Materials Processing Institute applies for Company Voluntary Arrangement amid financial challenges

A restructuring at the research organisation has brought redundancies

A key industrial research facility on Teesside has encountered financial difficulties and applied for an insolvency measure.

The Materials Processing Institute, based in Middlesbrough, is a centre of innovation in the country’s manufacturing sector, where researchers carry out pioneering work in areas such as advanced materials, industrial decarbonisation and digital technologies. It runs a range of facilities including laboratories, a metal alloys making site and offices used by a number of small and medium-sized companies.

Court filings show the not-for-profit organisation – which until recently had employed about 70 people and has roots extending back about eight decades – has applied to make a Company Voluntary Arrangement, a mechanism that insolvent companies can use to pay creditors over a specified time.

The move follows extensive investment in MPI over recent years, including millions of pounds of public funding to tackle productivity, sustainability and competitiveness-driving innovations. Most recently, MPI installed a new, seven-tonne electric arc furnace at its Green Steel Centre on Eston Road, creating a one-of-a-kind facility in the UK.

The equipment was supported by £2.9m grant funding from Innovate UK, part of national funding agency, UK Research and Innovation. In recent years similar sums have been awarded to the institute.

Total capital invested in new research equipment and facilities over the last four years is more than £10m. New facilities also include hydrometallurgy to look at the recycling of electric vehicle batteries and a pilot scale hydrogen gas network for investigations into fuel switching, hydrogen reduction processes and heating.

News of the CVA follows 2025 accounts for loss-making MPI, published in recent weeks, which includes details of problems encountered while trying to diversify the organisation away from a reliance on grant funding.

The company ran into what it called significant cashflow challenges that have prompted a full restructuring of the business – including a significant number of redundancies. Directors talked of the need to financially restructure MPI’s balance sheet, a process which is now being carried out via the CVA.

Within the most recent accounts, MPI said: “The company has experienced a challenging trading period during the year, resulting in losses and pressure on short-term cash flows. In response, management has initiated a restructuring programme aimed at reducing the cost base and improving operational efficiency. The company is currently in advanced discussions with its creditors regarding the implementation of a Company Voluntary Arrangement (CVA).

“The successful approval and implementation of the CVA is a key component of the company’s financial restructuring. The directors have prepared cash flow forecasts and projections, which incorporate the anticipated impact of the restructuring activities and the proposed CVA.

“These forecasts indicate that, subject to the successful outcome of the CVA, the company will have sufficient resources to continue trading and meet its liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements.

“However, the requirement to successfully agree and implement the CVA, represents a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. If the CVA is not approved or the anticipated support is not maintained, the company may be unable to realise its assets and discharge its liabilities in the normal course of business.”