TIM WIN Premier Waste Ma ageme Commercial Motor's Livery Corn
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• etition is impressive: a new-company enters for the first time and comes away not only with the top prize, but also with success in the various categories.
remier Waste Management was just months old when it entered the Commercial Motor Livery Competition P4 last year...and won. While an award-winning P.7 livery isn't the only way to win new business, =I it can certainly be a morale booster to your staff—particularly when the company is new. Still only 15 months old, the South Shieldszi based company is growing fast. "Having start-, ed from nothing we've built a business of -8; approaching 300 customers," says chief executive Jim Newton. "On average we gain a customer a day and we're on target to have 500 at kn? the end of two years' operation."
The company collects, transports, recycles and disposes of commercial and industrial waste. Customers drawn from a 25-mile radius from Ashington south to Ripon and west, across to Hexham, include some big names: Safeway, Proctor & Gamble, Dunlop Tyres and Twinings Tea. Some 60% of Premier's business comes from manufacturing with 25% from retail and 10% from the leisure industry.
Premier was set up after Newton approached Durham County Waste Management (DCWM) proposing a joint venture. As a local authority waste disposal company DCWM was well established in the treatment and disposal of domestic and industrial waste. Adding Premier to its portfolio fitted in with DCWM's long-term plans. Today it owns 75% of Premier with Newton and his operations director Mike Younger accounting for the remainder.
Newton has a lot of experience in the waste disposal industry: he started as a depot manager with Cleanaway and worked his way up to regional manager. After 12 years he started his own waste collection business, called Enviricare, which he sold in 1993 to a subsidiary of Northumbrian Water. He will steer Premier through a five-year business plan, after which full ownership will transfer to DCWM and his role within the group will be reviewed.
Waste disposal might be an "unseen" service, but Premier's vehicle livery couldn't be more "in your face". It's easy to see why it won the Commercial Motor Livery Competition last year (see panel).
The company operates just seven vehicles, all on Scania P114 8x4 chassis. Four trucks have front-end loaders, described by Newton as "huge compactors on wheels". These frontend mobile compaction systems are supplied by Faun and service 60 customers a day. They pick up containers of 2-10m3 and crush it in the equipment which has capacity for around 20 bins of rubbish.
Pillar to post "They do this two or three times a day and are therefore efficient," says Newton. "We route vehicles so they're not running from pillar to post so we would sell into an area of high density such as an industrial estate to minimise distance." The other three vehicles carry demountable skips of 20-40m3 capacity made by Ampliroll. An eighth Scania is on order and will be put into service in August.
Scania rigids were chosen because of confidence in the product, says Newton: "Scania has developed a good rigid eight-wheeler and has grown in that market. The product seemed right and a lot of people in the North-East are buying them, which gave us confidence."
The vehicles are supplied by local dealer Union Trucks of Killingworth on a two-year maintenance package. "That was a strong sell ing point," says Newton, "plus the out-of-hours maintenance, quick response times and assurance of back-up."
Waste transport is a capital-intensive activity The cost of each front-end loader is around £130,000 and the containers supplied to each customer cost almost as much. Premier will have spent £2m by the end of its second year, funded by operating leases.
The growth of the company is set to continue. Newton is recruiting his eighth driver, bringing the team up to 20. Turnover is on target for £1.5m this year and by the end of the second year of operation the business will have broken even, says Newton. By the end of the five-year plan he hopes to achieve a 35% return on sales: "There are higher margins to be made because it's a specialist business."
Breaking into new markets is never easy, so how did Premier do it? "Waste disposal is a funny thing—it's an unseen service until two things happen; it goes wrong or someone comes and talks to you about it," says Newton.
And talking is one of the ingredients of Premier's success. Management spends time with existing and potential customers to make sure service is matched to need. "We look at what type of waste a customer has, how it is generated and how it is moved so we can tailor our service," he says. "We want customers to consider us an extension of their own management team; we're there to be used for advice."
Premier says customers can cut their waste disposal costs by 20%. "The financial incentive is a catalyst; selling on price alone is not the way to do it You need a price structure and a range of benefits," says Newton. Potential customers are invited to audit Premier to satisfy themselves that their waste would be han dled responsibly. As a registered waste carrier Premier has to comply with extensive waste regulations and is legally responsible for the waste it carries and disposes of. Other benefits include fixing prices for up to five years and carrying out services free of charge if they are more than 24 hours past the scheduled time.
Newton is unequivocal about the final ingredient in Premier's success: his staff. "A lot of people work for me now who worked for me in the past," he says. "We've got people who have• chosen to work in a company where they're very much part of it. The drivers are the ambassadors of the business—it's only right to put the credit back to the team."
El by Nicky Clarke