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Former butter smuggler builds a $50-million business

Patrick O'Callaghan is the founder and president and CEO of East Coast Catering Ltd. (ECC). The Newfoundland-and-Labrador-based company focuses on catering and accommodation services to remote sites for the oil and gas, marine, mining and industrial construction sectors.

Photo courtesy of The Energy Show

Seizing opportunity comes naturally to Patrick O'Callaghan, the 70-year-old founder, president and CEO of East Coast Catering Ltd. (ECC). The Newfoundland- and Labrador-based company focuses on catering and accommodation services to remote sites for the oil and gas, marine, mining and industrial construction sectors.

Growing up in a family of eight, Mr. O'Callaghan got into business at age six "doing the shopping" for neighbours in Dundalk, a small town right on the border dividing the north and south of Ireland, halfway between Dublin and Belfast. Before turning 12, he was smuggling butter with the local gang, taking advantage of trade restrictions and price differences between New Zealand butter, at two shillings and seven pence, and Irish butter, at four shillings and 10 pence.

The profits were a small fortune back then, says Mr. O'Callaghan, referencing Angela's Ashes, Frank McCourt's biography, for a snapshot of Ireland's post-war poverty. Despite once being caught, he continued trading in butter until he fell in love with horses at the age of 16, finding new opportunities for wheeling and dealing around the stables.

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Mr. O'Callaghan blames his father for "conscripting" him into hotel school to get an education and start a real career. After graduating in hotel management from St. Mary's College in Dublin, in 1965, he worked in five-star hotels in Ireland, England, the United States and Canada. He arrived in Atlantic Canada in 1971 to serve as food and beverage manager of the Hotel Nova Scotian, before moving Newfoundland, becoming general manager of Hotel Newfoundland in 1976 (then owned by CN) and overseeing construction of their new Hotel Newfoundland in 1982.

He founded ECC as a private company in 1984 and remains the sole owner. Companies under ECC's umbrella include: ECC NS Ltd. in Dartmouth, N.S.; Labrador Catering Ltd. Partnership in Goose Bay, Labrador; Horizon Remote Catering Ltd. in Edmonton, and ECC Ireland in Dundalk, Ireland. Mr. O'Callaghan is also a partner in Capital Structures Inc. [to install the camp sites] and in Offshore Recruiting Inc. [providing skilled workers globally for offshore oil], both spinoffs of ECC, as well as in other Canadian and Irish business ventures.

With a staff fluctuating between 300 to 400 people, ECC operates across Canada and in Ireland, providing accommodation for over 5,500 people and serving up to 26,000 meals every day. The annual revenue for ECC last year was about $50-million. Mr. O'Callaghan was the Atlantic winner of Ernst & Young's 'Entrepreneur of the Year' award in 2012.

Why did you pick Canada?

I came back to Ireland when I was 25, towards the end of the '60s, after working in the hotel industry in the United States and London. I got my first management position, but the hotel was very isolated and I didn't particularly like the Ireland of those days. I saw Pierre Trudeau on the front page of The Telegraph sliding down the bannister in Buckingham Palace in London at a Commonwealth conference and doing a little pirouette behind the Queen. He was a breath of fresh air and that's the reason I chose to go to Canada.

Why didn't you stay in the U.S.?

I had seen Irish Americans coming back to Ireland with loads of money and throwing it around, so the minute I graduated from hotel school, I headed for New York and San Francisco. But I had a green card so was liable for the draft and they not too kindly advised me to join the army. I told them I could fight in Belfast – there was no need for me to go all the way to Vietnam to fight – and was told to clear out in 72 hours. I was working with Hilton hotels and they transferred me to London, England, which was great, but I had to pay my air fare.

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How did you get into catering?

There was this guy, Jerry Cunningham, who was the senior vice-president of the biggest oil drilling company in Canada in the 70s – with two rigs in Halifax. The parties they had were beyond belief. He and I got on well because his brother was from Dublin so he gave me an open invitation to come work for him. Years later, after overseeing the building of the new Hotel Newfoundland in St. John's [now the Sheraton] and opening it, I wasn't happy at work so I called him. Jerry gave me my first shot at the offshore so I started the company in 1984 with the first contract. From there I bid on more rigs. When the drilling died down, along with the federal program funding it, I started to bid on catering for remote camps.

My first break was the North Warning System. There was no e-mail in those days. You did a 22-page Telex and sent your bid package off. But I got a job with them at Cartwright which is way up north in Labrador. That was my first camp that I catered. From there I picked up a mine in Newfoundland and that led to two more, one in Yellowknife and another in Smithers, B.C.

How did you finance all that?

I've been an avid saver all my life and only spend on what I need. I had also operated a riding stable in St. John's, the first of its kind, plus I did reasonably well buying and selling horses. It was the equivalent of a nice fat salary on top of what I had as a hotel manager. So I had quite a bit to start but then, $50,000 got you off the ground. It was easy enough for me to do that. You needed about a month's supply of food, and you got paid very quickly, in 45 days.

Once you have cash in your hand, you can do an awful lot of things. You don't have to get on your knees to the banks. I can say, I'm putting up 50 per cent, give me the other 50. They won't have a problem as long as you're a good client.

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What were the challenges of catering in the middle of nowhere on that first job?

The logistics. Cartwright is frozen for the whole winter, so you have to put your supplies in during the summer by boat and your produce and other stuff comes in by air in the winter. I had 280 people in that camp. You have to work the numbers out and make sure you've calculated properly, otherwise you can lose your shirt. I specialized in food and beverage from almost the beginning of my hotel career, so I knew the value of portion control. You develop skill sets and knowledge. I also had to charter a plane, which I had never done before, because there weren't any planes going in to places like that with freight.

How did you compete against big food service companies like Compass and Aramark?

Quality, personality, always trying to be different. The biggest thing is I kept hotel standards. I never tried to do the industrial route and go with cheap products. I keep the high-end stuff to this day. Big mining companies, especially today, don't want unhappy people working for them. You do the talk bid at persuading them – if you're serving steak, you're talking about two bucks over a regular beef product – but you're only going to do it one night a week. I send fresh lobster to to everyone who's stuck in rigs and camps at Christmas and New Year's as my little present.

In the mining business, it's pretty much the same people all across Canada. So you build relationships and you're accepted as a pre-qualified bidder. Pre-qualifying is the big thing. I've got a good track record. I've also expanded from janitorial and housekeeping to busing, security and maintenance, depending on the job. You expand every time you see an opportunity within the actual base, camp or mine.

What's your biggest challenge now?

To keep getting more business. The drive is just my nature every time I see an opportunity. Logistics are always a problem and staff – getting the right ones and getting them trained properly and maintaining their skill sets for the projects around. You don't have to be a rocket scientist. We need practical people with good personalities who can be trained in the work that we need to do.

Why haven't you taken on a partner as the company's grown?

I didn't need one. Some people say I'm a control freak, but that's not true.

What kind of a leader are you?

I have the four Ds in life: Discuss, decide, delegate and disappear. It took me a long time to get to that level. I have a super team who've been with me a long time and I look after them extremely well – I'd say 20 per cent above the market for the senior people. It's that core group that make everything work, because when I'm in Ireland, somebody has to run the place. I keep extremely close to my core group and talk to them every single day. I'm a big phone person. I use e-mail for information and then we talk. I'm good at the talking bit. That's my biggest skill.

What about family?

My son Matthew joined me four years ago and I brought my nephew over from Ireland two years ago to work with me. I've got a lot of extended family moved into various slots and their kids all have summer work as well. They're up painting some of the facilities in Dublin as we speak. Wherever they can provide a service, they'll be given an opportunity.

What's your advice to entrepreneurs?

Do your homework in your field. Make sure you study it to death and know everything that's going on in all the companies. Company websites will give you loads of information. Keep your family and friends as close as you possibly can.

Don't believe all the naysayers who say you haven't a hope or a chance. You do. You just have to have the will to do it and be thinking 24/7. We all answer our phones 24/7.

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