Posted on Tuesday 23 August 2011 byUlster Business
[caption id="attachment_1144" align="alignnone" width="510" caption="160 delegates from 30 countries attended Randox\'s last sales conference"][/caption]
Crumlin-based medical diagnostics firm Randox Laboratories is going from strength to strength. Symon Ross met Managing Director Dr Peter Fitzgerald to get an insight into the business
There are not many businesses in Northern Ireland that are still working flat out the Friday before the 12th of July holiday.
But then Randox Laboratories is not your traditional Northern Irish business.
Set up by Dr Peter Fitzgerald in 1982 the medical diagnostics firm now has 900 staff around the world – more than 600 in Crumlin – and sells its sophisticated chemical diagnostic tests and devices into 130 countries, exporting more than 95 per cent of its products outside the UK and Ireland.
When I visit its headquarters in the Co. Antrim countryside – one of several sites in the area – the place is a hive of activity, with phone calls coming in from clients around the world, meetings taking place, and business trips being planned.
Dr Fitzgerald – who seems to be just Peter to everyone at the company – is polite and softly spoken, retaining the demeanor of a scientist rather than CEO of a company that has recently announced plans for a £15.8m expansion of its facilities and the recruitment of 242 new employees to cope with demand for its products.
"We've been pushing very hard in the last number of years to increase our sales and our sales have been going quite satisfactorily – we're up about 20 per cent in the first five months of the year. Fundamentally we need to expand our research and development, we need to expand our general operations, manufacturing, and sales and marketing. So all areas of the company are expanding in tandem with our market push," he explains.
"We hope to build additional manufacturing facilities in Northern Ireland in the near future. The actual building could be a year to two years along the line, but the planned job expansion of 250, we've taken on about 50 already and by the end of the year it will be another 30 or 40. The expansion is ongoing, not necessarily in large chunks, but it is relentless."
Randox deliberately exports broadly, with 40-45 per cent of business from Europe, 25-30 per cent from North America, 15-20 per cent from Asia and 10 per cent from Latin America. Last year it invested $7m in a new US headquarters in West Virginia and it has built a plant in India to service the Indian market, which will begin manufacturing next year. It has almost 30,000 customers.
"We don't have high market penetrations in many countries, we have broad representation. But our growth rates are better in the BRIC countries, India, Brazil and China, and we're improving in the Middle East," says Dr Fitzgerald.
"We're trying to keep our footprint very broad around the world to be in as many countries as possible. We do see plenty of growth in the more mature economies because we are taking market share away from our competitors and we are also bringing out new products which give new clinical improvements and innovations, so new markets are developing."
Randox spends upwards of £7m on research and development every year and has 200 scientists in Co. Antrim working on developing new products and systems to carry out its diagnostic tests. It manufactures around 8 per cent of all clinical chemistry tests in the world, and around 2 per cent of total diagnostic tests.
Since 1992 the firm has invested £130m in developing new Biochip Array Technology, which allows medical technicians to screen a patient sample for multiple diseases at the same time. Previously only around five or six tests could be run on a single sample.
Dr Fitzgerald says this allows more accurate and in many cases more timely diagnosis, noting that by putting numerous tests on to a microchip for cardiovascular disease it can save 20 per cent more of the people who come into a hospital with chest pains. For respiratory diseases, the tests help doctors prescribe the correct anti-biotic first time because he is able to diagnose what organisms are causing the infection.
"At the moment we are at the stage of trying to convince – because the medical establishment is slow to take up anything new – of the importance of new tests and multiple measurements," he said.
To further convince people of its technology Randox has opened a clinic in Crumlin to conduct health checks. People pay for a test, are given the information and analysis of it, and are then recommended to take the results to their GP. The Crumlin centre has been successful in identifying many different ailments and Randox plans to open another one in London in the next few months.
"We feel our role is to add value to the patient – to get a more accurate and proper diagnosis. We feel the patient should be empowered more, he should know more about his own measurements, his own tests and he should have access to them more readily," said Dr Fitzgerald.
"We find GPs are very happy with it because it helps them with their diagnosis. We're not pretending to be doctors, we're scientists."
Despite positive responses from GPs to Randox Health Checks, Dr Fitzgerald is clearly frustrated by the unwillingness of local hospitals and the NHS in general to engage with his company.
Randox has just won a significant contract for the biggest toxicology and forensic sciences lab in France and sells its products to forensic science doctors in America, China and Latin America, but he does not believe the prospects of selling in Northern Ireland are good.
"We make products which we sell to other people and you come back to Northern Ireland and the hospital is paying four times the price for them because of the way they buy," said Dr Fitzgerald.
"Sometimes you think there is a distinct bias against buying locally. That's not a statement I can support with facts, but you do sometimes feel that way. We sell to some prestigious hospitals around the world but (local hospitals) seem to find reasons not to buy from us."
He further notes that when Randox recently wanted to do a cardiovascular study in Northern Ireland it was unable to get support from local hospitals and the research in the end was done at hospitals in Dublin, Leeds and Edinburgh.
"Yesterday I was in Paris and we got the order for the largest forensic laboratory in France which will lead on to serving all the main medical laboratories. We have to write letters to the forensic science service here trying to get considered and we're going through that process at the moment. Antrim Hospital won't entertain us at all, which is extraordinary. You wonder what you've done wrong."
He insists it is not a case of sour grapes, simply frustration that Randox has the better technology and can provide it cheaper than hospitals here get it through the current procurement system, which he feels favours large global organisations such as Roche.
"We went to the Executive and the Audit Commission and questioned legally the practices of how they seem to be charging hospitals. We don't think procurement practices in Northern Ireland trusts or hospitals is very good. There's something very wrong," he said.
Dr Fitzgerald has never been afraid to voice his frustrations at the mentality of the Northern Ireland establishment.
In 2008, exasperated by the bureaucracy of Invest NI, he opted to base a new facility and 50 jobs in Donegal. The £2.4m Invest NI has put into Randox's latest expansion suggests that relationship has been mended, and Dr Fitzgerald describes current Invest NI chief executive Alastair Hamilton as "dynamic".
But he still has concerns that the economy remains too focused on the public sector, with not enough innovation and enterprise, and too few entrepreneurs, with a global outlook, prepared to go out to the world to sell.
Unlike many other business leaders, he doesn't think that lowering corporation tax would have a big impact on his firm, which already reduces its corporation tax via R&D tax credits.
"It's not going to change our business," he said. "There are things we feel that are far more pertinent to improving business in Northern Ireland – such as industrial tribunals. Employment law is a disincentive to employ, it is very draconian, inefficient and misplaced. Even though you might only have the odd case each year, we feel it is a disincentive to employ. It doesn't allow us the flexibility of employment that we should have. If we were to leave Northern Ireland it would be because of employment law more than anything else."
With an increasingly large role as an employer and exporter, it is to be hoped Randox finds no reasons to leave any time soon.