Buyers Express Early Interest in TyreGenics

The administrator for TyreGenics appears confident that a buyer for the cryogenic tyre recycling operation could be found within a matter of months. The administrator said it has been encouraged by initial interest from potential buyers, and believe a sale could take place before the six-month administration period is complete should the Baglan site be purchased as a going concern.

TyreGenics went into administration on January 15 following what administrator Begbies Traynor has described as a “sudden contraction” in the market for rubber sports surfaces, the primary end-market for the rubber crumb processed at the facility. According to Begbies Traynor partner Julian Pitts, the suddenness of the market contraction “meant the company has been unable to capitalise on the progress it had been making in new markets.” Scrap tyre processing at the South Wales based facility originally ceased in November 2008, the plan being to refurbish and upgrade the plant before resuming full-scale production in March 2009. During the facility’s downtime period, however, demand fell swiftly.

“Although the company operates in a niche market within the recycling industry, the plant was set up at a substantial capital expense, which combined with its unique nature and capabilities, has created encouraging early interest,” Pitts added. “We are optimistic that the plant will be sold for continued operation in South Wales, which should save up to 20 local jobs.”