CKN Holdings, the parent company of the CK Group of plastic recycling and export companies, has been placed into administration, with two of its sites having been bought by a company run by a former director.
The company encountered financial difficulties due to a dip in demand for material from China, accountancy and business advisory firm BDO, which was appointed administrator last week, has claimed.
Material recovered by CK Group is used in the production of plastic pipes amongst other applications
Through its network of companies which includes CK Polymers, the group sells plastic regrind and compound to customers in the UK, Europe and the Far East. It also has sites at Binbrook, Lincolnshire, Hull and Melrose in Scotland, employing a total of 69 staff.
Also a part of the CK Group is CK Services, which provides wheeled bins to local authorities and waste management companies.
Operations have continued at the recycling sites at reduced levels following BDO’s appointment and the company concluded a sale of the business and assets relating to the operations in Hull and Melrose to Sharp Polymer Solutions on Tuesday (19 July).
Cheshire-based Sharp Polymer Solutions was set up in 2012, and is run by Marc Sharples a former director of CK Group between 2000 and 2012. letsrecycle.com contacted Mr Sharples, but he was unavailable for comment.
17 employees were transferred to Sharp Polymer Solutions as a result of the acquisition, whilst a further 10 have been retained to operate the Binbrook site while a buyer is sought. 42 employees have been made redundant.
Regrind
CK Group, a founder member of the Recycling Association’s plastics group, described itself as one of the largest buyers and sellers of recycled plastic and regrind from UK and Irish based waste management companies, manufacturers and retailers. Material sourced by the company would be processed at one of its facilities or exported for processing, particularly to the Far East.
Grades handled included rigid plastics such as wheeled bins, caps and enclosures, crates and pipes, with end destinations including the manufacture of pipes and automotive parts.
Graham Newton, BDO business restructuring partner, said: “Unfortunately, the economic climate and difficult trading conditions, together with the impact of oil prices and a reduction in export demand, particularly from China, significantly affected the business.
“However, we have moved quickly to successfully achieve a sale of part of the business securing continued employment for 17 members of staff. We are seeking offers for the business and assets of the company’s main trading site at Binbrook from several interested parties and will continue to trade whilst a sale is explored. We welcome all new enquiries and encourage interested parties to contact Peter Mahoney of BDO in the first instance for further information.”
Warning
In December 2014, CK Group commercial director Chris Collier warned of the impact of the declining price of oil on the plastics recycling industry, in an opinion piece on letsrecycle.com (see letsrecycle.com story).
“Unfortunately, the economic climate and difficult trading conditions, together with the impact of oil prices and a reduction in export demand, particularly from China, significantly affected the business.”
Graham Newton
BDO
The news that CKN Holdings has been placed into administration comes at what is a period of particular volatility in the plastics market, with London-based plastic bag reprocessor PlasRecycle announcing that it had been placed into administration last week (see letsrecycle.com story).
Market
Also this month, Veolia bought the assets of the Euro Closed Loop Recycling HDPE milk bottle recycling business in Dagenham (see letsrecycle.com story), which had been shut down for several months. This news came shortly after the Ecotech plastic bottle recycling firm in nearby Rainham had been placed into administration (see letsrecycle.com story).
Commenting on the plastics market, Simon Ellin, chief executive of the Recycling Association, said: “This is very sad news, and while it is difficult to comment without knowing the exact details we can say that there is a regular pattern emerging as we have seen a lot of businesses going the same way.
“I know there are fundamental business factors at play but companies within the supply chain, [such as users of plastics in new products], who need to take more responsibility. The plastics recycling industry has shown that it is a very fragile model and we have to decide if we want this or not.”
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