UP to 500 staff at a Lurgan haulage business could be made redundant after they were told the company is considering shutting down because of its "unsustainable financial position".
And the boss of Morgan McLernon, a subsidiary of Culina Group and which has specialised in chilled and frozen food distribution for more than 40 years, has pinned much of the blame on the Brexit fall-out.
A letter to staff from its recently-appointed chief executive John Kerrigan - which has been seen by the Irish News - confirmed a "cessation of activity" and the immediate closure of its site at Silverwood in Lurgan.
He said: "Following a full strategic review of the Lurgan business it is with regret that, on behalf of the board of directors, I announce the proposed cessation of activity and site closure in Lurgan.
"As a consequence, it is also proposed that the Fowler Welch-managed GB operations in Appleton and Cairnryan will also cease."
He added: "The business has for an extended period continued to operate in an unsustainable financial position, not helped by Brexit and many other external factors.
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"Increased pressures on the company in terms of reduced volumes and increased operation costs now reflects the urgency of the situation, and has regretfully led to the business having no option but to consider shutting down its Northern Ireland-based operation."
His statement continues: "The business has explored the transition to new systems and processes and has undertaken huge efforts to tighten cost control in all aspects of the operation, but this has still not been able to achieve the necessary financial performance or commercial targets."
Mr Kerrigan said the proposed closure was not a reflection of the commitment and contribution of staff, who he said have been "unstinting in their agility and willingness to adapt to the changes", but was more a reflection of the difficult ongoing sector and market pressures faced by Morgan McLernon.
While a consultation process has now opened, the statement warns that the board "do not currently foresee a way to preclude the site closure given that the business is unsustainable".
A representative from Culina Group said: “We can confirm that a proposal has been put forward to close the Morgan McLernon site in Lurgan, Northern Ireland. A period of meaningful consultation has now been entered into with those colleagues affected.”
Morgan McLernon, which makes 57,000 deliveries a year to virtually every large supermarket in the UK and Ireland from its 66,000 sq ft chilled warehouse, operates 220 vehicles and 600 trailers.
Most recently published results, up to the end of 2021, show that Morgan McLernon had 391 drivers and 109 administrative staff on its books, and a wages bill of £16 million.
Sales increased that year from £63.8 million to £67.5 million, but it still swung from a £4 million profit to a loss of £340,000, which directors blamed on high fuel and labour costs and "the effects of Brexit and global inflationary pressures".
In 2019 DUP leader Sir Jeffrey Donaldson said he "could live" with 40,000 jobs losses as a result of Brexit, which his party backed.
Following the 2016 referendum on the UK leaving the EU, the company warned of an "acute shortage" of HGV lorry drivers in Northern Ireland.
