We catch up with Justin Kingwell, owner of Kingwell Holdings to see how both him and his biomass business was coping with the effects of Covid 19.
Justin works throughout the UK carrying out site clearances, tree clearance, stump removal, biomass recovery and ecology services. He has the largest fleet of mulchers in the UK and is the sales and service agent for Serrat and Fecon bio equipment.
What impact has Convid 19 had on your business?
We have a couple of subcontract operators parked up, as the volume of work has definitely dropped more than the normal slow-down that arrives at this time of year after bird nesting. Normally, we would bring these lads into the workshop to help on the annual refit work on the machines, but with the health rules as they are, unfortunately they are at home until things get going again. We also have one operator who has asthma on the furlough scheme as well, or at least he will be when the scheme actually starts. I feel for the larger firms, who have to find the cash to cover their furlough workers until the Government funds arrive, but I suppose that everyone is in the same boat. I really feel sorry for the legions of self-employed. Their pain is only just beginning. On the plus side, the previous sky-high prices for equipment are dropping and we’ve made some investment on that front, so we should have some new operator jobs coming up at some point.
What has the biomass industry been classified as, is it seen as an essential business with key workers?
Biomass work and the supporting operations, is definitely key work. 40% of the UK electricity base load is generated by burning wood. I can see demand rising and we are flat out on production on several sites and we are actively looking to get more sites for material. We have letters in every vehicle to produced if stopped, but so far none of the lads have been challenged. The social distancing and hygiene thing is fine – we all do that in this job anyway.
Has there been enough advice from the Government and forestry bodies on how best you and your staff should deal with this and is there any financial assistance available for businesses like yours?
Other than the excellent furlough scheme, we don’t qualify for any help, so I can’t comment on that. Luckily, we don’t need any help and it’s largely business as usual. We’re paying our bills and supporting our subcontractors wherever possible and will continue to do so. My personal views on the various industry trade associations are probably not printable, but needless to say, I consider them to be just another drain on our yearly financial resources. It’s the same with the likes of Safecontractor, RISQS and the others. You can’t tender for some work without them, so we fill out the forms, send off the money and forget about them. Overall, I think that the UK Government are doing a good job under the circumstances.
What more could have been done at the start of the outbreak to prevent the sanctions we are seeing now?
In my opinion, not a lot. Yes, there was confusing information and guidance at first, but that’s inevitable whenever a crisis arrives. I think that it may have already been here way before they realised anyway. I’ve been involved in several serious disease outbreaks with other work that we do abroad and these things are extremely difficult to control, as by the time you realise that there is a problem, it’s often too late to stop it.
How do you see the biomass industry when we come out the other side of this?
Flat out. The country has taken the decision to go this way and with most of the coal and oil burners now demolished or in mothballs, we have limited choices. I think that with the current demand at +5 million tons per annum and rising, there is no hope of keeping up with the volumes required and even though we are importing tens of millions of tons of foreign wood pellets and timber from diseased European forests at the moment, this supply is not a long-term solution. I can see the UK having to look for new sources of material.
The current +2 million tons of waste wood that is being landfilled and the vast amounts of compost currently being processed would be an obvious choice and converting current virgin fibre plants to take this material would be a quick and relatively cheap solution. If the ordinary public actually knew how close we currently run to having power outages, due to fuel running low at some plants, they would be extremely surprised. Needless to say, we will be making more investment into this area, despite my personal misgivings about the viability of the whole process.
What, if any, positives have you been able to take from this?
Lots. There will be more work to be done, more realistic prices for equipment, materials and consumables, a more efficient and dynamic workforce, a new national camaraderie that has become evident as communities work together under the restrictions, a more sympathetic and compassionate Government? Who knows? If you look at the National mood after WW2, the survivors were full of hope, energy and optimism and many went on to produce some of the greatest companies, organisations, arts, music and innovations that the World has ever seen. I’m hoping that in some tiny way, the end of this crisis will be similar in some respects.
The downsides, unfortunately, are inevitable. All the economic signs indicate that we have a serious global recession looming and the simple fact is, that the vast sums borrowed by Governments around the World to prop up their economies, will have to be paid back by raising taxes for ordinary companies and individuals. I think that here in the UK, we will witness a kind of reset of the industry. I think we will also see an inevitable cutting back of the big infrastructure spending spree that is currently propping up a significant sector of the industry. It’s truly tragic that there will be plenty of very decent firms who will not survive this, but there will also be a kind of natural selection that will allow the survivors to fill the gaps in the marketplace and take on a lot of out of work staff. Make no mistake, in my opinion, we have a landslide of pain coming our way once the repayment holidays end and this long period of no income will spell the end for many others, that will only show in a few months from now.
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