Croda to axe jobs and dispose of five factories

Croda International, the speciality chemicals company based in Yorkshire, is to axe roughly 7 per cent of its workforce with the closure or sale of five factories as it withdraws from the textile chemicals, solvent recovery and varnish media markets.

The flight abroad of clothes manufacturers to cheaper textile factories in the Far East and Asia has damaged demand for some of Croda's products, while pressure in Britain's engineering industry has also hurt.

It plans to close or sell three of its factories in Yorkshire – in Knottingley, Hull, and Leek – by the end of the year with the loss of 133 jobs. Croda will take an exceptional charge of £17m, including £5.2m of goodwill previously written off, £8.8m to write down assets and a £3m cash cost to cover the exit from the three sites. The plants had combined sales of £11.5m last year.

Croda will also take an extra operating exceptional charge of £1.9m to shut its lanoline factory in Bradford and close a rendering factory in Market Harborough, Leicestershire. The lanolin operations will be consolidated at Croda's Rawcliffe Bridge plant in East Yorkshire, where the business was founded in 1925.

The company said the moves were part of its transformation into a business specialising in oleochemicals, which are produced from raw materials such as rapeseed oil and wool grease.

Shares in Croda, which is the world's largest maker of chemicals derived from wool grease, fell 1p to 274.5p.