In all spheres of life everyone tends to look up to those older and bigger than themselves. With foundations going back to 1848, BSW Timber is one of the elder statesmen of the timber industry – and when size comes into the equation it has no equal in its field. This leads many in the trade to watch what it does with interest.

Recently, however, BSW has been doing the watching. It’s taken a long hard look at itself and made some major changes.

One prompt for the probe was the company suffering its first financial loss in its 150-year history. Examination revealed this was not just down to external factors – much had to do with the start-up costs of its new £12m sawmill in Latvia.

The self-examination led to some radical decisions – one of which was to sell BSW Harvesting. ‘It was a serious decision as we had to be sure we were going to have the security of a log supply,’ said chief executive Paul Barham, ‘but once we had established that, it wasn’t difficult.’

Mr Barham said that while a mature harvesting infrastructure is essential to any sawmill, BSW’s operation was no longer strategically relevant.

‘We are the largest log buyer in the UK and the more you buy the more complex the operation is,’ he said.

BSW’s harvesting operation was set up because no infrastructure existed. ‘We needed security, continuity, quality and competitiveness and it was right then to have our own log supply – but times change. If others can provide the things we need then it makes no sense to have them within the group.’

The operation was sold to Tilhill at the end of last year. Mr Barham said: ‘There was a comfort factor in our people going to Tilhill as they know exactly what we require.

Log procurement

‘What we have to do now as a group is manage and control very carefully the procurement of logs. This is done both centrally and regionally and we have dedicated people involved – plus we have very close relationships with our suppliers. They have to understand our business absolutely – we are inextricably linked.’

Another important change was the closure of the central sales and marketing operation at Cranage and the setting up of regional offices in its place.

Mr Barham explained: ‘What you can’t have in a business, and particularly in our industry, is polarisation. Regional sales offices bring together the market capabilities with our production capabilities.

‘To be successful all businesses should be customer focused rather than solely production focused. There has been an attitude of “we sell what we make and the market should take it” – but that has changed. There has to be a mutual understanding of the market requirements and the production capabilities – and whether production is in tune with that market.’

To that end, BSW recently completed an investment programme of more than £1.4m at its flagship Carlisle site which allows for further phased developments including machining and re-sawing operations.

New equipment includes an additional strength grading line and a Kalfass mechanised cross-cutting and stacking operation for both board and batten products. These can now be supplied either on-line from the green mill or from the stockyard to maximise flexibility of the production processes.

Alan Wheat, BSW’s national sales manager, said: ‘We spent a considerable time in the early part of 2001 researching the market in order to fully understand the changing needs of our customer base.’

Having identified those needs, the company then set out to provide a solution and Mr Wheat said: ‘Now we are fighting to keep up with demand. The Kalfass line enables us to take on the increasing demand for cut to length pallet board material with realistic lead times. BSW recognises the importance of this market sector and the investment in Carlisle signifies our long-term commitment to it.’

Further substantial investments are planned during the next 12 months.