In the border town of Berwick-upon-Tweed, 200-year-old timber windows and doors manufacturer Allan Brothers is harbouring big ambitions backed by European doors and window giant the Inwido Group.
Change is in the air at the company, reputed to be the longest established joinery manufacturer in the country, following an uncertain period which has seen the workforce reduced and three managing directors in just four years.
The new man at the helm, Danny Hughes, took the reins at the start of 2012, and heads a fresh management team which includes finance director Steve Elder (ex-Findus and Nestlé), operations director David Leadley and the return of Dareth Daley as sales director.
"It’s a real privilege to be running a business that has 200 years of history," said Mr Hughes, adding that Allan Brothers had been around so long it had used steam-powered machines during the industrial revolution.
Local institution
The company is something of an institution locally and with 160 staff is the second largest employer in the town after foodstuffs business General Mills (Häagen Dazs ice cream and Jus Rol pastry).
It’s still known as "the wood yard" in Berwick, a throwback to its origins when it imported timber and made components to supply to joinery manufacturers. For the last 170 years it has concentrated on joinery production, focusing on doors and windows in the past 80 years.
But a long manufacturing heritage doesn’t necessarily guarantee success or mean the company has to be "traditional" in the way it conducts business.
This is where Mr Hughes has been drawing on his consumer products background, which includes spells marketing the brands Brylcreem, WonderBra, and Pretty Polly, and he was also managing director at Silent Night Beds.
"The business used to be traditional," he said. "Now we are trying to be world class. We are putting the customer at the heart of the business."
This includes new product launches, a £1m investment in technology and an expansion into the consumer sector.
"Our vision is to be number one in the UK timber windows market. Today we are number three. I believe we will get to number one, partly through organic development and partly through acquisitions."
Currently, JELD-WEN and the Performance Timber Products Group are the two largest timber windows producers.
Early signs of the revitalisation of the business are encouraging, with an expected 10% sales growth in 2012 in a difficult market.
The target is to double sales over the next five years in a market where timber and aluminium-clad wood windows are growing and now make up around 20% of the UK windows market.
"We’re seeing PVCu declining quite quickly in the UK," said Mr Hughes. "The 2011 market statistics show PVCu traded down but timber increased its market share. PVCu windows installed in the 1980s are failing so now consumers are looking to timber and aluminium-clad timber windows.
"People were sold the story of plastic windows being maintenance-free and lasting for a lifetime. We are now seeing consumers losing trust in that as they’re having to replace that type of window."
That was an opportunity for Allan Brothers and other joinery producers to capitalise on. "We’re definitely not trying to compete on price, but adding value to the market," said Mr Hughes, adding that consumers were looking for quality specification, value, sustainability and aesthetics, balanced with price. The professional industrial market, including housebuilders, project work and social housing, is the bedrock of the Allan Brothers business, supplemented by smaller volumes to the merchant sector through a partnership with Premdor.
But a big investment in marketing is now being channelled in the consumer market, with consumer-focused brochures, a separate consumer website and the company’s first attendances at the National Homebuilding & Renovating Show at Birmingham NEC and the National Home Improvement Show in Olympia.
A network of 15 installers has been developed, which enables Allan Brothers to effectively service this market, while a programme of advertising and direct mail began in the first half of 2012 and is continuing.
Mr Hughes said the consumer promotional work had generated significant interest in the company’s products, with about £2m-worth of leads received in just three months, of which it expected to capture about £700,000-worth of business.
New webshop
The emphasis on customer focus and lean manufacturing has seen the implementation of a £500,000 Calwin enterprise resource planning system.
The system features a webshop facility, which can be used by the company’s installers in people’s homes to enter exact site dimensions, provide visualisation of the product in situ and link to the factory to generate accurate, instant quotations.
System benefits include greater efficiency and reduced stock levels through better demand ordering. Allan Brothers is also able to process the product more effectively through the factory, providing better visibility of product workflow and cutting lead times to four weeks.
Mr Hughes estimates that £500,000 of new business had been generated as a result of the system, with an estimated two-and-a-half-year payback on investment.
Another recent investment was a Weinig Opticut cross-cut saw, while a new paint line to improve capacity is planned in about 18 months.
Supplementing these investments is a lean manufacturing policy on the 7.5-acre site, led by a full-time lean manufacturing adviser.
"We’re trying to create a culture of continuous improvement in the business," said Mr Hughes.
This includes reducing waste in the manufacturing process, with a target of saving £300,000 in the next 12 months.
About 800 hours of lean manufacturing training – to the 5S set of principles created by Toyota – was implemented by the end of September. The 5S programme was first implemented in Allan Brothers’ vast timber warehouse and focuses on keeping areas clean, tidy and well-managed so materials are easier to find.
Mr Hughes said this made Allan Brothers more competitive and able to offer better value.
On the subject of timber, sustainability, performance and ease of machining/finishing are among the guiding principles in procurement, with all Swedish softwood FSC certified.
Nearly all windows are of engineered timber construction, and on the hardwood front Allan Brothers has been impressed with Red Grandis branded plantation-grown eucalyptus timber (also engineered) supplied by Timbmet.
The company is looking at using it instead of African hardwood on its Dual-Turn windows range, its highest volume product, because of its full FSC certification, good working properties and freedom from defects.
Meanwhile, promoting higher staff engagement levels and giving them an input in decision-making is now higher on the agenda, with the added benefit of helping to identify future factory investments.
"There are 3,900 years of experience represented here and we have a massive opportunity to tap into that knowledge," said Mr Hughes.
"Some of the staff here know more about making a window than the management."
The average length of service for employees is 17 years. Recently, 18 employees were honoured with a special lunch after completing 25 years’ service.
The financial backing of parent company Inwido AB, a Swedish door and window manufacturer, is clearly an important factor in Allan Brothers’ expansion.
"We are in a situation with a parent group that sees the UK as a key market for them," added Mr Hughes. "We know that will make Allan Brothers stronger in the UK market."
Inwido has operations across the Nordic countries and in Poland and is privately-owned by a Swedish-based private equity fund Ratos, which also has majority holdings in 16 other Nordic companies, including Europe’s largest stove manufacturer Jøtul, Finnish cinema chain Finnkino and cable TV and Danish telecommunications giant Stofa.
Its first-half financial results show net sales of €146m and operating profits of €14m.
Complementary products
For Inwido, Allan Brothers represents a channel for selling some of its complementary products.
Allan Brothers is developing an aluminium-clad timber window business, importing Inwido products from Poland, while another Inwido product – Pro Tec GRP curtain window walling – will be targeted at architects. There are plans for a London showroom.
"We will continue to grow our core business and develop the consumer business while leveraging Inwido products that are complementary," said Mr Hughes.
But he acknowledged the business climate for the £350m UK doors and windows market was not easy. "It remains tough out there and we anticipate it being tough for the foreseeable future. There are price and cost pressures in the market."
This, he expects, will further drive consolidation in the joinery sector.
"There have been a few business failures this year. But those that are investing in their business and management will be stronger and more robust in the future."
