After having survived two likely closures this year, carpet backing yarn producer Bonar Yarns has now made the 57-strong workforce redundant and has appointed a liquidator.
In April this year, American customer John Newman of Elite Turf USA rescued the business by buying up the old company and forming Newman Bonar. Merely two months later, soaring energy costs, rumoured to be up to GBP 300,000 a month, brought the company back to the brink of closure.
Newman Bonar managed to negotiate better terms with the energy supplier but it appears this was insufficient. The company has now confirmed that it has appointed liquidators.
‘Intense challenges’ for Newman Bonar
The majority of the 57-strong workforce have been made redundant immediately. A small number of employees have been retained by the liquidators to assist with the winding-up process.
According to liquidators Geoff Jacobs and Blair Nimmo from Interpath Advisory, John Newman had tried to stabilise the business by providing significant funding.
Prior to a management buyout in 2020, the company had an annual turnover of GBP 6.5 million.
In addition to significant increases in energy costs, the company apparently also had significant ongoing overhead costs.
They meant Newman Bonar was unable to re-establish contracts with key customers at a sufficient level to make the business viable.