Welsh Country Foods has announced it could be forced to close its lamb processing business after losing its key customer.

A 90-day consultation with workers has started and unions have pledged to do what they can to save jobs.

The plant was purchased by VION Food Group in August 2008. Welsh Country Foods is the major processing facility for Welsh lamb in north Wales, handling 640,000 lambs every year.

This is an extremely difficult day for everyone at Welsh Country Foods following the decision by its key customer to de-list Welsh Country Foods as a supplier. We recognise the impact which this decision will have on the local economy and the community in Anglesey and we are currently in discussions with the retailer to establish if their decision can be overturned and if any steps can be taken to mitigate their decision. Throughout the consultation process we will explore every opportunity to limit any potential job losses which will include attracting new customers to the site or the sale of the business to any interested parties. We will also work with our farmer supply base to minimise any impact that this may have on their activitiesIf the consultation exercise does not reveal a viable way forward for this plant regrettably we will have no other option but to close the site

Prys Morgan from Welsh Country Foods said it was a "difficult day" having to deliver the news to their "committed staff." He said during the consultation period they will be looking for new customers and other options to save the jobs.

Anglesey councillor Eric Jones said the news will have a "tremendous effect" on the local economy. He said Anglesey has lost a lot of work over the years, but he cannot recall any new jobs coming into the area.

Ieuan Wyn Jones AM for Ynys Môn has described the news as a "massive blow" to the local workforce and the Anglesey's economy.

The former leader of Plaid Cymru says he will be raising the issue with the Deputy Minister for Agriculture Alun Davies AM in the Assembly early next week.

We must do everything we can to try to keep these jobs. Our immediate priority is to try to sell the business as a going concern. I will also be meeting the farming unions on the island to discuss the impact on the agricultural industry. The potential loss of this abattoir will be devastating for local farmers in North West Wales given that there are no large plants nearby. This may well have an impact on prices as competition will be reduced.

Unite has pledged to work "strenuously" to see if the 350 jobs under threat at Welsh Country Foods can be saved.

Unite national officer, Julia Long described the announcement as "desperately sad news" and said the knock-on effect for the local economy could be "severe."

Jamie Pritchard, the Unite officer at Welsh Country Foods, spoke to ITV Wales after the news broke:

Following a strategic review of our lamb business we have taken the decision to serve notice on our supply relationship with Vion-owned Welsh Country Foods, Gaerwen Anglesey. This decision was not taken lightly, however we feel it is an opportune time to review our lamb sourcing to meet the changing needs of our customers. We have built a strong relationship with Welsh lamb farmers and we remain committed to sourcing lamb from the country.

The Welsh Government will be discussing this development with the chairman of VION UK Ltd early next week and will also engage with the site’s key customer to ensure that there is a clear understanding that Welsh Country Foods has the full support of the Welsh Government. This announcement comes at a time when the company is determining its future direction in light of the decision by its parent company to sell all UK assets. The Welsh Government has a well established relationship with VION UK Ltd, and will continue to discuss these sensitive commercial matters with the company for the foreseeable future

For the full report by Rob Shelley, see below: