The aquafeed company, Skretting, today announced that the company has started a process of consulting with employees with the view to cease production in the UK at the end of April 2019.
The company said its plans to cease because of market overcapacity. “This move is aimed at reducing the overcapacity in the highly competitive salmon feed market, and better utilise the company’s existing production facilities in Europe,” the company said in a press release.
Skretting has a HQ in Wincham, a plant in Longridge (both in North West England) and a Scottish site in Invergordon. Up to 100 people are at risk at losing their jobs.
The company – which is a wholly owned aquaculture arm of the Nutreco feed group in the Netherlands – has no plans to stop production in other markets and will continue to pursue its firmly established growth strategy.
“Unfortunately, we are experiencing unsustainable market conditions in the UK. With a new large feed plant becoming operational in Scotland early 2019, the total feed capacity in the region is expected to exceed the total market by more than 50%. This is driving down prices, leading to an unsustainable commercial environment”, said Therese Log Bergjord, CEO Skretting. “We have therefore made the decision to start consulting with our employees on a proposal to cease feed production in the UK”.
Skretting said it will continue to supply to the UK market where economically viable.
“This is a tough decision for Skretting’s management team and our owner, Nutreco, considering the implications for our local employees and partners. In the proposed plan, all locations, including two production sites will close down, and around 100 employees may become redundant. First and foremost, we now concentrate on finding good solutions with our employees, customers, suppliers and partners in the UK”, said Log Bergjord.
SalmonBusiness asked if mass redundanies were imminant. “The supply-demand imbalance is not expected to change in the UK market and Skretting has therefore made the difficult decision to consult with its employees on the proposal to cease production in the UK. We are working with employees with the expectation that all positions will become redundant with the closure of production at the end of April 2019,” wrote Sophie Noonan, Skretting Communications Manager in an email.
While Skretting experiences regional market challenges in the UK, the group will actively pursues further sustainable expansion of the global aquaculture industry from its operations in 19 countries across all continents.
“Aquaculture is an increasingly important and attractive solution to meet growing demand for healthy food. As the global leader in aquafeed, we are fully aware of our responsibilities. That is why we are prepared to take tough decisions to ensure sufficient profitability to finance our future and to remain a pioneer of continued sustainable development of the aquaculture industry”, said Log Bergjord.
Has uncertainty around Brexit influenced the decision?
Brexit is not a factor we have considered. It’s the unsustainable market conditions driven by the expected overcapacity that forms the basis for our proposal.
2) You say 100 employees may become redundant? Are redundancies imminent?
The supply-demand imbalance is not expected to change in the UK market and Skretting has therefore made the difficult decision to consult with its employees on the proposal to cease production in the UK. We are working with employees with the expectation that all positions will become redundant with the closure of production at the end of April 2019.