Around 100 workers at the Silberline factory in Fife have been told of plans to close the site just a few months after being acquired by new owners.
Silberline produces industrial pigments and coatings used for a variety of applications, primarily car coatings.
The American company has run a factory in Leven since 1974, where around a quarter of its 450 global workforce is based.
The announcement comes three months after Silberline was acquired by German company Eckart, which also specialises in pigments.
An employee said the German company is around four times the size of Silberline and the combined group now has “over capacity”.
It is understood the intention is to run the factory down by the end of 2025.
Statement from operations director
The news was confirmed through a statement provided by Silberline operations director Alan Snaddon.
He said: “On April 9, we announced a proposal to close the Eckart (formerly Silberline) site in Leven.
“This proposal comes after a lengthy review of our operations in Leven. It is a result of multiple factors, including the global trend of regionalisation in our business.
“We have now started consultations with our affected employees and their representatives about this proposal.
“No final decision to close the site has yet been taken.
“However, if the proposal goes ahead, we will do everything we can to support our employees.
“This proposal has not been formulated lightly and is as a result of the difficult situation we find ourselves in.”
Recent struggles for Fife Silberline factory
The most recent accounts for Silberline Limited, for the year ending December 31 2022, show sales of £19.8 million and a pre-tax profit of £164,000.
This profitable year followed losses of £513,000 in 2021; £1.5m in 2020 and £239,000 in 2019.
The business previously highlighted the reduced demand from car production during Covid and “logistical delays” as a result of Brexit.
Leven, Kennoway and Largo councillor Colin Davidson said the company’s plans can not be accepted without a fight.
He said: “The factory has been here for almost 50 years, employing hundreds of people in the community in that time.
“I will be asking for a meeting with the company’s management to see how we can try to avert this closure.
“Fife Council and the Scottish Government have to do everything in their power to talk to the company and try to reverse these plans.
“They are hugely valued company in the Levenmouth area. We will not accept this decision without exploring every avenue.”
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