Heinz to move HP Sauce production to Holland

By staff reporter

- Last updated on GMT

Related tags: Heinz, Philippines, Uk

In a move emphasising the flight of many food manufacturers out of
the UK, Heinz has decided to move production of the HP Sauce brand
to Holland from its plant in Birmingham.

Companies, including big employers such Heinz and Kraft, have been relocating plants to places like Russia, China and Eastern Europe partially in response to the UK's shortage of skilled employees.

About 125 jobs will lost be lost when the plant ends production of the famous sauce in March 2007. The Transport and General Workers' Union is protesting the decision, claiming that when Heinz took over the site it had promised there would be no shift in production.

Heinz, which bought HP Foods last year, has said the move would improve efficiency and productivity.

The move is part of the US company's programme to substantially reconfigure its European and Asian business units in a bid to pursue the faster growth of its leading brands in three core categories: ketchup and sauces; meals and snacks; and infant food.

Earlier this month Heinz completed the sale of its UK chilled prepared foods business to the Hain Celestial Group. The sale included one manufacturing site located in Luton.

In the Philippines, Heinz has sold its 50 per cent of its ownership in Heinz-UFC Philippines to its partner, Nutri Asia. Heinz products will continue to be sold in the Philippines through various distribution arrangements, focusing primarily on the sale of cooking and table sauces under the Heinz, Lea & Perrins and HP brand names.

Heinz also said earlier this month that it has entered advanced and exclusive negotiations with the Hain Celestial Group for the proposed sale of its UK frozen meat-free business, including the Linda McCartney brand.

The proposed sale would include a manufacturing facility in Fakenham, England. The potential sale is to be completed in early June.

"Our European business is now a leaner and more focused portfolio and we will be growing the retained core businesses with product and packaging innovation," said Heinz chairman, president and chief executive William Johnson.

Last year a UK report said that finding skilled employees and enough bodies to do the job is becoming more difficult for UK's food and drink manufacturers.

The widening skills gap and employee shortfall in the sector is highlighted in a report published by Improve, a jointly-funded training venture founded by the UK government and the food and drink industry.

More critically for the health of the industry, it could also push more and more food and drink companies to relocating to other countries in search of employees, Paula Widdowson, Improve's commercial director, told FoodProductionDaily.com at the time.

Companies, including big employers such Heinz and Kraft, have been relocating plants to places like Russia, China and Eastern Europe partially in response to the UK's shortage of skilled employees, Widdowson said.

The expected shortfall in employees is expected to reach about 200,000 in the UK's most productive sector within the next eight years, Improve estimates.

The UK's food and drink industry has one of the most poorly qualified workforces in the UK. About 19 per cent of the sector's workforce has no qualifications, compared to the average of 11 per cent for the total UK workforce, Improve says. One third of staff in the processing sector have no qualifications at all.

The problem is mainly due to changing demographics rather than growth in the industry. As more people retire there are less people available to replace them.

The shortage is especially acute in people who can operate and service machinery. Companies are also having problems finding skilled food and drink managers and supervisors.

"The shortage of technical operators is a massive issue,"​ Widdowson said.

The danger is the UK's largest manufacturing sector could lose out in the development of its infrastructure, productivity and knowledge base, she said. The sector has an annual turnover of £66 billion and employs 650,000 people.

While there are about 45,000 companies operating in the sector, about 2,000 of them are responsible for employing 400,000 staff.

The sector has a 22 per cent better productivity rate than the US. It is 28 per cent better in productivity than the European average.

A skills and employee shortage could harm this productivity.

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