SA Structural goes into administration, putting hundreds of jobs in jeopardy

One of the country’s biggest steel manufacturers – a significant Adelaide employer – has gone into administration.

SA Structural managing director Michael Mangos at the company’s former factory in Salisbury North in 2017. Picture: Dean Martin

One of the country’s biggest structural steel manufacturers has fallen into administration, triggering fears hundreds of people in Adelaide’s north will lose their job.

The collapse of SA Structural leaves several major projects in limbo, including the South Australian Government’s $715m Gawler train line electrification project which has already been plagued by delays and budget blowouts.

The company was also supplying steel to a number of school upgrade projects including a new science and technology building at Glenunga International High School.

It is understood close to 200 employees are affected by the company’s collapse, while amounts owed to creditors are yet to be revealed.

Treasurer Rob Lucas confirmed SA Structural had approached the State Government last year in a bid to secure financial support in the wake of COVID-19, but the appeal was rejected.

“During COVID they did reach out to the Government for assistance but the advice I got, the position I took, was that it wasn’t really a COVID-related problem they were confronting,” Mr Lucas said.

Administrator Andre Strazdins from BRI Ferrier has been contacted for more details.

SA Structural had embarked on an ambitious growth plan in recent years, with forays into NSW and Victoria, and completion of major projects including the South Australian Health and Medical Research Institute, the Royal Adelaide Hospital and the redevelopments of the Osborne shipyard, Adelaide Oval and Memorial Drive.

SA Structural sold its huge Edinburgh facility for $19.5m in 2019.

However, a former employee who left the business last year said the writing was on the wall more than 12 months ago, when the business suddenly stopped paying superannuation to staff.

“They weren’t paying super, probably for a little over a year and that was really the tipping point for me,” said the former employee, who declined to be named.

“There was no official company announcement – everyone found out through word of mouth.

“Then early last year people started becoming aware there were problems – super not coming in is a pretty good indicator that there are issues.

“I think growing too fast was an issue – the company had grown very quickly without having the necessary systems in place. It had taken on too much too fast and in the end couldn’t pull it off.”

Mr Lucas said: “It wasn’t really for the taxpayers of South Australia to pay for any significant issues that they might have got themselves into as a result of their own management decisions prior to COVID.

“There can be no criticism of any lack of flow of government tendering, activity or work in relation to any problems that they’re now facing, because they’ve had and have got a whole series of very significant contracts.”

Mr Lucas said it was too early to tell what impact the company’s demise would have on incomplete government projects.

“If the assumption is that they cannot continue then we’ll obviously need to be urgently looking at alternative supplies of product.”

SA Structural was established by Adelaide businessman Michael Mangos in 2003, providing structural steel for mining projects, infrastructure works, shopping centres, schools and hotels.

The company relocated to its 13,000sq m facility in Edinburgh in 2018, but less than two years later sold the property to investor Centuria for $19.5m, as part of a sale and leaseback arrangement.

In November, the facility was caught up in the Parafield COVID-19 cluster in Adelaide’s north, with visitors directed to self-isolate and seek medical testing.

Civil Contractors Federation SA chief executive Rebecca Pickering said the company’s collapse underlined the challenges facing the state’s civil construction sector.

“With $16.7 billion to be spent on infrastructure in the coming years, this highlights the importance of a consistent and reliable State Government release of tenders to the market,” she said.

“Business needs a steady and planned procurement approach if it is to build its capacity and capability to handle current and future works.”

The first meeting of creditors will be held on February 2 at the Adelaide Town Hall.

Mr Mangos has been contacted for comment.