SCOTT Timber, the largest pallet manufacturer in Europe, has bought rival James Industrial for £ 2.5 million. It is the latest in a string of acquisitions for the Rosyth-based company, and pushes turnover to £ 46m, almost 10 times what it was five years ago.
The deal adds 55 staff to the company to bring the total to more than 500, and increases Scott Timber's pallet-making and pallet-recycling businesses in almost equal amounts.
It adds the pallet-making businesses Pallet Craft 2000 and Alpha Timber, which generate about £ 2.5m in turnover between them.
The proportion of turnover from recycling will rise from 6% to 12%, which is particularly attractive because it has higher margins and it shelters the company from recent increases in the price of the Baltic softwood it uses to make pallets.
Scott will also benefit from having a recycling base in Wigan to add to its bases in Barry, south Wales, and Rosyth. Recycling depends on being close to customers for pallet collection, so the deal gives Scott much better access to the north English market.
John Scott, managing director and majority shareholder of Scott, said: 'James Industrial was particularly attractive because he was in a good location and because he had hundreds of arrangements in place.'
He added: 'We are still forging ahead. We are making investments to improve our efficiencies, and looking at ways to improve what we do.'
Scott is buying James Industrial from owner Michael James, who is bowing out to concentrate on his property interests. It is the company's second acquisition this year, following the purchase of Hammond Pallets, which was of a similar size and based in Cheshire.
Scott Timber makes well over 200,000 pallets every week and also has sites in Kent, Burton-on-Trent and Fort William. It also makes wooden boxes through its United Box subsidiary, which is based in Angus, Fife, and is a joint venture with James Jones and Sons.
It currently sells only to the Scottish market but there are plans to reach further south. 'We are looking to break into the English market, but not through acquisitions,' Scott said. 'We have manufacturing plants all over the UK, so if it is too far to travel we could set up within one of our existing plants. It will continue to be a side line, but we are keen to grow it.'