Pork firm gains new contract boost

A supplier of premium pork products to the retail sector is to expand with a new retail packing plant after winning a £30m contract with Asda.

Over 100 jobs will be created at the site in Hull after Cranswick Country Foods announced plans to open the packing plant having won the contract with a national supermarket chain.

Cranswick, which employs 5,000 people across the company and supplies 25% of the UK’s premium pork products, bought a building formerly used by the seafood industry in the city’s William Wright Dock area. The plant is expected to be operational by the end of March.

According to the company, which has a head office in East Yorkshire, an initial 100-120 retail packing jobs will be developed and the possibility of further recruitment may occur in the months ahead.

Chris Aldersley, who manages the company’s pork processing operations, said: “This is a significant contract win for Cranswick Country Foods and necessitated an expansion to accommodate the new business. The Fish Gate building was an ideal facility for us to convert to retail packing, due to having originally being built to a very high-standard food processing facility.

“Now the sale is complete, we are moving in to convert the building into retail slicing, dicing and packing lines. We will be investing heavily in new state-of-the-art machinery, and this will be installed over the next six-weeks.”

Strong trading

In a third-quarter (Q3) update Cranswick revealed strong trading for the period between 1 October 2012 and 31 December 2012.

Organic sales at the company grew by 7%, while overall sales saw growth of 8%, which is an increase on the 5% reported in the first half of 2012.

Although the growth of sales is said to be “broad-based”, with positive contributions from most categories, the bacon, sausage and cooked meat sectors had a strong effect on figures.

Export sales have remained healthy and management highlighted record volumes produced from its gourmet bacon plant in Sherburn-in-Elmet.

According to Shore Capital analysts Darren Shirley and Clive Black, total sales across the company’s bacon sector increased by 25%, strongly driven by volume growth in gammon products.

“The Cooked Meat range also reported double-digit sales growth, while we believe growth in sausage sales was also +10%,” they said.

The company also experienced further strong performance in exports to the Far East. Black and Shirley said: “With both of the group’s fresh pork facilities being awarded export licences to China, Q3 was a record period for export volumes of fifth-quarter products to the Far East, with around 2m kg of fifth-quarter products shipped out immediately once licences were attained and Cranswick currently sending approximately 25 containers per week to the Far East, compared to 15-20 through H2 2011/12.”

Cranswick said: “The group is in a strong financial position, with committed, unsecured facilities of £100m, which provide generous headroom going forward.”