Meat processor in Scotland faces phased closure

by Meat&Poultry Staff
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LIVINGSTON, Scotland – VION Food Group Ltd. (VION UK), a meat and poultry processor, announced plans on Oct. 5 to close its Hall’s of Broxburn meat processing plant in West Lothian, Scotland. The plant employs 1,700 workers.

VION Food Group purchased the facility in August 2008 as part of its acquisition of Grampian Country Food Group. The company has since made significant investments in the plant in an effort to return the business to profitability. The company also diverted work from other VION locations in the United Kingdom to the facility and hired new management from across VION's businesses, the company said.

“We have done everything in our power to avoid having to take this extremely regrettable action but we have been unable to identify any viable alternative to the closure of the plant," said Peter Barr, VION UK chairman. "This is a very sad day for all those involved but, unfortunately, the unsustainable losses which the plant continues to suffer, combined with the challenging economic conditions across all food sectors, have left us with no alternative."

Barr cited the "tens of millions of pounds" VION invested in the Hall’s site since 2008, but the facility continues to record unsustainable losses, he said.

"The outdated and inefficient layout of the site, overcapacity in the marketplace and increasing costs mean that it has been loss making for a number of years, a position we can no longer sustain," Barr said.

VION has been in ongoing discussions about the plant's fate with a Scottish Government Task Force since July. During those discussions the government proposed buying and leasing the site back to the company.

“While we greatly appreciated this imaginative and genuine offer of support, the level of funding involved was significantly below that required to resolve the site’s major and inherent problems,” Barr said. “Consequently, we felt it would be entirely wrong to accept public money, knowing that it would not deliver a sustainable solution for the site.”

The company is currently collaborating with the Scottish government to find a new owner for the facility, and Barr said a small number of companies expressed interest.

"We are engaged in detailed discussions with these parties to establish if their proposals would provide a viable solution for the Broxburn site," he added. "We will be providing the outcome of these discussions at next week’s Task Force meeting."

VION UK is a business arm of VION N.V. based in Eindhoven, Netherlands. VION UK produces and processes, beef, lamb, pork, bacon and chicken. The company also makes sausages, cooked meats and value-added chicken products.

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