Oceania Glass collapse linked to machinery failures and $21 million upgrade costs

Oceania Glass, Australia’s only architectural glass manufacturer, collapsed after its private equity owner declined to fund a $21 million plant upgrade, administrators told creditors on Sunday.

The 169-year-old company, which supplied large glass panes for Parliament House in Canberra, appointed Grant Thornton as administrator on February 4 after facing liquidity issues.

Administrator Lisa Gibb informed creditors that a float tank, a vital piece of manufacturing equipment, “urgently required an upgrade” estimated to cost about $21 million, according to documents filed with the Australian Securities and Investments Commission.

“The company did not have sufficient liquidity to fund the upgrade,” Gibb stated.

Crescent Capital, which acquired Oceania from CSR in 2019, previously told investors the company struggled to compete with cheaper Chinese imports.

“The company has been facing increased pricing competition from suppliers based in Asia, who have been ‘dumping’ product into the market, which has resulted in some of the company’s customers opting to import, thus impacting the company’s revenue,” Gibb said.

The Dandenong manufacturing plant closed on February 27, resulting in 150 job losses. While attempts to find a buyer for the plant failed, the national distribution business remains on the market.

Documents lodged with regulators revealed Crescent is owed $49 million, employees are owed $55 million, and unsecured creditors including Toll, Visy and Holcim are owed $13.5 million.

Despite Oceania’s collapse, Crescent continues pursuing deals in the sector, including a potential merger between New Zealand’s Metro Glass and Viridian Glass, Oceania’s former sister company that Crescent claims has been “successfully turned around” since acquisition.

Picture: credit Oceania Glass