'Our five-year plan is to hit half a billion - and that's significant for an Irish company'
Published date: 20/05/2021 15:14
Since starting Zeus out of his car as a reluctant teacher back in the 1990’s, the now 51-year-old has transformed it into one of Europe’s largest privately-owned packaging companies. Zeus — a name inspired by a fellow passenger on a business trip rather than the Greek god —now employs 600 people in 26 countries, with operations in the UK, China, Spain, Germany, Poland, the US, Canada, Australia and New Zealand.
The company makes and supplies 9,000 different stock items to industries ranging from grocery and hospitality to food processing, pharma and agriculture. Zeus’s industrial division sells pallet wrapping and cardboard boxes, while its hygiene business sells cleaning supplies to factories, offices, supermarkets, manufacturers, restaurants and hotels.
It also supplies packaging for takeaway meals and items such as coffee cups, stirrers, lids and bags to supermarkets such as Dunnes Stores and is the world’s No. 1 producer of twine and bale net.
The company turned over €210m in 2020, thanks to organic growth and a string of acquisitions. Last Monday, Zeus completed its acquisition of Petruzalek, an Austrian-based food packaging business. The €20m-purchase, which was announced in February, strengthens the Dublin-based company’s geographic reach in 12 European countries. In 2020, Petruzalek generated revenue of about €58m.
The deal was the last and largest purchase in Zeus’s three-year €40m acquisition strategy and was the seventh business to be embedded in the group in the past two years.
It puts Zeus on track to become the largest independent packaging distribution business in Europe.
O’Sullivan says: “Our five-year plan is to take the business to half a billion euro and that, by any stretch of the imagination, is significant for an Irish company.”
Growing up in Britway, a farming community about 14km from the east Cork town of Fermoy, O’Sullivan always wanted to make money and “not be poor”. The O’Sullivans were non-farmers living in an agricultural heartland; his father drove a forklift for the Dairygold co-op and his mother looked after the family’s three children. The entrepreneur worked the entire way through his education, from primary school right through to his eventual master’s degree.
He milked cows and rode out horses for local farmers, picked stones from fields for a pound a day, emulated his father by driving a forklift at Dairygold, and drew silage for an agricultural contractor.
“I would see the farmers’ sons who had no interest in having a farm and I would have given anything to be them because I loved it so much,” O’Sullivan says. “I have plenty of chips on my shoulders and I fully believe I am where I am now because of my drive.”
He attended the local Tech in Fermoy, but the vocational school didn’t offer any honours’ subjects. A teacher encouraged O’Sullivan to pursue four honours’ subjects on his own and even filled out the CAO form for him.
“He said to me, ‘I know you have a chance of getting out and not hanging around town. You’re good at this stuff and you can do it’,” O’Sullivan says. “I got a course at Thomond College (now part of UL) to become a metalwork and engineering teacher, even though I had no interest it. I just wanted to work and to better myself.”
After finishing the Leaving Cert at the age of 16, O’Sullivan had two options: accept his mother’s advice to work full-time as a farming contractor for 140 punts (€178) a week — “huge money at the time” — or become the first in his small Leaving Cert year to go to college.
“Zero disrespect to my mom but I went to Limerick. It was supposed to be a stepping stone; I didn’t want to be a metalwork teacher.”
While doing a master’s degree in engineering technology, O’Sullivan was working three other jobs, selling mobile phones, lecturing at Thomond College and even had a nixer as an electrician. He entered the packaging industry while he was teaching by working with a man who sold agricultural crop packaging. This eventually led to O’Sullivan giving up his teaching career to start his own business selling pallet wrapping in 1998.
In 2002, when Zeus was generating annual revenues of €4m, mostly from transit packaging and industrial packaging for the likes of Dell, the introduction of a tax on plastic carrier bags spelled trouble for companies that over-relied on supplying them. O’Sullivan’s first-ever acquisition was a Dublin-based supplier of carrier bags to Spar and BWG in the capital.
With a new-found taste for acquisitions, O’Sullivan went on to make four more. He borrowed extensively to build up the business this way until Zeus had achieved a turnover of €80m. Then the recession hit.
“We were swimming out of our depth — big-time,” he says.
“I had bought my last company in early 2008.
“Nowadays, when we’re buying a business, we use all these parameters such as Ebitda and multiples. But I didn’t know what that meant back then — I had never had a business lecture in my life because I had learned everything on the hoof. Danske Bank sent over a guy from Copenhagen to me who said ‘your Ebitda is this and your gearing is minus this’.
"I turned to him and said, ‘what is Ebitda?’ He said, ‘you owe us €50m and you don’t know what Ebitda is?’
“The bank could have taken the business from me if they felt there was something they could do with it. But we were in such a bad position there was nothing they could do with it,” O’Sullivan says.
Once business was back on track, he returned his attention to expansion. In 2019, Zeus embarked on a €40m-investment programme, buying an Irish hygiene supplies company called Essential Supplies, followed by manufacturer Aldar Tissues.
UK Investments included Liverpool-based distribution business Smith Bateson, Lincolnshire-based food packaging business Van der Windt, and Saffron Waldon-based VaioPak.
But by early 2020, Zeus was facing its second existential threat in a decade, as Covid-19 spread from China to Europe.
“I probably had a fair bit of insight into how bad this was going to be because I was speaking to China every morning,” O’Sullivan says.
When Ireland imposed a lockdown in March 2020, “I spent three weeks at our Rathcoole office without going home to make some very tough decisions very quickly.
“Fantastic customers of mine were closed. My supply was coming in from Asia and I had it all paid for. We have 2.5m sq ft of warehouse space so imagine that getting overfull and customers saying ‘we don’t need it — we’re closed’.
“At the moment, the whole supply chain is an absolute mess. In an ironic way, the Suez Canal (closure) was the best thing that happened to us because people saw this for real on RTÉ news. The price of container shipping has quadrupled in 12 months and everything is out of kilter. It’s going to take six to 12 months for the supply chain to sort itself out.”
It was bedding down acquisitions, coupled with winning new contracts, that helped Zeus shore up revenue last year, when turnover increased 13.5pc to €210m, albeit lower than the original target of €230m.
O’Sullivan expects Zeus to post revenue of €275m in 2021.
While home deliveries and the food takeaway sector boosted demand for packaging, they couldn’t compensate for the closure of offices right across Zeus’s markets.
“If you look at all the offices in Dublin, for instance, all those people who went in there every day before Covid spent money on food and the facility management companies we supply bought cleaning products and toilet paper,” he says. “You are never going to make up for the movement of people; in my business, people moving and going places equates to revenue.”
O’Sullivan is also making moves of his own: over the last 18 months, he’s been stepping back from the day-to-day operations of Zeus. He has created a board structure, with Keith Ockenden at the helm as CEO.
O’Sullivan now focuses on strategy, investment and innovation.
He is especially keen to expand Zeus’s sustainability offering — the company has been selling fully compostable cups for 15 years and is about to launch a sustainable fibre lid to McDonald’s outlets.
“While I completely intend to be around and be in my business, it would be desperately remiss of me if I didn’t put in the structures so that the business can survive if I wasn’t around tomorrow,” he says.
Reflecting on the hard graft he put in since childhood to achieve his goals, the Corkman wonders whether future generations of entrepreneurs will have the same drive as him.
“Kids nowadays — my kids included — have it so easy and I don’t know how that drive will be in them, even though I will do my level best to try and keep them grounded. When you already have all the stuff you want, how can you drive on for more stuff?”
What are the best lessons you have learned during your time in business?
"I have two. The first is to jump the fence that’s in front of you. Too many people start the race and are so focused on the end that they fall over the first fence.
“If you don’t jump the first fence, well you’re shagged because you’re gone anyway.
“Secondly, it’s great to have a goal. But don’t make it an easy goal. Make it a difficult goal and when you reach it, don’t be celebrating too much – set another goal within the next hour.
“I completed the acquisition of Petruzalek today and that’s a €55m business, and before the last documentation comes in, I’m on the next [acquisition]. I’m not out uncorking a bottle of Champagne.”
Name: Brian O’Sullivan
Position: Founder of Zeus Packaging
Lives: Fermoy, Co Cork
Education: Fermoy Vocational School. Bachelor of Technology degree from Thomond College of Education (now part of the University of Limerick) to become a metalwork and engineering teacher. Master’s degree in Engineering Technology from Thomond College
Hobbies: I have no hobbies. I don’t do anything except work. I feel that I’ve given so much time to work that when I’m not working, I’m with the kids. I’ve never played golf in my life but I believe it takes about four hours and I couldn’t do that to my kids
Favourite book: Michael O’Leary: Turbulent Times for the Man Who Made Ryanair by Matt Cooper. It was an easy read. I do think Ryanair is an amazing success story
Favourite band: Guns N’Roses