Poultry giant 2 Sisters Food Group is proposing to close its chicken factory in Anglesey which would see over 700 jobs lost.
The Birmingham-headquartered business, which is one of Britain’s largest food producers, has said its Llangefni poultry processing operation was “not sustainable” and lacked space to be efficient.
In a statement, the firm said Llangefni, which is bought in 2013, is one of its smallest sites and products could be made more efficiently elsewhere.
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Despite the firm having invested £5m at the site, the company said the building was old and would need significant investment to bring it up to the same standard as its other operations or face closure.
The company statement said: "The cost to produce here is higher, and it would require significant investment to bring it up to the standards of our other factories. Our products can be made more efficiently elsewhere across our estate.
"Therefore our proposal is to cease operations at the factory, putting the site at risk of closure."
If closed, a total of 730 jobs would be lost at the factory.
However, the company said that it would speak with employees to explore the options before making final decisions on closure.
“Clearly this will be extremely disappointing news for our Llangefni colleagues, and it is no reflection of their continuing hard work and commitment," it said.
"However, we have a duty to remain competitive and protect our wider business on which many thousands of people depend."
2 Sisters is headquartered in Birmingham and has operations across the West Midlands as well as its factory in North Wales, supplying poultry, biscuits and baked goods to a range of firms and supermarkets.
The company said it had reviewed its UK poultry division to overcome “challenges facing the food manufacturing sector”.
Latest accounts on companies house showed that the group had made a £95.5m loss to July 31 2021. While turnover had increased from £1.2bn to £1.4bn, the group's gross profit margin had reduced from 8.8% to 6.4%.
In an interview with The Grocer last month, chief executive Ronald Kers warned about the challenges facing the industry due to soaring production costs in energy, feed and labour and the worst-ever avian flu outbreak.
He said: "Whenever you lose tens of millions of pounds in revenue, that has an influence on any business, large or small. Many businesses (across the whole of the food sector) are now in a very precarious position and the worst is yet to come."
Ynys Mon MP Virginia Crosbie said the news was “devastating” for the employees who are threatened with redundancy at the site.
“I was briefed by the company this morning and it appears it has been badly affected by a range of issues with energy costs rises in April being a major part of the decision to consult on a closure to protect other parts of the business," she said.
She added that she would be speaking to the unions "very soon" and would support a task group being set up to “navigate what is happening and what could happen if the factory closes”.
“I am also meeting with the Chancellor this morning and I will be raising what is happening on the island with him as a matter of urgency,” she said.
“In the meantime, I will do all I can to work with the company, the unions and the council as this process takes place."
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