Family-run bakery business Brace's Bakery has confirmed plans to shut one of its factories and axe jobs amid rising costs and pressures within the bread market.
Brace's wrote to its members of staff on Tuesday (October 14) stating that as a result of "increasingly difficult" market conditions directors at the company had agreed that the only "viable option" was to close their manufacturing plant on the Pen-y-Fan Industrial Estate in Blackwood.
Jonathan Brace, the director of Brace's Bakery said the company envisages there will be fewer than 20 redundancies. The majority of staff are expected to move to the Croespenmaen site, which is located around a mile away.
Jonathan and Mark Brace said: "It will be very sad to see long term loyal staff leave the business, but out of this we will be securing over 200 jobs."
The Brace's family has been baking in the Welsh valleys since 1902 after George Brace started his own bakery in the mining village of Pontllanfraith, Blackwood.
The business, which now supplies bread, Welsh cakes, rolls and other artisanal products to major supermarkets, is still run by the Brace's family.
The letter sent to staff, which has been seen by WalesOnline, says that the production of the majority of products produced at the Pen-y-Fan factory will transfer to to Croespenmaen by January 1.
It adds that the directors made the decision to close the Pen-y-Fan site in order to safeguard jobs.
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"It is hoped that the majority of permanent staff employed at Pen-y-Fan will transfer to Croespenmaen, in accordance with the terms of their employment contract," the letter states.
However, it does note that there will need to be a "small reduction in headcount." For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here
Jonathan Brace, director at Brace's Bakery said: "The bread market has changed dramatically in the last 18 months, with people moving away from standard sliced breads. The whole of the industry is feeling the consequences of a declining market with Morrison's closing their Rathbones sliced bread bakery, the proposed merger of Allied Bakeries and Hovis, and Robert's, a large family bakery in Northwich Cheshire, going into administration.
"There has been rising costs with wages gas and electric, the increase in national insurance have all added to the market pressures. The market has been struggling with over capacity and we are no different.
"To be able to continue in this market we need to right size the business for the future.
"Our Croespenmaen site has the ability to make sliced and wrapped bread and also welsh cakes, rolls and artisanal products which will set us on the right path for the future. Our customers will see no change in the products they receive from us.
" We see this as a reset of the business, which gives us the opportunity to meet the new market demands head on. The majority of staff will move to Croespenmaen, we envisage there will be less than 20 redundancies.
"The Brace's family has been baking in the Welsh valleys for 123 year sand have big plans with new product launches and new customers but in different areas of the bread market which will secure the long term future of the business."