Rapid Envelopes appointed Mark Malone and W John Kelly of Birmingham-based insolvency practitioner Begbies Traynor on 8 March as joint administrators.
The deal went through at the end of April for an undisclosed sum and the plant has been up and running since the end of May, producing bespoke flexo envelopes, adding 300 million envelopes annually to Somerset-based Blake’s current 2 billion total and an additional 10% of turnover.
Blake managing director Michael Barter said he had been aware prior to its administration that Rapid was having some difficulties and that 60-staff Blake had altered its strategy to include UK manufacturing since Brexit. He said he was now giving “serious consideration” to other acquisitions and that there were several potentials on the cards.
“You have to remember that uncoated white paper, which the majority of our envelopes are made from, comes from Europe, so one can’t escape the effects of Brexit on currency,” said Barter.
“Because we have strong liquidity and no borrowings, we can seize opportunities when they become available and that gives us an advantageous position as it does in any company with strong cash reserves.
“We are predominantly a plain stock supplier, but this enables us to provide flexo that fits market demands. Several years ago, a flexo order would be three weeks, which is fine when you're riding on the back of European converters, but the market has changed and demands are greater and now flexo deliveries are within three days.
“Unless we did something like bringing UK manufacturing back again the business would be in jeopardy.”
Barter believes all 22 of Rapid’s staff at time of administration were made redundant. There are now fewer than 10 newly recruited local staff at the plant, operating three W&D 102 reel-fed envelope machines, along with finishing equipment.
In its statement of affairs dated 22 May 2017, Rapid had book debts of £627,148. The company had an estimated deficiency regarding creditors of £553,388.51 and had £240,478.44 in assets available to unsecured creditors. Its highest owed creditor out of 66 was Northampton-based Tavistock Paper Sales, at £351,467.06.
Barter said the company didn’t have a very strong order book as had been going through difficulty for a period.
“We are dealing with the people they were dealing with anyway,” he added.
“There is a resurgence in UK-based manufacturing, which is encouraging. There are some excellent people that have done this trade for years and years and if they were forced to go out of the industry the skillsets would be lost.”
£24m-turnover Blake currently operates with 14 key suppliers across Europe and has its head office in Yeovil, with a separate warehouse nearby. This year it has started rolling out its hubs of excellence in strategic locations across the UK, with the most recent one opening in Manchester.