Fresh hopes of saving 360 plastics firm jobs

Oct 19 2007 by Andrew Mernin, The Journal

THE hopes of saving 360 jobs at a troubled plastics manufacturer have risen with a number of investors circling the firm just days after it plunged into receivership.

Last week The Journal revealed that Hartlepool-based Stadium Plastics had called in the receivers after enduring heavy losses at its plant on the Tofts Farm Industrial Estate.

Receivers charged with saving the fate of the firm, which makes moulded parts mainly for the car industry, said the business had generated investor interest despite the fact that it had just gone on the market.

Receivers Grant Thornton also said they were committed to finding a UK-based buyer to avoid the business being shipped overseas.

Administrative receiver Joe McLean, said: “We are still at quite an early stage in the process of finding a buyer but the first three or four days have been useful in sense that we’ve stabilised the business and the response of the work force has been great. They’ve all buckled down and it hasn’t interfered with orders. We advertised the company in the Financial Times this week and we’ve already had a few shows of interest.”

Stadium, which will operate as normal while a buyer is sought, saw its pre-tax profits plummet from £400,000 in 2004 to a loss of £667,000 in 2005, with this figure remaining in the red last year, albeit climbing to a loss of £256,000.

It has blamed a decline in the amount customers are prepared to pay for its products for a troubled period which saw the firm’s turnover drop from around £33m in 2004 to £31m last year and its tangible assets fall from £4.9m to £3.8m in the same period. Earlier this week Grant Thornton met representatives from regional development agency One NorthEast to discuss ways of securing the company’s future in the region.

One NorthEast director of business and industry Ian Williams said: “One NorthEast and our partners at Hartlepool Borough Council have met with receivers Grant Thornton to look at what options are available.

“Grant Thornton are hopeful a buyer can be found and we will continue to support them over the coming weeks.”

Stadium’s tumble into receivership was another bitter blow in a miserable month for the region’s manufacturing industry. Last week US microchip manufacturer Atmel announced it would close its North Tyneside factory in the new year, with the loss of 600 jobs.

Meanwhile bosses at Electrolux’s household cooker factory in Spennymoor announced this month that they had a matter of weeks to save the jobs of its 500 workers while the Swedish firm runs an investigation into the viability of the plant.

Stadium Plastics was part of Hartlepool manufacturing giant Stadium Group plc until 2002 when it was sold off to a management buy-in team in a deal worth more than £10m.

The subsidiary was sold to plastics expert Jeremy Stoke, who was backed by cash from Lloyds TSB.

With a history in the region spanning over seven decades, Stadium was an early pioneer of injection moulding in the 1930s and its major customers have included Nissan and BMW.