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Freezer crowd
Page 24
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A lawyer, a property developer and a former dry goods operator have created a temperature controlled business they claim rivals all others. Chris 'Tindall finds out how they get on.
The Dakota hotel stands on the Sherwood Business Park, close to Junction 27 of the Ml. So does Innovate Logistics. One is marketed as a five-star hotel at three-star prices; the other is a transport and warehousing company formed in 2003. On the face of it, there's no reason why you should suspect the two businesses are linked. That is, until you realise one of the principal activities of Innovate's parent company, Innovate Holdings, is property development.
"Logistics usually grows from transport," says Pete Osborne, Innovate Logistics' managing director. "Stobart, Irlams, they all started with transport and then they chucked a warehouse on the hack of it. And then another, and then another. Here it was totally different. We had hardly any trucks at all, but we had warehouses falling out of our ears."
Osborne sold the business he had built up for 15 years, Pete Osborne Logistics, to the Stiller Group in June 2003. And, surprisingly, he says the decision to sell was a not difficult one he feared stagnation and was keen to take on more challenges. Even more surprising is his assertion that he knew nothing about Stiller Group and had never met them before selling, though there may be a certain amount of evasion to his answer.
However, further probing reveals an awkward albeit contractualperiod during which Stiller's fetched in an MD during Osborne's final four weeks. "It's always difficult when someone else gets hold of what you built up," he admits." It was difficult for the staff as well; they needed a clear cut-off point." He agrees that the company will always feel like "his baby", something he experiences every time he sees one of the trucks on the road. However, he adds: "But the other thing is,never fall in love with a deal. It was a business. It was my livelihood,it was very good to me,I was very lucky, and I had some very loyal customers. But it was a business."
Once he'd left. Osborne fully expected to spend his time on the sport that appears to appeal primarily to those at the top of their profession: golf. But Stephen Dargavel, a property developer, and Stephen Savage, a lawyer, together ran a serviced office business and they approached him with an offer he didn't refuse.
"You cannot run a successful chilled distribution logistics company without sheds," Dargavel explains. "So the ability for us to put up sheds around the UK quickly and in developing markets such as confectionary storage and chilled storage is one of the reasons [we approached Osborne]."
A lucky marriage
Savage describes the partnership as a "lucky marriage of skills". He also heaps praise on Osborne,peppering his speech with words such as "consummate professional", "superb logistics operator" and "consummate entrepreneurial style". These are all undoubtedly true, but the fact remains Osborne came from a dry goods background, not a temperature controlled business. So why did they choose him?
"Peter has a particular knowledge in relation to transport and we were predominantly a cold storage business," says Savage. -And while transport is different [compared with] refrigerated transport, his knowledge within transport itself was of enormous benefit to us." He adds that the three of them also have a natural fit of personalities, which might well be more importance to the company's success than some specialist knowledge. Dargavel adds that it was a deliberate move not to get someone from within the industry.
Learning about chilled distribution has been "interesting", according to Osborne. And he adds that having two partners to ease the pressure of running a company is more desirable: "It's a very lonely seat to have, to be the one man that runs one company." He is ambitious and gets a buzz out of starting something, and finishing it. "I'll probably get bored of it in 15 years and want to try something different," he adds, laughing.
So Innovate Logistics, with Osborne on board, was launched in autumn 2003. it resulted from the merger of five companies, including Solar Cold Services and Park Conditioned Storage. It now runs 70 trucks and has 105 drivers. Savage places an enormous amount of strength on the branding of the company and says it helped ease the amalgamation: "It has meant our customers and our workforce have some brand to follow," he explains. It has helped our workforce in particular; they feel much more as one organisation than they would have done in the event that all the businesses were run as individual companies."
Osborne describes the logo as "bold and brash" and reckons getting it into the market place did them -a massive power of good". He cites the racing driver David Coulthard as one example of someone who has noticed the trucks and commented on their design. Coulthard's father was a haulier and he is a stakeholder in the nearby Dakota Hotel, for which Innovate helped develop the land. Tension appears to be created when I ask whether they run abroad. Osborne claims it is something they have not thought about venturing into, which seems odd from such a forwardthinking firm. Savage adds: "We want to be market leader of refrigeration logistics in the UK.We cannot be swayed from that."
But surely in the future they will start looking further afield? "We are focused on our target as the moment and we are not going to be diverted away from it," Dargavel maintains.
Ahead of target In any case, things are looking good for the company. Savage says turnover is slightly ahead of targetthere are plans for a new warehouse in Durham this July and one near Spaghetti Junction in 2006.Dargavel concedes the company is still light on transport and they are planning to develop this. Savage adds: -And we will do this by whatever means are available to us."
Osborne, however, is adamant that the cold storage market has gone stagnantand suggests when Innovate came into the marketplace its competitors had to step up their game. He also claims those working in the market are resistant to change. The key to success, he stresses, is to breakout of that way of thinking, which he feels the three of them are doing: "It's no different really than moving a truck load of chick ens from here to London."
Though, as Savage points out, the disaster recovery procedure certainly needs to be different, particularly when your product is sitting in a temperature of -29°C.
"Yeah, that's the only difference," says Osborne, before suggesting: "Just keep the door shut! "And he roars with laughter. •