Employees sowing seeds of success

A long-established agricultural merchant has reached another milestone in its 138-year journey as its employees take the helm.

Lanarkshire-based Galloway and MacLeod is set to make the transition with the support of Baxi Partnership Ltd, the UKs leading employee-ownership consultants, and Co-operative Development Scotland.

Galloway and MacLeod, with its well-established history in the Scottish agricultural sector, has transformed its Stonehouse operation from a local animal feed and fertiliser supplier to a 13 million turnover business with 31 employees supplying customers across the UK and Ireland.

Chairman, Ralph MacLeod, whose family has been involved in the business for three generations, was inspired by David Erdals book Local Heroes which detailed Loch Fyne Oysters Ltds journey into employee ownership. Ralph realised the model may be the right vehicle for Galloway and MacLeod to enable growth and development without the restrictions of a traditional business structure. Another important consideration for Ralph was securing jobs in the local community which could not be guaranteed if the business was sold or merged with a competitor.

With support from Baxi Partnership, Ralph has secured a deal that will see some of the MacLeod familys shareholding being purchased and held in an Employee Benefits Trust for the benefit of current and future employees, while the remaining shares will be purchased by individual employees.

Ralph said: I have always believed that business is about people. Our involvement with Investors in People back in 1999 was the first step in encouraging employee participation, and all our recent developments and innovations can be traced back to this process.

What we have here is unique a management team that all started at the chalk face, a diverse product portfolio, innovative animal feed manufacture and proactive customer relationships. Now, the team who has spearheaded current business development will take over the reins for the benefit of all employees, customers and suppliers.

As many of our customers know, Galloway and MacLeod success has been built on its ability to innovate and deliver customised solutions in a fiercely competitive market. We launched our Intelligent Agriculture process two years ago in order to deliver improved profitability and environmental compliance for our customers.

Taking up the role of managing director, Donald Harvey added: Obviously our transition into employee ownership is great news for the employees, but it also has a significant impact on our customers and the sustainability of the business. Although the business has a long history, this move will help cement its future.

Galloway and MacLeod play a crucial role in supporting farmers in an industry which is experiencing significant challenges. A rising population, increase in commodity prices and pressures to produce more food with a lower environmental impact all have an effect on the agricultural sector Galloway and MacLeod through its unique Intelligent Agriculture programme can assist farmers achieve the required results.

The Baxi Partnership has been instrumental in guiding the companys move into employee ownership and has helped manage the transfer process. This includes advice on funding, legal documentation and company structure and ultimately working with the employees to help them make the transition into the role of owner.

Galloway and MacLeod also received support from Co-operative Development Scotland which fostered Ralphs interest in employee ownership through its event Its Your Business and provided grant funding to help secure the deal.

John Alexander, director at Baxi Partnership said: For many businesses, succession is a real issue for owners and unfortunately, the obvious solution to sell to a competitor can often lead to business relocation and job losses in the local community.

Galloway and MacLeod is a successful business, with a long history in an area which is dependent on the rural economy, which means maintaining jobs, skills and experience is vital. By transferring the company to its employees, the MacLeod family is securing their future and enabling them to benefit from Galloway and MacLeods future growth.

Founded by Philip Baxendale, of Baxi Boiler fame, The Baxi Partnership controls a 20 million fund to support businesses in becoming employee owned. The business is working with over 30 organisations across the UK as they make the move towards employee ownership.

A recent survey by the Cass business school, Model Growth, concluded that employee-owned businesses perform better. The study, of over 250 companies, found that employee-ownership is particularly beneficial for small and medium-sized companies, which outperform conventional rivals, employee-owned businesses are more resilient to economic downturns and create jobs faster, they are better employers, add more value to output and the more autonomy employees are given, the more profitability increases.