Top quality products at affordable prices. That’s the philosophy of Affordable Granite & Marble (AGM) in Matlock, Derbyshire. And while the philosophy itself is not unique, Proprietor Mark Holmes believes he has developed some unique ways of achieving it

Most of Affordable Granite & Marble’s customers want black worktops, so the company buy the best at advantageous prices by dealing exclusively with two family businesses in India who have their own Galaxy quarries and who do not supply anyone else in the UK.

“We do get an advantageous price but that’s partly because we buy one and-a-half to two containers a week from them. It’s worked well for both of us,” says Mark Holmes, the Proprietor.

“They have the best black in the world,” he says. And he knows about stone having been the Production Director of Stancliffe before the quarry company was sold to Marshalls in 2001.

AGM also buy from China and Brazil, and have independent representatives in both countries to ensure they receive good quality materials.

When Stancliffe were sold to Marshalls, Mark held on to the 4.5acre former quarry site near Matlock in Derbyshire that was once Stancliffe’s headquarters and which now houses AGM.

“We thought we would have five or six people here and I would build some other units to rent out, but it’s just grown,” he told NSS.

He now employs 19 people, having recently recruited two teams to template and fix some of the worktops made in the AGM factory. He has also bought the commercial vans for them to work from. He says the £400 signs on the sides of the company’s vehicles that show pictures of attractive kitchens are the most cost effective advertising he has tried.

The majority of AGM’s business comes from supplying other fixers, but they have started templating, manufacturing and fixing directly for customers, predominantly locally, to compensate for the lack of growth in wholesale sales.

While many of their trade customers have seen reductions in their work due to the collapse of housebuilding and fewer people moving home, AGM have attracted new trade customers and extended their appeal to retail customers.

Although some trade customers might be put off by AGM operating as a cash-and-carry rather than extending the usual 90-days credit, the prices are competitive and the quality of the stone is high, so customers make their own choices about the relative importance of price, quality and credit. As Mark says: “As well as the cost to us of extending credit, you only need a few bad debts and the prices have to go up for everyone. Why should the rest of our customers pay the price?”

AGM are also now looking to expand sales through kitchen showrooms and have just recruited a salesman to target that area. Until now they have only sold through local kitchen shops.

They have also opened a showroom on their own premises, which brought about the introduction of their own kitchen units. What was out there was not good enough quality for Mark and was too expensive, so he has had his own units made in solid oak.

They are good quality and low price and he thought he would sell hundreds of them. But he hasn’t. “I think we’re selling them too cheaply. People can’t believe good quality can be that cheap. I’m thinking about doubling the price,” he jokes.

Mark admits that, coming from a production background, he had neglected the marketing of AGM. That has been addressed of late by tasking Mike McMaster, former Marketing and IT Manager for AGM, to develop and launch a new website. In the time remaining before his planned departure from the company (to set up as an independent web designer) he has co-ordinated the company image and approach to marketing and developed the website.

And the website makes a difference. Last year AGM relaunched their website and it dropped off the front page of Google for a while, although it is back there now. “That was a costly exercise but it taught us a lot about how our customers get in touch with us.”

A final website will be live before the end of the year. In fact, the company will shortly have two new websites, one for retail customers and another dedicated to their trade customers.

AGM now also have an Assistant MD in Peter Jordan-Turner. The appointment will allow Mark to spend less time in the business and more time with his family in New Zealand, where has another business selling mostly stone tiles and shower trays.

To further strengthen the production team, AGM have also appointed Mike Picken to the post of General Manager.

Peter and Mike inherit a new £35,000 computerised business management system that has just been installed. “You have to invest in the right way,” says Mark. “If it frees up staff time it’s worth it. If you’re going to be cost effective and make money you have to move with the times.”

Although AGM’s trade sales have fallen about 8% this year, the higher net profit from retail sales has buoyed margins to the point where Mark says: “Touch wood, we haven’t been affected too badly by the recession.”

The idea of building units on site to rent out has not quite gone to plan. They did rent out the first unit they built, but when it was vacated they were glad of the space and now also occupy two others, one 10,000m2, that were built with the intention of renting to other companies.

Growth has been substantial but Mark says it has also been sustainable, with the customer base growing largely through word of mouth and the website at a rate AGM have been able to accommodate with a gradual increase in people employed and machinery used – machinery such as the T108 from Thibaut, Master 33 workcentre from Intermac, Italian Terzago and Chinese Stonehandler saws, and Montresor edge polisher, as well as all the lifting gear that includes gantries in every shed.

What brought Mark Holmes into the granite worktop market in the first place was fitting a kitchen in his own home just before the sale of Stancliffe.

“I went to Pisani to buy a slab of granite. It cost £400. I could see the margins in kitchens and thought I would have a go at that myself. I thought it would be an easy number. Of course, it’s not, but when we started we were £2,500 cheaper on a kitchen and I was making a healthy profit on that. It’s more competitive now, with some suppliers trying to make a living by selling three lengths of granite for £1,000!”

He had already carried out some research into importing and decided to look longer and harder at that. He found his suppliers through a process of trial and error, and says when he first went to China they seemed to consider him a way of disposing of their waste. “The first four or five containers I got I almost had to throw it all away. Eventually we found the suppliers who would give us the right quality.”

He has gained an advantage by having his slabs cut into worktop widths of 600mm, 630mm, 700mm, 900mm and 1000mm, as well as 1200mm for island surfaces, so he transports less waste. They are polished top and bottom, front and back by his suppliers before the granite is shipped.

This move has cut waste from the factory from as much as 35% to an average of about 10%. And it makes significant savings in production time – AGM can make four kitchens-worth of worktops using the imported countertops in the time it takes to make one from a normal slab of granite.

Why don’t more people import in this way? Mark puts it down to conservatism. “English business gets stuck in a rut – if it ain’t broke, don’t fix it. These counter tops don’t do every job in the book, but they do 90% of them.”

And the narrower slabs do not cost any more per tonne than larger scants because the suppliers make them out of smaller blocks that would otherwise be waste, especially as most importers want ever larger slabs.

Productivity at the AGM factory is high. “You have to get the workforce positive and motivated or you will employ three or four more than you need,” says Mark.

From whatever source, customers have found their way to AGM from as far apart as Scotland and the south coast of England, but when the worktops have to be transported long distances it is harder for AGM to maintain their cost-effectiveness. So Mark is now contemplating opening depots in Scotland and London. He could then make deliveries once a week and store the worktops in the depots ready for collection during the week, reducing transport costs.

To add weight to this plan, he has just bought £100,000-worth of processing machinery to augment the current production capacity in Derbyshire and give AGM the flexibility to machine slabs to customer requirements at the proposed new depots.

With the investments in plant and people at AGM, Mark and his staff feel optimistic. They are looking forward to a record-breaking year in 2010.