In the acutely competitive hardwood trade, achieving a balance between pricing, shipments and consumer demand can seem as tricky as riding a unicycle carrying a pack of square-edged oak.

So Thorogood Timber thought long and hard before embarking on plans to broaden its horizons by increasing storage capacity by one-third. For the relatively small, 40-year-old family owned business it was a significant step. In such a market, said Peter Thorogood, the latest family member to head the business, success is not necessarily defined by capacity or turnover, but by how your wood products find ways to exploit new niche markets. The management team had to be sure that growth plans would not dilute the strengths they felt made Thorogood a pretty unique and successful business.

Growth opportunities

The company’s current expansion programme can really be traced back to 1990 when it first moved to its six-acre Ardleigh, Essex site.

“The premises offered dramatically increased storage space and milling capacity and an overall opportunity for further expansion,” said Mr Thorogood. “In 1990 the Ardleigh site had a storage capacity of 18x42m, plus offices and the mill. Then in 2000 we added a second warehouse to deal with added volumes.”

The company’s development over the past decade has been given added impetus by a significant rise in demand for decorative hardwood for flooring and interior design. But that does not explain fully why Thorogoods was able to take advantage of this resurgent but acutely competitive market. It believes it has carved a niche in the hardwood business by developing distinct production techniques that add value to consumers and by not attempting to take on the bigger hardwood suppliers as direct competition. Instead, it says, it focuses on delivering to specialist markets, which may result in a smaller turnover but also steady profits – although, having said that, sales have risen every year since 1990, with the past five years proving particularly buoyant.

New cherry range

A prime example of Thorogood’s strategy of tweaking pre-existing hardwood logic has been the addition of American waney-edged hardwoods to its existing US stock and long-selling lines in European oak and beech and Scandinavian joinery softwood.

Mr Thorogood had felt that within the general UK hardwood market log diameters of imported US cherry and walnut were no longer as generous as they once were. “Width specifications were reducing, and the level of sap wood content was rising,” he said. “Our US mill partner cuts the timber in a very European style. We use the whole log, cut ‘through-and-through’, which means we can pull boards of 8-9in in width that are sap-free on both sides, particularly in cherry. Customers are turning to our stock because we offer good width and low amounts of sap content. All the cherry and walnut is sourced and milled by Horizon Wood Products within a close geographical region, so the consistency of the wood in terms of colour, content and grade is very reliable.”

Niche markets

Thorogoods, he added, is Horizon’s sole importer to the UK and last year the company also imported volumes of square-edged hardwood from the US, primarily white oak, tulipwood, ash, black cherry, soft maple, hard maple and black walnut.

Wherever it can, the company appears to develop a niche market by using unusual production techniques and value-added milling. For example, it also imports products from France that have been cut using the BPS (bois pierced stabilised) technique, which involves drilling a hole throughout the length of oak and then kiln drying it to approximately 12-14% moisture content. Thorogoods makes regular visits to France to inspect timber and keep pace with changes in the market place, sourcing primarily oak and beech from seven French mills. The company is attracted to suppliers that have a similar ethos, importing from selected sawmills to ensure they have a detailed input into the standard of the cut in order to meet the demand in their key business areas: furniture, flooring (milled to order ranging from 70-270mm widths), joinery, shop-fitting and kitchen refitting.

So it was against this background of an ever-evolving business that Mr Thorogood and his team started to look at the prospect of putting up a third warehouse. They deliberated for several months but, with customers and turnover increasing, it became clear by the end of last year that existing storage would soon become too small to handle the volume of hardwood being traded. And Mr Thorogood felt the company could generate even more business with greater storage space; the projections looked good and the customers were happy. He was also confident that Thorogoods’ message and image could be enhanced provided they set about their growth carefully.

So work started on the new 18x30m building. The extra space was to be used to help satisfy both forward orders from existing buyers and the overall growth in demand for hardwood from specialist joiners, furniture makers and re-fitters. In particular it was needed to cope with growing interest in the waney-edged Pennsylvanian cherry and walnut.

&#8220Customers are turning to our stock because we offer good width and low amounts of sap content”

Managing director Peter Thorogood

Rising turnover

The decision to go ahead on the project has turned out to be the right one. With the warehouse finished, turnover is rising – up 25% on the first six months of this year.

“Because we have got bigger stocks we are also able to service customers better from that depth of stock,” said Mr Thorogood. “And with the increasing capacity we have been able to store more econom-ically so we are getting more cubic metres into the same sort of area.”

And the development of the unique Thorogoods business looks set to continue. This month it is embarking on another exciting project to supply hardwood to refurbish the House of Commons parliamentary whips’ offices, using quarter-sawn oak for panelling, skirting and flooring. The project will fuel the company’s forecast of a 20% overall growth in turnover by the end of 2003 in spite of more cautious market conditions.

Mr Thorogood confirmed: “The current state of the market probably reflects the UK economy. There are fewer long-term orders but people are still spending money, the turnover is still there and the same quantities end up being purchased – that is my impression from talking to customers and a few friendly rivals.”

With the new warehousing a reality, Mr Thorogood is clearly proud that the company is continuing to build on its achievements made since 1963 when his grandfather, Robert, and father, Michael, began trading and machining timber.

“There has never been a time when I thought there was something better for me to do. I was born and bred into the timber industry and the industry always presents us with a challenge,” he said.

Thorogoods’ next responses to those challenges, he added, will be more investment at the Ardleigh mill and further office expansion starting September.