VION Could Close Hall’s of Broxburn

6 July 2012, at 7:54am

UK - VION Food UK has announced it could be forced to close its loss making site, Hall’s of Broxburn, putting 1,700 jobs at risk, despite investing heavily in the site over the last four years in an attempt to stem huge losses.

The site has continued to record unsustainable losses, in spite of significant capital expenditure and major restructuring exercises.

The company announced to staff it was beginning a 90-day consultation exercise with its unions and workers.

VION UK chairman Peter Barr said: “This is an extremely sad day and one we have strenuously tried to avoid for the past four years, but the huge losses being incurred mean we believe we have no alternative.

“Every possible step has been taken to secure the future of the business but we are currently losing 379,000 per day at the site, which is clearly unsustainable.

“There is significant over-capacity in the UK meat industry and market conditions are extremely challenging.“

The latest accounts for the VION UK companies show a significant deterioration in financial performance compared with the previous year.

“Over the past four years, we have restructured this plant, invested heavily in the site and have brought in new management from across the group in an attempt to stem the losses, which have arisen in part due to the complexity and inefficient layout of the plant. Regrettably the plant remains very heavily in the red despite our best endeavours.

“We have also invested significantly in a modern apprenticeship scheme at the plant which attracted the offer of grant support from the Scottish Government. While we were extremely grateful for the support offered, clearly, in the circumstances, we have not and will not be drawing on those funds.“

The plant was purchased by VION Food Group in August 2008 when it acquired the troubled Grampian Country Food Group, which had been in financial difficulties for several years. Hall’s of Broxburn, employing 1,150 permanent and 595 agency staff, is the major processing facility for Scottish pork, handling 8,000 pigs each week.

VION UK, part of the Netherlands-based VION N.V., currently employs almost 12,000 staff at 40 facilities across the country and is a major supporter of the UK farming industry, producing and processing beef, lamb, pork and chicken, as well as a range of sausages, cooked meats and other convenience products.

Mr Barr said: “If the consultation exercise does not reveal a viable way forward for this plant, a proportion of the work from these facilities will be transferred to other VION UK plants to strengthen their performance and help secure jobs. However, the market conditions are so severe that we will cease to supply the majority of products currently handled by this plant. We will make every endeavour to identify other Scottish producers who may be able to produce some of these products.

“We have today spoken to the workforce of the plant affected and have opened discussions with union representatives. We have also informed Scottish Enterprise and the Scottish Government. If the plant closure is confirmed, we will take all practical steps to work with the relevant agencies to minimise the undoubtedly significant impact on jobs and local economies.

“Clearly, our Halls of Broxburn site is a major market for the Scottish pig farming industry and we would, therefore, hope to extend the timeframe for any closure plan for the abattoir at the site in order to help minimise the potential impact on Scottish pig farmers.“