Cepac: Statement regarding Cepac Darlington

Steve Moss, Group Managing Director, said the on-going industrial action is causing immense harm to the business and its customers, suggesting that Unite’s actions so far would indicate that industrial action will keep being extended until Unite’s unrealistic demands are met. The announced increase in strike action damages the loss-making business further still, losing existing customers and now resulting in probable job losses. The results of the dispute have already put on hold investment plans previously agreed for Cepac Darlington. Moss said: “The company had repeatedly presented alternatives to Unite, who continued to fail to fully and realistically engage with the Company on what was our full and final offer. As a result, collective bargaining has come to an end, and we have made our last offer direct to our employees. Contrary to recent, and characteristically inaccurate, press releases from Unite the offer is a generous and realistic one, positioning the business for investment, transformation and growth, away from its traditional and declining markets and into growth areas of volume, sustainable packaging. We have continuously sought to explain to Unite the challenges our site faces and the need to secure its future, including investments, and that we are seeking to work with our colleagues and Unite to achieve the basis of a turnaround, seemingly all to no avail”.

Moss continued, “Our offer to employees remains an increase in basic pay of 8% backdated to 1st January 2023 and we have requested greater flexibility and harmonisation for all employees at the level of 40 hours per working week. Out of a total of 91 factory colleagues at the Darlington site 54 are already working 40 hours and we are requesting 37 employees to marginally increase their working week from 37.5 hours to 40 hours and of course be paid for so doing. The result of the uplift in hours and harmonisation is a pay increase of between 15.2% and 17.5%, for the majority of factory-based colleagues. This has been rejected repeatedly by Unite, with zero flexibility in their responses. I also want to put on record that what has been stated by Unite as a grossly detrimental change to the sick pay scheme, applicable to all employees at the site, is in fact an adjustment for some, but an improvement for many. The sick pay scheme is still amongst the best in the sector. It is sad that Unite continuously and consistently seem unable to engage positively to support us in securing the future of the employees at the Darlington site.”

Moss explained the severe consequences now being faced at the site, including customers needing to source elsewhere and the prospect of continued heavy losses into the future:
“We have explained very carefully, at every opportunity, to Unite and our employees’ representatives that our customers must ensure they have packaging. We are not the only supplier in the sector, which is fiercely competitive, and our customers will of course need to source elsewhere, if we are unable to supply them, or indeed there is a prospect of a lack of supply, which has been the case since Unite commenced the threat of industrial action several months ago. Regrettably the negative impacts on the business of the extended dispute now forces us to take action to minimise job losses and secure our business transformation into new sectors. The Company is proposing to restructure the site and operate a differently shaped business. We will focus upon business transformation, growing into highly sustainable packaging formats, with a reduced requirement for complex print and increased investment on specialist coatings, corrugation, lamination, die-cutting and gluing. It is also anticipated that we shall see continued growth in Digital printing. I must emphasise that we shall of course work with all existing print customers to support transition to other areas of our business and to alternative suppliers, if that is required, over the coming weeks and months.”

Moss explained the serious consequences of the decision to accelerate the sites transition, forced upon it as a consequence of the actions of Unite:
“The Darlington site still has a promising future, but the withdrawal of production during the 6 weeks of strike action simply presents too great a risk to re-invest in printed products. Today we shall be forced to advise of the potential likelihood of in excess of 60 redundancies at Cepac Darlington and consultation will commence immediately with employee representatives. We are still committed to investment for the future into new technologies, developing the business and offering secure long-term employment, as we move into a new and exciting future. The need to change is of paramount importance to be successful and grow. Sadly the structures, practices and technologies of the past 40 years are no longer applicable in the 21st century."

Moss emphasised again that customers are of paramount importance and will be supported as much as possible in such challenging circumstances:
“Customers have always been at the heart of our Darlington business, and we have sought to provide them with service and quality excellence over many years. We have come to this enforced decision point to re-structure with great sadness, but we would prefer to achieve a manageable transition for our customers and our business, which an extended period of strike action does not permit”.