Leading from the Front

Tim McCarthy is a CEO with a strong attitude of leading from the front. If ever faced with a challenge, his methodology is to lead his team into it – providing experienced guidance and full support.

It’s an approach to leadership that has served him well throughout his career, and continues to propel him forward as CEO of EPG Engines, Australia’s central distributor of Kohler Petrol Engines and Kohler Diesel Engines.

This long-standing relationship is a huge badge of distinction for EPG, as McCarthy explains that Kohler is one of the oldest privately held companies in North America, producing engines since 1920.

“Kohler started its business building the first generators powered by engines back in 1920 and it’s been leading the industry ever since,” he tells The CEO Magazine.

“They build engines in North America, Italy, China and India, and they are the only company – and we are the only company in Australia – that provides small frame engines from 4–70 horsepower in both petrol and diesel. All our competitors do one or the other. We do both.”

A Lifelong Love

McCarthy’s own involvement in the engine industry goes way back to his teenage years when he would spend his weekends working on cars and engines. Even as he embarked on a career in hydraulics, he would still spend every spare moment indulging his true “passion”.

“Then at age 26, a few friends of mine said, ‘Well, you really should do this for a living – it’s your life’,” he recalls. “So I applied and became the Queensland Manager of a diesel engine company – SMS Diesel in Brisbane.”

Back then, the Outdoor Power Equipment Association (OPEA) industry predominantly revolved around agriculture and lawn care, but a shift has taken place in the years since. “We’ve moved more into industrial and the mining sector,” McCarthy explains.

“The hydraulic industry has also really evolved and started utilizing engines that weren’t used when I first joined the company. We’ve maintained that lawn care and agricultural sector, and that’s driven us into areas that we didn’t have 18, 20 years ago.”

His love of engines hasn’t diminished, even after all these years, remaining far more than just a job. “Engines are my life. I would like to say I’m probably one of the unique CEOs in my role in Australia in that after I spend the day managing this company, I relax by actually working in my shed building engines. I’m not kidding.”

Industry in Evolution

Unlike McCarthy’s passion, what has shifted over the years is the industry itself. “A lot more products have come out of China that weren’t around 20 years ago,” he points out. “The industry has changed and become very focused on emissions and emission compliance. Up until 20 years ago, there was really no focus on that.”

He is proud to have been instrumental in some of those developments. During his time as President of the OPEA, he reveals that he and board members of the OPEA presented the issue of emission compliance to then Minister for the Environment and Energy Josh Frydenberg.

“Engines coming into Australia now from all the market leaders are very emission compliant and compliant with emission rules that we passed through parliament,” he adds.

This evolution will continue into the future, with greater scrutiny on emissions. “There’s going to be more focus on tightening up the quality of engines,” McCarthy predicts.

“As a distributor for Kohler, we’re not concerned because we know that Kohler is constantly developing new ways of meeting emission compliance in both Europe and North America, so we supply an engine that already meets those criteria.”

While he admits there may be some challenges in the diesel sector, Kohler is already making significant strides in that area, developing its direct injection engines in Italy in order to meet EU Stage V compliance.

A Bright Outlook

In terms of opportunities, the agriculture industry’s potential is immense with EPG already a market leader, according to McCarthy.

The industrial and mining sectors also hold great promise. But to fully tap into this, the company must first tackle issues around supply chain, which he says has “really been ruined” over the past few years – a common complaint.

“Our sales have grown dramatically in the past two or three years,” he confirms. “And because we’re reliant on product from North America and Europe, just getting enough product to fulfill our orders is essential.”

Freight prices have skyrocketed to what McCarthy describes as “insane” levels, with EPG paying three times as much for a container as it did just two-to-three years ago.

“We are doing a good job of supplying our customers by air freighting goods in, by fast sea freighting goods in, by making sure everyone’s getting a fair share of product. But the biggest focus is making sure we get our supply chain back in check,” he stresses, adding that he foresees that process taking another 12 months.

The overarching goal is market domination. While the company is not yet number one in Australia, McCarthy believes it is heading that way. “We’re certainly focused,” he insists. “We think we’ll be a company that’ll be supplying superior-quality petrol and diesel engines that will meet the market requirements in 5-to-10 years’ time.”

However, the ability to continue doing this for the years ahead lies in the strength of the team, he adds. Revolving around the idea of providing the personal touch, the team at EPG is all about going above and beyond for its customers – much like McCarthy’s take on leadership. He takes the time to make contact with each member of his team every single day.

“Everyone is going above and beyond,” he says. “We want to be successful, we want to be number one and we want to provide one hell of a service to our client base.”