Martin Lydon and Stephen McConnell | LMC Group
Backed by a solid performance in contracting and facilities management, LMC Group is preparing for exponential growth in its modular business further to investing in a new factory and research and development programme.
Founded by Managing Directors Martin Lydon and Stephen McConnell in 2008, LMC Group is made up of three distinct businesses – LMC mep Ltd, LMC FM and LMC Modular – a combination which has made it resilient in the face of the COVID-19 pandemic while also allowing for exciting innovation.
“Our facilities management business has grown by 40% (or €5m) in the past two years. We have managed to re-secure our contract with the Irish Prison Service for the next seven years and we’ve increased our work with the HSE, the Office of Public Works and many of our other clients. This gives us a steady baseline to work from and allowed us to have confidence that we were going to get through the pandemic intact,” says Lydon.
On the mechanical and electrical contracting side, LMC had a number of sites that continued operating including social housing projects and it managed to secure additional work through the year. This included a large project in Charlemont Square in Dublin with JJ Rattigan, a number of projects with BAM and some schools projects. Residential and Fit Out has also been quite strong, with LMC securing a new project with Fidelity Investments in May.
Lydon and McConnell set up LMC Modular in 2017, initially focusing on the manufacture of bathroom pods. It has grown rapidly since, with turnover climbing by around 50% year-on-year to reach €20m in 2020. When the pandemic hit, LMC Modular had just moved into a new 160,000 sq.ft. factory in Nenagh, County Tipperary, having quickly outgrown its previous facilities. “COVID-19 put a halt to our stride with the modular business, but we used it to our advantage,” says Lydon.
“In the early part of the pandemic we secured contracts to provide disabled-access bathroom pods to two hospitals in Limerick. This kept the wheels turning in the factory,” McConnell explains. “We did eventually have to close the factory for six weeks during the latest lockdown but we used this time to introduce a Lean manufacturing programme, which changed our processes totally and was really positive. Since we reopened we have already seen increases in production.
“The new factory has allowed us to really streamline what we’re doing and gives us room to expand. Having secured a number of projects in the UK, we are looking to maximise the export potential of that market for our elemental pods. The market is buoyant for modular work in Ireland at the moment, but five to ten years down the road, we will need to export more.”
The LMC Modular facility includes a bay dedicated to research and development. One of the products to be developed was the utility pod – the first of its kind in Ireland and a real success since it was introduced a year and a half ago. “When clients come to review their own sample pods and see the utility pod, nine times out of ten they will chose to have it on their next project,” says Lydon. “The utility pod has become a really important element of most of the buildings we have input into at the moment. The natural follow-on from this is for us to look at what else can be brought offsite.”
LMC Modular is currently going through a certification process with the National Standards Authority of Ireland (NSAI), which will allow it to manufacture full 3D volumetric buildings up to 12-storeys high.
“We are about 80% through that certification process and hoping to be certified in August or early September. There will be six months of prototyping to do before we launch the product into the market in Q1 or Q2 next year,” says McConnell.
“This is where the real innovation is happening in the group. We are developing a totally new bespoke construction system and looking at delivering fully finished volumetric units. With competing modular units the trades do internal finishes onsite, whereas ours will be 95% finished in the factory; we will be the first in the market to do this.”
“A lot of people look at offsite fabrication as bringing the construction industry into the factory, whereas the way we see it is manufacturing in a factory environment for the construction industry,” says Lydon.
“LMC Modular will require tens of millions of euros of investment, but we expect its growth to be exponential and for turnover to potentially reach hundreds of millions of euros in the next couple of years. When our new 3D volumetric project gets underway, it will require an entirely new factory.”
Supply chain challenges
As Lydon notes, the modular business is a “different beast” to the other two business lines. “Being a start-up using a lot of the suppliers who supply to our other companies brings its own challenges. We do need to bring the supply chain with us so they understand the journey we’re on. Typically in construction, supply involves just-in-time deliveries and materials being drip-fed throughout the duration of the project. However, in an offsite situation, all the plant is onsite and materials are mostly needed upfront and a good bit in advance of a project rising out of the ground.”
“Price increases are a real challenge at the moment,” adds McConnell. “We do our best to find suppliers who will hold rates for the next six months, or at least project by project. In the modular space, this doesn’t affect our clients as much as we do an awful lot of bulk buying.”
“In recent months, there have been two shutdowns, Brexit and then the Suez Canal was blocked off to top it all off. You couldn’t have a more perfect storm than that for a supply chain. We don’t expect prices to drop to any significant level any time soon, but we do expect them to tail off,” says Lydon.
At present around 120 people are employed at the LMC Modular factory while LMC mep Ltd and LMC FM both have a workforce of around 100 people each.
The Managing Directors used the downtime during the pandemic to evaluate their management teams and add strength and depth to them. “In FM, three of our senior managers became directors and they will now bring that company forward under their own steam. In mep, we have appointed a new associate director and a number of project managers and promoted one associate director to be member of the board,” says Lydon.
“We have made quite a number of changes at LMC Modular in an effort to steady the ship after very rapid growth and make sure the management team is strong and ready for the next phase of growth. We will continue to expand the team from the trades right through BIM, design teams and quality teams and have appointed a new operations manager and financial controller.”
Health and safety has always been at the forefront for LMC Group and Lydon and McConnell continually look at ways to improve conditions for its people. “When the pandemic hit, it was a lot easier to adapt the modular business to adhere to public health guidelines as it is all under one roof in the factory. Across the group, we were able to jump in with health and safety teams and put processes and procedures in place that kept all of our staff safe,” says McConnell.
“After the Christmas break, we carried out antigen testing for the entire staff so we knew we were starting back with a clean bill of health. We had introduced social distancing within a week of becoming aware of COVID-19 in 2020. To date, we haven’t recorded a single COVID-19 case, which is testament to our health and safety teams.”
Lydon and McConnell are excited about the current direction of LMC group and in particular LMC Modular: “With the move to a 160,000 sq.ft. manufacturing facility, huge investment in R&D, continual product innovation, and imminent NSAI certification for 3D volumetric construction, the future looks very bright,” they say.