Veriplast UK, which manufactures plastic packaging for the food sector, will end production at its Dragonville factory in December this year.
The business will be taken over by its sister firm Veriplast Holland after the firm announced that it had been “in steady decline” over recent years, which had been reflected in financial performance.
Danish firm Faerch Plast, which produces plastic disposables for the food industry and retail trade in Europe, has bought the buildings and land at Dragonville.
Steady decline
Christ Hart, md of Veriplast UK, said the decision was “taken with very deep regret” and blamed the redeployment of the business on a number of “external factors”.
He said: “Over the four financial years between 2006 and 2010, we made losses which totalled £13.4M. We made a further loss of £1.55M for the year ended March 31 2011.
“These losses have been caused by declining sales and increased costs, including sharp rises in energy and raw materials over the past few years. Meanwhile inexpensive imports have caused aggressive price wars and high market demand.”
Unfortunately despite everyone’s best efforts, the measures have not produced the kind of changes required, he added. The move to Holland is essential if the firm is to maintain and grow its quality service to its customers, including the UK market.
Redundancy terms
The 67 Veriplast employees at Dragonville will be offered alternative employment at the Standdaarbuiten plant in Southern Holland. The firm has also offered those that do not wish to relocate, “generous redundancy terms”, as well as support in retraining and searching for work elsewhere.
Faerch Plast has also offered a lifeline, saying that applications from Veriplast staff to work for the firm would be welcomed.
Hart said: “I should like to emphasise how highly I value the work of each and every one of our employees over the years. The proposed redeployment of the business to Holland has arisen only because of external factors and despite the very best efforts of everyone to try and reverse our continuing losses. Our first priority is to support members of staff as much as possible.”