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COM(82)875
Vol.1982/0268

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
GeneralSecretariatCOM(82)875 final
Brussels,7January1983
FOROFFICIAL USEONLY
COMMUNICATION FROMTHECOMMISSION TOTHECOUNCIL
Requestforassent,pursuanttoArticle56(2a)oftheECSCTreatyto
thegrantingofaconversion LoantoSmithKendonLtd.
UnitedKingdom
COM(82)875final

COMMISSION
OFTHE
EUROPEAN COMMUNITIES
FOROFFICIAL USEONLY
Communication totheCouncil
Subject:Requestforassent,pursuanttoArticle56(2a)oftheECSCTreaty
tothegrantingofaconversionloantoSmithKendonLtd.
UnitedKingdom.
I.THECOMPANYNo.359
Applicant <:'SmithKendonLtd.
RegisteredOffice :Bridgend,SouthWales
Parentcompanyof
applicantBeatriceFoods
Recipient SmithKendonLtd.
Fieldofactivityof
recipientManufacture andsaleofconfectionery

-2-
II.THEPROJECT
Description :Callard&BowserLtd,NuttalLtd(C.&B.N.)a
manufacturer ofhighqualityconfectionery ,was
recentlyacquiredbyBeatriceFoodsandplaced
underthemanagementofanotherBeatricesubsidiary,
SmithKendonLtd(S.K.),alsomanufacturing
confectioners ,carryingonbusinessatWaterton
Industrial Estate,Bridgend.Itisintendedto
mergethebusinessofC.&B.N.withthatofS.K.
intheverynearfuture.C.&B.N.currently
manufacture atHalifax,Yorkshire andHayes,
Middlesex .TheHayesfactoryisoldandinthe
opinionofthenewownersnotwellsuitedto
confectionery manufacture .About11,000tons
ofconfectionery weremanufactured intheyear
to31stAugust,1981,8,000atHayesand3,000
atHalifax.
TheprojectistoclosetheHayesmanufacturing
unit,concentrating allchocolateconfectionery
manufacture ononesiteatHalifax,whilebringing
theremaining6,000or7,000tonsofsugarconfect­
ionerytoapurposebuiltextensionofS.K.'smodern
factoryatWaterton.
Eventuallyitisalsointended,asaseparateproject
torelocatetheC.&B.N.headofficewiththat
ofS.K.atWaterton .
Theeffectofthemergerandrelocation ofproduct­
ionatWatertonwillbetoquadruplethesizeof
theexistingS.K.operationwithconsequent
increased demandonalllocal.serviceandmanufact­
uringsupplyindustries .
Cost : £000
Land 1,342
Buildings 2,500
Plantandmachinery 2,000
Other 0,500
Total 6,342(+11.2MioEcu)
Schedule :1982to1986,withthebulkofcapitalexpenditure
beingincurredin1983.
Market :TheproductsarebeingsoldmainlyintheU.K.
(55%),inthirdcountries (25%)andinEurope(20%)
Environment Environmentalprotection measures
currentlégislation .inaccordance with

Thesectoralandcompetition aspectsoftheprojecthavebeencloselyexamined
theydonotmilitateagainstthegrantingoftheloanappliedfor.
Theprojectappearstobeeconomically sound;itwillmakeasignificant
contribution totheredevelopment oftheregionwhichissufferingtheeffects
ofadeclineinECSCindustries .

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III.THEREGION
Projectlocation Bridgend,SouthWales
Unemployment rate
Nationalaidstatusof
projectareaTheunemployment rateinthePortTalbot
travel-to-workarea,ofwhichBridgend
formspart,was16%inFebruary1982.
AssistedArea.
TheECSCindustryhasbeenanimportantsourceofemployment inthearea.
IV.CONFORMITY WITHARTICLE56OFTHEECSCTREATY
____.... Inthepastdecade,industrial SouthWalesECSCredundancies in :., ..r...,nnn.,
:– hasbeenaffectedbythelossof18.000lobsProjectarea . T_–- inthecoalindustry.Insteel,thepast
6or7yearshaveseenamassivecontraction withintheindustrywithsteel
employmentfallingfromover67,000in1975to27,600bytheendof1981.
• \
Jobstobecreatedbytheproject :ThenewfactoryextensionatWatertonwill
leadtothecreationofabout284newproduct­
ionjobsinthenewlocationandmovingtheC.&B.N.administrative headquarters
toWatertonwouldprovideabout88newadministrative andsellingjobsinWaterton.
Itisexpectedthatabout260Production jobsand50administrative andselling
jobswouldberecruitedlocally.
AlthoughmanyofthejobslostattheHayesclosurewillberecreatedatHalifax
andWaterton,theoveralljoblossresultingfromtherestructuring actionwill
be156,duetotheinstallation ofmoreautomated andmodernequipmentat
Waterton andHalifax.
Training ■:Trainingwillbeprovidedbyapplicant.
TheCommissionconsidersthattheapplication complieswithArticle56(2a)
oftheECSCTreatyandthatthenewjobstobecreatedbytheprojectare
capableofabsorbingredundant ECSCworkersintoproductive employment.

-L-
V.CONVERSION LOAN
Loanappliedfor£3,100,000
Loantobegranted :TheCommission hasapproved aloanof
£3,100,000 (about5.48 MioECU)
orequivalent totheabovementioned
companyinaccordance withArticle56
application criteria (0JC82,
29March1979)
Interestrebate 3percentage pointsperyearforfive
yearson2.2MioECU.
Jobbasisofinterestrebate 110jobssuitableforformerECSC
industryworkers,towhomtheywillbe
offeredinpriority.
VI.COUNCILASSENT
TheCommission requeststheCounciltogiveitsassenttotheforegoing
decision-