The new chief executive of a historic Dundee business says he will leave “no stone unturned” as he fights to save it from closure.
Dundee firm Bonar Yarns, which has operated in the city for more than 100 years, went into administration two months ago, citing cash flow issues.
Based at Caldrum Works in St Salvador Street and specialising in polypropylene carpet backing yarns, it employs 59 staff.
It looked like its future was secured when, two weeks later, it was acquired by American businessman John Newman.
He was previously a customer through his New Jersey-based synthetic sports turf firm Elite Turf USA.
But just six weeks after the takeover, the machines inside the factory have fallen silent.
A meeting with workers 10 days ago informed them they would be unable to produce its products at a competitive price unless energy costs reduced.
Now, the chief executive of Newman Yarns, the new business set up to acquire Bonar Yarns, has described its desperate fight for survival.
Energy price quadruples
Andy Sones, who is also chief executive of Elite Turf USA, said the American business was familiar with “world-class” products being manufactured in Dundee which prompted the negotiations with administrators.
He said the purchase price, combined with the cost of repairing machines and putting down deposits for new equipment, has exceeded £1 million.
But high energy costs means a product can not be made at a competitive price, he said.
“We literally saw an overnight quadrupling of the price when we came in mid-April,” Mr Sones said.
“At that time energy company costs were going down, and prices should have been following.
“By the early part of last week, after five weeks of conversations, there was still no change.
“Faced with that reality, John (Newman) and I came in and met all the staff face-to-face on Friday 26th.
“We wanted to be transparent and tell them face-to-face what was going on and answer their questions.”
Newman Yarns insolvency process
Mr Sones said staff have continued to be paid and a formal redundancy process has not started.
He hopes it will not reach that point as discussions with energy firms continue.
Despite the heavy investment in the Dundee operation, the American businessmen are talking to insolvency practitioners about the best way forward.
He continued: “We have had to turn off machines that we now can’t afford to power.
“There are many people are working on multiple time zones to save the factory and the jobs.
“Make no mistake, though, energy is our biggest expense, and we can’t afford for it to increase by multiples and still sell the product at a viable price.
“Legally, we are not permitted to trade while insolvent nor to knowingly incur expenses we can’t pay.
“I am talking regularly to our lawyers and insolvency practitioners to sign off on our actions.
“We want to ensure that we are planning properly, evaluating all options, and meeting our own legal obligations.
“This is a very, very delicate moment.”
‘We’re still fighting’
Mr Sones said regulations prevented governments from subsidising the cost of energy but providers could choose what prices to charge.
“In the world we’re living in, they get to pick the winners and losers in industry, with the government hamstrung by their own regulations and agreements. How did we get here?”
Discussions are under way with Chris Law MP, Unite the union – which has hit out at “greedy” energy firms – and Scottish Enterprise.
Mr Sones said there would be “no stone unturned in trying to find a way through this”.
He adds: “We’re passionate about the Dundee plant. We’re passionate about doing our best for the superb workforce we have there.
“We believe in the world-class products being manufactured there. We’re still fighting.”
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