Employee-owners of animal feed company have an appetite for growth

An animal feed trading business is bullish about its prospects for the future after riding out the challenges of Brexit, Covid and the war in Ukraine.

Daniel Chilvers, Managing Director of Thomas Mawer Ltd, said the company is motivated by a move to new premises, a buoyant balance sheet and the responsibility from a switch two years ago to employee ownership.

It is also inspired by a crucial shift made in the 1990s by Daniel’s predecessors, who diversified from trading animal by-products and animal fats from the rendering industry as the BSE crisis unfolded.

He said: “We have a good foundation from the former owners who built the company over the years but we don’t get carried away when times are good and we don’t get too down when it’s hard.

“For last year we did £100m turnover which was a record, but that’s partly down to the cost of the raw material prices shooting up over the last 18 months. We work on very narrow margins which tend to get smaller as raw material prices rise.

“My shareholders are also my staff so I have a slightly different role to most managing directors, but we have a workforce that’s a cut above because we have people who are interested and have a stake in the company. We have successfully rebuilt our balance sheet since buying the business and there’s nothing stopping us going out and funding new developments”

Thomas Mawer Ltd employs 19 people across offices in Essex, Hereford and Hull city centre, where the business opened 45 years ago and still has its headquarters, recently moving into a third floor suite refurbished by Allenby Commercial at Chariot House in Carr Lane.

The company buys raw materials and commodities from all over the world and the UK and sells to animal feed companies and feed manufacturers, including most of the feed mills in Yorkshire who then supply the county’s farmers.

Daniel said: “We are relatively big in terms of turnover but tiny in a huge market with some very big players. But we find our niche. We can take things on that others can’t and we are fairly light on our feet. That enables us to get out of things that aren’t making money and move into other activities.

“We don’t own any assets. Lorries, drivers, bagging and storage are all third party. We focus on trading and serving our customers as best we can. We just hope our selling prices are higher than our buying prices!.”

Daniel is from Hull and joined Thomas Mawer Ltd five years ago as a trader, a job which still accounts for 80 per cent of his workload even after colleagues supported his appointment as their managing director when they bought the business in 2020. One of his first big decisions was to find the new premises.

He said: “Our lease was up and instead of simply signing a new one we felt it would be prudent to see what else was available. Charlie Allenby was here when I came for a look and he was very keen and enthusiastic and proud of what they have done with Paragon Arcade next door and that gave us a bit of a lift.

“It was clear they really care about the buildings, they are interested in the tenants and they care about the city and I buy into that. I want my staff to feel that the business is the priority but you also want something wider to ground you in a project that’s meaningful for the city.”

The transition to an employee ownership model is just one of a long list of challenges that the business has overcome.

Daniel said: “Brexit was a significant event because we import a lot of our materials from Europe. There are 30 to 40 lorry loads a month of a whole range of raw materials we import.

“It became a higher stress part of the business and we have employed additional staff to deal with the extra admin. The costs ultimately get passed on to consumers but we had to adapt and learn new things and that distracted from the day job and it all happened at the same time as Covid with a new way of working.

“A number of staff left the business during Covid and we had to recruit new people who had to learn and get training. It seems a long time ago now but in 2021 there was the chronic shortage of HGV drivers and then to cap it all the war! That sent everything from agricultural products to gas prices shooting through the roof!

“Now the dollar strength is giving us more headaches but there will always be challenges and we just roll up our sleeves. We are in a decent position with good demand and we are always developing new products because the BSE crisis created a culture of looking for the next thing and not waiting for crises to happen. We have to be ahead of the game and it will be exciting to see where we are in three or four years.”