Tino Bendix, CEO of Espersen.
Photo: Espersen.
After experiencing a significant drop in production volume due to difficult market conditions, with lower demand and rising costs, Espersen announced today it is taking further steps to safeguard its long-term sustainability and competitiveness. As part of this, it will initiate an evaluation of its production site in Grimsby, UK, including consideration of possible closure.
Espersen completed the acquisition of the Grimsby business from Iceland Seafood less than two years ago, in September 2023. A few months later, in April last year, and as part of the integration of the site, the Danish value-added seafood producer announced some layoffs, but also "substantial investments" into production, systems, and an optimised logistic flow.
As the company said then and has remarked again now, the acquisition was undertaken with the ambition to build a strong presence in the chilled segment in the UK, its single largest market. However, unforeseen market changes and significant investment requirements have challenged the viability of the Grimsby facility.
"Despite great efforts by the local team and positive steps taken, we do not foresee that the Grimsby production site will become financially sustainable in the foreseeable future with the current business plan. We now face a broader business reality where resources must be focused on our core operations," Espersen CEO Tino Bendix stated.
"While we are exploring all possibilities, we do not have the time or financial flexibility to support the long ramp-up initially envisioned for Grimsby, and we have to adjust the business plan accordingly," he continued.
In the event of a decision to close the plant, the company has already said that the process is expected to be completed within 12 months, depending on customer agreements.
The past year was a challenging one for the Danish company. Largely due to lower demand caused by macroeconomic factors and rising raw material prices, in particular the price of Norwegian Atlantic cod, Espersen experienced a significant decline in production volume.
According to information provided by the company, the combination of lower volumes, higher raw material costs, and the above-mentioned operating losses from the Grimsby production facility significantly contributed to the reported negative profit before net financials of DKK -57 million in 2024. The total revenue for 2024 was DKK 3,304 million for the year, a 4.7% decline compared to 2023.
In addition, this continued pressure on raw material pricing is now beginning to be reflected in consumer prices, and the company expects this to further affect demand in the short term.
Therefore, to ensure the long-term competitiveness and financial stability of the entire company, Espersen will initiate the aforementioned comprehensive evaluation of the production plant in Grimsby, including consideration of a possible closure.
"Espersen has an 88-year legacy of making difficult but necessary decisions to ensure our long-term sustainability. This is one of those moments where we must look ahead and make choices that safeguard our core business and future," Bendix claimed.
"We have already taken clear and decisive actions as announced earlier," he also said, alluding to the close and relocation of its primary production in Lithuania to Poland - where in 2024 it also made specific efficiency improvements in its consumer production -; and to what he called the "process of divesting" the Lithuanian production site, which is none other than its sale to Atlas Premium, a Latvian-based, Icelandic-managed, private label arctic whitefish processor.
The deal is scheduled to close on June 30, 2025, but, according to Espersen's CEO, that has not been enough either. "Despite these efforts, it is evident that further changes to our business model are required to navigate the increasingly demanding market situation," he stated.
In its statement, Espersen said that, regardless of the outcome of the evaluation of its production site in Grimsby, business operations in the UK will continue, and a local sales office will be maintained to serve the company's long-standing customer base in this market.
"We will continue to serve our customers with the same reliability and quality as always, and in the event of a closure decision being taken we will agree transition plans with each of our customers," Tino Bendix emphasised.
Thus, although the outcome of the strategic review is not yet known, Espersen said it will soon begin a comprehensive consultation process with employees. The company also acknowledged the uncertainty this situation creates for its employees in Grimsby and assured that it will ensure continued communication in a transparent, respectful, and timely manner throughout the evaluation process.
"Our colleagues in Grimsby have shown dedication and resilience, and they have our deepest respect," Bendix said. "We will support them through this process with care and clarity."
Finally, Espersen wanted to emphasize that both "the clear and decisive actions taken in recent times to adopt Espersen's business model" and the strategic review of its UK operations announced today underline the company's ability to adapt to market conditions.
"At Espersen, we have an obligation to make strategic decisions that secure Espersen's future, always with the long-term sustainability of the company in mind," its CEO concluded. "This evaluation is about strengthening Espersen's Consumer Production, making us more resilient, and ensuring that we continue delivering high-quality products efficiently and competitively."
