James Latham has double cause for celebration. This year it marks its 250th anniversary and it does so, maintains new chairman Peter Latham, from a current position of both commercial and strategic strength.
In conversation he’s as keen to discuss the present and future as the past, if anything more so. And this will clearly be the focus of anniversary festivities – that this is a business looking forward more than back.
That’s not to say that Latham won’t be making the most of its special birthday. The pride in its pedigree is evident from the gallery of past chairmen in the Hemel Hempstead head office. Most are from the 20th century, but they stretch back to the fourth James Latham to head the company in the 19th.
To put the company in historical perspective, when the first James Latham set up to import high grade furniture and joinery hardwood into Liverpool, George II was king, Nelson wasn’t born for another 12 months and America had 19 more years as a British colony.
At the time, the timber business followed the trade winds, with Latham’s mahogany collected from Jamaica by ships on the round route from Britain to Europe, Africa, the West Indies and back.
Family firm
The company soon spread its net to London and through the 19th century established further sites, continued to develop its supply network and customer base, and added Baltic pine to its portfolio. It was also in this early period that the pattern of family ownership took root that has stood it in good stead ever since.
“The cliché of the family firm is one generation setting it up, the son developing it and the grandson spending the money!” said Mr Latham. “But at Latham, different family members were brought in for specific roles and tended to work their way through the business.”
Mr Latham joined the company in 1973 after studying economics at Exeter University. As a Latham, the pressure was on to “strive harder” to prove your mettle and he soon found that family connections didn’t guarantee an easy ride. His first job was training officer, but he was then moved to the testing central London sales slot.
“It was a tough patch with some demanding customers,” he said. “One I dreaded was a cigar maker who bought mahogany for boxes. I had to brave the room where the women rolled the cigars – and they weren’t shy. As a young salesman I got some choice remarks!”
In his view, overall Latham has had the positives of family ownership, with few of the negatives. “It’s kept us fiercely independent and there’s a feeling pervading the company that we’re stewards of the business, here for the long term.”
And family ownership has not precluded Latham drawing on other perspectives either. While they retained over 50%, the company went public in 1961 and it also appoints non-family board members, director Chris Sutton being the latest.
After its development through the 19th century, Latham’s next big “growth spurt” came in the 1930s and 40s with the acquisition of home-grown mill Roland Bros, plywood producer Richard Graefe, and the Trebartha sawmill. In the late 1920s the company had also acquired Nigerian Hardwood Company, which formed part of the business for half a century.
Need to evolve
From the 1970s, as old lines of demarcation between various branches of the timber trade increasingly broke down, Latham knew it had to evolve again. “The stress was increasingly on our role as a distributor,” said Peter Latham. “We had to get closer to customers and, principally, that meant leaving our 18-acre Clapton depot. It served a wide area and access was increasingly problematic. Although, as it turned out, planning permission difficulties and indecision meant it took us a couple of decades from the time the idea was suggested to sell.”
Latham also had a merchanting arm which, for a while, formed a “substantial part of the company”. But this sat increasingly uncomfortably with development plans and was sold to Buildbase in 1999. Latham later decided its ceiling and partition subsidiary Neville Long, acquired in 1990, did not form part of its future either.
“The market was divided between three companies – two big ones and us,” said Mr Latham. “When Wolseley expressed an interest last year, we decided to sell.”
In 2001, preparatory to leaving Clapton, Latham moved headquarters to Hemel and set up depots in Thurrock and Purfleet, and the old east London site was finally sold in 2004. This final restructuring created Latham as it is today, with its other sites in Wigston, Dudley, Ossett, Yate, and Gateshead.
None of the present premises is on Clapton’s scale, but Latham offsets this by driving up efficiency in the space it has. A new warehouse model, using narrow aisle, 8m racking and four-way Combilift lift trucks, is already bedded in at Hemel, Thurrock and Purfleet and this is being rolled out at other sites.
“Our approach is increasingly akin to retail,” said Mr Latham. “We ideally turn over stock seven-and-a-half times a year and depots are fined 10% if they’re overstocked and rewarded 10% if they’re understocked. We’re making the assets work.”
A new computer system, BisTrack from Progressive Solutions, is another feature of the drive for productivity and, interestingly, Latham teamed up with Arnold Laver to install it, even though in some areas they compete.
“We were both switching from another system and it made sense to collaborate. Today BisTrack is giving us a lot of key business information.”
New challenges
Having taken on the chairmanship in December 2006, Mr Latham says he’s now excited about building on the restructuring and consolidation work of his predecessor Roger Latham. The business, he feels, is now leaner, fitter and ready to move forward. Importantly, recent disposals have also enabled it to plug a large part of the pension fund deficit and to further develop the business.
His style of management, he said, would be to devolve power as much as possible to the branches. “I’m keen to delegate authority to the appropriate level. It empowers staff and improves customer relations.”
He’ll also be maintaining the company’s commitment to training. “It is difficult today to send people on block release, but we have a good number doing IWSc courses as distance learning or day release. I also think it’s important for everyone to keep their nose to the grindstone with refresher courses and continuing training.”
Mr Latham is intent on pushing boundaries in environmental performance as well. “We’ve been at the forefront of certification and want to maintain that record,” he said. “Recently we’ve taken one of the first consignments of FSC-certified plywood from Indonesia and hardwood from FSC-certified concessions operated by Wijma in Cameroon and CIB in Congo. I’m also on The Timber Trade Federation’s environmental committee and took part in its missions to Africa and Malaysia.”
He believes the industry has a way to go down the certification road and sees major challenges and problems ahead. “But I’m optimistic,” he said. “At Latham we give equal weight to PEFC and FSC and I see encouraging signs that they will eventually call a truce and work together on key issues. If they co-operated on chain of custody, it would be huge progress.”
Latham is also looking at further product diversification. Particularly good prospects are seen in hardwood flooring and supplying the real wood kitchens and shopfitting sectors. It looks set for more involvement in Chinese plywood too. “We didn’t follow the rush to China. But, working with the Global Forest Trade Network and Tropical Forest Trust, we feel we’ve found a supplier with the right environmental credentials.”
Following its success with LG HiMacs acrylic surfaces, sales of which have hit £3m a year, Latham sees further potential in adding more non-wood lines to complement its stock-in-trade in wood-based panels, hardwoods and clear softwoods.
Now listed on the “lighter touch” Alternative Investment Market, Mr Latham also believes the company is well placed to “fill gaps in geographic coverage” through greenfield developments and acquisition.
The other project preoccupying the company is, of course, the anniversary. To mark the occasion it is creating the 250 oak tree James Latham copse in the new National Forest in Derbyshire, which covers over 200 square miles. There will also be events at the individual depots to involve the 275 staff and their customers and suppliers. Inevitably at these a glass or two will be raised to the achievements of yesteryear, but the toast will also undoubtedly be to Latham tomorrow.
