The Donaldson Group has expanded and grown over 162 years and now has the ability to build and fit out an entire house. Timber Design magazine found out what’s behind the company’s success.
The last two years have been transformational for the Donaldson Group. In 2020, the sixth generation of Donaldson took over the reins: Andrew Donaldson as Group Chief Executive and Michael Donaldson as Executive Chairman. Since then the business has made a number of strategic acquisitions, culminating in the largest in its 162-year history last December, with the acquisition of Stewart Milne Timber Systems (now Donaldson Timber Systems). This was a major deal and also marked the business entering the timber frame market for the first time.
“As timber experts with an historic commitment to the timber market, we have long-considered venturing into timber frame, but the timing was never quite right,” says Andrew. “Last summer we completed our five-year strategic plan and outlined our ambition to grow the business, with timber frame being an opportunity to explore. Never did we imagine that six months later we would be the UK’s largest timber frame manufacturer, but it was an opportunity that was just too good to miss.”
The family business has come a long way since 1860 when it began as a timber merchant in Tayport, Fife, run by James Donaldson and his two sons.
“What began as a single timber merchant has grown to become a 1,600+ employee business, with 11 trading subsidiaries and 17 separate brands,” explains Andrew.
Over the last two centuries, the Group has seen two world wars, several recessions and the evolution of the timber industry. Strategic growth and entrepreneurial spirit is a recurring theme, with family values and the importance of people remaining core throughout.
“The company’s first acquisition was in 1889,” adds Michael. “Steady expansion continued, but a turning point came in 1984 when our father took over from our grandfather. The original Tayport site was sold to a company of which they became partners and they developed it for housing. This was the first venture out of timber, and it gave them a new confidence to push the business forward.”
This, and a new generation managing director, was a catalyst for change, and in 1985, Donaldson Timber Engineering (DTE) was established – now the UK’s largest manufacturer of roof trusses.
Further strategic initiatives followed, including the acquisition of MGM Timber, and the three arms of the business – sawmilling, timber engineering and merchanting – began to flourish as a group.
Creating a one-stop-shop
Since its most recent acquisitions and business launches, the group now has three new divisions:
• Donaldson Off-site: Donaldson Timber Systems; Donaldson Timber Engineering; Donaldson Direct; and Rowan Manufacturing
• Interiors: Kitchens International, MGM Kitchens, Smith & Frater, Stonecare, Optima Kitchens, and Buzz Home Office
• Retail & Distribution: MGM Timber, Nu-Style Products, James Donaldson Insulation, Perform Panel, TimberCut4U, and online DIY marketplace, Plane & Simple (itsplaneandsimple.com)
• James Donaldson Timber remains as a separate entity.
Today, the Group has the capability to build and fit out an entire house.
“Our strategy is simple,” says Andrew. “The Off-site division is capable of designing, manufacturing and installing the structural element of a timber frame dwelling – so the walls, roof, floors, doors and stairs – and our Interiors division can fit it out with bedrooms, bathrooms, a kitchen and a home office.
“The idea is to be able to offer a full one-stop-shop at some stage, although we’ve got a bit of work to do first.”
The businesses operate individually with their own leadership teams, but each have market strengths that, when aligned, bring real benefits to clients. Andrew adds: “The experience we have in the sector will help us to spearhead further innovation, while providing the highest quality products and service offering. Our combined knowledge is unique in the market and our solutions-finding approach to clients’ projects in both house building and commercial sectors sets us apart.”
Time for timber
The Donaldson Group believes that rising construction costs, increasing housing demand and the significant skills shortage, coupled with the carbon reduction agenda, provide an opportunity for new and more innovative building solutions, and especially those involving timber in an off-site building system.
“We’re confident of the continued growth in the use of timber,” says Michael. “To ensure we play our part in providing the capacity that the market will need in the future, we’re making investments in product development, increased manufacturing capacity and innovation.”
A key focus of this strategy is to increase capacity, particularly within the Offsite division. As part of the SMTS acquisition in 2021, Alex Goodfellow joined the Group as CEO of Donaldson Off-site. Alex says: “With interest in timber rising, we recognise the need to increase capacity and innovate our systems and products to further meet demand. We’re working on several exciting developments, including new automated robotic lines in the DTS Winey factory to enable closed-panel production, and new systems at DTE. We’re also planning geographic expansion in 2023, with plans for DTS in Scotland and DTE in England.”
The impact of this will be significant, increasing capacity from 10,000 to 15,000 homes UK-wide.
“Building in timber contributes to the UK’s commitment to combat climate change,” explains Michael. “Timber as a building material has never been more relevant, and we’re proud to be playing our part in moving the industry forward. Our purpose is to nurture and empower so together we build positive futures now and for generations to come, through our people, our communities, sustainability, and investments. This ethos will always be core to what we do.”
All business and sectors have risks to manage and the timber industry is no exception. With the cost of living, energy costs, supply chain disruptions, ongoing Covid disruption and the war in Ukraine, there are many challenges to deal with.
Commenting on this, Andrew says, “These issues have certainly brought some resilience and agility into the business and that mental state of preparedness has been embedded in us.
“Consumer confidence in the housing market remains strong and that demand remains high. We’re confident that the outlook for timber is a positive one and we look forward to seeing it shine.”