Money crisis threat to Findus Foods factory

Jan 12 2009 by Andrew Mernin, The Journal

MORE than 400 jobs at a frozen food manufacturer which was ravaged by fire last week could be hanging in the balance after the company fell into administration.

Newcastle Production, which runs the Findus Foods factory in Longbenton, Newcastle, has called in administrators after struggling with cash flow problems and a period of sustained trading losses.

The news comes less than a week after the factory was seriously damaged in a blaze which halted production and left the company with a repair bill estimated at more than £20m.

The factory, which employs 420 people, is expected to close for at least four weeks while the fire damage is assessed and in that time, administrators will explore all options for the firm’s future and seek buyers.

Nick Cropper, Simon Wilson and Stuart Mackellar, partners at Zolfo Cooper, have been appointed joint administrators to the company.

Mr Cropper said he was upbeat over the prospects of finding a suitor for the company and securing the future of the plant, which opened in 1983.

He said: “Newcastle Productions is a well established local business and produces a range of high quality frozen food products in the UK under the Findus brand, a popular and long-established food label.

“We remain confident that there will be interest from potential buyers to secure the future of this business and will need the support of all parties to achieve this.

“We appreciate that this is a very concerning time for the employees, customers and suppliers of Newcastle Productions and will keep all concerned informed of significant updates.”

Managing director Vidar Engen said: “It happened late on Friday night after working hours, so I need to speak to my employees first and foremost.”

He also reiterated that the Findus brand would not be affected by the administration and denied media reports that the licence to make Findus products would now be sold to another manufacturer.

Newcastle Production makes and distributes a range of frozen food products under the Findus and GO3 brands, including crispy pancakes, ready meals and fish bakes.

The company reportedly hit financial difficulty with the collapse of one of its main backers, the Icelandic bank Landsbanki.

Last Tuesday, fire broke out in the main food production area of the factory at Balliol Business Park, Longbenton.

None of the 50 workers there at the time was injured in the blaze which needed 34 firefighters to bring it under control. A 3,000 square metre section of factory was destroyed.