News / Mussel firm placed in administration
NINE jobs could be under threat after a Shetland-based mussel farming business called in the administrators to sell its processing operation as a going concern on Thursday.
Isle of Shuna plc and its subsidiary Demlane have appointed Bruce Cartwright and Graham Frost of Pricewaterhouse Cooper as joint administrators.
The company employs six people at its recently extended processing factory in Walls, Shetland, and three people in an office in Bathgate, outside Edinburgh.
Mr Frost said the company had encountered cash flow problems and an attempt to restructure the business had failed due to a lack of working capital.
As part of the restructuring exercise, the 15 Shetland mussel farming sites owned by Demlane had been sold to rival Shetland firm Blueshell Mussels last month.
At its peak Demlane was producing 600 tonnes of high quality farmed mussels every year, capturing 25 per cent of the UK market and being shortlisted in the Scottish Food and Drink Excellence Awards in 2007.
The same year it extended its processing factory at the Kirkdale industrial estate, in Walls, with the help of £330,000 in grant funding from the Scottish government, Shetland Islands Council and Highlands and Islands Enterprise.
Only last year the company was celebrating a six figure deal selling mussels to Belgium, one of the biggest customers in Europe, after receiving a £500,000 grant from the European Fisheries Fund.
After offloading its entire sea-based operation to concentrate on creating a new range of seafood products, the company has been forced to admit that it can not afford to carry on.
Mr Frost said that wholesale distribution had not proved profitable enough. “The mussel production business operated by Demlane had recently been sold to allow it to focus on processing, and developing added value retail customer opportunities,” he said.
“The board have since reluctantly concluded that without additional working capital and investment this path is no longer feasible on a standalone basis.
“Our immediate focus will be to determine interest from industry players in continuing the strategy to develop production from the newly extended processing factory in Walls. We believe this represents an opportunity for an industry player to acquire a business and factory that is strategically important.”
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