Six months after acquiriing Vion’s UK pork operations, Karro Food Group has secured a £60m refinancing package with GE Capital, and it plans to ramp up its investment with the funding.
The deal was secured after Karro - which is backed by private equity outfit Endless - carried out a strategic review and reorganisation of its operations. It will provide Karro with immediate access to additional working capital and greater capacity to invest in its business, alongside the existing backing from Endless, Karro said.
Precise details for what investments Karro plans to make have yet to be announced, but a spokesman said they would be used for short to medium-term projects. This would include further integrating its supply chain by expanding its pig farming operations, he added.
At present, Karro farms about 9,000 sows in Scotland but plans to increase this to 10,500 over the next six to eight months, and believes it can double it within three to four years.
“The GE facility is excellent news for our employees, our farmers and our customers,” said Karro Food CEO Seamus Carr. “From a very strong asset base and a stable financial platform, the new GE facility will give us firepower to invest further in the business, react more rapidly to opportunities and grow our market share, not only here in the UK but also overseas.”
Separately, Karro this week announced proposals to scale back operations at its Wiveliscombe site in Somerset, stopping slaughtering and butchery and focusing only on curing and foodservice. The move puts at risk 113 of the 131 jobs at this site. A 45-day consultation with staff and unions kicked off on 23 July.
Carr said the proposals were tough but necessary in the light of overcapacity in UK pig processing and Wiveliscombe’s small scale. It is the smallest of Karro’s processing sites, handling on average about 5,000 pigs a week compared with 18,500 at Malton and 21,500 at Cookstown.
No comments yet