Vacjet director Marshall Horne said the business had reached its overdraft limit and had been told on Wednesday that the bank would not be honouring any paychecks.

“I couldn’t pay the guys their wages so I had to let them go,” Mr Horne said.

For the past four years Vacjet has made industrial vacuum loading equipment and water blasting equipment for councils, water authorities and the mining industry.

The staff made redundant include boilermakers, welders, fitters and turners, designers and administrative staff

Mr Horne said overseas competition, low prices, high rent and wage costs had all contributed to the business’ failure.

“Manufacturing is under extraordinary pressure from overseas and the race to the bottom as far as pricing goes,” he said.

“Industrial land prices in town are obscene. Rents are not sustainable. With worker shortage wages are going up.”

Mr Horne said Vacjet’s trailer division was being particularly challenged by overseas competitors. 

“We were getting beaten badly on price,” he said.

“Councils and water authorities buy the cheapest all the time, rather than going with a local product.”

But Mr Horne said he had a “full order book” and was weeks away from delivering equipment which would have brought in hundreds of thousands of dollars.

“It’s taken us by surprise,” he said.

“We probably had one of the best crews we had working together very well and getting better all the time.

“It just shows the banks are taking a lot more conservative position now.

“I think what they did was callous and unnecessary.

“Obviously I am responsible, but I got notified over the phone after a four-year relationship with the bank.

“It’s harsh for me, employees and suppliers.

“I don’t want to paint myself as the victim but I just don’t think we were given the support we should have been.”

Mr Horne said all employees’ benefits were guaranteed and they would get the money they were owed.

But he admitted the closure would mean “a lot of pain and suffering” for suppliers.

“I know one supplier who said this could put him under and that’s another family affected,” he said.

A Vacjet employee – who wanted to stay anonymous – said the mood was sombre at the Vacjet factory in Bendigo East yesterday.

“Everyone worked until 2pm, then we had a meeting and we were asked to get our tools and belongings out of the workshop by that afternoon,” he said.