FEED company Skretting is to close down its UK operations due to market overcapacity, the company announced today.
The Stavanger, Norway, headquartered firm has started a process of consulting with employees with the view to cease production in the UK at the end of April 2019.
The move is aimed at reducing the overcapacity in the highly competitive salmon feed market, and better utilise the company’s existing production facilities in Europe.
The company has no plans to stop production in other markets and will continue to pursue its firmly established growth strategy.
The decision comes just months before Marine Harvest Scotland’s new feed plant on Skye is due to open.
Therese Log Bergjord, CEO of Skretting, said: ‘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 per cent.
‘This is driving down prices, leading to an unsustainable commercial environment.
‘We have therefore made the decision to start consulting with our employees on a proposal to cease feed production in the UK.’
Skretting, which has UK facilities in Invergordon in Scotland and Longridge near Preston, will continue to supply to the UK market where economically viable.
‘This is a tough decision for Skretting’s management team and our owner, Nutreco, considering the implications for our local employees and partners,’ said Log Bergjord.
‘In the proposed plan, all locations, including two production sites, will close down, and around 100 employees may become redundant.
‘First and foremost, we now concentrate on finding good solutions with our employees, customers, suppliers and partners in the UK.’
While Skretting experiences regional market challenges in the UK, the group actively pursues further sustainable expansion of the global aquaculture industry from its operations in 19 countries across all continents.
‘Aquaculture is an increasingly important and attractive solution to meet growing demand for healthy food.
‘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,’ said Log Bergjord.
Picture: Skretting CEO Therese Log Bergjord