FM Conway - Going the Extra Mile

Putting the Pieces in Place 6 R

ecycling had now become such a fundamental part of our business that I often wondered why our competitors weren’t doing it. Why were we the only one? But then, our business was generating so many tonnes of recyclable material that we didn’t have to worry about what other people were doing. If it made sense for us, that was enough. And the same was increasingly true for other parts of the business. The self-delivery model combined with the growth we were going through was giving us a greater degree of control over all the basic elements our business. It was like looking at the pieces of a jigsaw puzzle, and working out how they would fit together as a picture. And I was starting to realise just how big that picture could be. Then something else occurred that brought that picture into even sharper focus. With all the new Term Contracts that we were getting, we were using a lot of asphalt – probably about 150,000 tonnes a year in 2007 – and most of that asphalt came from one supplier, Tarmac, who were now owned by Anglo-American. We’d negotiated a back-to-back deal with them, which meant that the price we paid went up according to an annual price inflation mechanism: any extra we got from our client for the asphalt, we would pass on to Tarmac. So, that was fine. And then one day I got a phone call from Tarmac, saying they were going to put up their prices. I told them that they were tied into the deal, just the same as we were. But later, at a conference, I bumped into Terry Last, one of Tarmac’s directors, and he picked a quarrel with me, which was most unlike him. He told me that the price of bitumen had gone up such a lot that they were making a loss on their arrangement

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