Tieman in administration

Melbourne-based tanker manufacturer Tieman Industries has announced it has been driven into voluntary administration, but says it's still hopeful of securing a buyer to allow the firm's core tanker business to continue.

Tieman's Support Services and Repairs division and its Tail Lifts and Whiting Door division will both close, spelling the loss of around 140 jobs, including 80 in Victoria.

Rahul Goyal, one of three appointed administrators at KordaMentha Restructuring, said the administrators now have full control of the company's day-to-day operations. While expressions of interest from potential buyers are being sought, the company will continue to trade as per normal.

Mr Goyal also said all outstanding tanker orders would be fulfilled to schedule and that the tail lift and service divisions would also continue while various options were being explored.

Should a buyer be found for Tieman's tanker business, around 100 jobs will be saved.

Tieman's joint Managing Director, Dale Tieman, told Victoria's Herald Sun newspaper that going into voluntary administration had been an extremely difficult decision, but one that could ultimately save the company's future.

All affected employees would receive full entitlements and superannuation, he told the paper.

The company said increasing foreign competition and difficult economic conditions had squeezed margins, rendering the service and tail lift divisions unsustainable.

According to a spokesperson for Tieman Industries, Michael Smith, the business sustained heavy losses last year due to market conditions, overstaffing and very large overheads.

"The company has been on a restructure plan but was unable to execute due to lack of funds," he said.

"They need to reduce costs, which included consolidating sites and reducing labour."

The closure of the tail lift and service division would allow any new owner to focus solely on Tieman's tanker business, which has a range of blue-chip clients in the fuel, transport and agriculture sectors and is presently based at the company's headquarters at Keon Park, in Melbourne's northern suburbs.

"The repairs and maintenance business and tail lift business is a very low-margin and high-cost business but they may make sense within a larger company," said Mr Smith.

Tieman Industries was founded by Neil Tieman in 1953. He ran the business until 2008, when he handed control to his sons, Colin and Dale, and was awarded an Order of Australia medal for services to the transport manufacturing industry in 2011.

The first meeting of creditors has been scheduled for Thursday, August 20, and will take place in Melbourne.

KordaMentha has asked anyone considering the purchase of Tieman's tanker, tail lift or service divisions to contact its offices as a matter of urgency.