Food plant's future in doubt

Esk processes frozen food and vegetables

A frozen food factory in Montrose has gone into receivership after failing to cope with increased competition in the market.

Esk Frozen Foods (EFF), which supplies frozen fruit and vegetables to supermarkets, employs 140 workers.

Receiver Blair Nimmo, of receivers KPMG, said the business would continue to trade while a buyer is sought.

News of the closure represents a second blow for the local economy, two months after drug chain GlaxoSmithKline announced its intention to shed over 700 jobs at its Montrose plant as part of a UK-wide streamlining operation.

Closure would affect hundreds of farms that supply the plant with fruit and vegetables.

Closure may impact on farmers across Scotland

Angus Council said the news was a setback for the town.

Esk is Scotland's largest frozen vegetable processor and had operated successfully until the 1990s, when a combination of a competitive European market and supermarket chains' preference for mass producers started to impact on its success.

Despite the 17-year-old company's processing of about 50,000 tonnes of fruit and vegetables, and sales of £10m at its peak, it said it cannot compete with the increased competition.

Mr Nimmo said that Esk held talks last year with an unnamed company over the possibility of a merger but these never came to fruition.

Farming headache

"It's not going to be terribly easy, there are many businesses in the north east in food processing which are suffering from the exact same problem," he said.

"And we ourselves have dealt with them. But we do see the opportunity here to find an interested party who may well see that they can bolt this business together with their existing one in a way which will make it viable."

The Scottish NFU said hundreds of farms from the Borders to the Highlands supplied the plant with fruit and vegetables.

Martin Cessford, of the SNFU, said closure would impact on both the workers at the plant and agriculture north of the Border.

Martin Cessford: Closure would be a disaster

"It would be a disaster for Scottish agriculture> We as farmers will be the worst off if a buyer cannot be found to keep Esk Foods as a producer and buyer of our produce," he said.

Esk's closure may force farmers in Scotland to travel south of the Border for trade.

A local fruit and vegetable grower said closure would impact on farmers' costs.

"If Esk closes, myself and many others will have to sell to English producers," he said.

"Farmers will either have to pay the transport costs themselves or accept a big cut in the prices they receive to compensate the buyers."