58 DEBATE
Rollie Attard - Panaz Our business is 50 per cent hospitality and 50 per cent healthcare, the most and least pandemic impacted industries.
To plan in a business, you’ve got to know where your cash is coming from and if you haven’t got a view of that pipeline, it’s certainly a challenge. We’ve had highs and lows.
For the first time we’re dealing with issues that are impacting our business from the outside, such as Covid, Brexit and raw material fluctuations. That’s been the story of the last year. Dealing with those challenges that are outside of your control has its own art really.
The fluctuation we’ve seen in the price of raw materials has been massive. Add to that the freight impact and time delays and people forward buying contracts and fanning the fire even more and you create this huge storm. It is going to cause inflation in product prices or a margin impact for manufacturers.
Add into that Brexit, which has been a challenge. We’ve got an operation now in the Netherlands which does facilitate orders, but the margin hit is massive.
Take the costs associated with exporting to Europe, add issues around free trade agreements not really being free trade agreements and the issue of tariffs and suddenly you’ve got British businesses becoming less competitive.
One of the biggest things we learned early in the pandemic was the importance of constant controls: control over costs, who is in the building, control over absolutely everything. We identified what our key indicators would be throughout, and we constantly evaluated them.
Rollie Attard
It was also about getting the systems in place to manage communications. We’ve engaged with every level of the business in a slightly new way. It has reinforced the benefits of stable and decisive leadership.
Dawn Stockell - VEKA
January and February last year were good, we were hitting budget numbers, and everything was looking great. Everything mid-way to March was looking good too, but that was effectively it. We had a lot of calls from customers and demand was dropping off a cliff, with discussions about them shutting down.
We made the call towards the end of March that we would follow suit and close the operation temporarily. We didn’t know at that time for how long. We furloughed our whole workforce, with the exception of three people.
We started to drip feed people back in early May. It was around September that we got the full workforce back.
We were hit with two big customer losses; they went into administration during lockdown. They were really key customers, so that was huge. It was a significant chunk of our revenue, so we had to rescale. We projected around 100 redundancies; in the end it was more like 25.
Dawn Stockell
You ask how we managed volatility: we owned that responsibility, it is in VEKA’s DNA. We didn’t hide from the fact we would have to make redundancies.
The biggest understanding for us is how quickly we can adapt as a business. Once you have that absolute focus to deliver something and to succeed or to power through, you will make it and ultimately pull together working as a team and a family.
We went through a whole process of understanding what we want to be to our customers, what we want to be to our employees, really embracing how we value them and their input. We actually changed our strapline from, ‘For now, for the future, for life,’ to, ‘We care, we act.’
Tony Raeburn - Pets Choice
We’ve had an interesting year. We acquired quite a big company just before Covid and had to make some changes there.
We closed an old factory and moved to a new, very automated one. We struggled to get a permit because of Covid and a lot of the engineers we needed were based in Germany and Italy and couldn’t come over. We then had to adapt very quickly to social distancing.
The great news is that something like 3.5 million extra households have acquired a pet since Covid, so we have loads of customers out there.
Tony Raeburn
We’ve also had to adapt to the move to people buying directly from home. We’ve seen a massive increase on direct sales from our websites, as well as extra demand from some retailers. We’ve had record sales, we’ve probably taken on another 30 employees during the pandemic, so from that side it’s been good.
The problems have arisen more from Brexit, which for us is a complete disaster.
They’re classing pet food, which is cooked at 121 degrees with no bugs, the same as moving animals across borders. So for us to move anything into Europe, we need a vet to inspect every pallet, we must then have a declaration form.
Basically, the whole system doesn’t work. We had one delivery two weeks ago. It should have been a day out to Germany, it took 12 days and instead of £700, cost £4,500 because of the delays. It is a complete nightmare. Come October it’s going to become a bigger nightmare. That is when the reverse rules of origin kick in. We also have factories in France and Germany, we probably bring in 20 truckloads a week from those, and they’ve had supply issues because of Covid.
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