Published: Thursday, 9th October, 2008 09:25
Jobs in jeopardy as Dalgety Bay firm takes hit
By Ally McRoberts
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A TOTAL of 153 jobs are under threat after a Dalgety Bay electronics manufacturing firm announced it was going into administration.
Workers at Cemtron were told the bad news on Tuesday but there are no redundancies “at the moment” while there are moves to sell the business as a going concern.
It’s yet another blow for the Fife manufacturing sector which has been reeling in recent years after the closures in West Fife of Solectron and Lexmark.
Cemtron blamed trading losses, cash flow and funding difficulties for plunging into administration but it will continue trading as a buyer is sought.
Joint administrator Tom Maclennan, of Tenon Recovery, said, “Despite the current problems affecting the company, we think it presents a good opportunity for an acquisition or for another business looking to expand into the growing electronic manufacturing service sector.”
Cemtron was founded in January 2000 and the current management team acquired it through a management buy-out in October 2005.
The firm, which has three sites in Fife including their main base in Hillend Industrial Park, has a turnover of around £16 million.
Labour MSP John Park told the Press that Cemtron hit trouble when HBOS called in a loan.
“I know from speaking to the management that they offered a significant amount of money to HBOS to improve their overdraft position, a proposal which the bank would not accept,” he said.
“My thoughts are with the workforce at this time and I’m happy to meet with them to see how I can help in any way.”
He added, “This is a company who have been very successful in a globally competitive market and I’m hopeful that a buyer can be found and the jobs saved, which is the most important factor.”
And he claimed Fife Council’s refusal to allow the company to move to the empty Lexmark factory in January had “threatened” the jobs.
He said, “The lacklustre response from Fife Council officials during the planning process in recognising the economic development aspect, and the decisions of Lib Dem and SNP councillors, has threatened over 150 quality manufacturing jobs.
One Cemtron worker, who asked not to be named, told the Press, “We got called in to a meeting at 4 o’clock on Tuesday and (managing director) Paul Brown read a statement and was very distraught about the news that he would be handing over the company to the administrators.
“In the current climate we were kind of expecting it.
“We knew the company was struggling because our rubbish was not being uplifted and each of the work vans stopped getting a fuel card – that was stopped due to the cash flow problem.
“A woman got a £100 cheque from the company for good service and when she took it to the bank it bounced.
“That’s the reward you get for your service. To run a company like that is crazy.”
He continued, “A lot of workers came here from Solectron, and the same thing’s happening all over again.
“I’ve a young family, and it looks like unemployment will grow so it’s putting a lot of us in a bit of a predicament.
“We didn’t know we were involved with HBOS until a few weeks ago.
“Apparently they forward us an advance from month to month which has kept the company going.”
Cemtron had applied to Fife Council last year for planning permission for their site in Hillend Industrial Park to be developed for housing so that they could move into the vacant Lexmark building in Rosyth.
They said this would allow them to increase sales to £50 million by 2012 and expand their workforce by another 125 people.
However, the site was zoned for employment use only and was not identified as part of the housing land allocation.
This was the basis of a decision by councillors to refuse the bid in January.
A spokeswoman for Cemtron told the Press after the decision, “There’s a good future for Cemtron, whether or not that’s in Fife is unsure at this time.”
Mr Park said, “While there is a clear global aspect to this problem, we have powers here in Fife to help companies improve their competitive position.
“That is why one of the most worrying aspects of this development has been the inability of Fife Council to facilitate a move into the former Lexmark site in Rosyth for Cemtron.
“If they had been able to release capital from their existing site the financial position of the company would have been much, much stronger today.”
Cemtron specialises in a complete end-to-end electronic manufacturing service and most of their produce is for export.
The company also has a supply chain office in Hong Kong and a strategic relationship in China.
Mr Maclennan added, “Cemtron is a highly regarded specialist contract electronic manufacturing service business with a very good client base and a skilled workforce.
“The company has grown steadily, has good penetration into its markets, a strong order book and considerable potential for further growth.”
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