Iceland Seafood to pause sale process as business conditions improve at Grimsby plant

New contract wins and easing of inflationary pressures reported, but consolidation still on the agenda at 'right time and terms'

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Manufacturing

David LaisterBusiness Editor (Humber)

11:37, 3 FEB 2023
Updated15:07, 3 FEB 2023

Iceland Seafood ��Ƶ, formerly Five Star Fish, on Great Grimsby Business Park, alongside the A180. Could there be a new name for the prominent site? — Iceland Seafood ��Ƶ, formerly Five Star Fish, on Great Grimsby Business Park, alongside the A180. (Image: PPH Commercial)

A Grimsby seafood plant’s sale process has been put on hold after two failed negotiations, as the parent company reported an upturn in operations.

Iceland Seafood International had put the significant ��Ƶ division on the market after racking up losses of £12 million. Employing almost 200 people on Great Grimsby Business Park, it attracted early interest, entering into exclusive discussions twice, but both broke down before a deal was agreed.

Now the Reykjavik team are to pause proceedings having ridden out exceptional pressures, with new contracts being served.

In a statement released to investors, chief executive Bjarni Ármannsson, said: “Recently, Iceland Seafood ��Ƶ has made significant progress with its strategic partners, recovering unprecedented inflationary cost and adding a significant new business. Therefore, the company foresees better results, driven by the above, in addition to returns on investments in equipment, that will increase its ability to grow and reduce unit costs.

“Markets are stabilising, after the high volatility and constant upward cost pressure experienced throughout last year, which severely impacted the results of IS ��Ƶ in 2022.

“IS ��Ƶ will continue to cooperate closely with its loyal customers and suppliers. Iceland Seafood will review its strategy on an ongoing basis and remains interested to support further consolidation of the ��Ƶ business at the right time and terms.”

Issues first emerged in August with a trading update confirming it was taking longer to stabilise what was effectively a new business start-up as Covid hit the ��Ƶ. A West Yorkshire operation had been merged with existing Grimsby processor Havelok in the former Five Star Fish plant.

The two entities creatign Icelandic Seafood ��Ƶ, Havelok Ltd and Icelandic Seafood Barraclough. — The two entities that created Icelandic Seafood ��Ƶ, Havelok Ltd and Icelandic Seafood Barraclough. (Image: Icelandic Seafood ��Ƶ)

It serves retail and foodservice, with the latter hit badly by the pandemic measures.

November saw Iceland Seafood set out its plan to exit the value added ��Ƶ market, with advisors appointed. A first prospective buyer was found in early December, but initial hopes were dashed within days as discussions ended after a week. As the year ended a second potential purchaser emerged, only for negotiations to abruptly end a fortnight ago, raising fears for the jobs as options were evaluated.

Mr Ármannsson said: “During December 2022, two letters of intent were signed with prospective buyers to sell the business, but neither negotiation turned out to be successful. “After careful considerations the board of Iceland Seafood has decided to put the sale process on hold and continue to operate the ��Ƶ subsidiary.

“In an industry where consolidation is needed, Iceland Seafood made it public late last year it was interested in selling the ��Ƶ business. It is however the conclusion of the board of directors that the proposals received didn’t reflect the value of the company, as external conditions for the industry have been challenging.”

The upbeat update comes after the sudden collapse of £24 million turnover processing firm Cook & Lucas in the town. Work is understood to have been picked up within the cluster, with a particular focus on foodservice. James Clark and Howard Smith from Interpath Advisory were appointed joint administrators. A total of 80 jobs were lost when it “closed abruptly” on January 10.