Uncertain wait for farmers as administrators try to explain how Cambridgeshire grain firm collapsed
PUBLISHED: 11:26 13 March 2017 | UPDATED: 11:26 13 March 2017
Farmers across East Anglia affected by the collapse of Wellgrain, one of the country's largest regional grain merchants, face an uncertain time if they are among the 286 names on the list of creditors believed to be owed in excess of £15 million.
Only a handful of the 33 staff have been retained by administrators Matthew Richards and Daniel Smith of Grant Thornton who was appointed administrator to the Ely based company.
Many of those farmers owed money by the company have been reluctant to speak publicly about the collapse but say the warning signs were there up to a fortnight before last Friday’s official statement.
One farmer said: “We had a couple of late payments but got the money last year – however they owe us for four loads although it’s not due yet.”
Another creditor told a social media forum: “I have customers with several hundred tonnes in storage with them, not sure how that will pan out. “
Wellgrain has been trading since 2003 and is part of Driftfwell Investments Ltd and run out of the same Alexandra House head office in Ely by Doug Spinney.
He has not been available for comment but a statement on the Wellgrain website says that “the business has ceased to trade and the business and assets of Wellgrain are under the control of the joint administrators.
“So your enquiry can be dealt with efficiently, creditors/customers are advised in the first instance to make contact with the following: Employees of Wellgrain: please contact ERA Solutions on 01827 383 531
“Creditor / customer enquiries: please either call 0161 214 6369 or email email@example.com. “
Wellgrain has provided a variety of services to the agricultural industry from grain, seed, fertiliser and animals’ feeds, providing a link between UK arable farmers and the global food market place.
East Cambs farmer Luke Palmer, chairman of the Ely and Soham NFU, is among those affected by the administration, with 70 per cent of his annual grain crop handled by Wellgrain.
“We never put our eggs into one basket and do spread our risk as much as possible,” he said. “We have always had a good relationship with them.”
He told the BBC he last sold grain to the company on February 14 and uploaded it a week later “probably their last day of trading, although of course there was no indication.”
Mr Palmer says he is “owed a few thousand – it’s frustrating but we’re not as bad as a lot of growers we have been talking to. Some have crops in store and not sure if they have legal access to it.”
Regional NFU director Robert Sheasby said the real surprise was no one saw the collapse coming and when it did “it came very quickly.”
He was unsure of the reasons but said modern agriculture works through a complex supply chain and one of the jobs of the administrators will be to examine what can often be technically difficult contracts and bound to forward supplies. Brexit was unlikely to be a cause since little has yet changed – it was, he said, “a side issue”.
Latest company accounts show that in the year ending June, 2015 Wellgrain had a turnover of nearly £86 million with pre tax profits of just £214,896. Main secured creditors of Wellgrain appear to be NatWest and RBS Invoice Financing; five years ago RBS offered Wellgrain a £12 million Assbed Based Lending (ABL) funding package to support growth.
Effectively the deal enabled Wellgrain a form of factoring that enabled more rapid payments on outstanding invoicing.
Quite what part currency fluctuations played in the collapse is not yet known nor whether the extra price premium paid to farmers for their business helped to crippled Wellgrain.
The NFU is urging its members affected by the administration – and two farmers are reported to be owed in excess of £100,000 each – to contact NFU Callfirst (0370 845 8458) for guidance and support.