UK – Orchard House Foods, UK’s food-and-drinks supplier, plans to shut one of its four production facilities which has become economically unsustainable.
The plant in Gateshead in north-eastern England, according to Orchard House Foods, has become a loss-making factory and continued to be in the red despite “significant investments”.
The company, sold by US group Hain Celestial to private-equity firm Elaghmore a year ago for GBP25m (US$30.1m) noted to have invested approximately GBP6m (US$7.10m), since its takeover in the soon-to-be-closed site in Gateshead.
Orchard House Foods was founded in Corby in 1985 and makes drinks, jellies, yogurts, compotes, and granolas for major retailers, supermarkets, and restaurants at its Earlstrees Industrial Estate base.
It was the first company to commercialize orange juice in the UK and introduced freshly squeezed to the high street that are originally hand-cut and hand-peeled.
Despite making significant investments in our Gateshead facility over a considerable period in an effort to turn around its financial performance, it is unfortunately still making losses that make it unsustainable over the long-term.”
Up to 430 staff could be made redundant out of the 1,000 permanent workers employed across its operations.
The company, which supplies the likes of Marks & Spencer, Morrisons, and Pret A Manger, said it plans to relocate production to its existing base in Corby, Northamptonshire.
Corby stated that because of the Gateshead facility’s unviable future, the group believes that the future of the business lies in consolidation, a review process has stated in consultation with staff and proposing to amalgamate production from the Gateshead site at another fruit processing facility in Corby.
The decision being considered, according to Corby, comes off the back of an incredibly challenging period for the sector and thus cannot be taken lightly.
Like many other businesses across the UK, Orchard House Foods has been suffering from a series of economic and business challenges that include rising energy, raw material, transport, and a shortage of available staff to work at the Gateshead site.
Reopens of mothballed Corby factory
Amid the shutdown of the loss-making factory, Orchard House Foods is to reopen its mothballed Corby factory.
It is expected that more than 100 jobs will be created locally when the Manton Road firm reopens its third Corby plant which was put out of action in 2018.
Other than being in the freshly-squeezed juice only, the reopened plant will be used to produce breakfast and dessert items.
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