One of the country’s largest steel drum manufacturers has been put up for sale, after its parent company, which is also one of the country’s largest plastics manufacturers, was placed into receivership last month.
The collapse comes as the manufacturing industry continues to suffer under the high Australian dollar and volatile economic conditions.
HP Steel, which is part of the HP Group of companies, has been put up for sale by receivers PwC. The company is one of the largest of its kind in Australia, and manufactures steel drums for the industrial, chemical, oil and food industries.
Greg Hall and Michael Fung of PwC were appointed as receivers and managers last month, and are calling for expressions of interest.
According to the company, HP Steel has revenue of about $20 million for the 2011 financial year, has a long-term blue chip customer base and two properties in Victoria and Queensland. It was acquired in 2007, but has since undergone a restructure resulting in “significant reductions in overheads”.
“We are hopeful of identifying the best party by Monday, and then hopefully entering into a contract to sell the company as a going concern,” Hall told SmartCompany this morning.
But the call for expressions of interest comes a month after HP Industries was placed in receivership on December 6, with Christopher Hill and Alan Hayes of PPB appointed as administrators along with Hall and Fung from PwC.
“The business is under-capitalised and that is the main factor that has led to the decision to appoint Receivers and Managers and Voluntary Administrators,” Hall said at the time. He further explained this morning the business was burdened by a significant amount of debt which led to the receivership.
HP Group employs more than 300 people in its various divisions, with HP Plastics and HP Steel the main components of the business. The entire business is turning over about $80 million per year, making not only steel drums but also plastic packaging containers for food and beverages, household chemicals, medical supplies, automotive and agriculture products.
Both HP Plastics and another division of the company, formerly titled Amcor PET, have been sold.
HP Industries was created after the three separate companies, Amcor PET, Hollywood Plastics and Greif Australia, combined. The steel component of the business, formerly titled Greif, was bought in 2007.
The business started manufacturing over 29 years ago.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
