ODS Business Services Ltd, the UK-based operation set up and financed by the ODS Group, has not escaped the turmoil initiated by the insolvency of the group's flagship plant at Dassow, Germany, earlier this year. Tuesday, ODS Business Services went into administration.

Martha Thompson and Tony Nygate, Business Restructuring partners at BDO Stoy Hayward, have been appointed joint administrators. ODS Business Services Ltd is based in Swindon (pictured) with approximately 300 staff.

The company has two divisions. One is a full service distribution centre and the other manufactures short runs of CDs and DVDs.

"Following an immediate business review, a decision has been made to close the manufacturing facility with immediate effect," says the administrators' statement. This will result in approximately 100 redundancies. The remaining staff will be retained in the company’s distribution centre while the administrators seek to secure a going concern sale for this side of the business.

Putting a brave face on the complicated reasons why ODS collapsed, Thompson said: “This is a troubled industry and ODS Business Services are not the only firm to have been hit. With the increasing numbers of people downloading content from the internet and cheaper manufacturing elsewhere in the world, companies in this sector are struggling."

“It is regrettable that we have had to close the manufacturing side of this business and to make a number of redundancies. However, we are currently in negotiations with interested parties with a view to securing a going concern sale for the distribution division.”

DVD Intelligence understands that ODS Business Services, that owed the ODS Group in the region of £20 million, suffered significant trading losses last year.

The saga of the ODS Dassow plant in Germany is not over yet. We last reported that the plant was to be run by a consortium bringing together Danish replicator Dicentia and the Spin Group-backed ODS Business Services A/S. However, in the latest twist, Spanish replicator Iberdisc Optical Storage Solutions has expressed "serious interest" in acquiring the Dassow plant, of which it was a client. Iberdisc has already acquired the ODS manufacturing plant in Goleniow, Poland, in February.

Negotiations with administrators started on Friday. Iberdisc CEO Christian Spychala is reported in the German press to say he believed the Dassow plant could "quickly return to production because Iberdisc needs more capacity." Production in the Goleniow plant in Poland is "bursting at the seams, the machines ran in three shifts, seven days a week, we attract new clients every day."

To date, half the equipment has been dismantled and sold. The Dassow capacity "has shrunk to a healthy size," said Spychala, which is the reason given for Iberdisc's late entry into the bidding. "The plant had been too big. We could restart operations initially with 100 staff." Iberdisc may be installing Blu-ray lines there.

The Iberdisc CEO claims this new deal involves neither former ODS boss Wilhelm F Mittrich not the Spin Group, and the financing will come from Spanish banks.

In view of short-lived expectations of the recent past, Marc Odebrecht, the insolvency administrator winding down the ODS Dassow plant, has dampened hopes of a positive outcome, as did the workers' council. "It will be a matter for creditors."

Story filed 16.04.08