Thursday, July 19, 2007
This month contributing editor Steve Banner travelled to the depths of Wiltshire to catch up with Jarvis MacDonald, managing director of vehicle conversion specialists the Trumac Group.
Based in Westbury, Wiltshire, refrigerated and dry freight bodybuilder Trumac Group used to be owned by well-known fridge body specialist GRP and traded under the GRP banner. How long have you been independent and who owns the company now?
Since November 2003 and it's owned by myself and Heather Trueman. We bought it, not because we thought we'd make our fortunes, but because we love the industry we're in. I've worked in it since 1992 and I was sales director for GRP from 1997 onwards. Heather Trueman was human resources director and PA to Don Rastrick, GRP's chairman. Don presented us with the opportunity to buy the business, so we took it. It was too good an opportunity to miss.
How difficult was it to raise the money to purchase it?
Luckily it was a sound business with a reasonable balance sheet and had been making small profits. So when we went to see three different banks about it, they all said yes. They were keen to help us.
How much did you pay for it?
A fair market price!
What did you do with it once you'd bought it?
We looked at all the costs to see where savings could be made. At the same time we reviewed our range of products to make sure that they were all sufficiently profitable in their own right. We had two objectives; to increase our sales and thus our turnover and to improve our margins. In the year prior to our taking over the firm the turnover was £3.9m, but in our last financial year we reached almost £7.5m.
What about boosting your margins?
That's been more difficult. It's a competitive market, and we haven't been able to increase the prices of our fridge box bodies for the past five years. We have a number of rivals out there who have been able to get their cost base down and as a consequence have been able to offer keen deals. So we decided to look at what our most serious competitors were doing and invest in order to emulate them, lowering our cost base and improving efficiency. As a consequence we made the decision to start producing our own insulated panels rather than buy them in. That's involved installing two panel presses plus all the related equipment at a cost of just over £300,000. At present we've no plans to supply panels to third parties, but if we find we have the spare capacity I wouldn't rule that out. There are people out there who use insulated panels to build horseboxes and exhibition units. We're not in either of those markets so we could supply them without feeling that they're competing with us.
Have you made any other investments in the factory?
We've rewired the place at a cost of £104,000. We had to upgrade the electrical system so that it could cope with the demands of the panel presses and we needed new power points around the plant too. We've also bought around a dozen air-operated scissor-lift gantries at £5,000 each so that people can work at heights safely. In addition we're putting in extra craneage and we've bought some new racking so we can keep parts next to the production line rather than the guys constantly having to go and fetch them. One of the difficulties we face is that certain component manufacturers are constantly late with deliveries, and I'm sure that other bodybuilders suffer in the same way. As a result we have to order some parts up to a fortnight before we actually need them to ensure we achieve our delivery dates.
What are your main product lines?
Refrigerated bodies for chassis cabs, including 3.5-tonners, dry freight box bodies, fridge van conversions, security vans — we supply a lot of them to councils to transport cash — bodies that are used to deliver gas cylinders and ground handling equipment for use at airports. We also do highly specialised bodies — we turn out around 60 a year — for, for example, road survey vehicles and we've built mobile classrooms for Network Rail.
What else do you do?
On top of all that we carry out body repair work. It's our most profitable area of activity — we've got a reputation for repairing fridge bodywork in particular, but we do quite a lot of dry freight bodies too — and one we're trying to grow. We'll repair anything from a car-derived van with panel damage to a full-size trailer. People bring vehicles to us from as far afield as Cornwall, Birmingham and London. We seem to pull in a fair amount of work from London because our labour rates are considerably lower than they are there and we can offer a collection and delivery service.
How many fridge bodies do you build a year?
Around 350 and getting on for the same number of fridge van conversions. The demand for conversions is growing quite rapidly. At present we're finding that people who used to use 7.5-tonners are either moving down to 3.5-tonners or up to 12/13-tonners. Operators are finding it difficult to recruit people licensed to drive 7.5-tonners these days, especially in London. Because of this they're either saying that if somebody has got to pass a separate test then we might as well get them to pass something that will qualify them to drive at 12/13 tonnes, or they're deciding to stick at 3.5 tonnes instead so that they can avoid tachographs, O licences and so on.
Are fridge van customers specifying single or double compartments? Opt for the latter and they can carry chilled and frozen food in the same vehicle.
About 70 per cent of them ask for single compartments and a good 75 per cent of those want them to chilled specifications. Many of the 30 per cent of customers who want dual compartments tend to be rental companies. Most of them specify a movable bulkhead between the two compartments that can be taken out completely to give them maximum flexibility rather than a fixed one.
When buyers ask for dual compartments, are they asking for twin evaporators too rather than fan kits so that the temperature in each compartment can be more precisely controlled?
It's a mixture. A lot more people can see the benefits of dual evaporators these days, but fan kits aren't dead yet. Some customers are still specifying them in order to keep the conversion cost down, even though it's only another £300 to £400 for a second evaporator. The only drawback of having a second evaporator, other than the price, is that it takes up space, and space may be restricted in a van.
How thick is the insulation in a fridge van these days?
Typically around 50mm on chilled, but with summers starting to get a bit warmer we may start suggesting to people that they take 75mm, simply to give the fridge unit a bit more of a fighting chance. On frozen work it tends to be 75mm anyway and we're starting to see customers ask for 100mm. It's only another £200 or so. We don't generally offer the clip-in, clip-out insulation kits. We prefer to put a wet-lay lining over the top of the insulation because we give a three-year warranty, refrigerated vans can get abused at times, and we believe that a wet-lay lining is more durable than the kit approach.
Whose fridge units do you fit?
GAH and Hubbard tend to be favoured by non-fleet customers buying van conversions in ones or twos while fleet customers usually go for Carrier or Thermo King because that's what they've got on their bigger vehicles. We're also fitting more Frigoblocks, but not on vans because they don't do an LCV product. Some van operators like under-bonnet fridge units, especially if they're running smaller vehicles. Others like to have something on the roof so that they can demonstrate to their customers that their vehicle is actually refrigerated.
Can you insulate factory-fitted van load area doors successfully or do operators have to specify special fridge doors?
We can insulate standard rear doors with a 75mm-thick grp pod filled with insulating material. The doors are fitted with heavy-duty seals that close on to heavy-duty seals on the inside of the vehicle. This arrangement will cope with fully-frozen temperatures down to -25°C, but we always recommend that customers opt for purpose-built freezer plug doors if they're on multi-drop work at that temperature because the doors will be constantly opening and closing. So far as the sliding side load area doors are concerned, the door furniture tends to be fairly weak for multi-drop deep-frozen fridge work and using them can sometimes lead to problems as the van gets older. So we tend to suggest that the factory door is taken off and a purpose-built freezer door fitted instead. It's possible to insulate an existing sliding side door if you're not on multi-drop, but if you do so you'll probably only be able to go down to -18°C.
Modern vans are heavier than their predecessors of 20 years ago. What impact has this had on the payload of a refrigerated 3.5-tonner?
We used to be able to tell customers that they could carry 1.1 to 1.2 tonnes quite comfortably in certain vans. Now we often have to be very careful and pretty creative in the work we do before we can guarantee a tonne.
Fridge vehicles used on international work have to be certified to ATP (Accord Transport Perisable) standards. Would you like to see this standard applied to temperature-controlled vehicles used solely within the UK?
Yes, because it would mean that they would all be fit for purpose. Many Continental countries have it as a national standard. We should too, and I think it will come anyway with the introduction of Whole Vehicle Type Approval.