Composites firm EPM Technology has risen from one-man band operating out of a garage to making a bid for Mayflower. David Fowler talks to its founder, Graham Mulholland.
When small East Midlands company EPM Technology emerged last month as a bidder for the automotive parts business of failed engineering group Mayflower, the most common reaction was ‘who?’
The second question was ‘why?’ Why would a £6m turnover composite materials specialist compete with heavyweights such as GKN for £94m Mayflower Vehicle Systems, a supplier of steel and aluminium panels and complete bodies to MG Rover and others?
For EPM’s founder, 30-year-old Graham Mulholland, it is a logical step in the growth of the company he started as a one-man operation in 1996. Pioneering the use of the thermoplastic composite Twintex, EPM Technology has built up its business from its beginnings in motorsport to embrace a range of mainly automotive applications. Mulholland’s quest from the start has been to break into ever higher-volume applications.
‘Historically the composites industry has made great promises and then struggled to deliver. What we’ve done in the past few years is develop from a base in motorsport and take the technology first to the bus industry, then to specialist vehicles such as Aston Martins and Bentleys. It’s true technology transfer,’ said Mulholland.
Mulholland is an unlikely entrepreneur. He left school at 16 and went to work at nearby East Midlands firm P&H, which made canoes using glass fibre and carbon fibre. Mulholland started ‘literally sweeping up’ but soon progressed to making canoe parts then, as a keen slalom canoeist, graduated to the competition department.
After 18 months he made a step up to trainee laminator at another local composite specialist, Astec. There he gained experience with a range of composite materials and techniques from hand lay-up to high-tech pre-pregnated systems. Among other things the firm was making body parts for the Jaguar XJR 15 race car. ‘It was the world’s first carbon-fibre supercar,’ he said, ‘as advanced as the McLaren F1.’By chance Mulholland was moved to the R&D department. ‘That opened up a whole new world because we were trialling things, pushing the boundaries of processes and working on vehicles such as the DB7 and the XJ 220. It was a very exciting time. Really leading edge,’ he recalled.
After three years Mulholland reached a personal watershed. His sports career as a slalom canoeist was progressing well – he was regularly in the top 10 in the UK – but there was little prospect of making much money. He decided to set up his own company.
For the new venture he adopted Saint-Gobain’s then new Twintex technology, which he’d come across at Astec. ‘It’s a thermoplastic rather than a thermosetting composite,’ he said. ‘The thermoset market is expensive and offers huge performance advantages for aerospace and Formula One, but nobody is going to make a carbon-fibre Fiesta.’
Twintex was a new type of composite that promised to be much more cost-effective. It is made up of glass fibres mingled with poly-propylene which can be moulded into the required shape by applying temperature and pressure. Mulholland saw its potential for use not just in the low volumes of motorsport but also in the longer production runs suitable for specialist car makers. ‘It’s the first low-risk scaleable composite technology,’ he said.
EPM Technology began life as Mulholland, a copy of Autosport magazine’s directory and a phone. He started cold-calling competition firms. Amazingly, the approach worked. ‘I went to see Prodrive and Nissan Motorsport and in about four or five weeks had an order for my first component.’ He made mould tools in his father’s garage and rented or borrowed the ovens of local composites businesses overnight to bake the parts, which he then delivered personally.
If it seems incredible that established motorsport organisations were prepared to risk ordering a part from an unknown, Mulholland quickly justified their faith. ‘In that business belief plays a big part. If you stand in front of an engineering director and say “I can make you a wheel arch” you have to deliver or they don’t go racing.’
After a while he hadn’t let anyone down and some members of staff from his first customers left to join other motorsport teams. They wanted components and soon Mulholland had eight World Rally teams as customers.
Then came a turning point. A customer, keen to award a contract for making bumpers using EPM’s technology, wanted to see Mulholland’s facilities. He had three weeks to set up his first factory, which he did in a start-up unit in Coalville, Leicestershire. Within 12 months he had to move to a bigger unit, and within another nine he had opened a second one and was employing 18 people. ‘We were making 300 bumpers a year for motorsport, 20 units a week for people such as Aston Martin and a lot of rally components.’
Even this was not enough. In 2002 EPM failed to win a fairly high-profile contract which Mulholland put down to the company’s facilities not being impressive enough. He started negotiations which ended in the purchase in November 2002 of his old employer, Astec, mainly because of its technology centre. This was the start of his vision of turning the company into ‘a manufacturer organised like a retailer’ offering a wide range of composite and materials technology.
The business is now split into three divisions: high performance, making carbon-fibre parts for Formula One; production, making parts in runs of 2,000-3,000 for specialist car makers; and low cost, for which earlier this month he opened a factory employing 130 in Bangalore, India. The technology centre feeds into all these, helping to advise a clients on the best technology for a given application. Mulholland believes this will help to attract a wider client base. Turnover has grown from £750,000 to £6m in the past three years and the company is branching out, most recently through another joint venture in India.
A recent feasibility study demonstrated that 1.2 tonnes could be saved from the weight of an ambulance by using a composite instead of an aluminium body. ‘It will have superior crash performance as well being able to carry more people and equipment,’ Mulholland said. The concept is currently undergoing durability trials and he believes it is close to getting the green light for production.
But the question remains: why would a composites specialist want to buy a conventional steel and aluminium panel maker like Mayflower Vehicle Systems? The answer is that a key part of Mulholland’s strategy for continued rapid growth is to become a ‘lightweight systems provider’, able to advise customers on a wide range of solutions and cater for clients who are worried about the risk of going down the composites route.
‘It would give us the ability to make runs of 5,000 units in composites, 20,000 in aluminium and more in steel,’ Mulholland predicted.
He admitted that the chance to buy Mayflower, which went into administration after the emergence of serious accounting irregularities, might have come slightly too soon. Mulholland is realistic about the prospect of it being sold to one of the better-known bidders. ‘It’s going to be close,’ he said. But EPM remains confident it is well placed to capture at least part of the Mayflower operation, as a large buyer may not want the whole business.
Whatever the outcome, EPM will grow: ‘We’re aggressively looking for opportunities. Composites from EPM to the volume market will happen.’
Mulholland contrasted the problems he had raising £20,000 for the company’s first oven with securing backing for the Mayflower bid. In the case of the oven, the bank was unenthusiastic. The company was seen to be growing too fast. ‘I went to our five biggest suppliers and said, “I want to put you on 90 days’ payment for four months so we can buy an oven from cashflow.”’ In contrast, he said, the £34m for the Mayflower bid was raised within days.
‘In the early days we were tarred with the “maverick” brush. People may now call this our “entrepreneurial streak” but back then they were calling it everything but. The only difference is that now we have a proven record.’