International Timber (IT) has been working hard on solving that age-old chicken and egg conundrum – only in this case, it’s been “which came first, the market or the investment?” At its new facility in Newport, South Wales, the company, traditionally known as a hardwood and softwood importer, has plumped for the latter in a giant leap of faith in the burgeoning timber frame market south of the Scottish border.
In line with its business ethos of continuous evolution (TTJ July 26, 2003), and to capitalise on the growing market, IT, with the wholehearted financial backing of its parent company Saint-Gobain, has invested a cool £4m in an all-singing, all-dancing timber frame component factory at Newport docks.
“The timber industry is changing,” said Tony Miles, commercial director. “People’s buying patterns have changed, pricing is more competitive and the import/export structure has altered. We had to decide how to re-position our business and our idea was to add value and enhance the margin of our product range.
“Even timber frame itself has changed since we first attacked the market,” he continued. “It wants and needs more from its supply chain, and facilities like Newport fit into that plan. Our view is that that we are no longer just selling a lump of wood but we’re selling a solution – and that’s our business philosophy across all our sites.”
The solutions offered to timber frame kit manufacturers from Newport are almost limitless – everything “from I-beams to architraves and from simple noggings to pre-measured floor kits” is the product portfolio and “supplying the whole of the UK [from Newport and Grangemouth] on a just in time basis, one week from date of order” is the promise.
Construction at Newport’s Alexandra Dock started in December 2002 and was completed in April 2003 when the machinery was installed. July 1 saw start-up and the facility quickly achieved an output of 2,200m3 per month.
Business model
While the project may have been a leap of faith, it was never a leap in the dark. IT had an established business model to copy in the shape of its Grangemouth facility, which has been servicing the Scottish timber frame market for 30 years.
Operations director Paul Foulds from the Grangemouth factory has overseen the Newport project from day one and currently makes the Scotland/ Wales round trip every couple of weeks. Mr Foulds, who has approaching 30 years’ experience in the timber frame industry, also heads up IT’s softwood purchasing and supply chain management.
The site, which is leased from ABP, which also carried out the construction, is on four acres with an option to expand to seven acres within three years. The new facility sports 30,000ft2 of undercover storage with the latest word in racking systems and 25,000ft2 of office and mill space.
Newport replicates the Grangemouth operation on a smaller scale but because Mr Foulds was presented with a blank canvas he was able to design the ideal timber frame components factory, with brand new machinery and, crucially, with two or three times the capacity that is currently needed.
And, having built room for growth, the company is free to expand in whichever direction it deems necessary, whether it be more machining facilities, more treatment facilities or more storage.
The machinery, which together accounted for £1.1m of the total investment, comprises a Weinig Hydromat moulding line, a Stenner VHE 105 twin band saw, a Dimter Opticut S700 cross-cut saw and a Protim E415 treatment plant.
While its output is still relatively low in relation to its capacity, the Newport facility is able to offer an outsourcing service and its cross-cutting and timber treatment capability is winning extra business.
Its main focus, however, remains timber frame manufacturers and for these it offers a one-stop shop of products and services from machining, re-sawing, cross-cutting, treatment and stress grading through to bundling and bar coding.
The key to increasing business has been in convincing customers that opting for pre-finished components relieves them of the burden of the cost of wastage and addresses certain operational issues, such as the skills shortage within the construction industry. This latter point also reduces the likelihood of margin-reducing remedial work.
In the case of floor kits, for example, the timber frame manufacturer can supply Newport with a cutting list, either manually or electronically, which is fed into the program that runs the optimising cross-cutter. The component number and length is printed directly onto each piece of timber, so that when it arrives at its destination (IT supplies to factory or direct to site) along with a component list, each piece can be easily identified, making assembly very straightforward.
Some manufacturers take component identification even further. “We have one customer who wants all his products colour coded,” said Tony Miles. “He has two or three components within 2-3mm of each other and colour coding means his men don’t have to measure them, which takes time and costs money.”
IT is already looking further down the line to pre-assembled components. It regularly supplies joist packs pre-drilled for services and, at Grangemouth, is researching the feasibility of supplying joists with the associated metalwork already in place.
However, the timber frame component business is not the type of market where a quote today results in an order tomorrow. “Like any business it takes time to develop and establish a trading relationship, especially so in an emerging market like timber frame,” said Mr Foulds. “However, once they see the benefits we get pretty good loyalty. Everyone we’ve pitched
to seriously has come back, so even in the few months we’ve been going we’ve got a lot of steady repeat business.
“We have a customer who has reduced his stockholding from 200 packs to 15,” he continued. “What we deliver in the morning he’s using by lunchtime.
It took a long time to build the confidence with that customer but, once we did, it was a real win. And it was a gain for him as he was able to release 10 men from cross-cutting and deploy them elsewhere in the factory.”
Customer base
Among timber frame manufacturers Newport’s customer base includes market leaders Taylor Lane and Space4 – not bad from a standing start less than a year ago and proof, as Tony Miles said, “that the market wants the product we offer”. In fact the products are so much in demand that IT is approaching the stage where it will hold components in stock for its major customers.
As a quayside operation the timber has to travel a mere 150 yards on IT’s own sideloaders before being deposited at the mill or the warehouse. And it remains undercover from that point. In July a new haulage deal will see the timber being transported via curtain-siders rather than flat-bed trucks, ensuring the product arrives at its destination in mint condition.
IT also prides itself in the flexibility of its supply. “Many terminal operators want to supply full loads of a particular product, which is great if you want eight or ten packs but if you only want one or two they’re not so keen,” said Mr Foulds. “What we say is you can have two packs of joists, two or three of studs, wall plates – in fact, you can have anything you want on a load.”
Its determination to sing to its customers’ tune has won IT plaudits as well as business. One fan is Colin Lane, joint managing director of Taylor Lane, one of the country’s top six timber frame manufacturers. “Newport is excellent for us,” he said. “The timber frame industry is booming and it is great to know that one of the major timber importers is investing for the growth of our industry. The greater access that we have to this type of facility, the better for our industry to grow.”
As for developing IT’s business, Tony Miles is in no doubt that timber frame is the way forward and that putting in the investment first and waiting for the market to catch up is a winning formula. “We believe timber frame is one of the largest growth areas for timber. We know the market’s coming and we aim to be at the forefront of it.”
