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A new era for NBG

Published:  19 January, 2010

BUYING GROUPS: With its slogan ‘Buying Better’,the National Buying Group is going full steam ahead with its bid to be the best in the business. Allan Durning talks to Lisa Arcangeli about about keeping ahead of the pack.

“As the market leader of the independent set, we are flattered by people who adopt our mantra and our slogans,” says National Buying Group chief executive, Allan Durning. He recently celebrated three years in the role and says that things are finally on course for when business returns to normal levels.

“NBG is about promoting a stronger independent sector and there will always be those who choose to follow us and adopt what we are doing. It will all be of benefit to independent merchants generally, if others choose to emulate the National Buying Group.

“We are continuing to enlarge and reinforce our position. Two new significant and quality businesses joined us in October. CU Plas in Merseyside and the Isle of Man and Adrian White Landscaping in South Oxfordshire.”

Buying better

The addition of lightside merchants is important for the group, says Mr Durning. “We want to extend the reach of NBG into these particular building distribution specialities.

“We realise that we have some work to do to get lightside to the level we already are with heavyside,” he admits.

“We are a strong player in heavyside materials, we are getting better at timber and sheet materials and we are improving upon our lightside, but we need more businesses like CU Plas and other organisations to think about joining us."

“If we can attract those lightside businesses, we will get stronger, they will get stronger, our deals will get better and we will be able to buy better.”

NBG, he says, is not ignoring traditional builders’ merchants. “We have had a raft of applications to join the partnership. Unfortunately, we have had to turn down more than we have accepted.”

Due to the dire market conditions, NBG he says, is being cautious because there may be some merchants who want to join the buying group “for all of the wrong reasons”.

Strategic infill

The Group has reached its level with traditional builders’ merchants. Now, it is seeking what Mr Durning terms ‘strategic infill’ – that is, parts of the map where it does not have as great a presence as it would like.

“We want total geographical coverage in all areas, instead of a patchwork quilt,” he explains.

Could he be alluding to the frenetic spate of acquisitions that took place before the economy nosedived, when the nationals were buying everything they could get their hands on “at crazy prices”?

That activity has all but ceased, purely because the nationals can no longer afford to continue buying at that pace.

“Independents are now looking at the sites the nationals purchased and are eyeing them up for themselves,” he says.

This must be a very satisfying situation for those independents which chose not to sell up and who can now afford to buy and open sites in these locations.

“When NBG rejects an application from a merchant, it is not because they are a bad business,” he explains. “It is because they may be geographically the wrong fit for NBG. We don’t want every merchant in Manchester.”

Prepared for the future

Following the brainstorming session of the G15 summit back in March, NBG’s category management is now up and running. The organisation now has nine category chairmen and vice-chairmen.

Allan Durning: determined to raise the bar for buying groups.

“We have made sure that we have a solid succession plan,” Mr Durning says.

“If you look at our past history, we used to be regionally focused – from the old buying groups of Chandor, Prospero and Simba. And, in the past, there was also a certain North/South/Central element going on.

“The old teams were OK, but the emphasis of putting someone from a region into a new team was not neces- sarily the best way to do business because the organisation might not be getting the right kind of knowledge, skills or experience.

“With the management teams now, it doesn’t matter where you come from; it’s all about product know- ledge, the market, whether you are a good negotiator, a good fixer, what you bring to the category you are handling and not what part of the UK you come from.” This kind of strategic thinking, he says, has lifted NBG’s profile considerably.

Change in supplier behaviour

Already, he states, NBG can see a marked change in supplier behaviour, “because we now have group expert- ise focused in the category with a strong chairman, vice-chairman and with clearly defined rules of engagement.

“These people know what is required of them and they are going out to get it. That is what we mean by ‘buying better’.”

All of the buying groups have been distracted on occasion by peripheral politics, cultural things and regional matters, he says.

“That has dissipated what they were good at doing – distributing building materials and buying better.

“That is why we stay focused and take the challenge to the suppliers. We say: ‘I’ll grow your market share, but for that I want the correct returns, the best deal and the correct emphasis on the business, like the terms you offer the nationals’.

“It has taken us three years to turn the supertanker around.” The message, he says, is now full steam ahead."

Demographic quality

“We will accept applicants who are suitably qualified to join us.

“It is not about numbers for NBG. It is about quality and geographical infill, to make us the most attractive proposition for suppliers who want to be part of our team to do business,” he emphasises.

“We have 254 locations at present and 77 members. That is comparable to a small national merchant. We are now in that league. It was what we aspired to and what we have attained.

“We are a highly organised group that has clear objectives, structure, and strong category management chairmen in place.

“We are a force to be reckoned with and we expect to be dealt with in the manner in which the suppliers deal with the nationals.”

This article was first featured in the November issue of Builders' Merchants News.

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