Workers at a Staffordshire biscuit factory have an anxious time ahead of them as they wait to hear whether their site is destined for major investment or closure.
Northern Foods (NFDS) said it plans to invest £40-50 million in opening a new Fox’s Biscuits “super site” at one of its manufacturing locations in Uttoxeter in Staffordshire or Batley in Yorkshire.
The firm also has a state-of-the-art manufacturing facility in Kirkham in Lancashire, which produces around 30 per cent of Fox’s sales.
But as part of the investment, the maker of Fox’s biscuits and Goodfella’s pizza is considering cutting its biscuit manufacturing sites from three to two.
If not selected for the investment, the Uttoxeter site, which employs 950 people, a high proportion of which are seasonal workers on temporary contracts, could close under the plans.
Northern Food said both the Uttoxeter and Batley sites are relatively old and require significant investment “if they are to achieve the ‘world class’ manufacturing standards required to underpin Fox’s management’s ambitions”.
The proposals could either see an extension of the current Uttoxeter manufacturing facility or the construction of a new-build manufacturing facility close to the existing Batley site.
The site in Kirkham would be retained, said the group.
Northern Foods said it was consulting with key stakeholders and development agencies in the regions concerned and a final decision would be made by early 2009.
The firm plans to complete the investment in the super site by 2011.
Northern Foods chief executive Stefan Barden said: “We intend to invest in a state-of-the-art biscuits factory for the business, the best in the UK, specially designed to manufacture Fox’s great quality biscuits efficiently.
“The resulting cost savings will ensure that even more money is available to invest in and grow the business, securing its future for yet another generation.
“We appreciate that this will be a difficult period for our loyal and hardworking employees; excitement will be mixed with apprehension and we will ensure that they are kept fully informed of any and all developments during the project.”
The news comes just two weeks after workers at nearby JCB, based in Rocester near Uttoxeter, learnt the firm was axing 650 jobs, nearly a tenth of its British workforce.
The construction equipment manufacturer said it had suffered a “rapid decline” in business as a result of the downturn in the building industry caused by the global credit crunch. Northern Foods also announced a rise in group revenue yesterday, but warned it would continue handing rising costs on to customers.
The group, which also supplies ready meals to Marks & Spencer, said revenue had increased by 7.6 per cent over last year’s figures in the first quarter.
But the firm said average selling prices were also up 5.5 per cent as it sought to pass on higher commodity costs to customers. Northern Foods said full-year commodity costs were expected to increase by around £20 million, together with a £12 million increase in its utilities bill.
“We continue to recover these cost increases,” the company said.