educational process where we have to educate the market," Dr Fitzgerald said. "The best example is in cardiac medicine. We find that by carrying out many tests on the one sample we can improve the accuracy of diagnosis and for patients going to hospital, we can improve life expectancy by 20%.
"In addition, we can rule out cardiac problems at an early stage, something which would otherwise be costly to the health system."
Unsurprisingly for a medical company, Randox spends a considerable amount of time and money on research and development - it has 185 people employed in the division - and has a number of well-developed products up its sleeve. One example involves the diagnosis of different types of stroke, an important factor in minimizing their impact on the body and in treating patients but thorough medical trials mean its products such as these are a few months off.
Overall, the aim is to make diagnosis a more personalized process.
"It's one thing having the test but you have to understand what it means in the individual setting," Dr Fitzgerald said. "Medicine tends to treat people like part of a herd and now we're moving toward personalized medicine. Sometimes you need to know what's normal for someone in a healthy state if you want to know what they're going to be like when they're ill."
But for now, business in its 'classical' diagnostics products remains buoyant and sales have increased every year since the company's inception. Around 70 extra employees have been taken on at the Crumlin headquarters since the start of 2009 and profits are "going north".
Randox's largest market is the US, followed by China, France and UK & Ireland and although these are relatively developed markets, Dr Fitzgerald said there is potential for a bigger market share.
"There's no market we operate in which is anywhere near saturation, even with the classical products. And with the classical products, there's even more potential."
So while the market looks healthy, what about the production? Would a manufacturer of this size not benefit from outsourcing or building factories in countries with lower labour costs?
"For us, the labour element is around 15% so it's not excessively high. The most important thing to us is quality of the product as we're making medical products and can't have a slippage in that area. We do have lands in Bangalore for manufacturing that we could use but we're happy as we are for now."
Although Randox can still claim to keep all its manufacturing in Ulster, the need to build a new facility saw it nip across the Northern Ireland border into Dungloe in County Donegal recently, not without a whiff of controversy.
Dr Fitzgerald said Invest NI were "very bureaucratic and slow in their movements" in 2008 when the company was looking to expand while the equivalent government investment vehicle in the Republic, IDA Ireland, were quick to act.
"Although we own quite a bit of land, when we looked at the cost of building a manufacturing facility here (in Crumlin) it was very expensive and prohibitive," Dr Fitzgerald said. "At that time Invest NI were in a less-dynamic mode and so we were approached by IDA Ireland who showed us a number of factories we could rent or buy. It seemed to be a lower cost option and they moved very fast to offer us a package.
"I have to say the main thing was the access to manufacturing facilities and ease of the discussion but that's all passed now with the new leadership at Invest NI including a very good minister in Arlene Foster and a dynamic new CEO, Alistair Hamilton."
With burnt bridges partially repaired, does Dr Fitzgerald envisage selling the company in the near future?
"It's not a plan at the moment. We've done a lot of R&D and I have to make sure we commercialize what we've achieved."
And because of this commitment, he sees a bright future for a company which sums up the much lauded word, innovation.
"We believe we are only medium sized at the moment but could be very large before long."