Fleury Michon to divest Brtagne plant suffering from significant volume losses linked to a drop in sales
FRANCE – French agrifood giant Fleury Michon has confirmed to be exploring a sale of its factory in Bretagne, citing “successive crises” (from Covid-19 and Avian flu) and a “very volatile and inflationary economic context”, that has led to significant volume losses linked to a drop in sales.
Taken over in 2002 from its former subsidiary Argoät le Hir, Charcuteries Cuisinées de Plélan (CCP) produces superior hams and other cooked meats for mass distribution, in particular Fleury Michon duck fleuron, roast chicken fleuron as well as ham and minced ham.
The company said the plant that is up for sale employs 114 people, including 105 on permanent contracts.
In a statement, Fleury Michon said: “Faced with this difficult situation, Fleury Michon is studying the project to sell the company Charcuteries Cuisinées de Plélan (CCP) and is actively looking for buyers to safeguard jobs and maintain the economic fabric of the region: a priority for Fleury Michon.”
Following the ongoing war in Ukraine and a series of diseases, including Avian flu, the processor has been weakened with direct repercussions on the production costs of finished products, despite operational efficiency efforts, leaving it in an unstable environment.
However, Fleury Michon posted growth in sales and market share gains in all its channels during the half-year of business operations.
Fleury Michon posted a net loss of EUR2.5m (US$2.5m) in its half-year results and revenue of EUR374.5m – an up 9.6% from a year earlier. Its net margins were down 0.7% and operating margins were down 1.1%.
The profitability of the company was very negatively impacted by the increase in its costs of raw materials, packaging, and energy, which could not be passed on in the selling prices during the first half of the year, the company said.
In October, the group set out plans to invest EUR120m over five years across production, innovation, and the digital arena.
Earlier this year, Fleury Michon also sold its Slovenia ready-meals manufacturer, Proconi, to a local peer in the central European market, Eta, for an undisclosed sum.
In a stock-exchange filing, Fleury Michon highlighted that the sale would have no impact on current operating income for 2021, and a negative impact (depreciation of securities) on net income for 2021, which should nonetheless be positive, as previously announced.
Subsequently, the move contributes to the efficiency of Fleury Michon’s business organization, considering that Proconi’s activity was not significant at the scale of Fleury Michon.
Last summer, Fleury Michon tried to sell its business in Canada but failed to tie up a deal.
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