Fruit importer finally on road to profit again

Portsmouth City Council's banana business will break even this year - for the first time since it took it over.

Ever since it bought struggling importer MMD in February 2008 for 2m, millions in council tax cash have had to be pumped in to keep it afloat.

This was done on the understanding that within a few years, the business would be making money once again. Now the goal is finally in sight.

A new import deal saw MMD poach Del Monte's fruit cargo from Dover last Wednesday, as reported in The News.

It brings in more than 1,000 extra tonnes of fruit in a week, and is worth an estimated 1m per year, beginning in the New Year.

Now the port's boss said that puts MMD on the road to becoming a truly profitable business once again.

Port manager Martin Putman, who is also a director of MMD, said: 'It will just about break even this year and the amount the city gets will just about be the same as what it costs.

'This is part of a business plan we've been working on for years.

'Now this year we expect it to be spot on in terms of having no net loss to the council.

'Then in 2011 to 2012, the city council will be in net benefit.

'By 2012 to 2013, we hope to be seeing real profit.'

Councillor Mike Hancock, in charge of economic matters at the council, said: 'We've turned round the situation at MMD and we're well on the way to being able to compete with other ports in the service we provide.'

He added there are other deals in the pipeline, but would not reveal what they are.

Last year the council paid close to 3.5m to keep the loss-making MMD business running.

But the council also owns the physical port itself - so it made around 2.1m of that back through land rent and cargo fees from MMD's facility.

Now the fees from the new Del Monte deal will balance what the council has put in this year, with what it gets back.

Although MMD is still expected to lose money on its import operations in 2011-12, requiring another subsidy, the council is expected to earn back more in fees and rent than that subsidy is worth.