04 Mar 2020 | 01.49 pm
Tom Murphy Goes Global With De Facto
Shaving Oil made in Mayo
04 Mar 2020 | 01.49 pm
After Mayo entrepreneur Tom Murphy was laid off, he developed a business supplying niche lifestyle products to pharmacies. Now he’s urging shavers to ‘can the can’
After more than four decades of business toil, there’s nothing like the ambition for global success with a new product to keep you attached to the grindstone. That’s the case with Tom Murphy in Castlebar, Co Mayo, founder and owner of Pamex and now taking on the world with De Facto shaving oil.
With Murphy (66), necessity was the mother of invention when he established Pamex with his wife Mary in 1995. He had been made redundant from his role as general sales manager at Syntex Pharmaceuticals when the company was taken over by Roche. After a few months on the dole, Murphy, then aged 42, set up his own venture as a sales promoter for various products sold in pharmacies.
One of the first products in the Pamex portfolio was Total Shaving Solution, an American shaving oil that Murphy came across through his barber and then tied down the distribution rights for Ireland. De Facto is a similar product, developed by Pamex and launched in February 2019. It’s the first product that the distributor has developed itself, and Murphy has such high hopes that the De Facto brand name has been trademarked around the world.
“I want this product to be a global brand and that’s some statement to make, but we’re quite serious about that,” says Murphy. “Our sales target for the first ten months was 100,000 units and the outcome was 150,000. Our online sales have been exceptional and quite a number of interesting companies have been in contact who want to take on the product.”
Shaving with an oil rather than gel or foam is an acquired discipline, as the oil is invisible. De Facto’s marketing pitch to millennials is that gel and foam cans are mostly not recyclable, so they can help ‘shave the world’ if they ‘can the can’. For Murphy himself, he says using an oil rather than gel stopped skin nicks during the daily shave.
Pamex’s fate doesn’t depend on the company’s first innovation. If it catches on in a major way, De Facto will be a bonus for a thriving enterprise. At the end of 2018, the Pamex Ltd balance sheet had €1,350,000 cash after the company booked a net profit of €720,000.
That was an exceptional outcome for the company after Murphy successfully locked horns with a French customer who decided it no longer required Pamex’s services.
With his sales background, the market gap Murphy identified at the start of Pamex was bringing new products to the attention of doctors and pharmacies. Pamex didn’t engage in the product distribution; that was farmed out to Cahill May Roberts. Instead the company’s sales reps knocked on doors promoting the sales possibilities of products such as Alflroex (biotic digestive supplement), BioXtra (oral health), Carmex (lip balm), Kin Dental (oral hygiene) and many others. The common thread across the products is that they ameliorate everyday problems.
According to Murphy: “Nearly all our products were new to the Irish market and that’s where our expertise come in. We are able to commercialise products from launch. Initially we made contact with brokers throughout Europe and they knew exactly what we were looking for.
“We want niche products that will add comfort to people’s lives. We have to make sure that there is a niche in the market and that there is a market in that niche for us. It’s a big challenge to take on a product from zero and launch it, but we have been successful because we are very focused on what we do.”
One of Pamex’s first deals was distributing opthalmic products on behalf of French company Chauvin, owned by Bausch & Lomb. Pamex was the brand’s exclusive agent until 2011, when Chauvin decided to organise distribution in Ireland themselves. According to Murphy, the Chauvin trade accounted for €2m of Pamex’s turnover, so he wasn’t best pleased by the sudden sundering of the agency.
Murphy recalls: “Under EU law, if you build up somebody’s business and you’re an agent, they can’t just take it away from you without compensation. If you’re just a distributor they can. We instigated legal proceedings in France and in February 2018 we won the case.”
Press reports of the dispute indicate that what Murphy describes as “handsome compensation” amounted to over €500,000. The Pamex legal costs were around €100,000, a large sum for an Irish SME, but Murphy was prepared to take that risk to prove his point. The outcome helps explain the 2018 spike in Pamex profit from €210,000 the year before.
Pamex has a more cordial relationship with another French company, Théa Group, which makes a range of eye-care products. Pamex started distributing Théa products in 2012 and in 2017 the two firms entered into a joint venture, Theapamex Ltd.
The venture’s general manager is Dermot Gavin, formerly a Pamex director, and Murphy has a 5.4% stake in the business. “Pamex does all the back office work for Theapamex so we have a very positive contribution to our company from the work we do for them,” Murphy explains.
Murphy bemoans the fact that his type of venture is outside the ambit of state supports. Although Pamex has some export trade, it doesn’t manufacture onsite, so Enterprise Ireland will not engage. “For example, we have the UK rights for Kin Dental products and we are looking at entering that market. We approached Enterprise Ireland and they said, but sure what are you doing, you are only sending boxes to the UK. I said yes, but they are our boxes, so that’s exporting. Oh no, we don’t consider that exporting, they told me.
“One of the agency individuals suggested maybe we could change the labels so as to ‘add value’. I said we can’t do that because these are cosmetic classified products under EU law. And then he said, isn’t it very strange that the company in Barcelona don’t ship to the UK themselves? I said whose side are you on — theirs or ours? They couldn’t get it.”
The De Facto shaving oil is manufactured in Ireland, down the road from Pamex at the Cosmetic Creations plant in Claremorris. If the product succeeds, Murphy will have a better calling card at EI. “We have a mission to make De Facto a global brand within the next five years,” says Murphy, who expects to be fully occupied on fulfilling that ambition.
“I said to my wife Mary some time ago, I wonder if I did retire what would I do? She just glared at me and said, ‘what would you do? — what would I do?’ So I think that made up my mind — retirement isn’t in my vocabulary.”