Few companies can report continued growth during the recent years of recession, but Bam Ritchies has managed to maintain and build on its position in the last five years. Claire Symes talks to Ian Dalgleish about how the company has bucked the trend.
In the last 15 years Bam Ritchies has gone from being a specialist contracting arm of Bam Nuttall to being seen more as a major player in its own right. This change has been driven by a number of large contract wins that have helped the business to record years of unbroken profit growth.
“At the time our turnover was around £10M a year but the Gibraltar contract alone was worth £16M. It was a real confidence thing. The Gibraltar scheme proved that there was no barrier to doing larger schemes.”
According to Ian Dalgleish, who was until recently general manager of Ritchies but is now an operations director for Bam Nuttall, the company has come a long way since it was started 50 years ago. And he should know - he worked for the business for almost 35 years and headed up the business for 20 of those years.
Ritchies was started in 1963 by explosive salesman Norman Dron and mining engineer Les Sutton who met while working at the Westfield open pit. The company started out as a drilling and blasting contractor but also took on a number of small civil engineering contracts for the Scottish hydro electric market as well as quarrying, road construction and tunnelling.
The operation of the company remained unchanged until the late 1970s when it was acquired by HBG. Sutton left when HBG took over but Dron stayed with the business until 1984 and interviewed Dalgleish before he joined in 1978.
Dalgleish himself studied geology at Aberdeen University but says the decision was not planned. “I started out studying maths in the first year but in the Scottish system you could take several subjects in the first year before specialising for your final three years,” he explains. “Alongside maths I chose chemistry, physics and geology but switched to just geology after the first term.”
On graduation, Dalgleish started work in Africa’s copper belt as a mining geologist working both underground and in open cast mines. “Some of the open pits had huge slope stability issues,” he says. “The need to apply numbers to geology struck a chord with me, so when I came back to the UK I studied for an MSc in engineering geology at Durham University.”
When he graduated, he joined what was then called Ritchies Equipment, which was already owned by Nuttall. At the time the company was mainly focused on drilling operations and the geotechnics business had yet to take off.
“When started I worked mostly in Scotland on drill and blasting projects but after 18 months I was asked to go and head up the Bristol office,” says Dalgleish.
“The pace of business was much slower then - partly due to the productivity of the equipment we were working with - and health and safety practices were quite different. It wasn’t that we actively worked in an unsafe manner, more that there was a different ethos back then.”
But the industry - and Ritchies - was on the verge of a major change. “The call for geotechnical skills started to grow in the early 1980s and Ritchies started to refocus, although drilling and blasting was still a major part of the business,” says Dalgleish.
There were a couple of projects that the company undertook in this period that really positioned it within the geotechnical sector, according to Dalgleish. One of the main ones was the major rock stabilisation the company worked on at Blaenau Ffestiniog, the Welsh mining town, which was challenging in terms of scale and access. “We had to construct a huge scaffold to carry out the work,” says Dalgleish.
“That project followed on from work on the A470 in South Wales where we installed permanent and temporary rock anchors,” he says. “At the time the rock anchor business was very niche and the A470 scheme was a learning curve for both Ritchies and the wider geotechnics industry.”
In 1984 Dalgleish became Ricthies’ development manager and it was around this time that the company bought out Scottish site investigation company David Pollock which had gone into receivership. “This took the company into another new area,” says Dalgleish. “We needed to invest in equipment but we gained a workforce with the right knowledge.”
Despite the changes in the sector and Ritchies’ move into new areas, Dalgleish describes the mid-1980s to early 1990s as a challenging one for the company. This was a major concern for him as in 1990 he was appointed as general manager of Ritchies and charged with improving the company’s fortunes.
“We have diversity in what we do - there are three or four main business streams and this helps to even out demand and we are also able to transfer people to balance things out.”
It is clear that Dalgleish took this challenge seriously - delivering consistent or increasing turnover in that period and an unbroken 15-year run of increasing profits - something few companies in the geotechnics sector can boast given the challenging market of the last five years.
“We are fortunate to have a very good workforce that are loyal to the business and work well as a team,” explains Dalgleish. “Our growth has been mostly organic, which has also been a key factor.
“We also have diversity in what we do - there are three or four main business streams and this helps to even out demand and we are also able to transfer people to balance things out. Staff retention is good because we try to give people responsibility early in their careers - my successor as Ritchies’ general manager Alasdair Henderson is a good example as he is only 37 but has a terrific ability and I know the business is in good hands. Henderson has worked for Ritchies for 18 years and joined the business direct from a five-year degree in civil engineering with geology from Glasgow University, so he has a good understanding of the business.”
As well as good business strategy, there have also been a number of projects that have helped drive and mark Ritchies’ rise from small contractor to major player in ground engineering.
The scheme that Dalgleish acknowledges as the springboard for the company’s growth was removal of the East Side Water Catchment structure in Gibraltar, which the company carried out between 2000 and 2003. “At the time our turnover was around £10M a year but the Gibraltar contract alone was worth £16M,” he says. “It was a real confidence thing. I knew the company was capable of doing more than £2M to £3M geotechnical jobs and the Gibraltar scheme proved that there was no barrier to doing larger schemes.”
Then followed a £30M contract with Network Rail to repair a section of track at Dolphinstone in Scotland that had been affected by a collapsed mine. “Network Rail’s focus was to get the line back operating at full capacity and we worked around the clock to deliver a major piling and grouting solution,” says Dalgleish.
Ritchies firmly positioned itself as a grouting specialist when it took on a contract at Dounreay to remove and decontaminate a shaft that had been abandoned in the 1970s following an explosion at thesite. The £20M scheme took three years to complete but won a British Construction Industry Award in 2008.
“The scheme really pushed the boundaries of grouting,” says Dalgleish. “We were working at 50bar at 100m below ground level and monitoring in real time.”
Ritchies has just completed its latest emergency engineering scheme with repairs to the tunnels at the Glendoe hydro electric site. “The scheme was massive and took two and a half years to complete with up to 300 staff working on it at one point,” says Dalgleish. “As the extent of the problem wasn’t clear at the start of the work, we didn’t know how big a scheme it was going to become but the client is very happy with the finished scheme.”
All these schemes have helped to ensure that Ritchies has not been impacted by the recent economic downturn. Dalgleish expected to finish 2012 with a turnover of £50M - up from around £40M in 2008. “Having major projects on the go is good as much of our work is shorter term,” says Dalgleish.
With Glendoe successfully completed, Ritchies’ major project focus is now Crossrail where the company is working with Keller on a four-year long £40M compensation grouting contract (See GE, Sept 2012).
But Dalgleish sees other prospects on the horizon with contracts in place for the earthworks at Hinkley and a major dam upgrade in Anglesey. “Hinkley will be a major scheme for us when it gets underway,” he says. “We had initially thought it might start at the end of 2012 but it seems more likely to start in the third quarter for this year now.”
According to Dalgleish, work is also picking up in other areas. “Up until a year ago it was only London and the south-east that had potential but now we are busy in Scotland and we are starting to see an improved level of enquiries in the north of England,” he says. “AMP6 will also bring more work although it will take 18 months to ramp up from the end of AMP5. There are reasons to be positive about the future.”
Although Dalgleish has now handed over the reigns of the business to Henderson it’s clear that he still has a firm affection for the business and is looking forward to playing an active part in celebrating the firm’s 50th anniversary this year.