Site closure planned as part of 2 Sisters turnaround
West Midlands food producer 2 Sisters has announced plans for its turnaround, including major investment in its brands and the closure of some of its UK facilities.
The Birmingham-based company said it was investing further in its UK poultry and Fox’s Biscuits businesses. It was forced to cut more than 200 jobs at a Fox’s Biscuit site in the East Midlands earlier this year.
It said it would be reducing the number of UK poultry sites to produce “shorter, more efficient supply chains” and reviewing loss-making sites.
As part of the review, it will be closing its Witham processing site in Essex. 2 Sisters said that a consultation has started and will “explore all possibilities” including redeploying Witham colleagues to other sites in the group.
Elsewhere, 1,000 jobs have been secured at the company’s Dronfield bakery after 2 Sisters said it had secured long-term contracts with clients of the site.
2 Sisters also confirmed today that it was looking to sell its Matthew Walker Christmas Pudding business, which was speculated on earlier this month. A deal would be worth in the region of £80m according to reports.
Chief executive Ronald Kers said of the sale: “It is quite natural to get this kind of speculation and, although we do not normally comment, we are in the early stages of a sale process for Matthew Walker and anticipate strong international interest.
“However, we will only sell at the right time and for the right value and our colleagues would be the first to know if this were to happen.”
Cost pressures and high-profile investigations and fines into its poultry businesses have affected the company’s bottom line.
Figures for the second quarter in 2019 showed pre-tax profits before interest of £61.9m, compared with £2.4m a year earlier. Total sales were down by nearly £140m, to £711.5m, which mostly reflected the sale of its Goodfellas pizza, Red Meat and the Manton Wood sandwich businesses.
Mr Kers said: “We’re all acutely aware that some of our plans, such as reducing our UK poultry footprint, brings uncertainty for colleagues, and it is with regret that we have to make such proposals. But the alternative of doing nothing and hoping for an upturn is not an option.”
“Our stated strategy is to become the number one poultry plus business in Europe and for several months now we have been engaged in a strategic review to facilitate our delivery on this, focussed on improving execution, reducing cost and building a better organisational culture.
“But there is now a pressing need to accelerate our turnaround so we can further increase the performance of our business.
“That’s why we’re keen to invest where we see potential growth: our UK Poultry business will benefit from this further investment and work which has already started to get Fox’s Biscuits in shape for the future ramps up to the next level with some major investment around automation, marketing and product innovation.
The company also said it would make an early repayment of the £250m bonds due to mature in July 2019. It said that the final payment of £60m required to effect this repayment will be made on 31 May.
Kers said: “This repayment of the 2019 Bonds, in accordance with the milestones previously communicated, is a significant step forward in the transformation of our business.”
