Summary
• BSW Timber has six mills in the UK and one in Latvia.
• The group’s annual capacity is one million m³, rising to 1.3 million m³ by 2015.
• A major investment programme is under way.
• A new visitor centre at the Carlisle mill showcases British timber.

BSW Timber’s chequebook has taken a bit of a pasting recently. There’s the £8m the company has forked out at its Fort William mill, the £7.5m at Howie Forest Products at Dalbeattie and the £6m at the Carlisle mill. And those are just the major investments – big bucks are also being spent on the other operations within the group.

The group is in the middle of a growth spurt, through both acquisition (it bought Howie two years ago) and investment and has ambitions not just to reinforce its position as the UK’s largest sawmilling group, but also to become the most profitable.

It prides itself on the national coverage it provides from its six UK mills – Boat of Garten, Petersmuir, Fort William and Dalbeattie in Scotland, Carlisle in England and Newbridge in Wales – and from its mill near Riga in Latvia. Among them they have 924 employees and an annual capacity of one million m³ of sawn timber. Group turnover for the year ending March 31, 2011 was £163m, up 48% on 2010 (£110m), with profits after tax at £12.4m – a massive 280% increase on 2010 (£4.4m).

Traditional sawmiller

Despite its size and reach, BSW is still, says chief executive Tony Hackney, a very traditional sawmilling company. And he added, because it is still privately owned mainly by the Brownlie family who all support this investment programme, profits can be ploughed back into the mills, rather than translated into dividends.

“This way we can strengthen the company, serve the customer better and be a completely reliable outlet for the supply chain,” he said. “And, of course, we also want to continue to grow market share.”

The major investments at the moment are focused on Fort William, Dalbeattie and Carlisle, with the target being an annual group capacity of over 1.3 million m³ by 2015 – “if not before”.

Investment at Dalbeattie was announced last year and is already well on the way to realising its potential of boosting Howie’s capacity by 40% to 350,000m³. Work has included the installation of a £5m planer grader line which is being commissioned now and which will double output of Easi-Edge construction timber to 120,000m³ per year. A £1m stacking line is already up and running – again boosting Easi-Edge capacity – and an additional 5MW biomass boiler has been installed to heat the kilns.

Fort William site

Over at Fort William, where £43m has been spent since expansion plans began three years ago, investment also continues apace. Again this comprises a planer grader line, due to be commissioned in November, which will mirror the technology, if not the configuration, of the one at Dalbeattie – ie Ledinek planers, Microtec Goldeneye scanning equipment and what Tony Hackney terms “the Rolls-Royce of handling and stacking equipment” from Austria-based Springer.

Two 5MW biomass heating plants are currently being commissioned and will generate heat for Fort William’s 10 kilns, replacing the current oil-fired boilers.

Once the infrastructure is in place, the existing ‘K1’ saw line will be replaced by ‘K2’. Equipment purchasing decisions have just been announced and BSW expects K2 to be fully commissioned in mid-2013, at which time production will double.

More dizzying sums are being spent at Carlisle with an overall £6m investment in the mill operations. Here, cross-cutting capacity is being doubled thanks to the installation of a Kalfass multi-head cross-cut and stacking equipment. Meanwhile, other improvements are a new dust extraction and vacuum system to improve the working environment and an additional 25m-long pressure treatment vessel is to be installed later this year, in preparation for the next fencing season.

Research and development

A further £250,000 has been invested in a 2m³ pressure treatment vessel and 10m³ “research and development” kiln. “This will enable us to experiment with the product in a full-scale plant rather than at a lab test facility, to see how we can improve what we do and to bring new products to the market,” said Mr Hackney.

The now almost ubiquitous – at least as far as BSW is concerned – biomass boilers from Slovenia-based KIV, are also in the construction and planning stages. They’ll provide heat for the kilns and help fulfil the company’s and the government’s renewables ambitions. It is BSW’s intention that all its mills will be self sufficient in heat energy.

In the spring there will be a new round of spending at Carlisle, with £4m earmarked for the installation in March of a planer grader line, with the same technology as at Dalbeattie and Fort William sawmills.

The figures would be eye-popping enough in times of plenty but in today’s economic climate they are even more exceptional. But for BSW they are the manifestation of its strong self-belief and of its conviction that British-grown timber has a solid future.

“The investments are a risk for us but when you’re growing a company you can’t do things in half measures,” said Mr Hackney. “It’s a bold move but it follows thorough investigation into what we do, how we do it and choosing the right equipment and the right partners.

“Then away we go and we will find the market and ensure that we supply it with material and fully utilise the mills. The programme is totally supported by the BSW board, the shareholders and the banks.”

The investment at Carlisle also underlines the group’s commitment to its Cumbrian operation. BSW’s purchase of Howie Forest Products, just 45 minutes away from Dalbeattie, caused some local consternation – why would BSW want to retain Carlisle when it had “a monster mill” just over the border?

Loyal servant

Tony Hackney’s position on this is unequivocal: “Carlisle has been a loyal servant to BSW and is in a prime location in terms of the motorway network. Our operational centre of gravity is both Carlisle and Dalbeattie – but Carlisle is going to play a very important role in the future.”

He’s referring not just to the mill’s bolstered production capacity but also to its role in the promotion of timber – and British timber in particular. The Carlisle site now boasts a brand spanking new visitor centre, which is being made available to all BSW’s customers for their own regional meetings or for training purposes.

“We can put our customers’ employees through our two specialist training courses which outline the basics of wood science and best practice in selection, storage and use of home-grown timber,” said group marketing manager Eve Johnson. “We also take them to see a harvesting operation.

“We’ve already had a trial run, which was very successful, so we’ll be rolling this out further,” she added.

Along with the Carlisle site visit, there will also be the opportunity to view the Dalbeattie operation. “This means they can see two different technologies in one hit,” said Mr Hackney. “A chipper canter profile line at Dalbeattie and a chipper canter quad bandsaw at Carlisle.”

Visitor centre

The visitor centre also acts as a showcase for British timber. The timber frame is spruce, milled at Carlisle; the exterior cladding is larch from Fort William; while the exposed beams are Douglas fir from BSW Petersmuir, which specialises in long lengths.

“We’re trying to promote these species,” said Mr Hackney. “I think the industry generally has regressed into only cutting whitewood and there’s an opportunity for us to provide other materials to the market.”

British-grown softwood now accounts for around 40% of the total UK softwood market and of that BSW supplies around 12%, so despite being the market leader by some margin (it accounts for about 33% of UK production) it still has “a lot to go at”.

Tony Hackney makes no apology for BSW’s “aggressive” approach to competing against imported softwood. “That’s my ambition in life,” he said candidly. “I’m here to make and sell products for BSW, I’m here to make life simple for my customers with a product which is readily available, and I’m here to keep our mills busy in what everybody would agree are difficult times.

“I think we have to make our own markets and overcome ‘consumer resistance’ by providing something better than our competitors do – not just in the UK but internationally,” he continued. “We’re making a mark here and I’m grateful to customers who have realised that home-grown timber is fit for purpose and has a role to play.”

C16 promotion

BSW has the luxury of being able to supply C24 material from its Latvian mill, but its marketing strategy has included the heavy promotion of home-grown C16 material as a viable alternative to imported C24, which is often “over-specified” by architects.

The campaign launched at the beginning of this year and saw BSW join forces with the 2011 RIBA Roadshow to host a series of 10 CPD seminars promoting the benefits of C16. Bespoke supporting material complemented the roadshow.

“Our C16 marketing campaign is part of an education process aimed at helping specifiers understand the alternatives,” said Ms Johnson, who spearheads the campaign. “It’s about helping specifiers understand what fit for purpose means and what is actually required.”

“We’ve got a good product that is immediately available and there is such a significant price differential that I hope people have to look at it,” said Mr Hackney. “And we’ve put in all this technology to improve the quality and the presentation and finish of the material so it will even look as good as imported material as well as being fit for purpose.

“I think there is a big future for home-grown timber.” And, of course, he could have added, for BSW, too.