Operation Management for NWF Agriculture
NWF Agriculture in Brief
NWF Agriculture (abbreviated NWFA hereinafter) started life in 1871 as a farmer owned trading company and now forms part of the AIM market quoted NWF Group plc. Covering the major dairy farming areas from Central Scotland all the way down the UK to Cornwall, NWFA’s main business is the manufacture and supply of ruminant compound feeds and blends, supported by a comprehensive Trading Desk supplying a range of straights and specialty feeds, forage seeds and additives. It is the No. 2 producer of ruminant animal feed in the UK, with 4,000 customers and an annual sale of 481,000 tonnes. It has four locations across UK, Ayr, Penrith, Wardle and Wixland. Among them, Ayr and Penrith have blending sheds, which means they are only able to mix ingredients. Whereas Wardle and Wixland are mills, which means they are not only able to blend, but also able to produce more complex compounds according to customers’ orders.
NWFA sees BOCM Pauls, “the total feed business”, as its biggest competitor within its production range. As observed from its revenue and operating profit in recent five years from 2008 to 2013, it is noticeable that NWFA is a small-medium sized enterprise with growth momentum and an average profit margin as low as 3%. NWFA is developing yet very much financially restricted due to its low profit margin. Therefore, rapid and massive expansion is impossible for NWFA in a short period of time.
Chart NWFA revenue & operating profit in million pounds, 2008-2013. The NWF Group plc. Annual Report 2009-2013.
The New Mill Deal
Very recently on 14 December 2013, NWFA has just completed an acquisition of a feed mill (referred as Mill A hereinafter) in Cheshire. The acquisition of Mill A serves multi-fold purposes. One is to reduce the ever-increasing competitors in Cheshire region. The other is to increase the capacity to serve the market in Scotland. Questions being asked could be why not simple buy a mill in Scotland. The answer
NWF Agriculture (abbreviated NWFA hereinafter) started life in 1871 as a farmer owned trading company and now forms part of the AIM market quoted NWF Group plc. Covering the major dairy farming areas from Central Scotland all the way down the UK to Cornwall, NWFA’s main business is the manufacture and supply of ruminant compound feeds and blends, supported by a comprehensive Trading Desk supplying a range of straights and specialty feeds, forage seeds and additives. It is the No. 2 producer of ruminant animal feed in the UK, with 4,000 customers and an annual sale of 481,000 tonnes. It has four locations across UK, Ayr, Penrith, Wardle and Wixland. Among them, Ayr and Penrith have blending sheds, which means they are only able to mix ingredients. Whereas Wardle and Wixland are mills, which means they are not only able to blend, but also able to produce more complex compounds according to customers’ orders.
NWFA sees BOCM Pauls, “the total feed business”, as its biggest competitor within its production range. As observed from its revenue and operating profit in recent five years from 2008 to 2013, it is noticeable that NWFA is a small-medium sized enterprise with growth momentum and an average profit margin as low as 3%. NWFA is developing yet very much financially restricted due to its low profit margin. Therefore, rapid and massive expansion is impossible for NWFA in a short period of time.
Chart NWFA revenue & operating profit in million pounds, 2008-2013. The NWF Group plc. Annual Report 2009-2013.
The New Mill Deal
Very recently on 14 December 2013, NWFA has just completed an acquisition of a feed mill (referred as Mill A hereinafter) in Cheshire. The acquisition of Mill A serves multi-fold purposes. One is to reduce the ever-increasing competitors in Cheshire region. The other is to increase the capacity to serve the market in Scotland. Questions being asked could be why not simple buy a mill in Scotland. The answer
References: Brown S., Blackmon K., Cousins P.and Maylor H., 2001. Operations Management: Policy, Practice and Performance Improvement. P. 183, 184. Butterworth-Heinemann Department for Environment Food and Rural Affairs. Animal Feed Statistics for Great Britain - September 2013. p.9, Table 7 Rosentrater, K.A. August 2004. Design Considerations for the Construction and Operation of Feed Milling Facilities. Part II: Process Engineering Considerations.p 14-16. Figure 1, 2, 5. NWF Agriculture Website. COMPANY INFORMATION. 2013. accessed 15 Dec 2013.