Was it Brexit or losing two major accounts that caused the crash?

There are conflicting narratives over the reason the foil and laminate maker API Group have called in the administrators this week.

Writing for the website Print Week Rhys Handley reported that the site in Scotland at Livingston had closed on Friday due to Brexit leaving 132 workers out of a job. His source in Edinburgh Live said the work would be switched by the USA parent company Steel Partners to a German firm called Dunsmore which they own.

He wrote: “An anonymous source told Printweek, however, that the closures had ‘nothing to do with Brexit’ and was rather because of the loss of two major contracts with BAT Tobacco and Johnnie Walker Black Label whisky. The source described the UK operations as being ‘dumped’ by Steel Partners.”

The API group has closed its three UK sites in Sheffield, Livingston and Stockport with Ernst & Young (EY), called in as administrators in order to find a buyer or to liquidate the company including API Laminates Ltd and API Foils Holdings Ltd according to Print Week.

Rhys Handley reported: “API was until recently observed to be highly acquisitive and focused on investment, having acquired Dutch company Amsterdam Metallized Products and Hazen Paper Company’s satellite paperboard lamination business in Osgood, Indiana in 2016 as well as a £500,000 kit investment in 2017.

“Around this time, the company turned over circa £121m from its Stockport headquarters. Its most recent accounts, up to 31 December 2018, reported an operating loss of £6.7m and 590 staff.”

ICSM Credit’s Ian Carrotte said the decision had come out of the blue and was as much to do with a parent company consolidating work in one centre in order to cut costs. He said: “Losing major accounts is a blow but usually it means a scaling back of an operation with some redundancies. To close a company and call in the administrators suggests there’s something else going on.”

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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk