14 January 2000

Pig production giant forced to call in receivers

By Robin Cradock

ONE of the UKs biggest pig producers has become the latest casualty of the ongoing crisis gripping the sector, and many more businesses are likely to follow suit, say receivers.

The news comes in the same week that saw a pig industry report warning of 50,000 job losses in the industry (see News).

Patchington Farms, based at Andover, Hants has 3000 sows plus breeding and finishing pigs on 30 sites across the south of England. It will continue trading while receivers from Pricewater-house Coopers assess the business.

"This is a well-run business with a very united and effective workforce which we are hoping to keep together," said Ryan Densham, Bristol-based partner with PWC.

Managing director Robert Bowden added: "After 30 years of building up my business, this is a sad day for me and my team. With my staff, I have done everything possible to keep the business going. I will now be doing all I can to help the receivers."

Another major Hants farming enterprise is also pulling out of pig production, after 40 years in the business. Kingsclere Estates, farmed by the May family since 1890, is shutting down its 300-sow unit and the last pigs will leave Plantation Farm at the end of September.

Director Michael Welsh said it was a highly efficient unit. "We were very reluctant to take this step. But the £ is too strong, imports are too high and there are no prospects of getting back into profit in this enterprise."

The estate will continue to concentrate on its 400 cow dairy herd and arable enterprises.

David Turner, senior agriculture specialist with PWC, reckoned that there were no more than six producers breaking even in the whole of the UK.

Mr Turner predicted that restructuring would continue to gather pace, leaving just 1500 producers – possibly fewer – covering 80% cent of UK output, a fall of about 1000 on todays figure.

"Farmers must improve their understanding of the true costs of production. In recent cases we have established that pig producers who were working on a production cost of 80p/kg in fact had costs of 90p plus, which obviously has a significant multiplier effect."

Stephen Baylis, of Leeds solicitor Hammond Suddards, stressed the need for farmers with financial problems to take early action, rather than having it forced on them.

"Insolvency practitioners such as ourselves are getting instructions from farmers themselves looking to make a controlled exit from pig production. So far the major banks have held their nerve, but buyers are wary of making investments when there are no signs of recovery." &#42