TTJ’s industry tour of Scotland continued on to Fife and to the country’s largest importer of timber James Donaldson & Sons Ltd.

The family-owned group, established in 1860, comprises importing, manufacturing, distribution, merchanting and timber engineering divisions. This year it has a projected turnover of more than £150m.

The £40m turnover MGM Timber merchanting business is the largest (by turnover) independent merchanting business in Scotland with 12 branches, while Donaldson Timber Engineering (DTE) is the UK’s largest roof truss manufacturer and engineered floor distributor.

During our visit – to James Donaldson Timber’s (JDT) Elm Park Sawmills site in Leven and the MGM Timber branch in Glenrothes – the company outlined its confidence in the market and spelled out new investment plans for further growth. First stop was a visit to MGM, the merchanting chain originally acquired by Donaldsons in 2002.

Group managing director Scott Cairns said the Glenrothes branch was a consistently high performer and a great example of a typical MGM unit.

The branch, with 13 staff and two vehicles, turns its stock on average 24 times a year. Its core timber and panels range, which includes a just-in-time delivery service from the local JDT site, has been boosted over recent years by a greater range of products, such as flooring, joinery, insulation and membranes.

Specialist products include wet wall plybacked board, American white oak machined products and recently a new feature – German-made high-end kitchens in the shop display area.

This latter feature enables joiner and kitchen-fitter customers to bring their clients to see the product at MGM.

"Competition is flerce with both Scottish based merchants and national merchanting groups expanding in Scotland.

"But it is MGM’s specialisation in forest products and high service ethics that gives us an edge with the customer," explained Mr Cairns.

TIMBER IMPORTING AND PROCESSING

Moving on to Leven where the James Donaldson Timber operation is based, we were joined by the division’s managing director Iain Torrance and commercial director Andrew Donaldson, who together with his brother Michael (MGM’s commercial manager) represent the sixth generation of the Donaldson family in the company. Their father Neil is group executive chairman.

Mr Cairns explained that for most of its 155-year history, the company had been focused on traditional timber importing. Expansion and acquisitions in recent decades now means the group is a very integrated group business with three distinct parts – JDT, MGM and DTE.

The Elm Park Sawmills site is set up to service customers in Scotland and Northern England.

A key moment for JDT was the inclusion of a second site in Chorley, England at the beginning of the downturn, allowing it to develop sales to merchants across England, bringing with it supply synergies and an improved product offering.

It had acquired the site in 2008 as part of a purchase of former Palgrave Brown assets from administrators – a move which gave it the Alfred Hulme MDF mouldings business. "The acquisition of Chorley was opportunistic rather than planned," said Mr Cairns.

"However, it did give use access to a market where we could see real opportunity for the future – white primed MDF mouldings." JDT currently handles about 180,000m3 of timber annually out of the Leven site, with a mix of Swedish, Finnish, Baltic and Russian pine and spruce, with much of the material still shipped to nearby Methil.

There are longstanding relationships with sawmill suppliers, such as UPM, Vida, Setra and Södra, with an emphasis on continuity of supply and quality.

"Structural timber is a part of our business but not the most important part," added Mr Torrance.

"A traditional part of our business is planing of softwood – cladding, mouldings and increasingly white primed MDF, basically products for housebuilding and RMI." TR26 is a very important structural resource for the group, with DTE being such a large roof truss manufacturer. JDT Leven treats all of DTE’s TR26 requirement.

Other products include decking, laminated products, panels and joinery timber.

Weinig and Stenner technology are among the machinery re-processing timber at Elm Park, while two treatment vessels provide Koppers E415 low pressure and Koppers Celcure high-pressure preservative treatment. In all, some 10-12,000m3 of stock is kept on the 11-acre Elm Park site.

Service is a big JDT focus, with the business offering full, half and mixed loads on short turnarounds.

Like many other timber businesses, JDT’s stockholding of home-grown timber products increased during the downturn as merchants were attracted to its low price point at the time. Better product presentation, marketing and technological investments by homegrown sawmills also aided the change. "This trend, whilst important to our sector, is unlikely to penetrate the mainstay of the timber frame sector, with the exception of specific projects and certain non-structural timber sections," said Mr Torrance.

"Offsite manufacturers are looking for the strutural predictability given by timber grown in non-temperate climates. The consistency offered by Scandinavian product is key to our clients."

GROWTH

Expansion plans are being plotted for all parts of the business.

The Chorley-based JDT Silktrim primed MDF mouldings manufacturing business saw a third double line added this year and overall demand for Silktrim has grown to due to increased housebuilding levels and the fact that an estimated 90% of new build housing now features white primed MDF.

The company said JDT’s market share had also increased significantly in the last two years.

JDT, the largest distributor of white primed MDF mouldings in Scotland, estimates the Silktrim business will achieve a turnover of £14m in 2015.

And a major new £2m investment is also on the cards.

"We are going to make a major investment in Scotland for manufacturing Silktrim," said Mr Torrance.

"It’s a great product and the Scottish site will service the local market and add more capacity for England.

"This gives us good capacity for growth throughout the UK.

"We believe that this traditional part of our business is well placed to grow in the years to come," added Mr Cairns.

"JDT will continue to be an essential supply partner to its customers."

Other recent expansion has seen Donaldson opening a dedicated insulation products business – the JD Insulation (JDI) distribution depot at Coatbridge – for end users/ and merchants.

Donaldsons also plans to add another branch to the DTE network, which currently has eight sites, adding to the new Warrington plant which opened in January.

"As a group, 2015/16 will see the group invest more money in a single year in all three of its core businesses than it has in the past few years combined," said Mr Cairns. The total investment in excess of £4m covers DTE, MGM and JDT.

"We feel we are in a good position in terms of market share following the downturn and we look forward to the next period with cautious optimism," said Mr Cairns.