MORE than 400 hundred jobs are set to be lost at a bakery factory that makes coffee shop cakes.

The owners of Kate's Cakes, which runs the site in Ashington, near Storrington, has launched a consultation process with the workers who make its range of flapjacks, brownies and minibites.

Run by multinational baking giant CSM, the site could close by the end of 2017 as it looks at merging the roles into two of its other factories in Daventry, Northamptonshire, and Bradford, Yorkshire.

CSM, which took over the running of Kate’s Cakes in 2007, formally announced closure of the Ashington bakery in a letter to staff on Wednesday (April 27).

Another site in Esher, Surrey, is also at risk, with more than 100 jobs set to go.

Steve Greenhalgh, who as managing director sold Kate's Cakes to CSM in 2007 for more than £32 million, said he was "devastated" about the job losses.

He said: "I personally built those factories - I invested a a lot of time and energy was put into it.

"It's a lot of people to lose their jobs, and then there's the wider impact as well.

"I'm devastated about it - it's incredibly disappointing. I wish all of them the very best."

John Lindsay, a member of the company’s senior European management team, said that staff affected would be offered alternative employment where possible - though this would require a move away from Sussex.

He said: "We are a responsible employer and we are working closely with the management and workforce at the Ashington site."

He said that the proposals to close the Sussex and Surrey sites were part of a growth programme across the US and Europe worth about £117 million.

“We are a growing business and really we need to meet our customer needs for the future,” he added.

The consultation lasts for 90 days and future plans for the site are not clear.

Steve Finn, of the Bakers Food & Allied Workers Union (BFAWU), said: "It's another blow to the industry."

The regional officer of the bakers' union said he did not believe the Ashington workers had a recognised union.

In a letter to staff, the company said: “We want to acknowledge the tremendous efforts and contributions all employees have made to the business and we realise this announcement creates uncertainty for you and your family.

“We would greatly appreciate your support in helping ensure the smooth running of the factories.”

CSM's president and chief executive, Robert Sharpe, added in a statement: “These actions will enhance our overall productivity, capabilities and capacity to allow us to profitably grow the business in the years ahead.”

HOME-BASED START-UP SOLD OFF TO MAJOR FIRM FOR £32M

WHEN Colin Lloyd and Kate Cherkoff started a cake business from a one-bedroom flat in Clapham in 1989, they could hardly have dreamed it would become a business worth more than £32 million when it was sold to multinational food giant CSM in 2007.

They launched their business, Kate’s Cakes, in their home with no baking qualifications or experience. Mr Lloyd worked in social care and his wife qualified in linguistics prior to setting up the business.

But the public appetite was there as major sandwich shop chains such as Pret a Manger snapped up their flapjacks and minibites.

Kate’s Cakes went from strength to strength during the coffee shop boom of the 1990s while operating from Partridge Green and, in 2000, relocated to Ashington off the A24. Steve Greenhalgh became operations director in 1999 and was part of the management buy-out of Kate’s Cakes in 2001.

He ultimately sold Kate’s Cakes to CSM for £32.5 million in 2007.

The 49-year-old said: “When I sold the company it had 525 people and huge growth.  “I personally built those factories – a lot of time and energy was put into it. I knew the company needed to go into the next phase.

“It was the right thing to do at the time for the business.”

The factory’s latest twist, which could see 400 people made redundant, is also seen by CSM as the means to further growth. Steve Finn of the Bakers Food & Allied Workers Union described the Ashington losses as “another blow” for the industry.