The bigger picture31 October 2009 by Mike Jeffree
International Plywood has evolved dramatically since its launch in 1988, and the development continues
• International Plywood averages 30,000 tonnes of stock nationally and despatches up to 8,000 packs a month.
• The company has FSC and PEFC certification and was an early signatory of the TTF’s Responsible Purchasing Policy.
• This year it won both Plywood Trader of the Year and Panels Trader of the Year categories at the TTJ Awards.
International Plywood’s (IP) first ever advert used an image of a jigsaw puzzle and the slogan “it takes many pieces to make a great business”. The intervening three decades have seen many more pieces slot into place and the emergence of a much bigger, broader picture.
Since its launch in 1988 IP has quadrupled turnover to £60m, expanded and diversified its product range and extended its distribution network across the UK and now to the Continent. The fact that it picked up two trophies at the 2009 TTJ Awards – both Plywood and Panel Trader of the Year – underlines that this is also a business that has established quite a reputation among customers.
How IP has become, in the words of managing director Ian Attwood, “one of the UK’s leading panel products players”, is attributed primarily to getting the business fundamentals right. But what has also clearly played a role has been the ability to recognise when it needs to change, improve and adapt to the demands of the market.
Supply chain logistics
IP was created when Mr Attwood’s father, David, hived off the importing arm of plywood merchant/ importer William Sharvatt. From the outset, one of the fundamentals it focused on, and one which has been core to its success since, was supply chain logistics.
“In our business it’s vital to get this right,” said David Attwood, who as chairman is still involved with shipping and procurement. “It’s where you can really differentiate yourself in the market and stand out from the crowd.”
And key to efficient logistics, added Ian Attwood, is working closely with the right shipping companies.
“We’ve formed strong partnerships with three or four shipping lines, all forest products specialists,” he said. “We’ve developed an understanding of each other’s business and know we can rely on them.”
Having such close relationships also enables IP to secure the best rates, with the preference being exclusivity on break bulk whole vessel-loads, which it says give it greater control than buying by container.
After evolving steadily in its early years, the pace at IP accelerated through the 1990s following the break-up of the hardwood plywood monopoly held by the Indonesian Apkindo trade organisation.
“That freed up the market and enabled us to form direct relationships with mills,” said Ian Attwood.
It was also in the 1990s that first Ian and then his brother Robert came on board. Their immersion in the business ranged from working in the yard to selling out on the road, with Ian eventually succeeding Scott Golding as MD in 2005 and Robert now director with special responsibility for logistics and stock control.
“Another of our strengths is that the rest of the management team also have experience across the business and understand every aspect,” said Ian Attwood. “We’ve also remained a family company, with a tight board structure, which means we can take decisions quickly.”
IP’s main depot remains at Innsworth, near Gloucester, shipping into the nearby Royal Portbury Docks in Bristol. But over the years it has extended undercover storage here to 5,500m² and today it also despatches direct from 12,000m² of warehousing at the port.
The widening geographic spread of sales also led to the launch of a depot at the Port of Blyth in 2002. “This improved the cost-effectiveness of delivering to the north east, north-west and Scotland,” said Ian Attwood, “and it has undoubtedly helped us expand in these areas.”
The aim of the acquisition of Panel Supplies Ltd of Basildon in 2007 was similar to setting up in Blyth.
“Panel Supplies, to which we’ve added the Taylor Maxwell plywood business we took over in July, has enabled us to develop in the south-east in a way we just couldn’t from Gloucester,” said Ian Attwood. “And it has substantially increased our activity through the Port of Tilbury, to the extent that we opened an office there in the summer.”
The Basildon company still trades under its own name, but has been assimilated into the central sales management and stock control software system, enabling IP to operate as a single, integrated supply unit.
“Nationally we now hold 30,000 tonnes of stock and deliver 7,000-8,000 packs a month,” said Ian Attwood.
International’s workforce has also grown, but since 1988 only trebled to 60. How the company has remained so lean is attributed largely to the knowledge and experience of its people. “We’re committed to training at all levels and we’ve had great staff retention,” said Ian Attwood. “Some have been with us over 25 years and that’s an invaluable asset.”
Many of IP’s customers are long-term too, but its overall customer base has evolved. It started out split 90/10 between merchant/distributors and end users. Today the ratio is 60/40, a change the company puts down to the growth of business, the blurring of traditional timber trade importer/agency demarcation lines and the development of its product range.
Plywood remains the heart of the business, but it now ships from a wider range of sources than ever. From Brazil it brings in softwood products, plus medium density overlay and phenolic film-faced panels and from Malaysia WBP hardwood plywoods, overlay, jumbo sizes and marine. It also stocks Chilean radiata pine, Russian birch, Finnish spruce, Douglas fir and Siberian softwood products, plus various speciality ranges.
The other key element of the line-up is the Chinese hardwood range. In the last decade China has transformed from the world’s biggest plywood importer to the biggest producer and IP was there at the outset, taking its first shipments in 1999. However, it admits, it wasn’t initially plain sailing.
“Quality was a problem and corners were cut,” said Ian Attwood. “But we’ve focused on four or five suppliers we work with closely, including visiting the mills, to ensure we get the consistent standard customers expect.”
As its winning the TTJ Panel Trader of the Year indicates, IP has also widened its remit to include other sheet materials, including chipboard, hardboard, fibreboard, MDF, OSB and blockboard.
“We did this to provide a service,” said Ian Attwood. “Busy merchants today don’t want one product from one supplier, one from another, or necessarily whole loads of plywood. They want a one-stop shop and mixed loads.”
Another critical change in International’s sourcing approach has come in its environmental policy. It’s an area where it also admits to mistakes in the past and, in fact, where there’s scope for continued improvement. “Like many, we were naïve and when suppliers said their timber was from sustainably-managed forests, we took them at face value,” said Ian Attwood.
“It was a free-for-all and there was no accountability,” agreed David Attwood. “And credit to the environmental NGOs for drawing attention to it. It was painful at the time, but long term they did us all a favour.”
IP underlined its environmental intent by securing first FSC chain of custody in 2003, followed by PEFC in 2006.
“In five years our sales of certified products went from zero to 20% of turnover,” said Ian Attwood. “This year it will be 35% and it won’t be long before we’re at 100% in our softwood range.
“Progress will be more difficult in hardwood plywood and marine due to availability of certified product, but we’re making other changes here. For instance, more of our products are now hardwood-faced on a plantation species core which makes better use of the resource.”
Responsible Purchasing Policy
Further emphasising its commitment, IP was one of the early signatories of the Timber Trade Federation’s Responsible Purchasing Policy, a ‘due diligence’ system for minimising the risk of suppliers sourcing illegal timber, and has also now joined the due diligence programme run by Track Record.
After this long period of pretty constant evolution the last year at IP has understandably seen more consolidation. The company has been affected by the downturn like every other timber business and has trimmed stock and slimmed down. But it’s still upbeat about the longer term. It continues to evaluate new sources of supply, including softwood plywood mills in Uruguay and Paraguay, and sees potential to develop its UK distribution network “as opportunities arise”. It is also targeting expansion in Europe, with International Panel Products, its three-year-old operation in Antwerp managed by Scott Golding, already well established in Belgium and Holland and looking to increase sales in France and Germany.
So there’s little doubt that the not too distant future will see yet more pieces added to the IP picture.