In news that is disappointing but not surprising given the recent reports on the unfolding Qenos saga, the new owner of Qenos has placed the company into voluntary administration, to be overseen by McGrathNicol Restructuring. The closure of the Qenos Botany facility has also been confirmed.
Qenos is an Australian-based petrochemical business, manufacturer of ethylene and polyethylene, and supplier of specialty polymers. Its LDPE and HDPE products are used extensively in the packaging industry.
The administrators will commence discussions with key partners to the Qenos business to determine the short-term future of the Altona plant. The eXsource business is continuing to operate.
The loss of Qenos will be a huge blow to the packaging industry and many other sectors, thwarting Australia's plans for developing a robust circular economy for plastics. The industry has raised concerns in the lead up to this announcement, and customers have spoken out about how this will impact their businesses.
Qenos' holding company, ChinaChem, entered into an agreement with property and infrastructure developer Logos, to purchase the Qenos sites. Logos formed a new company, LAOP Bidco, in December last year as the special purpose vehicle to take on the ownership of Qenos, and it is this company that has placed Qenos in administration and which will be providing funding to the voluntary administrators to support the process.
This includes funding to meet employee wages and entitlements, as well as the make safe and shut-down costs of the Botany plant, which ceased to operate in February 2023 and will not restart.
McGrathNicol chair and administrator, Jason Preston, said: “As administrators, we have been appointed to stabilise operations and work closely with Qenos employees, suppliers, customers, financiers, government and other stakeholders to secure the best possible outcome for all parties.”
A first statutory meeting of creditors must be held within eight business days after the administration begins and is expected to take place on 30 April. This first meeting will provide an opportunity for the administrators to update creditors and other relevant parties on the progress of the administration.
Meeting notices setting out the time and location for the first meeting of creditors will be distributed to Qenos creditors over the coming days.
Response from AWU
As the Altona operation's future hangs in the balance, The Australian Workers’ Union says workers' interests must come first in negotiations, saying it will meet with Qenos leaders and administrators to explore options for the future of the Altona site and demand workers are made the number one priority during the administration process.
“Unfortunately, this is not the AWU’s first rodeo, and we will be pulling out all stops to ensure the workers’ interests come first,” said AWU National Secretary Paul Farrow.
“Right now there seems to be some uncertainty about the future of the Altona site. If there’s a chance of retaining operations we want every option explored. We will be meeting with the administrators and with Qenos leadership to make sure no stone is left unturned.
“We have been assured that Qenos Group’s new owner, LAOP Bidco, has indicated it will propose a Deed of Company Arrangement that will fund employee’ pre-appointment entitlements, including redundancy. We also understand this agreement will be ratified in court over the next couple of days.”
Farrow, like other industry stakeholders, said the shutdown had serious flow-on implications, saying this should be a “grave warning to government that our energy intensive industries are not bluffing – they are genuinely living on the brink”.
“We are currently on a trajectory to lose core elements of our sovereign capability. Qenos is one of only two local producers of plastics that make products like food packaging, cable insulation, and council bins. Without this capability, Australia would be further at the mercy of unstable global supply chains to meet our essential daily needs. Qenos was also set to be crucial to plans to recycle thousands of tonnes of plastics locally.
Farrow points out that Qenos’s Botany operations are located at Botany Industrial Park, this site is shared with Indorama, Ixom, and Orica. The shut down could have serious implications for those businesses who have traditionally shared some services, utilities and product.
“The AWU will be meeting with these businesses as well and we will be lobbying government to ensure they get the support they need to stay open.
“Hundreds of local manufacturers, including in the plastics industry, are dependent on gas. Manufacturing can be strong in this country, but we must ensure gas remains affordable and available today as we modernise for the future.
“The Albanese’s Future Made in Australia program is an excellent program that we support, but if Australia wants to be a manufacturing powerhouse tomorrow we can’t allow our established manufacturing base to collapse today.”
