The James Donaldson Group, one of Scotland’s longest-standing family businesses, has grown from a small sawmill in Fife into a diversified group of companies that are leaders in timber distribution, manufacturing, and construction. Over its 160+ year history, the company has not only evolved with the times but has also managed to stay true to its roots—a testament to its ability to adapt while remaining grounded in family values.
Paul Andrews spoke to Michael Donaldson, Chairman of James Donaldson Group to find out more.
The story of the James Donaldson Group began in 1860, when James Donaldson opened a timber sawmill and merchant in Tayport, Fife. At the time, the company’s focus was simple: to process and distribute timber to meet the growing demand from local builders and farmers. What started as a small operation quickly established itself as a reputable supplier of high-quality timber products in the region.
In these early days, timber was a cornerstone of the construction industry, essential for everything from housing to shipbuilding. James Donaldson’s ability to meet the needs of his customers, while also adhering to high standards of quality, gave the business a strong foundation on which to grow.
Growth and Expansion: From Timber to Building Solutions
The first significant period of growth for the company came in the early 20th century, when timber became increasingly vital to the construction industry. As demand for housing and infrastructure grew, so did the need for timber. The company began expanding its operations to meet the demands of the time, increasing production capacity and diversifying its range of timber products.
As construction boomed during the post-war housing crisis, especially during the 1950s and 1960s, the James Donaldson Group capitalized on the increased demand for timber, supplying products to builders across Scotland and further afield.
Under the leadership of James Donaldson’s descendants, the company took steps toward vertical integration. Instead of merely producing raw timber, they expanded into the distribution and manufacturing of value-added timber products, such as engineered wood and building materials. This shift positioned the company not just as a timber supplier but as a full-service provider to the construction industry.
Diversification and Innovation: Building for the Future
As the company grew, it became clear that diversification would be key to its long-term success. While timber remained at the heart of the business, the group expanded its operations into new areas of the construction industry. This diversification strategy was particularly evident in the 1990s and 2000s.
As Michael continues, “One of the most significant milestones in our history came with the acquisition of MGM Timber in 2005. MGM Timber added to the group’s distribution capabilities and significantly increased its market share. This acquisition marked a turning point for the James Donaldson Group, as it moved from being a regional player to a national leader in the timber and building materials industry.”
Branching Out: The Formation of Donaldson Timber Systems
One of the most notable innovations in recent years has been the integration of Donaldson Timber Systems (formerly known as Stewart Milne Timber Systems), which focuses on offsite timber construction systems. As the construction industry increasingly turns to modular building and offsite manufacturing as a way to improve efficiency and reduce waste, the James Donaldson Group has positioned itself as a leader in this growing sector.
As Michael explains, “Offsite construction allows timber frames and other components to be manufactured in a controlled factory environment before being assembled on-site. This method offers several advantages, including reduced construction time, greater precision, and improved sustainability. Donaldson Timber Systems has become a key part of the group’s offering, catering to the needs of modern construction companies that are looking for more efficient and environmentally friendly building solutions.”
This venture highlights the company’s ability to stay ahead of industry trends and meet the changing needs of the market, while still capitalising on its core expertise in timber, and shows the need for a family business to evolve and adapt over time to remain relevant and meet the needs of a changing customer base too.
Resilience and Adaptation: Navigating Challenges
Like any long-standing business, the James Donaldson Group has had to navigate its fair share of challenges. Economic recessions, industry shifts, and changes in technology have all tested the company’s resilience. However, the group’s ability to adapt has been key to its longevity.
The 2008 financial crisis, which had a significant impact on the construction industry, posed one of the biggest challenges in recent history. As construction projects stalled and demand for building materials plummeted, the business had to adjust its operations to remain viable. The group’s strong leadership and diversified business model allowed it to weather the storm and emerge from the crisis in a strong position.
Similarly, the COVID-19 pandemic presented another significant test for the company. Like many in the construction and manufacturing sectors, the James Donaldson Group faced disruptions to its supply chains and operations.
“We had no choice but to take on the challenge and in many ways that probably helped both Andy and I as we transitioned into our new roles in the business."
"We really did have to lead from the front and make decisions quickly,” he continues.
The company quickly adapted, implementing new health and safety measures and adjusting its business practices to meet the challenges of the pandemic. The group’s strong foundation and ability to pivot in times of crisis has been key to its survival and continued growth, a journey that continues today.
A Family Business: Values Passed Down Through Generations
One of the defining characteristics of the James Donaldson Group is its commitment to remaining a family-owned and operated business. For over 160 years, the company has been passed down through five generations of the Donaldson family, each of whom has contributed to the company’s growth and evolution. As Michael explains, “Each generation has put their stamp on the business and made us what we are today and now it is down to myself, my brother Andy who is CEO and my sister-in-law, Alyson who is CFO, as the current family members engaged in the business to take it forward.”
Each new generation has brought its own perspective and approach to the business, but the core values—integrity, quality, family and service—have remained constant. The Donaldson family’s hands-on approach and long-term vision have been instrumental in ensuring the company’s continued success, even through challenging times like wars, economic downturns, and industry changes.
By staying true to its family values while embracing new ideas, the company has been able to expand and thrive over the decades, coping with the challenges they have faced along the way.
As Michael continues, “Family values are an integral part of the business and when Andy and I took over the business in 2020 we wanted to clarify the underlying purpose of what we do and why we are in business. The previous non-family CEO had developed the first mission, vision and set of values for our business and as anyone who has been through the process will know, it is difficult the first time that this is undertaken for any business. They had to essentially distil 150 years of our history, heritage and performance into a set of words.”
“Andy and I reviewed the position and wanted to make the vision and mission ours, which we did, redefining it to be our purpose, the purpose by which we plan to run the business for the next twenty or so years.”
“Essentially, we are ‘Building Positive Futures, Together’ which means that we are not just building that family for today. We have a responsibility to tomorrow, which is why our Group purpose is 'To nurture and empower, so that together we build Positive Futures now and for generations to come,’” he adds.
“The key values in terms of those previously defined – Family, Sustainability, People, Integrity and Customers – remain today, albeit in a slightly different order but certainly with family first,” continues Michael.
The Sixth Generation: A New Era of Leadership
In 2020, Andy Donaldson was appointed as CEO, representing the sixth generation of the family to lead the company. Under Andrew’s leadership, the group has continued to innovate and expand while remaining grounded in the family values that have always been at the heart of the business.
One of Andrew’s key focuses has been on digital transformation, recognising the need for the company to embrace technology in order to stay competitive in the modern marketplace. By investing in digital tools and systems, the James Donaldson Group is ensuring that it remains at the forefront of the timber and building materials industry, while also improving efficiency and customer service.
Sustainability has also been a central focus of Andrew’s leadership. As environmental concerns continue to shape the construction industry, the group has committed to reducing its carbon footprint and has placed sustainability at the forefront of its business practices, promoting the use of sustainable timber products.
The company has invested heavily in sustainable forestry, responsible sourcing, and eco-friendly manufacturing processes, ensuring that it meets the highest environmental standards while continuing to deliver top-quality products. This is evidenced with the leading UK offsite frame manufacturer, Donaldson Timber Systems, recently becoming the first timber frame manufacturer to offer a published, third party accredited environmental product declaration (EPD) for its product, proving its sustainability credentials. This focus on sustainability therefore not only helps to protect the environment but also positions the James Donaldson Group as a leader in responsible business practices.
Defining Roles and Responsibilities
When family members work together in senior roles there is always potential for overlap as to who is doing what, and early on Michael and Andy recognised that there was a need for roles to be defined.
As Michael continues, “I have been involved in the trading operations of our business for many years so stepping up to Chairman was always going to pose some challenges for me personally but for any family business, not just ours, time moves on and things change and with Andy becoming CEO we both realised that we needed to understand our roles."
"We created job descriptions for both the role of CEO and Chairman and whilst there are elements of overlap, we know where they are and that leaves us free to focus on our own roles and responsibilities too.”
“It is a really important and integral part of our governance and also enables others around us to know who to go to with specific questions and issues and also ensures that we are operating effectively too,” he adds.
A Proud Legacy with a Focus on the Future
From its origins as a small sawmill in Fife, the James Donaldson Group has grown into one of Scotland’s most successful family-run businesses, with a diverse portfolio of companies that serve the construction industry across the UK. Over its 164-year history, the company has demonstrated a remarkable ability to adapt, grow, and innovate, all while staying true to its core values of People, Sustainability, Integrity and customers, with Family at the core.
“Andy and I see one of the key parts of our job as custodians of the business for the next generation, not just of the direct family but the next generation of all of the stakeholders and communities involved in our business."
"We always have a focus on retaining the family feel within the business, something that is not easy when you are the size of our business today and as dispersed geographically as we are, but it is so important,” explains Michael.
“Securing the business as a sustainable business for generations to come and leaving it in a better place than when I picked it up is what drives me, giving people opportunities to achieve their potential, seeing them fly and making a difference each and every day and ensuring that we have the right people to enable the business to continue successfully into the future."
"I love this business and the role that I have within it and am extremely proud to have my name above the door and to continue the business in a way befitting of the generations of Donaldsons who have gone before me,” he concludes.
As the group continues to expand and evolve under the leadership of the sixth generation of the Donaldson family, it remains committed to building on its legacy while looking to the future. Whether through sustainable practices, new technologies, or innovative building solutions, the James Donaldson Group is well-positioned to continue its success for generations to come—always with the same dedication to family and timber that has defined it for over a century and a half.
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