Liquidators say Ballarat manufacturing company Ceramet had been unprofitable for more than five years before it went into liquidation last week.
Greg Andrews from GS Andrews Advisory told The Courier management strategies to improve profit had failed.
“The company’s closure is probably a bit of a hangover from the demise of the Australian car industry, however the company has been unprofitable over the approximately five or six years the current owners have had it,” he said.
“The owners had no choice but to call a halt and place the company into liquidation after management decisions or strategies they hoped would improve profitability failed and the losses were continuing.
“Because of the forthcoming Christmas break and various other aspects and requirements for cash, it was decided to put the company into liquidation. The family have put in a huge amount of money to maintain operations for the last five or six years and are by far the largest creditor.”
Ceramet’s closure comes after the company received $71,000 in state government funding as part of the Automotive Supply chain Transition Program.
The funding was to develop and implement a plan for transition of the company and to supply transition services to adapt to the decline in the automotive industry.
Mr Andrews said the use of the grants would be investigated as part of the liquidation process.
“It is a long way to go before we can make comments on anything relating to grants,” he said.
Mr Andrews said 10 staff had been re-employed to complete outstanding work for customers whose orders had not yet been fulfilled.
“We are trying to look after the interests of customers, many of who are reliant on the products that we produce and we don’t want to leave them short,” he said.
The partner of a former employee says it is not a surprise to any of the staff Ceramet has gone into liquidation, but all accept the decline in the automotive and manufacturing industries.
“We have always been told we haven’t been making money but we will be. The message from the general manager always was we will do well in the future,” they said.
At least one employee has said they will not return to work in manufacturing in Ballarat.
The 37 staff Ceramet employed will be looking for new jobs this Christmas.
Mr Andrews said parties have expressed interest in the business and the equipment.
EARLIER, SUNDAY 12pm:
The ripple effects of the decline in Australia’s car manufacturing industry are being felt as a tidal wave in Ballarat after metal pressing company Ceramet went into liquidation last week.
A source who wished to remain anonymous told The Courier 30 staff would lose their jobs after liquidators were appointed on Wednesday.
Ceramet’s technical and commercial manager Stephen Casey declined to comment to The Courier.
Australian Securities and Investment Commission (ASIC) records show a general meeting was held on Wednesday last week, with Gregory Stuart Andrews and Andrew Juzva being appointed liquidators.
Ceramet’s closure comes after the company received a share in more than half a million dollars of state government funding designed to buffer businesses from the demise of Victoria’s automotive manufacturing industry in 2017.
In 2016, the Delacombe-based company received a $16,000 grant as part of the same Automotive Supply Chain Transition Program.
Ceramet management staff had previously told The Courier staff were working hard to ensure the business was sustainable following the wind-down of the car manufacturing industry in Australia.
In 2016, the company said it had cut its dependence on the automotive industry by more than half and tripled its supply to overseas markets.
The metal fabricators had increased their exports from between 5 and 8 per cent to more than 20 per cent from 2012 to 2016.
“We’ve been in survival mode since the Global Financial Crisis,” general manager Michael Doolan told The Courier in 2016.
“(Before) it was probably 85, 90 per cent automotive and 70 per cent of that was Holden,” he had previously said.
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Mr Casey had said at the time the company was diversifying to ensure self sufficiency.
In addition to a focus on the automotive industry, Ceramet supplied metal parts to the electrical, solar, mining, defence, medical and building industries.
Its website states its precision parts, metal pressings and customised tools were exported to countries around the world, including Thailand, South Africa, Brazil, USA, Mexico, Hungary, Spain and Malaysia.
The company was a finalist at the Ballarat Business Excellence Awards in manufacturing in 2017.
When Ceramet opened its doors in Ballarat in 2005, the technology was ground-breaking. The metal and ceramic injection moulding facility replaced the far more expensive process of machined metals.