Scotland's largest food company is expanding into eastern Europe to take advantage of cheaper labour costs.

The family-owned Baxters Food Group has built a factory to pickle onions in Poland, it was announced yesterday.

However, Audrey Baxter, chairwoman and chief executive of the firm, has promised the Polish operation will have no impact on the Scottish workforce.

The creation of the new 4000 square metre factory in Wolsztyn, western Poland, comes after a disastrous year for Baxters, during which annual profits fell by more than £1m.

The drop was blamed on market conditions, yet the company still managed an annual turnover of more than £100m for the first time.

Nevertheless, the cheaper labour costs in Poland have proved too attractive to ignore.

While many Poles are leaving their country for better-paid jobs in the UK, including at the Fochabers headquarters of Baxters, the company said there remains a large pool of talented workers in Poland.

Cameron Whyte, project manager of the Polish factory, said: "It's the flipside of the same economic factor.

"Labour costs are a lot lower in Poland than they are in the UK and that means our operating costs are less.

"But we still had no problems finding a highly qualified, talented workforce. There are still a lot of people here in Poland looking for work."

Baxters, which was established in 1868, is known throughout the world for its range of luxury soups and jams.

It started as a small family firm but now employs more than 1000 people in the UK and Canada.

The majority of its workforce are employed at its plant in Fochabers, Moray. Many of them are Polish migrants.

Baxters' Polish factory will produce pickled onions. In the past the onions were shipped from the Netherlands then pickled at the Baxters plant in the Midlands, which is no longer open.

Audrey Baxter said the Fochabers workers should not be worried by the expansion in to Poland. "There is no intention of transferring operations over there. We have had a debate about that internally in the business," she added.