France: IMC-France considers closing its Marquette-lez-Lille site

The International Malting Company France (IMC-France) is experiencing structural economic difficulties arising as a result of the new situation prevailing in the marketplace. Faced with this, the company's management this morning informed the unions and employees' representatives that it would be consulting the Works Committee concerning plans to close its Marquette-lez-Lille production site. This site produces 105,000 tonnes of malt per year and employs 53 people.

The malt industry needs to face up to a situation of global overproduction. Europe is particularly affected by this, due among other things to the recent construction of production sites in Spain, Holland and Scandinavia, but also in Russia, the Ukraine, Romania... This extra capacity reduces the number of outlets open to European malt producers who had previously delivered into these markets.

Additionally, the brewery sector (IMC France's main client) is undergoing concentration, with the five leading brewers now accounting for 45% of global production. This concentration process is today accelerating, and combined with the global overcapacity situation is now putting considerable pressure on prices.

The crisis in the malt market is a long-term one and is unprecedented. It is resulting in the closure of the least competitive and least well situated malt plants. Consequently, in 2005 malt works closed down in the United Kingdom, while in February 2006 an 80,000 tonne malt plant closed at Reims and the leading German malt producer recently ceased trading.

IMC-France's results have deteriorated sharply faced with such an extremely difficult economic environment. Year 2005 ended with important losses (the prospects for 2006 are even more worrying), despite the measures taken over several years both in terms of commercial positioning policies and investments (with €7 million invested over four years for the water treatment plant, the boiler area and the dryer, etc).
Due to its size, its production costs, its structure and its geographical location far from a port (since 80% of production is exported), the IMC-France site is extremely vulnerable.

For IMC-France's general manager Sylvain Caulliez: "if this project of closing is confirmed, we will do everything possible to enable every employee to find a solution adapted to his or her personal situation."

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IMC France is the French subsidiary of the International Malting Company (IMC) group. It produces and markets malt for the brewing industry.
The International Malting Company group is jointly owned in equal proportions by Archer Daniels Midlands (ADM), a listed American food group, and by the French family owned group Lesaffre et Cie. The IMC group is based in France at Marquette-lez-Lille, in the United States, in Canada, in Australia and in New Zealand. It employs 300 people and produces 900,000 tonnes of malt per year.

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