Published on 26 - November - 2009
Exclusive: Chempak saved from liquidationAn mbo led by managing director John Richardson has saved fertiliser supplier Chempak Products after its parent company went into liquidation earlier this month.
Mr Richardson, md of Chempak's parent company Pre-Packed Products, confirmed to DIY Week that Pre-Packed Products is now in a state of liquidation having been placed in administration two weeks ago. Between 10 and 12 jobs have been lost as a result.
However, the Chempak part of the business, along with a mail order business called Garden Direct, have been saved in a management buyout lead by Mr Richardson.
He told DIY Week: "12 months ago we lost a major high street customer. Due to price increases on raw materials we were no longer able to make the rrp printed on the bag. The retailer wouldn't help us out and we were left with 12 months' worth of their packaging. We tried to trade out of it but we just couldn't do it. It became apparent that it [the mbo] was the only way of saving something from the ashes."
Me Richardson explained that the company had a piece of commercial property that it tried to sell, but without success. "Now we've lost the overhead connected with the building, the future looks quite promising."
However, the company will be changing its strategy to help it survive in the current market. "We'll need to fundamentally change what we're doing," Mr Richardson told DIY Week. "We're going to change our route to market, but we'll be making another statement prior to Christmas." However, the retention of the mail order side of the business may give some indication as to what the new business strategy is.
There has been some disruption over recent weeks, said Mr Richardson, and customers may have had trouble getting through on the phones, but the phones are now back on and service has resumed with everything hopefully back to normal in the next "couple of weeks".
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