A subtle mix of adventurous innovation and sharply-focused management has created a winner in the weedkilling world.
The shrinking of Britain's manufacturing base has produced one beneficial spin-off. It has given the new generation of entrepreneurs the chance to hire experienced managers cast adrift in mid-career by major companies. Not all new tycoons can see the need for such professional help as their companies move out of the cottage industry phase. But one who did is David Gill, a 41-year-old millionaire, who can best be described as the nation's leading weed killer.
Gill's Bristol-based company, Nomix-Chipman, is prospering through recession. First, because the systems he developed bump off the bindweed, ragwort, twitch grass and other noxious weeds with unparalleled efficiency. And second, because two years ago he had the foresight to hire veteran motor industry executive John Symonds to reshape the business and prepare for major expansion. In the '70s Symonds held top posts inside the old British Leyland: he ran the Cowley works, Pressed Steel and Unipart in quick succession before going on to Aston Martin Lagonda in the early '80s.
The Gill-Symonds blend of adventurous innovation with professional skills in manufacture have bred a remarkable business success story. Already one of the UK's fastest growing private businesses, Gill's company has seen sales soar from £1.5 million in 1987 to £8.5 million last year. Net profits reached £650,000 last year and there are no borrowings. Gill says:"True profits are more than £1 million, as last year we spent £500,000 on research and development and protecting intellectual property." There are plans to quadruple sales in the next two or three years to approaching £40 million and so far the business has barely scratched the surface of overseas potential.
Gill's story is the classic one of the inventor literally working in his garage, trying to devise the herbicide market's equivalent of a better mousetrap. It is all the more remarkable as he professes to have no particular technical qualifications - only a background selling horticultural machinery. "I always enjoyed the challenge of selling," he says, "but once I had conquered a particular challenge I quickly got bored with it." In his twenties he drifted from selling horticultural products to cars, then insurance and publishing, until 10 years ago when he took a job as sales manager for a small company in the West Country selling commercial grass cutting equipment.
Gill's effectiveness as a salesman soon boosted the profits of the business and he began looking for other products to offer. He liked the concept of a Micron spraying lance developed by ICI and BP which involved using lower volumes of herbicides: that meant killing weeds was quicker and cheaper because there was less "downtime" mixing and carrying the chemicals.
"I took an agency in 1981 and in the first year sold £30,000 worth of the equipment without really trying," he says. "The profit margin was a very stimulating 50%." He failed to persuade the firm he was working for to concentrate on this new product so he struck out on his own in early 1982. But the product itself was not as user friendly as it might have been."The biggest problem was the time spent mixing the chemicals," he recalls. "I found that I could sell the concept well enough, but discovered that customers were not using it because it did not really do quite what they wanted it to do. They found it too difficult to use."
He began badgering Micron to change the design but had no reaction. His enthusiasm for the concept led him to spend £12,000 of his own money in his first year's trading on trying to develop a better product himself. He worked on designs in his own garage and went to outside experts in electronics, chemicals, engineering and plastics for answers to his problems. From such amateurish beginnings in his own garage Gill achieved breakthroughs in a niche market others could not be bothered with. "I knew the customer and worked back from a customer need," Gill says by way of explaining his success. "A lot of inventors tend to invent and then put a need to the invention. I always only meet a need."
The first important development came over Christmas in 1982 when he was working on a spinning disk to give accurate spraying. "I had read a Japanese book on management which said you must question everything," he recalls. "It inspired me to try a small spinner with a square head instead of a round one. I ended up that evening brushing snow away outside the house so that I could test it out." It worked and within three months he had hired three women and an engineer to make his product, working from his double garage.
Every gardener is familiar with the standard sprayer used for killing weeds. The chemical has to be heavily diluted with water and pumped out under pressure. There are problems with variable rates of delivery and with drift onto plants you don't want to kill. For major weedkilling jobs facing local authorities or horticultural users, operators are weighed down with hefty backpacks of the herbicide. The equipment is pretty low-tech and it never seemed worth developing anything better until Gill realised that selling the equipment and the chemical as a package would transform the economics. "Selling an applicator for £100 alone does not justify the amount of R and D needed," Gill explains. "But if you are also selling herbicide at £10 a month for a year it all begins to make sense. All I had to do was persuade the customer it was worth paying more for herbicide to save on labour costs."
Gill's company offers the professional user a ready-to-use, oil-based herbicide in a sealed 750-millilitre pack clipped onto the spray lance. One of these clip-on packs does the work of the two full knapsacks of spray necessary under the old water-based system. Top of the range Nomix sprayers have lots of electronic gismos to enable the user to adjust flow rates and spraying widths. No pumping is required, the herbicide being gravity-fed through a spinning disc delivering droplets of herbicide to a precise size. The net result is that the volume of chemical used under the Nomix method is reduced to only 10% of the volumes used in water-based herbicides.
At present Nomix systems are supplied only to professional users: every local authority in Britain is a customer and the system is beginning to find increasing acceptance by horticulturalists, in forestry and vineyards as well as among citrus fruit growers. "Eventually we shall bring it to the ordinary consumer," Symonds says, "but you have to bear in mind that the use of herbicides is strictly controlled by the Ministry of Agriculture."
David Gill relates with some bitterness how unhelpful his bank was when he first showed them his business plan and sought an £8,000 loan to finance it. "I had been a model customer for five years - never going in the red," he says. "It was obvious the manager had not read my business plan nor made any attempt to understand my business. He offered me a £6,000 loan and I told him he was being irresponsible. It was like asking for a gallon of petrol to get me home and being offered three-quarters of a gallon, thus guaranteeing I was going to run out. The loan I wanted was based on real estimates of sales and levels of debtors. I told him if I accepted the £6,000 it would guarantee I would fail." Gill went to another bank.
The major UK chemical companies were equally unhelpful when, in 1986, he sought a partner to help finance his plan for nationwide distribution. Instead ICI tried to buy him out completely, offering £1 million.
Rejecting that idea Gill eventually found backing in the US from Monsanto who make "Round Up", one of the leading brand names in herbicides. They paid $2.5 million for a 14.8% stake in Gill's business plus the right to sell his formulations in overseas markets.
After that re-financing Gill was able, the following year, to buy out Chipman, his major competitor, and the leading national distributor of speciality herbicides. Among other things, Chipman has a contract to weed 10,000 miles of British Rail's track network every growing season. The company owns a special train which pours weedkiller onto the track through a curtain of water, at speeds of up to 40mph. It's not just to make the track look tidy, Symonds points out: "A good sized clump of dandelion can move a railway sleeper four and a half inches. Weeding is absolutely essential to safety."
That deal made the Nomix-Chipman combination the leader in what it calls the industrial and amenity herbicide market in Britain with a 40% share of the business. Gill then brought in Symonds to give the business a better structure and professional management and to stitch the two businesses together in one cohesive unit. "The partnership has worked because John, though used to operating in much bigger organisations, adopted the philosophy of working with what he had available," Gill claims. "We complement each other well. My great love is design while his skill is in manufacturing. New ideas and possibilities spark continually from Gill's fertile brain. He and Symonds are considering expanding the weed contracting side of their business as a franchise operation. They also see possibilities of using their hi-tech applicators to deliver fertiliser, insecticides and even de-icers to widen the market they aim at. Work is also going on researching a returnable container for herbicide, based on the successful system operated by the bottle gas companies like Calor. Even more exciting is the potential to use the system in horticulture instead of simply using it to keep public places free from weeds.
It would be wrong to say Nomix-Chipman has no competition. Indeed the company spends a lot of time and money on patent protection, as well as on developing new formulations and applicators. But Symonds at least insists that whatever competition there is "is on a different plane". David Gill, who retains an 85% share in a business which could easily now be worth £15 or £20 million, is in no rush to reach the stock market with his business.
While they keep their technical lead they see sales rising to £40 million over the next three years and profits perhaps hitting £5-6 million. At that point the ordinary investing public may be given a chance to share in Gill's remarkable success.
For reprints of this article, contact Anne Oakley (071) 413 4336.