60 jobs to go as Ipswich manufacturing facility closes
UP TO 60 workers at Claypave will lose their jobs after the Ipswich manufacturing facility was put into voluntary administration last month.
But the man charged with winding the company up said it wouldn't be a "doomsday story" for the Ipswich business which may still have a future.
Twenty-five workers were handed retrenchments today and tens more will be staggered over the next five weeks.
The retrenchments will all be from Claypave's production division.
Claypave administrator Adam Ward of Worrells Solvency and Forensic Accountants said it was not financially viable to continue making bricks.
"There will be a controlled shutdown of the production side," he said.
"We have lots of stock and what has been very apparent is production has outpaced the demand over the recent year or so.
"The stock supply continued to grow and grow."
All up about 60 staff will be made redundant.
Claypave's debts include a $4.9 million loan to the Commonwealth Bank, $700,000 to trade creditors.
It has accrued liabilities of $2 million in employee entitlements.
Despite the job loses Mr Ward insists "this isn't going to be a doomsday story".
"Best case scenarios is still the sale of the business," he said.
The administrator said Claypave's retail business would remain open.
"I don't want people to think the business has stopped trading, we have not," he said.
"We'll continue selling and trading without the need to make any more bricks or pavers."
The administrator remains optimistic buyers will snap-up the century-old Ipswich business.
"There's quite a number of key players that are interested, some serious people, not tyre kickers," he said.
"There certainly has been a lot of good interest."
Mr Ward expects the business will be sold after a diligence period, but was unsure whether its production business would reopen.
He was drafted by Claypave directors early in the business' financial trouble, a move that potentially saved it from more significant problems.
"I think the board of directors have done a good job in getting me in early," he said.
The significant oversupply in stock was due to Claypave continually running its kiln at a cost of $100,000 in gas each month.
Mr Ward said directors kept making bricks despite the market downturn because it did not want to lay-off staff.
"They've kept operating costs at the same level by keeping full production," he said.
Last month Member for Bundamba Jo-Ann Miller pledged full support from the State Government to Claypave workers affected.
Mr Ward said a kiln, an expensive machine, would cost the company thousands of dollars if it failed to reignite.
"It requires significant amounts of capital injection to do repairs and upgrades," he said.
"If you turn the kiln off it mightn't turn back on again."
The administrator said Claypave made bricks at a higher standard and were well sought after by small builders and mums and dad renovators.
"The type of clients was not the big property developer building housing estates," he said.
Mr Ward intends to hold a meeting of creditors on April 30 to determine the way forward for the company.