Auditors have told how cash-flow and profitability problems suffered by a major sugar beet contractor and haulier led to its demise.
Lincolnshire-based M&J Haulage, which employs 24 people and a number of subcontractors, operates as an agricultural contracting business, specialising in the cultivation of sugar beet and other arable crops.
The company grows its own crops whilst also providing contract farming and haulage services to other customers in the East Midlands.
It was expected to harvest an estimated 3,650ha of sugar beet this season.
However, auditors KPMG said the company had been impacted by reduced contract volumes leading to a material downturn in profitability and subsequent cash flow issues.
With growing creditor pressure, the inability to obtain further funding and in the absence of any committed increase in long-term orders, it was deemed that a viable business no longer existed.
Operations on site have been suspended and all employees have been sent home while the joint administrators assess the options available.
'Pioneers'
NFU Sugar Chairman, Michael Sly said M and J Haulage Ltd were "pioneers" of the Industry Harvest and Haulage Scheme – created to build best practice and efficiency in sugar beet harvesting, loading and haulage.
He said: “M and J’s demise not only creates huge challenges for growers, who may now struggle to find a replacement contractor to harvest and deliver their beet, but also brings into question the effectiveness of the Industry Harvest and Haulage Scheme and its ability to deliver a sustainable supply chain from field to factory.
"We have noted British Sugar’s assertion that contingency plans are in place for such instances, and that they do not anticipate any significant delays due to the loss of M and J Haulage Ltd. NFU Sugar urges British Sugar to share their plans with growers as soon as possible."
Chris Pole, partner at KPMG and joint administrator, explained: “The company had recently seen a decline in its order book, which led to significant pressure on its cashflow.
“Over the coming days, we will be assessing options for the business, including the possibility of resuming operations, while we explore a sale of the business and its assets.”
