Latest / Sales Trajectory Podcast / “Navigating Timber Supply, Pricing & Talent Challenges with Gary Walker (Belmont Timber)”

Transcript

“Navigating Timber Supply, Pricing & Talent Challenges with Gary Walker (Belmont Timber)” · Sales Trajectory Podcast

• 0:22
  SPEAKER_00: Welcome to the Sales Trajectory Podcast, where innovation meets execution in sales.
• 0:28
  SPEAKER_00: I'm Jason Howes, your host, a 35-year sales veteran and lifelong student of the game.
• 0:35
  SPEAKER_00: This podcast is for leaders and sales professionals with a growth mindset.
• 0:40
  SPEAKER_00: You'll hear real sales stories about new products, motivating teams to prospect, and boost productivity.
• 0:47
  SPEAKER_00: We dive deep into sales process, cutting edge tech, and recruiting top sales performers.
• 0:54
  SPEAKER_00: Let's get started.
• 1:01
  SPEAKER_00: Today I'm joined by Gary Walker, Managing Director of Belmont Timber.
• 1:06
  SPEAKER_00: And the reason I'm catching up with Gary is we were just having a general discussion, and there was a lot of value coming out of the discussion, and we thought it would be good to share with our industry.
• 1:15
  SPEAKER_00: So thanks for catching up today, Gary.
• 1:17
  SPEAKER_01: Pleasure, Jason.
• 1:18
  SPEAKER_00: And it has been, I have known Gary for a number of years, and Gary's very well known within the timber and building industry.
• 1:26
  SPEAKER_00: Obviously, being part of a quite a famous family business within our industry.
• 1:31
  SPEAKER_00: Gary, so just give us a bit of history on yourself and the and the business.
• 1:35
  SPEAKER_01: Look, the the business was started in 1952 by my father, John Walker, who was totally committed to the industry.
• 1:42
  SPEAKER_01: He did get an order of Australia for his contribution to the building industry.
• 1:47
  SPEAKER_01: The company started mainly doing disgantling timbers and it progressed from there to ready-cut hardwood.
• 1:55
  SPEAKER_01: We did a lot of housing commission work around New South Wales.
• 1:59
  SPEAKER_01: From there we then moved into pre-assembled softwood frames, from there into roof trusses, and in the last 12 months we've put in a couple posi strut machines.
• 2:10
  SPEAKER_01: So it's we've been involved and committed to the industry.
• 2:13
  SPEAKER_01: And uh I've been here now 44 years and thoroughly enjoy the industry and the interactions with people such as yourself, Jason, that we've known each other many, many years.
• 2:24
  SPEAKER_00: And uh what about did you start your career in the timber industry, Gary?
• 2:27
  SPEAKER_01: Actually, I'm a qualified accountant.
• 2:29
  SPEAKER_01: I worked at Ream Australia for a number of years doing a part-time, and then in 1975, my father's two IC unfortunately became well, and so I joined him in 1975, and uh I've been here with him until he passed in 2014, and after that I've been running the business for the last eight years.
• 2:51
  SPEAKER_01: He gave me a very, very good basis in this industry, and we're continuing on on the same line.
• 2:57
  SPEAKER_00: And Gary, I've got to take my hat off to you because uh obviously being an accountant, and I believe you also do most of the selling at Belmont Timbers as well.
• 3:04
  SPEAKER_00: So it's a bit like a salesperson needs the accountant, the accountant needs a salesperson.
• 3:08
  SPEAKER_01: So the accounting background is is very important because obviously it's important to know what your costs are, so you know what you're selling at, and that's a very important uh facet to have.
• 3:20
  SPEAKER_00: Absolutely.
• 3:20
  SPEAKER_00: And Gary, just from my uh information here, just to share with our listeners as well, how did you manage the recent times and supply challenges within your business?
• 3:30
  SPEAKER_00: I mean, obviously that must have uh hit you very hard and fast.
• 3:33
  SPEAKER_00: So how yeah, how did you manage that?
• 3:35
  SPEAKER_01: Look, it's been very, very challenging, but again, leaning on from my father, who had a philosophy to support Australian producers.
• 3:42
  SPEAKER_01: 99% of all of our material comes from the Australian producers.
• 3:47
  SPEAKER_01: And I have to say that they went back over the previous six to eight months on what our purchases were, and they have continued on supplying that same amount of timber.
• 3:58
  SPEAKER_01: So we we didn't want we could have taken additional, we didn't take additional, we took what we needed to run our plant, and so we've been very, very fortunate with their support that we've had timber throughout.
• 4:10
  SPEAKER_01: And that's the same with the EWP.
• 4:12
  SPEAKER_01: We support the Australian producers, and so we we did have material.
• 4:17
  SPEAKER_01: So we were we have been very, very fortunate, which comes back to the loyalty that we have showed them over the number of years, they have definitely shown the loyalty back to us.
• 4:26
  SPEAKER_00: Well, obviously, coming from a framing background, myself, and engineered background, yeah.
• 4:31
  SPEAKER_00: Obviously, yeah, if you if you don't have the support of your your suppliers, it's very hard to uh to surface the market.
• 4:38
  SPEAKER_00: But I mean, obviously, in these circumstances, it was like a bit of a perfect storm, really, wasn't it, where everyone expected the market to to slow, but it actually went the other way and boomed.
• 4:48
  SPEAKER_00: So would that uh affect a lot of your daily time um running timber?
• 4:53
  SPEAKER_01: Well, the majority of of my time is taken up procuring timber, other than the framing material.
• 4:59
  SPEAKER_01: So it's across the board, the demand that's been there, but again, showing the loyalty towards the the uh companies locally, they have.
• 5:09
  SPEAKER_01: If they have, they know in a very important fact we pay extremely well.
• 5:13
  SPEAKER_01: And as a result of that, again, they they have supported us.
• 5:16
  SPEAKER_01: It's been a challenge.
• 5:17
  SPEAKER_01: There's no two ways about it, because obviously, with the incentives that the government has given, uh the the number of homes that have been sold, as in some of the articles, three or four times what people would normally sell in a year.
• 5:31
  SPEAKER_01: And now this is now resulting in the problem, which is the cost of material.
• 5:37
  SPEAKER_00: And would you consider, I know I'm going back a fair way here, but you know, I know when the GST hit and a lot of the work was pulled forward and everyone was panicking and trying to miss out.
• 5:47
  SPEAKER_00: How many times worse would this situation have been than that?
• 5:51
  SPEAKER_01: Look, it's at that time, I have to say, John Walker looked after a lot more of the purchasing than I did.
• 5:57
  SPEAKER_01: All I can say is right at this moment, it's been extremely challenging.
• 6:01
  SPEAKER_01: Obviously, a lot of Baltic was coming into the market.
• 6:05
  SPEAKER_01: Again, 20 to 25% of our demand is from overseas.
• 6:10
  SPEAKER_01: So, with what's happening in Ukraine, what's happening in China, the difficulty of getting timber through Shanghai and Singapore, the problems we were having on the water here in Australia.
• 6:22
  SPEAKER_01: As you say, a perfect storm, a combination of all of that.
• 6:26
  SPEAKER_01: And again, we were very fortunate we could continue working five days a week, where I know there were unfortunately some people who could not work um every day.
• 6:36
  SPEAKER_01: They didn't have the timber.
• 6:37
  SPEAKER_01: And I think if you go into a number of the timber merchants, the shells were totally bare.
• 6:44
  SPEAKER_00: Yeah, absolutely.
• 6:45
  SPEAKER_00: And and I and I think that it's great to get that loyalty back as well, Gary, because like in most things, I mean, chasing the cheap price doesn't always give you the best long-term value or or um position in in your business, does it?
• 6:57
  SPEAKER_01: Look, we I believe over the years we have been paying extra over and above what we could have been buying it.
• 7:03
  SPEAKER_01: But again, we felt, not knowing it was going to be as bad as it was, but we felt hopefully that it would pay off in some time.
• 7:10
  SPEAKER_01: And again, I repeat, with the support of our local producers, we've done really survived the situation.
• 7:16
  SPEAKER_00: Oh, that's that's a great story.
• 7:17
  SPEAKER_00: And what about the impact of pricing on your business?
• 7:20
  SPEAKER_00: I know you were sharing some scary stats with me last week, and that's obviously bought upon some of the reasons to talk about this, just so other people within our industry get to see some of the impact on on businesses.
• 7:32
  SPEAKER_01: Look, we've seen reports of what uh building costs have gone up.
• 7:35
  SPEAKER_01: I'm not quite sure where they all come from.
• 7:37
  SPEAKER_01: But when I look at the fact that um with EWP, iJoyce from one of the suppliers has gone up in excess of 130%.
• 7:46
  SPEAKER_01: LVL's has gone up by excess of 90%.
• 7:50
  SPEAKER_01: The local timber suppliers have gone up by in excess of 60 60 to 70 percent.
• 7:56
  SPEAKER_01: That's to us.
• 7:57
  SPEAKER_01: I mean, maybe it mightn't have gone up to other people as much.
• 8:01
  SPEAKER_01: But that's the sort of the percentages that we have incurred, which then led to the discussion your idea we had.
• 8:08
  SPEAKER_01: And that is with the concern for the builders because the the producers can uh pass it on to the frame and trust plants, and we pass it on to our builders, but the builders can't pass it on are on fixed contracts, and that's resulting in the number in Queensland, Victoria, and New South Wales of the builders, and some of them very old and well-established builders that unfortunately have gone broke.
• 8:34
  SPEAKER_01: I spoke to a builder last week, I asked how he's going.
• 8:36
  SPEAKER_01: He said he's got five jobs to start.
• 8:38
  SPEAKER_01: I said, That's very good.
• 8:39
  SPEAKER_01: He said, No, not really, because on all five, I'm gonna make no margin because I sold them close to 12 months ago, which is a push through the various associations and to government that the period of time it's taking for plans to be registered, it's six to nine months, and that's quite some time.
• 8:57
  SPEAKER_01: And especially over these unprecedented times this year of the amount of increases.
• 9:02
  SPEAKER_01: So when the suppliers are giving us three to three months notice, that's great, but the builders are committed for a lot, lot longer.
• 9:10
  SPEAKER_00: No, and that's a fair call.
• 9:11
  SPEAKER_00: And and I think on on pricing, I mean, it'd be fair to say that I I'd say most business owners would admit that they were not making as much margin as they should have been to start with.
• 9:21
  SPEAKER_00: I think everyone was running really tight on margin.
• 9:24
  SPEAKER_00: It's obviously come back to to bite everyone fairly hard.
• 9:26
  SPEAKER_00: I mean, I work across, you know, predominantly within the building industry still, but across a lot of different product categories and segments.
• 9:34
  SPEAKER_00: And I'm hearing similar, you know, increases in other products as well.
• 9:37
  SPEAKER_00: So um, and that's as you mentioned, right across the board.
• 9:41
  SPEAKER_00: So and I think that the unfortunate part for the builders is you're right, particularly the builders that I think really were focused on building volume and and where a lot of people were getting the grants and all those sort of things, where they were signing up hundreds of new starts, they're the ones that have definitely, or or more, have come off sort of, you know, second best.
• 9:59
  SPEAKER_00: So it it is concerning.
• 10:01
  SPEAKER_00: And I think the good thing from my point of view when we were talking last week was that your builders are openly telling you their situation, and obviously you're doing what you can to support them as best as possible.
• 10:13
  SPEAKER_01: And how are you finding it yourself with the placement of people?
• 10:16
  SPEAKER_01: Because it that seems to be a problem as well.
• 10:19
  SPEAKER_00: Yeah, well, I actually went out, um, I brushed a few cobwebs off last Friday and did some cold calling and uh just walked around some local businesses.
• 10:26
  SPEAKER_00: And when I said I did recruitment, it was like a party had started.
• 10:29
  SPEAKER_00: But then I obviously let them know that I did sales recruitment.
• 10:32
  SPEAKER_00: So recruiting any people at the moment, warehouse, drivers, office, anything is really, really tough from a sales recruitment point of view.
• 10:41
  SPEAKER_00: It's very tough at the moment.
• 10:42
  SPEAKER_00: Look, our industry hasn't invested enough in training and development, unfortunately, and there's a massive big skill shortage in quality salespeople.
• 10:50
  SPEAKER_00: And I suppose the concern for businesses, from our opinion, is that um a lot of salespeople have probably been more the order taker and consultant of recent times because they've had to try and manage tough discussions with their customers, but obviously, you know, soon they're going to need to go back into prospecting mode and developing new business.
• 11:10
  SPEAKER_00: And a lot of people haven't had that experience.
• 11:12
  SPEAKER_00: So I think yeah, it's it's gonna be very challenging uh moving ahead.
• 11:16
  SPEAKER_00: And I know from your discussions with yourself, you were mentioning even getting enough people to work in your factory has been a big challenge for you.
• 11:23
  SPEAKER_01: And what do you think to overcome the problem?
• 11:26
  SPEAKER_00: Invest more in in the training or I think as a whole industry, I think we definitely um yeah, I know uh Tabmar, who we're both members for, and obviously I did my Tabmar traineeship 30 years ago.
• 11:38
  SPEAKER_00: I know they're doing a fantastic job bringing a lot more trainees through the industry, but I think it's it's you know, the government, the the schools, and I think everybody really needs to get together and it's like planting more trees, you know.
• 11:52
  SPEAKER_00: We need to bring more people into our industry because it's shortages are are not going to go away in the near future.
• 11:58
  SPEAKER_00: What about yourself?
• 11:58
  SPEAKER_00: What do you think?
• 11:59
  SPEAKER_01: Well, again, exactly that's what you've just said, the training.
• 12:03
  SPEAKER_01: And it's very difficult at the moment, even to find under Tapmart training, because the fact is that the people that could be prospective future trainees are now moving very quickly to get a short-term return by packing shells and being offered very high money.
• 12:20
  SPEAKER_01: It's short-sighted, but they're getting the money now instead of turning into apprentices.
• 12:25
  SPEAKER_01: And as you just said, I mean, our foreman here has been with us for 15 years and he's a tapmer trainee.
• 12:31
  SPEAKER_01: And my assistant manager is also assistant trainee.
• 12:34
  SPEAKER_01: Sorry, was an assistant trainee.
• 12:36
  SPEAKER_01: He's now an assistant manager.
• 12:38
  SPEAKER_01: So long term it is, but it's very difficult in any of the associations to find people at the moment who are willing to be trained.
• 12:46
  SPEAKER_01: So it it it is a problem.
• 12:48
  SPEAKER_00: And I think the other thing, too, is even we were talking before about trust detailers and estimators, you can't sort of sit here and say anymore it's not good money because it is good money.
• 12:56
  SPEAKER_00: And I was a trust detailer and it it's a great career.
• 12:59
  SPEAKER_00: I mean, I've really enjoyed it.
• 13:01
  SPEAKER_00: So it is a shame to see so much going offshore when we've got, you know, this younger generation that could be guided more into these careers that could be that could help all of us.
• 13:12
  SPEAKER_00: So yeah, I think it's a really important topic and obviously needs a lot more discussion.
• 13:16
  SPEAKER_00: Gary, is there anything else that any other advice you could potentially give to anyone in our industry that's watching this?
• 13:23
  SPEAKER_01: It's not so much advice.
• 13:24
  SPEAKER_01: I just believe that we've been from a challenging period of time in finding material to now, I believe, first and second quarter of next year, it's going to be very challenging because a lot of the project home builders are not selling at the moment.
• 13:40
  SPEAKER_01: And that's partly due to the very expensive land in in uh in Sydney.
• 13:46
  SPEAKER_01: We're just waiting, as you know, within an hour, we'll know whether we have our fifth rate increase.
• 13:51
  SPEAKER_01: And so, with all the increased costs that we've been talking about, the cost of the land and interest rates, um, the builders are not selling.
• 13:59
  SPEAKER_01: And as we said, six months, which is first quarter, second quarter next year, I do believe we're going to have a challenge with work.
• 14:06
  SPEAKER_01: So things haven't changed over the years.
• 14:08
  SPEAKER_01: It's one challenge or another, Jason.
• 14:10
  SPEAKER_00: I look appreciate that very much, Gary.
• 14:12
  SPEAKER_00: And it's always um, you know, excellent to catch up with yourself.
• 14:15
  SPEAKER_00: So thanks, thanks very much for your time.
• 14:17
  SPEAKER_00: It's greatly appreciated.
• 14:18
  SPEAKER_00: Anytime, Jason, always happy to talk to you.
• 14:21
  SPEAKER_00: Got a product that's struggling or launching something new?
• 14:24
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• 14:25
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