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After two decades of collaboration, the Valencia-based cereal and bakery giant ceased being Siro’s sole supplier for cookies, pasta, cereals, and pastries in 2018.
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With more than 1,700 employees, the group carried a debt of 300 million euros, ultimately leading to bankruptcy proceedings.
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The intervention of regional authorities, especially the decisive involvement of a national minister, unlocked a bold plan to rescue the company through foreign investment.
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Yesterday, a new Competitiveness Plan was signed at the Ministry of Industry, Trade and Tourism. This is described as a project for the future by senior officials.
Alberto García and Ana González first crossed paths in 2007 at the Aguilar de Campoo Siro plant, a biscuit producer and the country’s leading supplier for Mercadona. García worked in maintenance, on the production lines, while González managed her life alongside her partner’s daily routines.
The town of Aguilar de Campoo, with a population just over seven thousand, is known as a biscuit city where families often feel the company town defines daily life. Siro employs around 320 workers, and Gullón’s workforce nears a thousand.
According to Alberto, there was considerable stress and uncertainty at home as the plant faced challenges. He, aged 46, has a seven-year-old son and a home in Aguilar de Campoo, even as mortgage obligations lingered.
Life in this Cantabrian foothill community followed a steady course until last autumn, when the company’s Competitiveness Plan set out a future direction. The plan spelled out looming financial stress with a debt around 300 million euros and limited options to secure financing beyond hopeful projections.
Moving from Aguilar
The group’s four plants in Toro (Zamora), Venta de Baños (Palencia), and Aguilar de Campoo faced potential shutdowns. More than 1,700 people could be affected in three Castile regions already battling population decline. Siro and similar firms play a key role in stabilizing the local economy.
As Alberto recalled, the idea of dissolving the Aguilar operation loomed because the surrounding area offered limited alternatives; the broader concern was the depopulation trend across Spain. He described the conversation as troubling, but necessary given the context.
Documents accessibly reviewed by EL PERIÓDICO DE ESPAÑA trace the crisis to Mercadona’s shift in supplier strategy. From 1998 to 2018, Siro supplied a broad range of in-house products for Mercadona. A leadership change inside Mercadona reoriented supplier relationships, encouraging competition on the shelves and inviting bids from multiple producers per product category. Mercadona continues to source some cookies for its Hacendado line from Siro, while also purchasing from other manufacturers, including Gullón, Brioixpan, and foreign suppliers like Continental Furnaces.
For Mercadona, this diversification aimed to improve margins and unlock better unit costs by selecting the best price for each item. This shift created tensions for longtime suppliers who thrived on exclusivity, prompting many to seek new customers and new markets. Others did not survive the transition and suffered declines in sales and profits.
As the company later noted, securing efficiencies with new customers takes time. The margins in other markets lag behind those enjoyed with Mercadona, which remains a critical reference for the firm’s profitability.
The crisis also highlighted labor and production cost pressures. Wages, absenteeism, and underutilized capacity emerged as factors contributing to a loss of competitiveness, with occupancy rates rarely exceeding 61 percent on any given floor.
By the end of 2021, Siro reported a loss of around 85 million euros and total debt near 299 million euros. Banks hesitated to grant new financing, and the strategy shifted toward diversifying customers, reducing costs, and attracting foreign investment to stabilize the business and protect jobs.
In recent weeks, investment funds like Davidson Kempner and Afendis proposed an 180 million euro offer for 75 percent of the company in an effort to rescue the business. While some workers supported this, others feared a substantial hit to purchasing power and resisted the terms in assemblies.
The company stood on the edge of bankruptcy until negotiations produced an in-principle agreement, reached after extended talks that stretched into the early hours of the morning.
A decisive Madrid moment
The final deal emerged during a pivotal meeting held hundreds of kilometers away, with the government seeking a workable solution from the Ministry of Industry and Tourism in Madrid. Union representatives traveled to the capital by minibus, while the government committee in Valladolid coordinated efforts.
The ministers involved had long sought a compromise that could satisfy workers, investors, and regional authorities. A late-night dinner break gave way to renewed discussions, culminating in a signing around three in the morning. The agreement was subsequently presented as a victory by the ministerial team and regional leaders alike.
The leadership of the Junta de Castilla y León, led by Alfonso Fernández Mañueco, played a personal, hands-on role in crafting a path forward to preserve the business. The collaboration with government partners, including sectors aligned with Industry and Employment, underscored a shared commitment to saving jobs rather than pursuing a political agenda.
A spokesman later emphasized the priority of protecting workers and the local economy, noting that the goal was to prevent job losses and uphold the professional capital built over years in Aguilar and the surrounding towns.
Public remarks from officials celebrated the workers who helped secure a resolution, and many expressed relief at avoiding layoffs for the 1,700 families tied to the company. As the situation evolved, the focus shifted to implementing the plan and ensuring sustainable growth for Siro.
In a post-signing moment, officials highlighted the future promise of the plan and reaffirmed a commitment to ongoing government support as the business transitions. The union and management acknowledged the collaboration that enabled a stable path forward, with a shared message that better times lie ahead for Siro and its workers.