Northern Foods takes soup plant off Baxters' hands

BAXTERS Food Group has sold off one of its UK production plants to Northern Foods as it calls a day on its chilled soup operations.

The iconic Scottish brand agreed a deal with the maker of Fox's Biscuits and Goodfella's pizzas for its Grimsby factory.

Baxters, whose annual sales top 100 million, said last year it planned to pull out of the chilled soups sector amid a "highly competitive" market. The Grimsby factory was purpose-built for the firm in 2001. It added that the operation represented a "minute" proportion of the group's sales and stressed there would be no impact on the workforce in Scotland.

A number of Baxters' sauces are also produced at the factory, as well as at the group's main plant in Fochabers, which will absorb the extra sauce production.

A spokesman said: "Baxters made an announcement last year that it was closing its chilled foods division. The operation just didn't strategically achieve in comparison with other products.

"It is a very competitive market and there were more profitable areas to concentrate on, which is why we made the decision to move on."

Northern Foods, which is looking to expand its soups division, is to take on all of Baxters' 48 staff at the site. The plant, which covers 70,000sq ft, has gross assets worth 9 million, according to the latest set of Baxters' accounts.

Chairman and chief executive Audrey Baxter said: "I would like to take this opportunity to thank everyone at our Grimsby operation for all of their hard work over the years and wish them and Northern Foods continued success at the site."

Stefan Barden, chief executive of Northern Foods, added: "This transaction underpins our commitment to grow within our chosen markets and complements our recent purchase of Ethnic Cuisine.

"With both our soup and ready meal capacity increasingly constrained, buying the Baxters facility provides us with an additional high quality manufacturing facility, in a cost-efficient manner, without adding new capacity into the industry."

A year ago, Baxters opened a factory in Poland to pickle Polish-grown onions.

The Baxters spokesman yesterday told The Scotsman that the Polish operation was "progressing well".

The company's most recent figures showed that full-year sales at the family-owned firm had risen 10 per cent to 110 million.