John Tong: being more efficient.
Closing Tilbury will secure Finnforest’s long-term growth
Published: 30 November, 2009
LONDON: John Tong, Finnforest's senior vice-president upgrading and distribution, told trade press editors at a meeting last week about the company's proposal to close its Tilbury site in Essex in 2010.
As reported on www.buildersmerchantsnews.co.uk on 26 October, final decisions will be made by early January, with the proposed closure taking place by 31 December 2010 – if the proposal goes ahead.
The head office and distribution facilities are on a 20-acre site with a 500 000sq ft warehouse. Finnforest, Mr Tong reported, has entered in to a 90-day consultation period with all site employees. Around 120 roles are affected under the proposal with 70 head office staff moving to a location nearby. Under the proposal, distribution that takes place at Tilbury would be integrated in other Finnforest sites where new jobs would be created.
Part of the decision to propose to close the site was due to the Government's rating revaluation, backdated to 2005, resulting in an increase in operational costs "There was no question that we could pass on any extra costs to our customers," Mr Tong said. "But, by lowering the impact of these to the business, we will ensure long-term benefit to the company and will enable Finnforest to grow in the future. We are looking not at shrinking the company, but at being much more efficient."
Finnforest, he stated, was budgeting on 2010 being a relatively flat year. "By implementing greater cost control, adopting and furthering electronic warehousing and electronic invoicing, we are able to considerably alter the supply chain dynamics of how we do business."
Finnforest, he explained, was still investing in training and marketing. "We are committed to training around 200 of our customers' staff each year in how to sell our products. Once we train a merchant's staff our research has shown that sales of our products at that branch will rise by 10%."
The timber market remains volatile and although prices are high at present, Mr Tong said he anticipated that they will drop in Q2 2010. The UK market has little influence on timber prices, he commented. "This country only represents 2% of worldwide demand."