260 workers redundant
Twenty-seven years of contracting work in regional Queensland comes to an end.
Wednesday 30 August 2017
The post super-boom downturn in mining and construction has claimed another scalp this week with Ostwald Construction going into administration.
The Dalby based family owned and operated business has been active across the Bowen and Surat Basin for twenty-seven years.
During that time it’s worked as a contractor for Glencore, Rio Tinto, Origin, QGC as well as different regional councils across Queensland.
Announcing the decision this week, Managing Director Brendan Ostwald said they had pulled every lever possible to stay in business.
“With the significant downturn in mining and infrastructure, Ostwald’s has actively explored ways to keep the company trading including having downsized, sold major assets, reinvested profits in the company and more recently attempted to refinance and sell the business,” he said.
“Despite our best efforts, more recently, the company has been affected by commercial issues on two major infrastructure projects which have impacted cash flow and forced this decision.
“We will continue to actively assist the administrators, PriceWaterhouseCoopers who are now responsible for all Ostwald operations and decisions moving forward.
“I would like to take this opportunity to thank our hard working team for their loyalty and efforts as well as our suppliers and customers who have supported Ostwald.
“We are deeply saddened by this decision and are acutely aware the impact it will have on our loyal employees, their families and the local community.”
Two hundred and sixty Ostwald staff have so far been made redundant, and the administrators have not yet been able to confirm whether they will receive their redundancy entitlements.
Meanwhile, administrators are putting together a list of creditors and in due course, they will decide on whether liquidation, selling the business, or allowing Ostwald's to trade out of trouble will be in the best interest of creditors.
Ostwald’s two biggest projects at the moment are the Toowoomba Second Range Crossing and upgrades to the Pacific Highway in northern NSW.
Back in 2015 at the height of the downturn, Brendan Ostwald had been optimistic that they had done what was required to survive the mining correction.
“Adjusting to the 'new norm' is central to the outlook for the Surat Basin, and by any measure, there is reason for optimism,” he said at the time.
“Despite the pain of adjustment from an unprecedented period of resources sector construction, the Surat region is on target to maintain major project investment of around $2.5 billion a year from 2016-17 onwards.