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How I Made It, Sunday Times - Paul Shortt

 

The below interview with Castlecool MD and founder, Paul Shortt, appeared in the Sunday Times in July of 2010.

Paul Shortt does not say ‘it is not enough to succeed, others must fail’. But if he did, you’d understand it.

The 62 year old founder of Castlecool, the country’s largest independent temperature controlled and logistics company, didn’t start out to be an entrepreneur.

Instead, the Monaghan native trained as an accountant with Craig Gardiner, now PriceWaterhouse Coopers, and, in 1975, got a job as an accountant with the co-op Lough Egish, itself now part of Lakeland Dairies.

As the Chinese might have put it, they were interesting times. “It was the time of the butter and beef mountains and as a result of that temperature controlled warehouses and cold storage were big news,” he explained.

The co-op joined a consortium of parties to develop a company called Norish which was to specialise in this area. Appointed Norish’s financial director, Shortt was very involved its rapid expansion, opening facilities in Cork, Dublin, Portadown and Belfast.

In 1986 the company floated on both Dublin and London stock exchanges, a move which valued company at IRP 16m.

Being a public company changed everything however. “Being a PLC is pressure about share price and continual expansion,” said Shortt.

The result is that Norish began acquiring UK operations with gusto.

By that stage however, Shortt’s heart wasn’t in it. “I was getting disillusioned with the direction the company was going in. By 1994 Norish had sold off some of its facilities in Ireland. It was a move I hadn’t agreed with because I felt there was still business to be developed here.”

Unheeded, he decided to leave and do it himself, setting up Castlecool in 1995, in his home town of Castleblaney, backed by his own savings and VC capital.

It’s hard to imagine a worse start. Not alone was the state of the art temperature controlled facility he wanted to build beset with planning objections and delays, but on the very first day of trading, his business partner – an ex Norish colleague and a friend of 20 years standing - died of a heart attack.

Shortt’s response was to redouble his effort to get the nascent business off the ground.

“A lot of international food companies were beginning to outsource non-core services such as freezing and tempering (thawing to production ready state), picking and packing. My job was to convince them we could do the job,” he said.

That his initial 30,000 sq ft unit doubled in capacity within two years suggests he succeeded. Pretty soon he had opened a second facility in Dundalk as well.

In 2006 he acquired Lough Egish’s Food Park, a business Norish had sold on previously to a competitor of Castlecool.

Ever the pragmatist, acquiring it not alone gave Shortt extra capacity, “but it enabled me take out a competitor at the same time.”

The Food Park is a 64 acre site in which food processors can locate to avail of shared services, such as energy and logistics, saving significantly on capital overheads. At the moment nine companies are situated there, from which Castlecool earns not only rent, but storage and transport business.

The acquisition of the Food Park tripled the size of the company. “Unfortunately we bought it at peak market price, but that is something we just have to live with,” said Shortt, who has just opened the second half of the site to potential tenants.

Despite the recession, the company is profitable and growing. It had a turnover of Euro 9m in 2010, a figure up 10% on the previous year.

“The food industry has not suffered as badly as some other industries. In fact, frozen food volumes have actually gone up.”

During the boom the move was away from frozen, which was perceived as slightly déclassé, to chilled foods, for which people were prepared to pay a premium.

“Ironically, the research showed that the bulk of chilled foods ended up being put in the freezer when shoppers got home!” he laughed.

It’s an anomaly the recession is eradicating.

Another feature of the boom, but which rankles much more, was a feeling that traditional sectors were being marginalised. “The food industry as a whole was ignored. It was all about pharma and IT, the sexy side of industry,” said Shortt.

He does however acknowledge the debt he owes such industries, particularly IT. “In essence what we did here is take the Dell computer model of outsourcing and apply it to the food industry,” he explains.

If there is a further feature to which he attributes Castlecool’s success, it is the way in which it views customers.

“Our job is to continually help clients cut out costs by improving the amount of value added services we offer. We are very innovative and we work closely with customers to see what we can do that would help their business.”

A straight speaker who is uninterested in buzz-word management trends, for him business is all about service, from the top down.

“If you ring me, you get me. Our customers have all our mobile phone numbers and we are available to them 24/7. That is just the way we operate.”

Perhaps surprisingly for the boss of a company that has recently won a Deloitte gong for its management, he readily admits he would have never even been an entrepreneur if he hadn’t been unhappy in his job.

“On a personal level I think you have to be happy in the place that you work,” he said.

On another level, there is also a great satisfaction at being able to demonstrate, if not actually say, ‘I told you so’, to former colleagues.

 “I’m not saying I proved a point, but we are the largest temperature control and logistics company on the island.”