Going against the grain

by Melissa Hancock - Tuesday, 4th September 2007 -

What do you do when the price of the key resource that your business depends on increases by 25 per cent in a 12-month period?

Ask Neil Donaldson, the fifth-generation chairman and CEO of James Donaldson & Sons, one of the UK’s oldest family-run timber businesses. His business has just announced a 193 per cent increase in profits for the last year.

“There was no way we could avoid the rise in the price of timber last year. The only way we were able to remain competitive was through the integration of technology – our computer-controlled Mitek hydra-press equipment fits that bill. We have two machines in the UK and one in Ireland,” says Neil.

Each machine costs around £400,000 and reduces the set-up time of a roof truss from 30 minutes to one minute. The manufacturing time is also shaved – from two minutes to 30 seconds.

“I truly believe the equipment in all our various factories around the UK must be the envy of our competitors,” continues Neil. “Whenever there is an opportunity to improve efficiency by buying a new piece of equipment then we do just that.”

Last year the company also made a £300,000 investment in its treatment plant, making it the UK’s largest plant for preventing wood decay. Since becoming operational three months ago, the new plant has treated almost the same volume of wood as the old facility did during the previous 12-month period, resulting in an increased capacity of 300 per cent.

James Donaldson & Sons has been investing anything between £1m to £2m a year in the business for the past ten years and, aside from technology, a fair proportion of that goes on employee training.

“Our external spend on employee training last year totalled £46,000. But we estimate this only accounts for around 20 per cent of our total training – the vast majority is carried out in-house,” says Neil.

The investment is obviously paying off. The company’s labour turnover is 1.3 per cent, compared to the industry average of 19 per cent.

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