“A strong bond of trust” is what Continental Wood Products (CWP) says lies at the heart of its trading relationship with the Baltic states. As a fledgling company in 1990, CWP’s main objective was to develop opportunities arising from the newly independent countries. Initially creating a source of pallet wood supply suitable for the UK market, the company has since grown to be the largest UK stockist of a wide range of Baltic products.

In the early days CWP’s directors found themselves pioneers in countries with a limited business culture, but with a healthy appetite to exploit the new markets independence would open for them.

Director John Phillips recalls initial visits involving meeting potential suppliers at the rate of one an hour from 8am to 10pm for three to four days at a time.

“This,” he said, “would be followed by visits to antiquated and, in some cases, derelict sawmills, usually one- or two-man bands scattered around the country.

“We were really having to dig round to find suppliers. One man – a professor of mathematics who had gone into the timber business – could not get us to his sawmill because of heavy snow and instead drove his lorry loaded with sample packs to the hotel for us to inspect in the street. That type of initiative has helped turn the Baltics into the leading timber suppliers that they are today.

“We were as selective as we could be but, in the early days, we did not know who the good guys and the bad guys were. However, as far as integrity is concerned, I would highly rate the Baltics – we have only been let down once in 10 years.”

Practical help

Much of CWP’s success has been due to its willingness to back suppliers with both practical and financial help.

The early days in the Baltics were extremely demanding as most sawmills had financial problems and the banking system was unreliable – there was a lot of trust involved, prepayments were often made to help suppliers keep businesses going, and the risk factors were very high. Today most suppliers are financially sound, their businesses are professionally run and complemented by newer technology.

Mr Phillips said: “There is greater political and financial stability and the Baltic countries are now fellow members of the EU.

“CWP knew the only way it could succeed was by meeting the needs of the market. Certain specifications were required in the UK that were not easily sourced from historic suppliers. By using up to a dozen sawmills we could mix and match the specification our customers wanted, which is still what we are about today. Even in 2004 it is not possible to find many suppliers who can meet the full range of sizes and grades the UK requires and we continue to work with several of our original suppliers to source products, including pallet wood, carcassing regularised dry graded, fencing products, and birch lumber and furniture components.”

Adding value

CWP’s policy is to help both itself and suppliers by adding value wherever possible. To develop this market it has helped create a cut-to-size furniture component business which has grown dynamically in the past two years, although it took time to achieve the type of supply and quality needed.

The only limitations to further development are likely to be raw material supplies and the mills’ technical ability. Mr Phillips said: “It’s all very well having great sales connections, but if you don’t have the right products you can’t succeed.”

Fortunately for CWP, its Baltic colleagues are receptive to new ideas. Softwood director Nigel Paines said: “We work in partnership with our supplier friends who are only too pleased to find new outlets and increase value.”

Part of CWP’s strategy for the long term is investment in a new sawmilling project in Estonia which has its own kilning, regularising and grading facility, soon to be complemented by a pallet wood line and treatment plant.

Ninety per cent of everything that CWP supplies is from its stocks, valued at several million pounds, which, it says, takes the risk factor out of importing for many of its customers.

UK facilities

CWP’s UK operation includes a treatment plant and milling facility at its main distribution centre, Baltic Wharf in Rochford, Essex, where its weekly chartered vessels are discharged into a dedicated timber handling facility within the 46-acre site.

“When you consider how old and traditional the timber industry is, and the fact that none of the original CWP directors come from a softwood background, we have got ourselves on the map in a relatively short time. We are firmly established both in marketing and financial terms, and this is complemented by a strong balance sheet following years of reinvestment,” said Mr Phillips.

“Maybe we have succeeded because we have no preconceived ideas other than to meet the needs of the market. When we started we had nowhere to go but forwards. But whatever we have achieved is historic – it’s tomorrow that matters, and the years ahead.”