Since it was established two years ago, Ocon Construction has turned a few heads. The company says it aims to be the most ethical contractor in the UK and this year hopes to achieve a turnover of £130M. B&E talks toCommercial Director Bob Pringle to discover the philosophy behind the firm and the reasons for its rapid rise.

PARTNERING is a favourite topic for the construction industry, from contractors forming relationships with their suppliers to long-term deals with their clients. Ocon Construction claims it wants to take the concept a step further and introduce “true partnering” to the industry, which will go a lot deeper than the contractual level.

Ocon says it wants to develop human relationships and trust with its clients and customers. The company claims its overall objective will be to become the most ethical contractor in the country.

This might sound a bold claim, considering that the construction industry historically has not treated its suppliers as well as it could. Some cynics might say some companies make their money from withholding payments, and that companies’ profits are often decided as much in the courtroom than how much business they picked up over the year.

Ocon commercial director Bob Pringle says the key to the company’s work is paying on time. He says he wants to bring the lessons he learnt working with other companies to Ocon to develop a sounder and more sustainable way of doing business.

“I remember back in the old days that was how we used to make money,” he says. “We don’t need that for our business. The best way to do that is to pay people. We set things up so we’re paying people weekly or fortnightly.”

On the up

To look at Ocon’s balance sheets, ethical trading seems to have delivered a resounding success. The company was formed two years ago and turned over £30m in the first year and £95m last year. Pringle says the company expects a turnover of £130m this year and £150m the year after. This sounds like a phenomenal growth, although Pringle explains but Ocon had a head start, as it was formed to take on construction work from developer Opal.

He says Opal decided to set up a construction arm after bad experiences with its supply chain. “One of the reasons for setting up Ocon was we have suffered with builders delivering on time and to budget in the past,” he says. “The key to it initially was to get a builder to get more certainty in delivery. It meant having cost certainty without having to go to the tendering phase. We probably get onsite quicker as a contractor than Opal would have done working by itself and hiring its own contractor.”

A fair day’s pay?

Paying suppliers and subcontractors on time makes Ocon, unsurprisingly, an attractive company to work with. But Pringle says the company wants to build relationships over time based on trust and transparency.

“A lot of people want to work with us,” he says. “Very few have had a bad experience with us. From our point of view, I find it dismisses some of our fears that when they have worked with us for a while they are going to feel that they can put their prices up.”

Pringle says Ocon is willing to pay more to its suppliers if it means the company doesn’t have to worry about delivery. “We have got to give the market price to our suppliers, but delivery is also a big part of it,” he says. “We would rather pay more money to have more certainty. We want people who come to a scheme with solutions, not excesses that they can’t deliver.

“We have got to get that ethos through the supply chain.”

The construction industry pays a lot of lip service to environmental issues, but how much of this talk translated into positive action can be called into question when it comes down to paying more for products and services? Pringle says Ocon often has to rewrite the rule book to develop a greener approach to construction.

“It’s important for us that we move into the environmental construction market,” he says. “As a design and build contractor, we’re not always looking at ‘cheap is best’. We have got to balance the expenditure with the risk. It’s typical of the industry that it thinks it has always done it this way, so will carry on doing it the same way.”

Pringle says Ocon brought innovation to the construction site when it was only the second contractor to adopt Corus’ Corefast product on the £21m Birmingham One project. The 18-storey tower features a core made from a double layer of steel, which sandwiches a layer of concrete. The steel is manufactured offsite, which Corus says, helps to reduce onsite waste.

Familiarity breeds respect

Pringle says Ocon wants to make its suppliers feel involved with the company, which is one way to avoid having to expand the business to incorporate different trades to have peace of mind about delivery.

“Contractors are bringing trades inhouse so they can guarantee the delivery of those services,” Pringle says. “Partnering is the way to do that so those subcontractors can feel part of the business. Once you have worked on the tender, you won’t put it out to the market again.”

However, says Pringle, it isn’t always an easy task to find out if you’re doing things right. Rather than waiting for angry phonecalls from disgruntled suppliers, or to hear complaints from third parties, Ocon keeps a dialogue going with the companies it deals with.

The company sends out a regular questionnaire to its supply chain, asking companies if they feel involved with the project and with Ocon as a whole. The company also tries to find out what are its best and worst performing offices and asks in its questionnaire if suppliers were happy with responses Ocon’s regional offices, or were they paid on time.

“I would rather hear it from them than anyone else,” says Pringle. “I must say though, it’s annoying when we send questionnaires out to companies and we don’t hear anything back.”

An ethical employer?

When it comes to involving people in the business, top of the list, quite unsurprisingly, is Ocon’s own employees. “Training is one of the key ways we can get people to work to our ways, Pringle says. The guys who are coming in get an induction of our policies on how we do business.” He says the company often has to train its staff out of the working practices they picked up elsewhere in the construction industry and teach them a more ethical way of
working with the supply chain.

“How we want to do our business is important to our staff,” Pringle says. “People are coming after working with different contractors with a set way of thinking. There’s no point in trying to work better with the supply chain when your own people aren’t doing it right.”

Getting it right

A lot of the impetus to get its employees involved with the supply chain came from the nature of Ocon’s work. The company has been heavily involved in supplying student accommodation, which requires very tight deadlines, and a late-running project would leave universities stretched to house students.

However, Pringle says Ocon is looking to become more versatile and spread its business across different kinds of project.

“If all we ever do is student accommodation, all the work would finish in September,” he explains. “The whole point of building student accommodation is delivery.”

Ocon has spread itself out across three regional offices in the North West, Yorkshire and the Midlands. The company is also hoping to expand by tendering for a variety of contracts of different sizes.

Although Ocon favours contracts of more than £20m, it also has a specialist arm that works on contracts of £500,000 and upwards.

Pringle says the company, as a whole, would like to spread out the value of its tenders and hopes to gain experience in different areas of construction through working on different types of project. Ocon’s Yorkshire division, for example, is currently looking for smaller contracts after working mostly on £40m to £50m student accommodation projects. “The £1m and £2m contracts will move us into different sectors,” Pringle says. “They give us a bigger client base and exposes us to more consultants.”

Ocon is looking to expand on providing student accommodation and look for more work in the residential sector. The company is also looking for commercial and industrial contracts. If making sure all the company’s suppliers are paid on time is a tall order or not, only time will tell. Certainly, its meteoric rise hasn’t been without pitfalls. As a young company, Ocon has had troubles giving its customers peace of mind.

“One of the big issues is that we don’t have a trading history,” Pringle explains. “A lot of the industry wants it for their insurance histories. We provide a lot of that through our relationships with the supply chain.”And if Ocon does want to grow its business and then to expand into different sectors it will have to keep its supply chain happy.
Despite its first two years of rapid growth, Pringle says the company still has its feet planted firmly on the ground regarding plans for the future.

“I think we need to have a sustainable business that will react to change,” he says. “It’s not a short term goal. Anybody can turn over a fast buck, but that’s not the business we want.”

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