News

Nene Packaging has accused banks and the government of "not playing ball" and putting small and medium-sized businesses at risk, after its money releasing facility was withdrawn at short notice.

Northampton-based Nene was formerly a supplier to Entertainment UK, Woolworths' distribution arm, and has been able to maintain much of the business with customers following the firm's fall into administration last year.

Managing director Rob Lugmayer told Packaging News the firm was dealing directly with customers such as Tesco, but that it was having to wait for invoices to be paid after its bank withdrew its credit facility that released money up front.

"We've not lost our order book, just our cashflow," said Lugmayer

However, he said that while Nene would survive the problem there were other firms that would not be as lucky and called on the government and banks to make sure they were helping firms get the credit they need.

"They're talking the talk, but not walking the walk," he said. "We've done nothing wrong, but are being hit. If we were to go under it would affect not only our staff and customers, but also all the local companies that supply us."

"The problem is getting cash to businesses, and we are now looking at other banks as our existing one hasn't been playing ball."

Lugmayer added that packaging firms operating in the entertainment goods sector, such as DVDs and CDs, were well placed to weather the economic downturn as people continued consuming.

"When the economy is buoyant, people have a lot of disposable income, but now don't go out as much. They're still spending on luxury items, but for different reasons," he said.

Nene Packaging is a supplier of screen-printed corrugated boxes for point-of-sale display. It was set up in 1994 and was the subject of a management buyout by Lugmayer and his wife five years ago.