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How the big boys do it..


Michael C
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I wonder how much funding they got?

 

this much

 

This is the secret to their success. Their kiln drying operation uses hot thermal oil heated by biomass waste. The same technology can also be used for power generation which will be the logical expansion route for CW. If you think CW are dominate now in the area just wait until they can subsidize there production with power generation.

 

I admit I am not on the same scale but at least I have now similar technology to compete at this level.

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On many levels this feels wrong. Hard as it is to believe, trees grow round here. Wood is by its nature local. This centralisation could only be dreamed up by an economist, and look how well we are been served by them :cursing:

Operations like that are only viable with government handouts (your money btw) and cheap oil, both of which are finite.

(Phew.....fell better now:001_smile:)

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Erm,

Perhaps not, economies of scale will/should apply across all industries.

Look at how Mail is centralised to be sorted, ditto the UPS operation in the US of A. Or consider the apparent nonsense of vast distribution centres.

If bigger machinery is more efficient, even aside from the reduction in labour cost input, one then requires to centralise i.e. "draw in" & draw back out.

And despite haulage costs I do not see that a local "one man band" could compete with an industrial scale operation on productivity & therefore price?

PS

I am a "wannabe" one man band.:001_rolleyes:

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On many levels this feels wrong. Hard as it is to believe, trees grow round here. Wood is by its nature local. This centralisation could only be dreamed up by an economist, and look how well we are been served by them :cursing:

Operations like that are only viable with government handouts (your money btw) and cheap oil, both of which are finite.

(Phew.....fell better now:001_smile:)

 

At the end of the day it all comes down to cost per unit. The CW setup is probably geared up for 100,000 tonnes per year my operation is only set up for 10,000 tonnes per year a large tree surgeon 1,000 tonnes per year and a one man band 100 tonnes per year. It may be wrong but as fuel prices go up economies of scale start to kick in and the small guys will start to get squeezed.

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Erm,

Perhaps not, economies of scale will/should apply across all industries.

Look at how Mail is centralised to be sorted, ditto the UPS operation in the US of A. Or consider the apparent nonsense of vast distribution centres.

If bigger machinery is more efficient, even aside from the reduction in labour cost input, one then requires to centralise i.e. "draw in" & draw back out.

And despite haulage costs I do not see that a local "one man band" could compete with an industrial scale operation on productivity & therefore price?

PS

I am a "wannabe" one man band.:001_rolleyes:

 

Mail comes from everywhere to everywhere. Very different. You do have a point after that but those things work because oil is too cheap

If you are right that a one man band who works the local woods for example,near me, N Yorks, and sells me firewood, cant compete with a company in Herefordshire palletising deliveries of the same product, then SOMETHING is very very wrong.

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At the end of the day it all comes down to cost per unit. The CW setup is probably geared up for 100,000 tonnes per year my operation is only set up for 10,000 tonnes per year a large tree surgeon 1,000 tonnes per year and a one man band 100 tonnes per year. It may be wrong but as fuel prices go up economies of scale start to kick in and the small guys will start to get squeezed.

 

Good point. BUT its not a level playing field, firewood isnt a manufactured product (merely processed, all of which CAN be done by hand, but i'm not suggesting that!!!)that grows in everyones 'back-yard'. I bet if you got £400k given, your cost per unit would go down!

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Good point. BUT its not a level playing field, firewood isnt a manufactured product (merely processed, all of which CAN be done by hand, but i'm not suggesting that!!!)that grows in everyones 'back-yard'. I bet if you got £400k given, your cost per unit would go down!

 

I have to agree with you its not a level playing field with that sort of investment but after receiving that investment you will always maintain that advantage and eventually squeeze out the smaller competition. This is why I applaud CW because they could just drop their prices and undercut the market but instead have decided to keep prices high. This might be a condition of the grant agreement but after 5 years they will be free to determine there own prices.

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At the end of the day it all comes down to cost per unit. The CW setup is probably geared up for 100,000 tonnes per year my operation is only set up for 10,000 tonnes per year a large tree surgeon 1,000 tonnes per year and a one man band 100 tonnes per year. It may be wrong but as fuel prices go up economies of scale start to kick in and the small guys will start to get squeezed.

Hi John have you managed to grow your buisness to that size single handed or have you received funding aswell??

Thanks Phil.

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I wonder how much funding they got?

 

this much

 

 

 

Bless my cotton socks, 400K + !!!, and that presumably is a grant. Big money especially as CW may have had to match it. I said they were sharp operators, bet there is not many here that have received that sort of aid. Herefordshire is not exactly an employment blackspot.

 

A

Edited by Alycidon
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