BELGIUM/UK: PinguinLutosa to scrutinise UK costs

By Michelle Russell | 30 July 2012

Vegetable supplier PinguinLutosa is looking to bring its production costs in the UK in line with those from its operations in Europe 

Hein Deprez, CEO of the Belgium-based frozen and canned food group, Hein Deprez told just-food he wanted the cost per tonne of its produce in the UK to be the same as in other facilities across Europe, including Belgium, Poland and Hungary.

Last week, as it reported a jump in quarterly profits, PinguinLutosa, said it would take measure to improve the profitability in the UK with "a strict focus on cost control".

"Over the last few years we have closed several factories [in the UK] and what we are trying to do now is bring productivity on the same level as in our other facilities," Deprez told just-food today (30 July).

The CEO said Pinguin Lutosa plans to keep its remaining two facilities in the UK operational.

He added: "We are putting our costs in line with other countries. Why should England be more expensive per tonne than for example Belgium. The salary and labour costs in Belgium are double that of England, why should England be more expensive? We don't want to be cheaper, just in line. We are working to bring them to the same level as other countries."

Asked whether jobs would be under threat from the cost measures, Deprez said PinguinLutosa would not look to cut jobs in the UK. "It's about doing more volumes in the same organisation. For sure in a company you always have to trim to allow the tree to flower, this is normal and there are always changes but we are not saying we will cut this number of people, that is not the case."

Deprez, however, said the wet UK spring and summer has caused "complications" for the business.

"We depend always on the weather and climate. One of the conclusions will be, for example the green beans - the most important crop we have in England - will be reduced, so that means for next season, prices will have to rise and that will happen I think."

As a result, Deprez said the company is likely to have to pass on the price increases on certain products.

"I'm not saying in all products, but on certain products that will happen. We are a global company operating in different countries and you have countries that have different levels of climate but in peas and green beans, certainly in green beans there is a major problem and that will certainly influence prices."

On Thursday, PinguinLutosa reported a 92% jump in sales to EUR210.2m for the three months to the end of June.

Revenue included the impact of the acquisitions of canned food firm Scana Noliko and the frozen-food assets of French co-op CECAB. PinguinLutosa completed both deals last year.

PinguinLutosa said the integration of the CECAB business would receive the "highest priority" to improve its margins.

Deprez said the company would look at "creating optimisations" across the firm's portfolio of products. "In frozen products and frozen vegetables you always need a lot of investment so we continue to build new lines, to invest in new machinery like we did this year in Belgium, we opened a new factory and production line, so we will continue to do that."

Sectors: Commodities & ingredients, Frozen

Companies: PinguinLutosa, Pinguin

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