May 24 2013 Latest news:
By Sarah Chambers
Friday, February 8, 2013
A DUCK meat processing operation near Woodbridge is planning to shed around 90 full-time jobs as soaring feed costs take their toll.
Gressingham Foods, which runs a highly successful family poultry business at Debach and is a leading national duck producer, plans to mothball its butchery and processing business there and transfer it to its Redgrave factory around 27 miles away.
Other operations, including distribution, farms management, sales, finance and some packing operations will continue at the Debach headquarters.
Shocked staff at Debach, where 190 people are employed, were informed yesterday (Thursday). Under the plans, 100 staff will remain at Debach, and the company is hoping to transfer around 50 or 60 staff from there to its Redgrave site, where 210 are currently employed.
The Debach plant will re-open for peak seasonal work around November/December, when it will take on 90 seasonal staff, and, if market conditions improve, it could re-open in future years, joint managing director Geoffrey Buchanan said.
“We have thought long and hard about this decision and very regretfully have decided the changes are necessary to protect and enhance the business for the future,” he said.
“Despite good sales growth, feed costs have almost doubled over the last five years with a dramatic impact on profitability. Our site at Redgrave has the capacity we need for most of the year but retaining the operation on a seasonal basis at Debach gives us the scope to scale up when we need to. All affected staff are being consulted and we are looking to minimize the impact wherever we can.”
Overall, the £100million turnover business employs around 550 people, including 150 on farms across Suffolk and Norfolk. These are not affected by yesterday’s announcement.
“The business is still very sound. We have not taken this decision lightly at all, but it is being done to protect the future of the business,” added Mr Buchanan.
“We are cutting our cloth according to current circumstances.”
The company has sought efficiencies elsewhere to cope with the effects of high feed costs, which account for around 50% of costs, and has tried to pass on some costs to consumers, but still needed to find more savings, he said.
“We have tried to pass on some of the feed cost increase we have suffered but there is only so far you can go in the market place and have a product people will buy,” he said.
The reason the Redgrave site had been chosen over the Debach one was that it was closer to the farms which supply it, reducing transport costs, is 50% larger and has a line which runs faster.
“We made an announcement to both sites yesterday. We spoke with the Debach factory at lunch time and the Redgrave site that afternoon. Everybody has been informed and we will be opening a consultation period with staff to assess how we can minimise the impact,” said Mr Buchanan, who runs the business with brother, William.
“It’s a very sad day because we have been running the Debach factory all year round for about 20 odd years now so that did come as a bit of a shock. Some people were sad, some people were a bit upset which was understandable.”
The firm aimed to contribute towards transport costs in the first year for those who transfer, he said.
Feed costs compared to prices in quarter one and quarter two of last year were still on the rise, he said. Meanwhile, sale have plateaued, as the firm can no longer sustain its heavy promotional activity in the supermarkets.
“The growth has receded a bit during the last latter part of last year and early this year and we have had to take a different strategy in our pricing. We are no longer able to fund heavy promotions,” he said.
The company has the capacity to produce all its output at the site at Redgrave, so production will not be reduced as a result of the move. Gressingham Foods also produces turkey, goose and speciality poultry such as guinea fowl, quail and poussin. It is best known for its Gressingham Duck, a unique breed of duck grown on its Red Tractor approved farms across East Anglia.