The company, Australia’s largest supplier of envelopes, called in PPB Advisory yesterday morning.
The administrators have “parked” the business while they assess the situation.
PPB’s Fonda Makris told ProPrint: “We were appointed administrator yesterday morning and our first step is to meet with the board with Australian Envelopes this afternoon.
“Currently operations have stopped at Australian Envelopes, but we are hoping that they will be able to go back into production after today’s meeting. There is a letter currently being drafted and sent out to creditors and the first creditors meeting has been scheduled for 11 July.”
Australian Envelopes has six sites spanning every state and territory except the Northern Territory and Tasmania, and is a major supplier to the country’s biggest mailers, including the likes of Salmat, Stream Solutions, Geon, Blue Star and Ergo Asia. Its products are used for multimillion-piece contracts such as Commonwealth Bank, Westpac, the ATO and Centrelink.
ProPrint spoke to some of these major customers this morning, who largely said it was still early days, but they expected the impact to be significant.
Stream Solutions strategic sourcing manager Geoff Brennan told ProPrint that he was “surprised at the action”.
“We were aware they were looking for a buyer but there were no desperation signs. Often with a supplier in difficulty, there are clear indicators you can pick up on.”
Craig Bingon, general manager, Account Service Asia, at Ergo Asia, whose customers include Federal, State government, retail and FMCG clients, said the company “purchases a fair amount of goods through Australian Envelopes”.
“We are taking a responsible approach to the situation and we await further information on the issue.”
Another client said his team was “going bonkers” due to a number of major time-sensitive contracts. “It’s chaos, having to try and find alternative suppliers urgently.”
A senior executive at another major print group, which has been a long-term customer, said: “We had seen a significant shift in their pricing downwards over the past few weeks and months.”
He added that the problems might even stem back to the envelope manufacturer’s sale by private equity backer Catalyst in July 2010.
Salmat, the country’s biggest mailer, said it was currently assessing the situation, pointing out “there’s more than one supplier” in the market.
Australian Envelopes’ major competitors include Candida Stationery, Australian Office, Print T Mail and Camerons Group.
A representative of Candida said the news “came as a shock” but added that there has been a “price war” going on.
Another competitor agreed that Australian Envelopes had “drastically reduced prices”. He added: “There is undoubtedly going to be some issues in terms of supply.”
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