Confirmed: Deal is struck to save 1,000 jobs at Banham Poultry
- Credit: Copyright: Archant 2018
Banham Poultry's future in Norfolk has been secured after a major chicken producer swooped in to buy it.
The deal to sell the Attleborough firm to Chesterfield Poultry, in a pre-pack administration, was confirmed on Friday night, after a frantic three days of negotiations to save more than 1,000 jobs at the firm.
Banham boss Martyn Bromley said: 'We've managed to do a deal that preserves the jobs at Attleborough and beyond.'
He said the Derbyshire company's backing would stabilise Banham after a rocky summer of rising costs and falling trade, and that the new owners were 'committed to investing in the business'.
'You don't get written pledges in these things, you just read it – and my reading is that they are totally committed to Banham Poultry for the future.'
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On the future of Banham's 1,000 workers, he added: 'We are going to have to work really hard as a team to get these efficiencies out of the existing facilities, but we are going to need all those workers to help us do it.'
Mr Bromley, the company's chief executive, paid tribute to the owning Foulger family, who had 'sweated blood' to get a deal over the line.
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'They're going to be well looked after, but it will have cost them money. But they were so committed to maintaining these jobs.
'When we told the workforce what had gone, there was a massive round of applause. They were so relieved to be going on to what appeared to be really good people.'
Mr Bromley said Banham Poultry's two major supermarket customers, Morrisons and Aldi, were 'happy' with the outcome.
But creditors are unlikely to receive all the money that is owed to them, as the pre-pack structure of the deal leaves behind the debts of the failed company and moves the assets to a new company, Banham Poultry (2018).
'The spirit is to do our best with all the creditors,' he said. 'I understand there's some money to help with that but it's not always affordable to do all the full amounts.'
'The Foulger Family are very pleased to have secured a deal with Chesterfield Poultry to ensure the long-term future of Banham and secure the continued employment of a very loyal workforce, which was always at the forefront of any negotiations,' said Michael Foulger.
Chesterfield Poultry specialises in chicken production and its products are sold in grocery stores and small supermarkets around the UK, processing more than 1,200,000 birds a week.
'We are delighted to welcome Banham into the Chesterfield family and look forward to continuing the legacy of the brand and quality poultry production in Attleborough,' added Nadeem Iqbal, chief executive of Chesterfield Poultry Limited.
Banham was a family run business, managing and operating a group of chicken rearing farms providing first class laying flocks to the UK and export market. It has been operating in Norfolk for over 50 years and was a leading independent producer in the market with a turnover of circa £150m, accounting for roughly 7pc of the UK poultry market.
Banham produces its own chicks, hatches them and rears them all the way through to slaughter. It supplies chickens to major supermarkets and other stores and wholesalers throughout the UK. The company runs its own transport department covering live transport, chilled and frozen distribution, with its network reaching every corner of the UK.
It also operates with third party companies in a strong export market.
Processing takes place at its Attleborough plant and it is the largest employer in Breckland, employing more than 1,000 workers directly or contract staff.
Allan Graham and Trevor Birch, both of Duff and Phelps, were appointed joint administrators to Banham Poultry Limited and Banham Group Limited on Friday. Banham Poultry Limited handled processing and Banham Group Limited was responsible for the rearing of poultry. On appointment, the joint administrators secured the sale of the businesses, saving both jobs and guaranteeing no breach of animal welfare regulations.
Mr Graham said: 'The business has faced a perfect storm in recent months, with increasing margin pressures from supermarket chains as a result of price competition, combined with increases in feed prices.
'It had been undertaking a number of capital projects designed to improve productivity in the longer term but these have impacted short term profitability which in turn has hit margin.'
He added: 'The sale of the business – covering all assets, employees on permanent contracts, a hatchery and farms and processing plants at Banham – is a success. The swift conclusion of this sale has enabled Duff and Phelps to secure the future of over 1,100 employees, ensuring no break in processing and animal husbandry, guaranteeing the continued supply of high quality poultry to the UK food industry.'
Officials from Chesterfield Poultry began the transition on Friday afternoon, moving on to the Banham Poultry site in Station Road, he said.
Its bid was selected over one from Norfolk turkey producer Bernard Matthews, which showed its hand on Friday morning.
However its deal, which Banham directors were not keen on, would have led to the likely closure of the Attleborough plant, with just 160 jobs preserved and the remaining 850 redeployed at its other East Anglian sites.
Bernard Matthews was bought two years ago by 2 Sisters Food Group entrepreneur Ranjit Singh Boparan, the self-made 'chicken king' whose empire produces around a third of the UK's poultry.
The race to save Banham Poultry came to light on Wednesday, when it went public with its financial difficulties, which had prompted it to search for a buyer. The 59-year-old family firm endured a turbulent summer as feed prices rose, sales fell and major new machinery was bedded in.
That was followed just hours later by tragedy, when two contractors were found dead at the site after a suspected refrigerated gas leak.
Mr Bromley said the company was 'still in a state of grief and sympathy' for the loss of the two men.