Vion UK Announces Phased Closure of Hall’s of Broxburn

Throughout the consultation exercise we have had extensive discussions with our employees and their union representatives to seek alternative solutions but, while some efficiency improvements have been identified, they are not nearly enough to bridge the very considerable losses which Hall’s continues to incur.

8 Oct 2012 --- International food group Vion has announced plans to implement a phased closure of its loss-making Hall’s of Broxburn site. The news comes following the completion of a 90-day consultation exercise with unions and workers, which commenced on July 5th, and ongoing discussions with a Scottish Government Task Force led by Cabinet Secretary for Finance, Employment and Sustainable Growth John Swinney.

Vion UK chairman Peter Barr 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. 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.

As we outlined when we made our initial announcement in July, Vion has invested tens of millions of pounds in the Hall’s site over a number of years but it continues to record unsustainable losses. The outdated and inefficient layout of the site, overcapacity in the marketplace and increasing costs mean that it has been loss making for a number of years, a position we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."

Throughout the consultation exercise we have had extensive discussions with our employees and their union representatives to seek alternative solutions but, while some efficiency improvements have been identified, they are not nearly enough to bridge the very considerable losses which Hall’s continues to incur.

As part of this process, we explored the feasibility of undertaking a major overhaul of the site. However, the investment required to deliver a facility capable of competing with much larger and more competitive plants across Europe would have been enormous. In the current environment that level of expenditure is not an option.

During discussions with the Task Force, the Scottish Government outlined proposals to buy and lease 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. Consequently, we felt it would be entirely wrong to accept public money, knowing that it would not deliver a sustainable solution for the site.

In tandem with the Scottish Government, we have been working to find potential new owners for the site and this process has uncovered a small number of interested parties. We are engaged in detailed discussions with these parties to establish if their proposals would provide a viable solution for the Broxburn site. We will be providing the outcome of these discussions at next week’s Task Force meeting.

Vion Food Group purchased the Hall’s site, which employs 1700 people, in August 2008 when it acquired the troubled Grampian Country Food Group. Since that time, significant investments have been made in an attempt to create a profitable and sustainable future for the site. In addition, significant volumes of work have been brought in from other Vion locations in the UK and new management introduced from across the group. Peter Barr continued: “If a sustainable solution cannot be identified with one of the interested parties it is our intention to implement a phased closure of the site, with some areas stopping production later this month, and an anticipated full closure by February 2013. We are already in discussions with our employees and their union representatives and will be briefing them fully to confirm the enhanced redundancy terms on offer to them and to outline our plans to support them in the coming months.”