Associated British Foods Plc (ABF) has confirmed the closure of Vivergo, its UK bioethanol production plant in Hull, which also produces animal feed for UK farms.
ABF stated that the decision to close the plant had followed “extensive discussions” with Government to find a regulatory and financial solution that would enable Vivergo to operate on a profitable and sustainable basis.
The food processor went on to say that discussions with Government were “necessary” as Vivergo’s commercial viability was “undermined by the way in which UK regulations were being applied to favour foreign producers”.
This was an issue that ABF said was made “much worse” by Government’s decision in May to remove tariffs on US bioethanol coming into the UK market.
ABF concluded that the two actions meant Vivergo would “inevitably continue to be heavily loss-making without corrective Government intervention to provide short-term financial support and a longer-term regulatory solution”.
In a statement on its website, ABF commented: “The Government has decided not to offer either short-term financial support or the long-term regulatory certainty we sought.
“Given these circumstances and the financial losses already incurred, ABF has therefore determined in the interests of its shareholders that it cannot continue to support Vivergo.”
ABF said it will start an orderly closure process immediately and confirmed that Vivergo will have ceased all production of bioethanol and animal feed by 31st August 2025.
A spokesperson for ABF said: “It is deeply regrettable that the Government has chosen not to support a key national asset. We have been left with no choice but to announce the closure of Vivergo and we have informed our people.
“We have been fighting for months to keep this plant open. We initiated and led talks with Government in good faith. We presented a clear plan to restore Vivergo to profitability within two years under policy levers already aligned with the Government’s own green industrial strategy.
“In making this decision, the Government has thrown away billions in potential growth in the Humber and a sovereign capability in clean fuels that had the chance to lead the world. Hugely significant investment was lined up to go into the area, from ABF and other companies. Jobs in clean energy will now move overseas – principally to the US but also to other countries with a more sensible regulatory environment.
“This plant should always have been profitable under the right regulatory environment, as similar plants in Western Europe demonstrate. The Government’s own commissioned analysis spells out that Vivergo could and should be profitable under that environment.
“The loss of Vivergo will be felt most acutely by our dedicated workforce and their families and by the thousands whose livelihoods depend on our supply chain – from farmers to hauliers and engineers. We are hugely disappointed, on their behalf, that the press was informed of this decision before we were told – and before we had a chance to communicate to our staff. Our focus is now on supporting the working people at our plant in Hull.”
