Greencore may sell Hazlewood units

Greencore is considering the disposal of loss-making elements in Hazlewood Foods, the British group it is buying for €588 million (£463 million).

At an e.g.m. yesterday where shareholders sanctioned the purchase, its chief executive, Mr David Dilger, said Greencore had "clear, focused determination" to eliminate losses, by disposal or otherwise.

Two businesses were "losing significantly", he said, but declined to identify which ones. When asked whether the group would make workers redundant, he said: "Certainly not in Ireland and hopefully not anywhere. We haven't identified a single business for disposal."

Hazlewood, the world's biggest producer of sandwiches, also has chilled pizza, quiche and ready meals divisions. It expects sales this year to reach £775 million sterling (€1,256 million) and an operating profit before exceptionals of £48.7 million.

Mr Dilger identified a number of "issues" that needed to be addressed. Restructuring decisions had been deferred, the organisation structure was wrong for the business, its overhead base was too high and returns from investment had not yet come through.

Yet Mr Dilger said significant synergies could be made between the groups. One shareholder, Mr Joe Rae, cited Greencore's troubled investment in US group Imperial Holly and questioned its management's ability to complete a successful integration with Hazlewood. Responding, Mr Dilger said: "Neither I nor my executive colleagues are in any way proud of the 15 per cent shareholding we acquired in Imperial Holly. The US sugar industry is in a state of utter chaos because of dramatic oversupply."

Mr Dilger suggested its track record on acquisitions was stronger than its investments.

The integration of Hazlewood, he said, would take 18 months to complete.

Greencore chairman Mr Bernie Cahill said he had been invited by its management to remain in the position for another year. He will decide whether to stay before its next a.g.m. in February.