Success of manufacturer boils down to export sales

An Irish wood pellet boiler manufacturer has increased turnover by 500%, boosted by British government alternative energy incentives. And in the three years since it was set up, it has sold just one boiler in Ireland, writes Trish Dromey.

Success of manufacturer boils down to export sales

EXPORTING to Britain, Canada and the US, Tipperary- based wood pellet boiler manufacturing company Wood Energy Solutions is planning to grow its business by 150% this year.

Short-listed for a Small Firms Association award in the innovation category, the company increased turnover by 500% last year and employed an additional 13 staff, bringing the number to 22.

Managing director Declan Crosse says he sees huge growth opportunities for his company internationally, particularly in Britain.

“The government in the UK is offering incentives to people to switch to alternative energy sources and this is driving the market,’’ he says, pointing out that wood pellet heating can achieve cost savings of 50% over heating systems using oil. Wood Energy Solutions has already supplied boilers for the London Olympic Sailing Village, to local authorities in the North, Scotland and elsewhere in Britain and has signed agreements with distributors in the UK, the US, and Canada.

“We have signed a contract to supply boilers for use in local authority houses in rural areas in south Wales where gas is not available and we are in the final stages of negotiations with a UK-based poultry farm for the supply of commercial boilers,’’ says Mr Crosse.

While 80% of the company’s turnover comes from sales to the UK, it has also shipped boilers to Yellow-knife in Canada’s North West Territory, where temperatures can fall to minus 40°C and heat requirements are consequently high.

At present, 100% of sales go for export. Mr Crosse says that in three years since the company was set up, he has sold just one boiler in Ireland.

Despite approaching several local authorities in the early stages of Wood Energy Solutions, he has found that in the current economic climate there is little finance available here to switch to alternative heating options.

Mr Crosse previously worked in product design in his family’s business, which made boilers in Tipperary for more than 30 years.

“I could see there were opportunities and growth in wood pellet boiler manufacturing — this side of the business had been doing well,’’ reveals Mr Crosse, who set up the company in early 2010.

Within a short time after setting up he was approached by a company in Britain which asked him to design a boiler for the London Olympic Sailing village in Dorset. This was a high- profile order which got the company off to a good start.

Taking on a fabricator and an electrician, Mr Crosse opted to operate by subcontracting the manufacture of the boiler shell to a local company and importing the components so that the boilers could be assembled at the plant at Donaskeigh.

“This option meant that we keep our capital costs low and support other indigenous companies,’’ he says.

In 2010, as the company set about designing three boilers to heat 75 accommodation units in the Olympic Village, it also got an order from a local council in the North, for 10 boilers in Co Down.

In 2011 the company got orders from both Winchester and Warwick local authorities and signed a contract to supply the Highland Council in Scotland with boilers.

Initial products were designed for domestic use and the company produced a boiler for use in social housing projects which attracted the attention of British local councils.

In 2012 Wood Energy Solutions launched a larger boiler, suitable for use by hotels, care homes and leisure centres.

“This was also designed for agricultural use and is suitable for pig farms and mushroom farms, which require a lot of heat,’’ says Mr Crosse, who sees significant scope to sell this in rural areas of the UK which currently rely on oil heating.

In 2012, exports to Canada started when the company was contacted by a firm in Yellowknife which had read on the internet about the boilers Wood Energy Solutions had supplied to the Olympic Village.

In 2013 growth began to accelerate and the company took on four distributors in the UK which handle promotions and marketing and attend trade shows.

This has left Mr Crosse more time to explore other markets.

“In 2013 we exhibited at a wood pellet boiler exhibition at Saratoga Springs near New York and we signed up a distributor in New England and sent over two shipments of domestic boilers.

“This year we will be exhibiting in both Montreal and France in March,’’ he says.

Countries such as Germany and Austria are already well serviced by wood pellet boiler manufacturers, but Mr Crosse has identified France as the European country with the biggest growth potential.

The company is currently working on orders which will involve shipping 1,000 boilers to Wales over the next 18 months and 300 to Scotland starting in March.

“At present our production capacity is full for the next 12 to 18 months,’’ says Mr Crosse, but he adds that this can be increased by employing additional staff.

Wood Energy Solutions plans to increase its workforce by five or six by the end of the year. Its aim now is to establish itself as one of the leading European exporters of wood pellet boilers into North America, and become market leader in the UK.

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