Flexible packaging manufacturers Gelpack Excelsior and Gelpack Industrial have fallen into administration, resulting in 175 redundancies.
Chris Pole and Mark Orton from KPMG were appointed joint administrators to the two companies on 3 August.
The administrators said steps are being taken to effect an orderly wind-down of the Hereford-based businesses after they were unable to obtain funding to support trading. A skeleton staff has been retained for the time being to help fulfil outstanding orders and assist with the wind-down process.
KPMG partner and joint administrator Orton said: “We are in talks with a number of interested parties, and over the coming days and weeks, our principal focus is seeking a buyer for some or all of the businesses’ assets.
“However, without funding for the businesses, Gelpack Industrial and Gelpack Excelsior were unable to continue trading. We will now work to wind down the businesses, providing support for the employees and exploring options to realise assets.”
Gelpack Excelsior was created in 1988 through the merger of Excelsior Plastics and Gelpack Industrial.
In the early nineties there were acquisitions of Optiplas and PLIP, which were renamed Gelpack Recycling.
These companies were merged in 2000 to become Gelpack Industrial.The subsequent acquisition of Gelplas in 2004, which was merged into the group, created one of the largest privately-owned polyethylene flexible packaging manufacturers in the UK.
The Gelpack businesses primarily focus on the development and production of high performance films, bags, liners and sacks for a range of industrial sectors.
In its last filed accounts, for the year ended 31 December 2015, Gelpack Excelsior recorded a turnover of £32.3m – up from £30.9m at the end of 2014 – and profits after tax of £626,000.
Gelpack Industrial achieved a turnover of £17.3m in the same period – up from £16m at the end of 2014 – but made a loss after tax of £1.38m.
A note on Gelpack Industrial’s accounts warned of a risk that the company could enter solvency issues in the medium-to-long term due to cash flow issues and the lack of profitability.