Michael Burke has photos of Muhammad Ali and AP McCoy on the walls of the immense boardroom at Chanelle, his Co Galway pharmaceutical group. Inspiring photos are not unusual in corporate HQs, but Burke’s are more personal than most.
He spent an hour with the late Ali in Las Vegas on the night when Mike Tyson fought Frank Bruno in February 1989. “It was one of the highlights of my life,” he says.
Retired champion jockey McCoy, meanwhile, is married to Burke’s daughter Chanelle, who lends her name to the company, the largest Irish-owned pharma manufacturer. A keen horsewoman, Chanelle rode winners in 1995 at the Galway Races and Gowran Park in Kilkenny, where the former US president Jimmy Carter presented her prize.
“There’s a photo of it somewhere,” Burke says. “Another time, our horse won at the Curragh and Joanna Lumley presented the prize.”
The celebrity connections do not distract him from the day job of running Chanelle, which makes a vast range of generic drugs for humans and animals. Named exporter of the year for 2016 by the Irish Exporters Association, it employs 400 people and had turnover of €115m last year.
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Burke founded the company in the mid-1980s — and owns the lot still. In the corridors and cleanrooms at Chanelle, staff call him by his first name and wish him a happy new year.
“I’m one of them,” he says. “What you see is what you get.”
What you see at Chanelle’s 17-acre site outside Loughrea are two manufacturing plants, three research centres, warehousing and offices. A new 30,000 sq ft building has just been completed, part of a €70m expansion that will add 175 jobs and 75 new products at Chanelle over five years.
Burke estimates at least €250m-€300m has been invested in the business, which has sales offices in the UK and India and an R&D centre in Jordan. All told, it has capacity to produce 3bn tablets, 1.6bn capsules and 2.5m litres of liquid drugs a year. “Lookit,” he says, “it worked out OK. We’ve been very lucky.”
Burke grew up the youngest in a family of 10 children “in the middle of nowhere” outside Loughrea. They were not unusual; a family in a nearby thatched house had 24 children, he recalls.
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The Burke family business, dating from the 1850s, combined the local shop, pub and undertaker, and they also farmed. His father died when Burke was 11 years old, and his mother reared the family.
“She had a brilliant work ethic and made sure every one of us was educated. I worked really hard as a young fella.”
Burke was schooled at Garbally College in nearby Ballinasloe, and studied veterinary science at University College Dublin. There, he shared accommodation with the big-time horse trainer Dermot Weld, who remains a friend and trains Burke’s racehorses.
His first job out of college, in 1970, was a six-week stint as a vet in Co Kildare — prime horse country. Then he came home to a vet’s practice in Loughrea, where he was offered a partnership within months.
In 1978, aged 30, he borrowed the not inconsiderable sum of IR£5,000 (€6,350) from Allied Irish Banks to buy a property on Main Street, Loughrea. It became Chanelle Veterinary, a healthcare centre where farmers and animal owners could buy antibiotics and treatments.
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“It took off straight away. In year one, I did five times my forecast [revenue].”
Before long, Burke had vans on the road, supplying vets and co-ops. By the mid-1980s, he saw the opportunity to move into making his own animal health products.
He bought an old cotton factory outside Loughrea, a 40,000 sq ft property on a seven-acre site, and set up Chanelle Pharmaceuticals Manufacturing. It was a hugely ambitious move. “I had five kids at the time. It wasn’t an easy decision.”
The business made anaesthetics for cattle and sheep, and Burke targeted the Middle East, where there was a concentration of big dairy companies. On his second trip there, he landed a IR£250,000 contract.
“It kinda grew from there,” he says, capturing more than three decades of business in five words. “I could see the market was underdeveloped and there was big demand.”
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The expansion carried him as far afield as Asia and South America over the following years. He shrugs off the achievement.
“A lot of business is done on contacts and trust. As long as you deliver, people have confidence and belief. But you can only break that trust once.”
In 1987, he set up a dedicated registration unit, applying to register drugs that were coming off patent. “By the 1990s, we had quite a lot of products,” he says.
He put sales staff into the UK in 1993, and took a strategic decision in 1996 to pull back from South and Central America to focus on Europe. “The EU had a huge population of animals. It was a better market, with better prices.”
By 2000, Chanelle was in rude health, with strong sales in Ireland and overseas. Not content to stay still, Burke decided to expand into human pharmaceuticals. “The veterinary product market is worth €23bn, but the human market is €1.3 trillion,” he says. “It’s a 50 times bigger opportunity.”
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Chanelle seeks out drugs that are coming off patent and draws up the detailed dossier required to get licensed to make a generic version. Then it sells the licensing dossier to another pharma group, but keeps the contract to manufacture and package the drug.
In some cases, the company is ready to launch a drug on the day it comes off patent. Its biggest products are treatments for heart and brain conditions and it also makes a number of arthritis drugs.
“Whether you’re making a tablet for a human or a dog, it’s the same process,” he says. “Quality is number one.”
He runs the animal health business while the human pharma business, Chanelle Medical, is headed by Chanelle, who is based in the UK. A marketing and finance graduate, she previously worked at pharma group Wyeth.
About 40 people are employed at the R&D centre in Jordan, which opened in 2008 after an original plan to open in India was scuppered. Burke had bought land near Hyderabad airport but, when he applied for his planning permission, the land was rezoned for residential use.
“It turned out to be a blessing in disguise,” he says. “The lab in Jordan was critical for the success of the company.”
The company has licences to make more than 2,200 veterinary products and almost 800 human products. It launched 11 products last year — four for humans and seven in veterinary — though Burke does not know offhand how many products he makes in total. “I’ve never counted them.”
He is a fan of “lean” manufacturing systems and has recently introduced the Shingo model, a Japanese management approach that promotes transparency and efficiency. “It’s tremendous,” he says.
The company invests about €8.5m a year in R&D and spends €3m a year on equipment. Hiring staff in Loughrea has become easier as the company has grown, and many new recruits come from multinational pharma groups.
“Ireland is a great place for manufacturing,” he says. “The 12.5% corporation tax is a great advantage because it allows you to reinvest, but personal tax is too high.”
Sales at Chanelle have grown every year since its foundation, and revenues from human pharmaceuticals now outstrip the animal business. Burke expects the company to break the €200m turnover mark within seven to eight years, off the back of the latest expansion.
He is seeking approval from the US Food and Drug Administration for the new manufacturing plant, which would allow Chanelle to sell the products made there in the US. “More than half the pharmaceuticals sold in the US are generic products,” he says.
About 85% of Chanelle’s business comes from EU countries, while Australia, New Zealand, Japan and South Africa are also notable markets. The company exports to more than 80 countries.
Travel is a constant. Burke was in Saudi Arabia, Jordan and the United Arab Emirates in December. Last week, he was in the UK and France.
A two-week trip to Chile, Brazil, Mexico and Costa Rica is on the cards. He will turn 70 later this year but shows no sign of slowing down.
He has never entertained any buyout approaches for the business, he says. What might Chanelle be worth? “I wouldn’t have a clue.”
That said, he is not assuming his daughter Chanelle will take over her namesake company when he does decide to step down. “I would never put pressure on her. I’m a great believer in people doing what they want in life.”
Then he has a firm handshake and a parting piece of wisdom. “Life is what you make it,” he says. “Make it as peaceful as you can.”
Muhammad Ali himself would surely approve.
The life of Michael Burke
Age: 69
Home: Dublin and Oranmore, Galway
Family: married with five adult children
Education: Garbally College, Ballinasloe; veterinary degree from UCD
Favourite book: “I don’t read a lot. I love the sports pages and business pages.”
Favourite film: “I know it’s as old as the hills but I think The Quiet Man is one of the best films ever.”
Working day
I’m not a big sleeper. I need four or five hours a night. I get in to the office at 6am and sometimes earlier. Every day is different. I’m away 75% of the time. I travel to our offices in the UK and India and the research centre in Jordan. I meet customers all over the world. You come across some strange things. In Costa Rica, they have 85 native species of bird and an animal like a skunk, which lives in the trees and is always drunk. It’s amazing.
Downtime
I love hurling and horse racing. I played hurling with the Galway minor team but I gave it up when I went to college. I have four racehorses at the minute. I had one, Maneen, that won twice for me last year. I sold him to Hong Kong. It’s bad business to refuse good money.