SA Plastics

Ampa Plastics back in business

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PHOTO: After restarting, Ampa is employing approximately 70 people – led by management team Munya Mihlolo, Brett Goldberg, Andries Pretorius (financial director) and Trevor Zulberg (CEO of the Newco)

THERE’S usually no escape for a business when the liquidation notice goes out and it’s game over when the auction is advertised, no doubt, but that hasn’t been the case at Ampa Plastics Group.

THERE’S usually no escape for a business when the liquidation notice goes out and it’s game over when the auction is advertised, no doubt, but that hasn’t been the case at Ampa Plastics Group.

A virtually iconic name in the local plastics industry, originally known as Ampaglas, the company has been extruding sheet since 1973 and was the standard for extruded plastic sheet inAfrica for over four decades. But it all came to a grinding halt in October last year when the doors at the Ampa head office in Johannesburgwere shut.

The problem, as it invariably is in these situations, was financial, specifically that Ampa’s financial partners did not want to proceed further. Ampa CEO Trevor Zulberg requested additional cash flow capital from the shareholders to see it through a tough trading period. Unfortunately the shareholders (financiers) felt the business was better off going into liquidation and the doors were shut soon after.

All staff were barred from the premises in Elandsfontein the following day and all were out were out on the street. Operating from various coffee shops in the Bedfordview area over the recent festive season, making very necessary use of his mobile, Trevor somehow managed to cobble a rescue solution together. Balancing on the tightrope with liquidators on the one hand and other major obligations such as staff considerations on the other, Zulberg was in a tight spot. The problems were formidable: Ampa was literally in the dwang, with debts exceeding 100 bar, plus it had been employing over 280 people.

There were some positives though, if the business could get going again. These included the fact that the plant and equipment were in good condition and the core of the company’s staff remained committed, and who at that stage were just hoping the business could be saved, but at the end of 2016 and early this year that looked extremely unlikely.

Zulberg, the ex-Stallion Security, Tetrathene businessman, didn’t allow the obstacles to stall the recovery plan. Amazingly, he put together a rescue plan involving a large percentage of his personal funding, and some additional IDC work in progress funding. With this backing he was able to put in an offer to the liquidators in order to repurchase all the machinery that had been advertised in the local media. Then a new lease had to be negotiated with the landlord for the property in Tunney, Elandsfontein, and a settlement agreement needed to be reached with the majority union. Part of the offer to purchase was the continuation of the Ampa name so as to keep the usage of the brands that have become so well entrenched in the industry over the years.

Thankfully this was all negotiated and accepted successfully and therefore it was literally a case of a new beginning and a new entity was formed.

Huge legacy issues existed in the business, which was no surprise as it had been operating steadily for over four decades and had established itself as the preferred supplier for a range of plastic sheet types.

But although Zulberg and some of the key staff had been through “five months of hell,” some positives began to emerge.

“We have been able to cherry pick what we see as the best options,” said Zulberg, CEO of the Newco, specifically with regard to the product lines which offer most potential. It has gone back virtually to its roots and is now manufacturing polycarbonate flat and profiled sheet; polyprop twin-wall sheet (‘Coroplas’) as well as ABS, HD, PP and PST flat sheet.

And the bottom line is a lot less challenging too: break-even has dropped to less than a third of what it was when it was shut down last year.

Staff numbers have reduced dramatically as well: in its heyday prior to 2014, Ampa employed over 400 people, but had fallen to 280 by 2016. Now, after restarting, Ampa is employing approximately 70 people, the most obvious result of ‘right-sizing’ the operation.

The Ampa branch offices around the country have also gone. The company is now supplying via distributors or direct to clients.

“The process has been very challenging,” said Zulberg.

“We’ve all personally changed ( hopefully for the better) as well as strategically and have learnt a lot during this process and as a result it’s made us more adamant to prove what we can achieve.”

There is now a tangible sense of relief amongst the staff, particularly so after the barren festive season, and that looks like it’s being channelled into a new, driven market focus. That sense of relief was boosted at the time the doors reopened on 3 April and work flooded in again. That momentum from the earlier years may prove to be the most useful of the legacy issues that have built up around Ampa over the past 44 years.

Ampa is working again with its network of distributors across Southern and West Africa and is also due to start working with distributors within SA.

www.ampa.co.za