A new style of ownership for Newdawn

When Bowater Building Products acquired conservatory roof manufacturer Newdawn & Sun in late 2005, it was one of the early developments in what can now be seen as a trend in ‘changing ownership’ in the industry. Nigel Richmond, Bowater’s Chief Executive, explains how he sees the company and the market changing

Consolidation and evolution. It’s an inevitable response to changed market conditions. The changes really started 3-5 years ago in the window system market place, where the reality of a mature market started to hit home. As the domestic window replacement market got tougher, there was a shake out at system company level and at fabricator level.

Initially, the conservatory market seemed different, as it continued to grow and many window companies decided to get into conservatories, or expand their existing business, as a way of offsetting declines in their window sales.

In reality the warning clouds were already on the horizon for conservatories as well, as consumers reached ever higher levels of debt and house prices started to slow, affecting people’s willingness to re-mortgage to fund ‘big ticket’ purchases.

There is no doubt that the desire for conservatories is still there, but affordability is an issue for young families and in the older demographic, there is concern about pensions and retirement funding.

So when the conservatory market also started to slow, more consolidation was inevitable. As Newdawn, like its much larger rival Ultraframe, is now part of a wider group including window systems operations, it is tempting to ask whether the days of the independent roof manufacturer are numbered and whether there will be closer integration between the window system and the roof system in the future.

But no conservatory roof company can restrict itself to only supplying fabricators who use one specific window system. The economic reality is that roof companies will always be seeking to make their products compatible with the widest range of side frame options.

In that sense, independent roof manufacturers should still have a role in the market, but they may suffer unless they have close technical links with the other key players in the total conservatory build process.

This is because one of the main drivers of change in the future will be standards and regulation. It is inevitable that building regulations will become more stringent and probably involve thermal as well as structural performance. This will lead to greater emphasis on the relationships between roofs and side frames and the side frames and walls.

‘Co-opetition’

The management consultants have an ugly word for what is happening in more and more markets …’co-opetition.’ It means that companies who are competitors in some sectors of a market may very well co-operate in other areas.

Just because you compete in one area, don’t cut your nose off to spite your face if you can develop profitable business through co-operation elsewhere. If you look around, it is the way many professional companies are approaching the challenges of changing markets.’

Turning back to the prospects for the conservatory market as a whole, it isn’t all ‘doom and gloom’ and according to Newdawn’s reading of the trends, there is room for expansion in the market.

Trends

When it comes to product trends, Newdawn sees orangerie-style conservatories becoming more and more popular, offering all the benefits of a traditionally built extension combined with the light, spacious and airy feel of living under glass.

With demand for glass roofs up by nearly 50 per cent in the last year alone, Newdawn has seen increased sales of its Sunbrite range of roofing glass, as more and more homeowners choose this upmarket, high-specification option that allows year-round use.

Newdawn also sees the changing nature of the roof market is also encouraging customers to switch from fabricating bar length to buying in kits, as a means of addressing labour and skills shortages.

Potentially this is good news for roof manufacturers. There will be a concentrated number of very skilled fabricators still demanding bar length and, at the same time, a growing number of companies who do not want the hassle and want to buy in a roof they know will work. And that means more added value work for the roof company and their network partners.

At Newdawn we are talking closely to our fabricating customers to make sure we are all well placed to address these market changes.