Strength in diversity

Summary
• Ridgeons Forest Products plans to quadruple output within five years.
• Multi-million pound investment included a new mill and more warehousing space.
• It supplies its builders merchant parent Ridgeons Ltd, and external markets.
• It has FSC and PEFC chain of custody.

While 2008 may be proving to be a challenging year for many of us, there’s at least one company that remains confident it has the flexibility to stay ahead of the game.

Far from drawing in its horns, Ridgeons Forest Products, a division of East Anglia-based Ridgeons Ltd, the UK’s largest independent builders merchant, has invested heavily and intends not only to double output in 2008/09, but to quadruple it within five years.

Ridgeons Forest Products was set up 20 years ago, initially simply to supply timber products to its parent company. However, as the merchant grew (it now has 21 branches across East Anglia) and its business developed, so did Forest Products, and it became apparent that there was a wider customer base out there.

“We were aware that because of our unique skills in timber conversion and high quality finishing, there were other opportunities from outside the group,” said Mike Cammack, divisional director at Forest Products’ main site in Herringswell, Suffolk.

So around five years ago, the division began to identify different markets, the first of which to come on board was the picture mouldings industry. “They were looking for an opportunity to replace ramin and found that our openness and willingness to talk to them about what they could and couldn’t do [with different species] was as helpful as our machining skill,” said Mr Cammack, adding that Forest Products now supplies obeche, oak and ash, as well as high quality pine for picture mouldings.

That breakthrough persuaded the company that it was worth pursuing other markets, while still feeding the merchant branches and it now sells direct to sectors including shopfitting, garden buildings/sheds, furniture, civil engineering and caravan construction – the latter of which is undergoing something of a renaissance.

It’s this diverse customer base that has given Forest Products the incentive to invest, although the com-pany has never been shy of spending money.

“When we set up 20 years ago we did so with one of the most modern sawmilling lines in Europe and only the second CNC line in the UK,” said Mr Cammack. That line had come to the end of its natural life, however, so the decision was made to invest just over £5.5m at Herringswell and a further £2m at the company’s timber engineering site (also part of Ridgeons Forest Products) at Sudbury.

“The reinvestment in our sawmilling line will enable us to supply an ever increasing and demanding group as well as give us the opportunity to look for specialist external markets,’ said Mr Cammack. “We have a five-year plan that will take us to at least four times the level of where we are now.”

It’s not just the output that will change – the balance of external to internal sales will also shift: “External sales accounted for about 25% of our turnover in 2007 and by 2012 we would expect external sales and sales to the group to be in equal part.”

The investment has seen the addition of a further 8,500ft² of warehousing space, more fleet vehicles, 10 more staff and a new office building, but the heart of the matter is the mill upgrade. A custom-designed 28,000ft² building now houses gleaming machinery from the Weinig stable, including the Powermat 2000. It’s quite a sight to behold and Mike Cammack is excited by the opportunities it presents.

Not only will the new mill improve efficiency levels, and therefore, margins, it will also increase the company’s flexibility – and in an uncertain economic climate, flexibility is crucial.

“The days of customers buying large volumes of material, placing it in their yard and order picking as required have long gone,” said Mr Cammack. “Now it’s all just in time, little and often. You have to respond to that demand and you can’t do that unless you have the ability to interrupt the mill and switch [to another product]. This equipment allows us to do that.”

He’s confident that by keeping toes in various camps, he’ll find buyers for the extra output. “This mill is designed for total flexibility, so as market opportunities arise in different sectors, we have the capability to move into them,” he said.

Adaptability also enables the company to respond to the seasonality of some of the sectors it supplies – furniture manufacturing and shopfitting, for example.

There is also confidence that trade through the builders merchants will prosper and, just as Forest Products benefits by having Ridgeons as its core customer, so the parent company benefits from having control over the conversion and optimisation of its timber supply.

“We feel that, particularly with our timber engineering division, we’ve got enough within the package we offer to remain quite positive,” said Mr Cammack.

There are other, perhaps more quantifiable reasons for optimism, too. For example, 500,000 new homes are forecast to be built across the east of England over the next 20 years and there is plenty of potential for timber frame in affordable housing with Cambridge City Council setting a 40% compliance point for new developments within city boundaries.

And, he added, with chain of custody for both FSC and PEFC timber, the group should be able to tap into any building projects that require a high level of sustainability.

It all adds up to Ridgeons Forest Products being “a good place to be”. “Getting your hands on this level of investment is very exciting,” said Mr Cammack. “There’s a real wow factor to an operation like this: we’ve got the best technology available and it’s a sign that we’re going to be here for a long time. This gives confidence to the workforce and improves morale. There’s a real buzz about the place.”