Fencing and garden products specialist Forest Garden reports buoyant demand for its wide-ranging portfolio and says its grown in Britain, made in Britain position stands it in good stead following the EU refererendum.
“We believe having our own mills using home-grown timber gives us an edge, not least from an exchange rate perspective,” said John Gomersall, sales and marketing director. “We’re very new into the post-Brexit period but almost overnight the cost of imports rose by 10-12% so in theory we’re insulated to some extent and British production and supply should be more attractive.”
Forest Garden sister company M&M Timber uses the slogan “proud to be British”, so there’s a potential emotional pull, too. “We would hope and expect that people are going to support British industry and manufacturing and it’s something we’re going to leverage as much as we can.”
The “flip side” of Brexit, added Mr Gomersall, is the risk that an increase in import prices may force up the cost of home-grown material as harvesters realise they can get more money for their round timber .
And, while raw material availability for the company’s Lockerbie mill has been good, he said, it was worth noting supply can also be dependent on harvesting for carcassing mills. “If the construction market isn’t particularly buoyant it can be a challenge to get our round timber, which is taken from sections higher up the tree than carcassing timber.”
With the new National Living Wage coming into effect, labour costs will rise and access to seasonal labour could be impacted. “We use a lot of eastern European labour and we appreciate their work ethic,” said Mr Gomersall.
Forest moved to a consistent production profile in 2014 to lessen the significant peaks and troughs in output and this, he added, has reduced the dependence on temporary labour and provided “more certainty” to employees. After a slow start to the year, the market has been good.
“We were around 5% down on core fencing products in the first quarter, with the weather and the early Easter playing their part,” said Mr Gomersall. “But we were 13% up on the second quarter. There were storms in the south and south-east, which are quite densely populated and that had an impact. The storms also coincided with a couple of our key customers doing some fairly strong promotional activity so everything came together at the same time.”
Decorative fencing was up around 3% by July with Forest’s merchant customer base performing strongly in this added value area. Merchants have also embraced Forest’s revamped offering of sheds and sales at July were up 13% year-on-year and ahead of expectations.
Products have been turning over well and going into the fourth quarter Forest has headroom to build stocks for 2017. “We’ve got a great opportunity now to keep moving forward at pace ready for the next season, which is exactly where we want to be,” said Mr Gomersall.
Where Forest won’t be, however, is Glee. The success of the company’s showroom, which it opened in at the end of 2014 has convinced it to concentrate on showcasing its new products and merchandising solutions at its Hartlebury base, rather than at the Birmingham NEC.
“We had over 50 key customer visitors to our showroom last year,” said Mr Gomersall. “They were key regional and national players from across our customer base. They visited our showroom, spent quality time with us, selected their ranges and gained inspiration on how to best merchandise and sell our products.”
