After commencing voluntary administration proceedings in late July, French poultry processor Tilly Sabco has announced that it will cut 125 of its 450 jobs.
According to the company, the requirement to commence voluntary administration came as a result of the serious impact of the consequences of the avian flu crisis, which brought about the closure of its main export markets and ongoing restrictions after France was declared bird flu free.
The company hopes that the administration procedure will give the economic environment the opportunity to take initiatives to contribute to the development of various scenarios for the continuation in whole or part of Tilly Sabco’s business activities and employment, subject to the control of the Commercial Court.
Since February 2006, the management of Tilly Sabco has taken steps to adjust to the situation by significantly reducing its production programme to avoid the over exposure of its business, in the light of its financial commitments.
After several months of very poor business results (60% reduction in volume and 55% reduction in turnover for the first half year) the company suffered heavy losses. At present, market consumption has not recovered to the pre bird flu level, exacerbated by a significant reduction in world prices.
Since the 18 June, the date on which France was officially cleared ofavian flu, embargoes have been lifted slowly, with restrictions still in place. Tilly Sabco is therefore left with 4,500 tons of stock for the export market depreciating in value.
In such circumstances, and despite having considered alternative solutions, Tilly Sabco has not been able to find an answer to the problem that would have enabled it to avoid administration proceedings.