Its intention to close the plants near Butterwick and Swinderby in Lincolnshire dovetails with its aim to form a joint venture (JV) growing, harvesting, packing and marketing brassicas with Lincolnshire Field Products (LFP).
Once formed, the JV would be responsible for all growing and harvesting, and all processing and packing would take place at Wykeham, where LFP is based.
As a result, Produce World has proposed the closure of its site at Butterwick, where it employs 250 full-time staff. The company has also announced proposals to close its factory at Swinderby, which supports 90 full-time roles, and moving all processing and packing of conventionally grown root vegetables to its site at Isleham.
Consultations have begun with staff and their representatives at both plants.
However, at the same time, while there would be job losses at Butterwick, Produce World planned to create 60 new jobs at Wykeham, it said. In addition, it planned to build additional processing and storage facilities at Isleham to cope with the additional tonnage there, and a number of new jobs would be created through that, it stressed. It confirmed aims to invest £10M at Wykeham and Isleham.
“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,” said group executive chairman Neil Fraser.
“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.”
Fraser said Produce World would consider every possible option before implementing the proposals at Butterwick and Swinderby. “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,” he said.
LFP commercial director Martin Tate said: “This JV 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.
‘Scale and efficiency’
“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.”
The JV with LFP would mean that the group would have a turnover of around £250M, and would be the biggest grower and supplier of fresh vegetables in the UK, it claimed.
At present, across all its sites in East Anglia and Lincolnshire the group employs about 1,000 people as well as agency staff.
The history of Produce World goes back to 1898 when the Burgess family first started growing and selling fresh vegetables. The current generation of the family is the fourth to be involved with the business.