Financial News

  • 19 February 2014, 11:17

Fox's Owner's Debts Trigger End Of Salad Days

A prominent food tycoon is exploring the sale of a major supplier of salads to UK retailers as he battles to avert the prospect of hundreds of job losses.

Sky News has learnt that Ranjit Singh, chairman of the company behind Goodfellas pizzas and Fox's Biscuits, has drafted in advisers to drum up interest in Solway Foods, which makes salads and sandwiches for retailers.

The appointment of Spayne Lindsay, a firm which specialises in consumer industries mergers and acquisitions, comes at the same time that Mr Singh's 2 Sisters Food Group undertakes a consultation about the future of Solway's base in Corby, Northamptonshire.

More than 800 people work at Solway, which was part of Northern Foods, acquired by 2 Sisters in 2011 for nearly 350m.

In a statement issued last week, 2 Sisters said the consultation was necessary but that closure of the Corby facility was "a last resort".

"Despite considerable investment over the past two years, our current assessment is that on-going additional funding is required just to keep pace with the demands of a modern high-care food production facility," the company said.

"The scale of this continuing investment means the site would potentially not be viable in the long term. In addition, the complexity of serving a wide customer base with an ever-increasing product mix is not a viable proposition for the future."

An insider said on Friday that a sale of Solway, whose customers have included Costa Coffee, was only one of the options being considered by 2 Sisters.

A taskforce has been set up with the local authority to attempt to salvage the future of the Corby site with further meetings understood to have been scheduled for next week.

2 Sisters is chaired by Lord Allen, the former chief executive of ITV and Granada, the catering group.

Mr Singh has earned the nickname 'the chicken king' because of the market share he has accumulated in supplying meat and poultry to supermarkets across the UK and Europe.

Boparan Holdings, the holding company for 2 Sisters, announced in December that losses after interest and tax had more than doubled during the 13 weeks to October 26, 2013, from 5.1m to 12.1m.

The increased loss came despite a rise in sales, and reflected the costs associated with restructuring the business.

Mr Singh said the numbers represented "a solid start" to its financial year, calling market conditions "challenging and competitive...as inflation continues to squeeze consumers' spend".

From a standing start two decades ago, 2 Sisters has been built into a food empire boasting 3bn in annual sales.

In addition to well-known brands like Goodfellas and Fox's, it is a big supplier of own-label products, and in 2010 bought the fish and chip shops chain, Harry Ramsden's.

Last weekend, The Sunday Times reported that 2 Sisters could axe up to 1800 jobs, a figure which included the 800 jobs at Corby.

A spokesman for 2 Sisters declined to comment on Spayne Lindsay's appointment.

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