Almost 200 jobs saved at Northumberland food factory

Nearly 200 jobs at a Northumberland food factory have been safeguarded after a £1.5 million support package agreement.

Workers at Northumberland Foods had been facing the grim prospect of losing their jobs as the firm struggled with financial problems in the present economic climate.

The company took over the assets of the former Cheviot Foods from the administrator and started operating at the end of January.

The 190 positions, as well as many more among the factory's local suppliers, were saved after Northumberland County Council agreed to commit £250,000 to a deal designed to help revive the company's fortunes.

Further loans of £960,000 from The Royal Bank of Scotland (RBS) and £250,000 from regional development agency One North East will allow the plant to act on plans to turn itself into a profit-making venture.

Company bosses have predicted net profits of £114,000 by the end of this year, £770,000 for 2010 and £1.5m for 2011.

But the factory urgently needs extra working capital to see it through to the winter, when stronger profits could be made.

Councillor Styring said: "The action that we and our partners have taken, whilst coming with an obvious element of significant risk, is designed to give this important local business every chance of succeeding and taking away the uncertainty that has been hanging over many families in the area.

 "This is a unique situation. But there is presently an unemployment rate of 6.5 per cent in Amble East, compared with the Northumberland-wide figure of 4.1 per cent and these jobs would not have been easily replaced.

 "I can understand the reservations of some members, but am pleased that there was overwhelming all party support for the proposal.  The Council will carefully monitor the plant's performance in the months to come."

Northumberland Foods managing director Peter Kirkham added:  "This deal will safeguard the short to medium term future of Northumberland Foods whilst it re-establishes itself as a prime supplier of frozen vegetable products to the major retail and food service markets.  We are very grateful to Northumberland County Council, to The Royal Bank of Scotland and to One North East for their support when it is most needed."

Words: Maria Bracken

« Back to previous page