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Innovation is the watchword as Van Elle goes for growth


Van Elle's ambitious growth plans depend on introducing new technologyto the market. But UK contractors must become less conservative in their thinking about innovation, Vic Handley tells Emma Crates

VAN ELLE directors cannot show off their latest baby, the Vetrak, because it is on site just up the road. Ever since the prototype crawled across the yard last November it has been kept busy on site investigations around the country.

'We could do with another one, ' says deputy group managing director Vic Handley (pictured right). 'But we don't have time to build it.'

The Vetrak, one year in gestation at Van Elle's headquarters in Pinxton, Nottinghamshire, is a cable percussion rig with a difference. These rigs are usually an unwieldy 9 to 12 m long, and towed behind Land Rovers. By contrast, the self-powered, compact Vetrak is 2.8 m in length and slim enough (78 cm) to go through doorways. It is on crawler tracks, which Van Elle claims is a first for a rig of this type. At only 2.5 tonnes, it has even tracked across school f loors without doing damage.

All being well, the Vetrak will be less of a rarity by the end of the year. Van Elle has appointed a manufacturing partner, and 12 contractors have shown interest. With firm orders expected by the end of October, production could be under way soon.

So, why is there so much interest?

'We noticed that a lot of clients wanted deeper boreholes, producing more information in confined spaces. Traditionally, we would have used a window sampling rig. You can get it into position, but it doesn't have the power to drill the hole to depth.

So, we built this single-handedly. It was quite a challenge, ' says Van Elle's Andy Johnston, who developed the rig with colleague Graham Beardsmore.

This is just one of a range of innovations that have passed muster with Van Elle's innovations committee as the company strives to broaden its portfolio of offerings.

And, there is a big announcement due. Mr Handley and his colleagues keep alluding to th is, cloak-and-dagger style. A round the time this article is published, Van Elle directors will be hotfooting it to Russia to sign an agreement about bringing over a new piece of piling technology 'never before seen in the UK'.

'It will be revolutionary in this country, but I can't say too much yet. We've signed confidentiality agreements, ' he explains.

The innovation, he says, will take a bit of patience and a lot of investment as it is 'a bit radical' for the conservative UK market.

Having worked with Van Elle for the past nine years and in ground engineering for the past 20 years, Mr Handley has been at the sharp end of persuading clients to try new methods.

'For the past 20 years, I've been involved in getting some k ind of innovation to market. It's a tough business. But I think, as the younger generations come through, these innovations will be more readily accepted, ' he says.

Some of Van Elle's innovations have caught on. Smartfoot, for example, a modular foundation for housing that can be built to tolerances of (+/-3 mm) is already turning over £4 million and is targeted to grow to £10 million within the next two years.

'We see a lot of potential in housing and the Olympics, ' says Mr Handley. 'There will be a lot of permanent and semipermanent structures. And this is a recyclable foundation.'

Van Elle is the only company in the UK approved to install the ScrewFast system (see page 38) and uses screw piles on projects ranging from houses to Tesco stores.

But, Mr Handley believes there is still work to do to convince engineers that screwpiles, which have been around since Victorian times, actually work.

The company, which has f ive divisions, covers a variety of disciplines, including drilling and grouting.

In this turbulent sector, which has seen a handful of acquisitions in the past few months alone, Van Elle's broad portfolio of offerings has stood the company in good stead.

'If we were solely in piling, it might be a problem. But we've spread the risk; we've got a broader range of disciplines than most competitors, ' explains Mr Handley. 'We're confident we can use our core activities to grow the business. We grow from within. We've done that successfully year-on-year, ' adds group managing director Richard Holmes.

Last year, the company turned over £32 million, and this year the target is £36 m illion. But Mr Holmes is set t ing out an ambitious growth plan, targeting £50 million turnover by 2011.

'We'll also be improving our margins, both net and gross, ' stresses finance director Ian Gorbould. Margins are currently between 3.5 and 4 per cent, but Mr Gorbould's target is to achieve 5 per cent. This, he says, will be done through a mixture of good housekeeping at head off ice and increased eff iciency on site. Just by shopping around, for example, he has managed to take £150,000 off the annual insurance bill.

Piling is still the largest division. Seven years ago, it was turning over £5 million, but it is now pulling in £13.5 million a year, boosted in part by the strong housing market which lies at the heart of Van Elle's activities.

But in the past two years, Van Elle directors have increasingly focused on civil engineering, as a safeguard in case the housing market should stall. With projects for the Olympics limbering up at the starting line, this is a well-timed strategy.

'We see major opportunities in the south-east - particularly with the Olympics and the Thames Gateway, and the retail and leisu re developments going on there. It's quite an excit ing t ime, ' says Mr Holmes, who is running the piling division until Andrew Sneddon, from Expanded Piling, joins the company.

But Mr Handley emphasises that the company will not be chasing t rophy projects. 'We'll only do projects on which we can make money, ' he says.

The Midlands-based company works all over the UK and will be launching an office in the Republic of Ireland next spring.

Mr Handley says that the company would have liked to have been there five years ago when Ireland's Celtic Tiger economy was truly roaring. But, there was a lot of work to be done to establish the brand in the UK first.

While Van Elle is expanding its boundaries geographically and technologically, there is one area that the company has decided to pull away from: subsidence repair. This was once a key part of Van Elle's operation, but now turns over a paltry £0.5 million annually.

'Over the past th ree years, we have shifted away from insurance-related works, ' confirms Mr Holmes.

Mr Handley blames two factors: the compensation culture which has taken a stronger hold in the UK in the past few years, and the chaos of the insurance sector.

'Five years ago, if we'd ruined someone's lawn, we'd have dug it out and put a square yard of turf back in.

Now people want compensation, ' he says.

'Insurance companies have also become a lot more hard line in the way they deal with claims.

It was taking months to get paid.'

So, the company has taken the decision to downgrade subsidence repair and upgrade its restricted access instead.

'The margins are better, the grief is less and you get generally paid on time, ' beams Mr Handley.