Lerøy Seafood Group is to end production at one of its domestic factories by the end of the year.
The Norway-based business is to shut its processing plant in Hestvika amid “structural market changes that cannot be ignored”.
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Roy Eide, the managing director of the group’s Lerøy Seafood Industri arm, called the decision “difficult but necessary”.
Lerøy Seafood said the Hestvika facility, which is on the island of Hitra, is ageing and requires “significant” investment in maintenance and upgrades.
It added current and projected volumes did not support a business case for those investments, making consolidation necessary to better align capacity with market demand.
Volumes processed at Hestvika will instead be handled “elsewhere” in Lerøy Seafood’s supply chain, it said, without disclosing what products were processed at the site.
The Oslo Stock Exchange-listed group declined to comment on the number of jobs impacted by the closure.
However, in its statement it said all permanent employees at Hestvika will be offered positions at Lerøy Seafood’s Jøsnøya facility, which is located ten minutes away.
It added the process is being conducted in consultation with union representatives and local management.
Eide said: “Hitra is, and will continue to be, an important area for Lerøy. We have great faith in the people, the expertise, and the opportunities found here.
“By consolidating our operations, we gain a stronger and more robust industrial platform, providing a solid foundation for further developing our business on Hitra and in the region.”
The decision follows Lerøy Seafood’s organisational changes to consolidate primary processing within its Market Operations segment.
From the start of the year, the changes transferred processing activities previously reported under Farming to Market Operations.
The group said in its second-quarter results that the reorganisation was intended to improve efficiency and reduce costs.
In the quarter ended 30 June, Lerøy Seafood reported group revenue of Nkr7.90bn ($828.8m), down 11% year-on-year, while operational EBIT fell 16% to Nkr574m.
The group reported a loss of Nkr240m, compared with a profit of Nkr93m in the same quarter a year earlier.
