The collapse of refurbishment services giant Rok has led timber product manufacturers and distributors to ask the question: “Whose next?”
Timber companies interviewed by TTJ said the descent into administration of the £714m turnover contractor, which follows a similar fate to Connaught just two months ago, added pre-Christmas uncertainty to the construction trade and would have firms looking again at the credit terms extended to their customers.
Administrators PricewaterhouseCoopers said work on existing contracts had been suspended temporarily, but it was delighted that more than 100 expressions of interests for Rok’s business had already been received.
James Latham plc said it used to trade with part of the Rok group but closed the account some time ago.
“From our point of view it creates uncertainty for the construction sector leading up to Christmas,” said Chris Sutton, Lathams director.
“It’s things like this which makes companies look at their borrowing. The economy is fragile, does it make banks think twice about the construction sector?”
He said if struggling timber companies get hit by a bad debt it created nervousness and would lead to people questioning whether they should be extending credit terms to customers.
Premdor said it did not have any direct exposure to Rok, but it did supply distributors who supplied the contractor.
“But we do see some exposure in terms of business, as a lot of our product ended up at Rok,” said Robin Baker, Premdor sales and marketing director.
“It’s a sign of the times and you wonder what’s going to happen in 2011. Rok was not the first and I do not think it will be the last.”
JELD-WEN UK said it had a relatively small exposure to Rok.
“We have been monitoring the situation since Connaught collapsed,” said Joanne Mitchell, JELD-WEN’s European marketing director.
“We are a global company and our markets are quite diverse. Smaller joinery companies are more likely to be affected. But it’s an indication of the state of the market.”
“In terms of exposure we did bits and pieces with Rok but we’re covered by insurance,” said Stewart Hind, commercial manager at door manufacturer Bridgman IBC.
“But it is worrying that a company with a half-a-billion turnover has gone into administration. Whose next?”
Rok Maintenance managing director Nigel Lemmon told TTJ in August about its support for a cut in VAT on RMI work, which he said could save thousands of jobs in the construction sector.
