INTERVIEW OF THE WEEK: Willie Haughey of CRH By Steven Vass
WEE Willie Haughey's not happy. Last week his plans to build a palatial mansion in south Lanarkshire, with views of his beloved Parkhead, were thrown out by the Scottish government for falling foul of green belt policies. Never far from the public eye, he returned to centre stage to compare his plans to Donald Trump's now green-lighted golf extravaganza in Aberdeenshire.
Some might question whether a major tourism development and private six-bedroom mansion have anything in common, but the executive chairman of City Refrigeration Holdings (CRH), the Glasgow facilities management specialist, is not backing down. Instead, he questions the basis of Trump's economic promises.
"I am delighted that Trump got his planning permission, but the economic argument for Trump is that he's going to create 6000 jobs. That's a lot of jobs for a golf course and a hotel."
Even if Trump's claims are correct, Haughey makes the unlikely argument that his own past achievements should be viewed in the same light.
"All the things that Donald Trump said he was going to do, I have already done. I have created 9000 jobs. I am a huge employer in south Lanarkshire.
More convincingly, he adds: "And the rules for green belts don't stop you from getting planning permission if you put up the right case. All I asked to do was to knock down six outbuildings and build one house in the equivalent space," says Haughey, a Celtic director between 1994 and 1997 and chairman of Scottish Enterprise Glasgow from 2004 to 2007.
But Haughey, a prominent supporter of the Labour party who has donated more than £1 million pounds to date, does not seem keen to turn this into a full-blown row with the SNP government. There have been suggestions that he has diluted his Labour affiliations since last year's election, having ceased donating to the party after entanglement in the Wendy Alexander funding row.
More recently, he became the £2m, two-year sponsor of the Scottish Cup and agreed to it being called the Homecoming Cup after the initiative to attract expats back to Scotland in 2009.
These moves were not about repositioning himself politically, he says.
"I am happy to work with Alex Salmond in anything that's right for Scotland, but it doesn't change the fact that I am a Labour supporter.
"Football, religion and politics are things that you cannot change. They are in your heart."
These fixations go back to Haughey's childhood in Glasgow's Gorbals, near where CRH has built its new HQ.
Having left school with no qualifications at 15, he trained as a refrigeration engineer after a promising football career was ruled out by a leg injury.
A short, charismatic man with a thick Glasgow accent, he made money in the Middle East before returning to Scotland in the mid-1980s to start his company. The first important contract was to supply and maintain fridges for Tennent Caledonian in 1986.
Working 80-hour weeks with his wife Susan, Haughey branched into facilities management in the 1990s. But CRH hit the big time with a 10-year contract to manage Asda's back-office activities in 2001. This year the company is expected to turn over about £250m.
CRH does virtually everything for Asda behind the scenes, garnering nearly three-fifths of its revenues in the process. The rest comes from about 10 other clients, including Ladbrokes, Budweiser brewer Anheuser-Busch, Booker and the retailer Mosaic, each contributing between 3% and 5% of revenue.
Customers choose from a "shopping list" of services. Cleaning contracts produce 35% of CRH revenues, refrigeration and electrical/mechanical services produce 20% apiece, catering produces 12%, and back-office services, including call centres, produce 10%.
"We try to make the business recession-proof by picking clients from different sectors, but I don't want to sound like a smartarse when other people are struggling," he says, although you would doubt that bookmaking and even budget supermarkets can defy gravity forever.
Haughey adds that he and his team are in advanced conversations with two companies in the petrochemical and utilities sectors and also looking to expand beyond the UK into the Middle East and Asia for the first time.
Yet if CRH was a listed company, you would guess that this diversification would not soothe analysts' concerns that so much business rests with Asda. There are only three years left on the two companies' 10-year contract, so there will be renegotiations shortly, but Haughey insists there is no cause for worry.
"In our first nine years in the business, people said we had all of our eggs in one basket because of our contracts with three major brewers Tennent Caledonian, Scottish & Newcastle and Belhaven. But we've never fallen out with them and we still work for all of them in one form or another," he says.
"We try to give our clients 10% more than they were expecting, for less than they were hoping to pay."
This might be one reason why CRH's margins are not high, together with the fact that CRH spends more money on training, retaining and paying staff than would be possible with public shareholders. This year's pre-tax profits are expected to be £5.5m, a margin of just 2% compared to rivals Interserve and Mitie's respective 4% and 6%.
This is of no concern to Haughey, who would rather focus on winning new business than squeezing more out of his staff. He was recently approached by a headhunter about the soon-to-be-vacant chairmanship of Scottish Enterprise (SE), but declined to be considered for the post so that he could concentrate on CRH's expansion. This is possibly just as well, since he admits he was against the SNP's decision to scrap SE's local development bodies.
With that, he is off to prepare for trips overseas, after chairing the judging panel for the Youth Business International Entrepreneur of the Year awards.
"There is not another company in the world that which has grown from £6m turnover to £250m turnover in seven years with no mergers or acquisitions and without spending a penny on sales or marketing," he says.
If global plans take off, this could look modest compared with what is to come.
