Energy Efficiency : Weathering the storm

Contributing Editor Steed Webzell speaks with Nigel Atherton, Managing Director of XYZ Machine Tools, about the company’s impressive energy efficiency initiatives and general outlook for 2023

All businesses are under pressure to reduce their energy bills and fulfil their climate-change obligations. XYZ Machine Tools, one of the UK’s largest suppliers of CNC and manual milling machines and lathes, is no different. However, the company is ahead of the game thanks to a shrewd management decision taken around 8 years ago.

“Even back then our gas bill had exceeded £25,000 a year and, because we were building a 25,000 ft² extension at the time, I knew it would likely climb a further 40% once complete,” explains Managing Director Nigel Atherton.

While contemplating the best course of action, Mr Atherton’s finance director informed him that the company had a growing problem regarding the amount of wood going to landfill as a result of the pallets upon which its machines arrive.

“I was blissfully unaware that we were paying approximately £25,000 a year in landfill taxes and a further £25,000 in haulage just to put 100 tons of wood a year in the ground,” says Mr Atherton. “To try and address the issue we starting advertising the wood for sale, but there were no takers. We subsequently advertised it free to anyone prepared to collect, but still no response. Then we had a bright idea of how we could kill two birds with one stone.”

That idea centred on a £100,000 investment in a Froling TX200 250 kW woodchip biomass boiler, along with the associated radiators, fans and hot-water storage equipment. To feed the biomass boiler, XYZ Machine Tools invested a further £150,000 in a high-performance Untha wood chipper.

“It was one of our best-ever decisions because it paid for itself quickly and continues to save us a considerable sum every year,” reports Mr Atherton. “We have no landfill taxes, no haulage costs and we cut a considerable chunk from our carbon footprint. Furthermore, our annual gas consumption today is far lower, although it probably still costs us around £10,000 due to soaring prices. Luckily, we get a rebate on the energy saved by our biomass system to the tune of around £6000 a year courtesy of the Government’s Non-Domestic Renewable Heat Incentive scheme [now closed to new applicants].”

With the gas situation firmly under control, Mr Atherton is now turning his attention to electricity, the cost of which is currently very high due to global issues influencing prices.

“For this reason we’re now in the process of considering solar panels for our roof space,” he says. “We’re doing the sums to make sure the panels will pay for themselves relatively quickly and start saving us money. I’m like any other business person, I like to make savings. Another option could be a wind turbine. It always seems quite windy here on the Devon-Somerset border, so maybe we could tap into that natural resource, again depending on the return on investment.”

Proactive and sustainable investments are helping XYZ Machine Tools to build on its already impressive business performance. The period from May to November 2022 was the company’s most profitable ever. And although sales understandably slowed a little in December and January, the company is highly positive about 2023.

“I’m optimistic as our pipeline of enquiries looks very strong, from a diverse range of industries that include general subcontracting, machine building, tool manufacturing, education, electronics, aerospace and theatre/film,” says Mr Atherton. “People assume we don’t supply to prestige sectors such aerospace, but we’re an approved supplier to some of the UK’s biggest aerospace OEMs. In addition, we currently have £5 million worth of orders for machines currently in build that we haven’t invoiced yet. I think our profitability this year [1 May 2022 to 30 April 2023] will be the best in our history.”

XYZ Machine Tools is also confident that the February opening of its first official European subsidiary (in Poland) will provide a further important contribution.

“Until now we’ve used a distributor model in Europe, so it will be interesting to see if this change of strategy pays off,” says Mr Atherton. “XYZ Poland will attend their first exhibition, STOM-TOOL, a major national show in Kielce, on 28-31 March. This should be a good launch pad and help open what I expect to be quite a strong market for us.”