41-year-old manufacturing business collapses, despite $14 million turnover

A manufacturing business founded in 1973 and turning over $14 million has collapsed, with administrators blaming tough industry conditions.

Hallam Manufacturing was placed in administration on January 24, with Stephen Michell and Clyde White appointed from PCI Partners.

The business manufactured a variety of products from truck toolboxes and trolleys to display units and custom cabinets.

A number of established manufacturing businesses collapsed under financial pressures in 2013, and the Australian Industry Group Performance of Manufacturing Index remained in negative territory for most of 2013.

Michell told SmartCompany the business was placed in administration because of a cash flow shortage.

“It happened because of general market conditions, which are fairly tough,” he says.

“Unsecured creditors are owed around $1.9 million.”

Currently, the business’s trading is “very limited” and the administrators have had to stand down some of its 70 employees.

“Some have been stood down without pay at this stage while we analyse the ongoing trading of the business,” Michell says.

“The majority of the creditors are mostly steel companies and trade suppliers.”

The latest Ai Group PMI indicated the sector remains in contraction, although conditions were broadly unchanged in December.

Ai Group chief executive Innes Willox said in a statement, “2013 ended without much cheer for many Australian manufacturers.”

“The gains in September and October were reversed in the closing months of the year. New orders and employment fell further behind in December, casting doubt over whether the start of 2014 will usher in a more positive outlook for manufacturing activity,” he said.

The administrators of Hallam Manufacturing are looking at a sale of the business.

“We are now advertising for the sale of the company. We’ve had a little bit of interest related to it, but the ads don’t hit the paper until Friday and Saturday,” Michell says.

“It’s just a very tough environment for manufacturers at the moment.”