According to ‘The UK Plastics Industry: A Strategic Manufacturing Sector’ – a discussion document put together by the British Plastics Federation (BPF) last year to demonstrate the fundamental role of the plastics industry within UK manufacturing – the UK remains one of the top five processors of plastics in the EU, with the BFP estimating that 50 percent of all the plastics consumed in the UK are manufactured here. Furthermore, over 3,000 primary processors and 7,430 companies are working within the sector, employing approximately 180,000 people, which equates to seven percent of all employees within the UK manufacturing sector.
The BPF reports that these companies are widely dispersed across the country, and involved in supplying plastic products, components and materials to a wide range of sectors: from aerospace, automotive, and construction, to electrical, packaging and furniture, and the medical/healthcare, educational, military, marine and energy generation sectors in between. It suggests that if the manufacturing sector is expected to play an instrumental role in the UK’s post-recession economic recovery, greater investment in and promotion of the plastics industry will also be essential.
The report goes on to describe how the industry’s close ties with the UK’s world-class design sector remains one of its key strengths. A well-known example of the successful marriage between innovative design and plastic production is Trunki, the brand of ride-on children’s luggage manufactured by Magmatic Ltd that achieved national coverage after it appeared on the BBC2 reality TV show ‘Dragons Den’ in 2006. Although none of the ‘Dragons’ chose to invest in designer Rob Law’s concept, the product has gone on to win over 40 awards, as well as earning Rob an MBE for services to business, and is sold in around 96 countries in addition to further children’s travel product lines from Magmatic.
However, in spite of Magmatic’s success, the news has not been so positive for the company that manufactures Trunki, Inject Plastics Limited, which recently found itself in administration after encountering cash flow difficulties. SFP’s Daniel and Simon Plant, both licensed members of the Insolvency Practitioners’ Association, were appointed Joint Administrators to the beleaguered plastic manufacturers on November 23rd on account of the significant debts that it had accrued, including considerable sums owed to Her Majesty’s Revenue & Customs (HMRC) and trade creditors.
Simon Plant, Group Partner at SFP, believes that difficulties being experienced in certain quarters of the manufacturing industry and retail sectors have had a direct impact on firms like Inject Plastics: “When cash gets tight, and your backers become nervous, it can be tempting to do nothing and hope that the situation will improve, rather than taking swift action that can help turn a business around,” he says.
SFP worked closely with a boutique corporate finance firm, Shaw & Co, to conclude a sale of the Plymouth-based business in just under two weeks to Magmatic, the company for which Trunki creator Rob Law is managing director. SFP understands that the new business will become part of Magmatic – which last year had a turnover of over £6 million – and will be renamed Magma Moulding Ltd.
“We are happy in this case to have successfully achieved a sale of the business and assets as a going concern to a third party that has ensured the continuation of trade,” adds Simon, “and the workforce of almost 50 people at Inject Plastics remains employed.”