Last year, FSI Stump Cutters announced a strategic expansion into the UK market from 2024. The family-owned Danish company wants to strengthen its market position and provide a streamlined, localised service to customers. Management is already predicting major growth.
They have been a prominent name in the stump grinding market in the UK for more than a decade. In September 2023, FSI Stump Cutters decided to establish a subsidiary of the Danish manufacturing company in the UK. A strategic decision to facilitate new opportunities for growth through a closer connection with the retailer network in the UK.
“The UK is an important market for us, with a strong focus on tree care, gardens and parks in general. There is a lot of untapped potential here. That’s why we’ve decided to strengthen our position locally and increase the level of support and expertise for our retailers throughout the UK from January 2024,” says Managing Director Kim Schmidt.
With the new set-up in the UK, FSI Stump Cutters has a local sales director to manage the network of retailers. At the same time, the head office in Denmark is moving closer with direct dialogue to retailers and end users.
A niche product on the market
The story of FSI Stump Cutters begins when Henning Schmidt and a French wholesaler recognised a gap in the market around the turn of the millennium.
Stump grinders are a niche product. The competitors are primarily American products that don’t really fit European standards. Particularly in the UK, where there are a lot of terraced houses, it is difficult to access the back garden, as the machines must enter through the garden gate or the house itself to get out into the garden.
In 2002, FSI Stump Cutters entered the European market with far more compact machines than ever before. From day one, the company became an export company with niche products. Initially, the products were sold in France via the French wholesaler, and gradually importers from other countries were added.
Today, FSI Stump Cutters has sales and marketing partners on four continents, but is particularly strong in Europe, where the main markets are Germany, England and France.
Brexit – a minor bump in the road
When Brexit came into effect in 2021, heralding new times for trade between the countries, FSI Stump Cutters had a trading partner in England. At the time, the UK partner was responsible for imports. But the change still raised eyebrows back home in Denmark.
“We had a lot of concerns leading up to Brexit. There were also challenges in the beginning because we – like the authorities and everyone else – had to learn as we went along. We ship large machinery to the UK, so it was a question of whether the freight forwarders knew how to interpret the goods. It was a hassle, but not as bad as we had feared once the systems were aligned,” says Kim Schmidt.
Something FSI Stump Cutters had also feared was a downturn in the market after Brexit. However, they were helped by the Covid crisis, which boosted construction and therefore gave the company some good financial years in both 2021 and 2022.
UK subsidiary – a necessary evil
When FSI Stump Cutters decides in 2023 to have more of a local presence, a UK subsidiary becomes a necessity to get goods into the UK.
“England is the only place we have opened a subsidiary. Establishing subsidiaries in our primary markets was not in our business plan. So it wasn’t done willingly. It’s hard and demands a lot from the head office in Denmark. But it was a necessary evil, which has had a decidedly positive outcome,” says Kim Schmidt.
Today, distribution still runs from Denmark as a kind of dropshipping. However, the long-term intention is for FSI Stump Cutters to establish a physical warehouse in England with spare parts.
“Right now, we have a trailer with demo machines and accept that in some cases we lose money on an order. For example, when a small spare part needs to be shipped from Denmark. But we do it to give customers the service they deserve and remind ourselves to look at the bigger picture. When we have more insight into the business and day-to-day operations, it allows us to assess where we need to step up our efforts,” says Kim Schmidt.
Great expectations
FSI Stump Cutters is in a favourable position because the company already has a well-established name in the UK. With an official company start-up in the UK from January 2024, the management expects at least a doubling of turnover within two years.
“Already now, we can clearly see that our presence is making a difference. We have greater ownership of the communication that is sent out. And we have greater ownership of the quality,” says Kim Schmidt.
Since FSI Stump Cutters has a physical product that needs to be serviced, we are reliant on having a service network through our retailers. In conjunction with establishing a presence in the UK, FSI Stump Cutters has also travelled extensively around the UK to visit previous and potential dealers. At the same time, an English telephone number has been created which connects to the office in Denmark, so that end customers also experience a greater presence.
“A year ago, we never spoke to an end customer in the UK unless there was a major breakdown. Today, we talk to them about everything. Of course, it increases the workload, but it also provides much more feedback and input than before. And we get nothing but positive feedback. Our dealers and end users are very positive about the fact that we are closer. There are still challenges to overcome and new routines to learn. But the positive outcomes often outweigh the challenges that have been encountered along the way.”
3 tips from Kim Schmidt
Managing Director Kim Schmidt, who is responsible for business development, sales and marketing, offers three tips for entering the UK market.
1) Research the market
Research the market and identify the specific need. Research the pros and cons of setting up locally. For example, we needed to build a network of dealers with a physical presence because we have products that need to be serviced.
2) Ask for help
It’s a completely different way of doing business in the UK than in Denmark. Therefore, running a company is a huge, steep learning curve. Talk to people you know who have been in a similar situation and learn from their experiences.
If you have a Danish company, talk to your accountant. They may be a member of an international network of accountants and have references that can be useful.
Reach out to someone like CPIE Services. We sought out CPIE Services ourselves and have had everything we ask for answered and we get great answers. It’s nice to have someone locally who understands that we don’t know everything about running a business in the UK. They take that into account.
Could you do it without CPIE Services? Yes, I suppose you could, but it takes a lot of time. We couldn’t have done it without them.
3) Be patient – plan well in advance
We have been surprised that the English system seems so cumbersome. There are a lot of forms to fill out. Things take time and the system is not as agile as we know it from Denmark, where you just log in with MitID, press a few buttons, and then you have a licence or registration relatively quickly. You must be prepared for the administrative side of the business to work in a different way.
About FSI Stump Cutters
FSI Stump Cutters sells root and stump grinders worldwide and is by far the largest manufacturer in Europe.
The company was born out of a growing demand in the market for high-quality stump grinders that are built for the demands and tasks that users face when they need to remove tree stumps in a fast, environmentally friendly and economically sensible way.
- FSI Stump Cutters was founded in Denmark in 2002.
- English subsidiary founded in 2023.
- Today, the company is 100% family-owned and operated by Henning Schmidt and his sons Kim and Michael Schmidt.
- The company designs, develops and manufactures stump grinders for the professional market from production facilities in Ølholm near Vejle.
- Approximately 90 per cent of turnover comes from export sales.
Read more about FSI Stump Cutters
