UK firm Mottram's aluminium arm in administration

LONDON, June 23 (Reuters) - British aluminium alloy producer F E Mottram (Non Ferrous) Ltd entered voluntary administration on Monday because of collapsing metals prices and the economic downturn, its parent company Mottram Group said on Tuesday.

F E Mottram (Non Ferrous) Ltd, based in Cheshire in England, was part of the family-owned Mottram Group, which also owns ferro-titanium producer F E Mottram Ltd in Sheffield.

Accountants KPMG in Manchester have been appointed to sell F E Mottram (Non Ferrous) Ltd. The company's collapse has resulted in 61 people losing their jobs, the administrator said.

"One of our companies within our group has gone into voluntary administration," said Daniel Nix, managing director at Mottram Group. "It's just not viable to continue in the current market conditions and cash flow is non-existent."

Other parts of the Mottram Group are unaffected by the failure of the non ferrous business, he said.

F E Mottram (Non Ferrous) produced about 25,000 tonnes of aluminium alloys per year, with its customers mainly in the auto industry, such as Nissan (7201.T: Quote, Profile, Research), Honda (7267.T: Quote, Profile, Research) and Toyota (7203.T: Quote, Profile, Research), Nix added.

The worst economic slowdown in decades is to blame for the fall in demand for metals and alloys.

"F.E. Mottram's secondary aluminium smelting operation has been hit hard by the global downturn and in particular, by the reduced level of orders from car manufacturers and the reducing level of metal prices," said KPMG joint administrator and director Richard Fleming.

"The administrators intend to preserve the site in Congleton with the hope of finding a buyer for the business," he added. A round of redundancies had already been put in place earlier in the year, otherwise job losses would have been greater, Nix said.