French tannery files for bankruptcy protection but hopes to survive
23/03/2010
In the face of falling orders and cashflow difficulties, one of France’s best known tanning companies, Les Tanneries du Puy, filed for bankruptcy protection on March 23, although the company has said that if it can bring its facilities up to date, it has a chance of survival.
The day before, the workers staged industrial action at the tannery in Le Puy en Velay in central France, while the company’s management team held a meeting with shareholders. Following that meeting, company president, Philippe Alfonsi, announced that the company had filed for protection against payment demands from creditors.
An administrator is in place to make sure that the workers will be paid at the end of March.
Mr Alfonsi explained that, since the end of 2008 and the start of 2009, the company began to experience a 40% drop in orders. This translated into an average monthly loss of EUR 80,000, he added. Steps such as a reduction of the working hours of the employees had failed to improve cashflow sufficiently to turn the situation around.
He told local media: “Taking into account our cashflow situation, it would put the company at risk of going into liquidation if any major incident occurred. We are in this situation because of a downturn in activity, but also because we have a structural problem. In the face of strong competition, we have had a lack of investment and have failed to achieve productivity increases. We have good industrial and commercial ideas, but Tanneries du Puy has to modernise if it is to stay in the market. I regret having to make this decision, but it’s my duty to think ahead if the business is to have any chance of survival.”
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