Welsh suppliers of Tata Steel should take action in order to secure their commercial futures but they shouldn't worry unnecessarily.
Alan Bennett, chair of insolvency trade body R3 in Wales and partner at Ashfords LLP, is advising Tata Steel’s suppliers in Port Talbot, Newport, Trostre, and across Wales who may be feeling uncertain after last week’s announcement. He suggests looking at new business opportunities and being completely open and transparent with creditors, staff and other customers about their situation.
“Sadly, Wales knows only too well what it’s like to suffer when a dominant industry or company gets into trouble or ceases trading completely. Such a presence will inevitably have a wide reaching effect on communities and businesses in the surrounding area and further afield. But there are steps that these businesses can take to ensure they don’t suffer the same fate and to avoid further job losses.
“It is vitally important that they look at their business and marketing strategies to source new customers and strengthen their brand. There may even be some opportunities for diversification. Half the challenge is to understand your company’s finances including preparing short and long term forecasts to soften the blow of any impact. Talking to customers, suppliers and sources of finances should be at the top of your list as you will need their support and understanding during this time.
The HMRC also offers a Time To Pay scheme which can help spread out payments including VAT and PAYE that are due. The HMRC is another stakeholder with whom businesses need to be completely transparent from the start as it may help their case if they require some leeway.
“At R3, we always advise companies to seek advice as soon as possible from a qualified advisor, so they have the best possible chance of survival.”