After just a single visit to Australia, UK-based James Jones & Sons decided to buy a 60 per cent stake in Australian timber company Mayflower Enterprises, which is the parent company of XLam and Hyne Timber.
While the value of the acquisition was not disclosed, Mayflower had an annual turnover of $380 million for the year ended 30 June 2021, with a 21 per cent market share in Australia.
Under the deal, JJSL is buying a majority stake in Mayflower, with over 40 per cent being retained by existing shareholders, including the Hyne family. JJSL has expanded through similar international partnerships in the past, including the 25-year joint-venture ownership of Stella-Jones in North America.
Founded in 1882, Hyne Timber is a family-owned company that employs around 750 staff, operating two sawmills (at Tuan—near Maryborough—in Queensland and Tumbarumba in NSW) that produce a total of 800,000 cubic metres of sawn timber.
Additionally, the Mayflower group owns the XLam cross laminated timber plant in Wodonga Victoria, along with a recently-opened glue laminated timber plant in Maryborough and a number of distribution centres across the eastern seaboard.
There’s a few synergies in the deal. Both companies are old family businesses with similar longevities. JJSL is a 180 year old fifth-generation family-owned timber business, with annual sales in excess of £330 million (around $AU586 million). It operates 27 sites across the UK and employs around 1220 staff. And Hyne is a sixth-generation business.
Deal done with one visit to Australia
The British timber company first became aware of Hyne in October 2020 and approached the board to discuss strategic options.
In a phone conversation with The Fifth Estate, Hyne Timber spokesperson Katie Fowden said that JJSL had been looking for opportunities for international growth and expansion, which it found in Australia and New Zealand through the partnership with Hyne.
“[Managers from JJSL have] been out to Australia once, and that was predominantly to meet with team members and to visit the operations, which were otherwise bought sight unseen during Covid.
“[They] came out for the first time in February to visit the priority sites. They met with the management team and a large number of team members, which was their priority. It wasn’t so much about meeting with external stakeholders at this point in time, but that will be more of a focus with future visits.
“From a Hyne perspective, it’s something that we’re really excited about. Everyone wants to work for a business that’s about expansion and growth, especially when it involves sustainably grown plantation pine. We are really proud to work for a business that has a great sustainability value story.”
Laminated timber a key part of the deal
One of Hyne’s key assets is the XLam cross laminated timber production facility in Wodonga, which opened in May 2016. The $25 million facility was initially expected to create up to 54 jobs and produce about 60,000 cubic metres of CLT a year.
The plant—which was the first of its kind in Australia—now employs 85 people, and is expected to increase its workforce to105 people over the next 12 months to keep pace with demand.
“A number of years ago Hyne Timber bought XLam, with a plan for expansion and growth. That included a significant investment in bringing the first cross laminated timber plant into Australia, from New Zealand,” Ms Fowden said.
“XLam has over 10 years’ experience in manufacturing cross laminated timber, but the plant in Wodonga is a much more recent investment. It’s the largest cross laminated timber plant in the southern hemisphere. It’s very much a contemporary, automated, shiny plant.”
Wodonga was a green site, she said, a brand new construction, with the location chosen because of its strategic location for feedstock coming from the Tumbarumba mill in NSW and its proximity to customers, particularly in the Melbourne and Sydney markets.
If anyone wants to come and work for us in Wodonga, please give us a call
The deal comes at a time of rapid growth for Hyne, with staff shortage meaning the company is struggling to keep pace with demand.
“We see the future of construction very much focusing on timber because of its sustainability qualities, which are increasingly sought after as a solution and as part of companies’ ESG focus. We can provide that solution,” Ms Fowden said.
“And certainly there’s ever increasing interest, orders and opportunities in what you can do?—particularly with cross laminated timber in the commercial space?—but also in the multi residential and single dwelling space.
“The demand in timber at the moment is unprecedented, while fewer imports are coming in for various reasons. We’re also now seeing disruption of timber supply from Russia and Belarus, for good reason, which will have global impacts also on the flow of timber.”
She said XLam was experiencing rapid growth and the facility was recruiting additional shifts to meet that growth in current and projected demand.
“So if anyone wants to come and work for us in Wodonga, please give us a call.”