Vion is closing its loss-making Hall’s of Broxburn pig processing site in Scotland, leading to the loss of 1,700 jobs.

The move comes after the company started a 90-day consultation with staff and unions on 5 July – and despite an offer from the Scottish government to buy and lease the site back to Vion to avoid local job losses.

Broxburn will now close in February 2013 unless a new buyer can be found. A phased closure of the site will start later this month.

Vion UK chairman Peter Barr said the company had done everything in its power to avoid the closure but had not found a viable future for the site.

“Unfortunately, the unsustainable losses which the plant continues to suffer, combined with the challenging economic conditions across all food sectors, have left us with no alternative,” he said.

Vion had invested millions of pounds in the site, but this had not offset the outdated and inefficient layout of the Broxburn site, overcapacity in the market and increasing costs, Barr said. The company had considered modernising the site but concluded the investment would have been prohibitive, he added.

According to Barr, the Scots government’s offer to buy and lease the site back had also proved unworkable, as the funding on offer was well below that needed to make Broxburn sustainable in the long term.

“Consequently, we felt it would be entirely wrong to accept public money, knowing that it would not deliver a sustainable solution for the site,” he said.

Scots finance secretary John Swinney said: “This is disappointing news for Scotland and particularly for those working at Hall’s of Broxburn and their families.

“Since Vion announced the proposed closure in July, the Scottish Government and its agencies have taken every action in our power to secure the future of the plant, working with the company and stakeholders. We will continue to do so over the coming days. We are still working to secure a buyer and the taskforce will meet again next week.”

Quality Meat Scotland said: “Today’s news is disappointing and a major blow for Broxburn staff, many of whom are highly skilled and experienced and a valuable asset for the industry.

“While this is also a black day for the Scottish pig industry, it is very important to view today’s announcement in a wider context. History has repeatedly shown that one of the great strengths of the Scottish pig industry is its farmers’ ability to adapt and respond strongly in the face of challenge.

“This professional industry has proved its capacity to exceed customer expectations by delivering top quality, efficiently-produced pigmeat time and time again.”