Hereford-based plastic packaging companies Gelpack Industrial and Gelpack Excelsior have entered into administration, putting around 200 jobs at risk.
According to Chris Pole and Mark Orton, joint administrators from KPMG, both the companies had recently suffered difficult trading conditions, which led to an additional funding requirement.
While the administrators have retained a skeleton staff to help fulfil outstanding orders, the majority of staff has been sent home.
Mark Orton said: "Gelpack is a leading name within the packaging industry, with customers including well-known names from across the food and drink, pharmaceutical and bedding sectors.
"However, both companies have recently suffered difficult trading conditions that have led to an additional funding requirement, which has prompted them to enter into administration."
In May this year, Gelpack secured a £10m asset-based lending facility through business financier Bibby Financial Services.
The deal combined confidential invoice discounting, asset finance, stock finance and foreign exchange to unlock significant additional working capital for growth.
Gelpack Excelsior was found in 1988 through the merger of Excelsior Plastics and Gelpack Industrial. However, production at the company’s Hereford site dates back to 1962.
In the early 90s, the company acquired Optiplas and PLIP, which were renamed Gelpack Recycling. They were merged in 2000 to become Gelpack Industrial.
The acquisition of Gelplas in 2004, which was merged into the organization, created one of the largest privately owned polyethylene flexible packaging manufacturers in the UK, with total annual capacity of 30,000 tons.
The company produces films, bags, liners and sacks for a range of industry sectors, including food and beverage, medical and pharmaceutical, bedding and furniture manufacturing.