400 jobs are at risk at a 2 Sisters site in Grimsby, after the beleaguered food group began discussions on closing it down.
Their loss-making fish processor, Five Star Fish, recently lost contracts with Marks and Spencers, partly prompting this decision.
There are 390 food jobs at risk at the Five Star Fish site, which is no longer sustainable according to a statement from the company. Having conducted a full strategic review already, they found that the operation was not going to be able to continue for the long-term without serious changes.
“We are having ongoing discussions with our customers and with other local manufacturers to ensure we explore the full range of options available to us,” said a statement from the 2 Sisters Food Group. “However, the site is heavily loss-making and despite major investment in recent years, we are unable to reverse the situation. It is important to emphasise that no final decisions have yet been made, as the consultation process has only just begun.”
Despite this reassuring statement, it does look likely that the site will close entirely, as 2 Sisters do not seem to have any further plans to invest in it. This follows what has been a disastrous year for the company: a scandal erupted after hidden cameras captured health and safety violations in one of their chicken plants first, which then snowballed into investigations and shut-downs, creating heavy losses. The then-CEO Ranjit Singh Boparan was forced to resign recently, and is now acting in another capacity within the family-owned parent company, Boparan Holdings.
They have seen plunging profits over the first and second financial quarters of the year, although they have managed to start turning things around by cutting their current debts. It seems likely that the sale of the Five Star Fish site will be another stage in attempting to staunch the blood flow.
The company has already made heavy investments in the Five Star Fish site, most of which it never managed to recoup. These included first buying the business out of administration in 2010, and then putting £5 million into it in 2017. They have announced plans to extend and upgrade the Grimsby plant, but those have now seemingly gone to waste.
It was a contract with Marks and Spencer which had the firm feeling positive in the beginning. They were able to win the bid to supply coated fish products in August 2016, edging out Icelandic Seachill for the prize. They had already invested £6 million into the factory earlier in 2016, creating 70 new production and manufacturing jobs at the site.
However, given that another company – Young’s – have just announced a new contract to sell coated fish to Marks and Spencer, it looks like there is no hope for the Five Star Fish site to make any kind of resurgence. Speaking before the announcement was made by Young’s, a spokesperson for Marks and Spencer had said, “We’ve been working closely with Five Star Fish and will move our coated fish business to another M&S supplier.”
This seems to sound the death knoll for the ailing factory. Some hope may be around the corner for a small percentage of the employees losing their jobs, however, as Young’s announces the creation of jobs in the area in order to meet their new contract requirements. Since existing Young’s workers from other sites are being offered first shot at the new positions, it may be a hard fight to get ahead of the crowd when the recruitment process begins.