Palletower are manufacturers and suppliers to some of the world’s largest customers within retail, logistics and warehousing and offer the largest and most diverse range of storage and logistics equipment in the UK. Having over 100 product lines and in excess of 250,000 items in stock allows immediate despatch of orders. Products range from roll pallets and stillages to retail trolleys and plastic box pallets, just a snippet of the unrivalled choice, making them the largest supplier within their industry.
Matthew Palmer, Managing Director of Palletower Ltd, spoke to Warehouse & Logistics News.
WLN – When did you become MD? What were you doing before that?
I became MD of Palletower five years ago, at the time of the MBO. At that point I had been with the business 17 years, and board member for two years. I had worked in virtually every aspect of the business, and had re-invigorated the company’s export business by generating over £3m per year of export sales. I had a very good understanding of the strengths and weaknesses; this understanding was deepened by the MBO process, which took around 15 months to complete.
WLN – When was Palletower founded?
Palletower was established in 1966/7 to manufacture and sell the original Palletower product, a fourpiece retention frame for timber pallets. Simple as it may sound, this revolutionised storage and logistics within the UK and across a number of export markets.
WLN – When did you start selling the products in your current range?
It was a gradual change. The patents for the original Palletower product were running out by the time I joined in 1994, and other products on the market had changed enormously. The company had the foresight to embrace this change and worked with European manufacturers to become a UK stockist for a complete range of storage and logistics products. Over the next 10 years, the business worked tirelessly to expand stocks and grow the product range and in doing so we became the largest and ‘stand-out’ stockist with turnover growing from £4m in 1994 to £9m in 2004.
WLN – What products were you focused on by then?
By 2004 roll pallets had become the ‘go to’ product for retail and most logistics operations. The design of many roll pallets was modular, they could be flat packed and loaded in volume into shipping containers. Once assembled in the UK, the costs were substantially below the current market supply. This presented a great opportunity, one we grabbed very quickly. Alongside the stock range that continued to grow and develop, the business grew further to a turnover of around £14m at the time of the MBO.
WLN – I presume the huge growth of China as a manufacturing centre has had a major impact on your business?
Yes, definitely. From the mid 2000s we changed our sourcing approach to China. Initially, it was to replace our European stock manufacturers with a lower cost solution. We were successful very quickly, and started to look at the bigger picture and the larger potential that manufacturing in China presented.
WLN – How has Palletower developed since the MBO?
To grow further, the business needed a complete change of structure and culture; not a simple task in an established business. Having been 90% owned by the previous owner, the company had never had to look in on itself before; it had grown well, providing good revenues, but to cope with the demands of the MBO and the growth targets we set out, this had to change.
We overhauled the finance department and created formal management structures within our warehouse and commercial teams. All IT and operating systems were changed. The results of this are clear to see, business efficiencies have improved immeasurably and the culture within the business is one of a strong team that understands the requirements of the industry and customers within it.
WLN – Can you give us an idea of the size and scale of the Palletower operation?
Turnover has grown consistantly since the MBO. 2016 was £19.6m with export sales of over £5m a year; 2017’s forecast is for over £20m. The business holds in excess of £5m worth of stock at any one time. Alongside our 40 different styles of roll pallet we hold large volumes of stillages, plastic boxes and retail trolleys.
WLN – Has innovation and investment become an influential factor?
Yes, it’s a central part of our strategy. To enable the business to grow we have constantly re-invested year on year in systems, facilities and people. Financial systems have become key to the business understanding itself and being in control of its own growth. Investment in facilities and people at all levels of the business enable the planned growth to happen smoothly.
WLN – For such a sizeable business, presumably systems play a major role in day-to-day production?
Systems are at the heart of what we do. Our production involves manufacturing in China and an assembly operation here in the UK. Both sides take significant planning and resources to ensure product and customer requirements are met. Both China and UK offices use the same ERP systems, enabling a smooth flow of accurate information, vital with schedules of up to 20 weeks in advance.
The company set up a China office back in 2005. They have grown with us over the last 12 years, along with our other key sub-contracting factories. Inspection procedures and planning have also grown in step. Our production capacity is by far the highest in our industry. We manufactured and supplied globally over 200,000 roll pallets in 2016.
Within the UK, our substantial head office site receives and assembles all the roll pallets which are manufactured in China for the UK market. At peak, this activity employs as many as 40 staff. Barcoded QC checks as part of the process provide the feedback required for complete monitoring of finished products. Peak productions increase assembly to over to 5,000 roll pallets per week, far and away the largest output in the UK.
WLN – Where does Palletower sit within the UK supply chain?
In the UK and globally, we are a very significant player, both from our stocks and manufacturing capabilities. Our range is the widest in the industry and many customers rely on us for the diversity and volumes we offer.
Within the UK roll pallet industry we manufacture and supply more than any other company. Our ability to manufacture and equally, if not more importantly, assemble large volumes sets us apart. This is seen in the trust we are afforded by some of the UK’s largest retailers and logistics companies. These companies know that placing their business with us ensures they receive the right quality product, at the right time. 2017 will see us manufacture and deliver, ahead of time, two separate orders for major UK retailers that total over 49,000 roll pallets. This trust level enables retailers to plan supply chain operations for their busiest periods without the fear of being left short of vital equipment.
Our range of stillages is the largest available from stock in the UK, covering everything from demountable post pallets and collapsible stillages to large plastic box pallets and containers, all key components in the supply chain for many different types of industry.
WLN – How has Palletower been growing as an exporter and global player over the last 10 years?
We have always been export focused and very successful in exporting our products. Alongside my UK roles, I was the Export Director for 10 years up until the MBO; I still continue to look after the South African and SE Asian markets.
WLN – How big are your export sales now in value terms?
Globally we supply retail operations across Ireland, SE Asia, Middle East, South Africa, Australia and South America, worth approximately £5 million per year. Export markets continue to grow and diversify because of our product and its reliability.
WLN – How has Palletower’s product range impacted on industry?
We are the ‘go to’ company for storage and logistics equipment because of the sheer depth of diversity and size of our product range, and not just for steel products. We have an exceptional range of plastic products, which we are continuing to grow. We hold over 5,000 units of 1000 x 1200 x 760mm industry standard plastic box pallets in stock and are a key supplier to UK vegetable growers and food production companies.
WLN – Palletower has one of the largest rental fleets including roll pallets, stillages and plastic box pallets. What impact does this have on the business?
Our fleets are the largest in the industry, with in excess of 15,000 roll pallets on hire and available stocks of a further 10,000. Our stillages and plastic box pallets total more than 12,000 units. The impact is 100% positive on our business, it enables us to offer significant volumes of rental equipment to any customer in any industry.
WLN – Finally, where do you see Palletower going from here?
We’ve grown during a difficult market period, with suppressed pricing. Market conditions are unlikely to change short term but we feel there will be continued growth over the next few years as our product range continues to evolve and grow. We’ve recently invested £50,000 in the design and mould for a plastic collar for the protection of palletised goods. These are now being widely used within the home delivery supply chain for many online retailers.
Product development and expansion is key. Acquisition will be another key factor for us in the next five years and there are a number of avenues we will be actively pursuing during this time.
Tel: 0161 905 2233