Danish seafood company Espersen has launched a review to consider the future of its UK fish-processing facility in Grimsby, including the possible closure.
Espersen acquired the Grimsby plant in 2023 when it bought the UK operations of Iceland Seafood International but the Danish company said in a statement this week that the site is operating at a loss.
“The combination of lower [group] volumes, higher raw material costs, and the operating losses from the Grimsby production facility have significantly contributed to the reported negative profit before net financials,” Espersen said as it pointed to last year’s DKr57m ($8.6m) loss for the overall business.
That was based on group revenue of DKr3.3bn, representing a 4.7% decline on the previous 12 months.
The review being undertaken at Grimsby is aimed at ensuring the group company’s “long-term sustainability and competitiveness”.
CEO Tino Bendix said: “Espersen has an 88-year legacy of making difficult but necessary decisions to ensure our long-term sustainability. This is one of those moments where we must look ahead and make choices that safeguard our
core business and future.”
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By GlobalDataEspersen announced a “substantial” investment for the Grimsby plant last year but is now questioning the viability of the facility.
“Unforeseen market shifts and significant investment requirements have since challenged the viability of the Grimsby facility,” Bendix said.
“Despite great efforts by the local team and positive steps taken, we do not foresee that the Grimsby production site will become financially sustainable in the foreseeable future with the current business plan.
“While we are exploring all possibilities, we do not have the time or financial flexibility to support the long ramp-up initially envisioned for Grimsby, and we have to adjust the business plan accordingly.”
Just Food has asked Espersen to clarify the number of jobs that would be lost if the closure goes ahead, which the company said would be a process that would take 12 months if that decision is taken.
Espersen explained some of the pressures it has faced.
“For some time, Espersen has experienced a significant drop in production volume, largely due to lower demand caused by macroeconomic factors and rising prices on raw materials. Particularly, the price of Norwegian Atlantic Cod, which has increased sharply both due to the sanctions on Russian raw materials and in the last year, the reduced quotas in the Barents Sea.
“This continued pressure on raw material pricing is now starting to be reflected in consumer prices and will further impact demand in the near term.”
The review at Grimsby follows a similar decision by the seafood processor in March, when it announced the closing of its Klaipėda plant in Lithuania and a shift in production to Poland.
Bendix said in this week’s statement: “We have already taken clear and decisive actions as announced earlier. We have relocated our Lithuanian primary production to Poland and are in the process of divesting the Lithuanian production site.
“In 2024, we also made targeted efficiency improvements in our Polish consumer production. Despite these efforts, it is evident that further changes to our business model are required to navigate the increasingly demanding market situation.”
The closure of the Grimsby plant would effectively mark the end of Espersen’s physical processing presence in the UK, although it would maintain a sales office to serve its UK customers.
