March 12 2014 Latest news:
By Sarah Chambers
Tuesday, October 30, 2012
ALL 367 jobs at a major food plant in Bury St Edmunds appeared to be secure today as owners Premier Foods revealed plans to sell its Branston Pickle operation to a Japanese firm.
Premier said it had conditionally agreed the £92.7million sale of its sweet pickle and sauces arm at Bury to Mizkan, a leading vinegar maker.
All staff at the Bury plant are expected to transfer across to the buyer under TUPE, or employment protection, rules and the Premier said the two sides had entered into an agreement which would mean Mizkan will continue to make certain products at the Bury site for the next 15 years.
Bury MP David Ruffley welcomed the news, but said he would be keeping a careful watch to ensure that the undertakings given by the new owners are fully honoured “so that jobs are protected and this site continues to be a source of employment for my constituents”.
“We all hear of examples in British industry of foreign-owned businesses taking over indigenous ones and not sticking to their promises to the workforce. I will be watching to make sure that problem does not arise here,” he said.
Andrew Denny, president of Bury St Edmunds Chamber of Commerce & Industry, said there were always voices of unease when such an iconic British brand is sold to a foreign investor, but this was part of the global economy we now live in.
“Premier Foods needed to sell off the Branston name to pay off mounting debts and to reinvest in other parts of the business,” he said. “The main concern is for local jobs, but Mizkan would not have paid over £90m for a business they if planned to shut it down and there is a long term agreement in place which should keep the plant open for at another least 15 years. This, combined with the fact the new owners have more cash to invest in the plant, means that the future of the Bury St Edmunds factory is probably more secure now than it was before.”
Ivan Mercer. regional officer at the GMB union, said: “So far as GMB shop stewards are aware, this is going to be a standard transfer of undertakings under the TUPE legislation. The factory had been under threat some years ago but it has been out of the woods for some time so this could be good news for our members and for East Anglian economy and for UK manufacturing. I am seeking a meeting with management to find out what plans they have for the brands and for production at the factory.”
John Dugmore, chief executive of Suffolk Chamber of Commerce, said: “Suffolk Chambers focus is always about promoting business in Suffolk and ensuring that our county continues to be a thriving place for firms to operate successfully. If the sale of a company to a Japanese firm means that business continues to operate both locally and that the local employees jobs are protected then we are encouraged and it is good news for Bury and good news for Suffolk.”
The sale includes Branston sweet pickle, ketchup, relish, salad cream and mayonnaise, together with the Company’s Bury St Edmunds factory in Suffolk. Completion of the Disposal is expected to take place early in 2013 and all employees at the site are expected to transfer to Mizkan following an appropriate consultation process.
Michael Clarke, Chief Executive Officer of Premier Foods, said: “I’m delighted to have exceeded our disposal target 20 months early while at the same time delivering three successive quarters of sales growth and taking £40 million of overhead costs out of the business this year. We can now focus our attention on driving further momentum in our Grocery business and unlocking value in Bread”
“Our disposals since March have achieved a healthy average EV/EBITDA multiple of 8.9x based on current year trading and expected overhead cost reductions. This is a good result in the current market.”
Kazuhide Matazaemon Nakano VIII, chief executive of Mizkan, said: “Branston Sweet Pickle is an iconic brand that has established a market leading position. The Branston brand is also an excellent strategic fit with our global portfolio and adds to our solid foundation for growth in the UK.”
The transaction includes the production, distribution, sales, marketing and licensing of the Branston brand and the Bury St. Edmunds site.
Premier Foods and Mizkan have entered into a co-packing agreement which means Mizkan will continue to manufacture certain cooking sauces and other products at the Bury St Edmunds site for the next 15 years.
The two companies have entered into transitional services arrangements to facilitate the smooth transfer of the business.
The Disposal is conditional on the approval of Premier’s shareholders and consent from its banking syndicate, and is expected to complete early in 2013.
For the financial year ended December 31, 2011, sales of the sweet pickles and table sauces business were £66m, of which 54% were branded sales.
Mizkan is a 207 year old privately held international manufacturer, based in Japan. It is one of the leading vinegar manufacturers in the world with operations in Japan, the United States, the UK and other Asian countries.
In July this year, it purchased Premier Foods’ vinegar and sour pickles business for £41m. That transaction included the Sarson’s, Haywards and Dufrais brands.