Management buy-out secures future of VION’s pork processing operation
AS expected, VION NV has reached an agreement for a management buy-out of its UK pork operations, securing around 4,000 jobs, subject to Competition Authority approval in Ireland.
The deal, led by Seamus Carr, managing director of VION’s Pork Business Unit, is backed by UK private equity firm Endless, which has a strong track record of investing in companies in the UK across a wide range of sectors.
The announcement follows the strategic decision announced by VION almost a month ago that it was selling its UK food operations, employing in total 13,000 people at 38 sites, to focus on its core food activities in the Netherlands and Germany and its global ingredients business.
Discussions are ongoing with a number of prospective purchasers for VION’s other UK business units for poultry and red meat.
VION’s UK pork facilities are located in Wiveliscombe, Malton, Haverhill, Scunthorpe, Hull, Stoke and Enfield in England, at Cookstown in Northern Ireland and the pig farming and feed mill operation in Scotland at Brydock, Aberdeenshire. In addition, VION operates the McGees butchers business in the Republic of Ireland.
Mr Carr, who will be managing director of the new company said: “VION’s decision to sell its UK business naturally caused a degree of uncertainty amongst staff, suppliers and customers.
“Therefore, I’m very pleased that we have quickly been able to agree a deal for the pork business, which secures the future for our staff, our suppliers and gives our customers a seamless transition.
“Our ambitions for the new business are firstly to maintain the excellent levels of service and product quality which have helped us secure orders from all the major supermarkets and then to build upon the opportunities in the marketplace to grow the business.”
Peter Barr, chairman of VION UK, warmly welcomed the management buy-out.
He said: “When we announced our intention to sell, we highlighted the viability of the UK businesses and the strong interest from prospective purchasers.
“The swiftness with which we’ve been able to agree a deal with the management team of the pork business unit, which knows the company inside-out, underlines our confidence in the sales process.
“It’s therefore very encouraging that the pork business unit should be the subject of a successful and swift sale and this augurs well for our ongoing discussions with prospective buyers of the remaining areas of the business.“
“This is the very best outcome and I am sure the response from everyone involved, from our farmers and suppliers, to our employees and customers, will be extremely positive.
“We will now be focussing our attentions on securing the sales of our remaining poultry and red meat operations in the UK, which employ around 8,000 people. Both businesses remain profitable and cash-generative and are generating significant interest from prospective purchasers.”
Endless is a specialist investor in UK headquartered businesses, widely known for acquiring non-core businesses from large groups. This is the latest in a string of investments in UK businesses that were previously owned by large, often overseas, parent groups including Crown Paints from Akzo Nobel N.V., Bathstore from Wolseley plc, Acenta Steel from Niagara LaSalle Inc, Davy Markham from TH Global and Amco Group from Billington Holdings plc.
A spokesman from Endless said: “We are delighted to have been selected by the Management Buy-Out team to support their plans and aspirations for such a strategically important business in the UK food sector, with its focus on local produce at a time when end customers demands for British sourced food are increasing.”
VION NV entered the UK in the late 1990s with the acquisition of Key Country Foods, followed by Tranfield and subsequently Grampian Country Food Group in 2008, supplying beef, lamb, pork and chicken products to a broad range of blue-chip customers across the food retailing, food manufacturing and food service sectors.
The Ulster Farmers’ Union has welcomed the management buyout of Vion UK’s Pork Division.
UFU Pork and Bacon Chairman Ivor Ferguson said the news was a fresh opportunity for the local pig industry in Northern Ireland.
“I welcome the news that the future of Vion’s pork division has been secured through a management buyout,” he further explained.
“I also wish to publicly congratulate Seamus Carr on his new role as Managing Director of Vion Pork UK and we look forward to working with Seamus and his colleagues to forge a positive relationship between local pig producers and the processor. This is good news for Northern Ireland pig farmers, removing any uncertainty over the future of local pig processing. I anticipate that the new management team will wish to follow through on plans to increase the capacity of the Vion plant in Cookstown. I hope this will signal an upturn in fortunes for the industry which has endured a very difficult 2012.”
Mr Ferguson added: “There is a need for better communication between farmers and Vion and I hope to develop this with the new management structures now in place. Our message to Vion will be that pig farmers in Northern Ireland consistently produce pigs to the highest quality; a match for any of our competitors in the EU. We use genetics from the best breeding companies in the world and indeed we have a great record of exporting superior breeding pigs to other countries. The PIGIS recording system, developed jointly by AFBI and CAFRE, means producers receive text messages the day after their pigs are slaughtered informing them of their grading results and other management information.
“This is a leading edge use of IT which won the Practice with Science Award at this year’s Oxford Farming Conference. The UFU is actively encouraging all pig producers to use this technology and also to benchmark their pig production. Despite our track record on quality and innovation, Northern Ireland pig farmers have consistently been paid less for their pigs than the GB price and this remains a fundamental issue which will need to be addressed.”
Meanwhile, Enterprise Minister Arlene Foster has also welcomed confirmation of the management buy-out of the Vion Pork Unit which has a processing operation in Cookstown.
She said: “The announcement is welcome news for the local food processing industry. The management buy-out brings to an end uncertainty over the future of the unit and it will help to safeguard employment in Cookstown and the pig supply chain.
“Vion has an impressive portfolio of quality products and this decision helps to secure the future of one of the best known local food brands. It will also enable management to focus resources on the future development of the business.
“The company makes an important contribution to the Northern Ireland food industry, especially in terms of sales outside Northern Ireland, and in innovative products for customers. I look forward to discussing with the management team their plans to move forward on their investment project which is being supported by Invest Northern Ireland.”
Ulster Unionist Party Assembly Member for Mid-Ulster, Sandra Overend, has welcomed the news.
“I received confirmation that the Vion Plant in Cookstown has been bought by the company Endless. The fact that speculation has ended over the sale of this plant is very much welcomed. After Vion announced that they would be selling the plant, they assured me that no jobs would be at risk as a result of the sale, ending much speculation over the employees’ futures and I have been re-assured that the plant will continue as normal and that no job losses are projected.”
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