Some 250 workers at a produce business at Butterwick face an uncertain future following the announcement that the site is to close under re-structuring plans.
The Produce World Group has announced it intends to create a joint venture with LFP (Lincolnshire Field Products), based at Wykeham, near Spalding, which would see all its brassica business go through the new arrangement, along with LFP’s brassicas business and a range of other vegetables.
As a result, the Produce World Group has proposed the closure of its site at Butterwick, where 250 full-time workers are employed.
Consultations have commenced with colleagues and their representatives at Butterwick. It is anticipated that, while there would be job losses at Butterwick, about 60 new jobs would be created at Wykeham.
Produce World has also announced that it proposes closing its factory at Swinderby, where about 90 are employed, and moving all processing and packing of conventionally grown root vegetables to its site at Isleham. Additional processing and storage facilities are being built at the Isleham site to cope with the additional tonnage and a number of new jobs will be created.
The company has entered into consultation with colleagues and their representatives at the Swinderby site.
Produce World Group executive chairman Neil Fraser said: “At Produce World we are growing our business and developing a structure which will enable us to meet the current and future challenges in the industry. We are operating in a low margin business and more consolidation across the industry is inevitable. At the same time our customers are experiencing a period of unprecedented competition and changing consumer shopping habits.
“We have acted to ensure we can meet these challenges and make the Produce World Group sustainable for the future. We are committed to the long-term for the business and for fresh vegetable growing in Lincolnshire and across East Anglia.
“Our roots business at Isleham already operates successfully as a joint venture with Tompsett Burgess Growers and this is the model we plan to use with LFP.
“We are very much aware of the impact that the proposed closures will have on our colleagues at Butterwick and Swinderby, and we have considered and will consider every possible option before implementing these proposals. Both sites will remain open for a number of months and we will do everything we can to help colleagues to find alternative employment including jobs within the Produce World Group.”
The joint venture with LFP will mean that the overall Produce World Group will have a turnover of around £250m and will be the biggest grower and supplier of fresh vegetables in the UK.
About £10m will be invested across the Wykeham and Isleham sites.
Martin Tate, commercial director of LFP, said: “We believe that this joint venture plays to the strengths of both organisations, combining the growing expertise and experience in brassicas of LFP with the commercial skills of Produce World. The combination of the two businesses will ensure that we can compete in the market place and have a sustainable future.
“This joint venture will help to secure the future of brassica growing in this part of Lincolnshire. There is a huge amount of competition for land at the moment for both food and energy crops, and we want to ensure that brassicas continue to be grown in what has traditionally been the ‘brassica capital of the UK’.
“Consolidation in fresh produce supply chains is inevitable as a result of the pressure of the highly competitive retail environment, declining consumption, and changing consumer shopping habits. We need to respond to this pressure and put ourselves in the best possible position to succeed, and we believe that this joint venture will do that.
“This will give us scale and efficiency as part of the biggest grower and supplier of fresh vegetables in the UK. This is a proven model and Produce World Group already successfully runs its roots business in a similar way.”