Administrators called into food ingredients business

A WIDNES-based manufacturer and distributor of food products and ingredients has been placed into administration having been hit hard by volatile cream and butter prices earlier this year.
 
Key Food Ingredients imports bulk cream and butter to manufacture butter oil and butter ghee, catering to the foodservice, manufacturing and cocoa industries.
 
Sister firm Simplea Foods imports raw ingredients to produce pureed formats of ready-to-use ingredients such as garlic, ginger and chilli, together with a range of sauces and condiments suitable for the foodservice and retail markets. More recently, this has been expanded to include a Mediterranean range of marinated olives, antipasti and pestos.

The administration also affects Key Distribution, the firms’ warehousing and distribution division, which was expanded in February 2016.

The companies have a combined turnover of £8.3m and employed 44 staff.

Joint administrators Paul Dumbell, Paul Flint and David Costley-Wood from KPMG’s restructuring practice in Manchester said they have retained 39 staff for the time being, whilst they review operations and look to sell the business.

Paul Dumbell, director and joint administrator, said:  “Whilst historically a successful business, more recently the financial performance of Key Foods has been impacted by the volatile commodity prices of bulk cream and butter.

“In particular, the company was hit by a sharp increase in the market price of cream between April and July 2016, ultimately resulting in this administration appointment.
 
“In addition to securing the assets of the business and streamlining operations in an attempt to continue to trade, the joint administrators are now exploring a sale of this unique local business and its assets.”

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