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Towens: Banking on growth despite uncertainty
Somerset-based Towens saw an opportunity to evolve from a traditional waste management business by finding new ways to recycle construction and demolition waste. It has invested €1.9m in plant that will separate subsoil into its component parts of sand and stone for sale back to the construction market.
“We don’t like the uncertainty about inflation and economic growth. However, if you sat around waiting for the perfect time to invest, you wouldn’t do a great deal. We are in a good location, with a further three to five years’ construction expected at the Hinkley Point nuclear power station, which generates lots of other work around our area.
“At present, subsoil removed from construction sites is mainly sent to disused quarries – effectively it’s thrown away. It struck us that we could help to meet the increasing requirement for recycled products and create a new revenue stream.
“We finished commissioning our plant in June. It is now in operation, staffed by an internal team. We’re big believers in promoting people from within the business, and when you’ve made a chunky investment in something, you want to have people you know in charge of it.
“HSBC UK provided interim financing for the different phases of the plant; once we’ve paid for it, they will move that onto asset finance. The HSBC UK team has been very helpful and flexible in extending the loan periods – the plant was shipped from an Italian manufacturer, and there were some supply chain and installation delays.
“The biggest variables for us are the energy costs to operate the new plant, as well as rising labour costs and the strength of the end market for our products. However, I believe the new venture will add 10% to our revenues this year, and 15% thereafter.”
John Telling, Director, Towens Waste Management