North Yorkshire food group to invest £10m to boost UK production

PORK supplier Karro Food Group is to spend £2.5m on its North Yorkshire headquarters as part of a £10m UK investment programme.

The improvements at its Malton site involve a £1.5m upgrade to the gammon processing line, which will expand the company’s fresh pork and gammon production capability, and a £1m investment in a new “kill line” to facilitate export and domestic supply.

Karro will also create the Malton Innovation Centre, which will drive product development and R&D for the business.

This investment comes despite 141 redundancies being made at its Scunthorpe facilities, a result of an “external factor” – understood to be an order reduction from one of its major customers, Tesco.

The capital investment programme, financed from cash generated by the business, will be carried out over the next year at a number of Karro’s UK manufacturing facilities. It also includes a £6.5m investment into new chilling and processing technology at Karro’s facility in Cookstown, Northern Ireland, and £1m in new packing lines at its site in Haverhill, Suffolk.

Di Walker, executive chairman at Karro Food Group, said: “This significant investment demonstrates Karro’s commitment to use the latest technologies to enhance our already excellent product quality and provide the best service possible to our valued customers.

“It is further evidence that we are well-ahead of our five-year turnaround plan, and gives us added capability to develop our strategic retail and trade partnerships and enter new markets.”

The turnaround programme was launched following its buy-out from the Vion Food Group backed by Leeds-based private equity house, Endless, in January 2013.

Karro recently announced it had improved EBITDA, a measure of profitability, by £10m in its first year as an independent business, although it remains loss-making.

Ms Walker added: “The underlying performance of the business continues to gain momentum and we are extremely positive about the outlook for Karro Food Group. Furthermore, we will be in a position to report another year of significant financial improvement when we release our 2014 accounts in the coming months.”