Tulip has told employees at its King’s Lynn site about proposals which will put 118 jobs at risk, as it takes steps to keep the plant open following heavy losses last year.
The site, which currently employs 570 people, is set to revert to a five-day working week from its current seven-day operation as it seeks to mitigate a fall in production volumes and operational inefficiencies.
Due to the loss of customer orders over the last few years, the site is now making significant loss on a weekly basis, parent company Danish Crown said. “Now we are looking to take steps which will keep the Kings Lynn site operational for current and future generations. The business will engage closely with the employee representatives and those affected in order to minimise impact on people’s lives,” said Tulip CEO, Steve Francis.
Tulip reported a loss of £22 million in the 12 months to September 2016, prompting fears of factory closures, as ‘losses increased week by week’ following the loss of major orders to the retail sector, the company said. “Now, the downward trend is not only reversed, since the beginning of June, Tulip has actually started making money again on a weekly basis,” Mr Francis said.
“We have invested in creating strong and experienced management teams at all our facilities, which means that half of the top 50 managers in the company are new. I’m very pleased to see that their efforts and the improved focus of our existing team have both made such a huge difference so soon.”
Mr Francis, appointed in September 2016 to turn the company around, has, among other things, chosen to create a more decentralised management structure and has focused heavily on developing even closer relations with the company’s customers through extensive and dedicated service.
Danish Crown’s Group CEO, Jais Valeur, is happy with the progress in Tulip but said it still has a long way to go.
“When we look at the full year, the financial result in Tulip will continue and as expected show a significant loss. This is really a pity, but I am delighted to see the rising effects of the changes, because there is no doubt Tulip is basically a strong company. Now we need to keep momentum and continue the progress made so that the UK business can once again contribute positively to earnings in Danish Crown in the upcoming financial year,” said Mr Valeur.
King’s Lynn is one of 15 plants, employing 5,900 people, operated by Tulip in the UK, according to its website. The company operates within four main product groups in the UK – bacon, luncheon meat, canned goods and poultry products – and produces products under the Danepak, Tulip, Plumrose and Celebrity brands.
Last month, Danish Crown’s deputy chairman, Asger Krogsgaard, told the Pigs 2022 conference, the company will continue to grow its presence in the UK, which it has identified as a ‘key market’, whatever the outcome of the Brexit negotiations.