Soaring Cost of Steel Helps Push Engineering Firm into Liquidation
Steep increases to the cost of steel in recent months have helped force a Gloucestershire-based engineering firm into liquidation.
Woodford Engineering Ltd, which was until recently based in the town of Lydney and first established in 2004, ceased trading at the end of January, having called in liquidators after its financial position worsened across 2022.
Now closed entirely, the company had been providing a variety of machining and fabricating services to clients including the RHS Chelsea Flower Show, with its expertise covering stone and ceramic cutting, as well as metal work.
But the rising price of steel, which increased sharply worldwide in the wake of the Russian invasion of Ukraine early last year, is understood to have delivered a significant blow to the financial viability of the engineering firm.
Its debts reportedly totalled around £1.8 million as representatives from the corporate insolvency experts Begbies Traynor were appointed recently as liquidators.
“This situation highlights the far-reaching impact of global events on businesses here in the UK,” noted Andrew Hook from Begbies Traynor.
“While steel prices have since levelled off somewhat, the spike in costs put the company under untenable strain.”
Mr Hook and his colleague Julie Palmer were appointed as Woodford Engineering Ltd’s liquidators on March 10th 2023.
In February, it was reported that another engineering firm, the DRB Group, based in North Wales, was being entered into a Creditors’ Voluntary Liquidation (CVL) after hitting on tough times financially.
The Welsh firm employed around 120 people and provided services to manufacturing businesses but its activities had to cease after its financial position become unworkable.
Across England and Wales, last year saw the rates at which company directors were taking their businesses into voluntarily liquidation increased sharply.
In fact, official stats from the Insolvency Service show CVL cases were at their highest levels in decades across 2022.
Insolvency experts have said that after several years spent surviving the pandemic, with the help of government aid, many business bosses simply ran out of road and were left with little choice but to enter their operations into liquidation.
Directors in these situations are advised to seek guidance from relevant liquidation experts as early on in the process as possible.