Road Marking business area / RoadcareRoadcarePoor weather in Great Britain pulled down resultHead office: Bradford, Great BritainMD: John RaineyTurnover 2007: SKr 102(117) millionNumber of employees: 71 (70)Products: Thermoplastic roadmarkingproducts and contractingservices.Markets: Great Britain, Irelandand Portugal.Competitors: Ennis Paint (Prismo)and WJ Group.Share ofbusiness area’s turnoverContracting91%10%Revenue by productThermoplastics9%Nature of businessRoadcare is one of Great Britain’sleading road-marking companieswith nearly thirty years’ experiencewithin this specialised area. As asubsidiary of AB <strong>Geveko</strong> since 1994,the business has concentrated on themanufacture and application ofthermoplastic road-marking materials.Roadcare has developed a comprehensiverange of products and contractingservices that meet theincreasingly demanding conditionsfor road markings in Great Britain.Roadcare’s contracting business alsoprovides services as part of fixedtermmaintenance contracts (usuallyfive to seven years), which wereintroduced several years ago in GreatBritain. These long-term contractsinvolve the maintenance of motorwaysand other heavily traffickedstretches of road.The British business’s headoffice is in Bradford and the premisesalso serve as the base for one of thethree contracting units. The other twoare in Airdrie and West Bromwich.Formerly, Roadcare’s contract roadmarkingbusiness, Line MarkingsLimited, was limited to the northwith few activities elsewhere inGreat Britain. A focus on cost effectivenessand coordination has generatedgrowth in the contracting business,despite an unchanged numberof employees, and this has resultedin higher capacity and the capabilityto offer a comprehensive and extensiverange of services to customersthroughout Great Britain.Rommco (UK) Limited, thecompany that manufactures roadmarkingmaterials, is located at thepremises in Bradford. Rommco offersquality guaranteed thermoplasticproducts, not only for its associatecompany, Line Markings Limited,but also for customers on the Irishand Portuguese markets.MarketsThere are eleven manufacturers andmore than 200 road-marking contractorson the British market allcompeting for their share of the45,000 tonnes of thermoplasticroad-marking materials used eachyear, which means the competitionis fierce. Great Britain is one ofEurope’s largest road-markingmarkets, although for those in thisbusiness the intensely competitivesituation provides many challenges.As the differences in road-markingmaterials and application methodsare not particularly large, price andstandard of service are importantfactors.British customers know, giventhe current situation, that they canget value for money from their roadmarkingsupplier. However, manycustomers expect even more. Closecooperation with customers, with theaim of jointly identifying innovativeand economic solutions has becomethe norm for Line Markings Ltd.Developing close relationships andbuilding confidence has turned outto be not only successful but financiallyrewarding for all parties. Thecost efficiency that has been achievedin the customer/contractor relationhas attracted the attention of theHighway Agency, the British roadauthority, which rewards successfulpartnerships with further contracts.Outlook for 2008The American company EnnisInternational’s entry onto the Britishmarket via the acquisition of Prismohas further intensified competitionon the British market, which wasalready suffering from excess capacity.The effect is that the British marketnow has a large competitor that isoffering thermoplastic materials atprices only slightly above their productioncost and doing all it can togain a strong market position.Increased competition, aggressivepricing and acquisitions on thecontracting market are creatingunsettled conditions among thecompanies on the British road-32
Road Marking business area / Roadcaremarking market. This development,which reflects similar activities elsewherein Europe, has resulted in thestart of a process of consolidation onthe British contracting market. Inorder to survive and grow, a numberof British road-marking companieshave carried out acquisitions ormergers to position themselves tohandle the intensifying competition.Roadcare will play an active role inthis process. However, the roadmarkingmarket in Great Britainwill probably remain turbulent in2008, with the risk of narrowermargins.Future prospectsThe British market is dominated bythermoplastic road-marking materials,which will continue in the shortterm. There is growing interest inwater-based paints and other materials,as a consequence of long-termcontracts, which means that the lifetimecost of the products is assuminggreater importance for the customer.Demand for this type of product willtherefore increase. Rommco does notmanufacture water-based paints, butassociate companies in the <strong>Geveko</strong>Group offer a broad range, whichwill strengthen the competitive positionas demand builds up.On European markets a processof consolidation is taking place, andthis tendency looks set to continue.It is hardly likely that Britain will bean exception. The changes will probablytake place on the market overthe next few years. The necessarysteps will be taken to ensure thatRoadcare maintains its position asa major player on the British roadmarkingmarket.Great Britain will host the 2012Olympic Games and the governmenthas announced that its road maintenancebudget for 2008 will be reduced,in particular for local authorities andmunicipalities, whilst other taxfundedareas will be given higherpriority. There is a risk that this willbe reflected in the level of maintenancework on motorways in thenext few years during the run up tothe Olympic Games in 2012.One possible way of compensatingfor any shortfall within themaintenance sector during this periodand to continue generating growthon the British market could be tooffer products and services to othercategories of customer.Roadcare has developed a comprehensive range of products and contracting services that satisfy more demanding customers for roadmarking in Great Britain. Roadcare’s road-marking contractor, Line Markings Ltd, has applied road markings on the M6 motorway inLune Valley, Cumbria.Freefoto.com33