Summary
• MH Southern bought Robert Duncan Timber Products from the receivers two years ago.
• The first step was to return Duncans’ stock to viable levels.
• It’s reputation for just-in-time deliveries has been restored.
• New trade counter products include Timbmet’s Red Grandis.
• The company also owns Tweedside Timber & Joinery in Berwick.

There’s a buzz about Robert Duncan Timber Products – and it’s not just the hive of activity in the sawmill. As you enter its 5-acre Gateshead site, the long-established hardwood, softwood, panel products and mouldings importer/distributor looks in pretty good shape all round. A brand new 26-tonne Renault flatbed, complete with Hiab crane, has just pulled in to load up. The warehouses and yard look neat, tidy and well-stocked and forklifts are busy picking orders. One of the fleet of brand new sales rep’s cars is parked outside the office and a healthy stream of customers are dropping into the remodelled trade shop and call and collect centre. There are even a couple of petunia-packed timber planters – which Duncan sells – flanking the collect centre door.

MH Southern’s sales and marketing director Robert Bruce admits it all makes a stark contrast with the state Duncan was in when his company bought it from the receivers two years ago. He makes no bones about it. After several years of decline, the business was in a mess.

“It used to be one of the names for hardwood in the north-east. It had been going since 1946 and its reputation stretched down to Leeds and up to Edinburgh,” he said. “At its peak it was turning over £7m and had busy satellite depots in Leeds and Middlesborough.”

“But when the receivers stepped in, these depots had closed and sales had slumped to £2.5m,” said Keith Ornsby, ex-MH Southern operations manager who took over as Duncan’s branch manager a year ago.

The situation at Duncans deteriorated to such an extent, that sales staff had to drive unreliable second hand cars and delivery trucks broke down so much drivers went out in the morning not knowing whether they’d make it back again.

“Most importantly, stocks were cut below the minimum we needed,” said hardwood sales specialist Colin Thompson, who has been with Duncans for 23 years. “We just didn’t know what we could offer to customers from week to week, or, come to that, what was going to happen to the business.”

The core of the problem, said Robert Bruce, was that the company had failed to move with the times.

“There was little focus on added value and the company just seemed to want to keep doing what it had always done. But customers wanted more choice and better service and business was getting increasingly competitive – there’s a James Latham depot just across the road and a Lavers not far away. As a result they fell more and more behind.”

“It just became a vicious cycle,” said Mr Ornsby. “They lost customers through lack of investment and then had even less money to invest.”

Which all prompts the question why MH Southern, the successful Jarrow-based softwood, clear softwood and sheet materials importer/distributor, decided to buy the company just a month after it went into receivership in March 2009? Southern turns over what Duncan did at its peak and also owns Tweedside Timber & Joinery in Berwick, which adds another £1m a year.

“We had to take a long hard look, but we decided we could do something with it,” said Mr Bruce. “There was still good awareness of the Duncan name, even if some customers had lost faith. It also had a timber range which complemented ours. Southern’s sales split is about a 30% each specialist softwoods, redwoods and carcassing, with the remainder in panel products and a limited selection of hardwood. Duncan’s was 40% hardwood – about 50/50 temperate and tropical – 30% redwood, 15% carcassing and 15% sheet materials. So we had some overlap, where we could benefit from joint buying, but also opportunities for synergy.”

Robert Duncan also brought MH Southern further processing capabilities it was confident it could develop. Besides the mill, which has monthly capacity of 50,000 linear metres of wood and MDF mouldings and planed square-edged timber, these include an Arch timber treatment unit and priming facilities.

“What Duncan also had was a very experienced and knowledgeable staff, particularly in hardwood, with people like Colin Thompson and sales manager David Wise who had been in the business all their careers,” said Mr Ornsby. “They were a valuable resource, even if morale at the time was pretty low.”

Evidence of the value MH Southern attached to the personnel, was that over 95% were kept on – and today Duncan has a team of 42.

Among the first steps it took to get the business back on track was to spruce up the site, including re-concreting the yard, and returning stock to viable levels. Then came the much-needed investment in new vehicles, four six-tonners, the 26-tonne and an 18-tonne flatbed, plus the new sales fleet. All the trucks were decked out in Duncan’s bold new livery and logo and matching signage went up around the yard. The equipment in the mill and tool room were also put back on regular service contracts.

“This all helped improve staff morale,” said Mr Ornsby. “It showed the company finally had confidence in its future again. ”

Winning back the customers Duncan had lost hasn’t always been easy.

“They haven’t all returned, but we’ve persuaded others,” said Mr Bruce. “We’ve distributed a lot of new literature, stepped up local advertising and, of course, the reps have had lots of face-to-face meetings. We’ve also introduced initiatives like sales ‘Blitzdays’, where reps drop fliers for special offers on customers’ doormats, which have also unearthed a lot of new business.”

An all new website is proving another factor in Duncans’ revival.

“It’s not only getting the message out there about the business, it’s also bringing us a growing amount of online trade,” said Mr Bruce. “Currently we’re getting two or three orders a day, with fencing and decking particularly popular.”

Duncan’s has also won over customers by restoring its reputation for just-in-time delivery, helped no doubt by the return to regular maintenance in the mill and a return to stock levels of around £1m.

Another focus in the revamp has been the trade counter. The swamp-like car park has been repaved, and the 240m² collect centre spruced up and equipped with new racking. This is now once more a valuable source of good margin business, stocking everything from mouldings and PAR, to fencing, BSW Timeless Timber sleepers and planters, plus accessories and tools.

“We’ve backed it with a lot of publicity and regular trade days, which attract 40 to 50 people, where we give customers a sandwich and coffee,” said Mr Ornsby. “On Saturday mornings we also get the public in.”

“We’ve added new trade counter products too, including Timbmet’s Red Grandis, in mouldings, sawn material and laminated/engineered thicker sections, such as 63mm and 75mm for newel posts,” said Mr Bruce. “This is proving very popular as a meranti and sapele alternative.”

So far the stock synergy with Southern has included Duncan adding more construction products, including BSW Easi-Edge and long-length, large section softwoods. It has also extended its range with clears – Douglas fir, larch and cedar cladding and shingles. Southerns, meanwhile, has taken on some Duncan’s hardwoods, and is using its MDF priming facilities to enhance its value added offer.

An aspect that differentiates the two businesses, is their customer profile, with Southern selling predominantly to merchants, Duncan to merchants, but also bigger end users. This doesn’t seem to have been an issue however.

“In fact, all customers have been very supportive,” said Mr Bruce.

A year in, Mr Ornsby clearly has no regrets about taking on the job at Robert Duncan.

“I knew it would be a challenge, but it’s also been a great opportunity and I think we can be pleased with the progress we’ve made, particularly in such challenging market conditions,” he said. “Most rewarding has been working with these people. What we’ve achieved is first and foremost down to them.”

Mr Bruce is also happy with the rate of Duncan’s turnaround.

“It’s not the prettiest yard in the world yet, but we’re back to £5m turnover and heading in the right direction,” he said. “There’s more to be done, but we’re confident we can get Robert Duncan Timber back to its glory days – and beyond.”