Mass redundancies loom at Luton sandwich site

There is enough business to sustain Hain Celestial’s Luton sandwich factory for another 12 months, but its long-term future is uncertain if bosses cannot secure substantial new contracts, human resources boss Graham Trevor has admitted.

Up to 300 staff at the factory, which employs about 370 staff, are facing redundancy following the loss of a Marks & Spencer (M&S) contract that accounted for 90% of the site’s output.
Production will gradually transfer to rival Uniq’s Northampton factory from July to September, while the ham, cheese and pickle line would continue to supply M&S until April 2010, said Trevor. The contract win has increased Uniq’s share of M&S’s sandwich business to 60%.
Bosses at Hain Celestial were now in discussion with “several potential new customers” in a bid to secure the long-term future of the site, said Trevor. “Obviously the staff are very disappointed and upset, but we are a very flexible, well-invested chilled food production site capable of making sandwiches, baguettes, bagels, salads, pasta pots and a variety of other products for caterers and retailers. We have a high quality site and a fantastic, flexible workforce.”
If the site had not secured any new business by October, it would run on a skeleton staff of 70-100 until the following spring, he said.
Alan Costello, a regional organiser at the GMB union, said Hain Celestial had been “steadily reducing its headcount over the last couple of years”, but the latest news came as a “devastating blow” for the workforce.
Scores of redundancies have also been announced by Northern Foods, which announced plans to close its Hull ready meals plant last week after failing to agree “mutually acceptable and commercially viable terms” with Morrisons.
Chief executive Stefan Barden said: “We will be commencing consultation with employees on a proposal to cease production and close the site, in accordance with our strategy to continue with business only where terms generate an adequate return.”
The firm has also continued to exit low margin own-label contracts elsewhere in the business and has hinted at significant investments in automation to come.
Viable ready meals plants would, in future, turn over well over £100M and run with 200-300 staff as opposed to 1,000, Barden told reporters as he presented the firm’s full year results last week. Rumours that Northern is planning to step up automation in its plants have also been fuelled by a recent visit to the Centre for Food Robotics and Automation in Doncaster attended by more than 50 factory managers, senior engineers, project engineers and Barden himself.