Council expects payback as Northumberland Foods revived

03-Nov-2010 - Last updated on 03-Nov-2010 at 13:09 GMT

Northumberland County Council is hoping to recoup its £250,000 investment in Northumberland Foods after the administration-hit firm restarted production.

The firm’s new owner Longbenton Foods confirmed that production had restarted at Northumberland’s Amble site, and that 70 former staff had been re-employed.

250 jobs were lost this August at Northumberland’s facility in Amble, when the company went into administration citing financial difficulties; this followed a management buy-out of the firm that prevented its closure in February 2009.

Funding for the buy-out was provided by regional development agency One North East and Northumberland County Council; the former provided £3.4m while the council provided £250,000 last summer as a secured loan.

Hoping to recoup cash

Leader of Northumberland County Council Jeff Reid told FoodManfacture.co.uk that the council hoped to recoup its controversial loan: "The decision to support Northumberland Foods in 2009 was based on the importance of the business to the economy in the Amble area.

"The collapse of Northumberland Foods at that time would have placed great strain on families and local services in that part of the county. The support given by us has helped to achieve this positive outcome and we hope that we will now recoup the county council's investment."

Longbenton Foods said that supply contracts had been signed with local producers, while the firm hoped production lines at Northumberland would be running at maximum capacity by Christmas.

Before it hit difficulties, Northumberland Foods made frozen vegetable products for clients including Tesco, Sainsbury’s and Iceland.

Longbenton Foods employs more than 100 people at the former Findus frozen food plant in Newcastle.