Timbmet managing director Nigel Cox is an advocate of the ‘plan, do, review’ school of business strategy. Now, after some no-stone-unturned analysis and planning, and 18 months of serious doing across its operations, the company has reached a review stage.
Clearly neither Mr Cox nor chief executive Paul Rivers is complacent about the results. In fact the next round of planning for the next stage of doing is already under way. But both express quiet satisfaction that Timbmet is headed the right way – and that’s not just because in July, after several years of waning turnover, losses and cutbacks, it reported annual profits of £1.5m on £75m turnover, with like-for-like sales up 15%.
"Timbmet isn’t yet the pre-eminent business it used to be, but we’ve made solid progress," said Mr Cox. "We acknowledged life would not be easy, but convinced our team we were putting the right structures in place and that if we held our nerve, we’d make it work. Now that’s starting to happen."
Talking to TTJ a year ago, business turnaround specialist Mr Rivers acknowledged there had to be pain at Timbmet before gain. The company had become too fragmented and was pulling in too many different directions, to the extent that there was duplication and even competition between its core elements: the central Shellingford distribution centre, the regional depots, and Glasgow manufacturing operation. The solution was a significantly pared down management structure.
"That was tough," said Mr Rivers. "But we now feel like one business being run by one team."
This sense of unity has been reinforced by wider moves to restructure and involve the workforce. "We previously had heads of sales for the UK and for the depots operating pretty much in isolation," said Mr Cox. "Now we’ve got heads of sales covering east and west, integrating internal, field and depot sales."
"We’ve also introduced regular meetings for sales and commercial teams, which break into working groups to resolve particular issues," said Mr Rivers. "This has generally improved engagement and communication."
"It’s also reinforced that sense of teamwork," said Mr Cox. "For instance, we’ve been a lot busier recently and different departments have come together to resolve workload issues."
At this point, Mr Rivers stressed that Timbmet has also started to recruit again, and take on apprentices.
He earlier said another key for Timbmet’s revival was to "rediscover what made the business tick".
"We’ve been strengthening the company across the piece," he said. "However, at heart we’re a hardwood business. That’s our DNA and how the market perceives us, but it’s an area where we’d lost our way, until it was less important than panels."
The person who suggested to Mr Rivers that he should accept timber’s relative decline as inevitable was met with a firm and unprintable rebuttal of their opinion. And the outspoken chief executive’s point has been clearly proved.
"We refocused on the core issues: hardwood range, securing better credit in return for longer-term supply relationships and instilling consistency in everything from stock to pricing," he said. "We’ve addressed competitiveness too. We’re not talking silly prices, but market prices that really motivate sales."
Against the background of the EU Timber Regulation, Timbmet has also highlighted its pedigree in certified sustainable and legal timber, notably FSC-certified, including its Red Grandis eucalyptus.
The end result is Timbmet’s first timber growth for some time. And it’s looking for more, with a new 90-page timber brochure.
"We were about 45/55 timber and panels, this year it’s about 50/50 and we expect it to go to 55/45 quite soon," added Mr Cox. "And that’s in the context of increases in panels business."
Stressing that panels have not been neglected, Mr Cox also highlighted that growing sales here have not just been the result of a rising market either.
"We’ve developed even closer relations with suppliers," he said. "We’re building our Egger Zoom business strongly, and we’re holding more stocklines from Kronospan, including Fast and Fresh melamines."
Another prime objective has been to restore trading customer numbers. "We’ve focused especially on lapsed customers, asking why they left and what can we do to win them back," said Mr Rivers. "The result is that they’ve made up 50% of new accounts in the last 12 months."
The last year has seen issues at the Glasgow mill addressed too. "We had this great facility, but depots were farming out machining to third-party sub-contractors, so it was at 70% capacity," said Mr Rivers.
The solution was to bring most machining in house and improve internal logistics, with increased trunking from Glasgow to Shellingford. The outcome is a 29% increase in manufactured sales and a mill now running at 120% capacity.
In 2013 Mr Rivers also secured a new £20m finance facility from Lloyds and over the last year Timbmet has started to put that money, combined with its own reserves, to work. It has bought 12 state-of-the- art Scania trucks, with 12 more planned, while Shellingford has added four more Combilift trucks, taking its fleet to 30.
Other investment covers a website relaunch and new edgebander at the Stonehouse depot. "We’re also looking to add a coating facility," said Mr Cox, "and we’re completely overhauling telecoms, so we have one seamless system."
Having trimmed its ailing overseas business (notably dropping India), Timbmet is also rebuilding this specialist aspect of its operation.
"We still have a strong international reputation for supplying hardwood and we’ve been increasing activity in the Far East, notably Singapore and Japan," said Mr Rivers. "We’re also Middle East agents for Accoya, with which we had an excellent Dubai Wood Show this year, and we now have a guy promoting TEC (Timbmet Engineered Components) in the US."
Rounding out an increasingly healthy picture, Timbmet has agreed a 15-year deal to pay its pension deficit, and implemented modest pay rises and a staff bonus scheme.
"It’s been hard work but we’re now confident there’s a lot more to come from this company," said Mr Rivers. "We were a £110m business. That’s where we want to get back to and beyond."
Reservoir logs
To say that the latest exotic hardwood additions to Timbmet’s range give it a different sales story is an understatement. The ultra dense, durable Central American species derive from trees up to 400 years old and 20ft in diameter. But the really distinctive twist in the tale is that the timber has spent three decades under water.
The material comes from Lake Bayano in Panama, a reservoir which submerged 353km² of rainforest in 1979. It’s been untouched since, but the authorities have now issued harvesting permits to companies with the expertise to retrieve it, including Timbmet’s supplier, British Columbia-based CoastEcoTimber.
The company was established by managing director Alana Husby, who exudes enormous passion for the project. In the UK for the launch of the timber with Timbmet, she pitched it with enthusiasm, notably its unimpeachable green credentials.
Ms Husby studied forestry then worked in the family firm, Husby Forest Products, where she became "obsessed" with recovering and selling waste wood from logging operations.
From there, recovering the ‘waste’ Bayano forest seemed a natural step. She formed CoastEcoTimber and secured a 15,000ha underwater concession, estimated to contain around 600 million board feet of timber, comprising 15 hardwood species.
Two years on, the company employs 110 people, half from the indigenous Kuna Madugandi people, and has a mill near the lake where it processes the timber.
The harvesting method depends on the lakebed terrain.
"We work with Triton, a company which developed a mechanised underwater harvester that can be used in open areas," said Ms Husby.
"In others we have dive teams using hydraulic chainsaws. They fasten barrels to the tree, which are pumped full of air, then, when they cut the trunk, it rises to the surface."
The bulk of the timber is unscathed by decades underwater.
"It produces a stunning end product with incredible colour and grain effects," said Ms Husby. "Most is suitable for indoor and untreated outdoor use, and externally it silvers rapidly, which architects really like."
The material has also been audited by the Rainforest Alliance under its rediscovered wood programme and given FSC Controlled status. Initially Timbmet is offering the material in natural edged slabs, in species including zapatero (Panamanian walnut), dramatically striated dragonwood and cedro espino. Some pieces are 20x5ftx3in.
"We’re marketing these as one-offs for applications like counters and table tops, and they’re priced accordingly," said Nigel Cox.
Next Timbmet will add amargo amargo decking, pitched just below the price of ipe, followed by sawn timber in a similar species range to the slabs, with lengths from 8-16ft and thicknesses of 1-3in.
Giving the material added UK impetus, it starred at the Grand Designs Live show as presenter Kevin McCloud had awarded CoastEcoTimber "Kevin’s Green Heroes" status.
