Paul Hardy believes the upturn is here, especally if his figures for quarter one are anything to go by. Paul Braithwaite goes back to the head office at Erdington to talk to the upbeat managing director of Baxi Commercial Division.
It is about a year since I interviewed Paul Hardy, managing director of Baxi Commercial Division.

He was so incredibly upbeat about 2009 that I just had to revisit the company profile - and him.

I went into the interview armed with the previous article and some questions which I believed would come back to haunt him.

What I found was Hardy waiting with a copy of the same article which had been pinned up next to the coffee machine for all Baxi Commercial Division staff to see.

'For staff, the past three years had seen a lot of change and I wanted to reassure them. People who are worried about their jobs do not work to their full potential,' he said. 'If I could see the upside, they should too.'

Hardy says the article helped Baxi Commercial Division staff change their attitudes as did the rest of the upbeat messages that came through during the year.

This interview wasn't turning out quite as I had expected!

And, speaking of upbeat messages, he adds this year Baxi Commercial Division is taking on staff, not shedding them!

'I know some of my competitors cut staff and during the three-year plan, we lost about 38% of the workforce by natural wastage. But now it is definitely on the up.'

He adds: 'Last year I was satisfied about what we had done and bullish for the future'.

Fair enough but what about 2010? I must say I was not ready for some of the remarkable growth figures he was to talk about.

Take packaged plantrooms, for instance, which part of the business grew by 60 per cent in 2009 over 2008.

'There are opportunities for Baxi Commercial Division to give a cradle-to-grave service. It is what the customer needs.'

Credit for this philosophy goes to packages manager Mark Browne. This year, says Hardy, to maintain the growth, the service section needs three more people, an administrator (already in place) and two field service engineers - one in the south (M4 corridor: 'Reading would be good') and the other in the north (M62 corridor: 'Manchester area').

This service offering means Baxi Commercial Division engineers will look after any equipment which is in its portfolio or any competitors' heating equipment.

'Our expertise is in heating, not in the other equipment in a plantroom,' Hardy says simply. 'Our engineers are able to service and maintain our equipment and that of our competitors in the heating sector but we would not, for instance, know how to fix a large circulating pump. This is not what we do.'

In fact, Baxi Commercial Division, under its Potterton Commercial brand, has been supplying pre-fabricated plantrooms for years. But it partners with other suppliers where their expertise is needed, for instance, where a sophisticated building energy management system is to be installed, the company would call in the supplier of the specified system to install it. Hardy says it has just installed a plantroom which produces 4MW of boiler power.

He adds much of the growth in service work has come from the supply of smaller centralised boiler houses for social housing.

The company also wants to increase its offer of this service expertise to FM contractors in a partnering arrangement.

'We started partnering with one utility company last year. It looks after the building fabric and our expertise is called upon for annual maintenance or, when there is a problem, with the heating.'

Baxi Commercial Division personnel give advice pre- and post-sales. 'What we are after is the middle ground. We want to maintain the equipment pro-actively.'

Hardy does not think two extra service people will be enough but he will be surveying new customers, and listening to what they say, to refine the service process before adding more staff. If the success comes too quickly, then he has a cunning plan.

'We already have agents who work with us on the reactive side. We are ready to train them on the pro-active work as a stopgap.'

It's a case of 'if customers want us to service their boilers/ heat pumps etc, then we will service their boilers/ heat pumps etc'.

The division has just signed with a large fire and rescue service to maintain its heating equipment, Hardy adds.

Upturn is here

In fact, Hardy is so bullish he believes the upturn has already started.
'If you look at the first quarter of this year, March has been phenomenal and the Remeha sister company also reports a good month.'

And he expects this to continue whichever party is in power after the election.

'Government will need to cut back on the pretty things, those which would not harm the fabric of society. If there is a park without flowers in the flowerbed, then it will not hurt anyone but if there is a boiler which goes wrong, it will need to be fixed or replaced.'

Labour has already said it will, if it is returned to power, not reduce spending on skills, emergency services, hospitals and schools etc. 'If you have not got a boiler house, how can you open up a school?'

He believes all parties will remain committed to carbon reduction measures.
There are one or two blue chip commercial companies such as Travelodge (where Baxi Commercial has just supplied its biggest-yet solar thermal system) which are leading the field.

'For the present these companies are able to tell customers how green they are. Retailers, for instance, are moving to sun pipe units which let lots of daylight into the shop. But eventually the CRC league table will be published and government will start to name and shame those companies which have ignored the move to renewables and reward those at the top of the table.'

He adds those companies which have invested in resources and service will reap the rewards from now on as 'I believe 2009 was the low point in the economy'.

'And Baxi Commercial Division managed to hit its budget last year,' he smiles. It gets better, he insists.

This year Baxi-Senertec UK, the mini-CHP arm of the business moved into the Erdington building.

David Shaw, the business manager, indicated the company was ready to move to the next level. And now the stock and the database are much more accessible, Hardy feels the CHP addition will gallop away.

'It will benefit from the closer support of the commercial division and other expertise within the rest of the group,' he suggests. The mini-CHP arm has taken on Mark Gibbons as northern sales manager. He will be needed as the company has budgeted for a 57 per cent rise in sales over 2009.

So far the CHP arm is on budget after quarter one and has just taken its biggest order of four units for a Welsh nursing home.

And, don't forget, warns Hardy, CHP in general is a LZC product and the Dachs unit is over the 2 kW limit so does not qualify for the feed-in tariff.

Hardy adds that Dachs is always installed with hot water storage because, as buildings become more air tight, hot water is becoming the main focus in most commercial buildings.

Hardy is most excited about solar thermal. 'Heat from the sun is free,' he laughs, 'and I have not yet thought of a way government can tax it.'

Reliable industry stats, he says, are not readily available as it is a young sector for the commercial scene but if Baxi Commercial is anything to go by, in 2009 sales rose by 50 per cent and this year he has budgeted for a 70 per cent growth.

And, again, sales have been hit in quarter one.

Perhaps the most surprising sector to see a rise is cast-iron sectional boilers. In the first quarter of this year, sales rose by 69 per cent and not from a low base, says Hardy.

It is what Potterton Commercial has always made and has always had a high market share.

I asked why. 'The only reason I can think of is that this has been a cold, hard winter and there have been a lot of difficulties in commercial properties, schools, places where the old cast-iron sectional boilers are located down a few steps in a basement. Buildings have limped along because of the recession but companies and local authorities cannot afford to be caught out next winter, so this increase will continue,' he adds cheerfully.

Technically better

And don't forget, he adds, the newer cast-iron boilers are better technically and can even be fitted with units which make them condensing. Further, different fuels can be used including bio fuels.

Last but not least is the launch later this year of the Eurocondense three, a floor-standing boiler with an ultra small footprint which will replace the previous model. The models will range up to 300 kW and eventually will go to 600 kW.

Well, this interview turned out differently. Hardy remains bullish for the year ahead, even if there is more recession to come. Baxi Commercial Division is ready for the future. And raring to go!