As the Managing Director of one of the fastest growing packaging firms in Scotland, Chris Kelly of W&M Watson Packaging Ltd (WMW), tells Packaging Scotland about his vision for the current market, what he has in mind for the future of WMW and the development of The UPAC Group.
Q What made you come back to the family business?
A My father owned his own packaging business for 40 years. Due to his pending retirement, I was given the opportunity to work alongside him and learn the ropes of the business. With all five of my brothers working in professional fields, (from lawyers and accountants to property developers), we all got involved on various levels; my financial background placed me in the driver’s seat of the company.
Q What prompted you to start looking at acquisitions in the local market?
A It was clear the Scottish packaging market was very fragmented with a lot of small companies not turning profit.
Initially we thought about merging with some of our competition and setting up a co-operative, however there was very little interest shown, and the idea was abandoned.
My suspicions were they did not like the idea of sharing control of their respective companies. As a result, we took a different route, and started buying them one by one, and in the last three years we have acquired seven companies. The decision has created real momentum, and even now, we are in dialogue with two additional companies hoping for completed deals by the start of summer 2015.
Q What do you think weakens your current market?
A Rogue traders, people mis-selling products, recognised companies deliberately misleading their clients in respect to polythene gauge or length as well as the deliberate change of board specs without the customer’s consent. While this gives them a price advantage, it’s misleading to the customer, and weakens the market by lowering pricing; not only is it a short-termist strategy and morally reprehensible, it will ultimately be self-destructive to the local market.
Q What are the market strengths?
A Companies are beginning to invest again. After a tough recession, I think we will see steady growth for the next few years.
Q Describe the relationship between WMW and its affiliates? How do you see that relationship changing in the future?
A WMW and its affiliates are collectively known as The UPAC group. As a member of The UPAC Group, all members are privy to an expanded product line not previously available to their clients.
This expansion includes, but is not limited to the following product lines: cardboard boxes, moving packs, additional packaging supply options, labelling and customised packaging design, all at the competitive pricing customer deserve.
The group is currently comprised of W&M Watson Ltd, Peter Bryson Ltd, Lothian Labels Ltd, The Colour Carton Company Ltd and Merlin Healthcare Packaging. The synergies of this group are huge.
Q Where do you see WMW and its affiliates in ten years?
A The company has grown from £600k turnover to £10 million in five years, I expect this growth rate to continue, and we expect to expand into all aspects of packaging, from manufacturing to delivery.
Q What has been the most advantageous aspect of merging?
A Having control over our own supply chain has been a real advantage; it gives the members of The UPAC Group the ability to react quickly to consumer demands at an unbeatable price point.
Q The biggest challenge you are facing?
A The biggest challenge has been to manage our own expectations. We remain incredibly ambitious for the growth of The UPAC group, however we do need to ensure sufficient time is spent on the consolidation of our current acquisitions.
Q How have the staff handled the changes?
A The staff are the engine room of the whole organisation, and are pleased at our low staff turnover rate. As the company grows, the staff evolve as well, taking on new roles and responsibilities, while phasing out what is no longer working in our ever changing environment. We firmly believe in promoting from within, ensuring staff stay motivated to excel at their work.
Q What steps have you taken to ensure they are successful during these transitional times?
A There is a comprehensive training program within The UPAC Group that identifies and nurtures those showing interest and drive in moving up in the company.
Q What have you found the most rewarding in your current endeavours?
A Every company we have acquired has shown a year on year growth rate in excess of 20% in terms of turnover with either maintaining margin or even improving it. This is very satisfying as it reinforces our belief that these were ideal candidates from the start, and reinforces the thinking behind our integration plan is spot on.
Q What’s next for WMW?
A We continue to grow. We see ourselves still very much at the start of our journey, and expect to invest in a couple more companies this year. For consolidation purposes, we are actively seeking premises of around 150k square foot in the central belt of Scotland. It’s an exciting venture, and we look forward to where it continues to lead us in the future.