Losses for closure-threatened Highland seafood firm

image source, Google
image captionThai Union intends either to sell the Scottish subsidiary, which is based in Dingwall, or close it down

The Thai company that owns a loss-making Highland salmon business has had to write off nearly £11m of value in its latest accounts.

The Edinburgh Salmon Company (ESCo) is based in Dingwall.

It processes salmon as own-brand product for retail and wholesale.

The company is part of Thai Union, which intends either to sell the Scottish subsidiary or close it down. A decision on this expected later this month.

The Ross-shire processing plant has 163 staff workers, and up to 100 temporary workers at times of peak demand.

With excess capacity in the market, prices have been driven down and larger companies have won business.

One of the contracts lost by the Dingwall firm is reported to be the Pret-a-Manger high street chain.

At the same time, the price of unprocessed salmon has been volatile but generally high, and that has made it difficult for the Edinburgh Salmon Company to price its product profitably.

Accounts published at Thai Union headquarters, near Bangkok, show the Scottish assets had a value equivalent to £11.7m at the end of September.

'Discontinued operation'

However, the loss sustained by the Edinburgh Salmon Company in the first nine months of this year came to £13m. That is up from a loss in the first nine months of 2017 amounting to £3.3m.

Thai Union revealed that it had to take an accounting impairment to the valuation of the business, of £10.6m, or 455m Thai baht. That is based on an accounting convention that the expected sales price less the cost of preparing the product for sale.

In September, the French subsidiary that oversees Thai Union's European operations announced that it was preparing the workforce for closure by starting a 45-day consultation period, while trying to find a trade buyer.

The parent company's notes to market analysts this week stated: "Thai Union has begun to actively locate a buyer, and expects to dispose all relating assets in the next 12 months."

It said the Scottish firm is now accounted for as a "discontinued operation".

It added: "The company will actively pursue and explore all viable divestment opportunities in an attempt to avoid, reduce, and/or mitigate the potential impacts upon its valued employees."

Thai Union, one of the world's largest fish processing firms, also owns the John West brand and other market-leading tinned fish brands in France, the US and Asia.

Over-capacity in Scotland's farmed fish sector has also led to the decision this week by Skretting to close down fishfeed manufacturing plants in Invergordon, near Dingwall, and at Longridge near Preston, Lancashire.

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