From Formula One to aerospace, EPM Technology is a business that relishes a technical challenge. Dan Hayes talks to CEO Graham Mulholland about the company’s technology and growth target, following its buy-out by venture capital firm, Aero Services Global.
The 1967 film You Only Live Twice features one of the most iconic scenes in any James Bond movie. Sean Connery, playing the role of 007, takes to the skies in an autogyro to outwit, outmanoeuvre and ultimately dispatch a bevy of baddies in helicopters.
It’s fanciful stuff, of course. The autogyro – nicknamed Little Nellie – would never have left the ground carrying the array of weaponry it supposedly has on board, let alone zip around the sky like a fighter plane.
Not for the first time, though, the movie special effects team may have foretold the future. On the outskirts of Derby, in a factory that wouldn’t itself look all that out of place in a Bond film, the team at EPM Technology is working on a project that is a real-life version of Nellie.
Smaller and lighter
The firm’s founder and CEO, Graham Mulholland, explains: “The technology that you’d find in military helicopters such as an Apache or a Chinook is getting smaller and smaller. That means you don’t necessarily need something that’s the size of an Apache or a Chinook to carry it. We’ve been working on lightweight, small, nimble gyros for special forces that have all the capabilities of an Apache helicopter.”
They also have several advantages, he suggests: “It can be in the air in less than six metres. You start the engine, you’ve got forward momentum and up you go.” And, unlike the 1960s-era Chinook, you won’t hear this aircraft coming for five minutes before it actually appears.
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When we spoke in mid-September, the autogyro was just weeks away from its first test flight. This desire to make the seemingly impossible become possible has been part of Mulholland’s philosophy since he set up his company in a garage back in 1996.
Leaving school at 16 he began his career at Ilkeston-based P&H, a manufacturer of kayaks and canoes, before moving to another local firm, Astec, that was making carbon-fibre parts for the then state-of-the-art Jaguar XJR15 racing car.
After three years, Mulholland decided to set up on his own, cold-calling motorsport teams in a (successful) bid to sell them bespoke components.
We want to be challenged
Today, EPM employs 78 people. It still specialises in lightweight parts, but its portfolio now encompasses everything from Formula One, to aerospace and defence.
“Our ethos has always been about working hard,” Mulholland says. “And we’ve been very nimble on our toes when we’ve had to be. We don’t just want to make simple things and lots of them,” he adds.
“We want to make things that challenge us. If that means a space rocket or a Formula One car or the fastest train in the world, or supporting the armed forces with specific kit then that’s what we’ll do. Yes, it’s higher risk than making carbon-fibre wing mirrors, but it’s much more interesting.”
It’s also a pressurised business, where mistakes can be disastrous. “Every result has to be perfect,” adds Mulholland. “There are not many companies that have done Formula One work for the amount of time we have or that make the sorts of parts that we make. They are all performance-specific and timing is crucial. If someone wants something for [the Grand Prix at] Monza, they’re not going to accept having it in time for Barcelona.”
But, for all its longevity, EPM hasn’t always enjoyed plain sailing. The company came close to going into administration in 2005 when an acquisition didn’t deliver its hoped-for results. It also came under pressure following the credit crunch of 2008, when its turnover in the year to June slipped from £5m in 2008 to £3.5m in 2009.
Partly because of those experiences, EPM’s methodology in terms of gaining work involves gathering skills and expertise before it goes looking for customers.
Mulholland explains: “If we are building up to a growth phase, we save and save to give ourselves the buffer. We then employ people with the skills we need before we go and find the customers to fulfil the people we’ve taken on. “Particularly in composites, people win work and then wonder how they’ll fulfil it. To me that’s an extremely dangerous approach – because the customer is the guinea pig.”
Skills and recruitment
Recruitment remains a challenge, though. “We have quite a vigorous selection process; and it is a selection process, you don’t just come for an interview. And the process doesn’t always work. When that happens, I think we can see quite quickly when people aren’t settling in. We’ve suffered in the past when we’ve employed people quickly because an opportunity has arisen and we’ve learned the hard way. It won’t happen again.”
New recruits have to get to grips quickly with a forward-looking manufacturing environment, he adds. “I think we’ve already embraced Industry 4.0. I have sat at one or two seminars on the subject and thought, ‘You’re lecturing to the converted.’
Ahead of the curve
“To an extent, I think the R&D world has lost its way – I’m not sure people fully understand what companies such as McLaren, Dyson, Airbus, BAE Systems or Rolls-Royce are actually doing. It’s as if lean manufacturing consultants have run out of steam, so they want to talk about Industry 4.0. Then they come to businesses like mine and tell me we’re inefficient.
“I don’t think so. We don’t wake up in the morning and think: ‘Let’s do this the long way.’ It’s all a bit patronising. Some people are talking about Industry 4.0, but we’re actually doing it.”
Even so, finding the right customers is not easy, he adds. “The composites industry is moving incredibly quickly, but the harsh reality is we can’t work with everybody and we need to be quite firm about working with people who understand what it is they’re asking for.”
Mulholland points out that EPM has learnt a lot from its long-running association with Formula One. “Everybody wants to win the World Championship, but what do they need to win it? Well, perhaps they just want one brake duct, or perhaps they want an entire aerodynamic upgrade. The challenge for us is to understand those needs and wants.”
And not all potential customers are really looking for either EPM’s expertise or philosophy, he suggests. “If you want a cheap carbon-fibre bath, then go to the guy who makes them. But if you want a fighter jet that can get all the way to the Middle East without anybody seeing it… Well, we’d be interested in understanding how we might make that happen.”
And what may now seem cutting-edge may be entering the mainstream faster than most of us realise, he adds. “Consumers are only just beginning to see it, but it’s coming very, very quickly. The race is on to find lightweight structures, which is lucky for us.”
With its knowledge of Formula One technology in particular, EPM is well placed to benefit, he adds. “Technology transfer, knowledge sharing and taking a little bit of risk on structures, that’s exactly what we do. Fuel saving is also crucial in Formula One; making the combustion engine go further for less – and electrification programs… there’s a lot going on that people don’t realise.”
A look at the headlines from September’s Frankfurt Motor Show appears to underline Mulholland’s assessment, with projects by manufacturers such as Mercedes, BMW and VW all focusing on carbon-fibre, lightweight components and electric power plants.
Breaking the SME glass ceiling
But this era of rapid change has also meant EPM has had to make some radical decisions. In September, the company announced it was being bought by Manchester-based venture capital firm Aero Services Global (ASG).
Mulholland remains CEO and EPM will stay in Derby, while the deal, he says, will allow EPM to break the SME glass ceiling and forge ahead in its dealings with global players. It will also, he hopes, take EPM from its current annual turnover of around £6m into the £40m bracket.
“We recognise we need to be financed correctly to be at the top table,” he explains. “One of the biggest contracts we’ve tendered for this year was worth £65m a year. We were in front of a proper company that had asked us to tender for a major part of their business, but I was sitting in that meeting thinking, “I haven’t got a clue how to fund that.”
“To tender for a £20m-plus project you’ve got to have the financing. You’re not going to walk into a high street bank and say, ‘I’ve just won a £20m job, can you finance me?’ You’d see the colour fall out of them. So, taking our philosophy of building a foundation and then looking for the customer, I felt we were the wrong way around.”
The ASG deal brings with it the financial resources EPM needs to make the next step, asserts Mulholland, pointing out that since the deal has gone through, the firm has taken a £3m order from an aerospace firm. “Without the new funding, the deal wouldn’t have been sanctioned,” he says.
Whether it has anything to do with James Bond-style autogyros, however, we will just have to wait and see.