Simon Midwood, Managing Director of TIMCO, a leading supplier of essential construction products to the building and industrial sectors, predicts that 2022 will be a year of improved stability and growth.
As Simon explains; “After a very difficult two years, when the industry has been hit by product shortages, rising prices and transport delays, I think we’ll see raw material prices stabilise and transport delays becoming less severe. It’s great to see Capital Economics reporting that the construction sector grew by 3.5% from October to November last year, and businesses serving the construction sector should look to capitalise on the government building and huge amount of private sector house building taking place. The industry should cope better with any supply chain issues, as lots of manufacturers are now rehearsed in the issues and know how to manage them in a pandemic.”
Simon warns however, that: “Having just been informed by our shipping companies that they are imposing another 15% on their already outrageous prices, this is an incredible burden for the industry. They made astronomical profits last year and now they are asking for more, yet their service is worse than ever, so something must change.”
TIMCO has taken measures to protect against product shortages. It typically keeps around five to seven months’ worth of stock, which acts as a buffer against the worst product shortages and delays. As Simon comments: “Certain sectors have been worse affected, such as timber, cement, brick and block, which fortunately doesn’t affect us. We currently have £34 million worth of orders with the Far East and while our stock holdings helped, we had to source some alternative products to maintain supplies of the everyday products our customers rely on. I think companies need to be agile and open to finding new suppliers if they need to. There needs to be predictability in the supply chain.”
Despite difficult trading conditions, TIMCO experienced an increase in turnover of 14% – to £49.7m for 2020, and is expecting a £60 million turnover for 2021 when figures are audited. The company continued to invest in warehouse capacity (£1.1m was invested in increasing warehouse space to 120,000 sq ft), and in its people during the pandemic (seven new Regional Business Consultants were introduced, bringing the total 20).
An issue that is likely to continue to be a challenge is rising labour costs, particularly in warehousing. As Simon says: “Warehousing recruitment is most difficult as there is competition with warehousing for consumer products. As consumers, we all click and collect, but the implications are that someone has to do the picking and packing, whether for perfume or screws, especially with 24 hour online retail. There are currently around 800 warehouse jobs advertised around our Chester base, and we are currently trying to recruit 20-30 new positions. Companies need to ensure their roles go beyond simply offering a competitive salary, and include benefits such as birthday days off, duvet days, company loans, all of which we offer at TIMCO.”
Simon believes building related companies need to be bullish about business growth this year and to plan to have more predictability in their business: “The stop/start business mode during the pandemic will surely transition into a more predictable cycle this year, so now is the time to invest in the future, anticipating products that will be in demand, and investing for growth, and recruiting enough warehouse staff to process orders, so businesses are ready to accelerate their growth.”
“We’re looking forward to continuing our upwards trajectory in 2022 when we’ll be launching new products, such as hand tools in Q1, and new work wear in Q3, with another 500 new product lines for 2022, and more partnerships. We have enough capacity and space to enable us to double in size, in what will be a landmark 50th year in business for us,” concludes Simon.