Jobs to go as administrators unable to find buyer for final part of Caparo business

Ductile Stourbridge, in Charles Street, was the last business from the group remaining in administration following the collapse of Caparo Industries in October.

With dozens of sites across the area employing most of the group's 1,700-strong workforce, Caparo had been a presence in the area for decades, but it was the deal to buy the former Glynwed tube and strip steel businesses in 2004 that made it the biggest engineering group in the Black Country.

Run from offices in Oldbury, the group was part of the larger Caparo combine founded by Swraj Paul.

After a successful career in India he had come to the UK seeking treatment for his daughter, Ambika, who was suffering from leukaemia. It took him a year to get over her death, but he decided to stay in Britain and founded Caparo in 1968.

Now Lord Paul of Marylebone and an active member of the House of Lords, he is also chancellor of the University of Wolverhampton. He passed control of Caparo Industries to his son Angad in 1996. Angad Paul, aged 45, fell to his death from his penthouse at the family's apartment building in London's Portland Place just a fortnight after Caparo Industries went into administration.

It had been at the height of the recent steel crisis, with jobs being lost at major steelmaking sites in the north of England, that administrators from PwC - PricewaterhouseCoopers – were called in to Caparo Industries in mid-October. The collapse of the company meant 16 businesses within the group had been placed in administration.

Taken out of the hands of Caparo's directors, the businesses were now being run by the team from PwC as they looked at whether they could continue to operate until they were sold to new owners – seen as the best option in order to raise money to pay off Caparo Industries' creditors.

But, within a fortnight, they closed seven sites and made 450 workers redundant –more than 300 working at factories in Darlaston, Oldbury, Dudley, West Bromwich and Cradley Heath – saying these parts of the grouop were 'unviable'.

With 1,200 workers still working at Caparo factories, the administrators then focused their efforts on trying to find new owners for the remaining businesses.

They scored a number of small successes but a big win came later in November when the Gupta family, which runs the SIMEC and Liberty House steel businesses, bought the Caparo Tubular Solutions operation. More than 300 jobs were saved at sites in Oldbury and Bilston.

Then, just a week ago, the Gupta family bought almost all the remaining Caparo businesses, saving another 623 jobs at sites in Willenhall, West Bromwich, Wednesbury, Cradley Heath, Dudley and Oldbury.

The news was broken to staff yesterday lunchtime by administrators from PwC after last ditch attempts to find a buyer on Thursday night failed.

One Ductile worker, who asked not to be named, said: " It wasn't a surprise. It was more dragged out than anything."

He said workers had also been told about the unsuccessful late night bid to find a buyer.

The writing had been on the wall for Ductile after it was left out of last week's rescue of most of Caparo by Liberty House group, owned by the Gupta family. More than 600 jobs were saved at firms including Ductile's sister steel strip businesses JB&S Lees and Firth Cleveland, both based at the Trident Works in West Bromwich.

But Ductile Stourbridge was left unwanted and unsold as the PwC administrators renewed their efforts to find a buyer for the business.

Yesterday time ran out, and the administration team had to break the bad news to the workers at the Charles Street factory.

It means nearly 500 workers have lost their jobs in the Caparo collapse, but more than 1,100 jobs have been saved.

While 33 workers lost their jobs immediately yesterday, four more will be kept on temporarily to wind down the factory.

Matthew Hammond, PwC partner and lead administrator said: "After saving a total of 1,1111 jobs at Caparo, it is with regret that we have made these decisions. Despite sustained efforts to find a solution, including approaching key stakeholders in a bid to preserve funding, it was not possible to find a buyer for the business.

"Without a buyer or the ability to continue to trade economically, we were forced to take the difficult decision to close the unit with immediate effect.

"We thank those former members of staff for their service to CIP; we will work closely with them, their representatives and agencies to provide support and ensure that their redundancy and other claims are handled efficiently at this difficult time."

Originally known as Stourbridge Rolling Mills, the business was founded in 1905 and employed more than 200 people in the 1960s, producing strips of steel sheeting used for making cars and fridges. The original Stourbridge site was closed and the business merged with another site in Willenhall in 2000, creating Ductile Stourbridge.

It was bought by Caparo in 2004.