Forest was on the move in more ways than one last year.
The company had operated from a number of units on the Hartlebury Trading Estate, in Worcestershire, for some time and while they were in close proximity to each other the HQ functions were fragmented. The company was at the point where it needed to expand and, having looked at potential options, managed to secure premises adjacent to its former location.
So at the end of last year the company moved next door and in so doing was able to unite the management support team under the same roof for the first time. The main manufacturing and distribution facilities have stayed put.
It’s made a big difference to the day-today running of the UK’s market leading fencing and garden products manufacturer but it’s not the only major change embraced by Forest in the last year.
By any fencing manufacturer’s standards, 2014 was an extraordinary year. Storm damage towards the end of 2013 had boosted Q4 sales but drained stocks across the board, so when the next run of storms hit through Christmas and New Year and on into February, the fencing sector faced challenges and opportunities in equal measure.
One of Forest Garden’s greatest assets is its Forest Sawmill division, comprising a large mill at Lockerbie (it shares the Steven’s Croft site with James Jones & Sons and AW Jenkinson Forest Products) and two smaller ones at Sennybridge and, more recently, nearby Usk in the Brecon Beacons.
Around 80% of Forest Garden’s timber needs come from these three mills, all of which source timber from UK forests. The remaining 20% of components and finished products is imported from Europe and Scandinavia.
"Eighty per cent of our sawmills’ output comes to Forest Garden for conversion, with the remainder sold to third parties," said John Gomersall, sales and marketing director.
"Having control of our sawn timber and componentry supply means we are able to flex capacity as we need to – and we really worked the mills hard last year."
The mills increased output immediately after Christmas and both the milling and assembly operations ramped up production.
Over the year, Forest manufactured more than 1.8 million fence panels – up from 1.1 million in 2013.
Even with this surge in output, like all other fencing suppliers, Forest was forced to implement an allocation system.
"We worked with our key customers on what they could have on a regular basis," said Mr Gomersall. "It gave them a level of certainty and we know that during this time we grew market share for them."
Increasing fencing output by nearly three quarters of a million panels is undoubtedly a fantastic achievement but it gave Forest food for thought. The result was a switch in tactics and a new focus on building stocks throughout its operations, from round timber intake at the sawmill, to assembled product.
Additional shifts does not immediately equate to additional output, said Mr Gomersall. "You have to take an element of your skilled workers and team leaders from one shift and put them onto additional shifts and bring more people in and train them up.
You lose productivity in the short to medium term and in some ways you go backwards before you can go forwards, so it’s a big decision.
"It was the right move in early 2014 but around April of that year we made the decision to run a flatter production profile throughout the year."
This, he added, enables the company to build significant stocks during the traditional non-peak periods, insulating it against sudden spikes in demand.
In support of this strategy, Forest has ensured it has raw material ready to convert at its sawmills by increasing its stocks of round timber by 30%, from around 10,000 tonnes to around 13,000 tonnes.
On the secondary processing front, the company has built its normal stock holding of around 600,000-700,000 fencing slats to 1.4 million.
"We’ve pretty much doubled our componentry stock," said Mr Gomersall. "It equates to cut material ready to go for about 85,000 finished fence panels."
In terms of finished units, the more even production profile enabled the company to build a 2015 pre-season stock of over 150,000 panels – and that’s just the lap panels.
"It’s a work in progress but we are also looking to improve and enhance our production techniques," said Mr Gomersall.
"Building stock has paid dividends because although we haven’t had the storms this year the weather improved in April and it’s remarkable how much volume has gone out to the market. The strategy is definitely working for us."
One thing stock building does require is plenty of storage space and, as part of its new manufacturing profile, Forest is creating an extra 10 acres of hard standing storage space, some of it under cover, next to the production unit at the Hartlebury site.
This storage space is dedicated to the home delivery element of the business.
Forest delivers to over 3,000 stocking outlets per week and last year the number of full articulated lorry loads of product leaving the site reached up to 90 per day.
Around 100 vehicle loads are destined for delivery direct to the end customers’ homes, on behalf of their retail and trade customers.
The company launched its Forest DDH (direct delivery to home) internal badge in 2011 and last year it completed a whopping 170,000 drops direct to consumers.
This route to market sees Forest’s retail and trade partners take an order and pass it back up the line for the company to arrange delivery to the consumer. Increasingly this is via a weblink to a booking portal, which enables customers to pick their own delivery slot.
While the traditional merchant sector still prefers to have stock delivered to its own premises for it to supply to customers via its own delivery service, other vendors have really warmed to the system, recognising that they can tap into a revenue stream without the aggravation of finding the room to actually stock the product.
This change in buying patterns and the increased sales it has brought with it has been a real bonus.
"The consumer is becoming more savvy and confident buying products this way and more of our customers are embracing it too," said Mr Gomersall.
"At the same time we are making more of our products available to be sold through that route.
"It was primarily garden buildings and structures that were sold that way but more of our customers are now listing fencing products in predetermined pack sizes. We’ve been pleasantly surprised by the uptake from a standing start and volumes sold through this channel are growing."
Forest Garden has a strong tradition in product development and this year is no different. What has changed, however, is the environment in which the refreshed product range can be showcased.
The relocation of HQ functions brought with it the opportunity to set up a 5,000ft2 showroom, in which the company can display new and existing ranges and POS/ merchandising solutions, altering the product mix when appropriate.
It’s the first time the company has had such a facility and takes away some of its reliance on trade shows where space and time with customers is limited.
Among the 2015 products visitors are invited to see are eight pressure-treated additions to the summerhouse range, including the 7x7ft Blockley and 8x8ft Honeybourne corner summerhouses in shiplap.
Initial sales are "very encouraging" said Andrew Bendall, marketing manager, particularly through online retailers.
The premium end of Forest’s range of sheds has also been bolstered with six new versions manufactured by M&M Timber, which, said Guy Grainger, excels at producing short batch runs of premium products.
All are pressure treated and three are shiplap construction while three are the more premium end tongue and groove. Again, sales through online channels are proving particularly strong.
Modular double sleeper benches and tables, slender planters and two types of log store – the Pinnacle and the Flip Roof – are also new for 2015.
One of the biggest developments, however, is a new range of greenhouses.
The prototype 10x8ft greenhouse will soon be joined by a 10x6ft model and Forest is looking at the possibility of offering prepainted versions.
Manufactured by M&M, these will be offered for sale on a supply and install basis.
M&M TiMber successfully inTegraTed inTo foresT garden group
Forest Garden’s acquisition of M&M Timber at the end of 2013 brought the group’s combined annual turnover to £72m and created a dominant force in the fencing and garden products market.
"M&M had a number of key appeals to us," said Guy Grainger, Forest’s group chief executive.
"Firstly, the company operated in specialist timber markets that Forest wasn’t engaged in – agricultural fencing and play equipment – so it presented an easy way to migrate ourselves into those areas.
"The second attraction was that M&M had a number of key garden centre accounts, notably Wyevale, and specifically there was the appeal of the incised offer M&M had.
"It was the first company to market with incised round timber and the Agricised brand is one of the strongest brands I’ve got in my armoury as far as the group is concerned."
Following the acquisition, Forest absorbed M&M’s garden centre business into its own operations, under the aegis of John Gomersall, allowing M&M to concentrate on its round timber processing – although it also manufactures some products for Forest and is developing plant staging and retail display solutions.
M&M’s expertise in incising round timber is growing with the addition of a purpose built high production Excalibur machine in April, which replaces in-line Hedgehog incising technology. And while Koppers treatments remain the product of choice for Forest, M&M has switched to Arch Timber Protection’s Tanalith E.
Its Agricised 30 kiln dried, incised and Tanalith E treated fence posts, which carry a 30-year warranty, have recently been specified by Network Rail as the operator embarks on a major replacement programme. Sales of Agricised products in general are up 40% year-on-year.
And customer feedback led to the launch of a new, top-end post and rail system at the beginning of the year. Featuring chamfered posts and smooth contact surfaces, Prestige is being specified for equestrian applications and country estate driveways.
During the last 16 months a great deal of work has gone into repositioning M&M’s Agricised, Unilog and Playguard brands and their proposition to the customer and simplifying the pricing offer.
The integration has been very successful, said Mr Grainger. "The business is running ahead of plan and the people involved are very positive and fully engaged".
Nigel Poyner remains at M&M as divisional director and the company benefits from the group’s financial and marketing support.
A new addition to the team is group business development director Richard Sadler who is working alongside M&M to help them move towards new markets and is exploring the cross-selling opportunities between Forest’s and M&M’s customer bases. The fact that M&M’s Clows Top site is just 13 miles away from Hartlebury means that stock can easily be moved between the two.
One element of M&M’s business that won’t change is the name above the door. "I’ve absolutely no intention of dropping the M&M Timber name," said Mr Grainger.
"It’s got resonance in the market with the Agricised product, landscaping materials and play equipment and is very well respected in those areas."
