Meat plant puts Morrisons step closer to goal

Bradford-based Morrisons aims to become the UK’s biggest fresh food manufacturer by 2015 and this deal is part of a £200m investment in manufacturing over a three-year period.

Morrisons bought the 49 per cent stake in pork products maker Farmers Boy Deeside that it doesn’t own from fellow Yorkshire meat producer Cranswick.

Both Morrisons and Hull-based Cranswick declined to disclose the financial details of this transaction, but Shore Capital analyst Darren Shirley said total proceeds of £14.5m from the sale would generate a healthy book profit for Cranswick. Cranswick said the gross assets of the 49 per cent stake were £6.2m.

Morrisons said it has taken full ownership ahead of a total revamp of its cooked meat range this summer.

This is part of a bigger plan to totally redevelop the group’s own brand products.

“We are re-launching thousands of Morrisons products, improving the quality in each area and also looking to bring something different to the market wherever possible,” said a spokesman.

“The cooked meat range is one part of this and will see us introducing new products like ready-to-eat chicken.”

The takeover follows the joint acquisition of the factory in July 2010.

Since Morrisons and Cranswick took joint ownership of the site, Farmers Boy Deeside has invested around £30m at the site to expand its capacity and capability.

Morrisons said close work between the two parties has seen the site in North Wales double in size and enabled Morrisons to bring a greater number of products in house that were previously made by third parties.

The 175,000 sq ft factory has been significantly developed and now employs 600 people.

Morrisons’ group manufacturing director Martyn Fletcher said: “We have worked closely with Cranswick over the past 18 months to grow this site in Deeside and would like to thank them for their fantastic support in developing a state-of-the-art facility.”

Morrisons is the second largest fresh food manufacturer in the country, employing over 7,000 people. Vion UK is currently Britain’s biggest manufacturer of fresh food.

Unlike other major food retailers, Morrisons owns a number of bakeries, meat processing facilities and produce packing factories, giving greater control over the quality, cost and the supply of fresh food into its stores.

In February Morrisons acquired the Vion Winsford meat packing facility and followed this up with the purchase of a seafood factory in Grimsby earlier this month.

Last year, the company bought Derby-based FlowerWorld, a specialist cut flowers business.

All three moves were part of the plan to invest £200m over a three-year period to support the growth of the business.

Other plans include a £21m investment to increase the company’s capacity at its abattoir in Colne, Lancashire.

Morrisons is the only retailer to buy livestock from the farm and process them at its abattoirs in Colne, Spalding, Lincolnshire and Turriff, Aberdeenshire.

There will also be investments in fruit, vegetables and salad packing to add to the company’s recent investments in seafood and meat processing.

Morrisons’ chief executive Dalton Philips said: “This investment sets us apart from other retailers and means that we will be the biggest customer for UK farms.

“This will build on our record of serving the freshest and best food that our farmers have to offer with minimal waste in the supply chain.”

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