GLENROTHES-headquartered packaging supplier Pitreavie Group has a £13 million turnover, almost 100 employees and is about to venture south of the border with it latest planned acquisition.
For a business launched by two friends in the middle of the financial crisis, and which started with “literally nothing”, it’s a stunning success story.
Joe Diamond and Gordon Delaney are the men behind Pitreavie Group, having spotted a gap in the market for a service-led business eight years ago. The pair, with backgrounds in retail and sales respectively, have built the company through a combination of organic growth and strategic acquisitions to its current position with further plans for expansion.
Acquisitions have included temperature controlled packaging specialist SorbaFreeze, Aberdeen-based Andersons Packaging, Snapco Industrial Supplies in Glasgow and CP Cases (Scotland) in Aberdeen. At the time of interview, the business was in the process of buying a firm to the south of Birmingham, which will represent Pitreavie’s first acquisition outwith Scotland.
The firm recently announced a £650,000 investment to support growth of the packaging business, following hot on the heels of a £1 million investment in machinery and product development into SorbaFreeze.
“In the early days it was just Joe and I,” said Gordon, who is now group commercial director. “I’d be out cold calling all day every day and would come back with samples.
“With some of our bigger customers, we started as just another supplier providing a couple of boxes. Over time we’ve become an integral part of the supply chain; we’ve become more of a strategic partner rather than just a supplier of a cardboard box or roll of bubble wrap.”
The list of products and solutions offered by Pitreavie Group encompasses everything from oils, lubricants and hand tools to boxes, trays and specialist solutions for the oil, gas and offshore markets.
The company operates on a ‘stock and serve’ basis, meaning clients can have their stock delivered as and when required.
“In the very early days, we were buying from a major packaging supplier in Scotland,” Gordon recalled. “You could get the delivery any day you wanted as long as it was a Thursday! Joe was looking at me and I was looking at him, both of us thinking ‘this can’t be how it is in this industry’.
“There’s no room for complacency but some of the customers we work with, who we have fantastic relationships with, know we bend over backwards for them. The cornerstone of this business is customer service. Everything we do is all about customer service. Joe’s spearheading a project at the moment to land a new computer system – that’s a significant investment. We’ve just appointed a supply and logistics director, a financial controller and a third regional branch manager. These are all things we’re putting in place so we can further develop the business and provide an even greater level of service.”
Managing director Joe Diamond wasn’t daunted by the prospect of trying to build a business during the worst recession in living memory. Indeed, he believes there were some commercial advantages in hitting the market at a time when many companies were looking at ways to reduce costs.
“The business started because we thought we’d spotted a gap for a service-led business rather than a product-led business,” Joe explained. “With hindsight, there were probably some advantages (to starting off during the financial crisis). It was the ideal opportunity for customers to review their costs. If you’ve got someone knocking on your door saying they want to help with that, the door might have been more readily opened than it might have been three or four years previously. When the oil crisis started in Aberdeen, people who didn’t want to speak to us previously were phoning us up.
“The challenges today are very different. The team is much bigger. We have experts across every area of the business now, which is good. Our job today is more about setting the direction for the business and getting the best out of the people who are here.
“We have high standards for what we’re expecting people to do. Having the knowledge is great but that’s not enough; they need to fit in with the culture of the business as well. They need to be able to work as part of a team, because it’s a team game. There are too many moving parts, from procurement, warehouse, deliveries, sales, everybody in between – everybody’s got to work together.”
Joe stressed the importance of constantly innovating and introducing new offerings to customers.
“We’re constantly looking at new products and how we can better serve the customers, whether that’s through improved products, helping them improve processes, saving them money because they’re not buying the correct product for the job they’re doing, taking plastic out their supply chain or using less plastics, or just completely changing how their supply chain works,” he said. “They go from dealing direct with manufacturers where they’ve got high MOQs and big deliveries and big amounts of cash tied up in stock, to moving to a stock and serve basis with us where they’ll get their stuff just in time and pay for it as they go, freeing up warehouse space. One of our big customers was able to give up outside warehouse space they were paying for. They also cut internal warehouse in half and dedicated that half to production space.”
In a year when plastic waste has dominated much of the news cycle, it’s perhaps no surprise that Joe says the environmental side of things has become a much greater factor.
“There is a place for polythene still,” he said. “If it was invented today, it would be a wonder material. But we all know the downsides to it. We’ve been working for the past few years with our suppliers and customers to take volume of material out of the supply chain. We’ve helped come up with different blends, stronger blends; we can cut down the amount of plastic the customer is taking and still allow them to do the job they need to do.
“We also help our customers where we’ll bring back waste cardboard from them and make sure that goes through the proper recycling processes and doesn’t end up in landfill.”
Looking to the future, Pitreavie is anticipating further growth and more acquisitions. Gordon emphasised the importance of focusing on the long-term, customer retention and relying on the personal values he and Joe have developed during a 35-year friendship.
“Our own careers took us separate ways but this customer service thing has been ingrained in us,” he remarked. “So when we came back together to start this business, it’s been a huge help and continues to help us.
