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August 18, 2022

Orchard House Foods to close loss-making UK plant

The food-and-beverage business, bought by private equity last year, cited “a series of economic and business challenges”.

By Dean Best

Orchard House Foods, the UK food-and-drinks supplier, is to shut one of its four production facilities.

The company, sold by US group Hain Celestial to private-equity firm Elaghmore a year ago, is to close a plant in Gateshead in north-eastern England.

Orchard House Foods said the loss-making factory continued to be in the red despite “significant investments”. Up to 430 staff could be made redundant. Overall, the company employs 1,000 permanent workers across its operations.

In a statement, the business, which supplies prepared fruit, fruit drinks and fruit yogurts to UK grocers and foodservice operators, said it “expects that a significant number of new jobs will be created” at its remaining factories in Corby. Orchard House Foods has its head office in the town and plans to re-open a production line at one of its three sites in Corby as part of the changes.

“Despite making significant investments in our Gateshead facility over a considerable period in an effort to turn around its financial performance, it is unfortunately still making losses that make it unsustainable over the long-term,” Orchard House Foods chief executive Steve Corby said.

“As such, we believe that the future of the business lies in consolidation, so we are starting a review process in consultation with our staff and proposing to amalgamate production from our Gateshead site at our other fruit processing facility in Corby.

“This is not a decision we have taken lightly and comes off the back of an incredibly challenging period for the sector. Like many other businesses across the UK, we have been suffering from a series of economic and business challenges. They include rising energy, raw material, transport and labour costs. There has also been a shortage of available staff to work at our Gateshead site.”

Elaghmore bought Orchard House Foods from Hain Celestial for GBP25m (US$30.1m) in January 2021. Since the takeover, GBP6m has been invested in the soon-to-be-closed site in Gateshead, the manufacturer said.

Mr Corby joined Orchard House Foods last autumn. His most recent role was CEO of UK privately-owned chilled foods company Kanes Foods. Corby has a 30-year career encompassing Cott Beverages, Northern Foods and Greencore.

Six months earlier, former Premier Foods CEO Gavin Darby was hired to to take the role of Orchard House Foods’ chairman.

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