Around 150 jobs at risk as ABF warns bioethanol plant could close
The Vivergo fuels site in Saltend, near Hull, swung to a loss in recent months after it cut production levels in light of low bioethanol prices.
Associated British Foods (ABF) has said it could have to shut down its East Yorkshire bioethanol plant, with around 150 jobs at risk at the site.
The consumer giant, which also owns Primark and a raft of grocery brands, has said it is in talks with the Government to help preserve the site.
The Vivergo fuels site in Saltend, near Hull, swung to a loss in recent months after it cut production levels in light of low bioethanol prices.
Bosses said the site could be closed or mothballed again until conditions in the sector improve.
“In Vivergo, the way in which regulations are being applied to bioethanol is undermining the commercial viability of our business,” ABF told investors on Tuesday.
“We are having constructive discussions with the UK Government to explore regulatory options to improve the position.
“There is no guarantee that these discussions will be successful, and we will either mothball or close the Vivergo plant if necessary.”
The site, which was launched in 2007, processes locally grown wheat into bioethanol, a green transport fuel which can be mixed with petrol, and also creates animal feed.
George Weston, chief executive of ABF, told the PA news agency that the Government “subsidised” international competitors for their supply of bioethanol.
“If the Government wants to subsidise imported bioethanol then we can’t compete against that,” he said.
“The Government is engaging with us on this.
“It’s a great asset for our business so we need to make sure it is sustainable.”
It came as ABF told shareholders that pre-tax profits slid by 21% to £692 million for the 24 weeks to March 1, as it highlighted weakness in its sugar business.
Meanwhile, revenues were 2% lower at £9.5 billion for the period.