One man's recession is another's seed-bed - Alaric Hamilton expects a blooming future. Geoffrey Foster.
When the recession finally blows away, who will be any better off as a result of it? Not many people, for sure, but Alaric Hamilton expects to be among them. Hamilton is a nurseryman, a grower of ornamental outdoor plants. Eighteen months ago he bought a run-down and little known nursery (little enough known even in the horticultural trade) three or four miles from Woking in Surrey. When the good times return, he reckons, it will be a goldmine - and partly because of the recession.
This story has only just begun and, frankly, it already is plausible. The horticultural industry has been feeling the pinch of late, just like most others. Almost all are small businesses. The majority turn over £1 million or less, and a lot of these have been knocked sideways by interest rates. Some of the bigger firms have been too. For the past year or so the trade press has of gloomy reports of cost-cutting programmes, redundancies, closures and receiverships. When trading starts to deteriorate, it's usually very difficult for anyone in the trade, and particularly for a newcomer, to draught.
Moreover the growers - who supply independent garden centres, landscape contractors and such - were suffering even before the recession took hold, from circumstances which the downturn only served to exacerbate. Nurseries compete fiercely both with each with overseas suppliers, notably the Dutch. The unit price of their products is low, under £1 per plant on average, and the intensity of the competition has ensured have scarcely changed in the last half- dozen Nurserymen's complaints about 'insane prices' are liable source of copy for the horticultural press. There is no easy solution to this problem. The obvious way to keep going is to step up output and grow more plants. Nick Dakin-Elliot, who is a senior lecturer at the fountainhead of British horticultural excellence, Pershore College in Worcestershire, is one industry expert who believes that growers who fail to adopt this course 'are not going to be in business in five years' time'. But increased production means higher investment, which is a tall order in a recession. Not surprisingly, some of the big growers are moving in the other direction; they have been cutting back production (and laying off key production workers like propagators) while buying in stock from elsewhere, from rival nurseries and from the Continent.
Here lies the clue to Alaric Hamilton's confidence about the future, for he's pouring tens of thousands into his Halebourne Nurseries. 'I'm concerned that there's going to be a shortfall in the production of plants,' he says. He's not at all anxious really, because he intends to be one of those who makes good the deficiency. 'We (meaning Halebourne) can produce better quality plants for less money than they can be imported for,' he insists. A few of the bigger nurseries are also investing at the present time; very few of the smaller ones are.
The effect of Hamilton's investment to date is plain to see. Halebourne Nurseries occupy a site of roughly 10 acres just a few minutes' drive from the M3. The place has a slightly unfinished look, which isn't surprising since it is unfinished. To the left, after you come through the gate, is a tall glasshouse which was there when Hamilton arrived.
At present it serves as a potting shed and store. A little further on is another long-standing structure, a small bungalow which is obviously the office. A blue BMW is parked outside. The land behind the bungalow, stretching away into the distance, is enclosed within an immense polythene tent. This is the new multispan which has cost something over £150,000 to date. It covers over two acres, which Hamilton believes makes it the biggest single greenhouse in the UK, and it's still growing. As soon as the next extension is ready, the plastic end wall will be cut out and the tent will become bigger by half-a-dozen or more spans. Hamilton's spacious office in the bungalow opens straight into the multispan. On the far side of the glass door are thousands of liners (young plants ready for sale to nurseries and garden centres), potted and labelled, and standing in serried ranks in the warm, moist, atmosphere. 'I got a local boffin to do the control boxes,' says Hamilton with a flourish. Outside, and across the broad stream which divides the property in two, are single-span polythene 'tunnels' full of the stock plants from which cuttings are taken. In one small shed eight or nine cheerful propagators are hard at work. More investment went into the propagation tunnels, which have heated cables buried in the ground at 3in. intervals. Together with the water supply, the cost added up to £5,000 per bed.
The effect on output has been dramatic. Hamilton claims to have produced a million liners in his first year. 'That's a target I set and did not expect to achieve,' he admits. 'Next year I'm aiming for 1.5 million.' However, aggressive expansion seldom makes a businessman popular with his peers, and Hamilton is no exception to the general rule. He also fell out with his neighbours over exhibiting (or, rather, not being allowed to exhibit) at the local show. 'In the area, he's not a well-liked man,' says another Woking grower carefully. As Hamilton stretches forward across his desk, waving an unlit cigarette and expatiating upon the failings of the British horticultural industry, it's not too difficult to understand why.
'British nurseries,' observes an industry watcher, 'pride themselves on being independent small units.' The success of the Dutch, by contrast, is attributed, at least partially, to their willingness to cooperate - over marketing, for example. In this respect, if in no other, 45-year old Hamilton is the archetypal British nurseryman. Lean - he hasn't an ounce of flesh to spare - and thin faced, with the nut-brown complexion of one who lives much of his life out of doors, he is a natural loner who always wants to do things his own way.
It comes out at every point in his story. After school and a short period restoring vintage cars - he decided that he wanted to become a forester. That in itself was an odd choice for the son of a naval commander who later turned financial adviser. While working for successive forestry companies he went on a number of courses at the training college near Penrith in Cumbria, and collected a wad of certificates, in arboriculture, nurseries and landscaping as well as in woodmanship and forestry. Then, tired of a trainee's wages, he looked round for a management job. 'I was turned down everywhere I went,' he recalls. Eventually he landed a job by pretending he'd failed his forestry certificate, but the offer was withdrawn when he admitted the truth. The reason that he was unemployable, he concluded, was because he was better qualified than anyone he might work for. So, aged 23 and with £250 in his pocket, he founded his own contracting company, which he called Power Forestry.
There wasn't much work around at first. He wondered about taking a well-paid job chopping trees on a remote South Atlantic island, but his father wisely cautioned against. ('If you wish to change your mode of life, think about it. If you don't, stay as you are.') After a while he was offered a parcel of standing timber for £100, then another for £150 and a third for £200. On the third occasion he went to the bank for a loan, but was refused. Overnight the price of elm shot up, and he sold the timber to a merchant for £870. He paid the farmer the £200 asking price, returned to the bank and cleared out his account, all but £1 for spite. It's still there, he says, and Nat West still has to send him statements.
At last Hamilton found some real work, reinstating the grounds of a former school for blind children which was soon to be converted into an hotel. With the profit from this job he bought a mini-tractor with rotary grass cutter, and continued maintaining the same grounds. But forestry work began to come in too, and for several years he travelled all over the south of England, from Gloucestershire to Kent, pruning, felling and landscaping. Gradually, forestry gave way to landscaping, and because, as a landscape contractor, he couldn't get discounts on his purchases of plants, he bought his first nursery.
That was getting on for 12 years ago. Brook Nursery (now just a garden centre) occupies rather more than two acres bordering a busy main road which runs north out of Guildford, in one of the most densely populated parts of Surrey. Halebourne Nurseries are barely a mile away, down a country lane. One day, when he called there to buy plants, Hamilton asked flippantly if Halebourne was for sale. The enquiry elicited an equally flippant rejoinder: 'For £500,000.' But he was by then actively looking for somewhere bigger, and when, a few months later, he had a phone call to say that Halebourne had been put on the market he immediately came up with an offer. The purchase was completed in April last year.
Hamilton took himself off to his new property, leaving a manager in charge of the garden centre-which remains a convenient retail outlet for his home-grown plants. (Both businesses are 'divisions' of Power Forestry: the only forestry work it carries out these days, incidentally, is a little tree surgery.) He had a fairly precise idea of what he intended to do at Halebourne; and his plans were crystallised further at a nurseryman's conference at Pershore, on the future of the industry in Europe. He proposed to create a major liner production nursery - and with no half measures. Acquiring Brook Nursery taught him a great deal, he observes. 'When we bought Brook we made do with everything there. Here we were not going to make do. We would remove and build new...I put a bulldozer through the lot,' he adds, exaggerating somewhat. But the multispan was going up very soon after completion.
At his Pershore conference, Hamilton will have heard much talk, not only about the inefficiency of the UK industry, but about the need for specialisation and cooperation. That, however, is not his way. He means to do it all. 'We have to carry the widest range possible,' he says. 'If anyone wants some unusual plant we will endeavour to supply it. If we haven't got it we will find one and take cuttings.' In the short time since he took over, he claims, Halebourne's range has grown by 200 varieties. This kind of increase will admittedly slow down.
Nevertheless his propagators are working flat out while rival nurserymen are sacking theirs. 'Other people are not prepared to invest in paying wages if they are not going to get their money back for six months or a year,' he declares triumphantly. All well and good, but how is Hamilton financing Halebourne's phenomenal expansion? The bank charges must be crippling him. 'That's where we're scoring at present,' he replies. 'We have no overdraft.' It was not always so. When he acquired Brook for £72,000 he turned to Barclays for a loan. But he was apparently able to find the £170,000- odd purchase price for Halebourne (a long way short of the £500,000 once jokingly suggested), not to mention the cost of the multispan and all the other improvements that have gone in there since, without incurring debts. The explanation is that he had a fair sized stroke of luck a few years back. He was a shareholder/director of a company in quite another line of business, a specialised employment agency founded by his wife, which sold out to a plc during the late '80s boom.
Well everyone's entitled to his luck. What remains to be seen is whether it holds up. Will the hard times in the horticultural industry continue long enough to bring Hamilton the marketing advantages he expects, but not too long so that he overreaches himself? He's already made advances on the marketing front, it seems, by enlarging the customer base from about 60 to over 300 garden centres. Liners that remain unsold this year will be repotted and offered as more expensive specimen plants next year or the year after. 'There's no wastage, he emphasises. If the recession drags on for three years ,'We will be ready and waiting with specimen plants on Day 1.'
Yet Hamilton accepts that he's engaged in a high-risk enterprise. If the economics don't get you, it's possible that the insects - or diseases - will. Growers are particularly vulnerable to the weather - to cold, drought, floods, storms. Halebourne was without electricity for 28 hours last January, when a mains cable failed. A year earlier, gales cost another nursery £50,000 by destroying a fourbay multispan. Keeping your liners under one very big roof just might be as unwise as carrying all your eggs in one basket. But similar hazards apply in most businesses. Nothing ventured, nothing gained. And Hamilton, remember, is venturing his own money, not the bank's.