SOLID FOUNDATIONS FOR GROWTH
Named the 2022 EY Established Entrepreneur Of The Year, Conack Construction’s star is on the up. ICIM talks to joint MD Tom O’Connor about the company’s plans for growth
Congratulations on the award. What do you attribute the win to?
Well first off, I’m delighted that construction made it into the entrepreneurial category. The construction industry is so often portrayed in a negative light so it’s nice to see something positive for a change. I’m happy for Conack Construction but I’m also happy for the construction industry as a whole.
I think we were recognised in this category as we’re a company that delivers. We deliver a quality product on time and on budget. We’re not a claims conscious company, we believe in being open, fair and honest. We’re very aware of the fact that the client is trying to make a few bob, as is the subcontractor and as we are ourselves. One of our handles is ‘Building better together’ and it sums up our approach to all projects we undertake. Our client base is extending all the time and I think that’s because we’ve developed a reputation for doing things right and trying to be as fair as possible.
How do you win new clients?
Through word of mouth and our excellent reputation. Conack is a very well financed company and from day one, I have instilled a practice whereby every subcontractor gets paid on time, every month. The days of saying to a subcontractor, my client didn’t pay me so I can’t pay you, are gone. I can’t expect subcontractors to get a job done on time and on budget if I’m not paying them. They’re the type of practices we have implemented and they stand to us, as supply chains and subcontractors want to work for Conack as they know they’ll get paid.
How’s business at the moment?
Contrary to what we read in the papers, business is exceptionally good. Last year, we hit just shy of €150 million and we’re targeting €250 million over the next five years. As a company, we’re in a very positive position at the moment. We made the decision a couple of years ago that we need to constantly diversify our range of projects, so each year we identify a new sector to expand into. Right now, we have a nice mix of private clients and Government contracts including two hospitals, schools, hotels, fit-outs, offices, university jobs, civils, build to rent and social housing. We’ve moved into the modular space in a big way and we’re currently in discussions with the LDA and government agencies on further social housing projects. We believe the security of our company depends on working on as diverse a range of projects as possible. If we experience another economic downturn, we want to be best placed to weather it.
How difficult is it to secure Government contracts?
It’s extremely difficult. I wouldn’t envy anyone trying to grow a construction company at the moment by getting into Government contracts. It’s doable but it takes time. Neither myself nor my partner Kieran Cusack have ever worked for a big construction company. We literally started from scratch; we made a lot of mistakes but through that process, learned how to do things better and more efficiently. I believe that route makes us slightly different from everyone else and that has stood to us.
What’s your opinion on the housing crisis?
There has to be some kind of rapid build solution to housing to allow the industry to help and assist with the crisis. The OPW has commenced on a form of modular housing to house Ukrainian refugees and I believe that we as an industry and potentially the Government need to delve deeper into those type of solutions. There is some forward momentum with regards to the likes of offsite construction, but we’re not there yet and we need to get there as soon as possible. All contractors and developers struggle with the planning process and the objections that seem to accompany so many housing projects and it’s true to say that time will fix these issues, but we don’t have the luxury of time. The biggest hindrance to us as an economy is housing. When I meet my clients here in Limerick and we’re talking about building offices and apartment blocks and schools, a lack of accommodation is the single biggest issue. We have fantastic multinationals in Limerick, but how do we expect people to come and work here when they can’t find someplace to live? I don’t understand how people fail to recognise how easy this is to fix. All we need are houses. The market is there for them and although inflation is an issue, I don’t believe it’s enough of a challenge to impede the market if we had adequate supply.
Is the cost of materials impacting the company?
Yes, it is. We seem to have gone through about four generational crises over the past four years which have affected the entire economy, not just construction. Brexit hit first, the knock-on effect of which was inflation. Then we entered Covid and now we’re feeling the effects of the war in Ukraine. All of these crises have had a consistent knock-on effect on the price of materials. Inflation is starting to reduce as per the recent ESRI report, which is very welcome news. Inflation is a big issue for us and for our clients, but if you work with your client and you understand their financial parameters and your own financial restrictions, you can generally move forwards on a project. Every time we consider taking on a project, we ask ourselves, what’s the best way to approach this build today? What method is the most cost effective to employ?
Is it difficult to get staff?
It’s very hard to find good staff. Before Covid, guys would have been inclined to get in their cars Monday morning and drive to Dublin to work there for the week. The pandemic changed all that and as one of the bigger firms in our region, we’re attracting talent back into Limerick. In saying that, it’s definitely very difficult to find good guys; they’re hard to find and we’re fighting to get them to work for us.
Is there one project in particular that got the company noticed or helped you stand out from the crowd?
Yes, the Moxy Hotel in Dublin. Quite early on, we realised that if we were to progress in this industry and be recognised as an industry leader, we needed to work in Dublin. That’s a hard market to break, as you’re seen as a regional company trying to work in the capital. We made the decision to aim for a difficult job in Dublin and were awarded the Moxy at the back of Clerys. It was a very difficult job – there was very little space to actually work as we were beside the Luas line and a taxi rank and we also had work on the new Clerys going on behind us. Despite the numerous challenges we completed it successfully and on the back of that project, I was able to knock on a few doors around the city and say, I did this. Working on the Moxy proved very advantageous; the design team on the hotel was also working on Cherrywood Town Centre for Hines at the time. We got introduced to Hines and went on to negotiate the next €50 million phase of the Cherrywood project. Hines was very happy with the relationship and halfway through the first project, advised us to move onto the next phase which was just shy of €100 million. Deciding to break into the Dublin market really paid off.
How important is sustainability to Conack?
It’s very important and it’s becoming more client driven as opposed to just contractor driven. For us as a company, we strive to understand the environmental impact of everything that we do. A lot of my clients secure better funding models if their building has a green aspect, so we’re always building with that in mind. I believe that 95% of the waste materials I take off my site should be recycled. If you have the time and space to separate out all your materials and recycle appropriately, you’ll find that it’s much more cost-effective.
What’s your ambition for the company?
I want the team at Conack to really feel like it’s their company. We have a profit-share scheme in operation, which I feel is really important when it comes to staff feeling like progression within the company is a good and positive thing. One of our handles is ‘We are Conack’ and that’s how I want all staff to feel. With every new member of staff that comes in, we try and career path them. There’s actually a guy sitting across from me at the moment who started on JobBridge back in 2011. On the 1st of January this year, he was promoted to director of the company, along with five more directors that have all progressed their careers within Conack over the past few years. Career progression isn’t just possible at Conack, it’s actively encouraged. We believe that as we expand it should be team first, job second. Upholding and building upon the solid reputation we’ve built over the years is crucial and it’s what we’re basing our future success on.
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Michael McDonnell Managing Editor of Irish Construction Industry Magazine & Plan Magazine