Wood-based panel producer Sonae Industria UK will enter into consultation with employee and trade union representatives over the possible closure of its plant in Knowsley, Merseyside. The particle board plant has been open for 12 years, employing 220 people, and has a production capacity of 500,000m3 per annum.
The plant has had a troubled existence, having faced a number of health and safety enquiries and been the site of three deaths during the last three years. It has also had two fires, with one taking hold in June, last year.
Labour MP for Knowsley, George Howarth had called for the plant to be closed permanently in an early day motion at the House of Commons.
According to the company, long delays obtaining planning permission, following the fire, coupled with the economic climate and construction downturn have affected the viability of the plant.
Sonae Industria UK is an indirect affiliate company of Portugese Sonae Industria SGPS SA. The Portugese company had a consolidated turnover of €1.293million, in 2010, with 38% from sales in Central Europe, including the UK. During this time, the UK operation accounted for 5% of turnover.
Among its customers, Sonae Industria UK supplies melamine faced chipboard to Hill's Panel Products (HPP), which provides components to the furniture and construction industry. According to HPP, it serves a client base of over 2,000 businesses, including independents, which place an average of over 9,000 orders per month.
Marketing manager of HPP, Dan Mounsey commented: "Since 2007 we have purchased product manufactured at the Knowsley plant on a regular basis".
However he pointed out: " Our business with Sonae currently accounts for less than 5% of our total MFC purchases. At its peak, in 2010, this figure was 30%. We made the strategic decision to move business away from Sonae earlier this year to guarantee continuity of supply to our customers. If Sonae does stop production [in the UK], as indicated, it should have no bearing on HPP's ability to supply the market with our various MFC related products 9full sheets of MFC, cut and edged MFC, flatpack carcases etc). We still have a good relationship with Sonae and will hopefully continue to supply the UK market with product manufactured in their European factories.
In a statement Sonae Industria UK said it plans to continue supplying the UK market.
However Mounsey said it could lead to a hike in the cost of chipboard: "I think in many ways a price rice is inevitable, when you factor in the cost of manufacturing on the continent and then transport costs of getting what is a very heavy and bulky product here. Sonae has indicated that it will try to remain competitive, so there may be scope for it looking to mitigate this to some extent but the nature of the MFC market means that any increase will be passed on to customers."
Marketing manager of HPP, Dan Mounsey commented: "Since 2007 we have purchased product manufactured at the Knowsley plant on a regular basis".
However he pointed out: " Our business with Sonae currently accounts for less than 5% of our total MFC purchases. At its peak, in 2010, this figure was 30%. We made the strategic decision to move business away from Sonae earlier this year to guarantee continuity of supply to our customers. If Sonae does stop production [in the UK], as indicated, it should have no bearing on HPP's ability to supply the market with our various MFC related products 9full sheets of MFC, cut and edged MFC, flatpack carcases etc). We still have a good relationship with Sonae and will hopefully continue to supply the UK market with product manufactured in their European factories.
Completely agree also Melamine faced chipboard are that essential part of furnishings without which the piece of art would be barren and soul less.
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