Buyers for the cryogenic tyre recycler TyreGenics, which went into administration in January, could be found within months, a company spokesman has said. The recycler was forced into administration, appointing administrator Begbies Traynor, on 15 January after facing a perfect storm of technical difficulties and an unprecedented market downturn.
When MRW spoke to commercial director Grant Lloyd in September 2008, he was positive about the future of the plant, emphasising projected growth in new product markets and technical developments at the facility.
Explaining the latest situation a company spokesman said: When the plant first opened in July 2007 it was working well. But gradually a technical issue developed with the tyre crumb drying mechanism. To rectify this problem it was decided the entire plant needed to be upgraded because it was not commercially viable [as it was].
Everyone committed to investing six figures sums to upgrade the plant. But this meant the facility had to be shut down for three months and staff laid-off, which happened in November last year.
It was just after this decision that the companys main customer, and venture partner FieldTurf, suffered a 75 per cent drop in demand for its sports surfaces product. This put the directors in a position where they had to go into administration.
He said that higher costs coupled with the huge fall in demand from the companys core customer had created a perfect storm situation.
The spokesman and the administrator were both encouraged by early interest from buyers in the company. The spokesman said: If theres a going concern interest, a sale could happen very quickly [before the six month administration period is complete].
Begbies Traynor partner Julian Pitts added: The sudden nature of the contraction in the companys key market has meant the company has been unable to capitalise on the progress it had been making in new markets.
We are optimistic that the plant will be sold for continued operation in South Wales, which should save up to 20 local jobs.
Image: (L-R) TyreGenics managing director Nick Wyatt, director Simon Baggott and Credential Environmental and TyreGenics chairman Andy Hinton at the launch of the new plant in July 2007