Quiet man at helm of Fyffes happy to follow family tradition

Carl McCann may not be flashy or flamboyant, writes Una McCaffrey ,  but he has an air of authority and quiet confidence that…

Carl McCann may not be flashy or flamboyant, writes Una McCaffrey,  but he has an air of authority and quiet confidence that confirms his achievements to date.

A quick look around the lofty Fyffes board room confirms that it is empty apart from Mr Carl McCann and this reporter, but it is nonetheless hard to get away from the notion that there is another person - another presence perhaps - in the background.

This sense of not being completely alone stems principally from Mr McCann, and more specifically from his repeated references to the man who has clearly acted as his role model in both personal and professional life - his father, Neil.

Unlike many other company chiefs, Mr McCann, who became chairman of Fyffes upon the retirement of his "Dad" at the start of this year, is not too keen on talking about himself.

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He will politely answer questions and seems happy enough to supply basic personal information, but nothing is volunteered or given away without consideration.

When it comes to his father however, it is a different story - he repeatedly pays tribute to his hard work, his sound business judgement and his massive achievement in transforming a small Irish fruit company into the global giant that is Fyffes today. And it is not hard to see why.

Fyffes as it stands is the culmination of three generations' work, with the business tracing its roots back to Mr McCann's grandfather in Dundalk in the earlier part of the last century.

The grandfather, Mr Charles McCann, had what his grandson describes as "a very respectable" business comprising two fruit shops and a wholesaling operation. The company was the first agent for Fyffes bananas in Ireland.

The second World War stepped in before things got any bigger however, with the business scaled down as conflict brought the inevitable shortages.

Things began to move back towards the big time in the early 1950s, when circumstances forced Mr Neil McCann to abandon his almost-complete accountancy studies and take on the family business.

Mr Neil McCann expanded the business over the next few years by building a brand new depot, with a joint-venture move into Dublin following in the late 1950s.

His son describes this as the "risky, hard" period in the company's history.

By 1970, Mr McCann's Fruit Importers of Ireland (FII) was the largest fruit company in the country, with elevation to a listed concern coming in 1981. Further rapid growth ensued.

"This business is the creation of others," says Mr McCann, with that characteristic of shifting the focus on to others again in evidence.

To take away an impression that the current chairman has been a back-seat player since he came on board at Fyffes almost 25 years ago would, however, be a mistake.

He may not be flamboyant or flashy but there is, at the same time, an air of authority and quiet confidence that confirms his status and achievements to date.

Mr McCann joined Fyffes in 1980 from KPMG, where he had trained and practised as an accountant. He was finance director between 1983 and 1998 and was appointed vice-chairman in 1988 while still in his mid-30s.

His elevation to the chairmanship came after having been designated for the role some eight years previously.

When he first became involved with Fyffes, the company was, in his words, "going well", with annual sales up to £30 million (€38.1 million) and profits standing at about £2 million. Earlier this week, it reported profits of some €70 million on turnover of almost €2 billion.

The growth has been driven by the active acquisition strategy pursued by Fyffes over the years. It started in the Republic, and was followed by deals in the North in the 1980s.

It was in 1986 that the real "company-maker" came, with FII making its first overseas acquisition.

The purchase of Fyffes in Britain from United Brands (now Chiquita) propelled the Irish company into the big time. Fyffes was a larger company at the time and was respected for being one of the oldest fruit operations in the world and the first to put its own label on bananas.

Mr McCann evidently cherishes the memory, having no difficulty recalling the purchase price of £26.5 million sterling (€39.7 million). He even quips that he can remember the exchange rate on the day and you know he's not joking.

Acquisitions (about 150 of them in total) have, after all, been his central focus for the past quarter of a century. Even now, with a cash pile of €173 million sitting on his balance sheet - "we would certainly like to do something with it" - he says he spends as much as half of every week considering the opportunities that lie in Fyffes' path.

Last year, this involved spending €3.7 million on acquisition advisory fees, even though no deal emerged at the end of it all.

Given that advisory fees are usually for something more than 3 per cent of the ultimate transaction value, this would suggest that the deal in question was worth more than €120 million.

Mr McCann says a company needs to be "patient" to do acquisitions, with the business of "persuading people to do something" often taking years, particularly when staff are considered.

"It's a very delicate thing, to keep the proprietors and the good people afterwards. Mostly we get it right."

The most exciting acquisition so far, he says, was the purchase of the Geest banana business for £147.5 million sterling in 1997.

The move made Fyffes the fifth-biggest fruit company in the world and was seen as the firm's most significant strategic shift since the original purchase of Fyffes. It saw the Irish company beating off fierce competition from an Ecuadorian rival.

"It was something we pulled off against very difficult odds," says Mr McCann.

He describes the original purchase of Fyffes as "very dramatic and exciting", with the acquisition and subsequent sale of a stake in Irish Distillers "different".

The most public failure came with the World of Fruit website investment at the height of the dotcom boom in late 1999. After an initially euphoric market reaction to the move had died down, reality set in and sentiment turned.

"At that time, it looked like the whole world was moving on to the internet and if we weren't there we would be out of business. And then the whole thing blew up. We probably spent about €12 million. It's a lot in one way but not that much in the context of the business."

On future acquisitions, Mr McCann says the minimum size is probably a company making profits of a couple of million euros per year, with all sorts of structures in the fruit distribution or marketing areas holding some appeal.

Mr McCann is also keen on the idea of consolidation at the top of the fruit industry, where he says change will be driven by the need to reduce costs. "Everybody's got the same issues".

Over the longer term, he says, markets such as China, India and Russia might be interesting but points to continental Europe as the most imminent target.

Back at home, Mr McCann and his family have been in the news for another reason over the past few weeks, with their names mentioned as backers for Dr Tony Mullins's €70 million buyout of radiator and plastics group Barlo.

The deal has piqued the market's interest because it involves enigmatic financier Mr Dermot Desmond, who has been raising his stake in Barlo since the formal offer emerged.

The market is taking this as a sign that he wants to block the transaction, since most of his purchases have been made above the offer price of 40 cents.

Mr McCann has little to say on the matter since it is not his family's "show", but he says they were "pleased to be invited along" by Dr Mullins.

"I thought from looking at the figures that the price being offered was a full price. That's my honest view of it."

He is even more tight-lipped on the matter of insider dealing litigation against DCC and its chief executive, Mr Jim Flavin, who is a former director of Fyffes. He expresses only optimism that the matter will come to court this year.

Regardless of the result however, the matter must carry some unpleasantness for Mr McCann and his family, with the McCanns' 11 per cent stake in Fyffes automatically injecting an element of personality into the case.

Mr McCann says criticism in various forms of the strong McCann family presence in Fyffes is by now "a familiar theme" but he does not seem overly concerned by the phenomenon.

"The papers write what they think sells. It doesn't register".

He goes on to observe that the company has never been a "conventional family business", with his father always surrounding himself by a "very classy" management team.

He returns again and again to praising his company's staff and the staff of firms acquired over the years, saying Fyffes is a place where people forge careers rather than gaining experience for use elsewhere.

When he claims that Fyffes represents both work and hobby for some employees however, it is hard not to wonder whether he is in fact talking about himself or other members of his family.

His father, for example, despite approaching his 80s, is in the office almost every day and continues to take an active interest as a director.

When asked if he finds himself benchmarking his own performance against that of his father, Mr McCann says simply: "Every kid feels they can never be equal to their Dad."

FACTFILE:

Name: Carl McCann.

Title: Chairman, Fyffes.

Age: 50.

Family: Married to Marion. Three sons aged six, five and three and one daughter aged three months.

Background: Raised in Dundalk, Co Louth, where he attended primary school. Moved on to board at Castleknock College in Dublin and then studied business at Trinity College. Qualified as an accountant with KPMG in 1979 and joined Fyffes in 1981.

Hobbies: Used to run but has injured his knee. Likes tennis too but finds family occupies most of his free time.

Why he is in the news: Fyffes this week posted pre-tax profits of 71.8 million for 2003, up 14 per cent on the previous year.