UK poultry supplier Avara Foods plans closure of another facility
UK – Avara Foods, a UK poultry supplier co-owned by agri-food giant Cargill, is proposing to close another processing plant.
The proposal comes shortly after the company announced its intention to shutter a factory in Abergavenny, Wales, which would affect 400 employees.
The latest plan involved closing the Newent facility located in Gloucestershire, in the southwest of England. The closure is scheduled for Spring 2024.
Although Avara Foods has not disclosed the exact number of employees who will be impacted by this decision, media reports showed that the Newent facility, previously known as Freemans of Newent, employs around 320 people and provides chicken for restaurant chains like Nando’s.
Avara Foods attributed its decision to the challenging economic environment.
The company mentioned that it has faced significant inflationary pressures in fuel, commodities, and labor over the past two years.
Despite some price increases, they have not been sufficient to offset the rising costs and protect the company’s margins.
“In today’s trading environment, sustainable businesses must provide a competitive offer to consumers and sufficient margin to allow reinvestment in the food supply chain,” Avara Foods stated.
“These can only be achieved if inflation can be sufficiently offset and that, in turn, demands excellent productivity and efficiency.”
Meanwhile, the company has already taken steps to address these challenges, including the recent closure of the Abergavenny facility.
Avara Foods believes that its existing chicken volumes and full product range could be processed more efficiently and with lower capital investment by focusing on fewer, better-invested facilities.
The decision to close the Newent facility has been made through long-term business planning to create a sustainable poultry model capable of supplying a significant percentage of the UK’s poultry needs in the present and the future.
Avara Foods, established in 2018 as a joint venture between Cargill and UK group Faccenda Foods, will begin a collective consultation process with the affected employees as it moves forward with its plans.
Besides Newent, Avara Foods operates seven other processing sites in England. In its most recent financial accounts, covering the year to the end of May 2022, the company reported a turnover of £1.26 billion, compared to £1.19 billion the previous year.
However, Avara Foods booked an operating loss of £21.3 million, in contrast to an operating profit of £23 million in the previous year.
The accounts also show a loss after tax of £16.1 million, while a year earlier, the company had reported a profit after tax of £16.9 million.
