Danish seafood company Espersen has initiated a review to assess the future of its UK fish-processing facility in Grimsby, which may include potential closure.
Espersen acquired the Grimsby plant in 2023 as part of its purchase of Iceland Seafood International’s UK operations. However, the company reported that the site has been operating at a loss.
“The combination of lower [group] volumes, higher raw material costs, and the operating losses from the Grimsby production facility have significantly contributed to the reported negative profit before net financials,” Espersen stated, noting a DKr57m ($8.6m) loss for the overall business last year.
This loss occurred despite group revenue of DKr3.3bn, reflecting a 4.7% decline from the previous year.
The review at Grimsby aims to ensure the long-term sustainability and competitiveness of the group company.
CEO Tino Bendix remarked, “Espersen has an 88-year legacy of making difficult but necessary decisions to ensure our long-term sustainability. This is one of those moments where we must look ahead and make choices that safeguard our core business and future.”
Last year, Espersen announced a “substantial” investment in the Grimsby facility, yet now questions the plant’s viability.
“Unforeseen market shifts and significant investment requirements have since challenged the viability of the Grimsby facility,” Bendix stated.
“Despite great efforts by the local team and positive steps taken, we do not foresee that the Grimsby production site will become financially sustainable in the foreseeable future with the current business plan.
“While we are exploring all possibilities, we do not have the time or financial flexibility to support the long ramp-up initially envisioned for Grimsby, and we have to adjust the business plan accordingly.”
Espersen outlined several pressures it has faced recently.
“For some time, Espersen has experienced a significant drop in production volume, largely due to lower demand caused by macroeconomic factors and rising prices on raw materials. Particularly, the price of Norwegian Atlantic Cod has increased sharply due to sanctions on Russian raw materials. Additionally, reduced quotas in the Barents Sea have exacerbated this situation.”
“This continued pressure on raw material pricing is now starting to be reflected in consumer prices and will further impact demand in the near term.”
The review at Grimsby follows a similar decision made by the seafood processor in March, when it announced the closure of its Klaipėda plant in Lithuania and a shift in production to Poland.
In a recent statement, Bendix said, “We have already taken clear and decisive actions as announced earlier. We have relocated our Lithuanian primary production to Poland and are in the process of divesting the Lithuanian production site.”
“In 2024, we also made targeted efficiency improvements in our Polish consumer production. Despite these efforts, it is evident that further changes to our business model are required to navigate the increasingly demanding market situation.”
The potential closure of the Grimsby plant would effectively mark the end of Espersen’s physical processing presence in the UK, although the company intends to maintain a sales office to serve its UK customers.
