A profile of Simpson Packaging.

Simpson Packaging started in 1988 when John Simpson, experienced in the industry, borrowed £3,000 and set up in business.  A little later, his brother in law, Tony Dawes joined the company and the stage was set for the growth of a family business that would become a major supplier to the moving industry, and beyond.

The early days were tough, as they always are when a business starts.  Long days, hard graft and managing cash flow to keep the wages paid and the stock flowing is always a trial.  At that time the new company was just supplying cartons and tape, but there was more to follow – much more. Joan Simpson, John’s wife, Jackie Dawes, Tony’s wife, and Sue McCormick, Joan and Jackie’s sister all worked in the business too.  It was a real family affair.

Early in the growth of the company the country, and the moving industry, was hit by a recession.  But far from being a problem, John said that the enforced downturn was a blessing. “It stopped us growing too quickly,” he said.

But the recession lifted and business began to flow again. That was when the trouble started.  A friend of John’s, someone he had met while watching their respective sons play rugby, worked for Barclays bank.  He told John one day to come to see him when his business reached a turnover of £500,000.  John didn’t know why, but he soon found out.

“We were growing rapidly,” said John. “We had vehicles running all over the place and plenty of business.  When we reached the magic £500,000 level we were in danger of over trading.”  The problem was that the company had become a victim of its own success. It was supplying customers faster than it could buy stock. “If you can’t supply people they are not inclined to pay you what they already owe.  We had to take action.”

Fortunately the company’s suppliers continued to support them, but they needed paying.  Profitability was never a problem; cash flow was.  So John and Tony went to see John’s rugby-fan banker who helped them raise finance by re-mortgaging their houses. “We mortgaged everything we had,” said Tony. “We used our own money to finance the business.”

Diversification

For Simpson Packaging diversification came in a number of forms.  The first was to realise that there was a big world out there in addition to the moving market. Andrew Simpson, John’s son, explained: “We saw other packaging companies delivering right next door to one of our removal clients and thought, why can’t we do that too?”

Of course they could, and did. The moving industry has always been very seasonal.  Branching out into general industry smoothed out those peaks and troughs and gave the company a much wider base from which to develop. Today the company is much more than a supplier just to the moving industry, it has customers in all areas of industry including manufacturing, retail, even other packaging companies.

Diversification number two came when John and Tony bought a small box making company, now called White Rose Packaging. This was and still is a specialist manufacturer of short-run boxes for a variety of applications.  “If someone wants a few hundred boxes of a special size, printed with their own corporate logos, we can do it.  It might be expensive but whatever they want, we can do.”  The company now operates from a 40,000 sq ft factory in Leeds, employs 20 people, and is firmly in the made-to-measure, just-in-time business.

It was just five years ago that Dependable Packs, the manufacturer of paper blankets from Merthyr Tydfil, closed down.  Simpson Packaging was the company’s biggest customer and John and Tony were understandably concerned about the reliability of their supply. “We offered to help rescue the company but, in the end, it wasn’t possible,” said John.  Dependable Packs went out of business and Simpson Packaging ended up buying the assets.

“Our first idea was to move everything to Yorkshire,” said Tony. “But it was impractical. There were also the old staff in Wales who had been made redundant, we didn’t want to let that experience go to waste especially as we knew nothing about making blankets.”  

It was not an easy transition.  They renamed the company Dependable Packaging Limited which, as it turned out, was a mistake.  People assumed that it was a ‘phoenix’ company and the old firm had let a lot of customers down.  “With hindsight we should have called it something else,” said John.

Ironically it was the recent recession that came to their aid again.  For a long time Dependable Packaging’s only customer was Simpson Packaging, but as the down turn came and companies had to look for cheaper suppliers, enquiries started to flow in. “People started giving us a chance again,” said John.  Today the plant is working well and has the capacity to manufacture up to 30,000 paper blankets a day.

Today’s range

Today the company’s range has moved on a bit from the days of cartons and tape.  A flick through the catalogue reveals everything a moving company, or anyone else for that matter, could possibly need: wrapping machines, shrink systems, labels, strapping, self storage equipment, retail displays, quilted protectors, handling equipment … even uniforms.  There is also the bubble blanket: a roll of bubble sandwiched between a paper outer and a soft fabric inner much favoured by the international market.

Oliver Dawes, Tony’s son, summed up the offering from the company. “We offer a complete package: Simpson Packaging distributes removals supplies, self storage supplies and industrial packaging; White Rose Packaging supplies medium-volume bespoke cartons; and Dependable Packaging supplies paper for export wrap. The three companies employ over 80 people and have 20 vehicles on the road delivering throughout the UK.

The future

The family affair continues.  Andrew is Sales Manager ably assisted by Oliver and Becky Dawes, Oliver’s sister, who now works in the Accounts office too.

Despite the company’s success, there is still some anxiety about the future. Although the general industrial work is recovering from the recession, the moving industry is still slow.  What’s more, Andrew is convinced that the worst is yet to come. “I think this year is going to be the worst of the lot.  We haven’t seen the cuts yet.  When the public sector contracts come to an end it will reduce the work.  First time buyers are already struggling.  In the immediate future we will all need to keep a close eye on credit control.”

There is also the threat of rising material prices.  Almost everything the company supplies is made of paper or plastic.  The European paper market is dominated by a handful of giant suppliers who have the ability to control supply to keep prices high. “Paper has gone up by 40% in the last few months and we all know what’s going on with the oil price,” explained Andrew.  Much of the company’s efforts go towards buying well and buying forward to make sure it maintains supplies at a reasonable cost.  “We recently had to wait nearly six months for a delivery of paper.”

Advice for movers?  “If you possibly can, put some money into stock,” said John.  “I know companies will struggle to do that right now but with prices rising and supplies irregular, it really makes sense.  Also it makes sense to buy reusable materials, such as Coversafe products, if you can afford them as they last much longer and can save you money in the long run as well as improving the quality of your service.

More generally, John, Tony, Andrew and Oliver recommend diversification.  That’s what they have done and that, they believe, has helped many of the most successful moving companies to thrive and ride out the hard times.  Good advice from a family business that has seen the bad times, enjoyed the good, and appreciates the difference.

 

 

 

 

 

 

(Left to right) Oliver Dawes, Tony Dawes, John Simpson, Andrew Simpson