Job cuts loom as Aga feels the heat

AROUND 270 jobs are under threat at kitchen equipment firm Aga Foodservice as it prepares to reshuffle its manufacturing business. The group is considering pulling out of production of eye-level and slot-in gas cookers at its plant in Leamington Spa, Central England.

Aga instead wants to focus on its traditional top-of-the-range units and building its share of the export market. Profit margins on 'entry level' gas units, sold under the Leisure Cooker and Flavel brands, have been hit by competition on the High Street.

Chief executive William McGrath said a buyer may be found to take on the production, but a third of Aga's staff at Leamington Spa could lose their jobs.

'We are considering whether to come out of production of the slot-in and 55cm cookers which are the bulk of production at Leamington,' McGrath said. 'As a result we will be producing less cookers and we are now consulting with people down there to find the best way forward.'

Aga employs 800 staff at its Leamington Spa site, out of a total workforce of 3,000 in the UK and the US. Ceasing production of the gas cookers would wipe £20m from Aga's annual turnover, which hit £969m in 2000.

Aga has made several bolt-on acquisitions in the past five months as Aga expands its range of premium consumer products. Last summer it bought trendy tiles and interior finishings group Fired Earth and recently snapped up fireplace maker Elgin & Hall.

McGrath said the Leamington Spa site would still play a key role in the group as it concentrates on the premium end of the market. Further investment would make the plant a development centre for range cooking with new products set to be introduced later in the year. Aga's head office will also relocate to the site from Sheldon, Birmingham.