NFC poised for £220m 'invasion' of Europe
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. . . and will take a tough line in profitability at home by CM reporter
• The National Freight Corporation intends to build as big a freight business on the Continent as it has in Britain with a target of £220m annual turnover by 1978.
This target, announced by NFC chairman Mr Dan Pettit at a Daimler-Benz seminar for European operators, in Brittany last Friday, was immediately categorized by the local press as a second Operation Overlord (the code name for the 1944 Normandy invasion).
Mr Pettit spelt out the State-owned corporation's Continental five-year plan — for implementation largely through Pickford's International — during discussion of a paper on transport marketing (reported pp 23-31) which he had presented — backed by an NFC film made to attract European users to NFC services in Britain. The range of NFC services shown in the film also obviously impressed the Continental operators present.
Mr W. J. H. Siviter, central transport manager for Rank Xerox (UK) Ltd, questioned Mr Pettit on the NFC's plans for Europe. Mr Pettit said the NFC at present had £220m total annual turnover and £125 capital, and intended to have the same level of business in Europe by 1978.
This would not be achieved in isolation but in a relationship with local businesses; an involvement with the private transport sector throughout the Continent covering every aspect of the freight business — from contract hire to car transport, from waste disposal to container transport.
He also revealed a firmer line on the NFC's domestic business, when another questioner asked what profit ratio the corporation expected. The aim, he said, was a 20 per cent return on historical capital and 15 per cent on replacement capital, and operating companies which failed to achieve this over, say, three years would be shut down.
Earlier, Mr Pettit had told a German questioner that profit return on capital varied from about 5 per cent to 30 per cent among NFC companies.
Some Continental operators see the NFC's European plans as massive confirmation of their suspicions that British haulage is eager for the rapid establishment of promising footholds on the mainland. I was told last week of several medium-size Continental hauliers who had recently had as many as a dozen take-over approaches by UK firms.
Among those who already have a sizeable stake in European haulage are Transport Development Group, with 13 subsidiaries, mainly in Holland, and United Transport Overseas, with companies in Germany and Benelux already achieving £10m turnover annually. LTTO is keen to expand in Europe and is, I learn, seeking suitable companies for take-over to form a freight network.
Like TDG, UTO has a policy of retaining local management while imposing more systematic financial control. But suitable companies for such mergers are hard to find on the Continent and even when found, have a reputation for taking literally years before making a decision to sell.
And even though Continental operators may have over-reacted to news to the NFC's plans (which had already been hinted at in the UK press some months ago) there is no doubt that British hauliers wishing to establish themselves in Europe are keen to make a quick start.