Featured Article 27 Sep 2019
Image: Eltex
Image: Eltex

Most people don’t think about how the fabric in their clothes was made. They may know it is wool, cotton, silk, tweed or polyester fibre but they probably have no idea where the actual fabric was made, or indeed how. But if we did stop to ask ourselves that question, quite a few of us will find that it has been created utilising technology manufactured in Templemore, Co Tipperary.

Eltex began life in Sweden more than 50 years ago when the company’s co-founders set about solving a problem that had been creating difficulties for the textile industry for as long as it had been mechanised. They wanted to find a way of detecting broken or missing weft yarn in a shuttle weaving machine.

The result was the development of the world’s first electronic weft stop-motion sensor. The invention had its public debut at the ITMA exhibition in Hanover, Germany, in 1963 and Eltex was founded the following year in Sweden to manufacture these revolutionary products.

The sensors detect breaks in yarn in weaving machines and automatically stop the process to enable the problem to be fixed. Up until then, the process would continue until detected manually and the flawed section of fabric or carpet had to be either discarded or repaired by hand at a high cost to the manufacturer.

Unsurprisingly, demand for the new devices grew rapidly and the company expanded to open sales and distribution offices around the world. In January 1977, continued growth in demand led the company to open the manufacturing facility in Templemore.

As time went by, the company expanded its product range to include energy control devices, temperature and humidity loggers, food-handling safety systems and heavy-duty battery chargers. The company also moved into the carpet industry manufacturing sensors for the tufting process.

Today, the company produces a range of sensors that deal with anything to do with moving threads in textile manufacturing.

“It’s very high tech,” says Irish site director Seamus O’Dwyer. “We are the best in the world at what we do. Our products detect the tension on the threads and breaks, and improve the quality of the textiles as well as making the overall manufacturing process much more efficient.”

The winds of change began to blow for the company back in 2006 when the Swedish owning family decided to sell the company. The next generation had no particular desire to take on the business, while senior management in Sweden were approaching retirement age and found the prospect of a buyout unattractive.

That led to a management buyout by O’Dwyer and two colleagues from the US operation, Brian Hicks and Jonathan Bell, in 2007. “I had only met them in person once before,” O’Dwyer recalls. “I was on holiday in New York a few years before that and had travelled down to see the operation in South Carolina.”

That initial connection proved fruitful when he got a telephone call from the US one Friday evening in early 2007. “They asked me three questions,” O’Dwyer adds. “They asked me if I was interested in buying the company with them; if I could get the money; and if I could let them know by Monday. I answered yes to all three questions and then had to go and get the money.”

The credit crunch and subsequent global recession had yet to bite so finance wasn’t the issue it might have been. “I spoke to my bank manager over the weekend and was able to call back on Monday and say that I had organised the money.”

Things moved swiftly from that point. “We effectively bought the company on the phone,” O’Dwyer points out. “We made an offer and it was accepted and we moved on from there. Of course, due diligence and the legals and so on had to be completed after that. We completed the whole process within six months.”

The task then was to re-energise the company. The Eltex product range had been so far ahead of its time that it hadn’t been updated in almost 20 years by the time the company changed hands. “Our first task was to put more effort into sales and then we had to invest in product innovation to retain our market position,” he says.

This saw a fundamental reorganisation of the company. Research, development and innovation remained in Sweden, but all production was moved to Ireland. The US operation, which looks after sales, distribution and technical support in the key North American market, also received additional investment.

“The main thrust was to get out and sell more,” says O’Dwyer. “The three of us are equal shareholders in the business and 12 years on we still make all decisions for the business together.”

It wasn’t all plain sailing, however. “We saw the recession coming in March 2008,” he recalls.
“We saw sales dropping and our turnover fell by 40 per cent in nine months. We worked through it. We had to go to two-day weeks in 2009 to survive. We came out of it faster than other sectors and started growing again by the end of 2009. We had the second dip of the double dip recession in our sector in 2011 and 2012, and we came through that as well.”

2012 saw growth pick up pace again. “We have grown our turnover by 60 per cent since then and have now reached €10 million annually. The company is debt free and growing. If you’ll forgive the pun, we had to cut our cloth according to our measure and it worked. We have also been assisted by the IDA with training and capital equipment grants and that support has been very welcome.”

Today, the company employs 26 people at its Templemore facility and exports directly to 60 countries around the world and indirectly to more than 100. “We sell to more than half the countries in the world and have sales offices and agents in key markets throughout Europe, the Middle East and Asia.”

The future lies in continued focus on sales and innovation. The trend in the industry is towards miniaturisation with components becoming ever smaller. That development work is ongoing in Sweden, but the Irish operation has recently moved into the innovation space as well.

“At present, we make 150,000 ceramic sensors by hand every year here in Templemore. We are now working with the University of Limerick on an IDA-supported project to design a machine to semi-automate the process. No machine in the world can do it at the moment and this will improve our competitiveness and that’s vital in today’s world.”

Barry McCall

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