Darragh Cullen, head of the Co Tyrone company, has witnessed every stage of growth of the business, writes John Breslin
It was late 2008, the world was in financial meltdown, management teams at companies across the UK and the world were trying to figure out how to handle the situation, including survive.
At one factory in Dungannon, the workforce was slashed from 180 to 20 as orders completely dried up. The team at what would become EDGE Innovate needed a plan, and quick.
“The situation got more than a little dicey. Basically we had no work,” says Darragh Cullen, managing director of EDGE Innovate, then KMC Engineering. “We had no orders.”
“We probably hit rock bottom some time in late 2008, At that point no-one wanted to update their machines, buy new ones. The feeling was to keep the old ones and see what happens,” remembers Darragh of those dire days.
“None of the customers were buying equipment.”
The team had to rapidly draw up a plan on how to survive. They managed to do so, and then some.
Today, the company, which manufactures machinery that shreds, sorts, separates and stack materials at quarries, landfill sites, ports and recycling plants across the world, is one of Northern Ireland’s top 60 for pre-tax profits. It clocks in at 58 in the Belfast Telegraph Top 100 Companies 2022 in association with Grant Thornton, which is published today.
In the year to the end of 2020, EDGE Innovate posted a profit of £7.5m on revenues of £28.8m, a remarkable 26% ratio. It shipped approximately 350 machines to around 50 countries in the last year and has 170 employees.
Darragh was there at the beginning, in 1994, when KMC Engineering was founded in the Tyrone town.
“We were a small sub contractor for bigger international corporations in the sector. We would make the finished products as opposed to components,” says Darragh.
The company built the entire machine, over time for just one very large customer. He adds: “We were victims of our own success, getting more and more work from just one company. We were totally committed to our customer. They kept asking us to expand.
“We had all our eggs in one basket, which is a dangerous place to be but the customer kept giving us more and more orders.”
Then came the crash. “This had never happened before,” Darragh says, adding no-one knew how it was going to play out.
There was a Plan B but it did not include a global financial crash so fairly rapid decisions had to be made to work out ways to survive, he remembers.
“There was always the opportunity to make our own products, but we knew our customer would not be happy and we would lose the whole sub-contract business,” he says.
“But there was nothing to lose at that stage, so decided might as well get started. Let’s dip our toe in the water here and see how it works out.”
Management started to put the word out to dealers, the middle men in the business of selling manufacturing equipment, pumping them for information to identify gaps in the market. They looked across a range of places where the equipment they had already been building could be deployed, ports, quarries, recycling centres.
“We identified places the larger companies were not looking at because it was not big enough for them,” says Darragh.
This included the United States, where a number of the dealers just happened to be from Ireland. Darragh and others knew them. And for years they were already making the machines for others so had more than a fair idea about design.
It was not too long, early 2019, before the company’s first machine rolled off the production line for shipment to western Pennsylvania. It was a stacking conveyor, a machine with an angled truss that moves material from one point and places it on top of a pile.
“It was not massively different from other products out there, except we put tracks on,” says Darragh.
“But we were under no real pressure. We owned our own premises, did not have any debt so we did not need to make another 20 to survive. Time was on our side. We were not making any profit but it was enough to keep the doors open.”
It also meant most of the core team at the company stayed together as KMC morphed into EDGE Innovate, established in 2011, according to company records.
“We very, very quickly employed a couple of designers. After that it was a case of build, take videos, photographs, send out there,” says Darragh.
Some of the moves were a little unorthodox as the company worked to build up the reformed business. One machine was given to a dealer who was urged to sell it quickly and pay when the deal was done.
Then it was time to build up the business, go out and about to talk to customers, listen to them, find out the products on the markets, listen to the dealers, then head back home to brain storm.
“A consensus forms and you begin to realise ‘we are on to something here’,” says Darragh. They were in the manufacturing business and no longer working to anybody else’s design.
Those 350 machines loaded on to lorries at the Farlough Road base, sent up or down the road to Belfast, Warrenpoint or Rosslare, across the water to France and Britain and beyond, are destined for markets big and small.
“Europe is a big market,” says Darragh, adding, like many businesspeople right now, a note about the NI Protocol. “About Europe, we want to retain unfettered access.”
Obviously, the US is key, but Australia is also a major destination along with Canada. But there is also Africa. The company has a distributor in South Africa. has sold to various countries on the continent, including, for example, Ghana.
Following the March 2020 lockdown during the first Covid-19 wave, the company closed its factory for eight weeks.
Darragh says: “Everyone was closed. You had to do what we had to do. In our naivety we thought it would last two or three weeks.”
On re-opening. EDGE Innovate, like all those dependent on the global supply chain moving smoothly, had to deal with a mangled one. Components and finished goods were not moving anything like they were prior to the shut down as stalled production hit increased demand.
It was a “ducking and diving” situation, say Darragh. EDGE’s purchasing department was working overtime with “attention to detail more important” than it had ever been.
Decisions were made whether to wait on a part or drop the manufacture of a machine and move on to another. If work had already started, then often they decided to wait but on other occasions it was better to just move on to the next job.
The company’s experience reveals, in its small way, how the established ‘just in time’ supply chain — components and materials ordered for arrival just before they are needed — was radically disrupted by the pandemic.
“We actually carry three times as much stock as we used to. That’s different from before as we kept as little stock as we could because we had no real concerns, we did not bring in until a few days before needed,” says Darragh. “Now we are bringing in that component a month before.”
The company has made the Belfast Telegraph’s Top 100 for the first time.
“The team at EDGE Innovate are absolutely delighted to be included in Northern Ireland’s Top 100 Companies.,” says Darragh.
“This is testament to the hard work and resilience of all our stakeholders over the last year and indeed the last number of years especially during a global pandemic.
“With staff suffering from Covid, isolating and with an unpredictable supply chain, it has been an extremely challenging period.”
Darragh went on to thank the team, describing the growth during the pandemic a “remarkable and a testament to who we all are and how we conduct ourselves”.
Looking to the future, the managing director says it is fine for a company to consolidate at points, but there is no standing still for any length of time.
The company is building a new factory in Dungannon and developing ideas on how to expand.
Recycling, Darragh believes, is going to grow and grow, noting that some countries have hardly started on that path.
“There is going to be no such thing as a land full and equipment is going to be needed to allow that to happen,” says Darragh.
The company is thinking about the US, still in the relatively early stages of grappling with the impact of climate change, a concept a huge constituency in the county simple do not believe is happening.
“These things take a long, long time but there will be a huge market when legislation starts to go through to close down landfills. That is when the market is going to change.”