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Keep doing the right thing

There are many nice things that you get to see as MRW editor. But over the years, it has been a treat to visit UK-based manufacturing companies that are successfully working in our sector. In a tough time economically, and when many are quick to say that British manufacturing has died out, Dicom Paal is a thriving example to the contrary.

The company is based in Alfreton, Derbyshire and its factory manufactures equipment for use in the recycling and waste management industry as its managing director Craig Heley explains:

“Dicom Limited is the UK subsidiary of the Paal Group of companies. The holding company is RT Holding. Dicom has actually been established in the UK for over 25 years. In 2002, it was acquired by Paal.

“Dicom manufactures a range of static and portable compactors and vertical balers. The Paal Group offer horizontal auto-tie balers primarily for recycling. But is also does balers for the waste industry. These are the two-ram balers. “

As well as offering a complementary product range, another advantage of the marriage of Dicom and Paal is that it enables a more comprehensive after-sales service.

“We have a large service team,” says Heley. “We have 10 regionally-based engineers. This means for our horizontal baler customers, they can have a local engineer. Whereas if we were just supplying horizontal balers, then there is only enough business to maybe have four engineers.

“The other thing is that having Paal in Germany is a very good benchmark for Dicom. Paal is a fantastically run company. It is very, very professional and very well structured. For Dicom, we can see what it does, and the way it does things and we can learn a lot from it.

“It helps to set the right mindset – the right mentality – so that Dicom is not a garage or a jobbing shop but a professional company where we can see what Paal do well and try to copy it.”

The company is very proud of its after-sales service and has invested in digital pen technology to improve its customer service when it comes to invoicing and recording of servicing and repair work.

“Putting auto-tie horizontal balers into distribution centres has been a very successful area of growth”

Obviously, the UK is tentatively coming out of recession and I ask him what trends he is noticing when it comes to businesses buying equipment.

“One negative trend that has been apparent since the financial downturn is the length of time that people are taking before they actually place an order. We’ve found the gestation period between interest and final order has been extended. I think that is probably a consequence of companies going through more authorisation procedures.   

“A follow-on from that is that documentary requirement are going up. Our customers are becoming more professional in terms of using procurement teams and procurement managers so we aren’t dealing as much with the end-user.

“In terms of equipment, the market is changing from a rapid expansion phase to more of a replacement market. Recycling rates have gone up massively and are beginning to level out and as a consequence we are in more of a replacement phase and equipment is getting older for horizontal balers in particular.

“For compactors, there has been a slight move away from static compactors towards portable compactors. That again seems to have levelled out a bit. There are signs that the static market is recovering.”

Its clients include the large waste management companies such as Veolia and Sita, the large recyclers such as Severnside and Futur Recycling, and “we also sell directly to a number of retailers such as Ikea, Boots and Aldi have been a good customer of ours, as well as Lidl and Poundland” Heley says.

He adds: “Where Dicom has been strong in relation to the development of horizontal balers is putting the auto-tie horizontal balers into the distribution centres. That has been a very successful area of growth and it is an area where Dicom has excelled in relation to the rest of the group.”  

Now is seen as a good time to develop new equipment. “We are developing new products,” he says. “From the Dicom side, we’ve just released the C1220, which is a smaller, skip-sized portable but with a tipping device on as well. This is quite a new product in the market.

“Paal are developing new products and it has a very structured approach to product development. There is an ongoing cycle of new products it is coming out with. One of the strengths of Paal is that it offers a standard product with a huge range of options. So it means its engineering resource is dedicated to product development as opposed to coming up with bespoke designs. So it is continually improving its product designs.”

Over the coming years, he expects the market for compactors and balers to show some growth and that Dicom will share in this.

“It has been a difficult couple of years. We seem to have managed quite well during it. I would imagine that there will be growth but not spectacular growth. Our estimate would be that while we are coming out of the recession we will get 10 to 15% growth per annum, but that will level out fairly quickly to 5% growth thereafter.

“But I think there will be an increase in demand for the product. It is a key product in terms of the whole environmental debate. We believe it is environmentally and economically important to minimise transport costs and minimise storage costs. The compacting and baling of materials is an integral part of that.

“We are expecting the demand for refuse derived fuel to increase substantially and, assuming this happens, then logically the RDF will need to be baled in order to minimise transport and storage costs.

“Potential RDF projects have been discussed for several years, but we now get the sense that they will start to happen. With the Paal Dokon machine, which is unique in that it ties the bales with plastic twine (which is ideal for incineration), we are confident that we are well placed to take advantage of any such market shift.

“The industry has got a healthy future. I don’t see any major newcomers coming into the market, which would be destructive. The infrastructure needed in terms of the business and people expertise that Dicom and our competitors have will make it difficult for new entrants to compete. Provided Dicom Paal continue to do more right, than wrong, then we will continue to improve our position in the market.”  

Craig Heley CV

After university, he joined Ernst & Young as a chartered accountant. Once qualified, he wanted to go into industry. He spent three years with a construction company which included 18 months spent in Malawi. He then joined Delta PLC and spent 10 years in the world of plumbing and fittings. He joined Dicom Paal as group finance director in 2003 before becoming managing director of Dicom in 2007.

The best thing to happen in my career was…

From a personal development point of view it was going to Malawi. Going as a young man to Malawi in a senior role with lots of responsibility taught me a lot. Out there it was sink or swim.

The worst thing to happen in my career was…

From a career development point of view, I spent too long at Delta even though my role and responsibilities changed during that time.

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