High workrates maintain top turnover
A high throughput of work
per member is a winning
formula for achieving a
healthy turnover, says
Thames and Kennets
Machinery Ring manager,
Andy Moore reports
SERVING a 60-mile radius of Reading, Berks, the past seven years have seen the Thames and Kennet Machinery Rings turnover rise from £528,000 to £895,975.
Yet, in the same period, membership has risen only modestly – from 176 to 214.
"Unlike some rings which have a large membership, TKMR has a lower number of members but 84% of them are active," says ring manager, Michael Brown. "Tough times in farming have forced members to make efforts to cut their machinery investment and use the ring more actively."
Mr Brown also says that an increasing number of smaller farms with about 120ha (300 acres) are now joining forces and using the ring to top up their mechanisation.
"Members are also projecting machinery costings much further ahead and making long-term financial decisions," he adds. "They are taking a serious look at their budgets and, even at this stage, are planning their machinery requirements for the 2003 harvest."
Unlike some rings, TKMRs core business has remained fairly and squarely on member to member usage of machinery for all operations. This activity increased by 36% from 2000 to 2001.
The ring has also seen a significant growth in putting members in touch with suppliers of tractors required for hauling trailers during the silaging season.
Another factor contributing to turnover increase, says Mr Brown, is better cost management advice from banks and organisations such as ADAS, together with improved co-operation between members and other machinery rings. "Members often do not realise how their connections within UK rings can make a difference to their own business," he says.
Co-operation with the North West machinery ring has provided a TKMR member with amenity work from a supplier in Lancs, while another engineer member "vetted" a machine before it was bought by an Orkney ring member.
The other half of TKMRs business is a fuel supply service which has seen its turnover increase from £92,863 in 1996 to £566,744 in 2001.
Working with fuel suppliers, the ring aims to ensure its members buy at lower prices than purchasing direct – but not necessarily at rock bottom levels to encourage fair competition.
The ring claims to have attained a high turnover and member activity partly by the ratio of suppliers and demanders which has naturally evolved to 54% and 70% – some are both suppliers and demanders.
"Member activity and recruitment is kept at a constant level mainly by word of mouth," adds Mr Brown. "When members want something, they phone us, and 99% of the time we are able to point them in the right direction."
Membership fee is a £100 non-returnable share, annual subscription is £105, while commission is the industry standard 2% from supplier and demander.
Describing TKMR as being conservative, Mr Brown says the ring will endeavour to keep its levy rates at the same level to maintain a buoyant turnover and retain member loyalty.
Running a tight ship is also achieved by the ring monitoring costs closely on a monthly basis.
To date, TKMRs operating area has not been eligible for grant aid to set up an in-house labour agency. "While there is large demand for labour, sourcing workers in our area is becoming increasingly difficult," says Mr Brown. "Without the benefit of subsidies, the project would not be economically viable."
Member training is provided through a reciprocal agreement with three training groups which run courses for operating equipment such as chainsaws, forklifts and sprayers. *
THAMES & KENNET RING
• Ring manager Michael Brown, Bracken, Loxwood Road, Alfold, Surrey, GU6 8HN. Tel 01403-752556, email email@example.com
• Chairman Mr Brian Doble.
• Operating area 60-mile radius of Reading, Berks.
• Activities All types of agricultural work, self-drive supply of machinery, commodities and increasing amenity/commercial work.
• Members 214
• Fees £100 non-returnable share, £105 annual subscription, 2% commission from demander and supplier.
• Usage rate 54% supplier, 70% demander, total usage 84%.
• Total turnover £765,190 – 1996, £966,000 – 1999, £1,462,719 – 2001.
• Most popular services Self-drive hire and baling.