The man at the centre of the Terry's controversy explains to MIKE LAYCOCK the reasons behind the fateful decision to close the York factory.

PLANT director John Pollock knows all about the human impact of shutting down Terry's chocolate factory and moving production abroad.

He might be the top man at Terry's, but his job is under threat, just like the production line workers. The 52-year-old says that when he has finished leading the factory through the closure process, he will depart from a York business where he has worked for 15 years, and will have to consider where his own future lies.

He has also seen at first hand the reaction of his staff. He says there have been tears and sadness and disappointment, but little anger, and he has nothing but praise for the way workers have reacted to the news.

"It's not an easy thing, but they have conducted themselves superbly," he says.

But knowing just how serious the implications of the decision are for the community, how did he, along with fellow managers within the European confectionery division of Kraft and the UK commercial management, come to the conclusion that the York factory should close down?

He stresses first that this has not been an instant snap decision, but the result of years of analysis and investigation. "It's not a decision that has been made overnight. But at the end of the day, we were not able to come up with an alternative that was as good for the business."

He says Terry's has hit trouble in recent years, in particular over exports of Chocolate Orange to America. Sales first soared, then fell sharply, with problems exacerbated by the unsuccessful launch of a raspberry flavour version, which has now been withdrawn from the US.

But he says the big problem here is one of fixed costs - the size and layout of a site which does not lend itself to modernisation, the costs of running the site, depreciation, security and maintenance expenses. The plant is operating at less than 50 per cent of capacity, and less than a quarter of the 32-acre site is in use.

At the same time, supply costs would also be lower in Europe than in Britain. "We use thousands of tonnes of sugar each year, and the cost of sugar is considerably higher in the UK than in Europe."

All Gold production is set to move to Sweden, where he says there is spare capacity and state-of-the-art equipment.

Chocolate Orange is moving to Poland, where there is spare capacity and labour costs are much lower.

But Mr Pollock stresses that the savings on labour costs are largely offset by the higher costs of transporting a majority of the products back to Britain, with about 75 per cent of Chocolate Orange sold in Britain, and an even higher percentage of All Gold.

So can his mind be changed? Can he not be persuaded that, while Terry's might need to leave its existing site, it should instead move to another purpose-built factory in this area?

It becomes clear that the unions, council, MPs, and the Evening Press have their work cut out to alter the company's decision.

Mr Pollock says that, while the company will go through full consultation with the unions and others and listen to what they have to say, relocation has been examined carefully, and it was decided it was "not viable".

He adds: "We believe we have made the correct decision. While recognising the impact on the local community, this is the right commercial solution for the business."

Updated: 11:44 Friday, April 23, 2004