WEST LOTHIAN, Scotland – On July 5, Vion Food UK announced it may have to close its Hall’s of Broxburn plant in Scotland. Vion Food UK has invested heavily in the site, which employs more than 1,700 people, over the last four years in an attempt to turn around huge facility losses. Employing 1,150 permanent and 595 agency staff, Hall’s of Broxburn is the major processing facility for Scottish pork, handling 8,000 pigs per week.

In August 2008, the troubled plant was purchased by Vion Food Group when it acquired the Grampian Country Food Group, which had been experiencing financial difficulties for several years. Vion UK, part of the Netherlands-based VION N.V., employs approximately 12,000 people at 40 facilities across the country and is a major supporter of the UK farming industry, producing and processing beef, lamb, pork and chicken, as well as sausages, cooked meats and other convenience products.

Vion stated in a press release the plant has continued to suffer unsustainable losses, despite significant capital expenditure and major restructuring exercises in recent years. The company told its staff on July 5 it was beginning a 90-day consultation exercise with its unions and workers.

“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,” said Peter Barr, Vion UK chairman. “Every possible step has been taken to secure the future of the business, but we are currently losing £79,000 [US$122,782] per day at the site, which is clearly unsustainable.”

There is significant over-capacity in the UK meat industry and market conditions are extremely challenging, he added. Over the past four years, the company has restructured this plant, invested heavily in the site and has 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 endeavors,” Barr said.

“We have also invested significantly in a modern apprenticeship scheme at the plant which attracted the offer of grant support from the Scottish government,” he added “While we were extremely grateful for the support offered, clearly, in the circumstances, we have not and will not be drawing on those funds.”

If the consultation exercise does not reveal a viable way forward for this plant, a proportion of the work from these facilities will be transferred to other VION UK plants to strengthen their performance and help secure jobs, Barr said. “However, the market conditions are so severe that we will cease to supply the majority of products currently handled by this plant,” he added. “We will make every endeavor to identify other Scottish producers who may be able to produce some of these products.

“If the plant closure is confirmed, we will take all practical steps to work with the relevant agencies to minimize the undoubtedly significant impact on jobs and local economies,” he said.

“Clearly, our Hall’s of Broxburn site is a major market for the Scottish pig-farming industry and we ... hope to extend the timeframe for any closure plan for the abattoir at the site in order to help minimize the potential impact on Scottish pig farmers,” Barr concluded.