July 6, 2012
Vion may close major Scottish pig processing facility
Scotland's pig industry has been severely affected, with an announcement by Vion Food UK that it could be forced to shut down its loss-making site, Hall's of Broxburn.
The plant kills around 8,000 pigs each week but has of late been losing some GBP79,000 (US$122.610) each week, according to the company.
The plant was purchased by Vion in August 2008 when it acquired the troubled Grampian Country Food Group, which had been in financial difficulties for several years.
The announcement puts some 1,700 jobs at risk.
Hall's employs 1,150 permanent and 595 agency staff and is the major processing facility for Scottish pork.
Vion said it has invested heavily in the site over the last four years in an attempt to stem the huge losses.
A 90-day consultation exercise with unions and workers has begun.
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.
"There is significant over-capacity in the UK meat industry and market conditions are extremely challenging."
"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.
Barr said if the consultation exercise did not reveal a viable way forward, a proportion of the work from plant would be transferred to other Vion facilities in the UK. "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."
Broxburn is one of the five largest pig abattoirs in Scotland handling a combined 94% of the kill. The ten smallest, out of the 18 abattoirs which have handled pigs in the last six months, account for just 1% of total kill.
According to QMS, the Scottish pig slaughter sector has a greater dependence on sales to multiple retailers - more than 70% of sales - than either the beef or sheepmeat sectors but less dependence on markets outside the UK. And more than three quarters of the output from Scotland's pig plants is sold in the UK outside Scotland.
