Keenan’s System- Gerard Keenan
www.keenansystem.com Foundation / Location
The business was founded in 1978 and is located in Borris, County Carlow.
Employees / Suppliers
Keenan employs a total of 230 people with 163 located in Borris. The remaining 67 are in Britain, France, Germany, Australia, Denmark and USA. Our total number of suppliers is 603. Of this, 490 are Irish based from whom we had purchases of €13.7m in 2004. Our Irish based wage bill was €7.4m in 2004. Our total contribution to the Irish economy was over €21m.
Customers
Our business is in cattle feeding systems, already used on over 15,000 medium and large scale dairy, beef and sheep farms in 40 countries. Total sales were €37.2m in 2004 with exports accounting for €32.2m (c85%) of the total. Primary markets are the 10 countries in which Keenan have a direct presence with their own personnel on the ground. Keenan has subsidiaries (including sales and nutrition support) in Ireland, UK, France, Germany and Australia. In addition we have Keenan nutrition and sales personnel supporting Keenan Franchised Distributors in a number of key markets - Denmark, Sweden, Norway, Canada (Quebec), and USA (Northeast).
Keenan has developing business, distributors or customers in many other countries including Poland, South Africa, Iceland, Finland, Hungary. New Zealand, Holland, Belgium, Spain, Switzerland, Austria, Egypt, Kenya, Zimbabwe, United Arab Emirates, Indonesia, Oman, Malta, Chile, Argentina, Colombia, China and Japan.
Key Product Features
Keenan supply its dairy and beef farming customers with a unique, machine-based, nutrition management system to deliver improved livestock performance, better herd health, increased profits, higher farm productivity and reduced workload. At the heart of the Keenan System is the patented Keenan mixer-wagon supported by nutrition advice from the company’s own 30-strong team of nutritionists. The machine’s extraordinary reliability derives from unique gentle mixing characteristics. This also provides a platform for the company’s radical high fibre nutritional strategy. The company’s world wide nutrition team delivers expert solutions tailored to customers’ market requirements and locally sourced forages and feeds.
Benefits to Customers
A typical medium scale dairy or beef farming customer, fully applying the Keenan nutritional programme, will achieve a return double his outgoings on the system in the first year, with greater longer term returns expected. For example, in an Irish situation, a medium scale 60-cow dairy farmer will have benefits of €8,000 pa against system costs of €3,000 to €4,000 pa. Longer term (over 3 years) the annual benefits typically exceed €16,000 pa – net pa benefits of €12,000 to €13,000 pa. The improved nutrition at the core of the Keenan System brings a wide range of benefits – better rumen health, enabling cows to more efficiently convert feed into milk (i.e. improved feed conversion efficiency), improved milk quality (e.g. protein%) and reduced cow replacement costs. Keenan’s latest nutritional programme, Rumans, sets out to enable dairy farmers reduce herd size by 10% and increase farm profits!
Scale of Achievement
The Keenan mixer-wagon is number 1 in Ireland, Britain, France, Australia, Denmark and Sweden. The company is the world’s second largest manufacturer of mixer-wagons. Within five years of its foundation, Keenan had the market’s most reliable mixer-wagon and in 1985 added its unique nutrition-support strategy.
Today, it is recognised as the world leader in total mixed ration (TMR) feeding. TMR feeding is where dairy or beef cattle are presented with a total ration (mixed in a mixer-wagon) of forages, concentrates, minerals and vitamins. Keenan has made TMR feeding a realistic option for thousands of medium and larger scale dairy and beef herds. Prior to Keenan’s entry into TMR feeding, only larger scale farms used mixer-wagons. T
he overall Keenan package has brought major improvements in farm performance and financial return to the farmer. And it is bringing opportunity to the market despite all the pressures on the agricultural industry in the era of the EU Single Farm Payment.
Innovation/Creativity- What aspects of your operation do you regard as being particularly creative or innovative?
While the business is innovative across all its activities, there are three areas in particular that have been critical to our growth to a position of international significance: The Keenan mixer-wagon, Keenan nutritional advice support to customers, Food alliances.
When we introduced the first generation Keenan mixer-wagon, the Easifeeder, in 1983 the market was a tiny niche – at that time about 10 units pa in Ireland and 50 pa in Britain. Mixer-wagons had been introduced to European farmers from 1975 and were being used by only larger scale dairy and beef herds. While the concept of TMR (total mixed rations) feeding was attractive, machines were proving to be unreliable and costly to maintain.
The Keenan Easifeeder had a unique and patented mixing design that required little power in the mixing action. This resulted in great reliability, minimal service costs, long machine life and low depreciation costs. The machine was to rapidly gain market acceptance, replacing a major percentage of existing mixer wagons. It brought in many more buyers who were waiting for a more reliable mixer wagon.
This was the springboard to Keenan becoming the clear market leader in Britain and Ireland in the 1980’s with over 50% of a growing market. The next generation Keenan mixer-wagon, the Keenan Klassik introduced in 1998, based again on a gentle mixing but now also including a patented chopping action brought major nutritional benefits to users. The design allowed nutritionists include high levels of fibrous feeds in rations – increasingly recognised as critical to herd health and performance.
This factor has proven crucial in the Klassik’s adoption by many of the most important dairy research institutions (e.g. Cornell University, Minah Institute) in Northeast USA where the ‘fibre-herd health’ work is at its most advanced. Keenan nutritional advice support to customers : In 1990 Keenan introduced nutrition support as an integral part of the Keenan package. We were the only mixer-wagon company in the world to do this.
Our aim was to provide best nutritional practice to all our customers, to promote greater use of locally produced feeds and to improve customer profits. Our business objective was to attract more farmers into TMR feeding and have a distinct competitive advantage in the mixer-wagon market. Today Keenan employ 30 full time nutritionists. The nutrition advice development proved massively important in opening up markets across the world.
Up to 1990 Keenan was largely a home market (GB and Ireland) company. The combination of unrivalled machine reliability and world class nutrition advice made progressive farmers from across the world seek out Keenan. By 1995 Keenan had offices in Germany, France, Denmark, Australia, Sweden, USA and distributors in many other countries. In June 2005 Keenan launched Rumans-Rentals, a new nutrition based finance strategy to make the Keenan System accessible to a much greater number of farmers.
Based on radical new nutritional strategies, Rumans is a new nutrition service for customers. Rumans-Rentals sees the new nutrition service provided, along with a Keenan mixer-wagon, on a one-year rental programme basis. This removes the capital investment barrier and makes Keenan accessible for virtually any dairy, beef or sheep farmer.
Food alliances
In 1998, we introduced the concept of food alliances – where farmers would ally with processors to produce consistent quality beef or milk on a year-round basis. The aim was to reduce waste, improve competitiveness and farmer-processor profitability. Our business objective was to become more industry-relevant. This resulted in an alliance with a major Irish beef processor, Kepak, called the Keenan-Kepak Club.
The project saw over 200 diverse farms produce quality beef to high market specification on a predictable year-round basis. The KK project was to be hailed in Ireland, Britain, France and Australia as a flagship for industry co-operation and innovation. From Keenan’s perspective, the project transformed perception of Keenan in our markets, moving us to another level of credibility and acceptability - a major contributory factor to our Irish and UK sales doubling between 1997 and 2001 and the setting of a new business level in these markets.
Initial Expansion - How did your initial phase of market expansion occur?
The business was set up in 1978 by my father, Richard Keenan, at that point 60 years of age and just having sold his interests in a family engineering company. He set up the new business with my brother, Richard Jnr., a mechanical engineering graduate from UCD and myself, a commerce graduate from UCD.
Later we were to be joined by two other brothers, Tom and Noel. The business started out to develop new product solutions, primarily aimed at the progressive farmers of Ireland and UK. Between 1978 and 1983 we introduced a series of award winning products – the Electronic Farm Weighbridge, The Molasses Silage Applicator, The Weedlicker Herbicide Applicator and The Automatic Crush Gate.
In 1983 the award winning Easifeeder mixer wagon was introduced. It took us until 1985/86 before we made our first real profits and the first seven years of our business were massively challenging. Despite sales growth during this time, getting to critical mass levels was a different proposition. The high early investment in fixed assets coupled with the losses being incurred made cash a major problem for much of that time.
Despite huge efforts being put into development of new products and the building of sufficient sales volumes, it took us until the 1983 introduction of the Easifeeder to see a light at the end of the long tunnel. Our position was transformed by the arrival of the Easifeeder and our concentration in that area from 1986 onwards.
Obstacles Overcome – What are the toughest issues you deal with as you continue to grow your business?
The biggest single challenge is building an organisation that can adapt, change and develop effective customer solutions in a rapidly changing market environment. The overall business environment is rapidly changing and challenging. Our customers are faced with fast emerging new challenges. Interpreting those new challenges, developing relevant solutions, being better than our competitors – all of this requires a committed, innovative organisation capable of being very good in every business dimension.
We need to be world competitive in our manufacturing, development, nutrition, marketing, sales channels and our optimal utilisation of people. The biggest challenge is to get an entire organisation to more quickly effect new strategies and new solutions, to be ambitious and stay ahead of emerging threats and competitors.
Organisational Culture – How would you define the culture within your organisation?
The organisation is critical. Having people operating to their potential is our challenge, wanting to stretch themselves, is our competitive advantage. This is a culture that encourages a high level of participation, initiative and performance. The company relies on people to make the right decisions across the world.
We aim to hire people with ambition, ability, energy and initiative and we try not to set caps on their income potential or their development potential. We aim to reward team and individual performance in every possible activity and level. The business by its international nature has endless opportunities for personal progress. Staff and management at present own over 17% of the company. We aim to extend this and have no limits on staff management ownership.
Impact on Lifestyle - How do you recharge your batteries?
The business requires a high time input. A hugely important factor in my ability to give the required commitment is the unstinting support of my wife, Maree, and four children, Kate, Marianne, Tom and Alice. To recharge, I spend as much of my time with the family as possible. We like to travel abroad once or twice annually. While the 6-unit family holidays are no longer a feature, our reduced group holiday abroad annually. As a spectator (mainly on television) I’ve a big interest in all sports, especially soccer and rugby, particularly those with an Irish dimension. I like to walk at weekends. My reading interests tend to be around 20th century wars.
Role Models – Have you a role model who has influenced your approach to business?
In my business career I’ve had the good fortune to work with many really good people.
There have also been some great visionaries like my father (who could see a need for innovative machine solutions and had the courage to be a leader), Gordon Newman (an English nutritionist who saw a future where farmers would use locally sourced alternative forages and feeds) and John Sprouster (an Australian consultant who in 1998 introduced me to the power of consistent quality management).
Outside the company I’ve had a great admiration for Tony Ryan and Michael O’Leary who made flying from Ireland affordable, especially important for a struggling small business like ours in the 1980’s. Also Anita Roddick of Body Shop who proved that a business with soul and values could connect with customers and successfully make an international mark in an industry dominated by companies of huge scale.
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