Skretting plans to cease UK production due to salmon feed market overcapacity

By Jane Byrne contact

- Last updated on GMT

© GettyImages/Gearstd
© GettyImages/Gearstd
Skretting, part of the Nutreco group, has announced that the company has started a consultation process with employees in relation to shutting down production in the UK at the end of April 2019.

Skretting said regional market challenges in the UK, particularly Marine Harvest's plans to open a salmon feed plant next year in Scotland, have prompted the decision.

“Unfortunately, we are experiencing unsustainable market conditions in the UK. With a new large feed plant becoming operational in Scotland early 2019, the total feed capacity in the region is expected to exceed the total market by more than 50%. This is driving down prices, leading to an unsustainable commercial environment,”​ said Therese Log Bergjord, CEO Skretting, in a release.

More than 50 jobs are to be lost in Invergordon with the closure of a factory making fish feed for the salmon industry in Scotland.  The move will also see the closure of the company's plant near Preston in Lancashire, its head office in Norwich and a warehouse in Shetland.

This is a tough decision for Skretting’s management team and our owner, Nutreco, considering the implications for our local employees and partners. In the proposed plan, all locations, including two production sites will close down, and around 100 employees may become redundant,”​ continued the CEO.

When asked whether all avenues were pursued to try and work around the additional salmon feed capacity coming on stream in the UK, Log Bergjord told FeedNavigator:

"We analysed in detail many alternative solutions to the one we are facing here today. Unfortunately, we have not been able to identify any other solution offering continuous profitable production in the UK.

"We have only just begun the consultation process with our colleagues in the UK, so while the company has reached the preliminary decision that we will close our UK sites in April, we believe that it is extremely important to discuss the reasons behind this decision with everyone that will potentially be affected and to take on board any views provided by the employees before making a final decision."

Brexit was not a factor in the move to shut down its operations in the UK, she said.

"It is the unsustainable market conditions driven by the expected overcapacity that forms the basis for our decision."

Skretting said it would continue to supply to the UK market where economically viable.

The Norway based company has no plans to stop production in other markets; it said it would continue to pursue its firmly established growth strategy.

“As the global leader in aquafeed, we are fully aware of our responsibilities. That is why we are prepared to take tough decisions to ensure sufficient profitability to finance our future and to remain a pioneer of continued sustainable development of the aquaculture industry,” ​added Log Bergjord.

In an update last month on the status of its new feed plant in Scotland, Marine Harvest said that, after some delays in its construction, the new facility is now scheduled to start trial production in the first quarter of 2019. The plant will produce fish feed for aquaculture farms in Scotland, Ireland, Faroe Islands and Norway, and will have a capacity of 170,000 tons, said the leading salmon producer.

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