TyreGenics Enters Administration

Some 18 months after opening, the TyreGenics recycling joint venture in Baglan, South Wales, has been placed into administration. The £4 million, 80 tonne per day capacity facility was developed by major shareholder Credential Environmental along with BOC, FieldTurf Tarkett and RTI Cryogenics, and began operation in July 2007. From the outset it was announced that FieldTurf had committed to purchasing 70 per cent of output for the first three years, yet in spite of this assured market the facility has been affected by dwindling demand.

This is not the first bump in the road encountered by TyreGenics – the plant, which uses a cryogenic process to freeze tyres with liquid nitrogen before breaking them into crumbs, announced in early December 2008 it had laid off 14 employees due to ongoing problems with essential equipment. At the time TyreGenics said the workers had not been made permanently redundant and expected they’d be back at their jobs by February or March 2009. “The investors in TyreGenics, who agreed unanimously on the action have invested a further significant six-figure sum to finance the costs of the plant repairs and production down-time, in order to provide a robust business that can re-employ the staff and continue to grow once these production failures have been rectified,” commented TyreGenics managing director Nick Wyatt.

However, it is not only the future of these jobs that now seems uncertain. Business rescue, recovery and restructuring specialist Begbies Traynor has been appointed joint administrator of TyreGenics, and the jobs of the plant’s remaining 20 employees hang in the balance. “The sudden nature of the contraction in the company’s key market has meant the company has been unable to capitalise on the progress it had been making in new markets,” said Begbies Traynor partner Julian Pitts in the South Wales Evening Post. “The sudden nature of the contraction in the company’s key market has meant the company has been unable to capitalise on the progress it had been making in new markets.

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