Over 750 jobs are at risk at a leading fresh food producer in the UK as the company announced its intention to shut down one of its factories in the North West. A recent review indicated that significant investment would be necessary for the facility to continue operating.
In a statement released to the London Stock Exchange, the Bakkavor stated, “As we seek to further enhance our returns, we have identified that our Wigan facility is unsustainable with low margin business in a factory that requires significant investment.” The company further noted, “This has resulted in the difficult but necessary decision to announce the potential closure of this site, with consultation to commence at the end of September 2024.”
Should the consultation result in closure, the company estimates a loss of approximately £80 million in business for the first half of 2025. Meanwhile, the company has expressed its intention to offer alternative roles within the business to its Wigan staff “where possible” and will explore initiatives to assist affected employees in securing other employment.
The announcement came alongside the company’s latest half-year results, which highlighted an increase in overall revenue. For the six months ending 29 June 2024, the company reported a rise in UK revenue to just over £1.1 billion, compared to £1 billion in the same period of 2023. Additionally, there was a 27 per cent increase in operating profit to £58 million from £46 million.
Group Chief Executive Mike Edwards commented on the performance, stating, “This has been a strong first half for the group, with momentum from our 2023 restructuring activity continuing to support our performance in 2024.” He added, “I would like to take this opportunity to thank all of our colleagues for their continued hard work, commitment and loyalty to the business through this period of significant change.”
Edwards further elaborated, “We are firmly focused on continuing to rebuild margins and we are pleased to upgrade guidance for 2024 as we look to drive efficiency in every part of our business. We are excited about building a stronger company as the trading environment improves and we continue to leverage the benefit of the actions we have taken over the last couple of years. As such we have good line of sight to deliver further margin improvement as we move into 2025 and beyond.”
The company’s decision to potentially close its Wigan facility marks a significant development, especially given the substantial investments required to sustain the plant. Efforts will be made to support affected employees, offering alternative roles where possible and assisting in job placement. This decision comes in the wake of a strong financial performance in the first half of 2024, underscoring the duality of progress and necessary restructuring within the organisation.