Over 430 jobs to go at stricken chilled food distributor
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Almost 660 jobs have been saved at Alfreton-based ECVL Chill after the firm called in administrators from PwC.
As we reported last week, ECVL Chill, a division of EV Cargo, an acute shortage of drivers combined with the loss of some key accounts, has brought down the firm – although the administration does not affect the wider EV Cargo Group which continues to trade as before.
EVCL Chill operates primarily in the chilled food logistics market, storing and delivering products for a number of retail customers and suppliers to the UK food retail market, including Asda and Sainbury’s.
The business employs 1,092 full time employees operating from warehouses and depots in key locations across the UK including, Daventry, Alfreton, Rochdale, Crick, Bristol, and Penrith.
The business operates 374 trucks and 432 trailers across its transport network, alongside more than 20,000 pallets of warehousing capacity, servicing blue chip food retailers and manufacturers nationwide.
In the period to December 2020 turnover at the business exceeded £167m. However, EVCL Chill has struggled with a loss of a number of key customers and acute driver shortages during 2021 which given its fixed cost base, created significant liquidity challenges. The administrators say a number of sale options were explored but generated limited interest and management took the “difficult” decision to enter administration.
Some 658 jobs and a number of services have been transferred to key customers under their contractual arrangements. However, administrators say there are a number of roles that have not been transferred. The remaining employees will be updated on Monday.
Eddie Williams, joint administrator, said: “This has been a very difficult situation and involved intense discussions with key stakeholders on an accelerated basis to get to this position. As businesses move from survival mode to recovery, the financial climate is still very volatile.
“I am pleased that at least 658 roles will continue in a sector that is already facing many difficulties and challenges around inventory, personnel and the wider supply chain. Some vital continuity and stability has been ensured for a number of EVCL Chill’s stakeholders.
“We will continue to fully support all affected staff members during this difficult time.”
Helen Wheeler Jones, joint administrator, added: “We will also continue to liaise closely with customers on the key IT and transport requirements needed for them to fulfil orders, alongside other priority stakeholders including HMRC.”
The news comes just 18 months after the company was bought out of administration, saving 2,000 jobs.
The company is owned by venture capitalists Emergevest. The Unite union says that EV Cargo Chill’s collapse into administration is a “direct result of the parent company seeking to maximise short term returns at the expense of the investment needed to secure its long-term future”.
Unite national officer Matt Draper said: “The collapse of EV Cargo Chill at a time when there is huge demand for lorry drivers in particular, further calls into question the role and involvement of venture capitalists in UK industry.
“There is something fundamentally wrong in a system which allows the wealthy owners of a company to avoid paying for its collapse while the taxpayer has to pick up the pieces.
“EV Cargo workers have lost their jobs without warning, through no fault of their own, and Unite will be assisting its members in every way possible in coping at this difficult time.
“It is likely that the EV Cargo Chill workers employed on its supermarket contracts will be transferred directly to that employer. The rest of the employees will have a far more uncertain future, but this is a highly distressing and stressful time for all workers at EV Cargo Chill.
“Unite is dedicated to advancing the jobs, pay and conditions of its members and will fight back against any efforts to diminish workers’ living standards.”