Fifty-year old Carlow family business provides ‘muscle for machines’ globally

In 1974 four brothers in Carlow saw an opportunity to set up a small business manufacturing hydraulic cylinders; 50 years later that company is still family-owned but has grown substantially to have operations globally.

Burnside Autocyl now boasts a turnover of €80 million with 250 staff in Tullow, Co Carlow, with a further 35 staff in a 10-year old American subsidiary business along with sales offices in France and Germany.

The company designs, develops and manufactures hydraulic cylinders which are necessary for a wide variety of machines including warehouse equipment, recycling vehicles and construction. The cylinders are customised for each application and require precise engineering.

Caroline Kelly, sales director and daughter of one of the founding Byrne brothers, described the cylinders as the “muscles to machines”.

European growth had been a key focus for the company, which exports to 16 countries, but in 2014 it made a strategic decision to open a subsidiary company in North America – Burnside America, which is located in Pennsylvania.

This was in part because the company does not want to be “at the mercy of the fluctuations in economies, or markets or specific sectors”.

“By having a presence in the US market, we could ride the ebb and flow of the market,” she said. “If it was busy in the United States it might be not so busy in Europe and vice versa.”

Given the significant money spent on setting up the North America office, which produces cylinders in the exact same way as the Ireland operation, it is a key area of focus for the business..

“For the next number of years our investment is going to be heavily focused on our North American market opportunities,” said Kelly. “We have made an investment there, we have boots on the ground there so we are very well placed to service customers.”

The other area is obtaining a bigger proportion of the business offered by its current customer base, which tend to be market leaders in their segments. Its roster includes: Combilift; Toyota; HIAB; Jungheinrich; Manitou; and JLG.

“Being market leaders, our clients will typically have a platform strategy and will be producing on multiple continents,” said Kelly. “They expect their supply chain to be able to support that. So if we engage with the customer in Europe, quite commonly, they will then want us to support them on their North American front, they may want to support on their Asian front.”

The potential for growth in this market is substantial. The hydraulic cylinder market has a global revenue of €14 Million and is predicted to have compound annual growth of 4.4 per cent in the next few years.

Difficult environment

While Burnside’s story has been one of continued growth and evolution, it has not been without its challenges and the current market environment is one of those times.

“I would say it’s hugely challenging and becoming evermore challenging,” said Kelly. “We’re sitting here trying to produce a highly engineered product, using electricity, which is about three times the price of what it is in parts of Europe.”

The firm is also being hit by higher energy costs and has multiple shipping expenses as the raw materials come from mainland Europe and the finished items then have to be exported from Ireland.

“We’re working with a lot of disadvantages from the get go,” said Kelly. The sales director added those increased costs cannot be “simply offset by improved efficiencies”.

Given these unavoidable expenses, Burnside does not try to compete on price. It uses robotics and innovation to create a market-leading product. This has been successful as many of its clients have been around for over 30 years.

The other element that has helped retain customers, despite cheaper offerings elsewhere, is the company has retained the environment typical of a family business.

“A family business has a unique set of values that do translate into a specific sort of experience for our customers,” said Kelly. “We don't just own our businesses, we are working in our businesses, we live for them and through them.”

In particular, Kelly stressed that Burnside that has a “devotion to getting things right, to serving our customers the way they need to be serviced”.

This Making it Work article was produced in partnership with Enterprise Ireland