Brush buyout secures 110 jobs

A County Durham company has secured its own future - and that of over a hundred employees - with help from local business development agencies.

The management team at Geka Manufacturing successfully completed a management buyout on 1 August. As a consequence, 110 people employed at the plant are now able to continue working.

The Geka team is lead by Raymond Oliver, who has been fighting hard since February to make sure that the factory stays open. He has been helped along the way by several organisations in the North East's extensive business support network, headed up by the County Durham Development Company (CDDC).

Geka Manufacturing, which will shortly undergo a rebrand to become Sone Products Ltd, was originally part of the German GEKA Brush company. The parent firm recently decided to refocus 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.

Raymond Oliver said: "The decision to close the Stanley plant was made when the parent company decided to carry out production at a single factory in Germany. Our factory was still profitable, which made it a perfect option for a management buyout. In the present economic and political climate the business plan was a complex exercise. We had to stop the whole process less than a month ago and rewrite the plan completely."

After talking to CDDC's Strategic Accounts Management team, Geka was put in touch with Business and Enterprise North East (BENE), as well as Durham-based business advisers Clive Owen and Co, and Teesside business lawyers Endeavour Partnership. The company received financial backing from various partners, including CDDC and BENE.

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

Raymond said: 

"Having gone so far, we didn't want to give up. Without the support of the other organisations involved, we wouldn't have been able to achieve what we did. We may not have the support of a large organisation behind us anymore, but we can now take the company in whatever direction we choose. Now that we've secured the jobs and the business for the next three years, the challenge is to grow a new customer base - and hopefully more jobs in the process."

Stewart Watkins, Managing Director of CDDC, said: "I am delighted that a company employing so many local people has been saved by the dedication of its management team, and pleased that Durham County Council, through CDDC, has supported such an important deal."

"I am pleased that Geka will now continue as an independent company after being part of the county's manufacturing community since 1983."

Angus Allan, partner at Clive Owen & Co LLP Corporate Finance, said:

"We are delighted to have played our part in such a positive story for manufacturing in the region. Raymond Oliver has worked very hard to set out his vision for a sustainable, successful future for the company. This MBO provides a secure platform for the business to go forward and face the future with confidence. The deal also proves that, even in the most challenging circumstances, a strong management team with a good business plan and quality advisers can achieve its objectives."

 Paul Bury, Partner and Head of Corporate Development at Endeavour Partnership, said: 

"It's very satisfying to have been able to contribute, along with all the others involved, to the Geka Manufacturing MBO. The deal was a long and challenging process, but Raymond's patience and perseverance made sure that everyone kept their eye on the goal of securing the future of the company and its employees."

4 August 2010

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