Summary
¦ Balcas invested €3m in a new production line.
¦ It now manufactures more than 2,000 different profiles.
¦ The UK is the company’s main market.
¦ Veneer-wrapped mouldings and serviced door frames are growth areas.
Balcas Group’s architectural mouldings facility, Balcas Kildare in Co Kildare, has achieved the seemingly impossible during the recession. It has come through the other side with its volumes intact, its market share more than doubled, and a production capacity primed to take advantage of the eventual upturn.
The manufacturer of primed and veneer-wrapped MDF mouldings for the construction and home improvement markets has had to stay on its toes to keep ahead.
“The continuity and predictability of volumes which once existed in the mouldings market are gone due to the decline in new build housing,” said managing director David Gill. “But we reacted promptly to this changing demand and developed a product and service offering which works for today’s market.”
Major investment in production technology, particularly over the last couple of years, has made this possible, enabling Balcas to improve its product offer and expand its presence in the public and RMI sectors, while limiting its exposure to the depressed housing market.
Investments included a new dust extraction system to gear up for increased capacity, a Weinig 200 Powermat moulder and an additional veneer wrapping machine. The most significant investment, however, was the introduction of a €3m fully-automated production line with Powercom technology.
“We needed to increase our efficiencies and become extremely flexible to survive the recession,” said Mr Gill. “The investment has enabled us to reduce set-up times and this has reduced our production costs. We’ve also increased our production speeds and improved quality.”
Rising exports
The new line – “the first of its kind” – runs at 80m/min, a significant increase from the market standard 50m/min and it necessitated some R&D from Balcas’ primary MDF supplier, Medite.
“We needed to find an MDF board that would run at this speed,” said Mr Gill. “Medite’s innovation director Joe Kennedy and our production director Peter Burton worked tirelessly to get the board to our specification.”
Speeding up production has brought down lead times for customers which, at a time when distributors are reluctant to hold much stock, has been crucial for growth.
Output has stayed consistent throughout the recession, thanks to the company’s exposure to the UK’s public sector and RMI markets (93% of output is destined for the UK). That’s achievement enough, but the rise in market share has been even more impressive.
“Within the last year 20% of our volumes have come from new customers and this is thanks to the flexibility of what we can offer,” said Mr Gill.
Public sector work in the UK has certainly buoyed the company through recession and along with RMI – which has remained “resolute throughout” – it accounts for 80% of the business. However, Balcas hasn’t ignored the private sector and, indeed, is seeing it pick up, while government and local authority work is showing signs of tailing off.
Broadened product range
The company’s activity in various markets has encouraged it to broaden its product range.
“The big national housebuilders aren’t buying the volumes they were, but we’re seeing smaller builders with, for example, five house types saying they want their own skirting range,” said Mr Gill. “We now have a product portfolio of over 2,000 profiles. Three years ago it would have been less than half that. To maintain ultimate flexibility and control we have our own tool-making facility in-house.”
Serviced door frames are another growth area for Balcas. The company’s joinery production lines have become a bigger feature of the business as builders try to keep their on-site costs down. “We’re being asked to cross-cut door frames, trench frame heads and recess door frames for hinge and latch recessing,” said Mr Gill.
Future growth for Balcas is likely to come from the re-emerging private sector and, from a product point of view, from higher margin added-value business such as veneer-wrapped mouldings. Solid veneer wrapping has become more popular in the last 12 months as hardwood prices have risen.
“While the market remains challenging, our enhanced manufacturing capabilities are paying dividends,” said Mr Gill. “We have managed to reduce production set-up times, increase product quality and grow our product range. By succeeding in these key areas we have increased our customer base and market position significantly.”
