Investing in the circular economy – a topic high on the agenda of governments around the world – is paying dividends for two forward-thinking Scottish companies.

Though separated by 308 miles of road and more than six hours of travelling time, north-east Scotland-based sustainable biomass supplier and timber products specialist GMG Energy and the Dumfries & Galloway-based Paul Fergusson haulage company have found a productive way of working together – while boosting both their local economies.

While Malcolm Morrison, Director of GMG Energy, has his timber business in far-north Sutherland, he lives just two miles away from Paul Ferguson in Thornhill, Dumfriesshire, though the two businessmen had never met until a year and a half ago.

Then a mutual friend, aware that Paul's business of delivering LPG gas tanks took him all over the country, introduced the entrepreneurs and the issues of distance-to-market led to a tactical partnership benefitting both companies.

Malcolm Morrison said: "The circular economy is a hot topic at the moment – there is even a Scottish Government Minister assigned to its promotion – but in practice it includes cutting out waste, using local suppliers and rethinking the way we use goods and services.

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"Paul was delivering to the North of Scotland and his vehicles were often returning empty, since sourcing appropriately-timed return loads can be problematic. At the same time, I was looking to widen market share.

"So, when Paul has capacity, he can undertake deliveries locally around my business's Halladale area and transport loads of my products to customers in central and southern Scotland, allowing him to group more work together and make deliveries viable."

Paul Fergusson said: "Since I started liaising with Malcolm, it has been more than beneficial for everyone. It's much better for the environment, since I am not running an empty lorry for six hours and it saves hugely on costs.

"There are not a lot of places in north where you can get loads back south and Malcolm's contacts have been invaluable. Companies across the north are seeking to reduce their transport spend by working with enterprises closer to their base of operations.

"One major knock-on benefit is that it has allowed me to network with other local companies and, because I am now so busy in the area, I am now seriously considering basing a lorry permanently in the region and employing a driver in Inverness to service demand."

GMG Energy has already proved its commitment to working where possible with local enterprises by backing small quality manufacturer Orkney Pallets as it builds its business on the islands and beyond.

It is now supplying regular loads of treated timber to the St Ola-based company, substantially reducing its supply chain mileage as well as guaranteeing security of supply for the foreseeable future.

GMG Energy, which originated on a farm in the Strath of Halladale in Sutherland, made a strategic purchase of a substantial swathe of forest in the far north-east of Scotland earlier this year to protect future supply and increase its resilience to market shocks.

It processes in the region of 2,000 tonnes of timber a year, and replaces every tree it harvests, with recent replenishment activity far exceeding industry-standard one-for-one targets.

At well as the forestry purchase, GMG Energy has invested £150,000 in state-of-the-art sawmill equipment which takes its larger timber and processes it into posts, rail, cladding and purlins, or structural roof members.

It also plans a spend of in the region of £100,000 on timber treatment equipment which will open up new markets among construction companies and farm businesses which require treated and stress-tested products.