Tollman Chemical Manufacturing – Progressing through adversity

Tollman takes up the task of manufacturing, in an Australia where the promise of the Australian manufacturing industry is diminishing. Alas, you’ll know of recent news citing Holden and Toyota’s manufacturing plants are due to close imminently. Nevertheless, even with the commercial challenges and bureaucracy manufacturing faces, Tollman stands strong as a successful customised chemical manufacturer in the Victoria region.

Wholly independent and 100% privately owned, Tollman has been manufacturing, formulating, packaging and distributing chemicals for 15 years. The company’s website does state to provide services to a wide range of industries, but Managing Director Malcolm Dodson affirms that the majority of its business is done in agriculture, a mainstay of the economy of the land Down Under.

At present, the company services three core markets: contract tolling, toll manufacturing and its own proprietary products. The company prides itself on manufacturing and formulating its customers own chemical formulations, and if not that, it works to meet particular specifications assigned to it. The business of toll manufacturing needs an extraordinary level of understanding and cooperation due to its largely collaborative nature. As such, the success of what has been at the backbone of Tollman’s success, can in part be attributed to its strong partnerships, to cultivate the mutual growth of all businesses involved.

Tollman’s factory stands strong in Laverton North, Victoria with substantial manufacturing technology and storage tanks, as well as the workers and chemical experts that make it all happen. But what is it specifically about the company that has really kept the clock ticking on it all these years? To unearth this, we spoke in depth with Dodson about the company, how it operates, and how his leadership has kept it going and growing.

The history of Tollman

Established in 2002, Dodson himself founded the company. The story goes that Dodson was working for an existing chemical business that decided to shut up shop. Seizing the opportunity, he decided to rent part of the facility that was being vacated, and continued on with one of the contracts that was also being vacated. He negotiated a 500 tonne chemical creation deal, rented some equipment, and off he went.

“I worked on getting some more business over the next few years, and eventually built my own facility in 2003 when I couldn’t rent that one any longer,” says Dodson.

Of course, at the beginning, the business didn’t have the manpower is does today:

“At the start I did everything, and I mean everything. Whether it was driving the fork, making the chemicals, getting the sales.”

As time progressed though, the company grew and Dodson employed people to do jobs like engineering and building the plant. His 15 employees now include, usefully, a general manager to manage the day-to-day operations.

“My role now is to develop business relationships, look at opportunities, do product costings, see the future of the company and to drive it towards where it needs to be going,” confirmed Dodson.

The Efficacy Of Efficiency

Much like many of its finely tuned machines, Tollman itself operates like a finely tuned machine. It’s more than apparent that under Dodson’s leadership, efficiency is King, which is likely another branch to the success story of the business. An example of this resourcefulness coming into play? The company has only one site of operations with no ambition to build anymore.

“To get the unit cost of production down, you need to really work your site hard,” Dodson explains.

“It can be a difficult country, Australia, the distance and costs of transportation are vast. It’s cheaper to do it here, and if we need to ship to the west, we can do so for a reasonable amount of money.”

Fundamentally, Dodson clarifies that the goal at Tollman is to maximise plant utilisation, maximise net profit (“not necessarily sales but net profit”), and the company is successfully doing that, more or less through its efficiency.

“The government doesn’t seem to support manufacturing; it says the cost of wages is too high. I think this is broad and sweeping statement. Wages are high, but so is the cost of living,” Dodson states.

“If you put in measures of efficiency and get you unit costs of production down, maybe use a 25 tonne reactor instead of a 5 tonne one, those kinds of labour costs can be reduced.”

And as such, that’s how Tollman operates. The company has a very lean overhead of staff. It streamlines as much as it can and there aren’t too many bums on seats:

“Most of our people are in the factory, producing.”

In fact, in the future, for some of its packaging lines, the company will be looking at using robots to reduce labour, “and that’s one way of increasing your profit” Dodson rationalises.

Growth

Product Development

In terms of keeping the business going, and indeed growing, Dodson is heavily focused on not just the development of its existing workstreams, but on creating new ones. As such, the business has and does continue to see the benefits:

“Our sales increased remarkably last year, they’ve plateaued a little bit, but they should climb again next year,” says Dodson.

Whilst Tollman has been in the field of manufacturing general chemicals for a long time, that which is its baseline, it has since become heavily involved in agricultural herbicide manufacturing (as previously mentioned). Furthermore:

“This year, we’ve got another business starting where all the products are made by Tollman, but marketed through this new business.” These products are wetting agents used in conjunction with herbicide in an agricultural field.

Another big advancement on the Tollman agenda: a year and a half ago, Dodson hired a highly skilled technology development specialist who has been key in developing a number of products for Tollman. One of these being a product Dodson described as being as “better than anything on the market”, but furtively, and understandably, he cannot say much more until the product is released.

The company also has a product development chemist onsite creating additional products in quite a variety of industrial markets. Dodson has found that businesses that are getting their products in the US, find the costs to be substantial – mainly after seeing the US dollar going against them. In turn, these companies have asked Tollman to produce product equivalents, which it has been doing, successfully, for many a customer.

Big talk, but Dodson does proclaim Tollman to be probably most versatile chemical company in Australia in terms of the types of chemicals it can make:

“There’s not a lot of small chemical companies / independently owned companies like us in Australia that can offer the services we do. There are companies that do certain things, and companies that do others, but there are none that cover the range we do. If we exited the market now, there’d be a fairly big hole on what these companies can get done in Australia.”

Indeed there is a lot of local demand for things that need to be made quickly and promptly, and where only one company in the whole country makes a certain product, or if businesses have to order their products from China, there’s always the potential for a six week lead time if not more. Hence, Tollman recently had a titanium reactor built in China which is on the verge of getting shipped to Australia.

“This reactor means we can cut the lead time from months, to a week. That big stretch of water from here to the rest of the world means time, and that’s where our business is at its prime, we are Johnny On the Spot,” Dodson exclaims.

Marketing

So whilst there’s the continual product development strategies for the business, the company’s marketing strategy remains simple (yet still effective). Word of mouth and Google Adwords.

“Google Adwords has been great for our online visibility, though the word-of-mouth marketing for Tollman is especially strong. We have a good reputation so we get a lot of referrals. We work 365 days a year, we deliver satisfaction to customers, and in the 15 years we’ve been operation, we’ve never, ever missed or had a late order that was our fault,” states Dodson proudly. Being a small company has helped Dodson keep it exceedingly efficient, more so than a larger company might have been able to.

With regards to the internal marketing, and by that we mean the internal culture that keeps its works happy and productive Tollman, Dodson is confident in the satisfaction level of his employees. The evidence is in the one single person that has left in the space of two to three years, and the low level of absenteeism:

“The team gets along pretty well, we all know our role and I think people can see there’s a future with Tollman.”

Employees see that Dodson, as Managing Director, is highly driven to keep the business going. They are confident in his ambition and his ability in continuing to make something of Tollman. This is especially since many of these workers have come from similar roles where they’ve seen these companies shut down, leaving them disconcertingly out of work. “It’s nice for them to see prospects and possibilities.”

End roads

Dodson is clear in his distaste of government bureaucracies that can hold up a lot of progress for his business and businesses like his. Nevertheless, he strives to jump these hurdles with persistence and tenacity. He hopes that the regime will change, and that the powers that be will connect with manufacturers more closely to understand them better and to help nurture this fading commerce.

Nevertheless, Tollman is recognised by the local council as a growing enterprise, and the company has won a few local business awards in years gone by. Like a plant growing through concrete, the business prospers in an otherwise challenging landscape.