GEKA Brush buyout secures 110 jobs

A manufacturer of cosmetic packaging has secured its own future – and that of more than a hundred employees – with help from local business development agencies.

A Director and former Director of GEKA Manufacturing, based in Stanley, County Durham, successfully completed a management buyout on August 1, resulting in 110 staff keeping their jobs.

Raymond Oliver, Managing Director of GEKA Manufacturing, led the team which has fought since February to keep the factory open. The company has been given excellent support 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 be renamed SONE Products Ltd, was originally part of the German GEKA Brush GmbH company. The parent firm decided to restructure 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.

Mr Oliver said: “Our factory was operating profitably, with a dedicated workforce behind it but our parent company wanted to consolidate its operations into one factory in Germany. This made the decision for a management buyout a good option.  In the present economic and political climate the business plan was a complex exercise.  We had to continually amend and in the last few weeks had to alter the plan due to the current uncertainty in the external environment.”

After talking to CDDC’s Strategic Accounts Management team, GEKA was put in touch with Business Link, as well as Durham-based business advisers Clive Owen and Co, and Teesside business lawyers Endeavour Partnership. The MBO team received financial support from various partners, including CDDC and the North East England Investment Centre, which is accessed through the Business Link service.

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

Mr Oliver added: “The support of the other organisations involved was fantastic; without it 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, the challenge is to grow a new customer base – and hopefully create more jobs in the region.”

Stewart Watkins, Managing Director of CDDC, said: “GEKA Manufacturing will now be able to continue as an independent company after being part of the county’s manufacturing community since 1981. It is heartening to see that a company employing so many local people has been saved by the dedication of its management team, and I’m pleased that Durham County Council, through CDDC, has supported such an important deal.”

Angus Allan, partner at Clive Owen and Co 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.”

Nicola Campbell, the Business Link adviser who worked closely with Raymond throughout the process, said: “This is a great result for the business and for the region. We are delighted that we were able to support Raymond throughout the management buyout – offering a range of advice, consultancy and access to funding.

“This is a great example of how the North East’s business support services are really making an impact, helping businesses to continue operating successfully and safeguarding jobs in the region.”

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