Partner Article

MBO saves 110 jobs

OVER 100 jobs at a North East manufacturer have been saved following a management buyout.

Cosmetic packaging maker GEKA Manufacturing, based in Stanley, County Durham, has been rescued from the brink of extinction thanks to a current director and a former board member of the firm.

Managing Director Raymond Oliver led the team which has effectively saved 110 jobs after a six-month fight to keep the factory open.

The bid was aided by several organisations in the North East’s business support network, headed up by the County Durham Development Company (CDDC).

GEKA Manufacturing, which will shortly be renamed SONE Products Ltd, was originally part of the German GEKA Brush GmbH company.

The parent firm decided to restructure its manufacturing facilities in Europe, and as a result the plant at the Tanfield Lea Industrial Estate, in operation for more than a quarter of a century, was under threat of closure.

Mr Oliver said: “Our factory was operating profitably, with a dedicated workforce behind it but our parent company wanted to consolidate its operations into one factory in Germany. This made the decision for a management buyout a good option. In the present economic and political climate the business plan was a complex exercise. We had to continually amend and in the last few weeks had to alter the plan due to the current uncertainty in the external environment.”

Mr Oliver and his fellow director Walter Schmidt plan to continue working with their former parent company for at least the next three years, as well as developing new customers of their own.

Stewart Watkins, Managing Director of CDDC, said: “GEKA Manufacturing will now be able to continue as an independent company after being part of the county’s manufacturing community since 1981. It is heartening to see that a company employing so many local people has been saved by the dedication of its management team, and I’m pleased that Durham County Council, through CDDC, has supported such an important deal.”

After talking to CDDC’s Strategic Accounts Management team, GEKA was put in touch with Business Link, as well as Durham-based business advisers Clive Owen and Co, and Teesside business lawyers Endeavour Partnership.

The MBO team received financial support from various partners, including CDDC and the North East England Investment Centre, which is accessed through the Business Link service.

This was posted in Bdaily's Members' News section by Ruth Mitchell .