Latest news with #Vivergo
Yahoo
3 days ago
- Business
- Yahoo
Biofuel plant workers take concerns to Westminster
Workers from the UK's largest bioethanol plant have visited Westminster to raise concerns the facility could close within days without government support. Bosses of Vivergo Fuels in Saltend, near Hull, said the plant's future was "hanging in the balance" after the removal of a 19% tariff on US ethanol imports, which was part of the recent UK-US trade deal. The firm said that without urgent action, the plant, which employs more than 160 people, would no longer be viable. The government said it was working closely with the industry to understand the impacts of the trade deal and it was open to discussions over potential support. According to the Local Democracy Reporting Service, about 35 workers made the trip to London. Ben Hackett, managing director of Vivergo Fuels, said: "With the future of the Vivergo plant hanging in the balance, our workers felt compelled to speak directly to their MPs about what is at stake. "This isn't just about one site. It's about protecting thousands of skilled jobs, supporting British farming and preserving a vital part of our green energy infrastructure." MP for Hull East Karl Turner said: "The fact that dozens of workers had to travel from East Yorkshire to Westminster today shows just how serious this situation is. "Vivergo is not only a major employer in our region - it's a key player in our green economy and food security." The new mayor of Hull and East Yorkshire, Luke Campbell, urged the government to "rethink" the trade deal with the US to protect British job. In April, Associated British Foods (ABF) said it was in talks with the government to help save its Saltend plant after the company was forced to cut production levels due to low bioethanol prices. Vivergo Fuels produces bioethanol which is used in E10 petrol. E10, which was introduced in 2021 to help cut carbon emissions, contains up to 10% bioethanol. The plant also produces animal feed, which is a by-product of the bioethanol production process. Listen to highlights from Hull and East Yorkshire on BBC Sounds, watch the latest episode of Look North or tell us about a story you think we should be covering here. Biofuel plant 'faces closure after US trade deal' Biofuel plant could close with loss of 150 jobs Local Democracy Reporting Service Vivergo Fuels
The Herald Scotland
16-05-2025
- Business
- The Herald Scotland
Trouble looks to be bubbling for UK food production
The agreement has upped the amount of tariff-free US beef allowed into the UK to 13,000 tonnes annually, but that quota is matched the other way around for UK beef exports. Experts reckon there is scope for British producers to capitalise on the premium market in the United States, while on the other hand the 13,000 tonnes of US meat headed in this direction is equivalent to about 3% of all UK beef imports, and therefore unlikely to have a major distorting effect on the domestic market. Read more: Ethanol and bioethanol - the same substance, though the former can be produced from fossil fuels while the latter comes strictly from renewables such as plant biomass - is a different story. The US is the world's largest producer of ethanol which is produced primarily from maize, which the country's "corn belt" states in the midwest produce an abundance of. The UK-US EPD will remove the current 19% tariff on US ethanol imports and replace this with a duty-free quota of 1.4 billion litres. While this should lower costs for manufacturing sectors in the UK that use ethanol as a raw material, it could also pose a considerable threat to agriculture. British ethanol is mainly made from feed wheat which supports farmers across the country. The UK's two main bioethanol plants currently have capacity to purchase around two million tonnes of wheat each year, so if industrial users shifted to cheaper US ethanol imports, many farmers would lose a reliable market for their feed wheat. Furthermore, UK bioethanol production generates a number of by-products, including up to one million tonnes of animal feed annually. A lack of domestic production could ripple into the wider market. Another crucial by-product is carbon dioxide, which is used extensively throughout the UK food system for things such as putting the fizz into carbonated beverages, stunning pigs and poultry before slaughter, and extending the shelf life of fresh and chilled food. Key players will therefore be watching to see if an emerging CO2 problem is around the corner, a situation last faced in 2022 when soaring energy prices led to a disruption in supplies. Among them will be Associated British Foods, which has already warned that its Vivergo biofuels factor in Yorkshire may be financially unviable.
Yahoo
30-04-2025
- Business
- Yahoo
Associated British Foods PLC (ASBFF) (H1 2025) Earnings Call Highlights: Navigating Challenges ...
Group Revenue: GBP9.5 billion, in line with last year at constant currency. Group Adjusted Operating Profit: GBP835 million, a decrease of 10% at constant currency. Operating Margin: Down from 9.8% to 8.8% due to losses in Sugar. Retail Revenue Growth: 1% increase, with strong performance in key growth markets. Retail Operating Profit: Increased by 8% from GBP508 million to GBP540 million. Retail Operating Margin: Improved from 11.3% to 12.1%. Grocery Operating Profit: Increased by 1%, with a margin of 10.9%. Ingredients Operating Profit: Up 8%, with strong performance in yeast and bakery ingredients. Sugar Sales Decline: 4% decrease, with an adjusted operating loss of GBP16 million. Free Cash Flow: GBP27 million, with capital expenditure of GBP0.6 billion. Share Buybacks: GBP422 million completed, with a further GBP169 million planned for the year. Net Debt: GBP2.8 billion, with leverage of 1 times. Interim Dividend: 20.7p, in line with last year. Adjusted Earnings Per Share: Decreased by 8% to 83.6p per share. Warning! GuruFocus has detected 5 Warning Sign with BWAGF. Release Date: April 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Primark delivered good sales growth in Europe and the US, demonstrating the effectiveness of its low-cost model. The Grocery and Ingredients segments showed robust performance, benefiting from multi-year investments and strategic initiatives. The company maintained a strong balance sheet and completed significant share buybacks, reflecting confidence in future performance. Primark's expansion in the US and Europe, including new store openings and increased brand awareness, is progressing well. The company is investing in digital channels and supply chain efficiencies, which are expected to drive long-term growth and cost optimization. The Sugar segment reported an operating loss due to lower European sugar prices and high beet costs, with further losses expected. Vivergo, the bioethanol plant, faced significant challenges due to low bioethanol prices and regulatory issues, resulting in operating losses. The UK and Ireland retail environment remains challenging, with consumer caution impacting sales. The company faces potential impacts from US tariffs, particularly affecting Primark's supply chain and cost structure. Allied Bakeries in the UK experienced lower sales volumes, and strategic options are being evaluated to address ongoing challenges. Q: Why have you decided to conduct strategic reviews for Vivergo and Allied Bakeries now, and not earlier? A: George Weston, Chief Executive, explained that the decision was based on recent developments. For Allied Bakeries, improvements seen last year did not persist, prompting a reevaluation. For Vivergo, the plant's operational issues were resolved, but unexpected low ethanol prices necessitated a strategic review. The reviews are specific to each situation and are not indicative of being reactive or asleep at the wheel. Q: Are you concerned about structural issues affecting Primark's market share in the UK? A: George Weston stated that he is not worried about structural issues. Primark remains well-placed and competitively priced. While larger competitors are improving, Primark's market share remains resilient, and there are significant cost opportunities to leverage for future growth. Q: Can you comment on the margin outlook for Primark next year, considering the weaker US dollar and lower shipping costs? A: Joana Edwards, Interim Finance Director, noted that while there are some tailwinds, such as improved FX rates, the company is about two-thirds hedged for next year. The margin levels are comfortable, and any tailwinds provide flexibility for potential investments in pricing or maintaining margins. Q: If Vivergo does not receive favorable regulatory outcomes, what would be the cost implications of mothballing the plant? A: Joana Edwards mentioned that Vivergo is fully written off, so there are no material costs expected from an impairment perspective. The closure costs would be around GBP15 million, with ongoing mothballing costs of a couple of million per year. Q: How are you addressing the potential impact of US tariffs on Primark's supply chain? A: George Weston explained that short-term strategies involve delaying shipments to US ports to mitigate tariff impacts. Long-term, there are viable alternative sources for some products, but categories like footwear and cosmetics, which are heavily reliant on China, present challenges. The company is monitoring the situation closely and adapting as needed. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
29-04-2025
- Business
- Yahoo
Biofuel plant could close with loss of 150 jobs
The company behind Primark has announced it could close a bioethanol plant in East Yorkshire, putting about 150 jobs at risk. Associated British Foods (ABF), a multinational food, ingredients and retail group, said it was in talks with the government to help preserve its Vivergo fuels site at Saltend, near Hull. The plant has recorded a loss in recent months after cutting production levels due to low bioethanol prices. ABF said the site could be closed or mothballed until conditions in the sector improved. The plant produces bioethanol, which is used in a type of petrol called E10. The fuel, which was introduced in 2021 to help cut carbon emissions, contains up to 10% bioethanol. Vivergo also produces animal feed, which is a by-product of the bioethanol production process. ABF told investors that the way in which regulations were being applied to bioethanol was undermining the commercial viability of the business. The consumer giant said it was having "constructive discussions" with the government, but added there was no guarantee these would be successful. "We will either mothball or close the Vivergo plant if necessary," a spokesperson added. George Weston, chief executive of ABF, said the government "subsidised" international competitors for their supply of bioethanol. "If the government wants to subsidise imported bioethanol then we can't compete against that," he said. However, he added that the government was "engaging with us on this". The plant opened in 2012, but was mothballed between 2018 and 2021. ABF's pre-tax profits slid by 21% to £692m for the 24 weeks to 1 March, with revenues 2% lower at £9.5bn for the period, shareholders were told. In addition to Primark, the group owns brands including Kingsmill, Ryvita and Twinings. Listen to highlights from Hull and East Yorkshire on BBC Sounds, watch the latest episode of Look North or tell us about a story you think we should be covering here. Primark boss quits after complaint about behaviour Biofuels plant announces reopening Hydrogen energy site given the green light Associated British Foods Sign in to access your portfolio
The Herald Scotland
29-04-2025
- Business
- The Herald Scotland
Primark promises no price hike despite rising costs
"We went nine years without moving prices before inflation forced us to change pricing a couple of years ago, but since then we have brought down the price of kids' clothing," said George Weston, chief executive of Primark owner Associated British Foods. "We haven't moved any more prices and are absolutely not planning to move any more. Hopefully we can keep them flat for another eight or nine years." Read more: He added there had been some benefit from weakness in the US dollar and benign cotton costs, while the company is "choosing to absorb" rising labour costs. Retailers and hospitality providers have been hit particularly hard by the increase in employers' national insurance contributions that came into effect at the beginning of this month, with a number warning of higher prices and job losses as a result. Primark has 187 British stores that generated 46% of sales in the first half of the financial year. Its next largest market is Spain and Portugal, where sales grew by by 18%, followed by France and Italy (up 4%), Northern Europe (up 1%), the US (up 17%) and central and eastern Europe (up 21%). Primark's overall sales grew by 1% to £4.47bn, aided by new store openings abroad. Commenting on the impact of the tariff farrago in its results statement, AB Foods cautioned that several countries could slide into recession as a result of US trade policy. Read more: 'Sentiment is unlikely to improve as markets continue to face uncertainty and instability following recent tariff announcements by the US, retaliatory actions by China and the risk of further tariff trade wars. 'Consumer confidence could deteriorate further as a number of countries, including the US, face the risk of recession that could increase individuals' debt problems.' The search for a successor to former Primark chief executive Paul Marchant is "underway", the company said yesterday. Mr Marchant resigned last month, admitting an "error of judgement", following an allegation by a woman about his behaviour in a social setting. Group revenues at AB Foods, whose food and ingredient brands include well-known favourites such as Kingsmill and Ryvita, dipped by 2% to £9.5 billion with adjusted pre-tax profit falling 10% to £818m as the performance at its sugar division turned sour. "A sharp fall in sugar prices saw the division turn loss-making, with underlying operating profits down more than £140m on last year," said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. "The regulatory picture for its bioethanol plant, Vivergo, is making operations unviable too, and unless current discussions with the UK government are fruitful, ABF could be forced to close the plant, at least temporarily.' AB Foods has cut production at its Vivergo bioethanol plant in London and has threatened to close it unless the government steps in to change regulations. The business made an operating loss in the first six months of the financial year. The conglomerate's diversified business model was a boon during the pandemic and continues to benefit, with the grocery and ingredients divisions doing much of the heavy lifting in the first half of the year while retail and sugar struggled. Even so, analysts at AJ Bell said Primark's underperformance was "worrying" given that warm temperatures should have driven increased footfall into stores. 'They will be looking at whether they are getting the basics right – putting the right product in the right places at the right times and right price points to get people through the tills," analysts said in a note to investors. "It badly needs to arrest a loss of market share. 'Making life more difficult in terms of getting things on track is the recent departure under a cloud of Primark's longstanding CEO Paul Marchant. The chain badly needs someone permanent to provide it with direction for the future.'
