Grimsby’s cold storage capacity is to be increased by 20 per cent after £5 million of government support was netted for a key project.
Brexit and Covid have put pressure on a vital element of the wider seafood sector, with it trading at over-capacity for the past six months, as just in time imports have switched to more considered buying by the town’s cluster of processors.
The £30 million Europarc proposal from HSH Coldstores is fully consented and will create 60 new jobs, with the potential to unlock hundreds more in Grimsby. It was the lead beneficiary from the first round of the UK Seafood Infrastructure Fund, with £20 million being invested nationwide.
Read more: Seafood processor swoops for neighbouring home delivery specialist
A further £2.4 million has been awarded to JCS Fish to expand its processing operations in the town, with cash for projects in Fort William, Peterhead and Alness in Scotland, for Mowi, Denholm Seeafoods and Aquascot; Shoreham Port for vessel maintenance and Falfish Ltd in Newlyn ad Mevagissey.
Henry Pringle, chief operating officer for Constellation, HSH's parent company, welcomed new Fisheries Minister Mark Spencer to the existing Birchin Way site, taking him on a tour of the huge operation.
He said: “We are running at over-capacity, we’re storing in the aisles, it is everywhere, and it is not just us. Everyone in Grimsby is full. We see that as a major impediment to Grimsby industry, processing depends on cold storage and occupancy at the moment creates tonnes of additional cost. We cannot take in additional customers, and we’re having to shuttle to the Midlands and Peterborough.
“Grimsby being the centre of fish and seafood processing in the UK, a lot of the supply chains are dependent on imports. This is the main fish and chip shop warehouse for the UK.”
Cold storage is required for raw product, ingredients for value-added processing and pre-sale holding, with transportation to and from the cluster adding to the cost, and eroding competitive advantage.
Mr Pringle said: “We are looking at building a new facility within Grimsby, supporting 30,000 pallet spaces. There are 150,000 currently, so that will be increasing by 20 per cent.”
The 52-year-old second generation business holds a third of the market share in the town, and will employ 200 people when the addition completes, scheduled for early 2024.
It is currently being rendered for, and has been hit by inflation in the building materials market.
Of the reasoning behind the demand, Mr Pringle said: “We are at peak season going into Christmas, there has been a bounce-back post Covid and Brexit concern means no-one wants just-in-time inventory. The model is now to import and hold greater stock.
“We wouldn’t be able to do this without the grant funding. Capital expenditure accelerated, construction costs have gone through the roof and while they have come down, they are not where they started. This really gets us across the line in terms of making it viable.”
When first announced in May 2021, with Europarc developer Wykeland, the 171,000 sq ft site had a price tag of £15 million, though 25 new fuel efficient trucks with the latest refrigeration technology are also part of the successful bid.
At JCS, a state-of-the-art 2,000 sq m fish processing factory with integrated smokehouse is to be developed, doubling salmon and trout processing capability to 20 tonnes per day. It could bring 32 jobs to the town, while reducing reliance on imports.
It came as it was announced in Tromso, Norway, that the next International Coldwater Prawn Forum will be held in Grimsby in 2024, likely to bring more than 200 delegates. The town successfully hosted the World Seafood Congress in 2015.
Mr Spencer, appointed to Defra under Liz Truss, and the representative for Sherwood in Nottinghamshire, said: “We are adding value to the processing sector, building extra storage that helps with the supply chains and generates jobs.
“This is about investing for the future and making sure we have one of the most robust, sustainable and employable industries in Europe. We are now competing with our colleagues across the water, we want to make sure the UK fisheries sector is robust and fit for the future.
“It demonstrates our huge opportunities in this sector, and I think this will assist on that journey, moving forward in the new world post-Brexit, and I think it is great news for the sector, it proves we can do it here in the Uk and do it very successfully.”
He rejected the idea it was paying for issues arising from the vote to leave, despite the stated change in business model. “Companies are holding more stock because they are confident in the future and confident they are going to sell it,” he said.
Post-Brexit 'wrinkles on the way' to 'new world' as hope expressed for Icelandic Seafood UK
Icelandic Seafood International’s decision to exit UK operations, putting 200 jobs at risk in Grimsby, was raised with the Minister.
He claimed administrators had been appointed in media interviews, but this was refuted by the business, which is working with specialist MAR Advisors to achieve a sale.
The company operates the huge former Five Star Fish plant on Great Grimsby Business Park, having merged two businesses into it as Covid struck UK shores.
Mr Spencer said there would be “wrinkles on the way” following Brexit, with the company’s chief executive having pointed to harder trading conditions as part of the reasoning, with losses of £12 million revealed.
He said: “It is very sad for these people, losing jobs - potentially - and I hope the administrator can find someone to take it on lock, stock and barrel. With this investment there will be other jobs in fish processing industry and as a nation we have reason to be optimistic about the future.”
ISI had announced it was to pull out of the UK in a trading update last week. It is rigorously pursuing a sale, with interest mooted.
Following his comments, to several media outlets, Bjarni Ármannsson, Icelandic Seafood International group chief executive, said: "Iceland Seafood is running a sales process on its UK subsidiary, Iceland Seafood UK, after having decided to exit the UK value-added operation.
"MAR Advisors have been mandated to run the process. We are currently presenting the company to prospective buyers. As Iceland Seafood is a publicly-listed company we will report the outcome of such a process at an appropriate time to the market. Any suggestions that Iceland Seafood UK is in a liquidation process are false. That is not the case at all."
Grimsby MP Lia Nici had earlier in the week taken to social media to air her concerns about finding out about the company’s plight via social media. The Westminster agenda led to her missing Mr Spencer’s visit, but she met with him in London prior to his arrival.
READ NEXT:
Ed Miliband on Humber 2030 Vision and how Labour aims to lead the global race to Net Zero
Myenergi co-founder named Great British Entrepreneur of the Year
Cranswick resilient against the economic crunch as Hull 'home' of McCrispy kicks on
'Unprecedented' inflationary pressures on seafood leads Hilton to reel in profit expectations
Brexit, logistics and lockdown woes lead grocery exporter Ramsden International to annual loss
