IMS Manufacturing, Italy’s leading optical disc manufacturer, called in the liquidators only five months after it restructured its operations. The workforce of 132, who demonstrated at the company’s gates, last week were notified they were to be laid off.

According to local sources, the workers blocked access to the warehouse, where pallets were still holding €8 million worth of stock, amongst it the latest album of Coldplay and The Beatles' Christmas box set. Deliveries stopped when the company made no commitment to pay the October salaries and dispelled the idea of a ‘white knight’ coming to save jobs, reports Il Sole 24 Ore newspaper.

The arrival of the Internet and downloads – legal or not – impacted on the Italian market, bringing total music CD production down from 338 million discs in 2001 to 120 million units last year. IMS revenues fell from €18 million in 2007 to €12 million last year, recording a loss of €4.8 million and total debts of €18.9 million.

Difficulties were highlighted in the report of the auditors. Yet, annexes to the budget referred to encouraging revenue figures from the start of 2011, with a jump of 40% over 2010. An employee quoted in the local press said, by the end of July, they had to produce 1.2 million discs, were inundated with orders and were struggling to keep pace.

On 1 June, IMS - International Media Services Spa and IMS Logistics Srl merged into IMS Manufacturing Srl and changed their name to IMS International Media Services Srl. The new company took over operational management for all contractual, commercial and financial activities from the two merged companies. That day, the fiduciary Aletti appointed Pier Mario Scappato as CEO of the restructured entity. Scappato resigned from the position shortly after in July. Dominican Republic-domiciled Massimo Zigiotti is reported to be now in charge, according to Il Sole 24 Ore.

Records filed with Companies House in the UK show that, on 9 June 2011, Scappato was also appointed Director and CEO of IMS International Media Services Limited, a similarly-named company registered in Wickford (Essex) in the UK, of which IMS Spa is a shareholder. DVD Intelligence telephone and email queries were not answered.

Entrepreneur Ludovico Del Iojo took over the reins of the company in April 2010. The fiduciary Aletti became the new owner when Del Iojo stepped down.

For all intents and purposes, the plan did not produce the desired outcome, and on 7 October, the company announced its liquidation to the unions for "unexpected further drastic reduction in volume that happened suddenly over the last two months."

The company has been a fixture of the country’s recorded media industry for over 50 years when it was a subsidiary of EMI Music Italy. Headquartered in Caronno Pertusella, near Milan, IMS was Italy’s first manufacturer of CD discs. In its haydays, it was pressing 70 million CDs and DVDs annually.

Until a few months ago IMS was under contract with EMI for the production and distribution of the music label’s CDs and DVDs. In a statement, EMI Music Italy says it had to take ‘emergency measures’ to limit the damage to its operations and image given that the IMS Group is no longer able to ensure continuity of services, manufacturing and distribution. In the statement, EMI hoped for "a satisfactory resolution of the situation of all IMS employees as soon as possible," reports Il Sole 24 Ore.

EMI has been keeping close bonds with the IMS Group, a loyalty demonstrated last month when EMI employees showed solidarity with the plight of their IMS counterparts following news of the company filing for liquidation. Singer Vasco Rossi, an EMI recording artist, was on the frontline of the mobilization to support the workers.

As the 132 employees were notified of their layoffs, EMI reportedly made available €400,000 to cover their 13th month salaries, holidays pay and back wages as per agreements with the unions.

Story filed 25.11.11