£150m investment planned for 2 Sisters poultry division

Leading processor 2 Sisters Food Group has announced a new £150m investment programme in its poultry business, designed to “meet customer needs, drive efficiency and revolutionise the supply chain end-to-end”.

The aim, it says, is to create “world-class facilities with state of the art technology” over the next three to four years.

“We are making a number of important investments with the aim of providing our customers with innovative products, better value and reduced waste,” said chief executive Ranjit Singh.

Further details are being withheld, though the £150m is additional to the £10m the company has already spent on reducing campylobacter, including blast surface chilling of carcasses and secondary scalding in the factories.

See also: Sales of chicken up in third quarter (Q3)

“With the further use of our new factory interventions, we anticipate an even greater removal of campylobacter, reducing its presence to significantly less than the industry target,” said a statement to investors.

The announcement came as Boparan Holdings, 2 Sisters’ parent company, reported a year of declining sales and profit.

In the 52 weeks to 1 August, total sales fell 8.2% to £3.14bn, while operating profit was down 34% to £58.8m. On a like-for-like bases, turnover was down 1.7% at £3.19bn, with operating profit 38% lower at £60.4m. “The operating environment for our industry remains tough,” said Mr Singh.

However, there were some signs of improvement, with a 17.5% increase in like-for-like operating profit to £22.8m from Q3 to Q4.

The dominant Protein division, which includes poultry and red meat, faced a number of challenges in the past year, the report adds.

“We have been working hard to mitigate the effects of the avian influenza outbreaks, negative consumer sentiment following FSA campylobacter reporting, and the impact of deflation throughout 2015.

“We are encouraged by the positive trends which continued in Q4, where our share of the UK poultry market grew by 4% versus Q3.”

An IT systems glitch earlier in the year also cost the company £17.4m.

Boparan Holdings – relative turnovers

Protein division                £2,209m

Chilled division                  £596m

Branded division              £392m