A survival scheme for the Wellman International manufacturing and recycling business in Co Cavan has been approved by the High Court.
The scheme involves restructuring of the company’s operations and a programme of compulsory redundancies cutting the workforce at its Mullagh plant from 203 to 138 people.
Of 118 employees who voted on the scheme, 107 voted in favour, 10 against and one abstained, the court heard on Tuesday.
Approving the scheme, prepared by examiner Kieran Wallace, Mr Justice Rory Mulcahy was satisfied it met the requirements for court approval set down by the Companies Act.
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There is “every basis” for believing the scheme would facilitate the company’s survival as a going concern, he said. It is “very welcome” that 138 jobs are being retained, he added.
Wellman International, incorporated here in 1970, manufactures recycled polyester fibre products (PET) from used plastic bottles and waste polyester products for a wide variety of industrial uses, including in the automotive, home, geotextile and industrial sectors.
It is fully owned by Indorama Ventures Recycling Netherland BV which is ultimately owned by Indorama Ventures Public Company Limited, incorporated in Thailand.
Wellman’s liabilities included more than €12m owed to intercompany creditors, including almost €11m to Indorama Netherlands BV.
In seeking court approval for the scheme on Tuesday, James Doherty SC, for the examiner, said the alternative to the scheme was liquidation, which would see all the jobs lost.
The judge was told the company supported the scheme and there were no objections to the examiner’s application from a number of creditors represented in court.
Barrister Arthur Cunningham, for the Revenue Commissioners, said its debt was being paid in full. The Industrial Development Authority, which has sought repayment of €540,000 under a grant made in 2021 to the company, was not objecting to the scheme, the court heard.
The Mullagh plant is the largest European producer of recycled polyester fibres. The Cavan-based arm of the company carries out manufacturing in Ireland but principally does its business in the rest of Europe.
In his report, the examiner said Wellman faced challenges in recent years, including falling demand for recycled PET for reasons including importation into Europe from China of lower-priced plastic resin that had not been recycled or reused. It was also affected by market volatility due to factors including the Russian invasion of Ukraine, the war in Gaza and international tariffs.
It was loss making during 2023 and 2024 and relied on considerable shareholder and group company financial support to fund its continued operations. As a result of the losses, its parent company withdrew its support.
Despite the fall in demand and sales, the company’s fixed costs, particularly employee costs, have remained high, the report said.
The investment plan involves the investor acquiring a 100 per cent shareholding in the company, including a €3 million loan and €1.95 million in new subscription monies. The investor has indicated further short term investment of about €5.95 million will be made for working capital and capital expenditure projects.
The investor operates waste processing facilities and purity plastic recovery plants across the UK and will be in a position to reduce costs of the company’s raw material inputs, the report said. The existing directors of the company will be replaced by investor-nominated directors.
