Mammoth food factory poised for extinction

By Ben Bouckley

- Last updated on GMT

Related tags: Auction

Mammoth food factory poised for extinction
Longbenton Foods’ Benton Lane site in Newcastle proved impossible to sell as a going concern due to its mammoth size and outdated layout, its administrator has told FoodManufacture.co.uk.

The company entered administration under controversial circumstances ​in March, after cashflow problems meant production ceased and around 150 staff were sent home in mid-February. They were eventually made redundant.

Grant Thornton partner Joe McLean said the process was “moving inexorably to a conclusion”​, and confirmed that equipment from the site – which produced outsourced Findus products such as Crispy Pancakes – would be auctioned-off via auction house Troostwijk on September 14/15.

In May, McLean said he had turned down several offers for the plant and machinery only, since this would remove his ability to secure a sale of the entire facility and potentially save jobs.

Major effort

But expressing sadness for the workers made redundant, McLean told FoodManufacture.co.uk last night: “I will probably never be able to demonstrate to those sidelined the major effort I made to try and help people come back to work. But there was simply no buyer.”

McLean said that when the online auction process was over, with the kit sold on locally and abroad, he would continue to market the facility itself for sale.

Some of the site’s kit was owned by a third-party financier, but McLean said it had agreed not to sell the kit for several months after he was initially called in, as he pursued a sale of the business as a going concern.

In trying to secure a buyer for the site, he said he had pitched the business to “hundreds of firms in the UK, Europe and beyond”,​ with numerous site visits occurring between March and July.

“No-one was interested enough to make an offer, although I did have one derisory offer,”​ McLean added.

But the financier had now decided to dispose of a significant proportion of the factory’s kit via auction, including the more important pieces of equipment, he said.

Site too big

Since the financier’s lot included the more important equipment, McLean said this left him with “no option but to sell my kit at the same time, to secure value through a common sale”.

However, McLean said he had faced two fundamental problems trying to secure a site sale over the past five months.

Interested parties had made it clear that the Benton Lane site was too big at 330,000sq ft and, secondly, would have been configured differently, had it been built in 2011.

“A very well-known firm that’s put food on the nation’s dinner plates for 30 - 40 years even said that the site was too big; that the economics of it didn’t stack up,”​ McLean said.

FoodManufacture.co.uk contacted North Tyneside MP Mary Glindon for comment, but none was forthcoming as we went to publication.

Related topics: Frozen

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